U.S. v. Poly-Carb, Inc.

• Decision Date: 03 December 1996
• Docket Number: No. CV-N-91-360-ECR.,CV-N-91-360-ECR.
• Parties: UNITED STATES of America, Plaintiff, v. POLY-CARB, INC., Montana Refining Company, and C. Michael Wilwerding, Defendants.
• Court: U.S. District Court — District of Nevada

Page 1518

951 F.Supp. 1518

UNITED STATES of America, Plaintiff, v. POLY-CARB, INC., Montana Refining Company, and C. Michael Wilwerding, Defendants.

No. CV-N-91-360-ECR.

United States District Court, D. Nevada.

December 3, 1996.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Lois J. Schiffer, Asst. Attorney General, Environment & Natural Resources Div., T. Anthony Quinn, James A. Lofton, U.S. Dept. of Justice, Environmental Enforcement Section, Washington, D.C. and Kathryn E. Landreth, U.S. Attorney for the District of Nevada, Shirley Smith, Asst. U.S. Attorney in Charge, Reno, NV, for Plaintiff.

Michael G. Thornton, Kurt W. Melchior, Joseph M. Keene, Nossaman, Buthner, Knox & Ellio, San Francisco, CA, and Robert F. Saint-Aubin of Maddox & Saint-Aubin, Reno, NV, for Defendants.

ORDER

EDWARD C. REED, Jr., District Judge.

The United States of America ("Plaintiff") (Doc. # 88) and Montana Refining Company ("Defendant") (Doc. # 90) have renewed their motions for summary judgment in this action brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601-9675 ("CERCLA"). Because we find that there exist several genuine issues of material fact regarding liability, and that no reasonable jury could find for Defendant as to all other material facts bearing on liability, we DENY Defendant's renewed summary judgment motion (Doc. # 90) and GRANT IN PART Plaintiff's renewed summary judgment motion (Doc. # 88).

BACKGROUND

Poly-Carb, Inc. set up a chemical processing plant ("Poly-Carb Site") in Wells, Nevada, and in late 1984 received about 9000 gallons of a material known as "phenolic caustic" ("caustic") from Montana Refining Company of Great Falls, Montana. EPA Report at 1 (Doc. # 33, Ex. A, Att. 1). This caustic contained, among other things, "phenols" and "cresols," which are hazardous substances as defined by EPA hazardous waste regulations. Id. at 1-2. On May 27, 1985 approximately 8000 gallons of caustic spilled from a holding tank on the Poly-Carb Site and contaminated about 300 cubic yards of nearby soil. Id. at 1. This spill may have been the work of vandals. Id.

In 1986 the U.S. Environmental Protection Agency ("EPA") began its clean-up effort, technically known as a "removal" action, which continued until August 1988. Id. at 16-20. Pursuant to 42 U.S.C. § 9607(a)(4)(A), the United States ("Plaintiff") filed suit August 15, 1991 against Poly-Carb, Inc. as owner of the Site, C. Michael Wilwerding as president of Poly-Carb, and Montana Refining Company ("MRC" and "Defendant") as arranger of the shipment of caustic to Wells, Nevada. Complaint (Doc. # 1). February 24, 1993, default was entered against Poly-Carb and C. Michael Wilwerding, leaving MRC as the only defendant in the action. Docs. # 52 & 53.

MRC and Plaintiff filed cross-motions for summary judgment in September, 1992. Docs. # 33 & 34. This Court entered judgment in favor of Defendant on June 11, 1993, appeal was taken, and on August 17, 1994 the Ninth Circuit Court of Appeals vacated our summary judgment and remanded the case to this Court. Judgment (Doc. # 59); Appellate Memorandum (Doc. # 65). The parties have since renewed their motions for summary judgment and these motions (Docs. # 88 & 90) are now ripe.

DISCUSSION

I. Summary Judgment Standard

The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court. Zweig v. Hearst Corp., 521 F.2d 1129 (9th Cir.), cert. denied, 423 U.S. 1025, 96 S.Ct. 469, 46 L.Ed.2d 399 (1975). The moving party is entitled to summary judgment as a matter of law where, viewing the evidence and the inferences arising therefrom in favor of the nonmovant, there are no genuine issues of material fact in dispute. Fed. R.Civ.P. 56(c); Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.1996). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 1261, 134 L.Ed.2d 209 (1996).

