Opinion
Cause No. IP95-1359-C-M/S
January 20, 2000
ORDER
The plaintiffs have asked this Court to reconsider, clarify or amend its entry of judgment in favor of defendants Ace Battery Co. ("Ace"), Alter Barge Line, Inc. ("Alter Barge"), and Oscar Winski Co., Inc. ("Winski"). The motion, brought under Rule 59 (Motion to Alter or Amend Judgment) and under Rule 60 (Motion for Relief from Judgment), was filed on October 14, 1999, exactly ten days following the Court's entry of judgment for Ace, Alter Barge and Winski. Thus, it would be a timely motion under either rule. Fed.R.Civ.P. 59(e) (motion "shall be filed no later than 10 days after entry of the judgment"); Fed.R.Civ.P. 60(b) ("motion shall be made within a reasonable time"). The judgment followed three summary judgment orders resolving the issue of whether the three defendants are liable under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601-9675 (1995), for "arrang[ing] for disposal or treatment . . . of hazardous substances." Id. § 9607(a)(3).
According to the plaintiffs, the Court could not enter a Rule 58 final judgment because the orders did not resolve all of the claims between all of the parties in this action. Nor should the Court have awarded partial final judgment under Rule 54, the plaintiffs assert, because three pending summary judgment motions raise the same issues as were resolved in favor of Ace, Alter Barge and Winski, along with other issues. Those unresolved motions create the likelihood of duplicate appeals, the plaintiffs argue. The plaintiffs further argue that entry of partial final judgment would be error because of pending counter- and cross-claims filed by Ace and Alter Barge, for which Ace is still actively seeking discovery. Finally, they argue that if the Court meant to enter a Rule 54(b) judgment, it did not include the findings necessary for an appeal to be taken from the judgment. Thus, if the Court declines reconsideration the plaintiffs ask it to amend the judgment accordingly.
In opposition, defendant Winski contends that a Rule 54(b) certification for entry of final judgment on the claims against it was proper because its counter- and cross-claims were mooted by the grant of summary judgment in its favor. Defendants Ace and Alter Barge argue that the judgment should be considered one under Rule 54(b), because their reply brief contained an analysis of the elements of a Rule 54(b) judgment. Ace and Alter Barge incorporate that earlier reply brief by reference, which they contend "thoroughly addressed each of the issues raised by Plaintiffs." Defs.' Resistance to Pls.' Mot. for Rel. from J., ¶ 2. In a supplemental "resistance" to plaintiffs' motion, Ace and Alter Barge suggest that if the Court agrees to modify the judgment, it should do so by a nunc pro tunc order, such as the one included with their materials.
After reviewing the parties' arguments with respect to the order for entry of final judgment, the Court is persuaded that at a minimum it should be amended to comport with the requirements of Rule 54(b). In response to the plaintiffs' concerns about whether those requirements are met, the Court has also addressed the motions filed by the three defendants identified as seeking summary judgment on the same issue as Ace, Alter and Winski. As an added precaution, the Court has reviewed the status of all of the claims that relate to the potential arranger liability of suppliers of batteries to Ace, or lead plates reclaimed from batteries and sold to the smelter on the site.
I. FACTUAL AND PROCEDURAL BACKGROUND
This action was brought under CERCLA for purposes of determining liability among numerous defendants for the cleanup costs of a contaminated site, known as the "Avanti" site, owned by the plaintiffs. For purposes of its summary judgment rulings, the Court found that plaintiff Quemetco, Inc. ("Quemetco"), owned property at the site from 1964 to 1972. RSR Corp. v. Avanti, IP 95-1359, Order Dated June 25, 1999, at 2 ("Ace Order"). It also found that Quemetco and others had used the Avanti property to operate a secondary lead smelting facility. Id. A secondary smelter collects scrap materials containing lead and processes them to produce new usable forms of lead. Id. Quemetco was later acquired by plaintiff, RSR Corporation ("RSR Corp."). Third Am. Compl. ¶ 74. Neither RSR nor Quemetco (collectively "RSR") produced sufficient evidence to create a genuine issue of material fact regarding their arranger-liability claims against Ace, Alter Barge or Winski. Ace Order at 20; RSR Corp. v. Avanti, IP 95-1359, Order dated July 9, 1999, at 14 ("Alter Barge Order"); RSR Corp. v. Avanti, IP 95-1359, Order dated July 13, 1999, at 5 ("Winski Order"). Instead, the Court found that sufficient evidence supported the "useful product" defense raised by Ace, and indirectly by Alter Barge and Winski, and granted their cross-motions for summary judgment on the issue of arranger liability.
On or about July 22, 1999, Ace, Alter Barge and Winski moved for entry of final judgment on the Court's summary judgment rulings in their favor. RSR responded to those motions on or about August 17, 1999, and the defendants replied on August 31, 1999. After reviewing and considering the parties' briefing, the Court issued an order on September 2, 1999, directing judgment be entered in favor of the three defendants on the claims against them under the arranger liability theory. Two judgments were entered on October 4, 1999, one in favor of Winski, the other for Ace and Alter Barge, followed shortly by RSR's pending motion to alter or amend.
II. STANDARDS A. Motion to Alter or Amend
A motion to alter or amend judgment brought within ten days of the entry of judgment is considered timely filed. Russell v. Delco Remy Div. of Gen. Motors Corp., 51 F.3d 746, 749 (7th Cir. 1995). Rule 59(e) motions allow a district court to correct its own errors of law or fact, and thus avoid unnecessary appellate proceedings. Russell, 51 F.3d at 749. They do not, however, allow a party to advance arguments or theories that could and should have been made before the judgment was rendered. LB Credit Corp. v. Resolution Trust Corp., 49 F.3d 1263, 1267 (7th Cir. 1995). Instead, the motion "must clearly establish either a manifest error of law or fact or must present newly discovered evidence." Id. The error at issue here is whether the Court should have, or properly, entered a Rule 54(b) judgment.
