United States v. Mottolo

• Decision Date: 27 March 1984
• Docket Number: Civ. No. 83-547-D.
• Court: U.S. District Court — District of New Hampshire
• Parties: UNITED STATES of America, Plaintiff, v. Richard MOTTOLO, Service Pumping & Drain Co., Inc., K.J. Quinn & Co., Inc., Lewis Chemical Corporation, Carl Sutera, Defendants. K.J. QUINN & CO., INC. Third Party Plaintiff, v. STATE OF NEW HAMPSHIRE Third Party Defendant.

629 F. Supp. 56

UNITED STATES of America, Plaintiff, v. Richard MOTTOLO, Service Pumping & Drain Co., Inc., K.J. Quinn & Co., Inc., Lewis Chemical Corporation, Carl Sutera, Defendants.

K.J. QUINN & CO., INC. Third Party Plaintiff, v. STATE OF NEW HAMPSHIRE Third Party Defendant.

Civ. No. 83-547-D.

United States District Court, D. New Hampshire.

March 27, 1984.

U.S. Atty. by Douglas J. Miller, Asst. U.S. Atty., Concord, N.H., F. Henry Habicht, II, Action Asst. Atty. Gen. Elizabeth Yu, Atty. Environmental Enforcement Section, Land and Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., Andrew S. Hogeland, Lynn Peterson, Office of Regional Counsel US E.P.A. Boston, Mass., for plaintiff.

Engel & Morse, P.A. by Lynn D. Morse, Exeter, N.H., for Richard Mottolo and Service Pumping & Drain Co., Inc.

Stark & Peltonen, P.A. by Rodney L. Stark Manchester, N.H., for K.J. Quinn & Co., Inc.

Sheehan, Phimney, Bass & Green, P.A. by James E. Higgins and Claudia C. Damon, Manchester, N.H., for Lewis Chemical Corp. and Carl Sutera.

Peter Beeson, Asst. Atty. Gen., Environmental Protection Div., Concord, N.H., for State of N.H.

ORDER

DEVINE, Chief Judge.

The United States of America brings this action under section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9607(a), for reimbursement of costs incurred by the United States in response to the release or threat of release of hazardous substances into the environment from defendant Mottolo's facility in Raymond, New Hampshire ("Mottolo site"). Jurisdiction is founded upon 28 U.S.C. § 1345.

Sutera Motion to Dismiss

Defendant Carl Sutera moves to dismiss claims brought against him by the United States. Rule 12(b)(6), Fed.R.Civ.P. Sutera and the United States present matters outside the pleadings, and the Court treats the motion as one for summary judgment. Rule 12(b), Fed.R.Civ.P.

In order to succeed in his motion for summary judgment, Sutera must demonstrate that, viewing the record in the light most favorable to the United States, matters presented to the Court reveal that there is no genuine issue as to any material fact and that Sutera is entitled to a judgment as a matter of law. Early v. Eastern Transfer, 699 F.2d 552, 554-55 (1st Cir.), cert. denied, 464 U.S. 824, 104 S.Ct. 93, 78 L.Ed.2d 100 (1983). A dispute of fact is material if it affects the outcome of the litigation, and is genuine if manifested by the substantial evidence going beyond the allegations of the complaint. Pignons S.A. de Mecanique de Precision v. Polaroid Corporation, 657 F.2d 482, 486 (1st Cir. 1981). Sutera bears the burden of showing that there is no genuine issue as to all the material facts necessary to entitle him to judgment. Donovan v. Agnew, 712 F.2d 1508, 1509, 1516 (1st Cir.1983). He must affirmatively show there is no genuine issue of fact as to every relevant issue raised by the pleadings. Emery v. Merrimack Valley Wood Products, Inc., 701 F.2d 985, 991 (1st Cir.1983); Mack v. Cape Elizabeth School Board, 553 F.2d 720, 722 (1st Cir. 1977).

The Court briefly recounts the parties' dealings as set forth in the complaint. Plaintiff United States alleges that defendant Richard Mottolo was the owner of the Mottolo site at which Mottolo, d/b/a Service Pumping & Drain Company ("Service"), transported, dumped, and discharged wastes containing hazardous substances. Complaint ¶ 4. Defendant Lewis Chemical Corporation ("Lewis"), a Massachusetts corporation, arranged with Mottolo and/or Service for the disposal of wastes containing hazardous substances owned or possessed by Lewis, which were disposed of at the Mottolo site. ¶ 7. Defendant Carl Sutera is and was at all relevant times the president and principal shareholder of Lewis. ¶ 8. Sutera was and is responsible for the conduct and management of the affairs and activities of Lewis. Id. He controls and controlled the affairs and activities of Lewis, and participated in arranging for the disposal of Lewis' wastes at the Mottolo site. Id. Lewis and Sutera are persons who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at the dump site owned or operated by another party or entity and containing such substances. ¶ 28.

