Opinion
Case No. 3:88-cv-873-J-20-HTS.
December 21, 2005
ORDER
After conducting a non-jury trial on Monday, August 29, 2005, the Court finds as follows:
Findings of Fact
Plaintiff JEA, is located in within the Middle District of Florida. Defendant Eppinger and Russell Company is a defunct New York corporation, previously registered to do business in the State of Florida. (Doc. No. 1 ("Complaint"), filed October 21, 1988.) Eppinger and Russell Company was formed in New York on December 30, 1904. Eppinger and Russell Company was in the business to purchase wood, treat it with preservatives, largely creosote, and sell it as telephone poles, railroad ties, piles and similar products. (Doc. No. 1 at ¶ 11.) In 1942, all stock of Eppinger and Russell was purchased by Bernuth Lembcke Co., Inc. (Deposition of Charles Von Bernuth at 37 in Trial Exhibit 38.) After that date Eppinger and Russell was a wholly owned subsidiary of Bernuth Lembcke Co., Inc. (Doc. No. 1 at ¶ 12.) In 1980 Bernuth Lembcke Co., Inc. was renamed The Bernuth Corporation. (Doc. No. 1 at ¶ 6.) The Bernuth Corporation is one of the defendants in this case and was qualified to transact business in Florida in July of 1980.
The name of the Jacksonville Electric Authority was changed to JEA by virtue of Ordinance 1998-0253.
"In 1925 and 1926 Tufts [University] received 4,808 of Eppinger [and Russell]'s 5,000 shares through a testamentary gift of an alumnus of the institution. In 1939 the school purchased the remaining 192 shares. It then sold all of its shares in Eppinger [and Russell] to Bernuth Lembcke Co., Inc. in 1942. . . ." Jacksonville Elec. Authority v. Bernuth Corp., 996 F.2d 1107, 1108 (11th Cir. 1993).
Bernuth, Lembcke is a Delaware corporation and a wholly-owned subsidiary of The Bernuth Corporation. The Bernuth Corporation is a successor to a previous New York corporation called Bernuth, Lembcke. (Deposition of Peter Bernuth at 4 in Trial Exhibit 38.)
The property which is the subject of this litigation is located off of Tallyrand Avenue in Jacksonville, Florida. This property was first used as a wood treating plant by Eppinger and Russell from 1909 to 1962. (Doc. No. 1 at ¶ 13.) By Warranty Deed dated February 9, 1962, Eppinger and Russell deeded the Tallyrand Avenue property to Bernuth Lembcke Co., Inc. Bernuth operated creosote storage facilities on the property until 1966. (Trial Exhibit 37 at ¶ 6.) From 1962 until mid-1966, creosote was sold from the tanks on the property.
The wood treatment was done by taking heated creosote oil from a storage tank through a working tank to a treatment cylinder. (Deposition of James LaPrade at 15 in Trial Exhibit 38.) Wood was placed in the cylinder on small rail cars and the creosote oil was pumped in under pressure. When the treatment was completed, excess oil was pumped out and the pressure was released, which pulled excess creosote from the wood. (Id. at 24.) The wood then remained on the rail cars and any creosote oil left on the wood would drip onto the ground. Nothing was placed on the ground beneath the wood to prevent the creosote oil from dripping onto ground. (Id. at 60.) The wood remained on the rail cars until it was moved by crane to the storage yard where it was stacked. (Id.)
The creosote was transferred off of the transport vessels and placed into storage tanks on the subject site. Creosote spilled on the dock, in the water, and on the land during the unloading of tankers into the storage tanks at the subject property. (Deposition of Frank Thomas "Tommy" Pound at 11-13 16 in Trial Exhibit 38; Trial Exhibit 4.) When creosote is discharged in water, most of the creosote, which is heavier than water, sinks to the bottom. (Pound Dep. at 85.) James LaPrade, Vice President of Bernuth Lembcke, observed creosote spill on the dock and in the water during the unloading of tankers into the storage tanks at the subject property. (LaPrade Dep. at 26.) When creosote is discharged in water, the light fractions of creosote will cause a colorful sheen on the water that usually evaporates quickly. (Pound Dep. at 85.) At the time creosote was transferred off the transport vessels and placed into storage tanks on the subject site, the creosote was owned by Bernuth Lembcke. (LaPrade Dep. at 15 Deposition of Edward Bader at 13 in Trial Exhibit 38.) Eppinger and Russell acquired ownership of the creosote when it was drawn from the storage tanks and put into Eppinger and Russell work tanks. (Bader Dep. at 13.) Zinc meta-arsenite was also used on the property until approximately 1938, during the time that Eppinger and Russell held title to the parcel. (Trial Exhibit 37 at ¶ 10.)