B. Rule 54(b) Partial Final Judgment
Judgment may be entered in a multiple party or multiple claim case, when one or more but fewer than all the claims have been finally resolved. Fed.R.Civ.P. 54(b). A Rule 54(b) partial final judgment, however, may be entered only when the court makes "an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." Id. The proper entry of a "Rule 54(b) judgment requires first that the district court reach a judgment that is final in the sense that it completely disposes of a separate claim for relief or finally resolves all claims against a particular party or parties." United States v. Ettrick Wood Prod., Inc., 916 F.2d 1211, 1217 (7th Cir. 1990). It also requires the court to 1) expressly find that there is no just reason for delay, stating its reasons for such a finding, and 2) expressly direct the entry of final judgment. Id. If a court fails to state the reasons for entering a partial judgment, or does not mention Rule 54(b), it "casts some doubt on whether [it] has properly directed entry of final judgment under Rule 54(b)." Id.
To avoid raising that doubt, the court should make clear that it is directing the entry of final judgment on a separate and independent claim. For purposes of Rule 54(b), claims are not separate and independent if the facts on which they depend are "largely the same," or if the factual differences are minor. ODC Comm. Corp. v. Wenruth Invest., 826 F.2d 509, 512 (7th Cir. 1987). Factors considered include whether separate recoveries are possible on the claims, or whether it would violate the prohibition against splitting claims if they were brought separately. Id. "[M]ere variations in legal theories do not constitute separate claims." Id. In fact, the Seventh Circuit has described the test as "whether the claim that is contended to be separate so overlaps the claim or claims that have been retained for trial that if the latter were to give rise to a separate appeal at the end of the case the court would have to go over the same ground that it had covered in the first appeal." Lawyers Title Ins. Corp. v. Dearborn Title Corp., 118 F.3d 1157, 1162 (7th Cir. 1997).
The judgment also must be final, which means it must be "a decision upon a cognizable claim for relief," Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 7 (1980), and an "ultimate disposition" of at least one claim, or the rights and liabilities of at least one of the parties. Id.; Bank of Lincolnwood v. Federal Leas., Inc., 622 F.2d 944, 947 (7th Cir. 1980). Once the court determines it is dealing with a final decision, it must decide whether there is any reason for delay in entering a judgment and allowing an appeal. United States Gen., Inc. v. Albert, 792 F.2d 678, 681 (7th Cir. 1986). Although the court has discretion when making this determination, its discretion is not unbridled. See Ettrick, 916 F.2d at 1218 (noting court does not have "carte blanche" to send any decision involving a separate claim to the appellate court). Instead, the court should consider certain factors before deciding that entry of judgment is warranted. Even though the rule does not require it, "it is important that the court explain its reasoning, both for its own and the appellate court's benefit." Id.
A non-exclusive list of factors to be considered when determining whether there is just reason for delay include:
1. the relationship between the adjudicated and unadjudicated claims;
2. the possibility that the need for review might or might not be mooted by future developments in the district court;
3. the possibility that the reviewing court might be obliged to consider the same issue a second time;
4. the presence or absence of a claim or counterclaim which could result in set-off against the judgment sought to be made final;
5. miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense. . . .Federal Leas., Inc., 622 F.2d at 949 (citing Allis-Chalmers Corp. v. Philadelphia Elec. Co., 521 F.2d 360, 364 (3d Cir. 1975)). Courts should also consider judicial administrative interests and the equities involved. United States General, 792 F.2d at 681.
Once the court decides there is no just reason to delay entry of judgment it must specifically say so, and expressly direct the entry of final judgment. Failure to do so, however, will not defeat appellate jurisdiction if the basis for the court's determination is apparent. Federal Leas., 622 F.2d at 949.
C. Motion for Summary Judgment
Summary judgment is granted "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." Fed.R.Civ.P. 56(c). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the opposing party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed fact is material only if it might affect the outcome of the suit in light of the substantive law. Id.
The moving party has the initial burden to show the absence of genuine issues of material fact. See Schroeder v. Barth, 969 F.2d 421, 423 (7th Cir. 1992). This burden does not entail producing evidence to negate claims on which the opposing party has the burden of proof. See Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n. 3 (7th Cir. 1994). The party opposing a summary judgment motion bears an affirmative burden of presenting evidence that a disputed issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Scherer v. Rockwell Int'l Corp., 975 F.2d 356, 360 (7th Cir. 1992). The opposing party must "go beyond the pleadings" and set forth specific facts to show that a genuine issue exists. See Hong v. Children's Mem. Hosp., 993 F.2d 1257, 1261 (7th Cir. 1993), cert. denied, 511 U.S. 1005 (1994). This burden cannot be met with conclusory statements or speculation, see Weihaupt v. American Med. Ass'n, 874 F.2d 419, 428 (7th Cir. 1989), but only with appropriate citations to relevant admissible evidence. See Local Rule 56.1; Brasic v. Heinemann's Inc., Bakeries, 121 F.3d 281, 286 (7th Cir. 1997); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923-24 (7th Cir. 1994). Evidence sufficient to support every essential element of the claims on which the opposing party bears the burden of proof must be cited. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In considering a summary judgment motion, a court must draw all reasonable inferences "in the light most favorable" to the opposing party. Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992). If a reasonable factfinder could find for the opposing party, then summary judgment is inappropriate. Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Celotex Corp., 477 U.S. at 322-23; Shields Enters., 975 F.2d at 1294. With these standards the Court now turns to an analysis of the pending motions.
