Waukegan Port Dist. v. N. Shore Gas Co.
| Decision Date | 04 March 2019 |
| Docket Number | No. 18 CV 7312,18 CV 7312 |
| Citation | 371 F.Supp.3d 452 |
| Parties | WAUKEGAN PORT DISTRICT, Plaintiff, v. NORTH SHORE GAS COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Alan Bruce White, Ashley Elizabeth Parr, Barnes & Thornburg LLP, Joseph Francis Madonia, Locke Lord LLP, Chicago, IL, for Plaintiff.
John Francis Kennedy, Allison Emma Czerniak, Elizabeth Erin Babbitt, Taft Stettinius & Hollister LLP, Chicago, IL, for Defendant.
Before the Court is plaintiff's motion to remand this action to the Circuit Court of Lake County, Illinois, which is granted in large part for the reasons explained below.
On October 1, 2018, plaintiff, Waukegan Port District (the "Port District"), filed a lawsuit against defendant, North Shore Gas Company ("North Shore Gas" or "NSG"), in the Circuit Court of Lake County, Illinois. The Port District states in its complaint: "This is a civil action for damages caused by the continuing release of hazardous substances from property owned by NSG into the soil and groundwater of a number of neighboring parcels owned by the Port District." The Port District further alleges the following. North Shore Gas's South Plant MGP (Manufactured Gas Plant) in Waukegan operated from 1898 to 1927, and then again between 1935 and 1946. It was demolished in 1951. The South Plant MGP generated various byproducts and wastes, such as coal tar, ammonia, cyanide, ammonium sulfate, sulfur, wastewater sludges, ash, and tar/oil emulsions. These materials contain polynuclear aromatic hydrocarbons, petroleum hydrocarbons, heavy metals, and phenolic compounds, several of which are known or suspected carcinogens. North Shore Gas released hazardous substances from these byproducts and wastes onto the South Plant MGP parcel and further released and continues to release these hazardous substances onto adjacent and nearby parcels owned by the Port District and others.
North Shore Gas conducted contaminant investigations and limited cleanup activities on its parcel from the early 1990s to around 2003. Most of the work was done under the Illinois Voluntary Site Remediation Program and did not address off-site property contamination. In 2003 or 2004, North Shore Gas removed some of the contaminated soils above the groundwater table from its own property only. It left in place the contamination in soil and groundwater located below the groundwater table on its property, and it did not install any barriers at its eastern property boundaries to prevent continuing releases of contamination onto the Port District's and other neighboring parcels. In 2006, North Shore Gas requested that the South Plant MGP parcel be included in the federal Superfund program. The United States Environmental Protection Agency (the "EPA") accepted the site into the Superfund Alternative program. The South Plant MGP Superfund Site (the "Site"), as defined by the EPA, covers more than twenty acres and includes several properties adjacent to the South Plant MGP parcel, among them eight parcels comprising more than thirteen acres that are owned by the Port District and located east of the South Plant MGP parcel. The Port District's parcels include a marina, a visitor center/administration building, a maintenance building, a marine service facility, landscaped open space and a public park, and asphalt-paved public parking lots.
At the direction of the EPA, and pursuant to a 2007 Administrative Order on Consent under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), North Shore Gas conducted a Remedial Investigation ("RI") of the Site. The RI found that Dense Non-Aqueous Phase Liquid ("DNAPL") hazardous-substance contamination (made up of the substances described above) released as a result of North Shore Gas's operations was a continuing source of contamination to the soil and groundwater of nearby properties. In July 2015, the EPA issued a "Record of Decision for Interim Action" (the "ROD"), which established an interim remedy for the DNAPL contamination beneath the Site. The ROD provides for interim action—the "enhanced recovery of mobile DNAPL using a network of co-located horizontal groundwater injection and DNAPL recovery wells." (ECF No. 1-1 at 171.) Recovered DNAPL is to be collected and shipped off site for treatment and disposal. The ROD estimates that "DNAPL recovery would occur over a[n] 8-year period before the mass and mobility is reduced to the extent practicable." (Id. at 194.) The work is projected to begin in 2020. The ROD states that once the work under the interim remedy is completed, the EPA will select a final remedy to address site groundwater and soil contaminants as well as potential soil vapor intrusion risks. (Id. at 182.) In September 2015, North Shore Gas and the EPA entered into an Administrative Order on Consent for Remedial Design under CERCLA.