From 1962 until mid-1966, creosote was sold from the tanks on the subject property. There were five creosote storage tanks on the property: one with a 1 million gallon capacity, two which held 50,000 gallons, and two that held 150,000 gallons. Alvah Crandall was the Jacksonville plant manager for Eppinger and Russell. (Deposition of Alvah Crandall in Trial Exhibit 38.) He supervised the loading of creosote onto tank cars or tank trucks headed for other creosote plants in the Southeast United States. (Id.)
On December 20, 1965, Bernuth Lembcke Co., Inc. applied for a permit from the City of Jacksonville to dismantle existing creosote tanks on the Tallyrand property. William E. Davis worked for Atlas Tank Company in 1966 and was accompanied by his wife, Lola Mae Davis, to the subject property for the purpose of dismantling the tanks. (Deposition of Lola Mae Davis at 5 in Trial Exhibit 38.) Mrs. Davis kept a calendar of work performed on the property related to the removal of storage tanks in 1966. Mr. and Mrs. Davis arrived in Jacksonville on September 14, 1966 and remained until the storage tanks were removed on November 15, 1966. (Id. at 9.)
At the time the tanks were dismantled in 1966, the smaller tanks had an oil-like product in them, and the large tanks had creosote in a dry form. (Deposition of William Davis at 20 in Trial Exhibit 38.) The large tank had creosote sludge in it that was about 4 feet deep on one side, which tapered down to about 2 to 3 feet on the other side. (Id. at 22.) At the time the tanks were dismantled, sawmill shavings were added to the sludge to make a consistency that a front-end loader could pick up. (Id. at 24.)
Tommy Pound, terminal manager for Bernuth Lembcke Co., Inc. for their Jacksonville facility located immediately across Tallyrand Avenue from the subject property, admitted that it was common practice that when they had a build-up of sludge in the work tank or cylinder that Alvah Crandall would remove the sludge, mix it with wood shavings or sawdust, and bury it on the property. (Pound Dep. at 95 Crandall Dep. at 15.) A million gallon tank of creosote could have as much as 150,000 gallons of sludge, measured at 30,000 gallons per foot for a 75-foot diameter tank. (Pound Dep. at 103.) From approximately 1966 until 1978, James Alberty supervised the unloading of creosote from tank ships on behalf of The Bernuth Company and Bernuth Lembcke Co., Inc. using a dock appurtenant to Texaco's property, immediately south of the subject property. (Deposition of James Alberty at 12 in Trial Exhibit 38.)
The Jacksonville Electric Authority (n/k/a JEA) acquired the subject property by condemnation from Southern Regional Industrial Realty, Inc. in 1977. (Doc. No. 1 at ¶ 8.) By the time JEA acquired the site, it was aware the property had been used as a wood treating site and that creosote was used at the site. (Deposition of Hubert Chapman at 135 in Trial Exhibit 38.) Simultaneous with the acquisition by condemnation, the JEA awarded contracts for the construction of percolation ponds on the property. The percolation ponds were designed to receive the chemical wastewater from JEA's Kennedy Generating Station for sedimentation, neutralization, percolation, and evaporation. (Deposition of Richard Breitmoser in Trial Exhibit 38.) The wastewater that was directed to the ponds consisted primarily of boiler wash water, which resulted from periodic boiler washing. The operation of the percolation/evaporation pond system was permitted by the Florida Department of Environmental Regulation for the collection and disposal of low volume chemical waste, boiler cleaning, and blowdown waste. (Chapman Dep. at 46.) The construction of the percolation ponds and roads on the Tallyrand site resulted in the moving of soil at the site. The area where the creosote sludge was buried was altered by this construction. (Trial Exhibit 37 at ¶ 20.)
In 1983, JEA discontinued further work on plans to renovate the percolation pond berms at the Kennedy Generating Station and the pumping of wastewater to the ponds ceased. (Deposition of John Schatmeyer at 31 in Trial Exhibit 38.) Subsequently, wastewater was diverted to a chemical wastewater treating facility constructed on the subject property and, thereafter, discharged to the Buckman treatment plant. (Trial Exhibit 37 at ¶ 21.) On October 27, 1983, JEA entered into a contract with Wood Hopkins for maintenance dredging at the Kennedy Generating Station using a portion of the subject property for soil disposal. (Trial Exhibit 37 at ¶ 22.) During the construction of the Dillon substation on the property in 1982, approximately 1,800 cubic yards of soil contaminated with arsenic and creosote was removed by JEA subcontractor Miller Electric. The layer of contaminated soil removed during the construction of the Dillon substation was between 10 and 30 inches deep. (Deposition of Dan Taylor at 70 in Trial Exhibit 38.)