III. DISCUSSION A. RSR's Motion for Relief From Judgment
On September 2, 1999, the Court issued an order directing the entry of final judgment in favor of Ace, Alter Barge and Winski, without indicating it had considered or made findings as required by Rule 54(b). Because that judgment was not a final resolution of the entire case, it could only be considered a partial final judgment under Rule 54(b). The inadvertent omission of the findings and expressions of intent necessary to make that point clear requires the Court to reconsider the earlier order and its ensuing judgment. See In re Disclosure of Grand Jury Mat., 821 F.2d 1290, 1293-94 (7th Cir. 1987) (noting district court's equitable authority to vacate orders under Rule 60(b)); Simons v. Gorsuch, 715 F.2d 1248, 1252-53 (7th Cir. 1983) (district court's decision to deny motion to vacate reviewed only for abuse of discretion); Smith v. Widman Truck. Excav., Inc., 627 F.2d 792, 799 (7th Cir. 1980) ("no question of the power of a Federal district court to vacate its own orders . . . `whenever such action is appropriate to accomplish justice'"). In doing so, the Court finds that its order directing the entry of final judgment was both unclear and incomplete. Thus, RSR's motion for relief from judgment is GRANTED, and the September 2, and October 4, 1999, order and judgment are hereby VACATED.
Before determining whether to redirect the entry of judgment under Rule 54(b), the Court will first consider the issues regarding arranger liability raised by defendants J. Solotken Co., Inc. ("Solotken"), Brodey Brodey, Inc. ("Brodey"), and S.W. Industries, Inc. ("SWI"). As noted by the plaintiffs, these three defendants employ the useful product defense in connection with the claims against them, just as did Ace, Alter, and Winski. If the Court finds that summary judgment is appropriate on the arranger liability issue for each of these defendants, it will have more information on which to base its analysis about the propriety of the entry of partial final judgment on the claims involving battery plates and lead components.
The Court is aware that Congress recently amended CERCLA to clarify the liability of those engaged in "recycling transactions," which it defined as including arranging for recycling of scrap metals and spent lead-acid batteries, among other things. See Superfund Recycling Equity Act of 1999 ("SREA"), signed November 30, 1999. Currently pending is a motion for leave to amend the case management plan to allow for amendments to the pleadings to reflect the application of the SREA and for additional fact and expert witness discovery. In anticipation of the Court's favorable ruling on that motion, several defendants, including SWI, Solotken, and Brodey, have made known their intentions to amend their answers to reflect the effect of the SREA. Such an amendment may or may not lead to additional dispositive motions regarding these defendants' liability under CERCLA. In the absence of any briefing or evidence addressed to the elements of proof under the recycling amendment, the Court will not address the effect of the SREA at this time
B. J. Solotken Co., Inc .
CERCLA was enacted by Congress in 1980 to "provide clean-up of hazardous waste from polluted sites throughout the United States." Pneumo Abex v. High Point Thomasville Denton, 142 F.3d 769, 773 (4th Cir. 1998), cert. denied, 119 S.Ct. 407 (1998). To hold a defendant liable for clean-up costs under CERCLA, the law requires satisfaction of a four-part test. Plaintiffs must show that: "(1) the site in question is a `facility' as defined by CERCLA; (2) the Defendant is a `responsible person' for the spill as defined by CERCLA; (3) there was a release of hazardous substances; and (4) such a release caused the Plaintiff to incur response costs." Environmental Transp. Systems, Inc., v. Ensco, Inc., 969 F.2d 503, 506 (7th Cir. 1992); see also United States v. Wedzeb Enterprises, Inc., 844 F. Supp. 1328, 1333 (S.D.Ind. 1994). There is no dispute in this case as to elements (1), (3), and (4). Therefore, the issues before the Court relate to the second element, whether Solotken, Brodey and SWI are responsible persons under CERCLA.
Persons are responsible for CERCLA clean up when their activities fit in one of four categories. 42 U.S.C. § 9607 (a)(1)-(4) (1995). RSR alleges that Solotken, Brodey and SWI are liable under the third category, which provides that "any person who by contract, agreement, or otherwise arranged for disposal or treatment, of hazardous substances . . . shall be liable." 42 U.S.C. § 9607 (a)(3). This category is called "arranger liability."
Solotken, like its co-defendant Oscar Winski Company, Inc. ("Winski"), contends it is not responsible for clean-up costs under CERCLA because it only sold used batteries to co-defendant Ace Battery, Inc. ("Ace"). That sale constituted the sale of a useful product and not an arrangement for treatment or disposal of a hazardous substance. It is undisputed that Solotken is a scrap dealer, engaged primarily in the rag and paper recycling business, and that the sale of non-ferrous metals and spent batteries was an incidental aspect of its business. Alpert Dep. at 11, 87; Pl.'s Resp. to J. Solotken's Statement of Undisp. Mat. Facts at 2 ("Pl.'s Resp."). Of the non-ferrous metals Solotken sold, lead represented the smallest percentage of the business. Alpert Dep. at 87; Pl.'s Resp. at 2. Aluminum wire, a non-hazardous substance, constituted a much greater part of the business. Id. During the relevant time period, 1964 to 1972, Solotken delivered spent batteries to Ace, a battery-breaking operation that sold lead components from the batteries to a smelter on the Avanti site. Pl.'s Resp. at 3. The Court has already held that Ace's sale of lead components from the batteries it broke was the sale of a useful product, which negates any finding of arranger liability for Ace. Ace Order at 20. Similarly, the Court has held that Winski is not liable under CERCLA because its sale of spent batteries to Ace was its only link to the Avanti site. Winski Order at 5.
"Ferrous" metals are those that contain iron. American Heritage Dictionary. Non-ferrous metals do not contain iron. See Def. Brodey's Ex. 1, Jesse Adams Dep. at 9.
