United States v. Northeastern Pharm. & Chem. Co.
| Decision Date | 31 January 1984 |
| Docket Number | No. 80-5066-CV-S-4.,80-5066-CV-S-4. |
| Citation | 579 F. Supp. 823 |
| Parties | UNITED STATES of America, Plaintiff, v. NORTHEASTERN PHARMACEUTICAL AND CHEMICAL COMPANY, INC., et al., Defendants. |
| Court | U.S. District Court — Western District of Missouri |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
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.
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
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).
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?
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?
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.
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) 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.
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 may...
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