The Port District says that it has never consented to, permitted, or approved of North Shore Gas's continuing contamination and impairment of the use of its property. In June 2017, a Master Plan for Redevelopment of the Port District's marina property was approved. The Port District alleges that the contamination of its property by North Shore Gas has damaged redevelopment efforts. It asserts state-law claims for negligence, trespass, public nuisance, and private nuisance, and it seeks compensatory and punitive damages. On November 1, 2018, North Shore Gas removed the action to this court. It asserts that federal-question jurisdiction exists under 28 U.S.C. § 1331 because the case "arises under" federal law.1 The Port District moves to remand the action to state court.
"The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Citadel Sec., LLC v. Chi. Bd. Options Exch., Inc. , 808 F.3d 694, 701 (7th Cir. 2015) (some internal punctuation omitted) (quoting Rivet v. Regions Bank of La. , 522 U.S. 470, 474, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998) ). A federal defense to a claim arising under state law does not suffice to support federal subject-matter jurisdiction. Id. ; Crosby v. Cooper B-Line, Inc. , 725 F.3d 795, 800-01 (7th Cir. 2013). North Shore Gas, as the party asserting federal jurisdiction, has the burden of establishing that it exists. See Muscarello v. Ogle Cty. Bd. of Comm'rs , 610 F.3d 416, 425 (7th Cir. 2010). Any "[d]oubts regarding removal are resolved in favor of the plaintiff's choice of forum in state court." Morris v. Nuzzo , 718 F.3d 660, 668 (7th Cir. 2013).
One exception to the well-pleaded complaint rule, known as the complete-preemption doctrine, "provides that, where Congress has completely preempted a given area of state law, a plaintiff's state law claim will be ‘recharacterized’ as a federal claim so that removal becomes proper." Hart v. Wal-Mart Stores, Inc. Assocs.' Health & Welfare Plan , 360 F.3d 674, 678 (7th Cir. 2004) (citation omitted). But North Shore Gas disavows any reliance on the complete-preemption doctrine.2 (ECF No. 26, Def.'s Opp'n Pl.'s Mot. at 12.) It does, however, invoke the artful-pleading doctrine, under which, in broad terms, a plaintiff's omission from its complaint of any reference to federal law will not defeat removal when the plaintiff's claim is necessarily federal. See Hays v. Bryan Cave LLP , 446 F.3d 712, 713 (7th Cir. 2006). The Port District's "artful pleading," as North Shore Gas sees it, is that while the Port District's claims are "couched in terms of state law tort claims for damages," they are really a "challenge" to the EPA's interim remedy, over which, North Shore Gas submits, this Court has subject-matter jurisdiction. (Def.'s Opp'n Pl.'s Mot. at 10.)
Even when state law creates a plaintiff's cause of action, "its case might still ‘arise under’ the laws of the United States if a well-pleaded complaint established that its right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties." Franchise Tax Bd. v. Constr. Laborers Vacation Tr. , 463 U.S. 1, 13, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) ; see also Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg. , 545 U.S. 308, 312, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005) ( ) (citation omitted). This is a "slim category" of cases. Empire Healthchoice Assurance, Inc. v. McVeigh , 547 U.S. 677, 701, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006).
According to North Shore Gas, the Port District's right to relief depends on the resolution of a substantial question of federal law. North Shore Gas cites authority from other jurisdictions for the proposition that a substantial question of federal law may exist where an ostensibly state-law-based claim constitutes a "challenge" to a CERCLA cleanup. (Def.'s Opp'n Pl.'s Mot. at 6 (citing Coffey v. Freeport-McMoRan Copper & Gold Inc. , 623 F.Supp.2d 1257, 1271 (W.D. Okla.) (citing ARCO Envtl. Remediation, L.L.C. v. Dep't of Health & Envtl. Quality , 213 F.3d 1108, 1115-16 (9th Cir. 2000) ), aff'd , 581 F.3d 1240 (10th Cir. 2009) ).) Courts of appeals for other circuits have stated that a claim is a "challenge" to a CERCLA cleanup where it is "related to the goals of the cleanup," Razore v. Tulalip Tribes of Washington , 66 F.3d 236, 239 (9th Cir. 1995), or it "interferes with the implementation of a CERCLA remedy," Broward Gardens Tenants Ass'n v. EPA , 311 F.3d 1066, 1072 (11th Cir. 2002) (citing ...
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