US v. American Cyanamid Co.

• Decision Date: 17 March 1992
• Docket Number: Civ. A. No. 89-0565 P.
• Citation: 786 F. Supp. 152
• Parties: UNITED STATES of America v. AMERICAN CYANAMID COMPANY and Rohm & Haas Company.
• Court: U.S. District Court — District of Rhode Island

786 F. Supp. 152

UNITED STATES of America v. AMERICAN CYANAMID COMPANY and Rohm & Haas Company.

Civ. A. No. 89-0565 P.

United States District Court, D. Rhode Island.

March 17, 1992.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Alex A. Beehler, Steve C. Gold, Environment and Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., for plaintiff.

Deming E. Sherman, Edwards & Angell, Providence, R.I., for defendants.

MEMORANDUM AND ORDER

PETTINE, Senior District Judge.

Once again, the Court visits the Picillo Pig Farm, a hazardous waste site in Coventry, Rhode Island. The United States government, through the Environmental Protection Agency, sued American Cyanamid Company and Rohm & Haas Company for recovery of clean-up ("response") costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA). The Court found the defendants liable in United States v. American Cyanamid Co., No. 89-0565P (D.R.I. May 31, 1990); the only remaining issue is the amount of recovery the United States may demand from defendants. The Court finds the defendants liable for the amount calculated on Table 1.

I. CASE HISTORY

The Picillo Pig Farm has been the center of at least three separate actions before this Court. Litigation surrounding this hazardous waste site began in 1977, when the problem was first recognized.

State environmental authorities discovered this chemical wasteland at Picillo Pig Farm in 1977 after combustible chemicals caused a dramatic explosion and towering flames to rip through the waste disposal site. After the fire, state investigators discovered large trenches and pits filled with free-flowing, multicolored, pungent liquid wastes; they also excavated approximately 10,000 barrels and containers in varying states of decay containing hazardous chemical wastes.

Violet v. Picillo, 648 F.Supp. 1283, 1286 (D.R.I.1986). This Court, in O'Neil v. Picillo, 682 F.Supp. 706 (D.R.I.1988), aff'd, 883 F.2d 176 (1st Cir.1989), cert. denied, 493 U.S. 1071, 110 S.Ct. 1115, 107 L.Ed.2d 1022 (1990), found American Cyanamid and Rohm & Haas jointly and severally liable to the State of Rhode Island.

The federal Environmental Protection Agency was not a party to the O'Neil litigation. The United States brought the present suit to recover its response costs associated with the clean-up of the Picillo Pig Farm. Based on nonmutual offensive collateral estoppel, the Court granted partial summary judgment to the government regarding defendants' liability on May 31, 1991.¹ United States v. American Cyanamid Co., No. 89-0565P (D.R.I. May 31, 1990).

Liability established, only the issue of the amount of recovery remained. On June 26, 1991, the Court referred this action to Special Master Stephen D. Anderson, Esq., for determination of the factual issues regarding the costs incurred by the United States in connection with the site. Special Master Anderson submitted his thorough and well-organized Report to the Court on November 13, 1991. Both parties, the United States and the generator defendants, have objected to certain findings of fact made by the Master. According to the Order of this Court dated June 26, 1991, the Court will decide de novo any of the Master's factual findings objected to by a party, as well as all questions of law based on the record of proceedings before the Special Master.

This opinion will proceed in three parts. First, the Court will review the general law of CERCLA recovery. Second, the Court will summarize the major aspects of the Special Master's findings. Third, the objections of the polluter defendants and the United States will be addressed. Discussion will be in terms of general categories of recovery; table 1 (at the end of the opinion) will set out the final dollar figures.

II. CERCLA "SUPERFUND" LAW

A. CERCLA AUTHORIZES AWARDING RESPONSE COSTS TO THE UNITED STATES GOVERNMENT

Congress enacted CERCLA, 42 U.S.C. §§ 9601-9675 in December 1980 "to initiate and establish a comprehensive response and financing mechanism to abate and control the vast problems associated with abandoned and inactive hazardous waste disposal sites." H.R.Rep. No. 1016(I), 96th Cong., 2d Sess. 22, reprinted in, 1980 U.S.Code Cong. & Admin.News 6119, 6125. Congress intended CERCLA to place the financial responsibility for cleanup on those polluters who generated and improperly disposed of hazardous wastes.