Defendant Sutera argues that the complaint does not allege that he individually was a person who by contract, agreement, or otherwise arranged for disposal, treatment, or transportation of hazardous waste, and that he is not a person who owned or possessed hazardous substances within the meaning of section 107(a)(3) of CERCLA. In essence, Sutera argues that he operated as Lewis Chemical Corporation to limit his personal liability, and that the United States now improperly seeks to hold him vicariously responsible for the actions of the corporation.

The United States seeks to hold Sutera liable under the provisions of 42 U.S.C. § 9607(a)(3), which states:

any person who by contract, agreement or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment of hazardous substances owned or possessed by such person, by any other party or entity, at any facility owned or operated by another party or entity and containing such hazardous substances ... shall be liable....

"Person" means an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State, or any interstate body. 42 U.S.C. § 9601(21).

Sutera argues he is not a "person" who arranged for the transport or disposal of hazardous wastes within the meaning of CERCLA. Sutera maintains that any relevant activities occurred while he acted in his capacity as president and shareholder of Lewis; that he did not engage in relevant activities as an individual; that he did not abuse the privilege of operating in the corporate form; and that he breached no duty and broke no existing law at the time he engaged in any relevant activity.

Second, Sutera argues that he did not "own or possess" hazardous substances and that ownership or possession of hazardous substances is required for liability under CERCLA. Sutera claims that Lewis, or a previous occupant of the Lewis plant, owned or possessed the substances. The United States argues that Sutera "possessed" the substances within the meaning of CERCLA by virtue of his control over them. Furthermore, the United States argues that because Sutera arranged for the disposal of the substances, it is not necessary that he owned or possessed them.

In support of his contentions, Sutera avers that he is now and was in 1977-78 the President, Treasurer, and sole shareholder of Lewis. Sutera Affidavit ¶ 1. The number of Lewis employees has fluctuated between 7 and 12 in addition to himself. ¶ 4. In about 1977 Lewis set up operations in a former leather plant and cleaned up bits of leather and latex. ¶¶ 6, 7. In 1977-78 Anthony Benvenuto, office manager for Lewis, first contacted Service to clear a clogged drain at the plant. ¶ 8. A representative of Service let Benvenuto know that he could remove rubbish, and after this was brought to Sutera's attention, Sutera approved paying Service to remove old leather and latex placed by Lewis employees in barrels stored on the plant property. ¶ 9. Sutera, Lewis, or Lewis's employees did not authorize and are not aware of removal of any toxic materials by Service. ¶ 10.

As president of Lewis, although he does not do everything every day, Sutera is responsible for the entire operation. ¶ 11. In this capacity Sutera authorized Service to remove barrels of leather and latex from the Lewis plant. Id. Sutera had no role to play in making or deciding to make telephone calls to Service to let them know they could pick up a load from Lewis. ¶ 12. Mottolo was given no instructions or recommendations as to proper disposal methods by Sutera or any other Lewis employee. ¶ 13. Neither Sutera nor any Lewis employee had any direct knowledge and/or supervision of Service's transportation or disposal of the materials which originated from Lewis. ¶ 14. The materials that Lewis paid Mottolo to take were the property of the corporation and were not Sutera's personal property. ¶ 21. Sutera's contact with those materials was solely in his capacity as agent or servant of the corporation. ¶ 21.

The United States argues that although it has not been given a reasonable opportunity to pursue discovery,¹ it has been able to gather evidence from other sources, which raises a genuine dispute on the facts of Sutera's participation in and control over Lewis' waste disposal practices. Sutera was involved in "basically every facet" and "just every aspect" of Lewis. 1983 Sutera Deposition, p. 11. He makes all the decisions as to where wastes will be disposed of. Id. at 132. Sutera gave the okay for removal of wastes by Mottolo after Mottolo had come down and cleared the drain and made it known that he could remove rubbish. 1980 Sutera Deposition, p. 73. Sutera is responsible for the entire operation of Lewis and does just about everything. Id. at 117. Sutera is

responsible for what happens. I don't actually do everything. In other words, a decision such as giving Mottolo a toxic chemical would—would not be able to come from anyone buy sic myself. No one has the authority to do something of that—of that gravity, to make that kind of decision. Now, once I decide that we're going to work along with Mottolo, that we'll give him this material, it wouldn't be my function to call him up each and every time we had to give him something. One of my guys in the plant would be capable of calling him up and saying we have a load for you to pick up. So although I am responsible for making the judgment

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