United States District Court, S.D. Indiana, Indianapolis Division
ENTRY ON THE PARTIES' CROSS-MOTIONS FOR SUMMARY
JUDGMENT
TANYA
WALTON PRATT, JUDGE
This
matter is before the Court on Plaintiff Von Duprin LLC's
(“Von Duprin”) Motion for Partial Summary
Judgment on Section 107(a) Liability (Filing No.
133), and Defendant Moran Electric Service, Inc's.
(“Moran”) Cross-Motion for Partial Summary
Judgment (Filing No. 138). Also pending is Major
Holdings, LLC's and Major Tool and Machine, Inc.'s
(collectively, “the Major Defendants”),
Cross-Motion for Summary Judgment against Plaintiff and
Motion for Summary Judgment against Cross-Claimant
(Filing No. 141). Von Duprin alleges the Major
Defendants, in their status as current owners of certain
properties, are liable for damages owed to it under Section
107(a) of the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”).
(Filing No. 134.) Moran asks the Court to deny Von
Duprin's motion for summary judgment and to issue a
ruling declaring that Moran is responsible only for its
proportionate share of harm. (Filing No. 139.) The
Major Defendants seek summary judgment on all claims asserted
against them by both Von Duprin and Moran. (Filing No.
142.) For the reasons stated below, Von Duprin's
Motion for Partial Summary Judgment is
denied. Moran's Motion for Partial
Summary Judgment is granted. The Major
Defendants' Motion for Summary Judgment against Von
Duprin is granted in part and denied in
part, and their Motion for Summary Judgment against
cross-claimant Moran is denied.
I.
BACKGROUND
A.
Factual History
This
litigation relates to the release of hazardous substances at
several properties located in Indianapolis, Indiana,
including a property previously owned by Von Duprin, and 1925
Columbia Avenue, (the “Von Duprin Facility”) and
several upgradient properties, owned at various times by
Moran and/or the Major Defendants. Those upgradient
properties are bounded by Hovey Street to the east, East
19th Street to the south, Dr. Andrew J. Brown
Avenue to the west, and East 21st Street to the
North. (Filing No. 42-1.) The parties have generally
divided the upgradient lot into three components based on
ownership rather than geography: the “Former Ertel
Facility, ” the “Former Zimmer Paper Facility,
” (subdivided into the Zimmer Paper Facility and the
Zimmer Packaging Facility) and the “Former Moran
Facility.” (Filing No. 134 at 7-8; Filing
No. 139 at 5-6; Filing No. 142 at 6-7.) All
three of those facilities as well as the Von Duprin Facility
were once owned and operated by manufacturers who released
chlorinated solvents into nearby groundwater, which comingled
into a plume producing negative environmental effects.
The
Major Defendants are the current owners of four of the
properties at issue in this case: the Moran Property, the
Zimmer Paper Parcel, the Zimmer Packaging Facility, and the
Ertel Facility. While the Major Defendants themselves have
not caused or contributed any contamination on any of those
properties, it is undisputed that their ownership of the
contaminated properties brings legal obligations. Since
acquiring the properties they have participated in
investigation and cleanup.
1.The
Von Duprin Facility
Von
Duprin manufactured exit devices such as door handles for
commercial applications from 1955 to 1986 at 1925 Columbia
Avenue in Indianapolis.[1] (Filing No. 140-1 at 2, 5.)
Its operations resulted in the release of hazardous
chemicals, including trichloroethylene (“TCE”)
and perchloroethylene (“PCE”), into soil and
groundwater on and around the Von Duprin
Facility[2]. (Filing No. 140-2.) In 1986, Von
Duprin ceased operations, and its owner at that time,
Ingersoll-Rand Company, sold the facility to Threaded Rod
Company, Inc. in 1987. (Filing No. 140-1 at 2.)
Threaded Rod Company manufactured anchor bolts and connecting
rods and did not generate hazardous waste. Id.
2.