In broad terms, CERCLA set up a large federal fund known as the "Superfund." EPA uses Superfund money to clean up hazardous waste site dumps; the money spent is then recouped from the original polluters. There are approximately 1,200 identified Superfund sites in the United States, and the number increases by about 100 a year.²

Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), imposes liability on owners of hazardous waste sites, generators of hazardous waste, and transporters of hazardous waste for costs including:

(A) all costs of removal or remedial action incurred by the United States or a State or an Indian tribe not inconsistent with the national contingency plan;

42 U.S.C. § 9607(a)(4)(A). It is worth reiterating that all costs incurred by the government are recoverable under this section. This includes indirect costs and administrative expenses. United States v. R.W. Meyer, Inc., 889 F.2d 1497, 1500-04 (6th Cir.1989); United States v. Hardage, 733 F.Supp. 1424, 1432 (W.D.Okla.1989) hereinafter Hardage I.

In United States v. Northeastern Pharm. & Chem. Co., 579 F.Supp. 823 (W.D.Mo.1984), aff'd in part and rev'd in part on other grounds, 810 F.2d 726 (8th Cir.1986), cert. denied, 484 U.S. 848, 108 S.Ct. 146, 98 L.Ed.2d 102 (1987) hereinafter NEPACCO I, the Court interpreted the government's response costs to include:

(a) Investigations, monitoring and testing to identify the extent of danger to the public health or welfare or the environment.

(b) Investigations, monitoring and testing to identify the extent of the release or threatened release of hazardous substances.

(c) Planning and implementation of a response action.

(d) Recovery of the costs associated with the above actions, and to enforce the provisions of CERCLA, including the costs incurred for the staffs of the EPA and the Department of Justice.

Id. at 850.

Initial investigative costs are "clearly authorized" for recovery from parties liable under Section 107(a). New York v. General Electric Co., 592 F.Supp. 291, 298 (N.D.N.Y.1984); see also Hardage I, 733 F.Supp. at 1432; United States v. Conservation Chemical Co., 619 F.Supp. 162, 186 (W.D.Mo.1985); United States v. Wade, 577 F.Supp. 1326, 1333 n. 4 (E.D.Pa.1983).

Under Section 104(b), courts have held that the United States is entitled to recover its litigation costs from liable parties. NEPACCO I, 579 F.Supp. at 851; United States v. South Carolina Recycling & Disposal, Inc., 653 F.Supp. 984, 1009 (D.S.C. 1984), aff'd in part and vacated in part on other grounds sub nom., United States v. Monsanto Co., 858 F.2d 160 (4th Cir. 1988), cert. denied, 490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019 (1989) hereinafter SCRDI.

B. THE GOVERNMENT'S PRIMA FACIE CASE

The National Contingency Plan ("NCP"), promulgated pursuant to 42 U.S.C. § 9605, outlines procedures for selecting response actions to hazardous substance releases.³ Certain CERCLA directives refer to the NCP, including the relevant provision for CERCLA cost recovery actions.

During all phases of response, documentation shall be collected and maintained to support all action taken under this plan, and to form the basis for cost recovery. In general, documentation shall be sufficient to provide the source and circumstances of the condition, ... and accurate accounting of Federal or private party costs incurred....

40 C.F.R. § 300.69 (1986).

Once the government meets the threshold criteria, the burden of proof shifts to the defendants.

C. BURDEN OF PROOF IN AREA OF RESPONSE COSTS

Liable defendants must pay "all costs ... not inconsistent with the national contingency plan." 42 U.S.C. § 9607(a)(4)(A) (emphasis added). The NCP establishes detailed procedures for choosing appropriate response actions. "As long as the actions taken by the government were in harmony with the NCP, the costs incurred pursuant to those actions are presumed to be reasonable and therefore are recoverable." NEPACCO I, 579 F.Supp. at 851.

Defendants bear the burden of proving that the response costs claimed by the United States are inconsistent with the NCP. United States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 747 (8th Cir.1986), cert. denied, 484 U.S. 848, 108 S.Ct. 146, 98 L.Ed.2d 102 (1987) hereinafter NEPACCO II. To establish such inconsistency, defendants must prove that the agency's actions were arbitrary and capricious. Id. at 748; United States v. Monsanto Co., No. 86-2862-4A, slip op. at 5 (W.D.Tenn. Aug. 12, 1991) (judicial review limited to the administrative record and then only under the arbitrary and capricious standard).

This language in CERCLA requires deference by this court to the judgment of agency professionals. Defendants, therefor, may not seek to have the court substitute its own judgment for that of the EPA. Defendants may only show that the EPA's decision about the method of cleanup was "inconsistent" with the NCP in that the EPA was arbitrary and capricious in the discharge of their duties under the NCP.

United States v. Ward, 618 F.Supp. 884, 900 (E.D.N.C.1985).

III. SPECIAL MASTER'S REPORT AND RECOMMENDATION

Special Master Anderson conducted ten days of evidentiary hearings, received testimony from thirteen witnesses, and took into evidence thousands of pages of documents. See Master's Report at 1-10. In his Report, the Master addressed the two crucial issues which form the basis of the parties' objections. First, does the government's documentation of expenses satisfy the NCP...