Just like Winski, Solotken cannot be held responsible for the eventual contamination at the Avanti site simply for selling used batteries to Ace. There is no claim of contamination of, or order to clean up, the Ace property where Solotken's used batteries were delivered. Thus, the Court's earlier decision regarding Ace's liability, and the corresponding ruling about Winski's liability, govern its finding with respect to this claim. To the extent that RSR seeks to hold Solotken liable for contamination at the Avanti site through Ace's ultimate transfer of lead components from spent batteries Solotken sold to Ace, its efforts fail. Solotken is not liable for arranging for treatment or disposal of a hazardous waste at the Avanti site through its sale of batteries to Ace.
Unlike Winski, however, Solotken also must defend against RSR's claim that it sold solder, spent batteries, wheel weights and other lead-containing materials directly to smelters at the Avanti site. According to a former manager of Quemetco's smelter, Benjamin McKinney ("McKinney"), Solotken delivered whole spent batteries to the smelter at the Avanti site. McKinney Dep. at 92. Another former smelter employee, Edward L. Puckett ("Puckett"), concurred that Solotken was a source of supply for wheel weights and scrap lead to the smelter. Puckett Dep. at 56. Solotken was listed by former comptroller and secretary of Quemetco, Royce A. Robinson ("Robinson"), as a supplier of "battery scrap, glass scrap or other scrap" during the relevant time period. Robinson Aff. ¶¶ 3, 5. The plaintiffs also argue that the smelter only paid for the tin and not for the lead content of the solder Solotken admits it delivered to the site, which means the lead was without value and being discarded.
In support of this contention, the plaintiffs site an unsworn declaration of former employee Lawrence R. Bartlett, not included with the materials submitted in response to this motion. That declaration, however, was attached to plaintiffs' response to the Brodey motion for summary judgment and appears to comport with the requirements of 28 U.S.C. § 1746. Specifically, Bartlett declared "under penalty of perjury" that the statements in it were true and correct. Pls.' Ex. 6, Decl. of Lawrence R. Bartlett; see Tyler v. Runyon, 70 F.3d 458, 462 (7th Cir. 1995).
To counter the plaintiffs' showing on this issue, Solotken offers the testimony of Ace's president, James Kirkham ("Kirkham"), that Ace would not have continued to do business with Quemetco or any other smelter at the Avanti site if the smelter directly solicited sales of used batteries from Ace's customers, such as Solotken. Kirkham Dep. at 181-82. Solotken also points to testimony of former Quemetco employee, Lawrence R. Bartlett ("Bartlett"), about whether Solotken supplied "junk batteries" to the site. Although Bartlett initially answered, "I believe they did, but I couldn't tell you how much. . . .", Bartlett Dep. at 169, his subsequent responses cast a shadow on that testimony. During cross-examination Bartlett said that Quemetco primarily bought chopped aluminum wire from Solotken, and he admitted that he had no personal knowledge as to whether Solotken ever sent junk batteries to the site. Id. at 245-46. This evidence raises a genuine issue of material fact about whether Solotken actually arranged for the disposal or treatment of whole spent batteries at the Avanti site.
Solotken contends that the other lead-containing materials it supplied to the Avanti site were analogous to the lead plates reclaimed by Ace from spent batteries. According to Solotken, the solder contained tin and lead, both of which were useful products in the smelting of secondary lead. Solotken Reply at 2. Consequently, Solotken argues it cannot be held liable for delivering such useful products to the site. Unfortunately, Solotken offers no evidence in support of this contention, or of its corresponding contention that solder needed no further treatment by Quemetco before it was introduced directly into the smelter. Id. The useful product defense requires the party raising it to produce actual evidence that it delivered a useful product, and will not be established by a mere assertion that a product was useful. Because Solotken has no such evidence, the Court cannot grant summary judgment in its favor on the basis of the useful product exception to arranger liability. Given the state of the record, there are genuine issues of material fact about whether Solotken's direct transactions with smelters at the Avanti site constituted an arrangement for treatment or disposal of a hazardous substance.
With respect to RSR's claim that Solotken is subject to arranger liability for selling used batteries to Ace, Solotken's motion for summary judgment is GRANTED, in part. The act of transferring spent batteries to a battery breaker that subsequently delivers a useful product to a smelter at a contaminated site does not subject the transferror to CERCLA arranger liability. However, with respect to the plaintiffs' claim that Solotken supplied solder, wheel weights, used batteries and other lead-containing materials directly to the Avanti site, the Court finds sufficient evidence to create a genuine issue of material fact about whether Solotken had arranged thereby for disposal of a hazardous waste. Thus, Solotken's motion for summary judgment on this claim is DENIED, in part.
B. Brodey Brodey, Inc .
The materials by which defendant Brodey is accused of being responsible for contaminating the Avanti site fall into three categories. First, like Winski and Solotken, Brodey is accused of contaminating the site through its delivery of spent batteries to Ace. There is no dispute about the fact that when Brodey acquired spent batteries with a general scrap delivery, it would send them to Ace. Nor is there any dispute that lead components from some of those batteries were likely among Ace's subsequent deliveries to the Avanti site. As the Court has found with the other two co-defendants, however, the act of transferring spent batteries to a battery-breaking company that subsequently delivers a useful product to a smelter at a contaminated site does not subject the transferror to liability under CERCLA. Consequently, partial summary judgment should be entered for Brodey with respect to this claim.
