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Valbruna Slater Steel Corp. v. Joslyn Manufacturing Co.

United States District Court, N.D. Indiana, Fort Wayne Division

January 16, 2018

VALBRUNA SLATER STEEL CORPORATION and FORT WAYNE STEEL CORPORATION, Plaintiffs,
v.
JOSLYN MANUFACTURING COMPANY, JOSLYN CORPORATION and JOSLYN MANUFACTURING COMPANY, LLC, Defendants.

          OPINION AND ORDER

          JON E. DEGUILIO JUDGE.

         This case arises under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq. In response to a cost recovery claim filed by Valbruna Slater Steel Corporation and Fort Wayne Steel Corporation (collectively, “Valbruna”), Joslyn Manufacturing Company, Joslyn Corporation, and Joslyn Manufacturing Company, LLC (collectively, “Joslyn”), filed a contribution counterclaim under § 113(f). The Court heard that counterclaim in Phase II of a bench trial on June 12, 2017, and now enters its findings of fact and conclusions of law as to the same.

         BACKGROUND

         This environmental litigation has endured for more than seven years. To summarize briefly, Valbruna owns a contaminated steel processing site, which it has spent a considerable sum to remediate. To recover its cleanup expenses under § 107(a), it sued Joslyn, which used to own the site for fifty plus years. The Court adjudicated that claim at Phase I of trial, finding Joslyn strictly liable to Valbruna for $2, 029, 871.09 in costs. The Court further disallowed $181, 380.83 in costs, determining that they were not necessary and/or were not consistent with the National Contingency Plan. [DE 175].

         The resolution of that claim does not, however, end this matter. A defendant in a § 107(a) suit can “blunt any inequitable distribution of costs by filing a § 113(f) counterclaim, ” which requires “the equitable apportionment of costs among the liable parties, including the PRP that filed the § 107(a) action.” United States v. Atl. Research Corp., 551 U.S. 128, 140 (2007). Joslyn took such a course here, thereby requiring it to bear the burden of proof in demonstrating an entitlement to contribution. NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 690 (7th Cir. 2014). Since the parties agree that the prima facie case has been satisfied as to liability under § 107 [DE 161], it remains only for the Court to equitably allocate costs under § 113(f). To that end, the Court held Phase II of trial on contribution issues on June 12, 2017. Based upon its consideration of the testimony at trial and the other evidence submitted by the parties, the Court now enters the following conclusions of law and findings of fact pursuant to Federal Rule of Civil Procedure 52:

         FACTS

         The parties stipulated to the following facts:

1. From 1928 to 1981, Joslyn owned property located at what is presently identified as 2302 and 2400 Taylor Street f/k/a 1701 McKinley Avenue in Fort Wayne, Indiana (collectively, “Site”) and operated a steel manufacturing facility on the Site (“Steel Facility”) for all of those years.
2. On February 2, 1981, Joslyn sold the Site and Steel Facility to Slater Steel Corporation (“Slater”).
3. In June 2003, Slater filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of Delaware (“Slater Bankruptcy”).
4. The soil and groundwater at and around the Site are contaminated with numerous hazardous substances, including chlorinated organic chemicals (e.g., TCE), semi-volatile organic chemicals, heavy metals, PCBs and radioactive elements related to historical operations at the Site.
5. Valbruna acquired the Site in April 2004 following an auction conducted as part of the Slater Bankruptcy.
6. FWSC acquired that portion of the Site presently identified as 2302 Taylor Street (“2302 Property”), and VSSC acquired that portion of the Site presently identified as 2400 Taylor Street (“2400 Property”).
7. In April 2004, Valbruna and the Indiana Department of Environmental Management (“IDEM”) entered into a Prospective Purchasers Agreement (“PPA”), which required Valbruna to spend approximately $1 million on Site investigation and remediation work in response to pre-existing contamination at and from the Site. Valbruna contributed $500, 000 of the $1 million.
8. From 2005 to 2006, Valbruna conducted Electrical Resistance Heating (“ERH”) utilizing the PPA funds to address volatile organic compound impacts at a portion of the Site where degreasing operations had historically occurred.
9. In June 2006, the U.S. Environmental Protection Agency (“EPA”) inspected the Site in relation to its historical contamination issues.
10. By letter dated November 1, 2007, IDEM issued a Risk Assessment Review outlining the Site's remaining areas of ...

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