Union Carbide Corp. v. Thiokol Corp.

Decision Date17 October 1994
Docket NumberCiv. A. No. CV293-66.
Citation890 F. Supp. 1035
PartiesUNION CARBIDE CORP., Plaintiff, v. THIOKOL CORP., et al., Defendants and Third-Party Plaintiffs, v. RHONE-POULENC, INC., Third-Party Defendant.
CourtU.S. District Court — Southern District of Georgia

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Arnold C. Young, Savannah, GA, Charles Adams Perry, Atlanta, GA, for plaintiff.

Wallace Eugene Harrell, Brunswick, GA, Jeffrey C. Wyant and Robert C. Mitchell, Chicago, IL, Robert A. Bilott, Cincinnati, OH, for defendants.

ORDER

ALAIMO, District Judge.

On May 24, 1993, Plaintiff, Union Carbide Corp. ("Union Carbide"), filed this federal question action against Defendants/Third Party Plaintiffs, Thiokol Corp., Morton International, Inc., and Morton Thiokol, Inc. (collectively, "Thiokol"), alleging that Thiokol is liable under 1) the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et. seq. ("CERCLA"), 2) a contract indemnification clause, and 3) common law principles of contribution and indemnity for the costs of cleaning up toxic waste at a site near Woodbine, Georgia, currently owned by Union Carbide. This case is now before the Court on two motions for summary judgment: a motion filed by Defendant, Thiokol, requesting summary judgment on all counts of Union Carbide's amended complaint and on Counts I, II and III of Thiokol's counterclaim; and a motion filed by Plaintiff, Union Carbide, for partial summary judgment on the issue of Thiokol's liability under section 107 of CERCLA. For the reasons discussed below, summary judgment for Defendant will be GRANTED in part and DENIED in part, and partial summary judgment for Plaintiff will be GRANTED in part and DENIED in part.

FACTS

This case concerns the toxic waste contamination of a 7,200 acre parcel of real property (the "site") located near Woodbine, Georgia. Thiokol owned the site from 1963 until November, 1976. From 1967 until November of 1976, Thiokol processed for Union Carbide the pesticide, Temik, an aldicarb product, at the site. This was done pursuant to contracts which included a "Toll-Processing" agreement dated October 14, 1971. Under Article 24 of the Toll-Processing agreement, Thiokol agreed to indemnify Union Carbide for all of Thiokol's activities in manufacturing Temik. During that period, Thiokol also manufactured other products, such as pyrotechnic ordnance and riot control agents.1 Thiokol maintained a landfill on the site, as well as other solid waste management units ("SWMUs"), where hazardous substances were disposed.

In November, 1976, Thiokol sold the site to Union Carbide. Section 10 of the parties' asset purchase agreement provides: "Seller will indemnify and hold Buyer harmless against and in respect of: (a) any and all losses, damages, claims, or expenses based upon the conduct of Seller of its business at the Facility at any time." Section 14, however, provides that

All statements contained in any certificate or other instrument delivered by or on behalf of Seller or Buyer, respectively, pursuant to this Agreement shall be deemed representations and warranties hereunder by Seller or Buyer, as the case may be. All representations, warranties and agreements made by Seller or Buyer, respectively, in this Agreement or pursuant hereto shall, for a period of eighteen (18) months, survive the closing hereunder and any investigation made by or on behalf of Seller or Buyer, as the case may be.

Union Carbide also used the site to manufacture agricultural chemicals, including Temik. In December, 1986, Union Carbide sold part of the site, including the manufacturing plant, to Rhone-Poulenc, Inc. Union Carbide retained 3000 acres containing the 20 acre landfill used by both Thiokol and Union Carbide and the seven SWMUs used only by Thiokol.

The primary hazardous substance at the landfill was Temik aldicarb fines, a listed hazardous waste. (Union Carbide Corporation Application for Closure/Post-Closure of Landfill, p. 3; Hazardous Waste Facility Permit No. HW-063(D), Sept. 29, 1988, p. 8). The SWMUs contain acetone, aldicarb, malononitrile, orthochlorobenzaldehyde and orthochlorobenzalmalononitrile, and possibly unexploded ordnance. (RCRA Resource Conservation and Recovery Act facility investigation, Law Environmental, March, 1992, p. 15)

In 1981, in accordance with a directive from the Georgia Department of Natural Resources, Environmental Protection Division ("EPD"), Union Carbide stopped using the portion of the landfill where hazardous wastes were being disposed. In 1985, some wastes were removed from the site and contaminated soil was tested and removed. On December 31, 1986, the EPD approved Union Carbide's Closure Plan for the landfill. A fence was constructed around the landfill in February of 1987, and gopher tortoises and indigo snakes were removed from the landfill. In June of 1987, a clay cap was installed over the landfill. Closure of the landfill was completed on May 14, 1988.