On August 18, 1982, Jones Edmonds and Associates, consultant to the JEA, advised the Authority of the discovery of contamination on the subject property related to creosote and arsenic. (Trial Exhibit 37 at ¶ 24.) On September 7, 1982, Jones Edmonds and Associates completed a final report regarding its findings in the creosote investigation at the Kennedy Generation Station. In March 1984, JEA notified the Environmental Protection Agency (Form 8900-1) of the presence of waste from an abandoned wood preservation facility on JEA property. (Trial Exhibit 37 at ¶ 25.)
The original constituents of concern for the Florida Department of Environmental Regulation (n/k/a/ Florida Department of Environmental Protection (FDEP)) included creosote, zinc meta-arsenite (ZMA) and pentachlorophenol (PCP). (Trial Exhibit 2 at 3.) In the groundwater, soil, and sediment sampling on the subject property, carbazole and phenanthrene compounds were used as indicators of creosote contamination. (Id.) Analytical results from 1983 site investigations indicated the presence of arsenic and creosote contamination in both groundwater and soils at the site. Arsenic and creosote are "hazardous substances" as established by the Comprehensive Environmental Responses, Compensative and Liability Act (CERCLA) of 1980, 42 U.S.C. § 9601 (14) and defined in Section 403.703(29), Florida Statutes. Groundwater under the site has exceeded Florida's Primary Drinking Water Standards for arsenic, which provides for a maximum contaminant level 10 parts per billion. (Trial Exhibit 2 at 4-5.)
The Consent Order signed by JEA with the FDEP on April 18, 1985 required JEA to prepare the following documents prior to initiating an actual clean-up: (1) Site Assessment Plan; (2) Site Assessment Report; (3) Conceptual Design of the Corrective Action Plan; and (4) Final Design of the Corrective Action Plan. (Trial Exhibit 2.) On July 11, 1986, Camp Dresser and McKee (CDM) submitted its Site Assessment Plan draft report to JEA. The Plan established clean-up goals for mitigating the potential public health effects and environmental impacts on the site, with an estimated cost of site restoration of $8.7 million for Phase I (Upland) and $2.4 million for Phase II (Submerged Lands). (Trial Exhibit 37 at ¶ 30.) In 1987, the Final Site Assessment Report was completed, which established criteria clean-up goals for containment and control of potential migration pathways of contaminants. (Trial Exhibit 37 at ¶ 31.) The Site Assessment Report evaluated several remedial action alternatives and recommended a two phased plan to address site improvement and containment of sediments within the JEA property boundaries. The estimated cost for clean-up was $10.3 million. On May 22, 1987 the FDEP approved the Final Site Assessment Report. On August 13, 1987 the FEDP transmitted the Final Site Assessment Report to the Environmental Protection Agency (EPA).
The studies performed by CDM, on behalf of JEA, found the major contaminants at the site to be Polycyclic Aromatic Hydrocarbons (PAH's) and arsenic. (Trial Exhibit 37 at ¶ 32.) The original Risk Assessment for the subject property identified two principal site-related human health risks: (1) dermal contact with soils exceeding 1 mg/kg of PAH's and (2) incidental ingestion of soils exceeding 15 mg/kg of arsenic. The original clean-up criteria established by the Risk Assessment for incidental ingestion were 15 mg/kg for arsenic and 100 mg/kg of PAH's. (Trial Exhibit 37 at ¶ 33.)
The EPA has taken over from the State of Florida the lead role in enforcement concerning the subject site. (Trial. Exhibit 37 at ¶ 34.) On December 22, 1997, JEA entered into an Administrative Order on Consent (AOC) for the subject site with EPA, pursuant to the Resource Conservation and Recovery Act of 1976 (RCRA). (Trial Exhibit 1.) But for JEA's activities on the site, the EPA enforcement action would not be one undertaken pursuant to RCRA. (Trial Exhibit 37 at ¶ 35.)
Section 8 of the AOC, entitled "Work To Be Performed," obligates JEA "to perform the specified in the [AOC], in the manner and by the dates specified" therein. (Trial Exhibit 1 at 19.) The work JEA was obligated to perform includes "Interim Measures (IM)/Stabilization." "Interim measures" are defined as actions which can be initiated in advance of the implementation of the final corrective action to achieve the goal of stabilization. "Stabilization" is controlling or abating the immediate threat to human health or the environment from releases and preventing or minimizing the spread of contaminants for a long-term corrective measure while being evaluated.
JEA must also perform "Confirmatory Sampling" and analysis of soil or ground water to confirm that hazardous waste or hazardous constituents have been released into the environment at the site. The Confirmatory Sampling Workplan must also include schedules of implementation and completion of specific actions necessary to determine whether or not a release has occurred. Additionally, JEA must perform a RCRA Facility Investigation ("RFI"), which is the investigation and characterization of the sources of contamination and the nature, extent, direction, rate, movement and concentration of such sources of contamination and releases of hazardous waste that has been or is likely to be released into the environment from the facility.
