U.S. v. R.W. Meyer, Inc., 89-2236

Citation932 F.2d 568
Decision Date09 May 1991
Docket NumberNo. 89-2236,89-2236
Parties, 60 USLW 2059, 21 Envtl. L. Rep. 21,062 UNITED STATES of America, Plaintiff, v. R.W. MEYER, INC., Defendant/Third Party, Plaintiff-Appellant, Northernaire Plating Company, Willard S. Garwood, Defendants/Third Party, Plaintiffs-Appellees, City of Cadillac, Third Party Defendant, Fourth Party Plaintiff.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Susan J. Bradley (argued), Jon D. VanderPloeg, Smith, Haughey, Rice & Roegge, Grand Rapids, Mich., for defendant-appellant R.W. Meyer, Inc.

Michael P. McCasey, Miles J. Murphy (argued), Cholette, Perkins & Buchanan, Grand Rapids, Mich., Susan E. Morrison, Gary R. Rentrop, P.C., Bloomfield Hills, Mich., for defendants-appellees Willard S. Garwood and Northernaire Plating Co.

Before GUY and BOGGS, Circuit Judges, and BERTELSMAN, District Judge. *

BERTELSMAN, District Judge.

This appeal involved the construction of the provisions of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) governing contribution actions among responsible parties following a cleanup of a hazardous waste site and an Immediate Removal Action by the Environmental Protection Agency (EPA). 42 U.S.C. Secs. 9607, 9613(f)(1).

BACKGROUND

The facts and background necessary to place this opinion in context were well stated by Chief Judge Hillman in his unpublished opinion awarding contribution, as follows:

"This matter stems from a suit brought by the United States against Northernaire Plating Company ("Northernaire") for recovery of its costs in conducting an 'Immediate Removal Action' pursuant to the Comprehensive Environmental Response, Compensation & Liability Act (hereinafter, "CERCLA"), 42 U.S.C. Sec. 9601, et seq. Northernaire owned and operated a metal electroplating business in Cadillac, Michigan. Beginning in 1972, it operated under a 10-year lease on property owned by R.W. Meyer, Inc. ("Meyer"). Northernaire continued operations until mid-1981 when its assets were sold to Toplocker Enterprises, Inc. ("Toplocker"). From July of 1975 until this sale, Willard S. Garwood was the president and sole shareholder of Northernaire. He personally oversaw and managed the day-to-day operations of the company.

"Acting upon inspection reports from the Michigan Department of Natural Resources ("MDNR"), the United States Environmental Protection Agency ("EPA") conducted an Immediate Removal Action at the Northernaire site from July 5 until August 3, 1983. Cleanup of the site required neutralization of caustic acids, bulking and shipment of liquid acids, neutralization of caustic and acid sludges, excavation and removal of a contaminated sewer line, and decontamination of the inside of the building. All of the hazardous substances found at the site were chemicals and by-products of metal electro-plating operations.

"In an earlier opinion and order dated May 6, 1988, this court found the defendants "Each defendant, (Northernaire and Garwood moving together) has brought cross-claims for contribution against the other. Currently before the court are the summary judgment motions on these cross-claims.

Garwood, Northernaire, and Meyer jointly and severally liable to plaintiff for the costs of the Immediate Removal Action under Section 107(a) of CERCLA. 42 U.S.C. Sec. 9607(a). United States v. Northernaire Plating Co., 670 F.Supp. 742 (W.D.Mich.1987). The court awarded plaintiff $268,818.25 plus prejudgment interest. The court later determined the prejudgment interest due to be $74,004.97, making the total award to plaintiff $342,823.22.

"CERCLA specifically allows actions for contribution among parties who have been held jointly and severally liable:

"(1) Contribution

"Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this sub-section shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 or section 9607 of this title.

"42 U.S.C. 9613(f)(1)."

Joint App., at 414-16.

Further details may be found in the opinions of the trial court and this court which imposed joint and several liability on the instant parties. 1 United States v. Northernaire Plating Company, 670 F.Supp. 742 (W.D.Mich.1987); aff'd sub nom., United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 1527, 108 L.Ed.2d 767 (1990).

