United States v. P.R. Indus. Dev. Co.

• Citation: 287 F.Supp.3d 133
• Decision Date: 07 December 2017
• Docket Number: Civil No. 15–2328 (FAB)
• Parties: UNITED STATES of America, Plaintiff, v. PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY, Defendant.
• Court: U.S. District Court — District of Puerto Rico

287 F.Supp.3d 133

UNITED STATES of America, Plaintiff,
v.
PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY, Defendant.

Civil No. 15–2328 (FAB)

United States District Court, D. Puerto Rico.

Signed December 7, 2017

Richard Samuel Greene, IV, Patrick B. Bryan, Claire Helen Woods, United States Department of Justice Env. Natural Res. Div.—Env. Enforcement Section, Washington, DC, for Plaintiff.

Hector Benitez–Arraiza, Luis Daniel Rosa–Velazquez, Victor D. Candelario–Vega, Giselle M. Martinez–Velazquez, Quinones & Arbona, P.S.C., Juan J. Casillas–Ayala, Diana M. Batlle–Barasorda, Casillas, Santiago & Torres, LLC, Ana Maria Palou–Balsa, Puerto Rico Industrial Company, San Juan, PR, for Defendant.

OPINION AND ORDER

BESOSA, District Judge.

287 F.Supp.3d 137

On September 25, 2015 the United States of America ("United States") filed a complaint against the Puerto Rico Industrial Development Company ("PRIDCO") pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607 et seq. (Docket No. 1.) Subsequently, the United States filed an amended complaint. (Docket No. 8.) PRIDCO answered the amended complaint. (Docket No. 11.) Additionally, PRIDCO filed a third party complaint. (Docket No. 46.) The United States moved for summary judgment against PRIDCO pursuant to Federal Rule of Civil Procedure 56 (" Rule 56") on July 14, 2016. (Docket No. 101.) PRIDCO opposed the motion for summary judgment, and requested that the Court defer resolution of this motion pursuant to Federal Rule of Civil Procedure 56(d). (Docket Nos. 116 and 117.) The United States filed a reply. (Docket No. 127.) For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART the motion for summary judgment, and DENIES PRIDCO's request to defer resolution of the summary judgment motion. Moreover, The Court further ORDERS the United States and PRIDCO to meet and confer with each other regarding the third party complaint, which will be addressed at the January 16, 2018 pretrial conference.

I. Factual Background

This matter concerns contaminated groundwater located on property belonging to PRIDCO in Maunabo, Puerto Rico (hereinafter, "property").¹ PRIDCO is a government instrumentality of the Commonwealth of Puerto Rico, incorporated in 1942 to stimulate the formation of local firms and to attract foreign investment. (Docket No. 11 at p. 2; Docket No. 117–3 at p. 2.) To accomplish these ends, PRIDCO maintains an infrastructure development program, and facilities for lease or sale to qualified investors. (Docket No. 117–3 at p. 2.) The property, which PRIDCO acquired in 1964, is among these facilities. (Docket No. 117–4 at p. 2.)

The property includes three industrial structures. (Docket No. 101–4 at p. 17.) Between 1969 and 2015, PRIDCO leased the property to: (1) System Engineering Labs (1969 through 1971); (2) Coulter de Puerto Rico (1972 through 1980); (3) Solar Mar of Puerto Rico (1980 through 1984); (4) Orle International Company (1986 through 1989); (5) Puerto Rico Housing Department (1989 through 1991); (6) Municipality of Maunabo (1996 through 1998); (7) Premium Fruit Company (1999 through 2003); (8) E.I.G. Aqua Pura de Puerto Rico, Inc; (9) Juan Orozco, Ltd. (date of lease not specified); and (10) Centro de Acopio Manufacturing (date of lease not specified). (Docket No. 101–15 at p. 4.)

The Puerto Rico Aqueduct and Sewer Authority ("PRASA") operates four groundwater supply wells in Maunabo, providing water to 14,000 people. (Docket No. 101–6 at p. 12.) One of the four PRASA wells is located adjacent to the southern edge of the property (hereinafter,

287 F.Supp.3d 138

"Maunabo well"). (Docket No. 101–14 at p. 17.)

Between 2001 and 2004, PRASA detected volatile organic compounds ("VOC"), including trichloroethylene ("TCE") and cis–1, 2–dichloroethene ("cis–1, 2–DCE"), in the tap water of its customers.² (Docket No. 101–3 at p. 23.) TCE and cis–1, 2–DCE are hazardous substances. Id. In 2002, PRASA discovered that groundwater from the Maunabo well contained TCE and cis–1, 2–DCE. (Docket No. 101–6 at p. 12.) PRASA installed a carbon filtration system to treat the contaminated groundwater. (Docket No. 101–2 at p. 3.) In response to the contamination, PRASA commenced sampling groundwater from the Maunabo well three times a year to verify compliance with federal and local drinking water standards.³ Id.

