US v. Saporito

Decision Date09 February 2010
Docket NumberNo. 07 C 3169.,07 C 3169.
Citation684 F. Supp.2d 1043
PartiesUNITED STATES of America, Plaintiff, v. James Y. SAPORITO and Paul Carr, Defendants.
CourtU.S. District Court — Northern District of Illinois

AUSA, Jonathan C. Haile, United States Attorney's Office, Chicago, IL, Jennifer Lukas-Jackson, W. Benjamin Fisherow, U.S. Department of Justice, Washington, DC, for Plaintiff.

Deanne M. Mazzochi, Rakoczy Molino Mazzochi LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

REBECCA R. PALLMEYER, District Judge.

Beginning in December 2003, the United States spent $1.5 million to clean up hazardous substances at a site on the northwest side of Chicago where the Crescent Plating Works once operated. In this lawsuit under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), the government seeks to recover these funds from Defendants James Saporito and Paul Carr. According to the government, Saporito ran the operation from 1997 to 1999 and again from 2001 to 2003 when he was also an owner, and Carr was responsible for the day-to-day operations from 2000 to 2003. The government has reached a settlement agreement with Carr. Saporito, the only remaining defendant, has filed six counterclaims, and both sides have moved for summary judgment. For the reasons explained here, the court grants the government's motion to dismiss Saporito's counterclaims and enters summary judgment in favor of the government.

FACTUAL BACKGROUND
Preliminary Matters

The court has had no small amount of difficulty determining what facts are truly in dispute due to the 236 pages worth of filings—not counting exhibits—the parties have submitted on the matter. Defendant's Reply to Plaintiff's 56.1(b)(3) Response to Defendant's 56.1(a)(3) Statement, Dkt. 123, is by itself 110 pages long. Many of those pages, as well as the 50 pages of Defendant's 56.1(b)(3) Response to Plaintiff's 56.1(a)(3) Statement, Dkt. 111, are taken up with repeating a handful of objections, which, for the reasons explained here, must be overruled.

First, Defendant argues that the government may not rely on EPA Pollution Reports and EPA Action Memorandum because they are inadmissible hearsay. (Def's Response to Pl's 56.1(b)(3), Dkt. 111, ¶¶ 3-4, 14, 51, 64-70; Def's Reply to Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 123, ¶ 28.) Under Federal Rule of Evidence 803(8), however, public records and reports are not excluded by the hearsay rule. That exception applies to the reports in question, e.g., O'Dell v. Hercules, Inc., 904 F.2d 1194, 1206 (8th Cir.1990), and Defendant does not attempt to argue otherwise.

Defendant also seeks to exclude the EPA documents and a declaration by an EPA employee on the grounds that those documents contain opinion testimony that was not disclosed in accordance with the scheduling order. (Def's Memo in Opposition, Dkt. 110, at 1 n. 1, 6; Def's 56.1(b)(3) Response to Pl's 56.1(a)(3), Dkt. 111, ¶¶ 38, 39; Def's Reply to Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 123, ¶¶ 24, 28, 37, 42, Supp ¶¶ 42, 44, 45.) The authors of the declaration and the EPA documents were on hand for the EPA's cleanup of Crescent Plating, so their recounting of the evidence is based on first-hand observations. Thus, the evidence is admissible under Federal Rule of Evidence 701 and the government was not required to make disclosures pursuant to Federal Rule of Civil Procedure 26(a)(2).

When he is not arguing that evidence based on personal knowledge is inadmissible expert testimony, Defendant argues the reverse: that statements by Frank Altmayer, an expert for the government, are not admissible because Altmayer has not been shown to have personal knowledge of the subject of that testimony. (Def's Response to Pl's 56.1(b)(3), Dkt. 111, ¶¶ 4-5, 7-8, 14-15, 17, 19-20, 38-39; Def's Reply to Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 123, Supp. ¶¶ 14-16, 20, 22-23, 53.) This objection, too, is overruled; as an expert witness, Altmayer need not have personal knowledge of the subject about which he testifies. FED. R.EVID. 703.

Finally, Defendant argues repeatedly that certain statements by Altmayer cannot be relied on because they were not timely disclosed in his expert report. (Def's Response to Pl's 56.1(b)(3), Dkt. 111, ¶¶ 5-8, 14-15, 17, 19-20, 26, 38-39, 55; Def's Reply to Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 123, Supp. ¶¶ 14-16, 20, 22-23.) As the court understands this argument, it is no more than a technical complaint: the government's 56.1(a)(3) statement cites to a declaration submitted by Altmayer in support of the government's motion for summary judgment rather than to Altmayer's expert report. That report was timely disclosed. Defendant complains that the exact phrases used in the 56.1(a)(3) statement and Altmayer's declaration are not found in Altmayer's expert report, but he never argues that one of those phrases is not supported by the report. It may have been preferable for the government's statement to cite to the report or for Altmayer's declaration itself to cite to the report, but Defendant has not pointed to anything in the statement or declaration that is either contradicted by or not supported by the report.