Apparently, the parties allowed the building to degenerate into a true environmental disaster area. As this court observed in the former appeal:

"In March 1983, officials from the EPA and the Michigan Department of Natural Resources (MDNR) examined the property. Their examination was prompted by earlier reports of MDNR officials indicating that the building had been locked and abandoned and that a child had received chemical burns from playing around discarded drums of electroplating waste that were left outside the building. State tests on samples of the soil, sludge, and drum contents disclosed the presence of significant amounts of caustic and corrosive materials. During their examination of the site, EPA and MDNR officials observed drums and tanks housing cyanide littered among disarray outside the facility. Based on their observations outside the building, the officials determined that Northernaire had discharged its electroplating waste into a "catch" basin and that the waste had seeped into the ground from the bottom of the basin. The waste then entered a pipe that drained into a sewer line that discharged into the sewage treatment plant for the city of Cadillac."

Meyer, 889 F.2d at 1498-99 (footnote omitted).

In the former appeal, this court affirmed the decision of the trial court finding that the damage to the site had been "indivisible" and imposing joint and several liability on the present parties to reimburse the EPA for the removal costs for the cleanup of the building. 2 The total cost of the cleanup plus prejudgment interest was $342,823.22. In this subsequent contribution action, the trial court held that two-thirds of the liability should be borne by Northernaire and its principal shareholder, each contributing one-third each. But the court held that the remaining one-third ($114,274.41) should be borne by the appellant property owner.

The appellant attacks this apportionment, arguing strenuously that its responsibility should be limited to an amount apportioned according to the degree that the sewer line mentioned in the above quote contributed to the cleanup costs. Applying this approach, the appellant generously offers to pay $1,709.03. Appellees accept the trial court's apportionment.

The appellant also quibbles about certain statements made by the trial court in its opinion, stating that some facts recited were not supported by the record.

ANALYSIS

The trial court held that it was within its discretion to apply certain factors found in the legislative history of CERCLA in making its contribution apportionment. Although these factors were originally intended as criteria for deciding whether a party could establish a right to an apportionment of several liability in the EPA's initial removal action, the trial court found "these criteria useful in determining the proportionate share each party is entitled to in contribution from the other." Joint App., at 417.

The criteria mentioned are:

"(1) the ability of the parties to demonstrate that their contribution to a discharge release or disposal of a hazardous waste can be distinguished;

"(2) the amount of the hazardous waste involved;

"(3) the degree of toxicity of the hazardous waste involved;

"(4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste;

"(5) the degree of care exercised by the parties with respect to the hazardous waste concerned, taking into account the characteristics of such hazardous waste; and

"(6) the degree of cooperation by the parties with Federal, State, or local officials to prevent any harm to the public health or the environment."

Id. (citing Amoco Oil Co. v. Dingwell, 690 F.Supp. 78, 86 (D.Me.1988), aff'd sub nom. Travelers Indemnity Co. v. Dingwell, 884 F.2d 629 (1st Cir.1989); United States v. A & F Materials Co., Inc., 578 F.Supp. 1249 (S.D.Ill.1984); H.R. No. 253(III), 99th Cong., 2d Sess. 19, (1985), reprinted in 1986 U.S.Code Cong. & Admin.News 2835, 3038, 3042).

The trial court recognized that the lessee was the primary actor in allowing this site to become contaminated. (Appellant argues that the lessee was the only actor.) The trial court found, however, that in addition to constructing the defective sewer line which contributed to the contamination, appellant bore significant responsibility "simply by virtue of being the landowner." Id. at 418. The trial court observed further that appellant "neither assisted nor cooperated with the EPA officials during their investigation and eventual cleanup of the ... site." Id.

Chief Judge Hillman concluded, "As it is well within the province of this court, I have balanced each of the defendants' behavior with respect to the equitable guidelines discussed." Id. at 421. As a result of the balancing, he made the apportionment described above.

The trial judge was well within the broad discretion afforded by the statute in making the apportionment he did.

Congress intended to invest the district courts with this discretion in making CERCLA...

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