Opinion
Civil Action No. 3:94 CV-2477-H, No. 3:96-CV-1927-H, No. 3:96-CV-1929-H, No. 3:96-CV-2985-H, No. 3:96-CV-2993-H, No. 3:96-CV-3057-H, No. 3:96-CV-3092-H, No. 3:96-CV-3093-H, No. 3:96-CV-3094-H, No. 3:96-CV-3095-H, No. 3:96-CV-3096-H, No. 3:96-CV-3097-H, No. 3:96-CV-3098-H, No. 3:97-CV-0052-H, No. 3:97-CV-0055-H, No. 3:97-CV-1185-H
November 22, 2002
MEMORANDUM OPINION AND ORDER
Before the Court is Meridian Housing Co. ("Meridian") and Bonny Corporation's Amended Motion for Summary Judgment Against the Railroads filed August 21, 2002; St. Louis Southwestern Railway Company's and Southern Pacific Transportation Company's ("Railroads") Response filed September 6, 2002; and, Meridian's Reply filed September 17, 2002. Pursuant to the Railroads' Agreed Order of Partial Dismissal Against Bonny Corporation, Bonny's Summary Judgment Claims are DENIED as moot.
Pursuant to the Court's Revised Case Management and Scheduling Order entered by the Court on October 15, 2001, which stays all matters other than the CERCLA and RCRA environmental claims, this Opinion is limited to Meridian's Motion for Summary Judgment in the matter of the Railroads' CERCLA claims. Upon review of the pleadings, briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that Defendant Meridian's Amended Motion for Summary Judgment as to the CERCLA §§ 107 and 113 claims should be GRANTED.
I. BACKGROUND
Meridian's Motion for Summary Judgment against the Railroads is filed pursuant to the Court's October 15, 2001 Revised Case Management and Scheduling Order governing the litigation of environmental claims within the In re: Voluntary Purchasing Groups, Inc., ("VPG ") Litigation. The Railroads assert claims for cost recovery and contribution for response costs "in excess of Southern Pacific's and SSW's equitable shares" against Defendant Meridian under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") sections 107 and 113, 42 U.S.C. § 9607 and 9613, and for declaratory judgment under 28 U.S.C. § 2201 and CERCLA §§ 9607 and 9613. (First Am.Compl. at 12-15). These claims are asserted in the No. 3:94-CV-2477-H lawsuit by the Railroads against Meridian, Bonny, and Chickasha Cotton Oil Company, and as cross-claims and third-party claims in fifteen other cases associated with the VPG litigation. This decision reaches all of those claims.
Those cases include: No. 3:96-CV-1927-H (Teresa Collins), No. 3:96-CV-1929-H (S. E. Brown), No. 3:96-CV-2985-H (Vernon Adams), No. 3:96-CV-2993-H (Margaret Morris), No. 3:96-CV-3057-H (Felicia Adair), No. 3:96-CV-3092-H (Ronnie Burnett), No. 3:96-CV-3096-H (Ph. Velazquez), No. 3:96-CV-3097-H (J.D. Atkins), No. 3:96-CV-3098-H (Henry Relford), No. 3:97-CV-0052-H (R. P. Belcher), No. 3:97-CCV-0055-H (Louise Adair), No. 3:97-CV-1185-H (Estella Brown).
Defendant Meridian contends that the Railroads do not have a viable claim for contribution under CERCLA, because Meridian is entitled to protection against contribution claims under two separate Consent Decrees entered into with the State of Texas: State of Texas v. Bonny Corp., Inc., Meridian Housing Co., Michael D. Smith and H. Dean Smith, filed September 7, 2000 (hereinafter "Consent Decree #1 ") and State of Texas v. Voluntary Purchasing Groups, Inc., filed August 1, 2001 (hereinafter "Consent Decree #2"). (Def. App. at 31-48 and 1-30). Consent Decree #1 was entered into with Bonny Corporation, Meridian Housing Company, and Michael D. Smith and H. Dean Smith relating to (i) costs incurred by the TNRCC at the former Hi-Yield Superfund Site in Commerce, Texas, and (ii) natural resource damage associated with the Site. (Consent Decree #1 at 1). Consent Decree #2 was entered into with VPG pursuant to for (i) costs incurred by the TNRCC at the Commerce Site, (ii) natural resource damage associated with the Site, and (iii) the release, or threatened release, of solid wastes or hazardous substances from two sites operated by, or formerly operated by, VPG in Bonham, Texas and one site near Ridgeway, Texas. (Consent Decree #2 at 1).
