US v. Consolidated Rail Corp., Civ. A. No. 85-502 MMS.

• Decision Date: 02 February 1990
• Docket Number: Civ. A. No. 85-502 MMS.
• Court: U.S. District Court — District of Delaware
• Parties: UNITED STATES of America, Plaintiff, v. CONSOLIDATED RAIL CORPORATION; Sea-Port Services, Ltd., formerly Sealand, Ltd.; Oil Industries, Ltd.; Wayne Hawkins; Chem Clear, Inc.; Coopers Creek Chemical Corporation; Penn Fuel Gas, Inc.; Philadelphia Gas Works; Public Service Electric and Gas Company; and National Industrial Services, Inc., f/k/a Maine Coastal Service, Defendants. PENN FUEL GAS, INC.; Consolidated Rail Corporation; Chem Clear, Inc.; Coopers Creek Chemical Corporation; Philadelphia Gas Works; Public Service Electric and Gas Company; and Sea-Port Services, Ltd., formerly Sealand, Ltd., Third-Party Plaintiffs, v. EKLOF MARINE CORPORATION; Burke-Parsons-Bowlby Corporation; A.M. Lavin Machine Works, Inc.; and Robert Zeigler, d/b/a American Reclamation Refining Company, Third-Party Defendants.

729 F. Supp. 1461

UNITED STATES of America, Plaintiff, v. CONSOLIDATED RAIL CORPORATION; Sea-Port Services, Ltd., formerly Sealand, Ltd.; Oil Industries, Ltd.; Wayne Hawkins; Chem Clear, Inc.; Coopers Creek Chemical Corporation; Penn Fuel Gas, Inc.; Philadelphia Gas Works; Public Service Electric and Gas Company; and National Industrial Services, Inc., f/k/a Maine Coastal Service, Defendants.

PENN FUEL GAS, INC.; Consolidated Rail Corporation; Chem Clear, Inc.; Coopers Creek Chemical Corporation; Philadelphia Gas Works; Public Service Electric and Gas Company; and Sea-Port Services, Ltd., formerly Sealand, Ltd., Third-Party Plaintiffs, v. EKLOF MARINE CORPORATION; Burke-Parsons-Bowlby Corporation; A.M. Lavin Machine Works, Inc.; and Robert Zeigler, d/b/a American Reclamation Refining Company, Third-Party Defendants.

Civ. A. No. 85-502 MMS.

United States District Court, D. Delaware.

February 2, 1990.

William C. Carpenter, Jr., U.S. Atty., and Richard G. Andrews, First Asst. U.S. Atty., Dept. of Justice, Wilmington, Del. (Michael Goodstein, Dept. of Justice, of counsel), Washington, D.C., for U.S.

Somers S. Price, Jr. of Potter, Anderson & Corroon, Wilmington, Del. (Abbi L. Cohen of Dechert, Price, Rhoades, Philadelphia, Pa., of counsel), for Consolidated Rail Corp.

Wayne Hawkins, Wilmington, Del., pro se.

Stephen E. Herrmann of Richards, Layton & Finger, Wilmington, Del. (Thomas W. Scott of Killian & Gephart, Harrisburg, Pa., of counsel), for Chem Clear, Inc.

Henry E. Gallagher of Connolly, Bove, Lodge & Hutz, Wilmington, Del., for Coopers Creek Chemical Corp.

C. Scott Reese of Cooch & Taylor, Wilmington, Del. (Robert A. Swift of Kohn, Savett, Marion & Graf, P.C., Philadelphia, Pa., of counsel), for Penn Fuel Gas, Inc.

Judith N. Renzulli of Duane, Morris & Hecksher, Wilmington, Del. (John W. Walker of Reed Smith Shaw & McClay, Philadelphia, Pa., of counsel), for Philadelphia Gas Works.

William D. Johnston of Young, Conaway, Stargatt & Taylor, Wilmington, Del. (Maureen Vaskis, Newark, N.J., of counsel), for Public Service Elec. and Gas Co.