Former Ertel Facility
Ertel
Manufacturing operated the facility from the 1890's
through 2001 and it originally contained a machine shop and
aluminum and iron foundries, but later was used to
manufacture automotive engine parts. (Filing No. 135-1 at
5.) The property was sold to Dynagear in 1998, who used
it to manufacture auto parts until 2002, when the property
was abandoned, leaving behind soil and groundwater impacted
with chlorinated volatile organic compounds. Id.
Between 2004 and 2008, the City of Indianapolis, the Indiana
Department of Environmental Management (“IDEM”),
and the U.S. Environmental Protection Agency performed
cleanup activities at the Former Ertel Facility site.
Id. at 6. The parties agree that these
cleanup activities addressed soil on the site that had been
impacted by TCE, and designated evidence shows that
confirmation sampling following soil excavation at the site
showed elevated levels of TCE and PCE at levels that far
exceed industrial default closure levels. (Filing No.
140-17 at 28-32.) The parties disagree as to whether the
cleanup activities addressed TCE or PCE in the groundwater on
the site.[3] (Filing No. 134 at 7; Filing
No. 139 at 6; Filing No. 142 at 6.)
3.
Former Zimmer Paper Facility
The
Former Zimmer Paper Facility was located at 1931 Dr. Andrew
J. Brown Avenue. (Filing No. 135-1 at 4.) It had
been used for chemical and equipment storage. (Filing No.
134 at 7.) Moran owned the property between 1967 and
1983, when title was conveyed to Defendant Zimmer Paper
Products Incorporated (“Zimmer”). (Filing No.
135-1 at 4.) Major Holdings acquired title to the
facility in 2007 and is the current owner. Id. In
2007, 7, 350 tons of chlorinated solvent-impacted-soil were
removed from the site. (Filing No. 135-4 at 5.) The
parties dispute whether there has been any remedial effort to
address impacts to the groundwater at the Former Zimmer Paper
Facility.[4] (Filing No. 134 at 8; Filing
No. 139 at 6; Filing No. 142 at 6.)
4.
Former Moran Facility
The
Former Moran Facility (Moran Motor Shop and Moran Dynamometer
Building) is property addressed as 1931 Dr. Andrew J. Brown
Avenue and 1436 E. 19th Street. Moran used the
site for industrial manufacturing operations from
approximately 1927 to 1998. Major Holdings has owned this
property since 2005.
In
April 2016, IDEM notified Moran that it was a potentially
responsible party (“PRP”) under the State Cleanup
Program pursuant to Indiana Code § 13-25-4, in
connection with soil and gradient contamination at property
located on the former Moran Facility. IDEM determined the
Former Moran Facility released TCE, PCE, and other hazardous
substances that aggregated with hazardous substances running
off other nearby properties to create a “ground water
contaminant plume.” (Filing No. 135-1 at 6.)
Von Duprin attributes these hazardous substances to
degreasing pits that Moran operated when it owned the
property. (Filing No. 134 at 8.) Von Duprin alleges
“no effort was made to address impacts to the
groundwater either on the Moran site or downgradient.”
Id. Moran alleges that soil samples taken from the
degreasing pits just after Moran ceased operations at the
site in 1996 showed either no traces of TCE or TCE
concentrations “well below industrial default closure
levels.” (Filing No. 139 at 5.) According to
Moran, after buildings at the Former Moran Facility were
demolished, soil samples detected levels of TCE and PCE below
the industrial default closure levels and those samples were
disposed of as non-hazardous waste. Id. The Major
Defendants dispute Von Duprin's claim that no remedial
efforts were undertaken at the Former Moran Facility to
reduce the migration of contamination to the groundwater.
(Filing No. 142 at 7.)
5.
Investigative and Remedial Efforts
In
August 2013, IDEM notified Von Duprin that it was a PRP under
the State Cleanup Program pursuant to Indiana Code §
13-25-4 in connection with soil and groundwater Contamination
at the Columbia Avenue Facility and may have incurred
liability in connection with the release of hazardous
substances from the Von Duprin Facility. (Filing No.
