US v. Bell Petroleum Services, Inc.

Decision Date08 March 1990
Docket NumberNo. MO-88-CA-05.,MO-88-CA-05.
Citation734 F. Supp. 771
PartiesUNITED STATES of America v. BELL PETROLEUM SERVICES, INC., et al.
CourtU.S. District Court — Western District of Texas

COPYRIGHT MATERIAL OMITTED

Nancy S. Nowak, U.S. Trustee's Office, Winstanley F. Luke, U.S. Atty's. Office, San Antonio, Tex., Barbara A. Finamore, U.S. Dept. of Justice, Washington, D.C., Harry Kelso, Peter R. Mounsey and Craig E. Johnson, U.S. Dept. of Justice, Land & Natural Resources Div., Washington, D.C., and Thomas R. Bartman, U.S. Dept. of Justice, Washington, D.C., for U.S. E.P.A.

James E. Ross, Houston, Tex., for Southern American Ins. Co.

Eugene B. Labay, Thomas A. Countryman, Kevin M. Beiter and Walter J. Batla, Cox & Smith, Inc., San Antonio, Tex., and Gerald P. Keith, H. Christopher Mott and Leslie M. Luttrell, Ginnings, Birkelbach, Keith & Delgado, El Paso, Tex., for Bell Petroleum Services, Inc.

W.B. Browder, Jr., Stubbeman, McRae, Sealy, Laughlin & Browder, Inc., Midland, Tex., for Regal Intern., Inc.

Michael T. Morgan, Morgan & Ward, Midland, Tex., for John R. Leigh.

James B. Harris and Scott D. Deatherage, Thompson & Knight, Dallas, Tex., for Chromalloy American Corp. and Sequa Corp.

R. Brent Cooper, Michael W. Huddleston and Judith H. Winston, Cowles & Thompson, Dallas, Tex., for Puritan Ins. Co.

David C. McCue, Maloney & Smith, Dallas, Tex., and Walter J. Batla, Cox & Smith, Inc., San Antonio, Tex., for Ranger Ins. Co.

Marc Randall May, Odessa, Tex., for Eddie Wright.

Eddie Wright, Odessa, Tex., pro se.

William R. Barnes, Odessa, Tex., for NIPCO, Inc.

Jack Q. Tidwell, McMahon, Tidwell, Hansen, Atkins & Fowler, P.C., Odessa, Tex., for Stell Chrome, State Farm Fire and Cas. Co. and Trinity Universal Co.

Stewart McKeehan, Browning & McKeehan, Odessa, Tex., for Spearman Radiator and Supply and Dudley's Radiator.

Jack Q. Tidwell and Michael Douglas Atkins, McMahon, Tidwell, Hansen, Atkins & Fowler, P.C., Odessa, Tex., for Triple H. Chrome Plating.

Winstanley F. Luke, U.S. Atty's Office, San Antonio, Tex., and Thomas R. Bartman, U.S. Dept. of Justice, Washington, D.C., for Small Business Admin.

Michael Lowenberg, Steven M. Morgan and Jeff Glass, Akin, Gump, Strauss, Hauer & Feld, Dallas, Tex., for Kerr-McGee Corp. Marc A. Sheiness and Jose A. Berlanga, Hirsch, Glover, Robinson & Sheiness, Houston, Tex., for Southland Royalty Co.

Max Edwin Wright, Cotton, Bledsoe, Tighe & Dawson, P.C., Midland, Tex., for Phillips Petroleum Co.

Timothy D. Yeats and Richard L. Palmer, Little, Palmer & Williams, Big Spring, Tex., for Pacific Indem. Co. and Chubb and Son, Inc.

William M. Kerr, Kerr, Fitzgerald & Kerr, Midland, Tex., and John G. Niles and Ralph W. Dau, O'Melveny & Myers, Los Angeles, Cal., for Cigna Property Cas. Ins. Co.

Russell S. Johnson, Donald D. Gavlick and Mary T. Mishtal, Sawtelle, Goode, Davidson & Troilo, San Antonio, Tex., for U.S. Fire Ins. Co.

George V. Basham, III, Lloyd, Gosselink, Ryan & Fowler, Austin, Tex., and Thomas Butler Alleman, Niewald, Waldeck, Norris & Brown, Houston, Tex., for Granite State Ins. Co.

Donald Warner Griffis, Griffis & Griffis, San Angelo, Tex., for Republic Ins. Co.

MEMORANDUM OPINION ON CROSS MOTIONS FOR SUMMARY JUDGMENT

BUNTON, Chief Judge.