The moving party bears the burden of informing the court of the basis for its motion, together with evidence demonstrating the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Once the moving party has met its burden, the party opposing the motion may not rest upon the mere allegations or denials of his pleadings but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

In evaluating the appropriateness of summary judgment, three steps are necessary: (1) determining whether a fact is material; (2) determining whether there is a genuine issue for the trier of fact, as determined by the documents submitted to the court; and (3) considering that evidence in light of the appropriate standard of proof. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. As to materiality, only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes which are irrelevant or unnecessary will not be considered. Id. Where there is a complete failure of proof concerning an essential element of the nonmoving party's case, all other facts are rendered immaterial, and the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323, 106 S.Ct. at 2552-53. Summary judgment is not a disfavored procedural shortcut, but an integral part of the federal rules as a whole. Id.

II. Standard of Proof

A CERCLA plaintiff must prove, at minimum, four elements. First, that the waste disposal site is a "facility" within the meaning of 42 U.S.C. § 9601(9). Cose v. Getty Oil Company, 4 F.3d 700, 703 (9th Cir.1993). Second, that a "release" or "threatened release" of a "hazardous substance" from the facility has occurred. Id. Third, that such release required the expenditure of response costs that are "consistent with the national contingency plan." Id. at 703-04. Fourth, that the defendant falls within one of the four classes of persons subject to CERCLA liability. Id. at 704. A defendant may defeat liability by proof of an affirmative defense, including a defense listed in 42 U.S.C. § 9607(b). We review the elements and defenses in turn.

III. The Material Facts

A. The Poly-Carb Site was a "Facility"

Under 42 U.S.C. § 9607(a)(3), "any person who ... arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility" shall be liable (emphasis added). A facility includes, among other things, "any site or area where a hazardous substance has been deposited, stored, disposed of, or placed." 42 U.S.C. § 9601(9). Defendant disputes that the Poly-Carb Site was a "facility" within this definition on the grounds that 1) the caustic was not a "hazardous substance" being disposed of or treated within the statute's meaning (Def.'s Summ.J.Mot. at 10-23 (Doc. # 90)), and 2) Plaintiff has failed to bring forth evidence showing that Defendant's caustic, which Defendant admits it delivered to a facility run by BriCo, was the same material spilled at the Poly-Carb facility (Def.'s Summ.J.Mot. at 7-10 (Doc. # 90)).¹ The first ground we address below in Part III.D; the second ground is unconvincing.

Indeed, this Court confesses to some surprise at Defendant's refusal to concede this point. E.g., Def.'s Reply at 2 (Doc. # 100); Def.'s Resp. at 2-4 (Doc. # 109). Defendant admits that it shipped about 7,000 gallons of caustic to Wells, Nevada, for use at Poly-Carb's "facility." Def.'s Undisputed Facts at ¶¶ 5, 8 (Doc. # 91). It is true that precisely how and when the caustic got from the BriCo facility to the Poly-Carb Site is still murky. Def.'s Resp. at 2-4 (Doc. # 109). But the who, what, why, and where are not in dispute. Def.'s Reply (Doc. # 108). Michael Wilwerding stated unequivocally that "Poly-Carb did not obtain spent caustic from any source other than Montana Refining Company." Wilwerding Decl. at ¶ 14 (Doc. # 97, Ex. A); see also Wilwerding Supp.Decl. at ¶ 9 (Doc. # 114). That Plaintiff's evidence is weak and confusing as to when and how the caustic was delivered to the Poly-Carb Site does not mean that the delivery never happened. No genuine issue of material fact exists regarding Defendant's "arrange[ment] with a transporter for transport ... of [caustic] owned or possessed by [Defendant], ... [to] any facility ... containing such [caustic] ... from which there [was] a release." 42 U.S.C. § 9607(a)(3)-(4).

B. Release of a Hazardous Substance

We are even more surprised by Defendant's argument that no release occurred, since caustic was unquestionably spilled at the Poly-Carb Site. Wilwerding Supp.Decl. at ¶ 9 (Doc. # 114); Wilwerding Decl. at ¶¶ 14-16 (Doc. # 97, Ex. A). Defendant challenges the existence of this release on the grounds that the EPA On-Site Coordinator did not find any "phenolic caustic" during the removal process. Def.'s Reply at ¶ 51 (Doc. # 108). It is true that the only hazardous substances found during cleanup were "phenols" and "cresols," but the evidence is overwhelming that MRC's spilled phenolic caustic was the source of those chemicals.² Mandel Decl. at ¶ 8 (Doc. # 33, Ex. A); Wilwerding Decl. at ¶¶ 14-16 (Doc. # 97, Ex. A). No reasonable jury could find otherwise.

Whether the caustic was a "hazardous substance" within the ambit of CERCLA arranger liability is a closer question, which we address below in Part III.D. However, Defendant's only dispute with respect to this issue is its claim that caustic falls within the petroleum exclusion; it is otherwise undisputed that phenols and cresols are hazardous substances with the meaning of CERCLA. Def.'s Summ.J.Mot. at 18-23 (Doc. # 90)...