Douglas B. Catts of Schmittinger & Rodriguez, P.A., Dover, Del., for U.S. Printing Ink Corp.

Beth H. Christman of Casarino, Christman & Shalk, Wilmington, Del. (John T. Ward and Thomas J. Minton of Quinn, Ward & Kershaw, Baltimore, Md., of counsel), for Eklof Marine Corp.

William L. Garrett, Jr. of O'Donnell & Garrett, Wilmington, Del. (Robert G. McLusky of Jackson, Kelly, Holt & O'Farrell, Charleston, W.Va., of counsel), for Burke-Parsons-Bowlby Corp. Joseph W. Weik of Czajkowski, Weik & Knepper, Wilmington, Del. (Lewis Kates of Kates & Mozzocone, Philadelphia, Pa., of counsel), for A.M. Lavin Mach. Works, Inc.

Robert J. Katzenstein of Lassen, Smith, Katzenstein & Furlow, Wilmington, Del. (Herbert Pressman of Pressman & Pressman, Philadelphia, Pa., of counsel), for Robert J. Zeigler.

OPINION

MURRAY M. SCHWARTZ, Senior District Judge.

In 1985, the United States of America brought this action under sections 104(a) and (b) and 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9604(a) and (b) and 9607(a), for reimbursement of costs incurred in response to the alleged release of hazardous substances from the Sealand, Ltd. site in Mount Pleasant, Delaware ("the Sealand site"). (Docket Item "Dkt." 1 at ¶ 1). The United States asserts claims against defendants alleging liability under section 9607(a)(1) as owners or operators of the facility and/or under section 9607(a)(3) as generators of the waste.¹ On August 6, 1986, seven of the primary defendants filed an amended third-party complaint for indemnification and/or contribution by third-party defendants as owners or operators of the Sealand site, as generators of substances treated or disposed of at the site, or as transporters of such substances who selected the Sealand site for disposal or treatment of the substances. (See Dkt. 250).

Third-party defendant, Burke-Parsons-Bowlby ("BPB"), is alleged to have "participated in and directed the operation" of the Sealand site. (See Dkt. 250 at ¶ 37). Third-party plaintiffs seek contribution from BPB as an entity which is liable under CERCLA. Operator liability and generator liability are asserted pursuant to 42 U.S.C. §§ 9607(a)(2) and (a)(3), respectively. (Dkt. 250 at ¶ 39). Contribution from BPB is sought under 42 U.S.C. § 9613(f)(1) which can be obtained from any person who is "liable or potentially liable" under CERCLA. Third-party defendant, Eklof Marine ("Eklof") is alleged to have arranged for disposal or treatment of coal tar² at the Sealand site. (Dkt. 250 at ¶¶ 33 and 35). Generator liability is asserted pursuant to 42 U.S.C. § 9607(a)(3). (Dkt. 250 at ¶ 39). In this decision, I address both motions for summary judgment. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331 as this case arises under 42 U.S.C. §§ 9607 and 9613(b).

For the reasons set forth below, both BPB's and Eklof's motions for summary judgment will be granted. Where, as in this case, the third-party defendant is not liable under CERCLA as either an operator or a generator, the third-party plaintiffs have no claim for contribution or indemnity. Thus, the contribution claims against BPB will also be dismissed.

I. FACTUAL BACKGROUND

BPB is a West Virginia corporation based in Ripley, West Virginia which produces pressure-treated wood products used in the home, highway and railroad construction industries. (Affidavit of Norman Hildreth Vice-President of Production of BPB, hereinafter "Hildreth Aff.", Dkt. 436, Exhibit 1 at ¶ 2). It has production facilities in DuBois, Pennsylvania; Goshen, Virginia; Wilmington, North Carolina; Stanton, Kentucky; and Spencer, West Virginia. (Id.) Among the items produced by BPB are bridge timbers and railroad crossties, both of which are treated with various mixtures of coal tar and creosote. (Id.)³

In approximately 1982, Hildreth learned that Philadelphia Electric Company ("PECO") had waste coal tar available at its Chester, Pennsylvania plant. (Id. at ¶ 5). Hildreth discussed with PECO the possibility of setting up a processing facility at the PECO plant by which BPB could separate excess water from the material prior to transport. (Id.) However, PECO preferred to seek bids for the sale of the coal tar. (Id.) BPB elected not to submit a bid on the coal tar. (Id.)

