U.S. v. Vertac Chemical Corp.

• Decision Date: 28 December 1999
• Docket Number: No. LR-C-80-109.,LR-C-80-109.
• Citation: 79 F.Supp.2d 1034
• Parties: UNITED STATES of America, Plaintiff, v. VERTAC CHEMICAL CORP., et al., Defendants.
• Court: U.S. District Court — Eastern District of Arkansas

79 F.Supp.2d 1034

UNITED STATES of America, Plaintiff, v. VERTAC CHEMICAL CORP., et al., Defendants.

No. LR-C-80-109.

United States District Court, E.D. Arkansas, Western Division.

December 28, 1999.

V. Robert Denham, Jr., Powell, Goldstein, Frazer & Murphy, Atlanta, GA, Charles L. Schlumberger, Wright, Lindsey & Jennings, Little Rock, AR, for Hercules, Inc.

Steven W. Quattlebaum, Williams & Anderson, Little Rock, AR, for Uniroyal Chemical.

MEMORANDUM OPINION AND ORDER

GEORGE HOWARD, Jr., District Judge.

The final stage of this almost twenty year old case involves the allocation of costs incurred by the Environmental Protection Agency (EPA) and by Hercules, Inc. (Hercules) for the remediation of hazardous contamination and wastes on approximately 93 acres of land in Jacksonville Arkansas, known as the Vertac Site and certain nearby off-site areas.¹ On August 8, 1999, the Court entered judgment in favor of the United States and against defendants Hercules and Uniroyal Chemical, Ltd. (Uniroyal) in the amount of $89,084,710.00 plus any additional response costs incurred or to be incurred after May 31, 1998 and post-judgment interest.²

The Vertac Plant Site is located in Jacksonville, Arkansas. Herbicide products, including 2,4,-D (dichlorophenoxyacetic acid), 2,4,5-T (trichlorophenoxyacetic acid) and 2,4,5-TP (trichlorophenoxyproprionic acid) were produced at the plant from around 1957 until 1986. Hazardous substances, including dioxin, were generated during the operations at the Site, and were disposed at the Site and Off Site areas. The disposal of the hazardous substances caused contamination of areas and equipment both on and off the Site, and the accumulation of over 28,000 drums of hazardous wastes.

Two parties are involved in the allocation stage. Hercules was found liable as an owner/operator and arranger.³ Uniroyal was found liable as an arranger based on tolling agreements Vertac and Uniroyal entered into whereby Uniroyal sent 1,2, 4,5-tetrachlorobenzene ("TCB") to Vertac for Vertac to convert into 2,4,5-T for Uniroyal. See United States v. Vertac Chemical Corp., 966 F.Supp. 1491 (E.D.Ark. 1997).

As can be expected, Hercules and Uniroyal each advance different arguments.⁴ On the one hand, Uniroyal relies primarily on the relative involvement of the liable parties. It contends that its role as an arranger was minimal. It asserts that the Court should use a volumetric calculation, which can be calculated based on the evidence presented at the hearing. Based on Uniroyal's calculations, a volumetric calculation would result in an initial allocation of 1.58% to Uniroyal and 98.42% to Hercules. In addition to its volumetric calculation, Uniroyal argues that it is then entitled to a "downward departure." Hercules, on the other hand, attempts to divvy up the site, so that it ends up with an allocation in which Uniroyal would be about 70 percent liable. In particular, Hercules advances a division in which it has no connection with the drummed waste, the EPA's single largest expenditure.

Hercules' attempt to limit its responsibility for response costs to about 30 percent is, on its face, absurd. Hercules operated or owned the plant from 1961 to 1976. It had the greatest presence, by far, of any of the responsible parties. The problem is that Uniroyal and Hercules are left "holding the bag" for Vertac, who at least arguably caused the greatest amount of harm.

Resolution of contribution claims under CERCLA is governed by 42 U.S.C. § 9613(f). It provides: "In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate." 42 U.S.C. § 9613(f)(1). The statute does not limit the courts to any particular factors, but grants the court "broad discretion to balance the equities in the interest of justice." Bedford Affiliates v. Sills, 156 F.3d 416, 429 (2d Cir.1998). In an attempt to find an equitable resolution to what is at times a complex problem, the courts have employed a number of approaches. See David G. Mandelbaum, Toward A Superfund Cost Allocation Principle, 3 Envtl. Law. 117, 124 (1996) (noting the difficulty in allocating costs). Most have looked to the what are referred to as the "Gore factors," proposed by then Senator Albert Gore as a method to apportion joint and several liability. These factors 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 hazardous waste involved;

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

(4) the degree of involvement of 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.

Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935 (8th Cir.1995). The factors are neither an exhaustive nor exclusive list. United States v. Colorado & Eastern R. R., Co., 50 F.3d 1530, 1536 n. 5 (10th Cir.1995). The primary emphasis is placed on the harm each party causes the environment and care on the part of the parties. Control Data at 935-936.

Divisibility of harm is not a defense to a contribution action under § 113(f), although the Court may consider separate harms caused by different parties in allocating costs. See Redwing Carriers, Inc. v. Saraland Apts., 94 F.3d 1489, 1513-14 (11th Cir.1996). But see Acushnet Co. v. Mohasco Corp., 191 F.3d 69, 77 (1st Cir. 1999) (party may avoid liability for response costs in contribution action "if it demonstrates that its share of hazardous waste deposited at the site constitutes no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts.")

Hercules seeks to divide the Site into various areas, or "harms." The Court has previously rejected Hercules' attempt to divide the Site into "mini-sites."⁵ The Court, however, is not persuaded that the "mini-sites" represent "distinct" harms on which the Court can allocate costs. The history of this site reveals a commingling of the wastes. Furthermore, Hercules' proposed division is, at best, arbitrary, and couched in terms to reduce Hercules' liability. As the First Circuit recently noted in rejecting a quantitative minimum at which a party could be held responsible, the task of tracing chemical waste to particular sources in particular amounts "is often technologically infeasible due to the fluctuating quantity and varied nature of the pollution at a site over the course of many years." Acushnet Co. v. Mohasco Corp., 191 F.3d at 77.

The problem noted in Acushnet is illustrated by Hercules' argument regarding the costs associated with the incineration of the drummed wastes. When the State ordered Vertac to shut down in the summer of 1979, there were approximately 2700 drums of 2,4,5-T still bottoms stored on-site. Workers spent much of the summer placing those 55-gallon drums into larger drums, shoveling up contaminated soil, and placing that soil into the larger overpack drums. When Vertac resumed production in the fall of 1979, it produced only 2,4-D and eventually accumulated about 26,000 drums of 2,4-D waste. This waste was accumulated between 1979 and 1986, when Hercules had no involvement or presence at the Site.

Hercules argues that no dioxin is produced in the 2,4-D manufacturing process. Thus, according to Hercules, none of the 2,4-D waste drums should have contained dioxin. Furthermore, Hercules presented expert testimony to demonstrate that there should not have been cross contamination of the 2,4-D waste with the 2,4,5-T wastes. According to Hercules, none of the 2,4-D wastes should have had any detectable concentration of dioxin from the fall of 1979 onward, when Vertac ceased manufacturing 2,4,5-T.

Hercules states that it had no involvement in management of the drummed wastes and should not be responsible for the costs of incineration of the drummed waste. Of course, Uniroyal, as an arranger, also did not have any involvement.

The Court has previously found that there was cross-contamination and commingling of the wastes at the entire Site. During the years Hercules operated the plant, Hercules generated hazardous substances which were disposed of at the Site through "leaks, spills, drum burial, and other releases into the environment... The Hercules operation resulted in contamination of soil, groundwater, equipment, tanks, sewer lines, the sewage treatment plants, and sediments and flood plains in Rocky Branch Creek and Bayou Meto." United States v. Vertac Chemical Corp., 966 F.Supp. 1491, 1494-95 (E.D.Ark.1997).

Furthermore, as noted in previous decisions, dioxin was found in the 2,4-D wastes. See United States v. Vertac Chemical Corp., 33 F.Supp.2d at 780. The Court will not second guess the studies and find that they are incorrect or unreliable, as requested by Hercules. Additionally, Hercules admitted that some degree of dioxin contamination found in the 2,4-D drums could have come from contaminated soil being placed in the drums. That soil was contaminated by years of production.

Thus, the Court is not persuaded that Hercules has established "separate harms" on which to allocate responsibility.

The Court has considered carefully the arguments of the parties, the voluminous record and reviewed a large number of decisions and articles in an attempt to reach an equitable resolution to the problem. Allocation of costs between the two remaining parties is difficult, given the particular circumstances of this case where one of the major polluters is insolvent, a number of parties have settled, and the remaining parties'...