1. Undisputed Facts

a. Crescent Plating's Operation

Beginning in the 1970s, Crescent Plating operated a facility on the northwest side of Chicago that plated steel and brass objects with various metals such as zinc, chromium, and copper. (Pl's 56.1(b)(3), Dkt. 87, ¶¶ 3-4.) In addition to those metals, the plating process also used, among other potentially hazardous chemical, sodium cyanide, hexavalent chromium, and trichloroethene. (Id. ¶¶ 5, 7.) Very simply explained, the electroplating process involves dipping the item to be plated into a series of chemical baths through which electrical current is run. (Id. ¶¶ 6, 8.) Crescent Plating had at least two different plating lines each made up of a series of baths. (Id. ¶¶ 9-10.) When items are moved from one bath to another, some dripping of the plating solution onto the floor is inevitable. (Id. ¶¶ 16-17.) The floor at Crescent Plating was bare concrete; although waste from spills was routed through trenches to a pit lined with polypropylene to be cleaned up, those trenches were also bare concrete. (Id. ¶¶ 12, 19.) Highly acidic plating chemicals can corrode concrete. (Id. ¶ 20.)

The electrical current needed for the plating process comes from a device called a rectifier that converts alternating current to direct current. (Pl's 56.1(b)(3), Dkt. 87, ¶ 6.) Altmayer, the government's expert witness, describes the rectifier as a necessary part of the process, (Id.), but Defendant claims that his expert witness, Gerald Albert Krulik, disputes that description of a rectifier. (Def's 56.1(b)(3) Response to Pl's 56.1(a)(3), Dkt. 111, ¶ 6.) In fact, Krulik nowhere states that electroplating can be performed without a rectifier; he adds only that a rectifier has many uses aside from electroplating—every laptop needs one, for example, in order to charge its battery—and that the rectifier is not capable of producing hazardous waste on its own. (Id.) The government does not dispute these facts. (Pl's Reply to Def's 56.1(b)(3) Response to Pl's 56.1(a)(3), Dkt. 121, at 5-6.)

To dispose of plating solutions, Crescent Plating pumped the waste through pipes to the facility's wastewater treatment area. (Pl's 56.1(b)(3), Dkt. 87, ¶¶ 12-13.) The waste was then treated with various chemicals before being poured into a 60,000 gallon clarifier, a large tank that relies on gravity to separate water from precipitated metals as the waste settles. (Id. ¶ 14.) The clarifier produced some waste that, under the Clean Water Act and local regulations, was permissibly disposed of into the sewer, but the clarifier also produced sludge that was routed to a 2,025-gallon tank. (Id. ¶ 15.) Water was removed from the sludge in a filter press and the remaining "cakes" of dewatered sludge were placed in a bin located outside the building for proper disposal offsite. (Id.)

b. Defendant's Involvement with Crescent Plating

From as early as 1974, Crescent Plating was owned and run by Donald Saporito, Defendant's cousin. (Def's 56.1(a)(3), Dkt. 93, ¶ 5.) Paul Carr began working there in 1979 and worked his way up to plant manager in 1997, vice president in 1999, and president in 2000. (Pl's 56.1(a)(3), Dkt. 87, ¶ 22-27.) Defendant testified that he became involved in Crescent Plating in 1997 when he loaned $100,000 to his cousin. (Def's 56.1(a)(3), Dkt. 93, ¶ 9.) Although Defendant describes the transaction as a loan, the government has submitted a signed Bill of Sale reflecting that the transaction was a purchase. (Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 108, ¶ 9, Ex. 3.) In addition, a Crescent Plating employee stated that Defendant told her he had bought the operation.1 (Id. ¶ 9.) Notwithstanding whether the deal involved a purchase or a loan, Defendant does not dispute that he held the title of Vice President at Crescent Plating between 1997 and 1999 and had some responsibilities at the company during that time period. (Pl's 56.1(a)(3), Dkt. 87, ¶ 28, 30.) Although documents show that Defendant had signatory authority for Crescent Plating's operations, that he was responsible for plant maintenance, and that he had responsibility for environmental regulatory paperwork, Defendant has disputed that evidence, questioning the authenticity of his signature on documents where it appears. (Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 108, ¶ 10; Def's Reply to Pl's 56.1(b)(3) Response to Def's 56.1(a)(3), Dkt. 123, ¶ 10.) In 1999, Donald Saporito terminated Defendant from Crescent Plating's employ. (Def's 56.1(a)(3), Dkt. 93, ¶ 10.)

Some time after his termination—the exact date is not in the record—Defendant sued Crescent Plating and Donald Saporito in state court. The third amended complaint in that litigation, a copy of which is...

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