The second and third categories include alleged lead-containing scrap materials that Brodey delivered directly to Quemetco or others at the Avanti site. Brodey is accused of delivering whole spent batteries to the smelters at the contaminated site, but the evidence offered in support of this accusation cannot withstand summary judgment. The only evidence cited by RSR for this allegation is the testimony of a former secretary at Quemetco, Linda Cecil. According to Cecil's affidavit, she worked at Quemetco's Harris Street smelting facility from October 11, 1970 to June 11, 1979. Pls.' Ex. 2, Cecil Aff. ¶ 1. She performed secretarial duties, which included the processing of accounts payable and receivable and helping with other paperwork. Id. ¶ 4. Her testimony is that she recalls Quemetco purchasing scrap lead materials and scrap batteries from various suppliers, including Brodey. Id. ¶¶ 5-6.
Brodey has moved to strike Cecil's affidavit for failing to comply with Rule 56(e), which requires that affidavits be based "on personal knowledge" and that they "shall set forth facts as would be admissible in evidence." Fed.R.Civ.P. 56(e). The affidavit must also "show affirmatively that the affiant is competent to testify to the matters stated therein." Id. Cecil executed her affidavit with an affirmation that the statements were "true and correct to the best of [her] knowledge, information, and belief." Pls.' Ex. 2, Cecil Aff. Brodey argues Cecil did not affirm that her statements were true and correct to the best of her knowledge, which suggests that some statements may not have been based on personal knowledge. A verification that pleadings are based on a party's personal knowledge, information or belief "avoids the possibility of perjury," but has been found "insufficient for purposes of opposing a motion for summary judgment." Price v. Rochford, 947 F.2d 829, 832 (7th Cir. 1991). The Price court advises that because this type of verification allows the witness to avoid the risk of perjury, it cannot suffice for summary judgment purposes. Id.
Although Cecil's affirmance is based on knowledge, information and belief, rather than "or," it still leaves room for doubt about the basis for any given statement. Nowhere in the affidavit did Cecil provide any facts that would show affirmatively that she was competent to testify about the nature of the materials supplied by Brodey. At most she was aware that Brodey was a supplier. She did not claim to have ever seen Brodey deliver batteries, nor did she see any paperwork documenting such a delivery. In her deposition, Cecil explained why she concluded that Brodey supplied spent batteries: she had taken telephone calls from Brodey and routed them to the appropriate Quemecto employees. Cecil Dep. at 63-64. Yet, she could not recall whether the purpose of those calls was to discuss battery deliveries or sales. Id. According to Cecil, those telephone calls provide the only basis for her recollection about materials Brodey may have delivered to the site. Id. at 64-65. None of her statements allow the Court to determine whether her testimony on this issue is based on personal knowledge of the content of Brodey's deliveries. Thus, the Court finds that Cecil's statements alone are not sufficient to raise a genuine issue of material fact about whether Brodey actually delivered whole spent batteries to the Avanti site. Brodey's motion for summary judgment should be GRANTED, in part, on this issue.
The third category of materials delivered by Brodey included lead-containing scrap of various types, which Brodey does not dispute for purposes of summary judgment. Def. Brodey's Reply to Pls' Statement of Add'l Mat'l Facts at 9, Fact 24; at 11, Fact 27. Instead, Brodey disputes the allegations about the amount of scrap it supplied and asserts that the materials were a "necessary part of the smelting process, through which the smelter operators created a saleable product." Id. at 8, Facts 21-22. That is, Brodey invokes the useful product defense. Brodey also argues that it delivered "processed scrap metal," which is not considered a hazardous waste under the federal environmental regulations. While the former argument has been a recognized defense to CERCLA arranger liability, the latter has yet to be addressed by courts in this circuit.
Under CERCLA, the term "hazardous waste" has the same meaning as provided in the Solid Waste Disposal Act ("SWDA"). 42 U.S.C. § 9601 (29) (citing 42 U.S.C. § 6903). Hazardous waste is defined for purposes of the SWDA as:
a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may —
(A) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or
(B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed.42 U.S.C. § 6903(5). Citing regulations issued by the Environmental Protection Agency ("EPA") that define solid and hazardous waste for purposes of the SWDA and Resource Conservation and Recovery Act ("RCRA"), Brodey claims that the materials it supplied are specifically excluded from the definition of solid waste, and therefore cannot be considered hazardous waste under CERCLA.
According to EPA regulations, a hazardous waste that can be regulated under the SWDA must first be a solid waste as defined by § 261.2. 40 C.F.R. § 261.3(a), 262.11. A solid waste is any discarded material that is not excluded by § 261.4(a). That section specifically mentions "excluded scrap material . . . being recycled." 40 C.F.R. § 261.4(a)(13). Excluded scrap material includes processed scrap metal, which is defined as metals that have been "manually or physically altered . . . to enhance economic value or improve the handling of materials." 40 C.F.R. § 261.1(c)(10). For example, the definition specifically refers to scrap metal that has been "separated by metal type (i.e., sorted)." Id. Brodey claims that it separated its scrap metals into metal types before it sold them to the smelters, and therefore it did not provide hazardous waste to the smelters. RSR argues that no case has ever held that solder dross, such as allegedly delivered by Brodey to the site, is not a hazardous waste, and cites a case in which the court found the opposite. See California v. Summer Del Caribe, Inc., 821 F. Supp. 574 (N.D.Cal. 1993).
The real problem with Brodey's theory, however, is that Brodey has failed to demonstrate why the Court should rely only on the cited regulations for defining "hazardous substances" for purposes of CERCLA arranger liability. While it is true that Congress designated the SWDA, as amended by RCRA, as the source of definitions for the terms hazardous waste, treatment, and disposal, the term "hazardous substance" appears to have a broader meaning. See 42 U.S.C. § 9601(14). The cited regulations relate to management and regulation of solid wastes under the SWDA and RCRA, and certain substances are excluded from such regulation. It is not clear how those exclusions apply to CERCLA, or whether they should govern the Court's determination of the nature of the substances delivered by Brodey to the site.