Moreover, JEA is obligated to perform Corrective Measures Study ("CMS"). CMS is the investigation and evaluation of potential remedies which will protect human health and environment from the release of hazardous waste, or hazardous constituents, into the environment from the facility. Lastly, JEA is obligated to initiate Corrective Measures Implementation ("CMI"), which are those activities necessary to initiate, complete, monitor and maintain the remedies EPA selects to protect human health and the environment from a release or a potential release from hazardous waste, or hazardous constituents, in the environment from the facility. A CMI Workplan must include, at a minimum, a summary of the proposed treatability study and conceptual design, or JEA's justification for not proposing a treatability study. After EPA selects the appropriate remedial action, JEA must file with EPA and "fully implement" a CMI Workplan according to the approved CMI workplans and schedule.
The AOC also contains Section 9, which addresses public participation and comment in the selection of the appropriate Corrective Measures for the facility. This section enumerates procedures EPA will follow to ensure the public has an opportunity to comment on corrective measures proposed by EPA prior to their adoption. This method would achieve the "meaningful public participation" necessary as part of a "CERCLA-quality clean-up." See National Oil and Hazardous Substances Pollution Contingency Plan, 55 Fed. Reg. 8793 (Mar. 8, 1990) ("meaningful public participation" is integral to CERCLA-quality cleanup). Upon receipt of EPA's written approval of any workplan, report, specification, or schedule submitted pursuant to the AOC, JEA must commence work and implement any approved workplan in accordance with the schedule and provisions contained therein. (Trial Exhibit 1 at 26.) The AOC also requires that all work performed pursuant to the AOC be under the direction and supervision of a professional engineer, hydrologist, geologist, or environmental scientist.
JEA has incurred the following costs responding to contamination on the site:
Consultant and Engineering Costs A. Quinton White Associates $ 1,541.99 Camp, Dresser McKee $ 1,881,630.61 Clement International Corp. $ 42,090.89 Chrostowski, Pearsall, Foster, Durda Preziosi $ 42,387.89 CH2M Hill $ 381,173.31 Envirosoft $ 3,850.00 Jacksonville Seaport Authority $ 165.611.00 Jones, Edmunds Associates, Inc. $ 136,144.41 Rizzo Associates, Inc. $ 262.50 Weinberg Consulting Group, Inc. $ 72,392.50 ______________ Total $ 2,727,135.10
Hazardous Waste Disposal Clean Harbors Environmental Services $ 3,071.26 LAIDLAW Environmental Services $ 21,058.20 Safety Kleen $ 2,457.00 ______________ Total $ 26,580.46
In addition to consultant and engineering costs, and hazardous waste disposal costs, JEA has incurred the following attorneys' fees for work directly related to, and which advanced remediation efforts. None of these fees were for services related to this litigation.
Non-litigation Attorneys' Fees Office of General Counsel $ 11,348.50 LeBouef, Lamb, Leiby MacRae $ 58,195.00 Rogers, Towers, Bailey, Jones Gay $ 3,064.00 _______________ Total $ 72,607.50
The total for past response costs incurred by JEA, which would be recoverable under CERCLA is $2,826,323.06. (Trial Exhibit 39.)
Matthew R. McClure, P.E., of JEA testified that none of the past response costs listed above were attributable to JEA's activities on the property that would not have been incurred otherwise. David Lane, P.E., of CH2M Hill testified that the minimum remedial activities EPA or FDEP would require on the site are a cap over a portion of the site and a vertical barrier below the surface of the soil along two sides of the property. In addition, JEA will, at a minimum, be required to install a flexible cap or liner over contaminated sediment in the St. Johns River adjacent to the site. Mr. Lane's opinion was based on the history of enforcement at the site and a review of actions required by EPA or FDEP at comparable sites. (Trial Exhibit 40.) Mr. Lane testified that he did not believe the remediation costs at the site being sought by JEA were increased as a result of JEA's own activities at the site.
The most recent estimate for the minimum capital costs for these remediation measures is $12.1 million. In addition, JEA will be required to conduct ongoing monitoring and maintenance at the site, which is estimated to cost a minimum of $9.3 million, for a total minimum cost of $21.4 million. (Trial Exhibit 40.)
