United States v. Puerto Rico Indus. Dev. Co.

• Decision Date: 31 May 2019
• Docket Number: Civil No. 15-2328 (FAB)
• Citation: 386 F.Supp.3d 162
• Parties: UNITED STATES of America, Plaintiff, v. PUERTO RICO INDUSTRIAL DEVELOPMENT COMPANY, Defendant.
• Court: U.S. District Court — District of Puerto Rico

386 F.Supp.3d 162

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 May 31, 2019

Catherine Adams Fiske, United States Department of Justice, Boston, MA, Richard Samuel Greene, IV, United States Department of Justice Environmental Enforcement Section, Patrick B. Bryan, US Department of Justice—Environment & Natural Res DIV, Washington, DC, for Plaintiff.

Juan J. Casillas-Ayala, Diana M. Batlle-Barasorda, Casillas, Santiago & Torres, LLC, Victor D. Candelario-Vega, Quinones & Arbona, PSC, Ana Maria Palou-Balsa, Puerto Rico Industrial Company, Giselle M. Martinez-Velazquez, Cancio, Nadal, Rivera & Diaz, PSC, San Juan, PR, for Defendant.

OPINION AND ORDER

BESOSA, District Judge.

Before the Court is the United States' motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 (" Rule 56"). (Docket No. 142.) The United States seeks to recover $ 5,398,161.04 from defendant Puerto Rico Industrial Development Company ("PRIDCO") pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607 et seq. Id. at p. 13. For the reasons set forth below, the United States' motion for summary judgment is GRANTED .

I. Background

This litigation concerns contaminated groundwater in Maunabo, Puerto Rico (hereinafter, the "property"). 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, Ex. 3 at p. 2.) To accomplish these ends, PRIDCO maintains industrial facilities throughout Puerto Rico. Id. The property, which PRIDCO acquired in 1964, is among these facilities. (Docket No. 117, Ex. 4 at p. 2.)

The Puerto Rico Aqueduct and Sewer Authority ("PRASA") operates four groundwater supply wells in Maunabo, providing water to 14,000 people. (Docket No. 101, Ex. 6 at p. 12.) Between 2001 and 2004, PRASA detected volatile organic compounds, including trichloroethylene ("TCE") and cis-1, 2-dichloroethene ("cis-1, 2-DCE"), in the water supply.¹ (Docket No. 101, Ex. 3 at p. 23.) TCE and cis-1, 2-DCE are hazardous substances. Id. Subsequently, the United States Environmental Protection Agency ("EPA") identified three plumes of contaminated groundwater throughout the Municipality of Maunabo: (1) the cis-1, 2-DCE plume, (2) the PCE plume, and (3) the 1, 1-DCE plume. (Docket No. 101, Ex. 5 at p. 171.) The cis-1, 2-DCE plume is located below PRIDCO's property. (Docket No. 101, Ex. 6 at p. 26.)² Together, the three plumes comprise the Maunabo Area Groundwater Contamination Superfund Site (hereinafter, the "site"). Id. at p. 12. The EPA placed the site on the National Priorities List, a compilation of the most contaminated sites in the United States. Id. at p. 15.³

The United States commenced this action on September 25, 2015. (Docket No. 1.) The Court granted the United States' motion to trifurcate this litigation into a Liability Phase ("Phase I"), a Cost Phase ("Phase II"), and a Contribution Phase ("Phase III"). (Docket No. 85.) In Phase I, the Court held that PRIDCO is prima facie liable pursuant to CERCLA for all response costs incurred by the EPA in connection with the cis-1, 2-DCE plume.

United States v. P.R. Indus. Dev. Co., 287 F. Supp. 3d 133 (D.P.R. 2017) (Besosa, J.).⁴ The Court granted PRIDCO leave, however, to assert the third-party defense in Phase II. Id. at 141 and 153.

PRIDCO and the United States filed cross-motions for summary judgment regarding the third-party defense. (Docket Nos. 142 and 143.) The Court held that the third-party defense is inapplicable, a disposition that solidified PRIDCO's status as a liable party pursuant to CERCLA. United States v. P.R. Indus. Dev. Co., 368 F.Supp.3d 326, 334 (D.P.R. 2019) (Besosa, J.) (holding that PRIDCO failed to "establish by a preponderance of the evidence that an ‘act or omission of a third party other than an employee or agent of [PRIDCO] ... caused the groundwater contamination’ ") (citing 42 U.S.C. § 9607(b)(3) ).⁵

The United States also moved for summary judgment regarding costs, seeking to recover $ 5,398,161.04 from PRIDCO. (Docket No. 142 at p. 13.) In its motion for summary judgment, the United States: (1) omitted "five small dollar contracts," (2) referred to the cis-1, 2-DCE plume as multiple plumes rather than a single plume, and (3) requested reimbursement for "all costs," a representation that contradicted its request for "only" past costs in its motion to limit the scope of judicial review. P.R. Indus. Dev. Co., 368 F.Supp.3d at 339–340. The Court ordered the United States to "specify which response actions (e.g. removal actions, remedial actions) underlie the costs that PRIDCO is purportedly liable for in this action." Id. at 339.