A Hazardous Waste Facility Permit for the landfill was issued by the EPD on September 29, 1988. In an amendment to the Georgia Hazardous Waste Facility Permit for the landfill, effective October 30, 1992, the EPD ordered a RCRA (Resource Conservation and Recovery Act) Facility Assessment (RFA) for six of the SWMUs specifically and also for any other SWMU not listed. A RCRA Facility Investigation (RFI) was then completed for all seven SWMUs, with a corrective action plan to follow. Remedial action at the SWMUs is anticipated by Union Carbide.

DISCUSSION

I. SUMMARY JUDGMENT

Summary judgment requires the movant to establish the absence of genuine issues of material fact, such that the movant is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Adickes v. S.H. Kress & Co., 398 U.S. 144, 153, 90 S.Ct. 1598, 1606, 26 L.Ed.2d 142 (1970). Summary judgment is also proper "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The non-moving party to a summary judgment motion need make this showing only after the moving party has satisfied its burden. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991). The court should consider the pleadings, depositions and affidavits in the case before reaching its decision, Fed. R.Civ.P. 56(c), and all reasonable inferences will be made in favor of the non-movant. Griesel v. Hamlin, 963 F.2d 338, 341 (11th Cir.1992).

Cross-motions for summary judgment do not preclude the Court from finding material facts in dispute. Each motion must be considered separately, and the Court may render judgment for one party only if it finds that there is no genuine issue of material fact and that such party is entitled to prevail as a matter of law. Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2720. Wright v. Credit Bureau of Ga., Inc., 548 F.Supp. 591, 594 (N.D.Ga.1982).

A. CERCLA Claims

The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") imposes strict liability for the cost of responding to a release or threatened release of a hazardous substance on four categories of people: current owners or operators of a facility where a hazardous substance has been disposed; those who were owners or operators of a facility at the time of disposal; transporters of a hazardous substance; and those who arranged for disposal or treatment at any facility containing a hazardous substance. 42 U.S.C. § 9607(a). Private plaintiffs as well as the government may recover their response costs from parties in these four categories. 42 U.S.C. § 9613.

1. Statute of Limitations Under CERCLA

CERCLA has two different statutes of limitations. There is a six-year statute of limitations for an action to recover the cost of a remedial action under § 107 of CERCLA. 42 U.S.C. § 9613(g)(2)(B). The statute of limitations begins to run when there is "initiation of physical on-site construction of the remedial action." Id. There is a three-year statute of limitations for removal actions, which runs from the date of completion of the removal. Id. at (g)(2)(A).

Thus, in order to determine the proper statute of limitations for a CERCLA cleanup, the cleanup first must be defined as either a removal or remedial action. CERCLA distinguishes between removal and remedial actions.2 A removal is a short-term, temporary response to a release or threatened release, while a remedial action is a long-term, more thoroughly researched and planned permanent remedy to a release or threatened release. Remedial actions are described as "those actions consistent with permanent remedy taken instead of or in addition to removal actions." 42 U.S.C. § 9601(24).

a. The Landfill

Union Carbide's CERCLA claims for the landfill are subject to the six-year statute of limitations for remedial actions. Thus, the claims are timely only if the statute of limitations did not begin to run until May 24, 1987.

i) Remedial Action

Union Carbide does not dispute that the closure plan approved by the EPD in December, 1986 was a remedial action. Indeed, it must be a remedial action in order for Union Carbide to benefit from the 6-year statute of limitations. This 6-year statute began to run at the initiation of physical on-site construction at the landfill.

ii) Physical On-Site Construction

The Court can find very little guidance in determining when physical on-site construction of a remedial action begins. Union Carbide points to a proposed "Cost Recovery Rule" of the EPA which states:

The term "physical on-site construction" for remedial actions is limited to actions that occur after completion of the remedial design and issuance of the Notice to Proceed on which remedial action personnel are authorized to begin
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