Mr. McClure also testified that JEA is obligated to, and will, comply with the terms of AOC. JEA will not implement any remedial measures that are inconsistent with the terms of the AOC. The AOC imposes substantial penalties on JEA should it fail to comply with the terms of the Order. (Trial Exhibit 1 at 33.) JEA is reporting the estimated remediation costs on its financial statements as a contingent liability. JEA will receive $525,000 pursuant to a pro tanto settlement between the former Third Party Defendant, Southern Regional Industrial Realty, JEA, and Defendants Eppinger and Russell and The Bernuth Corporation. (Trial Exhibit 37 at ¶ 36.) JEA has also concluded pro tanto settlements with two insurers for Defendants Eppinger and Russell and The Bernuth Corporation, in the amount of $825,000, for the two settling carriers. (Trial Exhibit 37 at ¶ 37.) A third carrier that provided excess coverage to Defendants, The Home Insurance Company (now designated The Home Insurance Company in Liquidation), is operating under an Order of Liquidation in Docket No. 03-E-0106, In the Matter of The Home Insurance Company, entered June 13, 2003 by the State of New Hampshire Superior Court, Merrimack SS. (Trial Exhibit 36.)
Conclusions of Law
"An essential purpose of CERCLA is to place the ultimate responsibility for the clean up of hazardous waste on `those responsible for problems caused by the disposal of chemical poison.'" Redwing Carriers, Inc. v. Saraland Apts., 94 F.3d 1489, 1507 (11th Cir. 1996) (quoting Florida Power Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1317 (11th Cir. 1990)).Accord United States v. DICO, Inc., 266 F.3d 864, 877 (8th Cir. 2001) ("CERCLA is a remedial statute designed to make parties responsible for introducing hazardous waste into the environment pay for cleaning up the messes they have created."). To further this purpose, "a bifurcated mechanism was created to promote the cleanup of waste sites, spills and hazardous substances released into the environment." Bunger v. Hartman, 797 F. Supp. 968, 970 (S.D. Fla. 1992). Namely, "[t]he federal government was empowered to respond to environmental hazards through the creation of Superfund, 42 U.S.C. § 9604-05, 9611-12, while private parties were permitted to institute actions to recover `response costs' for the cleanup of sites from those responsible for the hazard, 42 U.S.C. § 9607(a)." Id.
In order to establish liability under CERCLA, JEA must show: 1) that the site is a CERCLA "facility" as defined in 42 U.S.C. § 9601(9); 2) that there was a release or threatened release of a hazardous substance at the site; 3) that JEA incurred response costs consistent with the National Contingency Plan; and 4) Defendants are responsible persons as defined in 42 U.S.C. § 9607(a)(1)-(a)(4). Blasland, Bouck Lee, Inc. v. City of North Miami, 283 F.3d 1286, 1302-03 (11th Cir. 2002); Redwing Carriers, Inc., 94 F.3d at 1496-97. When a plaintiff establishes each of these elements and the defendant is unable to establish the applicability of one of the defenses listed in 42 U.S.C. § 9607(d), the plaintiff is entitled to judgment on the liability issue in a private cost recovery action. For the reasons stated below, JEA has established each of these four elements and no defenses are applicable. Accordingly, JEA is entitled to judgment on the liability issue.
"There shall be no liability . . . for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by —
(1) an act of God;
(2) an act of war;
(3) an act or omission of a third party other than an employee or agent of the defendant . . .; or
(4) any combination of the foregoing paragraphs.
42 U.S.C. § 9607.
The subject property is a "facility" within the meaning of 42 U.S.C. § 9601(9) because a hazardous substance was placed there. See, e.g., 3550 Stevens Creek Associates v. Barclays Bank of California, 915 F.2d 1355, 1358 (9th Cir. 1990) (citing definition of "facility" within Section 101(9) of CERCLA, 42 U.S.C. § 9601(9)); United States v. Amtreco, Inc., 809 F. Supp. 959, 964 (M.D. Ga. 1992) ("Since creosote and other hazardous wastes were present on the Amtreco site prior to the EPA cleanup, the Amtreco site is a facility under CERCLA.").
"The term `facility' means (A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel." 42 U.S.C. § 9601(9).
There was a "release" on the site as defined in 42 U.S.C. § 9601(22), which is "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment. . . ." In the process of transferring creosote off of the transport vessels and placing it into storage tanks on the subject site, creosote spilled on the dock, in the water, and on the land during the unloading. Additionally, at the time the storage tanks were dismantled in 1966, sawmill shavings were added to the sludge remaining in the tanks to make a consistency that a front-end loader could pick up and was then buried on the property. Accord United States v. Dickerson, 660 F. Supp. 227, 231 (M.D. Ga.) ("It is undisputed that creosote is a known carcinogen and has been classified by Congress as being hazardous."), aff'd Dickerson v. Administrator, EPA, 834 F.2d 974 (11th Cir. 1987).