The United States Environmental Protection Agency ("EPA") and the Puerto Rico Environmental Quality Board ("EQB") are responsible for decontamination of the groundwater.⁴ (Docket No. 101–6 at pp. 12—13.) The EPA confirmed that the groundwater from the Maunabo well is contaminated primarily with cis–1, 2–DCE. Id. at p. 26. After further investigation, the EPA discovered three plumes of contaminated groundwater throughout the Municipality of Maunabo. (Docket No. 101–5 at p. 171.) The three plumes are referred to as: (1) cis–1, 2–DCE, (2) PCE, and (3) 1, 1–DCE. (Docket No. 101–5 at p. 171.) The cis–1, 2–DCE plume is located below the property, "flow[ing] southwest toward [a] river, but is intercepted by [the Maunabo well]." (Docket No. 101–6 at p. 26; Docket No. 101–3 at p. 14.) The PCE plume is located south of the PRIDCO property near a former sugar mill. (Docket No. 101–4 at p. 18.) The 1, 1–DCE plume is located northwest of the property. (Docket No. 101–6 at p. 12.) Together, the three plumes comprise the Maunabo Area Groundwater Contamination Superfund Site (hereinafter, "site"). (Docket No. 101–6 at p. 12.). In 2006, the site was listed on the EPA's National Priorities List, a compilation of the most contaminated sites in the United States. (Docket No. 101–6 at p. 15.)

PRIDCO conducted an independent investigation of the contaminated groundwater beneath the property. GeoEnviroTech, the firm hired by PRIDCO to study the cis—1, 2–DCE plume, confirmed that the groundwater below the property contained hazardous substances. (Docket No. 101–14 at pp. 8, 19.)

The EPA incurred response costs related to decontamination efforts regarding the cis–1, 2–DCE plume. These efforts have included an investigation and the issuance of a Record of Decision ("ROD"). (Docket No. 101–2 at p. 3.) The ROD sets forth a remedy for the site, including air sparging for the cis–1, 2–DCE plume and

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monitored natural attenuation for the PCE and 1, 1–DCE plumes. (Docket No. 101–6 at p. 75.) The United States seeks reimbursement from PRIDCO "for all response costs, including enforcement costs, incurred by the EPA in connection" with efforts to decontaminate the cis–1, 2–DCE plume located below the PRIDCO property. (Docket No. 8 at p. 9.)

II. Motion to Defer Summary Judgment

PRIDCO moves for this Court to defer resolution of the summary judgment motion pursuant to Rule 56(d). (Docket No. 116 at p. 40.) Rule 56(d)"allows a summary judgment motion to be denied or the hearing on the motion to be continued, if the nonmoving party has not had an opportunity to make full discovery." Celotex Corp. v. Catrett, 477 U.S. 317, 326, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Deferment of summary judgment adjudication is appropriate if PRIDCO "shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition." Fed. R. Civ. P. 56(d) ; see In Re PHC Shareholder Litig., 762 F.3d 138, 144 (1st Cir. 2014) (holding that Rule 56(d) motions should be granted freely early in the litigation).

PRIDCO premises its Rule 56(d) motion on the contested source of contamination at the property. Outstanding discovery requests, PRIDCO argues, are "extremely relevant to PRIDCO's defense" and "may hold the key to alternative theories as to why there is contamination at the groundwater and not at the surface soil level, and what may be the source of the contamination." (Docket No. 116 at p. 45.)

The Court recognizes that PRDICO may have yet to receive relevant discovery. At this stage, however, the issue before the Court is one of liability. The Court granted the United States' motion to trifurcate this matter into a Liability Phase ("Phase I"), a Cost Phase ("Phase II"), and a Contribution Phase ("Phase III"). (Docket No. 85.) As discussed below, identifying the source of contamination is immaterial to the prima facie liability analysis. See Robertshaw Controls Co. v. Watts Regulator Co., 807 F.Supp. 144, 153 (D. Me. 1992) ("Congress specifically rejected including a causation requirement in Section [107]."). Consequently, the reason provided by PRIDCO to defer summary judgment as to liability is inapposite. The parties will exchange discovery pertaining to the source of contamination during Phase II and Phase III. Accordingly, PRIDCO's Rule 56(d) motion is DENIED .

III. Summary Judgment Motion

A. Standard of Review

Summary judgment serves to assess the evidence and determine if there is a genuine need for trial. Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990). The Court may grant a motion for summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a...