United States v. Northeastern Pharm. & Chem. Co., No. 80-5066-CV-S-4.

CourtUnited States District Courts. 8th Circuit. Western District of Missouri
Citation579 F. Supp. 823
Docket NumberNo. 80-5066-CV-S-4.
PartiesUNITED STATES of America, Plaintiff, v. NORTHEASTERN PHARMACEUTICAL AND CHEMICAL COMPANY, INC., et al., Defendants.
Decision Date31 January 1984

579 F. Supp. 823

UNITED STATES of America, Plaintiff,
v.
NORTHEASTERN PHARMACEUTICAL AND CHEMICAL COMPANY, INC., et al., Defendants.

No. 80-5066-CV-S-4.

United States District Court, W.D. Missouri, S.D.

January 31, 1984.


579 F. Supp. 824
COPYRIGHT MATERIAL OMITTED
579 F. Supp. 825
COPYRIGHT MATERIAL OMITTED
579 F. Supp. 826
Vernon Poschel, Asst. U.S. Atty., Kansas City, Mo., John R. Barker, Environmental Enforcement Section, Dept. of Justice, Washington, D.C., Dan Shiel, E.P.A., Kansas City, Mo., James Kohanek, E.P.A., Washington, D.C., for plaintiff

Ted L. Perryman, Roberts & Heneghan, Inc., St. Louis, Mo., for defendant Northeastern Pharmaceutical, Michaels & Lee.

Howard Holtzmann, Holtzmann, Wise & Shepard, New York City, John C. Noonan, Stinson, Mag & Fizzell, Kansas City, Mo., for defendant Syntex Agribusiness.

Ronald Mills, pro se.

RUSSELL G. CLARK, Chief Judge.

 INDEX TO MEMORANDUM OPINION
                 PAGE NO
                Summary of Issues 826
                Summary of Conclusions of Law 827
                Initial Findings of Fact 827
                 The NEPACCO Manufacturing Process 828
                 Disposal of Hazardous Waste at NEPACCO 829
                 Governmental Response 830
                 Endangerment to Health and the Environment 832
                I. Section 7003 of the Resource Conservation
                and Recovery Act of 1976 (RCRA), 42 U.S.C. §
                6973 (1980) 833
                II. Sections 104, 106(a) and 107(a) of the Comprehensive
                Environmental Response, Compensation
                and Liability Act (CERCLA) of 1980, 42
                U.S.C. §§ 9604, 9606(a) and 9607(a) 838
                 A. Retroactive Application of CERCLA to
                Non-Negligent Past Off-Site Generators and
                Transporters 839
                 B. Standard of Liability—Strict Liability 843
                 C. Joint and Several Liability 844
                 D. Imminent and Substantial Endangerment—Section
                 106(a), 42 U.S.C. § 9606(a) 845
                III. Liability of the Defendants 846
                 Mills 846
                 NEPACCO 847
                 Lee 847
                 Michaels 849
                IV. Recoverable Response Costs 850
                

MEMORANDUM OPINION

The plaintiff instituted this action on August 1, 1980 and filed an amended complaint on August 19, 1982 seeking injunctive relief and reimbursement of all costs incurred in performing certain remedial and removal actions at the Denney farm site, near Verona, Missouri, pursuant to section 7003 of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6973, and sections 104, 106(a) and 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9604, 9606(a) and 9607(a). The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1345; 42 U.S.C. § 6973, and 42 U.S.C. §§ 9604, 9606(a), and 9613(b).

Summary of Issues

The Court considered the following issues:

1. Whether section 7003 of RCRA or sections 104, 106(a) and 107(a) of CERCLA apply retroactively to hold past non-negligent off-site generators and transporters liable for the costs incurred in the cleanup of an inactive or abandoned hazardous waste disposal site?

2. Whether sections 104, 106(a) and 107(a) of CERCLA apply retroactively to hold past non-negligent off-site generators and transporters liable for response costs incurred prior to the enactment of CERCLA?

3. If CERCLA is to be applied retroactively, does it violate the Fifth Amendment Due Process Clause of the United States Constitution?

579 F. Supp. 827

4. What standard of liability should be imposed under CERCLA — strict liability or negligence?

5. If the defendants are liable, whether joint and several liability should be imposed?

6. Whether the Denney farm disposal site presented an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from the site?

7. Whether these specific defendants are liable under the provisions of CERCLA?

8. If the defendants are liable under CERCLA, what costs are recoverable by plaintiff?

Summary of Conclusions of Law

The Court finds that:

1. Section 7003 of RCRA does not apply retroactively to past non-negligent off-site generators and transporters.

2. Sections 104, 106(a) and 107(a) of CERCLA do apply retroactively to past non-negligent off-site generators and transporters.

3. Sections 104, 106(a) and 107(a) of CERCLA do not apply retroactively to response costs incurred prior to December 11, 1980.