For the reasons stated below, JEA incurred response costs as a result of the release. These costs include costs for monitoring, assessing, and evaluating the release of hazardous substances at the subject site and costs of implementing a response action, as well as certain attorneys' fees.
Under CERCLA, 42 U.S.C. § 9607(a), the term "covered persons" includes four categories of potentially responsible parties:
1) the owner and operator of a vessel or a 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 disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and
4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance.42 U.S.C. § 9607(a); Redwing Carriers, Inc. v. Saraland Apts., 94 F.3d at 1497. Whether an entity is a "covered person" is determined at the time of the triggering event concerning disposal of hazardous waste, not as the time suit is filed. InTown of Oyster Bay v. Occidental Chemical Corp., 987 F.Supp. 182, 201 (E.D.N.Y. 1997), the court observed that "[t]here is no indication in CERCLA that liability under this section depends upon whether the defendant corporation is a person at the time of suit. Rather, because liability is triggered by the disposal of hazardous waste, the only logical conclusion is that CERCLA `personhood' is also measured as of the time of this triggering event." Accordingly, even a defunct company may be held liable under CERCLA for its pre-dissolution activities. See, e.g., New York v. Longboat, Inc., 140 F.Supp.2d 174, 177 (N.D.N.Y. 2001); Town of Oyster Bay, 987 F.Supp. at 201. The Court is persuaded by these sister courts and therefore concludes that Defendants Eppinger and Russell Company and The Bernuth Corporation are "covered persons" under CERCLA.
The Eleventh Circuit has "interpreted the phrase `owner and operator' in subsection 9607(a)(1) to be disjunctive, imposing liability on any person who was either the current owner or the current operator of a facility." Redwing Carriers, Inc. v. Saraland Apts., 94 F.3d 1489, 1498 (11th Cir. 1996).
In this litigation JEA seeks recovery of several categories of past and future response costs. Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 668 (5th Cir. 1989) ("once liability is established [under CERCLA], the court must determine the appropriate remedy and which costs are recoverable"). These include past costs of monitoring, assessing, and evaluating the subject site, as well as certain non-litigation attorneys' fees. JEA also seeks future costs for (a) site remediation and (b) ongoing monitoring and maintenance of the site. The Court will address JEA's claims in that order.
"CERCLA is not a paradigm of clarity or precision. It has been criticized frequently for inartful drafting and numerous ambiguities attributable to its precipitous passage. Problems of interpretation have arisen from the Act's use of inadequately defined terms, a difficulty particularly apparent in the response costs area." Artesian Water Co. v. Government of New Castle County, 851 F.2d 643, 648 (3d Cir. 1988).
Past Response Costs
The costs of monitoring, assessing and evaluating a site are recoverable as CERCLA response costs, defined in 42 U.S.C. § 9601(25). Marriott Corp. v. Simkins Indus., Inc., 825 F.Supp. 1575, 1581, 1583 (S.D. Fla. 1993); Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., 4 F.3d 1209, 1218-19 (3d Cir. 1993).Accord Artesian Water Co. v. Government of New Castle County, 851 F.2d 643, 651 (3d Cir. 1988) (affirming district court's conclusion that costs incurred in monitoring and evaluating the impact of the leachate on the subject water supply were recoverable under 42 U.S.C. § 9607.) A prima facie case on liability under CERCLA does not include the implementation of clean-up programs. All that the law requires before investigation and monitoring costs are recoverable is that a release of a hazardous substance caused the incurrence of necessary response costs consistent with the NCP. See, e.g., County Line Invest. Co. v. Tinney, 933 F.2d 1508, 1512 (10th Cir. 1991); Marriott Corp. v. Simkins Indus., 825 F. Supp. at 1581; Artesian Water, 659 F. Supp. at 1287. Accord Jones v. Inmont Corp., 584 F. Supp. 1425, 1430 (S.D. Ohio 1984) ("To require either the government or a private party to complete cleanup prior to filing suit would defeat the dual purposes of CERCLA to promote rapid response to hazardous situations and to place the financial burden on the responsible parties."). Additionally, the "prevailing judicial view [is] that government approval prior to initiation of a private action is not required for consistency with the NCP." Marriott Corp., 825 F. Supp. at 1580; accord Richland-Lexington Airport Dist. v. Atlas Properties, Inc., 901 F.2d 1206, 1209 (4th Cir. 1990) (finding that "governmental approval is not a prerequisite to private recovery for cleanup costs under 42 U.S.C. §§ 9607(a)(2), (3), and (4)(B) of CERCLA."); Tanglewood East Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1575 (5th Cir. 1988) ("We find no merit to the contention that prior governmental involvement is a prerequisite to the recouping of response costs."); Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 891-92 (9th Cir. 1986) (rejecting any requirement of governmental approval before a private suit can be brought under 42 U.S.C. § 9607 of CERCLA). As itemized above in the recitation of facts, JEA has incurred a total of $2,826,323.06 in past response costs, which are recoverable under CERCLA.