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where the facts and law as represented in the pleadings, affidavits and other summary judgment evidence show that no reasonable trier of fact could find for the nonmoving party as to any material fact. FED.R.CIV.P. 56; Lujan v. National Wildlife Federation, 497 U.S. 871, 888 (1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Innovative Database Systs. v. Morales, 990 F.2d 217 (5th Cir. 1993). "The moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Properties, Inc. v. Potomac Ins. Co. of Ill., 140 F.3d 622, 625 (5th Cir. 1998) (citing Celotex, 477 U.S. at 322-25). If the movant fails to meet its initial burden, the motion must be denied, regardless of the nonmovant's response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
If the movant does meet its burden, the nonmovant must go beyond the pleadings and designate specific facts showing that a genuine issue of material fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998). A party opposing summary judgment may not rest on mere conclusory allegations or denials in its pleadings unsupported by specific facts presented in affidavits opposing the motion for summary judgment. FED. R. Civ. P. 56(e); Lujan, 497 U.S. at 888; Hightower v. Texas Hosp. Assn., 65 F.3d 443, 447 (5th Cir. 1995).
In determining whether genuine issues of fact exist, "[f]actual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists." Lynch, 140 F.3d at 625; see also Eastman Kodak v. Image Technical Services, 504 U.S. 451 (1992). However, in the absence of any proof, the Court will not assume that the nonmoving party could or would prove the necessary facts. Lynch, 140 F.3d at 625. A party must do more than simply show some "metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991).
III. ANALYSIS
A. Liability under CERCLA § 107
The Railroads' First Amended Complaint was filed November 1, 2001 seeking cost recovery under CERCLA § 107(a)(4)(B) and contribution under CERCLA § 113(f)(1). The Fifth Circuit in Availl Svcs., Inc. v. Cooper Indus., Inc., 263 F.3d 134, 137 (2001) ruled that only "innocent parties" can file CERCLA § 107(a) suits. Potentially Responsible Parties (PRPs) "must pursue a contribution action [under § 113(f)] instead." Id. The Railroads were found liable as owners of a CERCLA facility in the Court's August 7, 1997 Order ("1997 Order") in Case No. 3:94-CV-2477-H. Therefore, the Railroads are PRPs and are barred from bringing a § 107(a) suit against Meridian.
B. Liability under CERCLA § 113
Under CERCLA § 113, 42 U.S.C. § 9613(f)(1) "[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title . . ." A § 113(f)(1) contribution claim "involves actions between PRPs, while a cost recovery suit [under § 107] is initiated by a non-responsible party against a PRP." Availl, 263 F.3d at 137. Contribution claims are a "mechanism for apportioning costs that are recoverable under section 107." Geraghty Miller, Inc., v. Conoco Inc., 234 F.3d 917, 924 (5th Cir. 2000). Under § 113, courts may allocate response costs equitably among various PRPs. Availl, 263 F.3d at 137. In this case, the Railroads seek contribution from Meridian, for the their costs expended in remediation of the Commerce Site.