4. CERCLA does not violate the Fifth Amendment Due Process Clause.

5. The standard to be applied in determining liability under CERCLA is strict liability.

6. CERCLA allows for the imposition of joint and several liability.

7. The Denney farm site presented an imminent and substantial endangerment to the public health, welfare and the environment.

8. All four defendants are jointly and severally liable pursuant to CERCLA for all costs incurred by the plaintiff after December 10, 1980, including costs for salaries, expenses and attorney fees.

9. All four defendants are jointly and severally liable for prejudgment interest at the rate of 9% per annum calculated from August 19, 1982, as well as, all future costs of removal or remedial action incurred by the plaintiff not inconsistent with the national contingency plan.

INITIAL FINDINGS OF FACT

Defendant Northeastern Pharmaceutical and Chemical Co., Inc. (NEPACCO) is a corporation incorporated in 1966 under the laws of Delaware with its principal office in Stamford, Connecticut. NEPACCO's corporate charter was forfeited by the Delaware Secretary of State on August 22, 1976, for failure to maintain an agent for service of process. NEPACCO never filed a certificate of voluntary dissolution with the Delaware Secretary of State, although in 1974 its assets were liquidated and the proceeds distributed to shareholders after payment of the corporation's outstanding debts.1 Defendant Edwin B. Michaels (Michaels)

579 F. Supp. 828
formed NEPACCO, held stock in the corporation, and was its president. Defendant John W. Lee (Lee) was the vice-president of NEPACCO and was also a stockholder. Defendant Ronald Mills (Mills) was employed by NEPACCO at the Verona, Missouri plant as shift supervisor. Defendant Syntex Agribusiness, Inc. (Syntex) is a corporation incorporated in the State of Delaware and doing business in the State of Missouri.

The NEPACCO Manufacturing Process

On June 7, 1967, defendant Michaels applied for a patent on a method for manufacturing hexachlorophene. On February 6, 1968, defendants Michaels and Lee applied for a patent on a method for purifying 2,4,5-trichlorophenol (TCP) and hexachlorophene. On or about November 18, 1969, NEPACCO entered into an agreement with Hoffman-Taff, Inc., whereby NEPACCO leased portions of the premises at an existing manufacturing facility located near Verona, Missouri, and purchased manufacturing equipment used by Hoffman-Taff and located therein for the purpose of manufacturing hexachlorophene. Hoffman-Taff had manufactured the compound known as agent orange prior to their closure and subsequent sell-out to Syntex. NEPACCO manufactured hexachlorophene at the Verona facility from April 1970 to January 1972. Michaels was present at the Verona facility on a permanent basis during the first year of operation and construction (1970) and during that time had overall responsibility for company operations with the upper level employees reporting to him. By early 1971, Michaels had moved back to the state of Connecticut leaving the direct management responsibility for the NEPACCO plant operation and for quality control with Lee.

The process by which NEPACCO manufactured hexachlorophene involves two steps: first, the production of 2,4,5-trichlorophenol (TCP) and second, the production of the finished product, hexachlorophene. The first step in the production of hexachlorophene involved a reaction to form a crude intermediate TCP. This reaction involved a distillation process resulting in refined TCP as the distillate. 2,3,7,8-tetrachlorodibenzo-p-dioxin (dioxin or TCDD), among other chemicals, was formed as a by-product in the TCP process. The residue or waste that resulted from the TCP distillation is called still bottoms, described as a "dark oily sludge." The highest concentrations of dioxin are found in the still bottoms. Still bottoms were removed from the process every 3rd or 4th batch and transferred to a 7,500 gallon holding tank that was located on the west side of the plant. The holding tank was periodically emptied by waste haulers, who carried the still bottom residue away in tank trucks.

The second step of the production process involved the reaction of the refined TCP with sulfuric acid to form hexachlorophene as a precipitate. Toluene and water were then added to this crude extraction. Decolorizing and filtering clays were added to extract the undesirable shades of color and other impurities, one of which was dioxin. The finished product was hexachlorophene that resembled "white flour." Waste streams from the second step included: waste solvents; recrop liquor remaining after the hexachlorophene had been precipitated; clay filter cake and waste water from both steps of the process as well as from general maintenance and cleaning.

Dioxin may have been found in each waste stream. TCP, TCB and Toluene may have been found in the waste solvents, contaminated waste water and clay filter cake. Hexachlorophene may have been found in the recrop liquor and clay filter cake. Depending upon the efficiency of the production system, the refined TCP

579 F. Supp. 829
may have contained dioxin that was passed on into the hexachlorophene process. Accordingly, the more efficient a system, the less dioxin contained in the refined TCP, if any. If the refined TCP did contain dioxin, then the dioxin would have been found in the following materials, listed in high to low concentration priority: clay filter cake, finished hexachlorophene and waste water. The industry standard in 1971 for levels of dioxin in refined TCP was one part per million (ppm). The process and equipment used by NEPACCO in 1971 met industry standards and it was conceivable that if the NEPACCO process was...