Attorneys' Fees
The U.S. Supreme Court has held that CERCLA does not authorize recovery of attorneys' fees associated with litigating a cost recovery action, accordingly JEA is neither seeking nor is awarded recovery of these fees. Key Tronic Corp. v. United States, 511 U.S. 809, 814 (1994). Fees associated with primarily protecting a defendant's interests "as a defendant in the proceedings that establish the extent of its liability. . . . do not constitute `necessary costs of response' and are not recoverable under CERCLA." Id. at 820-21. The Court in Key Tronic did, however, distinguish between traditional attorneys' litigation fee awards and the recovery of fees for work that is directly related to, and advances, remediation efforts. For example, "[t]racking down other responsible solvent polluters increases the probability that a cleanup will be effective and get paid for," accordingly, "[t]hese kinds of activities are recoverable costs of response clearly distinguishable from litigation expenses." Id. at 820.
JEA avers, and Defendants do not dispute, that JEA has incurred recoverable non-litigation attorneys' fees under CERCLA. Upon a review of the record, the Court concludes that JEA is entitled to recover $72,607.50 in non-litigation attorneys' fees. (Trial Exhibits 21 23).
Future Response Costs
CERCLA, 42 U.S.C. § 9607(a)(4)(B), authorizes recovery of necessary response costs which were incurred and consistent with the NCP. Cooper Indus. v. Aviall Servs., 543 U.S. 157, 125 S. Ct. 577, 581 (2004) (noting that CERCLA "provides that PRPs shall be liable for `any other necessary costs of response incurred by any other person consistent with the national contingency plan'"). The NCP, more formally known as the National Oil and Hazardous Substances Pollution Contingency Plan, see 40 C.F.R. §§ 300.1-300.920, is comprised of EPA regulations setting forth procedures and standards for responding to releases of hazardous substances. Union Pac. R.R. v. Reilly Indus., 215 F.3d 830, 835 (8th Cir. 2000); accord Cooper Indus. v. Aviall Servs., 125 S.Ct. at 581 n. 2. The NCP, which is EPA's regulatory template for a CERCLA-quality cleanup, "sets performance standards, identifies methods for investigating the environmental impact of a release or threatened release, and establishes criteria for determining the appropriate extent of response activities."Public Service Co. of Colorado v. Gates Rubber Co., 175 F.3d 1177, 1181-82 (10th Cir. 1999) (citing OHM Remediation Srvs. v. Evans Cooperage Co., Inc., 116 F.3d 1574, 1579 (5th Cir. 1997)). A private party bears the burden of establishing substantial compliance with the NCP. See, e.g., Nashua Corp. v. Norton Co., 116 F. Supp. 2d 330, 352 (N.D.N.Y. 2000); Versatile Metals, Inc. v. Union Corp., 693 F. Supp. 1563, 1574 (D. Pa. 1988); Levin Metals Corp. v. Parr-Richmond Terminal Co., 608 F. Supp. 1272, 1275 (N.D. Cal. 1985); New York v. Shore Realty Corp., 648 F. Supp. 255, 261-62 (E.D.N.Y. 1986).
In evaluating the future costs sought by JEA, the Court must determine whether the claimed costs are necessary, incurred, and consistent with the NCP. To be "consistent with the NCP" requires substantial compliance upon evaluating the cleanup as a whole, and "immaterial or insubstantial deviations" from the provisions of 40 C.F.R. part 300 "will not be considered not consistent with the NCP." 40 C.F.R. § 300.700(c)(4). See also Public Serv. Co. v. Gates Rubber Co., 175 F.3d at 1182 ("we believe those response actions reflecting in substance NCP procedures and criteria will be deemed consistent").
For the purpose of cost recovery under section 107(a)(4)(B) of CERCLA:
(i) A private party response action will be considered "consistent with the NCP" if the action, when evaluated as a whole, is in substantial compliance with the applicable requirements in paragraphs (5) and (6) of this section, and results in a CERCLA-quality cleanup; and
(ii) Any response action carried out in compliance with the terms of an order issued by EPA pursuant to section 106 of CERCLA, or a consent decree entered into pursuant to section 122 of CERCLA, will be considered "consistent with the NCP." 40 C.F.R. 300.700(c)(3).
