United States v. Dico, Inc.
Citation | 892 F.Supp.2d 1138 |
Decision Date | 24 September 2012 |
Docket Number | No. 4:10–cv–00503.,4:10–cv–00503. |
Parties | UNITED STATES of America, Plaintiff, v. DICO, INC. and Titan Tire Corporation, Defendants. |
Court | United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa |
OPINION TEXT STARTS HERE
Bryan S. Hatch, Bryan S. Hatch, Stinson Morrison Hecker LLP, Omaha, NE, Mark E. Johnson, Brian D. Williams, Mark E. Johnson, Brian D. Williams, Stinson Morrison Hecker LLP, Kansas City, MO, for Plaintiff.
Eric C. Albert, Sara C. Colangelo, Loren A. Remsberg, Sarah D. Himmelhoch, U.S. Dept of Justice, Washington, DC, for Defendants.
Before the Court is the United States of America's (“Plaintiff”) Motion for Partial Summary Judgment on Arranger Liability (“Plaintiff's Motion”), filed June 8, 2012. Clerk's No. 61. On July 9, 2012, Dico, Inc. (“Dico”) and Titan Tire Corporation (“Titan”) (collectively “Defendants”) filed their Memorandum in Opposition to Plaintiff's Motion. Clerk's No. 68. On July 25, 2012, Plaintiff filed a Reply Memorandum. Clerk's No. 78. On August 22, 2012, the Court held a hearing on Plaintiff's Motion.1See Clerk's No. 86. The matter is fully submitted.
Dico is a Delaware corporation “doing business in this district.” Pl.'s Statement of Undisputed Facts (“Pl.'s Facts”) ¶ 1. Titan is an Illinois corporation also “doing business in this district.” Id. ¶ 7. This lawsuit arose out of Plaintiff's claims under “Sections 106, 107 and 113(g) of the Comprehensive Environmental Response, Compensation, and Liability Act [“CERCLA”] of 1980.” Compl. ¶ 2. Plaintiff seeks to recover unreimbursed response costs, civil penalties, and punitive damages in connection with the release and threatened release of PCB 2 at Southern Iowa Mechanical's (“SIM”) site in Ottumwa, Iowa. See id. Plaintiff also prays that this Court enter a declaratory judgment holding Defendants liable for all future response costs that Plaintiff will incur as a result of this release and threatened release of PCB at SIM's Ottumwa location. See id.
The discovery of PCB in some of Dico's buildings' insulation 3 led to an investigation by the Environmental Protection Agency (the “EPA” or the “Agency”). This investigation culminated with the issuance of an unilateral administrative order on March 4, 1994 (the “1994 Order”) requiring Dico to implement a series of measures designed to prevent the release of PCB into the environment. See Pl.'s Facts ¶¶ 23–26, 34. Consistent with the terms of the 1994 Order, Dico and the EPA agreed on a Removal Action Work Plan to address the PCB contamination. See id. ¶¶ 36, 41. Dico performed the Work Plan according to its terms and submitted a final report to the EPA on April 11, 1997 (the “1997 Report”) indicating that it had completed the required removal. See id. ¶ 43. Less than a month later, on May 8, 1997, the EPA issued a notice of completion approving the 1997 Report and noting that “the continuing obligations” of the 1994 Order remained in effect.4See id.
¶ 76; see also App. to United States' Statement of Undisputed Facts (“Pl.'s App.”) at 218.
After 2001, Dico did not use or occupy “on a routine basis” some of the PCB-contaminated buildings subject to the 1994 Order.5See Pl.'s App. at 531 ¶ 22. Because of this, “at some point prior to 2004,” Dico decided to sell these buildings and authorized Titan's President, William Campbell (“Campbell”), to act as its agent in negotiating the sales. See Pl.'s Facts ¶ 98. To that end, in 2007, Titan, on behalf of Dico, entered into three transactions with SIM: two “demo and remove” contracts concerning the maintenance building and the western portion of building 3, and one purchase agreement for buildings 4 and 5. See id. ¶ 109. SIM paid Dico $1.00 per square foot to acquire these four buildings.6See Pl.'s App. at 414–15; 417.
These three transactions, however, were not the only transactions between Defendants and SIM. See Pl.'s Facts ¶ 102; see also Defs.' App. at 138–39. SIM purchased Dico's weld shop building in 2004 and the northern part of its production building in 2007. See Pl.'s Facts ¶ 102; Defs.' App. at 138–39; Hr'g Tr. at 64:9–13. Neither of these two buildings fell under the scope of the 1994 Order as they had never been tested for PCB, nor had they been otherwise confirmed to contain PCB. See Pl.'s Facts ¶ 34; see also Defs.' Mem. in Opp'n to Pl.'s Mot. for Partial Summ. J. on “Arranger Liability” () at 7.