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123 practice notes
  • State of NY v. General Elec. Co., No. 83-CV-1615.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • June 26, 1984
    ...the release or threat of release of hazardous substances ...."12 See United States v. Northeastern Pharmaceutical & Chemical Co., 579 F.Supp. 823, 20 ERC 1401, 1425 (W.D.Mo.1984); United States v. Wade, 577 F.Supp. 1326, 20 ERC 1277, 1281 n. 4 (E.D.Pa.1983). Defendant's reliance on Environm......
  • O'NEIL v. Picillo, Civ. A. No. 83-0787 P.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • March 8, 1988
    ...entities must affirmatively show that their actions were consistent.... United States v. Northeastern Pharmaceutical and Chemical Co., 579 F.Supp. 823, 850-51 (D.Mo.1984); see United States v. South Carolina Recycling and Disposal, Inc., 653 F.Supp. 984, 1009 It is also clear from the statu......
  • United States v. Ward, No. 83-63-CIV-5.
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • September 9, 1985
    ...from these defenses, CERCLA imposes strict liability. United States v. Northeastern Pharmaceutical and Chemical Co., Inc. (NEPACCO), 579 F.Supp. 823, 843-44 (W.D.Mo.1984); United States v. Price, 577 F.Supp. 1103, 1113 (D.N.J. 1983); United States v. Chem-Dyne Corp., 572 F.Supp. 802, 805 (S......
  • California Dep. of Toxic v. Interstate Non-Ferrous, No. CIVF97-5016 OWW LJO.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • July 28, 2003
    ...v. Ward, 8 Chem. & Rad.Waste Litig.Rep. 484, 487 (D.N.C. May 14, 1984); United States v. Northeastern Pharmaceutical and Chemical Co., 579 F.Supp. 823, 844-45 (W.D.Mo.1984); United States v. A & F Materials Co., 578 F.Supp. 1249, 1256-57 (S.D.Ill.1984); United States v. Wade, 577 F.Supp. 13......
  • Request a trial to view additional results
121 cases
  • State of NY v. General Elec. Co., No. 83-CV-1615.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • June 26, 1984
    ...the release or threat of release of hazardous substances ...."12 See United States v. Northeastern Pharmaceutical & Chemical Co., 579 F.Supp. 823, 20 ERC 1401, 1425 (W.D.Mo.1984); United States v. Wade, 577 F.Supp. 1326, 20 ERC 1277, 1281 n. 4 (E.D.Pa.1983). Defendant's reliance on Environm......
  • O'NEIL v. Picillo, Civ. A. No. 83-0787 P.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • March 8, 1988
    ...entities must affirmatively show that their actions were consistent.... United States v. Northeastern Pharmaceutical and Chemical Co., 579 F.Supp. 823, 850-51 (D.Mo.1984); see United States v. South Carolina Recycling and Disposal, Inc., 653 F.Supp. 984, 1009 It is also clear from the statu......
  • United States v. Ward, No. 83-63-CIV-5.
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • September 9, 1985
    ...from these defenses, CERCLA imposes strict liability. United States v. Northeastern Pharmaceutical and Chemical Co., Inc. (NEPACCO), 579 F.Supp. 823, 843-44 (W.D.Mo.1984); United States v. Price, 577 F.Supp. 1103, 1113 (D.N.J. 1983); United States v. Chem-Dyne Corp., 572 F.Supp. 802, 805 (S......
  • California Dep. of Toxic v. Interstate Non-Ferrous, No. CIVF97-5016 OWW LJO.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • July 28, 2003
    ...v. Ward, 8 Chem. & Rad.Waste Litig.Rep. 484, 487 (D.N.C. May 14, 1984); United States v. Northeastern Pharmaceutical and Chemical Co., 579 F.Supp. 823, 844-45 (W.D.Mo.1984); United States v. A & F Materials Co., 578 F.Supp. 1249, 1256-57 (S.D.Ill.1984); United States v. Wade, 577 F.Supp. 13......
  • Request a trial to view additional results
2 books & journal articles
  • CERCLA Liability
    • United States
    • Superfund Deskbook -
    • August 11, 2014
    ...the site (citing United States v. Conservation Chem. Co., 619 F. Supp. 162 (W.D. Mo. 1985))); United States v. Ne. Pharm. & Chem. Co., 579 F. Supp. 823, 846–47 (W.D. Mo. 1984), af’d in part, reversed in part , 810 F.2d 726 (8th Cir. 1986). 90. Action Mfg. Co. v. Simon Wrecking Co., 428 F. S......
  • Environmental Contamination at U.S. Military Bases in South Korea and the Responsibility to Clean Up
    • United States
    • Environmental Law Reporter Nbr. 40-1, January 2010
    • January 1, 2010
    ...protect public health and welfare and the environment. 42 U.S.C. §9606(a) (2007). 70. United States v. Ne. Pharm. & Chem. Co. (NEPACCO), 579 F. Supp. 823, 14 ELR 20212 (W.D. Mo. 1984) (inding that a relatively small quantity of hazardous substances that are toxic at low dosage levels are su......

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