Later in 1982, Hildreth contacted PECO to determine whether it had sold its coal tar. (Id.) He was given the name and telephone number of Wayne Hawkins.⁴ (Id.) Hildreth then called Hawkins to discuss purchasing treated coal tar for use in its wood preservation business. (Id. at 6). In May 1982, BPB agreed to purchase coal tar products supplied by Sea-Port containing no more than 5 percent water. (Id.)

Initially, Sea-Port arranged for BPB to pick up loads of coal tar from Eklof Marine in Staten Island, New York. (Id. at ¶ 7). Eklof is a marine transportation corporation which operates a fleet of barges and tankers out of Staten Island, New York which transports oil and other liquids along the east coast. (Affidavit of Carl Eklof, Sr. Vice President of Eklof, hereinafter "Eklof Aff.", Dkt. 458, Appendix A, Exhibit 1 at ¶ 3). In early 1982, M.R. Trading⁵ contracted with Eklof to transport waste oil from Boston to Philadelphia. (Id. at ¶¶ 6-8; accord Affidavit of Julius M. Meyer owner of M.R. Trading, hereinafter "Meyer Aff.", Dkt. 458, Appendix A, Exhibit 2 at ¶ 4). After the material was on Eklof's barges, water content was found to be greater than expected⁶ and the material was rejected by the intended purchaser, Diamond Petroleum Company.⁷ (Id. at ¶ 3). Because the deal with Diamond had fallen through and Diamond was obligated to pay Eklof directly, Eklof was unable to receive its transport fee. (Id. at ¶ 5).

Meyer therefore instructed Eklof to take the oil to its facilities on Staten Island and hold the oil aboard the vessel. (Eklof Aff., Dkt. 458, Appendix A, Exhibit 1 at ¶ 9). From time to time, Eklof was required to transfer the oil from one barge to another to make various barges available for use, repair or inspection. (Id. at ¶ 10).

According to third-party plaintiffs Eklof was actively seeking prospective buyers in order to recoup their costs⁸ and be rid of the oil which was tying up the barges.⁹ (See Dkt. 460 at 10-12).

During this time Robert Zeigler (d/b/a American Reclamation Refining Company) was retained to broker oil for Sea-Port. Zeigler contacted Eklof to verify there was material he wanted to unload from his barge.¹⁰ (Deposition of Robert J. Zeigler hereinafter "Zeigler Dep." Dkt. 460A at 11-12). This resulted in a contract for the sale of the oil in Eklof's barges between Sea-Port, as buyer, and Eklof and M.R. Trading, as sellers. (Dkt. 458, Appendix A, Exhibit 2, Meyer 1). Eklof would receive $.04 per gallon and M.R. Trading would receive $.02 per gallon. (Id.) In fact Eklof never received any payment for the oil. (Dkt. 387 at ¶ 3). Eklof shipments totalling 150,000 gallons from Eklof to Sealand, Ltd. or Sealand's purchaser were made beginning in June, 1982 and ending the summer of 1983.¹¹ (Eklof Aff., Dkt. 458, Appendix A, Exhibit 1 at ¶ 8).

After obtaining several loads of material from the Eklof facilities on Staten Island,¹² BPB determined that the coal tar's water content was greater than five percent such that the material required reprocessing at BPB's individual production facilities to drive off the excess moisture. (Id. at ¶ 8). When Hildreth complained, Hawkins stated that although his contractor was not doing an acceptable job, Sea-Port would soon be operating its own production facility in the Mount Pleasant, Delaware area. (Id.)

From September, 1982 to August, 1983 BPB obtained coal tar directly from the Sealand site. That facility was a remodeled tank farm that had previously been used in the distillation of animal fats. (Id. at ¶ 9). Hildreth...