CERCLA imposes liability on "any person who by contract, agreement, or otherwise arranged for disposal or treatment, of hazardous substances. . . ." 42 U.S.C. § 9607 (a)(3) (emphasis added). The term "hazardous substance" is defined under CERCLA as "(A) any substance designated pursuant to [the Water Pollution Control Act, also known as the Clean Water Act ("CWA")], (B) any element, compound, mixture, solution, or substance designated pursuant to § 9602 of [CERCLA], (C) any hazardous waste having the characteristics identified under or listed pursuant to [the SWDA, also known as RCRA] . . ., (D) any toxic pollutant listed under [the CWA], (E) any hazardous chemical substance or mixture with respect to which the Administrator [of EPA] has taken action pursuant to [the Toxic Substances Control Act]." 42 U.S.C. § 9601 (14); see also City of New York v. Exxon Corp., 744 F. Supp. 474, 482 (S.D.N.Y. 1990). Thus, CERCLA incorporates definitions for and listings of hazardous substances from various environmental statutes, not just the SWDA and RCRA, as well as empowers the EPA to designate substances for purposes of CERCLA liability. See 42 U.S.C. § 9602. For this reason, it is unlikely that courts in this circuit would rely only on the definitions of hazardous waste under the SWDA and RCRA when determining whether lead-containing scrap materials are hazardous substances under § 107 of CERCLA. 42 U.S.C. § 9607.
In support of its alternative theory of defense (useful product), Brodey asserts that to the extent that it sold any scrap metal to the smelter it would have been sorted by metal type and intended for use in alloying, citing deposition testimony of former Quemetco employee Bartlett. Bartlett Dep. at 333-34, 337. Bartlett specifically testified during his deposition that the smelter had an average production of five to six hundred tons of lead metal per month, which required approximately one thousand tons of whole spent batteries per month. Bartlett Dep. at 137-38. In addition, that production entailed the purchase of additives "to pick up extra units of antimony, to pick up units of tin, arsenic, some type metals, solders, really any lead-bearing scrap." Id. at 138. Although Bartlett did not see Brodey deliver any scrap to the smelter, or process any paperwork for a sale from Brodey, or know exactly how Brodey's scrap was used, he testified that the materials Brodey supplied "were used for alloy, . . . to create a product, yes." Bartlett Dep. at 332, 337.
Bartlett's second supplemental affidavit, dated March 8, 1998, states, "I do remember buying additives such as type metal, scrap solder, lithograph metal, and any other metal high in antimony and/or tin content for alloying from Brodey Brodey." Def.'s Ex. 8, Bartlett Second Supp. Aff. ¶ 10(B). At one point, Bartlett testified that Brodey supplied five to ten tons of scrap to the smelter and it did so two to five times a year. Bartlett Dep. at 330-31. He gave the same figures in his first affidavit, but in his second supplemental affidavit he corrected his former estimate to one to four thousand pounds. Def.'s Ex. 8, Bartlett Second Supp. Aff. ¶ 10(B). During his deposition, Bartlett revised his estimate again and said Brodey supplied more like five to ten thousand pounds. Bartlett Dep. at 336. Jesse Adams, a former Brodey employee, testified that lead constituted only about 2% of the metals processed in Brodey's business — the bulk of its business was copper and brass (85%) — and most of Brodey's lead was shipped to Chicago. Adams Dep. at 10, 30. He also did not recall ever delivering materials to the Avanti site. Id. at 40.
The plaintiffs point to other testimony in addition to Bartlett's, that generally describes Quemetco's acquisition of "scrap lead items" from Brodey. See Puckett Dep. at 56; Pls' Ex. 4, Bartlett's Aff. ¶ 5(g); Pls' Ex. 8, Robinson Aff. ¶ 5. Thus, the parties' evidence creates a factual issue about whether Brodey delivered sorted scrap to the site, what type of scrap it was, and how it was used. For purposes of summary judgment, the Court must view that evidence in the light most favorable to the non-movant, RSR. In so doing, the Court finds that there is a conflict in the evidence about the nature and quantity of lead-containing materials supplied by Brodey to the Avanti site, and for this reason, Brodey's motion for summary judgment must be DENIED, in part.
Plaintiffs also point to the testimony of McKinney, who stated in his affidavit that Brodey supplied "40 tri-axle truck loads" of scrap lead per year to the Avanti site, although the deposition pages cited do not definitively support the proposition that McKinney personally knew that Brodey supplied scrap lead to the site. Of greater concern, however, is the fact that McKinney testified at his deposition that he did not sign the affidavit under oath and did not understand that he was swearing to anything in it. McKinney Dep. at 77-78, 181-82. He also admitted there were statements in it with which he disagreed. Id. at 77. In addition, McKinney refused to be deposed under oath, and did not consider himself to be under oath as he testified. Id. at 183. Consequently, the testimony offered by McKinney is insufficient evidence of any facts for summary judgment purposes.
According to plaintiffs, the testimony of Robert Quenell also supported the fact that Brodey supplied a significant amount of lead scrap to the Avanti site. The cited pages from Quenell's deposition, however, do not support that fact. Quenell testified that he did not have any firsthand knowledge of the daily operations of the smelter site, nor did he buy any lead from scrap dealers. Quenell Dep. at 98. With respect to Brodey, Quenell testified that he knew "practically nothing" about the company, but that he heard about them through McKinney. Id. at 99. He then described Brodey as a battery-breaking business, and thought that Jim Kirkham, Ace's president, worked for Brodey. Id. at 101.