BEFORE THIS COURT are cross Motions for Summary Judgment filed by the Plaintiff and by collective Defendants Sequa and Chromalloy (hereinafter referred to as "Sequa"). The issue before the Court is whether the recovery costs incurred by the Government in its initial response to the chromium contamination found in the Trinity Aquifer underlying the "Chromium I Site" in Odessa, Texas are consistent with the National Contingency Plan. This Court, on September 20, 1989 and November 9, 1989 found Defendants Bell, Sequa and John Leigh liable for the Government's Response Costs under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. The question now before the Court was reserved for "Phase II" of the proceedings. Having reviewed the voluminous Motions of the parties and the various responses thereto, the Court is of the opinion that the response costs incurred by the Government in this case were in fact consistent with the National Contingency Plan and Summary Judgment should be granted for the Plaintiff. The Court shall reserve its ruling, however, on the exact amounts of some of the Government's costs pending the filing of affidavits by the Government, Sequa, Bell and Leigh.

BACKGROUND

This suit originated in the United States Bankruptcy Court as a bankruptcy petition styled In re Bell Petroleum Services, Inc. The Government filed as a creditor and Bell objected to its alleged liability for response costs incurred by the Government at the Chromium I Site (the "Site"), Odessa, Texas. A joint Motion for Withdrawal of Bankruptcy Reference was signed by Judge Glen Ayers in June of 1988. In December of 1988, this Court granted the Government's Motion to bring into the action all of the Potentially Responsible Parties.

The controversy at bar involves the initial response of the State of Texas to citizen complaints of discolored water around the Site in Odessa, Texas. The State commissioned studies of the area and determined that the Trinity Aquifer which flows underneath the 24-block Site was a potential source of contamination.

In September of 1984, the Environmental Protection Agency (the "EPA") authorized a response action at the Site pursuant to its authority under Section 104(c) of CERCLA, 42 U.S.C. Section 9604(c). On the same date, EPA entered into a cooperative agreement with the State of Texas whereby the State was to undertake forward planning at the Site and to perform a remedial investigation, a feasibility study and remedial design work for the Site. EPA would then reimburse the State for these costs.

The remedial investigation revealed that the disposal of chromium waste at 4318 Brazos Street had severely contaminated the Trinity Aquifer, which provides water to residences and businesses beyond the Odessa City Limits, with chromium. The contaminants now extend north and northwest from 4318 Brazos Street because of the flow of the groundwater in the area. Chromium is a "hazardous substance" as that term is defined in CERCLA. 42 U.S.C. Section 9601(14).

EPA, as required by CERCLA, maintained a position of oversight, but still participated in planning the State's studies and remedial design of the alternate water system at the Site. EPA then reviewed these activities and memorialized them in reaching its Record of Decision which approved the State selected alternate water system response. Finally, as per the agreement, EPA reimbursed the State's costs by a letter of credit with the State of Texas on August 27, 1987. Section 107 of CERCLA, 42 U.S.C. Section 9607, authorizes EPA to seek reimbursement of these payments from persons responsible for contamination at the Site.

On December 1, 1988 and with permission of the Court, the Government filed a Complaint against, among others, Bell, Sequa and Leigh based on Section 107 of CERCLA.

STANDARD ON MOTION FOR SUMMARY JUDGMENT

Rule 56(c) of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that the moving party is entitled to a judgment as a matter of law." Rule 56(e) provides:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.

Thus, the focus of this Court is upon disputes over material facts; facts that might affect the outcome of the lawsuit under the governing substantive law will preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Phillips Oil Co. v. OKC Corp., 812 F.2d 265, 272 (5th Cir.1987), cert. denied, 484 U.S. 851, 108 S.Ct. 152, 98 L.Ed.2d 107 (1987), and the cases cited therein.

The Supreme Court's 1986 trilogy of summary judgment cases clarified the test for granting summary judgment. In Anderson v. Liberty Lobby, the Court stated that the trial court must consider the substantive burden of proof imposed on the party making the claim. In the case before this Court, the Government has the burden with respect to its claims; the Defendants have the burden with respect to certain defenses they raise. The Court in Anderson v. Liberty Lobby defined "material" as involving a "dispute over facts which may affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby requires this Court to substantively evaluate the evidence offered by the moving and non-moving parties to determine whether the evidence raises a "material" fact question which is "genuine."

In a second case, the Supreme Court reiterated that where the party moving for summary judgment has established prima facie that there is no genuine issue as to any material fact, the non-moving party must then come forward with "specific facts" showing a genuine issue for trial. It must be "more than simply ... that there is some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A third case, Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) held that where the moving party shows that the opposing party is unable to produce evidence in support of its case, summary judgment is appropriate. In Celotex Corp., it was not necessary for the motion for summary judgment to be supported by affidavits or other material specifically negating the non-moving party's claim so long as the District Court was satisfied that there was an absence of evidence...

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