In Availl Services, Inc. v. Cooper Industries, 2002 WL 31521595 (2002) the Fifth Circuit describes the evolution of judicial interpretation § 113 of CERCLA. As CERCLA was originally enacted it contained no explicit provision by which PRPs could recover from each other for any inequitable response costs incurred in the remediation of toxic sites. Federal courts, however, began to articulate "a federal common law right of contribution to resolve claims among PRPs." Id. See also City of Philadelphia v. Stepan Chem. Co., 544 F. Supp. 1135 (E.D.Pa. 1982) (which the Fifth Circuit regards as the "seminal decision" regarding contribution) and Tanglewood E. Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1575 (5th Cir. 1988).
This right of contribution established in § 113 is not without limitations, however. In United States v. Colorado Eastern Railroad Co., 50 F.3d 1530, 1537 (1995) the Tenth Circuit ruled that the right of contribution established in § 113(f)(1) is subject to the restriction set forth in § 133(f)(2) which provides in relevant part:
A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. 42 U.S.C. § 9613(f)(2)
If a PRP has entered into a settlement agreement regarding response costs with the United States or a State, it may not be sued for contribution regarding any matter addressed in the settlement: "[A]PRP who has entered into a judicially approved settlement with the United States [or a State] may not be held liable for contribution to another PRP if the contribution claim concerns matters addressed in the settlement." Id. In United States v. Cannons Engineering Corp., 899 F.2d 79, 92 (1990) the First Circuit notes that Congress enacted § 113(f)(2) "to encourage settlements and provide PRPs a measure of finality in return for their willingness to settle."
In this case, as noted above, both VPG and Meridian have settled with the State of Texas regarding the State's response costs and any costs having to do with all natural resources damages at the Hi-Yield Site. In Consent Decree #1 the State of Texas settled with Bonny Corp., Meridian Housing Co., Michael D. Smith, and H. Dean Smith. Section IX of this Consent Decree ("Effect of Settlement: Contribution Protection") provides that the Settling Defendants (including Meridian) are entitled to "protection from contribution actions or claims as provided by CERCLA Section 113(f)(2), 42 U.S.C. § 9613(f)(2), and the laws of the State of Texas, including, but not limited to, the Texas Solid Waste Disposal Act, TEX. HEALTH SAFETY CODE ANN. § 361.00a et seq., for matters addressed in this Consent Decree." In Consent Decree #2 the State of Texas settled with VPG. Meridian argues that both of these Consent Decrees prevent the Railroads from bringing any claims for contribution against Meridian.
In Crown Cork Seal Co. v. Dockery, 907 F. Supp. 147 (M.D.N.C. 1995) the District Court found three elements necessary to bar a claim for contribution under § 113(f)(2): (1) the settling party must have resolved its liability to the United States or a State; (2) the resolution of that liability must have been in an administrative or judicially approved settlement, and (3) the claims for contribution must regard matters addressed in the settlement agreement. Id. at 150. The Court adopts this test as consistent with the plain meaning of § 113(f)(2) and with the Tenth Circuit's holding in Colorado. See 42 U.S.C. § 9613(f)(2); see also Colorado, 50 F.3d at 1537.
In this case there is no disagreement that both of the Consent Decrees were part of a judicially approved settlement. Thus, the second element is satisfied. In order to prevail on a Summary Judgment Motion on the issue of whether the Consent Decrees bar the Railroads from bringing § 113 CERCLA contribution claims against it, Meridian must prove elements number one and three — showing that as a matter of law it was a party to a consent decree which resolved its liability with the State, and that the Railroads' claim for contribution regards "matters addressed" in that settlement agreement.
C. Consent Decree #1 (September 7, 2000)
In Consent Decree #1 Meridian was a named party (along with Bonny Corporation, Michael D. Smith and H. Dean Smith) to a settlement agreement with the State of Texas. Thus, the first element of the test is fulfilled by this Consent Decree.
Regarding the third element, the "matters addressed" test, the Railroads contend that this Consent Decree does not bar their claims for recovery, because their claims are not "matters addressed." (Resp. at 10).
