United States v. Dico, Inc.
| Decision Date | 01 February 2021 |
| Docket Number | 4:10-cv-00503 |
| Citation | 516 F.Supp.3d 839 |
| Court | U.S. District Court — Southern District of Iowa |
| Parties | UNITED STATES of America, Plaintiff, v. DICO, INC. and Titan Tire Corporation, Defendants. |
Sergio Enrique Acosta, Joel David Bertocchi, Thomas D. Lupo, Hinshaw & Culbertson LLP, Chicago, IL, Michael F. Iasparro, Hinshaw & Culbertson LLP, Rockford, IL, Stephen H. Locher, Mark McCormick, Belin McCormick, P.C., Des Moines, IA, for Defendant.
Eric D. Albert, Sara C. Colangelo, Elizabeth L. Loeb, Zachary Nathaniel Moor, Steven D. Shermer, Sarah D. Himmelhoch, U.S. Department of Justice-Environment & Natural Resources, Washington, DC, Robyn E. Hanson, United States Department of Justice, Denver, CO, for Plaintiff.
Before the Court is the United States Government's Unopposed Motion to Enter Consent Decree. ECF No. 368. On November 2, 2020, the Court entered an Order directing the parties to file a joint submission providing the Court with further information regarding the parties' negotiation process, the anticipated litigation risks if the settlement had not been reached or was not approved, the remaining cleanup to be performed, and any lingering environmental concerns. ECF No. 369. The Court further asked the parties to brief whether the Court could approve the settlement without first vacating the judgments previously entered. Id. On December 1, 2020, the parties filed a joint supplemental brief addressing the Court's concerns. ECF No. 370. The matter is fully submitted.
In 1974, trichloroethylene (TCE) was found in the Des Moines public drinking water supply. United States v. BP Amoco Oil , No. 3:99-cv-10671, 2000 WL 35503251, at *1 (S.D. Iowa Sept. 29, 2000). The hazardous chemical was traced back to property owned by Defendant Dico, Inc. Id. Following enactment of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 – 9628, the U.S. Environmental Protection Agency (EPA) designated Dico's property in Des Moines, Iowa a Superfund Site (Des Moines TCE Site) in 1983 and placed it on a national priority list. Id. ; E2 Inc., Planning for the Future: A Reuse Planning Report for the Des Moines TCE Superfund Site Dico Property 2 (2007), https://semspub.epa.gov/work/07/30047239.pdf. In 1986, the EPA initiated response activities to mitigate the release of hazardous substances into the local water supply, including the installation of a groundwater treatment system that requires monitoring to this day. BP Amoco Oil , 2000 WL 35503251, at *1 ; Superfund Site: Des Moines TCE Des Moines, IA Cleanup Activities , U.S. Environmental Protection Agency (last visited Jan. 26, 2021), https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fuseaction=second.Cleanup & id=0700316#bkground.
On April 21, 1995, the Government filed a complaint against Dico, Inc. in United States v. Dico, Inc. , No. 4-95-cv-10289 (S.D. Iowa Apr. 21, 1995), under CERCLA seeking reimbursement of the response costs incurred in the cleanup of hazardous substances at the Des Moines TCE Site. See generally No. 4-95-cv-10289, ECF No. 1. Following a bench trial, the Court found Dico liable for response costs. No. 4-95-cv-10289, ECF No. 247. On March 29, 2000, the Court entered judgment against Dico for $4,129,426.67 in past response costs and for future response costs with respect to the Des Moines TCE Site, which the Eighth Circuit affirmed. No. 4-95-cv-10289, ECF Nos. 252, 256. Dico has not paid this judgment.
In 1994, hazardous polychlorinated biphenyls (PCBs) were discovered in several buildings on Dico's property. ECF No. 350 at 2. The EPA initiated a removal action and issued a unilateral administrative order (UAO) requiring Dico to address the contamination by repairing and encapsulating its buildings to prevent the further release of PCBs into the environment and to implement an ongoing operation and maintenance plan. Id. In 2007, Defendant Titan Tire Corporation, on behalf of Dico, its corporate affiliate, sold several buildings that were the subject of the UAO to Southern Iowa Mechanical, L.L.C. (SIM) without disclosing the presence of the PCBs to SIM or notifying the EPA of the sale. Id. at 1–2. SIM dismantled the buildings, relocated the steel beams used to construct them to its property in Ottumwa, Iowa, and destroyed the rest of the building materials. Id. at 2. Later that year, the EPA learned of the sale of the buildings and their dismantling. Id. The EPA traced the buildings to SIM's property and found PCBs still attached to the steel beams and in the surrounding soil. Id. The EPA initiated another removal action at the SIM site to dispose of the hazardous substance. Id.