SIM's motives for entering the three 2007 transactions are far from clear. Compare Pl.'s App. at 517 ¶¶ 10, 12 ( ) with Pl.'s App. at 516 ¶ 4 ( ) and Defs.' App. at 821 ¶ 4, 824–25 ¶ 5 ( ). Having carefully examined the record on summary judgment, the Court notes that the evidence concerning SIM's motives is self-contradictory, inconsistent, and confusing. For instance, SIM states that the buildings it purchased from Defendants were “movable steel buildings” which SIM intended to “disassemble[ ] and remove[ ] ... to its [Ottumwa] property for later use.” Pl.'s App. at 118 ¶ 2; 121 ¶ 16. For this reason, SIM did not consider its activities on Dico's property to be demolition, but rather disassembly.7See id. at 118 ¶ 2. On the other hand, SIM also describes its motives for purchasing the buildings by stating that it “wanted to buy only the steel beams” and planned on discarding the remaining building components or selling them for scrap. See id. at 517 ¶ 10. SIM further states that it never intended to reuse every component of these buildings and that its transactions with Defendants were not conditioned on reusing all of the building components. See id. at 517 ¶¶ 12–13.
In addition to disputing SIM's motives, the parties also disagree as to Defendants' motives for selling the buildings to SIM. Defendants maintain that they “did not sell any of these buildings for the purpose of disposing, treating, or transporting any hazardous substances.” Defs.' App. at 811 ¶ 12; 825–26 ¶ 8. Defendants further claim that these buildings were commercially useful products.8See Pl.'s App. at 666, pp. 241:1–3 & 241:23–25. Plaintiff, on the other hand, insists that the evidence permits but one reasonable inference—Defendants entered the three 2007 contracts “for the purpose of discarding a used and no longer useful product containing [PCB].” Pl.'s Mem. in Supp. of Mot. for Partial Summ. J. (“Pl.'s Br.”) at 12. In support, Plaintiff urges this Court to consider that Dico “had no use for the [PCB-contaminated] [b]uildings,” that “Dico had no employees after the mid–1990s,” that two of the three contracts at issue were labeled “demo[lish] and remove,” that Defendants did not pay sales tax 9 on these transactions, that Defendants did not disclose the environmental history of the buildings, and that by selling them to SIM, Dico “eliminated a $2.87 million liability 10 in favor of a $150,000 profit.” 11Id. at 13–14, 18. Furthermore, Plaintiff argues that Defendants deliberately chose to contract with SIM because SIM was a “patsy ... who wouldn't ask the tough questions because [it] was not a demolition contractor.” Hr'g Tr. at 36:11–13.
Despite the parties' disagreement on almost all aspects of this case, they agree on at least one issue—at the time of entering the three 2007 contracts, SIM did not know that, in 1992, Eckenfelder, Inc. confirmed the presence of PCB in some of the buildings purchased by SIM. See Pl.'s Facts ¶ 118; Pl.'s App. at 517 ¶¶ 14–15; Defs.' App. at 821 ¶ 6. Defendants admit that they did not share this information with SIM, but point out that they warned SIM “not to breach the asphalt cap under or surrounding the structures.” Pl.'s Facts ¶ 119. This asphalt cap, however, had nothing to do with the PCB contamination; rather, it had been installed in an effort to contain an existing groundwater contamination at the Dico site. See Hr'g Tr. at 36:6–10. Following its purchase of the Dico buildings, SIM dismantled them and disposed of all materials, except for the steel beams, which it took to its Ottumwa site. See Pl.'s Facts ¶¶ 129–30; Hr'g Tr. at 13:8–12.
When, on September 9, 2007, the EPA learned of the buildings' sale, the Agency undertook efforts to locate the building components. See Pl.'s Facts ¶¶ 136–37, 139–40. It discovered that SIM had stored the steel beams at its Ottumwa site “in piles in a large open area, many in direct contact with the ground ... and not protected from the elements.” 12Id. ¶ 149. Pieces of insulation were visible among these piles. See id.; see also Pl.'s App. at 673. In May of 2008, the EPA tested 13 samples taken from the steel beam piles and the soil in the vicinity of the piles and confirmed that PCB was present on at least some of the beams, in the soil, and in some of the remaining insulation attached to the beams. See Pl.'s Facts ¶¶ 150–51; see also Pl.'s App. at 225–28; 234. The EPA, however, had no way of tracing the origin of this PCB. See Defs.' App. at 138–39. The Agency knew that the beams came from Dico buildings, but could not confirm whether they came from buildings subject to the 1994 Order or from other Dico buildings.14See id. at 136–39; see also
Defendants insist that the steel beams taken from the buildings at issue were free from PCB. See Defs.' App. at 879 ¶¶ 1.2–1.5; Hr'g Tr. at 53:16–18. In support, they assert that the wall and ceiling insulation was the only confirmed source of PCB. See Defs.' App. at 879 ¶ 1.5. Notably, Defendants state, the 1994 Order makes no mention of the buildings' steel beams. See id. ¶ 1.4. Furthermore, Mary Peterson 15 believed that the PCB testing of the steel beams at SIM's facility was “a precautionary measure,” and she “very much...
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