The Consent Decree defines "matters addressed" as "(i) all response actions (and associated costs) taken by the State of Texas, VPG, or by Settling Defendants at or in connection with the Site and (ii) all natural resource damages associated with the Site." Id. The Railroads argue that this does not include the costs involved in the remediation and corrective action taken on Railroad property by the Railroads: "[T]he Railroads' remediation and corrective action taken on Railroad property and costs expended by the Railroads are not matters addressed in the Consent Decree." Id.
As to the "costs expended" referenced by the Railroads above, to the extent that these are intended to refer to costs relating to the remediation of the Hi-Yield Site as a whole but excluding the Railroads' property, the Consent Decree precludes contribution actions from any party against Meridian for costs associated with response actions taken by the State of Texas, VPG, or Meridian, and for costs associated with all natural resource damages associated with the Site. The Railroads have not provided summary judgment evidence that their costs associated with remediation of the Hi-Yield Site (excluding their own property) were outside of these two categories.
As to whether the response cost associated with the Railroads' property is a "matter addressed" in the Consent Decree, Meridian argues that these costs are addressed in the Decree. Consent Decree #1 defines the "Site" as "the former Hi-Yield Superfund Site, located on the west side of Commerce, Texas." (Consent Decree at 6). It does not provide any indication of the specific properties included in the definition, but it does not specifically exclude the Railroads' properties from the Hi-Yield Site.
Meridian points to evidence that the EPA intended the Railroads' property to be included in the Hi-Yield Superfund Site. Two EPA administrative orders were issued five years before the Consent Decree was entered into. Both the EPA Administrative Order on Consent for Removal Action dated April 13, 1995 ("EPA Order #1") and the EPA Administrative Order on Consent for Removal Action dated September 29, 1995 ("EPA Order #2") found as a conclusion of law that the Hi-Yield Site qualifies as a "facility" under CERCLA, 42 U.S.C. § 9601(9). (EPA Order #1 at 7, EPA Order #2 at 7). Both Orders specifically define the Hi-Yield Site as including the Railroad properties.
The EPA Orders define the "Hi-Yield Site" as including "all of the following: the Hi-Yield Plant Site (including the Hi-Yield Consolidation Site), the Hi-Yield Residential Area site, and Sayle Creek." (EPA Order #1 at 3, EPA Order #2 at 3, emphasis added). The "Hi-Yield Plant Site" is further defined as: "the location of former manufacturing and commercial activities in Commerce, Hunt County, Texas, which is bounded to the southwest by, and includes, property of St. Louis Southwestern Railway Co./Southern Pacific Transportation Company . . ." (EPA Order #1 at 3, EPA Order #2 at 3). Both of these Orders restrict the use of this definition of the Site to the "purposes of [the] Order[s]," but are nevertheless indicative of the intention of the EPA that the Railroad property be defined as a part of the Hi-Yield Site. (EPA Order #1 at 3, EPA Order #2 at 3).
In the Court's Memorandum Opinion and Order of August 7, 1997, the Court found the entire Commerce Site, including the Railroads' property to be one CERCLA "facility" based on EPA conclusions, notwithstanding the separate EPA administrative orders concerning different discrete parcels of land at the Site. (1997 Order at 10). In this Order the Court specifically rejected the Railroads' argument that their property should not be included as part of the Hi-Yield Site for purposes of determining CERCLA liability, and the Railroads were held to be "owners" of a "facility" on this basis. Id. at 11.
Based on the above, the Court finds that Consent Decree #1 included the Railroads' property in its definition of the "Site" and that the Railroads' property and costs for its remediation are "matters addressed" by Consent Decree #1.
Based on the above evidence and authorities and pursuant to Consent Decree #1 and § 113(f)(2) the Railroads are barred from bringing CERCLA action for contribution against Meridian for costs relating to the Hi-Yield Site. The Court need not address whether Meridian was also protected by Consent Decree #2. For the reasons stated above Meridian's Motion for Summary Judgment on the Railroads' § 107 and § 113 CERCLA claims is GRANTED.