On October 26, 2010, the Government filed this action against Dico and Titan Tire under CERCLA seeking reimbursement of the response costs incurred in connection with the SIM Site and civil penalties and punitive damages for violations of the UAO issued with respect to the Des Moines TCE Site. Id. On summary judgment, the Court concluded that Defendants were liable for intentionally arranging for the disposal of a hazardous substance by selling the buildings to SIM; that Dico had violated the UAO by arranging for demolition of the buildings and failing to notify the EPA and could thus be subject to punitive damages; and that Defendants were liable for all response costs incurred as a result of the SIM site removal action. ECF Nos. 119, 128. On February 25, 2014, following a bench trial, the Court entered judgment in this case against Dico for $1,620,000 in civil penalties related to its violation of the UAO. ECF Nos. 198, 199. The Eighth Circuit affirmed the civil penalties award but vacated the Court's Order with respect to its conclusions on arranger liability, associated response costs, and punitive damages. United States v. Dico, Inc. , 808 F.3d 342, 351, 352 (8th Cir. 2015). On September 7, 2017, following a second bench trial, the Court entered judgment against both Defendants jointly and severally for past response costs amounting to $5,454,370 at the time of trial as well as future response costs at the SIM Site, and against Dico for $5,454,370 in punitive damages related to its violation of the UAO after concluding Defendants were liable as arrangers under CERCLA. ECF Nos. 350, 351. The Eighth Circuit affirmed. United States v. Dico, Inc. , 920 F.3d 1174, 1181 (8th Cir. 2019). Defendants have not paid either of these judgments.2
On September 15, 2020, the Government lodged a proposed Consent Decree with the Court. ECF Nos. 367, 367-1. The Consent Decree, if entered by the Court, would satisfy (1) the judgment rendered against Dico on March 29, 2000, in the amount of $4,129,426.67; (2) the judgments rendered against both Defendants on February 25, 2014, for civil penalties in the amount of $1,620,000, and on September 7, 2017, for response costs and punitive damages each in the amount of $5,454,370; and (3) any potential claims related to the Des Moines TCE and SIM Sites against Defendants' mutual parent corporation Titan International, Inc. ECF No. 367-1 ¶¶ 35, 36. In exchange for satisfaction of the judgments, Defendants and Titan International would be required, jointly and severally, to pay a total of $11,500,000, plus interest, to the United States and to donate the Dico property to the City of Des Moines3 free and clear of all liens and encumbrances. Id. ¶¶ 4, 9. The City would then be responsible for the remaining response actions required to return the property to productive use, under the EPA's oversight. Id. ¶ 14; ECF No. 367-2 at 19–28. The Consent Decree further provides a covenant not to sue or take administrative action under CERCLA relating to either site. ECF No. 367-1 ¶¶ 35, 37. Once entered, the Government would file notices that all three judgments entered by the Court have been satisfied, id. ¶ 36, and Defendants would also be required to dismiss their still-pending petition to the EPA's Environmental Appeals Board,4 id. ¶ 45.
On September 22, 2020, the Government published notice of the proposed Consent Decree in the Federal Register. See 85 Fed Reg. 184 at 59552 (Sept. 22, 2020) (). The Government did not receive any comments. ECF No. 368. The Des Moines City Council also placed the approval of the proposed Consent Decree on the public agenda for their meeting held on September 14, 2020; no comments were voiced against the proposed Consent Decree. ECF No. 370 at 7.
On October 23, 2020, the Government filed its unresisted motion for entry of the proposed Consent Decree. Id. The Court concludes an evidentiary hearing is not necessary in this matter. See United States v. BP Amoco Oil PLC , 277 F.3d 1012, 1017 (8th Cir. 2002) (); see also United States v. Cannons Eng'g Corp. , 899 F.2d 79, 94 (1st Cir. 1990) (). Nor does the Court believe that an independent expert will substantially aid it in its review. See Grove v. Principal Mut. Life Ins. Co. , 200 F.R.D. 434, 443–44 (S.D. Iowa 2001) ().
"CERCLA is a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites." Dico, Inc. v. Amoco Oil Co. , 340 F.3d 525, 529 (8th Cir. 2003) (quoting Key Tronic Corp. v. United States , 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994)...
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