135-8.) At IDEM's direction, Von Duprin performed
extensive sampling and investigation of the soil, soil gas,
indoor air, and groundwater at the Von Duprin Facility.
(Filing No. 136 at 2.) IDEM required Von Duprin to
conduct downgradient groundwater and indoor air sampling to
determine how far certain hazardous substances migrated.
Id. Von Duprin's investigation found hazardous
substances at the Von Duprin Facility and other properties
near Dr. Andrew J. Brown Avenue and E. 19th
Street, including at residences. Id. Von Duprin
installed mitigation systems into each affected residence
that reduced contaminants to levels that meet IDEM's
expectations. Id. Von Duprin continues to maintain
and pay the annual cost for the operation of each residential
mitigation system. Id.
IDEM
also ordered the Threaded Rod Company, the current occupant
of the Von Duprin Facility, to investigate the extent of
groundwater contamination and to engage in remedial actions
to protect nearby residents and the public from hazardous
chemicals. (Filing No. 135-9.) After undertaking an
investigation, the Threaded Rod Company sued Von Duprin and
Moran to recover the costs. (Filing No. 135-10.) Von
Duprin reached a settlement with the Threaded Rod Company,
the terms of which required Von Duprin to complete the
investigation the Threaded Rod Company had started and to
finance cleanup of the Von Duprin Facility and the
contaminated groundwater. (Filing No. 136 at 3.) The
Threaded Rod Company relinquished its work product to Von
Duprin, giving Von Duprin access to sampling results and
laboratory data and reports prepared by Threaded Rod
Company's consultants. Id. Von Duprin has
attempted to engage the Defendants in remedial efforts to
mitigate the contaminated groundwater in the area, but,
according to Von Duprin, the Defendants have refused.
Id. at 4. Moran denies it has contributed to
contamination of groundwater through TCE and PCE seepage
(Filing No. 139 at 5-6), and the Major Defendants
deny that they have refused to engage in remedial efforts.
(Filing No. 142 at 7.) More facts will follow as
necessary.
B.
Procedural History
Von
Duprin filed this action seeking a judgment against Moran,
the Major Defendants and Zimmer Paper Products Incorporated
(collectively, “Defendants”) under 42 U.S.C.
§§ 9607(a)(4)(B) and 9613(g)(2) and Indiana Code
§ 13-30-9. Von Duprin's Amended Complaint, filed on
January 4, 2017, alleges the same two claims against each
Defendant: (1) cost recovery under section 107(a)(4)(B) of
CERCLA, and (2) declaratory judgment under section 113(g)(2)
of CERCLA[5]. (Filing No. 42.) It also alleges
environmental claims against Moran and Zimmer Paper under
Indiana Code § 13-30-9, et seq, which allows
Hoosiers to “bring an environmental legal action
against a person that caused or contributed to the release
[of hazardous substances or petroleum] to recover reasonable
costs of a removal or remedial action.” Id.
On
January 18, 2017, the Major Defendants filed an Answer to Von
Duprin's Amended Complaint and a counterclaim against Von
Duprin and a cross-claim against Moran. (Filing No.
46.) On January 24, 2017, Moran filed an Answer to Von
Duprin's Amended Complaint, a counterclaim against Von
Duprin, and a Motion for Leave to Assert Counterclaims
against the other Defendants. (Filing No. 52;
Filing No. 53.)
Pursuant
to the Court's “Courtroom Procedures and Trial
Practice, ” (Filing No. 67), the Major
Defendants and Moran notified the Court that the parties
intended to file cross-motions for summary judgment and moved
to set a “summary judgment briefing schedule.”