C. S.W. Industries, Inc .
SWI is a scrap ferrous metal dealer accused of being responsible for contamination of the Avanti site. During a period of time from approximately 1964 to 1969, SWI periodically accepted whole spent batteries from scrap suppliers as an incidental part of its business. Brf. in Supp. of SWI's Mot. for S.J., Statement of Mat. Facts Nos. 1, 2. For purposes of SWI's motion for summary judgment, the plaintiffs only dispute three of SWI's statements of material facts, two for procedural reasons. The procedural problem is that Facts 5 and 6 are not supported by any designation to admissible evidence. As such, they do not qualify as a supported statement of material fact by SWI. The only substantive dispute is with Fact 4, which states that SWI "may have sold a very limited quantity of battery plates to Plaintiffs." Id. No. 4. According to the plaintiffs, this statement mischaracterizes the cited testimony, which is that SWI actually sold battery plates, not that it "may have" sold them, and the sale was to Western Lead's smelter located at the contaminated site, not to the plaintiffs. Pls.' Resp. to SWI's St. of Mat. Facts, No. 4. Western Lead is not a plaintiff in this action, it is a defendant against whom a default judgment has been obtained by plaintiffs.
"Ferrous" metals are those that contain iron. American Heritage Dict.; Adams Dep. at 9.
Additional material facts, however, were asserted by the plaintiffs, including that SWI "disposed of battery cases at the Avanti site by mixing broken battery cases with loads of battery plates" it delivered to the site. Id. Add. Fact No. 9 (citing Bartlett Dep. at 171-72, 258). Bartlett testified that he witnessed SWI employees putting the battery cases into a load destined for the site. Bartlett Dep. at 258. As a result of this intermingling of cases and plates, the loads of battery plates from SWI contained less recoverable lead than a normal load of reclaimed lead plates would yield. Pls.' Resp. to SWI's St. of Mat. Facts, Add. Fact No. 10; Bartlett Dep. at 172. Consequently, the plaintiffs characterize SWI's deliveries of battery plates as being the disposal of battery cases.
Although SWI did not present a formal opposition to the plaintiffs' statements of additional material facts, its reply brief adequately communicates that those facts, and the inferences plaintiffs ask the Court to draw from them, are in dispute. For example, the plaintiffs argue that because SWI included a significant amount of broken battery cases with the loads of battery plates, they were trying to dispose of them. Noting that the Court has already determined that liability may attach to anyone who disposed of battery casings at the site, the plaintiffs assert that SWI is subject to arranger liability. SWI disagrees with the plaintiffs, and argues that it sold battery plates to the smelter to make a profit, and as plaintiffs concede, if broken cases were included in the loads, the purpose was to "cheat the smelter," rather than waste disposal. Consequently, this conduct could not constitute an arrangement with the smelter for the disposal or treatment of broken cases. In essence, SWI focuses only on the parties' intent with respect to the transaction. Alternatively, SWI admits that its battery-breaking operation may not have been as efficient as most, but argues against that inefficiency forming the basis for imposing liability under CERCLA.
The trouble with SWI's first contention is that it ignores the fact that the useful product defense does not just look at the defendant's intent to determine whether the transaction in question was an arrangement for disposal/treatment, or for the sale of a useful product. True, the Seventh Circuit has interpreted the language "arrange for" as suggesting intentional conduct. See G.J. Leasing Co., Inc. v. Union Elec. Co., 54 F.3d 379, 385 (7th Cir. 1995). Yet, it is possible for a defendant to intend the transfer of a useful product, which contains a hazardous substance, and not succeed because the product is not commercially viable. SWI's second contention finds no support in the law. The useful product defense requires a court to examine the transaction further to determine whether the seller's intent to sell a useful product was actually fulfilled.
That is, the Court must also rule out the possibility that the product was not in fact useful. Courts have identified several factors to be weighed when determining the nature of a transaction, including: "the intent of the parties to the contract as to whether the materials were to be reused entirely or reclaimed and then reused; the value of the materials sold; the usefulness of the materials in the condition in which they were sold, and the state of the product at the time of transferral (was the hazardous material contained or leaking/loose)." Pneumo, 142 F.3d at 775; see also AM Int'l Inc. v. International Forging Equip. Corp., 982 F.2d 989, 999 (6th Cir. 1993) (focusing on the value and usefulness of the product and the intent of the parties). Evidence provided by SWI, however, suggests that SWI's product was not useful. According to Sam Wolkoff ("Wolkoff"), an officer and director of SWI, the scrap dealer's method of breaking batteries was
The crudest way you can think of, with an ax or whatever way we can do it. We weren't a good operator, nobody really liked us, to be honest, in my opinion, but nobody else was good in those days. Then they went into the things that you threw the batteries in. We never went into anything, and that's why I say [the used battery portion] became less and less of our business.
Wolkoff Dep. at 75. Wolkoff testified that it became "harder and harder to get anybody" willing to break batteries for SWI, admitting "it had to be a drunk, okay?" Id. Finally, in approximately November of 1969, SWI discontinued breaking batteries for the smelter when Western Lead's vice president in charge of purchasing, Leo Bledsoe ("Bledsoe"), and Quemetco's Bartlett discovered that SWI had been "salting the loads with excess rubber." Bartlett Dep. at 171-72. As a result of this discovery, the smelter quit doing business with SWI. Id.
Bartlett explained that in the 1960s battery cases were made of hard rubber, and that the smelter wanted plates with as little rubber as possible, because rubber could not be converted to lead. Id. at 172. Ordinarily, a load of battery plates would be seventy percent metal, but when the smelter checked SWI's loads it found they were only forty-five to fifty percent metal, "the rest of it being rubber." Id. This testimony was offered as part of SWI's evidence in support of its motion for summary judgment. SWI does not interpret it as representing anything other than proof it sold broken battery plates to the smelter, just as Ace and Alter Barge had done. The scrap dealer dismissed the rubber content of its loads as evidence that its operation was less than efficient.