The main issue for this Court to determine is whether JEA has "incurred" compensable future costs under CERCLA. The Ninth Circuit explained in In re Dant Russell, Inc., sections 9607 and 9613 "envision that, before suing, CERCLA plaintiffs will spend some money responding to an environmental hazard. They can then go to court and obtain reimbursement for their initial outlays, as well as a declaration that the responsible party will have continuing liability for the cost of finishing the job." In re Dant Russell, Inc., 951 F.2d 246, 249-50 (9th Cir. 1991). The Second Circuit court noted that "[t]he proper remedy for future response costs is not a present lump-sum payment of anticipated expenses but instead a declaratory judgment award dividing future response costs among responsible parties," Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 92 (2d Cir. 2000), yet this Court finds Gussack Realty distinguishable from the instant case. In Gussack Realty, the "district court set plaintiffs' past response costs at zero" and entered judgment for plaintiffs in the amount of $1,083,585, as compensation for future costs that plaintiffs would incur remediating the property. Id. at 90. Unlike like Gussack Realty, this Court awards JEA $2,826,323.06 in past response costs and finds JEA has incurred compensable future expenses under CERCLA.
As the Dant Russell court rightly observes, "Since CERCLA places no strings on the award of response costs, allowing recovery for future costs absent any binding commitment to incur these costs would leave no incentive to complete the cleanup."In re Dant Russell, Inc., 951 F.2d at 250. The AOC, to which JEA is a party, orders JEA to conduct corrective measures to remediate the subject site pursuant to a plan approved by EPA. The Court finds that JEA has made a "commitment of resources for meeting these costs." See id. at 249; see also Farmland Indus., Inc. v. Frazier-Parrott Commodities, 111 F.3d 588, 591 (8th Cir. 1997) (costs, such as attorneys' fees, can be "incurred" without actually paying for them); Quarles Petroleum Co. v. United States, 551 F.2d 1201, 1205 (Ct.Cl. 1977) (noting that within the context of the Federal Water Pollution Control Act, "To incur means to become liable for or subject to; it does not mean to actually pay for."). Not only is JEA reporting the estimated remediation costs on its financial statements as a contingent liability, but it is also legally obligated to expend monies necessary to implement the remediation plan approved by regulatory authorities. See also Ohio ex rel. Brown v. Georgeoff, 562 F. Supp. 1300, 1316 (N.D. Ohio 1983) (noting that while the statute indeed speaks of costs "incurred" in the past tense, the court held that once some expenditure has been made, the controversy is sufficiently real to permit the court to issue a declaratory judgment on defendant's liability).
The Court finds that JEA has proven by a preponderance of the evidence that the minimum remedial activities proposed in response to the contamination of the site are consistent with the NCP and have been "incurred" in the amount of $21,400,000.00, in future costs for which JEA can recover under CERCLA.
Equitable Apportionment
Defendants have requested an equitable apportionment of damages pursuant to 42 U.S.C. § 9613(f), on the grounds that JEA's construction of percolation ponds and roads on the subject site resulted in the moving of soil on the property. While equitable defenses are not available in CERCLA response cost recovery action, Blasland, Bouck Lee v. City of N. Miami, 283 F.3d 1286, 1304 (11th Cir. 2002), "equitable considerations might come into play in the damage allocation phase of a CERCLA case."United States v. Atlas Minerals Chemicals, Inc., 797 F. Supp. 411, 417 (E.D. Pa. 1992). The movement of soil during construction of percolation ponds and roads altered the area where the creosote sludge was buried. Therefore, Defendants seek a reduction in JEA's recoverable damages to reflect JEA's proportionate share of responsibility for response costs. However, the Court is persuaded by the testimony of Mr. Lane, who stated that the remediation costs at the site were not increased as a result of JEA's own activities on the property. This trial testimony has not been refuted. Accordingly, the Court concludes that Defendants are not entitled to an equitable apportionment of damages.
Accordingly, it is ORDERED and ADJUDGED:
(1) Defendants are not entitled to an equitable apportionment of damages;
(2) The Clerk is directed to amend the name of Plaintiff from the Jacksonville Electric Authority to JEA;
(3) The Clerk is directed to enter judgment in favor of Plaintiff JEA, in the following amounts:
(A) $2,826,323.06 in past response costs,
(B) $72,607.50 in non-litigation attorneys' fees, and
(C) $21,400,000.00, in future costs recoverable under CERCLA Defendants, for a total of $24,298,930.56.
(4) The total award is off-set by the two settlements JEA has already entered, in the amounts of $525,000.00 and $828,000.00. The Clerk is therefore directed to enter judgment against Defendants Eppinger and Russell Company and The Bernuth Corporation in the amount of $22,945,930.56.
$24,298,930.56 — $525,000.00 — $828,000.00 = $22,945,930.56.
(5) The Court believes that this concludes this case. Unless one of the remaining parties advises the Court to the contrary, the Clerk is directed to close the file in thirty (30) days.
DONE AND ENTERED.