(Filing No. 129.) The Court granted that motion in
part and set the following summary judgment briefing
schedule:
1. Von Duprin's deadline to file its Motion for Summary
Judgment and Brief in Support is July 27,
2018 (limited to 35 pages);
2. Moran, Major Holdings, and Major Tool's deadline to
file their Cross-Motions for Summary Judgment, Briefs in
Support, and Responses in Opposition to Von Duprin's
Motion for Summary Judgment is August 17,
2018 (limited to 55 pages);
3. Von Duprin's deadline to file its Reply in Support of
its Motion for Summary Judgment and Responses in Opposition
to Cross-Motions for Summary Judgment is
September 14, 2018 (limited to 40
pages); and
4. Moran, Major Holdings, and Major Tool's deadline to
file their Replies in Support of Cross-Motions for Summary
Judgment is September 28, 2018
(limited to 20 pages).
If Von Duprin believes a Surreply is appropriate under Local
Rule 56-1(d), plaintiff may file a Surreply no later
than seven days from the filing of Defendants'
Replies in Support of Cross-Motions for summary judgment,
(limited to 7 pages).
(Filing No. 132.)
On July
27, 2018, Von Duprin filed its Motion for Partial Summary
Judgment, asking only for judgment as to liability under
Section 107(a) of CERCLA against all parties. (Filing No.
133.)
On
August 17, 2018, Moran filed a response and Cross-Motion for
Summary Judgment asking the Court to determine that it is
liable only for its proportionate share of the harm caused
under Section 107(a) of CERCLA. (Filing No. 138.)
Also, on August 17, 2018, the Major Defendants filed their
response and Cross-Motion for Summary Judgment, asking for
judgment against all parties as to all claims. (Filing
No. 141.)
On
August 21, 2018, Moran moved to strike the Major
Defendants' Motion for Summary Judgment, arguing the
Court's Summary Judgment Briefing Schedule did not
contemplate a Motion for Summary Judgment against a
cross-claimant, and thus the Major Defendants should have
filed their Motion for Summary Judgment against Moran by the
July 27, 2018 original deadline for dispositive motions.
(Filing No. 144.) The Major Defendants responded
that the briefing schedule did not specify when it should
file its Motion for Summary Judgment against Moran, but that
it had acted in good faith and Moran had not suffered any
prejudice. (Filing No. 145.) Before the Court ruled
on that Motion to Strike, Von Duprin filed a Reply in support
of its Motion for Partial Summary Judgment (Filing No.
149; Filing No. 150), and Moran filed a
Response in Opposition to Major Defendants' Cross-Motion
for Summary Judgment. (Filing No. 152.) On December
10, 2018, the Court denied Moran's Motion to Strike,
finding the Major Defendants had committed excusable neglect
by filing their Cross-Motion for Summary Judgment after the
Court's original dispositive motions deadline.
(Filing No. 164.)
II.
STANDARD OF REVIEW
The
purpose of summary judgment is to “pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Federal Rule of Civil Procedure 56 provides that summary
judgment is appropriate if “the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.”
Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487,
489-90 (7th Cir. 2007). In ruling on a motion for summary
judgment, the court reviews “the record in the light
most favorable to the non-moving party and draw[s] all
reasonable inferences in that party's favor.”
Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009)
(citation omitted). “However, inferences that are
supported by only speculation or conjecture will not defeat a
summary judgment motion.” Dorsey v. Morgan
Stanley, 507 F.3d 624, 627 (7th Cir. 2007) (citation and
quotation marks omitted). Additionally, “[a] party who
bears the burden of proof on a particular issue may not rest
on its pleadings, but must affirmatively demonstrate, by
specific factual allegations, that there is a genuine issue
of material fact that requires trial.”
Hemsworth, 476 F.3d at 490 (citation omitted).
“The opposing party cannot meet this burden with
conclusory statements or speculation but only with
appropriate citations to relevant admissible evidence.”
Sink v. Knox County Hosp., 900 F.Supp. 1065, 1072
(S.D. Ind. 1995) (citations omitted).