The United States subsequently provided supplemental documentation concerning the small dollar contracts, confirming that the "EPA's indirect costs and prejudgment interest, as [stated in the motion for summary judgement], are supported and have been calculated correctly." (Docket No. 166, Ex. 1 at p. 2.) The United States referred to the cis-1, 2-DCE plume as the "TCE-cis-1, 2-DCE Plumes" because TCE is also located on PRIDCO's property. Id. at p. 6. The terms "PRIDCO plume," "cis-1, 2-DCE plume," and "TCE-cis-1, 2-DCE plumes" are synonymous. Id.

The cost calculation in the United States' motion for summary judgment represents past costs because the "EPA has not yet commenced the [selected remedy for the site]." Id. at p. 1. PRIDCO is liable, however, for "all costs," including future costs. CERCLA provides that the Court "shall enter a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages." 42 U.S.C. § 9613(g)(2)(B) ; see In re Dant & Russell, Inc., 951 F.2d 246, 249–50 (9th Cir. 1991) ("CERCLA plaintiffs will spend some money responding to an environmental hazard. They can then go to court and obtain reimbursement for their initial outlays, as well as a declaration that the responsible party will have continuing liability for the cost of finishing the job."). Congress recognized that "CERCLA cleanups are protracted ordeals that usually require a series of removal actions spanning several years." United States v. GE, 670 F.3d 377, 394 (1st Cir. 2012) (citing Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 16 (1st Cir. 2004) (noting that the decontamination of hazardous substances is "done in phases")). The United States need not relitigate CERCLA liability to recover future costs from PRIDCO. PRIDCO may, however, contest the amount of response costs in subsequent CERCLA litigation. United States v. USX Corp., 68 F.3d 811, 819 n.17 (3rd Cir. 1995) ("Essentially, [ section 9613(g)(2) ] mandates collateral estoppel effect to a liability determination. Of course, a defendant would remain able to contest the amount of response costs or whether work undertaken was consistent with the national contingency plan.").

According to the United States, the response costs total $ 5,398,161.04. (Docket No. 142 at p. 10.) Because PRIDCO failed to present a genuine issue of material fact as to costs, summary judgment is warranted.

II. Summary Judgment Standard

A court will grant summary judgment if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party. A fact is material if it has the potential of determining the outcome of the litigation." Dunn v. Trs. of Bos. Univ., 761 F.3d 63, 68 (1st Cir. 2014) (internal citation omitted).

The role of summary judgment is to "pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required." Tobin v. Fed. Exp. Corp., 775 F.3d 448, 450 (1st Cir. 2014) (internal citation omitted). The party moving for summary judgment has the initial burden of "demonstrat[ing] the absence of a genuine issue of material fact" with definite and competent evidence. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Maldonado-Denis v. Castillo-Rodríguez, 23 F.3d 576, 581 (1st Cir. 1994). The movant must identify "portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any’ " which support its motion. Celotex, 477 U.S. at 323, 106 S.Ct. 2548 (citing Fed. R. Civ. P. 56(c) ).

Once a properly supported motion has been presented, the burden shifts to the nonmovant "to demonstrate that a trier of fact reasonably could find in [its] favor." Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000) (internal citation omitted). "When the nonmovant bears the burden of proof on a particular issue, [he or] she [or it] can thwart summary judgment only by identifying competent evidence in the record sufficient to create a jury question." Tobin, 775 F.3d at 450-51. A court draws all reasonable inferences from the record in the light most favorable to the nonmovant, but it disregards unsupported and conclusory allegations. McGrath v. Tavares, 757 F.3d 20, 25 (1st Cir. 2014).

III. Cost Recovery Pursuant to Section 9607(a)(4)(A) of CERCLA

PRIDCO is liable for "all costs of removal or remedial action incurred by the United States Government ... not inconsistent with the national contingency plan." 42 U.S.C. § 9607(1)(4)(A). Accordingly, the CERCLA cost analysis is a function of two variables: (1) the response actions implemented by the EPA, and (2) consistency with the National Contingency Plan ("NCP").

A. Response Actions

CERCLA sets forth two categories of response actions: (1) removal actions, and (2) remedial actions....