Because the determination of whether a seller was supplying a useful product depends so much on the facts surrounding the transaction, evidence showing that more than fifty percent of the product supplied by SWI was useless rubber, creates a genuine issue of material fact about whether SWI may avoid arranger liability by means of the useful product defense. Thus, the motion for summary judgment should be DENIED, with respect to SWI's deliveries of battery plates to the site.
For the same reasons as those underlying the Winski decision, and those just described with respect to Solotken and Brodey, the Court finds that SWI's sale of whole spent batteries to Ace was not the sale of a useful product. Instead, it was the sale of spent batteries, from which Ace reclaimed a useful product that it delivered to the site in question. SWI's link to the site through Ace does not result in arranger liability, and the motion for summary judgment is GRANTED, in part, with respect to this claim. It is DENIED, in part, with respect to the claims involving the direct deliveries of materials to the Avanti site.
D. Rule 54(b) Partial Final Judgment
Under CERCLA, a plaintiff may bring a claim for recovery based on four different types of relationships between an alleged potentially responsible person and the contaminated site. 42 U.S.C. § 9607(a). The four categories of responsible persons subject to clean-up costs are:
(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, 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 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 occurrence of response costs, of a hazardous substance. . . .42 U.S.C. § 9607 (a)(1)-(4). The claims that have been resolved fall in category three, or persons who arranged for disposal or treatment of hazardous substances. In particular, the claim for which Ace, Alter and Winski seek entry of judgment, is against potential arrangers who claim they were in fact selling a useful product — reclaimed lead components from spent batteries.
As noted, there are two ways to determine if a decision is upon a "cognizable claim for relief" for purposes of Rule 54(b). See Curtiss-Wright, 446 U.S. at 7. It could be an ultimate disposition of at least one separate and independent claim, or it could resolve all of the rights and liabilities of at least one of the parties. Id. Because the Court's decisions have not resolved all of the rights and liabilities of at least one of the parties, with the possible exception of Winski, its determination of the propriety of a Rule 54(b) judgment turns on whether an ultimate resolution of at least one separate claim has been achieved. The relevant claim is that against alleged arrangers for the disposal or treatment of hazardous substances who claim to have been selling a useful product.
A comprehensive review of the entire case has been undertaken to determine whether any other claims of this type are pending. The Court has found that of the seventy-one defendants in this action, eighteen have entered settlements with the plaintiffs, twelve have suffered a default judgment, five have been awarded summary judgment, ten have been dismissed, and twenty-six remain in the case. Of those still in the case, eleven have dispositive motions pending that are either fully or partially briefed. One of those pending motions mentions the useful product defense in connection with battery breaking activities, but the defense is secondary to a primary defense that no successor liability may be imposed on that defendant, The Recycling Group. In fact, the brief in support of The Recycling Group's motion for summary judgment does not cite any evidence that would assist the Court in applying the useful product defense. Given such a tenuous connection to this defense, the Recycling Group motion alone would not threaten the finality of any judgment being entered on arranger liability in the battery breaking context.
Another defendant, Indiana Battery, Inc., had a pending motion for summary judgment until it withdrew its motion on November 3, 1999. In that motion, Indiana Battery had argued that it only sold scrap batteries, for a profit, to Ace and another battery breaker, both of which sold reclaimed lead components to the smelters. As such, Indiana Battery asserted the useful product defense to avoid liability, similar to Winski and the others. In addition, three other defendants face possible arranger liability that might involve a decision with respect to the useful product defense. These three, Kasle Recycling Metallic Resources Corp., Kasle Recycling, Inc., and GNB Technologies, Inc., have yet to reveal their defense strategies in a dispositive motion.
Indiana Battery has also moved to amend its answer to reflect application of the SREA to its liability dispute.
Although the Court has just resolved the summary judgment motions of Solotken, Brodey and SWI, who raised the useful product defense in the battery breaking context, it cannot be assured that this type of claim will not arise again in the other defendants' cases. Likewise, the Court has found that to the extent a defendant's delivery of batteries was to Ace, it is not subject to arranger liability for contamination at the Avanti site. Indiana Battery would seem to fall in this category, but unless asked to resolve the issue on a summary judgment motion, the Court cannot decide whether this defendant should be included in the proposed entry of partial judgment. In addition, the issue of whether a scrap dealer would qualify for an exemption from CERCLA liability for recycling activity under the Superfund Recycling Equities Act of 1999 ("SREA"), seems to be intertwined with the useful product defense as the Court has analyzed it in the prior decisions. If the parties are allowed to amend their pleadings to reflect the retroactive application of this recent amendment to CERCLA, the Court's useful product decisions may be affected. Given these uncertainties, the Court cannot conclude that a cognizable claim against Ace, Alter, Winski, Solotken, Brodey and SWI has received an ultimate resolution. Correspondingly, the relationship between the adjudicated facts and the unadjudicated facts and issues relating to the SREA lead the Court to exercise added caution about entering a final judgment at this stage of the litigation.
For these reasons, the Court finds that there is reason to delay the entry of a partial final judgment on the arranger liability claims described above. Thus, the plaintiffs' motion for relief is GRANTED, and the defendants' earlier motion for entry of judgment is hereby DENIED.
IV. CONCLUSION
The Court has found that it erroneously entered a final judgment in this action on October 4, 1999, and has GRANTED the plaintiffs' motion to reconsider, clarify or amend its entry of judgment. It has also considered and decided the pending motions of defendants Solotken, Brodey and SWI, having GRANTED, in part, and DENIED, in part, summary judgment with respect to the liability issues addressed in each motion. Finally, upon thorough review of the status of all of the defendants in this action, and in light of the recent amendments to CERCLA, the Court has found that entry of a Rule 54(b) partial final judgment would be improper at this time, and will not redirect the entry of the judgments it VACATED by this order.
IT IS SO ORDERED.