“In
much the same way that a court is not required to scour the
record in search of evidence to defeat a motion for summary
judgment, nor is it permitted to conduct a paper trial on the
merits of [the] claim.” Ritchie v. Glidden
Co., 242 F.3d 713, 723 (7th Cir. 2001) (citations and
quotation marks omitted). “[N]either the mere existence
of some alleged factual dispute between the parties nor the
existence of some metaphysical doubt as to the material facts
is sufficient to defeat a motion for summary judgment.”
Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391,
395 (7th Cir. 1997) (citations and quotation marks omitted).
These
same standards apply even when each side files a motion for
summary judgment. The existence of cross-motions for summary
judgment does not imply that there are no genuine issues of
material fact. R.J. Corman Derailment Serv., LLC v.
Int'l Union of Operating Eng'rs., 335 F.3d 643,
647 (7th Cir. 2003). The process of taking the facts in the
light most favorable to the non-moving party, first for one
side and then for the other, may reveal that neither side has
enough to prevail without a trial. Id. at 648.
“With cross-motions, [the Court's] review of the
record requires that [the Court] construe all inferences in
favor of the party against whom the motion under
consideration is made.” O'Regan v. Arbitration
Forums, Inc., 246 F.3d 975, 983 (7th Cir. 2001)
(citation and quotation marks omitted).
III.
DISCUSSION
In
response to the serious environmental and health risks posed
by industrial pollution, Congress enacted CERCLA in December
of 1980. See 42 U.S.C. § 9601-9675.
Burlington Northern and Santa Fe Ry. Co. v. United
States, 556 U.S. 599, 602 (2009). CERCLA is designed to
encourage private parties to assume the financial
responsibility of cleanup by allowing them to seek recovery
from others. Id. at 602. In 1986, Congress passed
the Superfund Amendments and Reauthorization Act (SARA),
which amended CERCLA. Among the SARA amendments: Congress
created an express cause of action for contribution for
certain parties liable or potentially liable under Section
107(a), codified as CERCLA § 113(f)(1), and an express
right of contribution for those parties who resolved their
liability to the United States or the State in an approved
settlement, codified as CERCLA § 113(f)(3)(B). See
Bernstein v. Bankert, 733 F.3d 190, 206
(7thCir. 2013).
Section
107(a)(2) CERCLA liability attaches to any person who at the
time of disposal of any hazardous substance owned or operated
any facility at which such hazardous substances were
released. The elements of a CERCLA claim are: (1) the Site in
question is a “facility”; (2) a release or
threatened release of a hazardous substance at or from the
facility has occurred; (3) the release or threatened release
has resulted in necessary response costs being incurred
consistent with the “national contingency plan”;
and (4) the defendant is a “covered person” under
§107(a) of CERCLA. 42 U.S.C. § 9607(a);
Sycamore Indus. Park Assocs. v. Ericsson,
Inc., 546 F.3d 847, 850 (7th Cir. 2008); NutraSweet
Co. v. X-L Eng'g Co., 227 F.3d 776, 791 (7th Cir.
2000). A “covered person” includes the following:
(1) the current owner and operator of the facility; (2) any
person who at the time of disposal of any hazardous substance
owned or operated any facility at which such hazardous
substances were disposed of; (3) any person, who by contract,
agreement or otherwise arranged for the disposal or treatment
of hazardous substances at the facility; and (4) persons who
transported hazardous substances to the facility.
See, 42 U.S.C. § 9607(a)(1)-(4). In its Amended
Complaint, Von Duprin has asserted a claim for cost recovery
under Section 107(a) of CERCLA against each of the
Defendants.
A.
Count I - Cost Recovery Under Section 107(a) of
CERCLA 1.Von Duprin's Motion
For Partial Summary Judgment (Filing No. 133)
Von
Duprin asserts three premises in its motion for partial
summary judgment. First, that the Former Ertel Facility, the
Former Zimmer Paper Facility, and the Former Moran Facility
are all facilities that released or threatened to release
hazardous substances under CERCLA. (Filing No. 134 at
12-17.) Second, Moran operated the Former Moran Facility
while it released or threatened to release hazardous
substances, and the Major Defendants currently own and
operate the Former Ertel Facility and the Former Zimmer Paper
Facility. Id. at 17-19. Third, Von Duprin incurred
response costs due to release or threatened release of
hazardous substances from those facilities, and at least some
of those response costs were necessary and incurred
consistent with the National Contingency Plan
(“NCP”) as required for recovery under CERCLA.
Id. at 19-25.
Moran
urges the Court to deny Von Duprin's Motion for Partial
Summary Judgment, arguing Von Duprin has not met its burden
of showing that its expenditures were necessary or incurred
in compliance with the NCP, as required by Section
107(a).[6] (Filing No. 139 at 12-21.) The
Major Defendants join that argument and make six others in
opposition to Von Duprin's Motion.[7] (Filing No.
142 at 25-42.) First, they argue that Von Duprin waived
its claims by failing to file the State of Claims and
Defenses required by the Second Revised Case Management Plan.
Id. at 19-20. They argue Von Duprin has failed to
show that contamination from any site owned by the Major
Defendants caused Von Duprin to incur any costs. Id.
at 24-25. They argue Von Duprin's claims are barred
because as Bona Fide Prospective Purchasers, the Major
Defendants are exempted from CERCLA. Id. at 42-50.
They argue Von Duprin's claims are barred by the
“third party” defense set forth in Section
107(b)(3) of CERCLA, which exempts current owners or
operators who can show that the release of hazardous
substance was solely caused by a third party, among other
things. Id. at 50-52. And last, the Major Defendants
argue Von Duprin failed to state a claim against Major
Holdings under Section 107(a)(2) of CERCLA. Id. at
52-54. The Major Defendants also seek summary judgment
against Moran which the Court will addresses below.
2.
Waiver
As an
initial matter, the Court must determine whether Von Duprin
has waived its claims against the Major Defendants. The
Second Revised Case Management Plan states “…
consistent with the certification provisions of Fed. R. Civ.
Proc. 11(b) the party with the burden of proof shall file a
statement of the claims or defenses it intends to prove at
trial, stating specifically the legal theories upon which the
claims or defenses are based.” (Filing No. 98 at
3, ¶ E.) The parties agree that Von Duprin never
filed a Statement of Claims and Defenses. The Major
Defendants argue that by failing to file a Statement of
Claims and Defenses, Von Duprin “waived its claims
against the Major Defendants under Section 107 and Section
113 and its defenses to the Major Defendants' claims
under Section 113(f).” (Filing No. 142 at 20.)
In support, the Major Defendants cite four cases in which
this Court granted summary judgment on a claim that a party
had omitted from its Statement of Claims and Defenses.
Id.
In lieu
of filing a statement that it considered redundant,
“superfluous and unnecessary, ” Von Duprin's
counsel informed defense counsel that all of Von Duprin's
claims were set forth in its Amended Complaint and he
inquired of the parties to see whether there was an objection
to his decision to stand on that complaint. Von Duprin cites
an e-mail its counsel sent to counsel for Moran and the Major
Defendants on July 16, 2018, which reads:
Von Duprin's claims were fully set forth in its Amended
Complaint [Dkt. 42] and there has been no change in its
position in the intervening 18 months. Also, we do not
believe that Von Duprin has asserted any defenses on which it
bears the burden of proof. We believe that repeating Von
Duprin's claims in yet another docket filing is
superfluous and unnecessary.
That said, Von Duprin is willing to participate in this
exercise if the Defendants see any benefit to having Von
Duprin repeat its claims again. We would appreciate having
the Defendants' view on this issue.
Also, we will check with the Court staff who may want to
maintain the symmetry of the docket by having a statement
from each party even if that submission merely repeats the
party's previous claims. If so, we ...