Summary
denying plaintiff's motion for summary judgment where, viewing the evidence in the light most favorable to the individual defendants, it was possible that the defendants were actively involved in the company's daily operations but were not involved in disposal of hazardous waste products
Summary of this case from City of New York v. N.Y. Cross Harbor Railroad TerminalOpinion
Case No. 1:99-CV-384
October 2, 2001
For Plaintiff(s): Charles M. Denton/Eric C. Fleetham.
For Defendant(s): Robert J. Jonker/John V. Byl/Dean F. Pacific.
OPINION
Plaintiff, Aero-Motive Company ("Aero II"), filed suit against Defendants, William and Roger Becker ("the Beckers"), under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 — 9675; Part 201 of Michigan's Natural Resources and Environmental Protection Act ("NREPA"), M.C.L. § 324. 20101 — 21113; and the federal Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 — 6992. In addition, Aero II has filed state common law claims of nuisance, public nuisance, negligence, contribution, and unjust enrichment. On October 1, 1999, this Court denied the Beckers' motion to dismiss for failure to state a claim and Aero II's motion for partial summary judgment or default judgment. The matter is now before the Court on the parties' cross motions for summary judgment.
Plaintiff Aero II filed a Motion for Partial Summary Judgment for its claims under CERCLA, RCRA, and NREPA. Defendants move for Summary Judgment on these claims as well as the state common law claims.
Facts
A. Undisputed FactsAero II is a Michigan corporation with its principal place of business in Kalamazoo, Michigan. The Beckers are both residents of Kalamazoo County, Michigan. The Beckers' father formed Aero-Motive Manufacturing Company ("Aero I"), a manufacturer of cable and hose reels, around 1939. The Beckers assumed control of Aero I around the time of their father's death in 1960. From this time until June 1972, the Beckers were each directors and 40% shareholders of Aero I. The only other shareholder of the company was the Beckers' brother, Thomas Becker, who was not actively involved in the management of the business. Roger Becker served as President and William Becker as Vice-President of the company until the sale of the company to Plaintiff on June 8, 1972. In October 1963, the Beckers purchased the plot of land at issue in this suit, located in Kalamazoo ("the Site"). The Beckers acquired the Site in their individual capacities, not as agents or in the name of Aero I. They bought the real estate for the purpose of constructing a new plant for the company. Aero I constructed a manufacturing plant on the Site and began operations there in 1965. The Beckers sold the Site to Aero I on October 16, 1968, for a substantial profit and transferred title accordingly.
The imprecision in dates is due to the Beckers' lack of precise records and recollection regarding the early details of the business. (Roger Becker Dep. at 6-8; William Becker at Dep. 11, Pl.'s Br. Supp. Exs. I-1, I-3.)
The Beckers' Responses to Plaintiff's Request for Admissions reveal that the land was purchased as four separate parcels in four different transactions, dated October 15, 1963; October 30, 1963; November 1, 1963; and September 30, 1964. (Pl.'s Br. Supp. Ex. B at 2.)
On June 8, 1972, the Beckers sold Aero I to Kalaco, Inc., a subsidiary of the Daniel Woodhead Company. Kalaco then changed its corporate name to Aero-Motive Manufacturing Company ("Aero II") and continued manufacturing operations at the Site. In 1974, Aero II added a warehouse to the original building and installed an underground storage tank used to hold waste oils prior to removal from the Site. Aero II removed the storage tank in 1992 and found that contaminants had leaked from the tank into a limited area around it. As a result, the State required Aero II to take corrective action during which Aero II found that the soil underneath the warehouse addition was contaminated with Trichloroethylene ("TCE") and other solvents. Hydrogeological investigations conducted by Aero II show that contamination has affected an area one mile down gradient from the Site. As a result, Aero II has removed contaminated soils from the Site, taken other remedial actions, and incurred various costs related to these activities. Aero II notified the Beckers of their potential liability for the TCE contamination in August 1995.
Aero II does not seek recovery for the expenses associated with the cleanup of waste from the underground storage tank. (Pl.'s Reply Br. at 6, n. 6.) The Court mentions the removal of the tank because it resulted in the discovery of hazardous wastes at the Site, ultimately leading to this suit.
B. Disputed Facts
1. Facts According to Aero II
Aero II makes various accusations regarding the Beckers' control over the operation of Aero I and the company's practices of hazardous waste disposal. First, Aero II claims that the Beckers were intimately involved in the daily operations of the Aero I plant. It presents testimony that the Beckers would often walk around the plant and talk to the workers. (Evans Dep. at 11-12; Kelley Dep. at 38; Southwood Dep. at 18, Pl.'s Br. Supp. Exs. I-5, I-9, I-11.) The Beckers admit that they managed Aero I together and made all significant business decisions jointly. (Roger Becker Dep. at 17.) Aero II accuses the Beckers of having direct control over Aero I's disposal of waste products.
According to Aero II, in August 1967, during excavation for an addition to the plant, a pit ("the Disposal Pit") was created on the Site. Aero II produces a work order for the excavation project as well as aerial photographs identifying the Site and the Disposal Pit in August 1967. (Pl.'s Br. Supp. Exs. D, E.) Aero II accuses the Beckers of using the Disposal Pit as a dumping station for all Aero I's waste products.
Aero II notes three sources of pollution from Aero I: wastes dumped in the Disposal Pit, TCE used in cleaning the plant degreaser, and other solvents dumped near the former loading dock. Aero II alleges that the Beckers knew about the Disposal Pit and used it for disposal of various wastes from Aero I, including trash, paper, wood, garbage, paint, paint filters, cutting oils, lacquer thinner, Toluene, and TCE. Aero II claims that Aero I's standard practice was to dump all waste, except salvageable metal collected by a scrap man, into the Disposal Pit. (Corke Dep. at 78-80; Kelley Dep. at 45, 47; Shull Dep. at 14, 32-33, Pl.'s Br. Supp. Exs. I-4, I-9, I-10.) Aero II also presents evidence that paint wastes, including paint filters and paint cans, were dumped into the Disposal Pit. (Kelley Dep. at 49-50, 115; Shull Dep. at 9-10, 18.) According to testimony presented by Aero II, the Disposal Pit spontaneously combusted on occasion because of the disposal of these products. (Corke Dep. at 96; Shull Dep. at 33.)
In addition, Aero II presents evidence that the plant degreaser was periodically cleaned by pumping TCE from the degreaser into 55-gallon drums which were then placed in the Disposal Pit (Corke Dep. at 91-92.) According to an employee of Aero I, TCE would sometimes spill onto the floor and get swept into a nearby drain. (Kelley Dep. at 25-26.) The drain allegedly discharged into the soil on which Aero II's addition was built.
Finally, according to Aero II, TCE and other solvents used by Aero I were dumped near the former loading dock area. Aero II claims that all of this activity took place under the knowledge and control of the Beckers.
2. Facts According to the Beckers
The Beckers counter these assertions by noting that no evidence is presented as to their direct involvement in any waste disposal, and the contamination at the Site is wholly the fault of Aero II. The Beckers note that none of the employees of Aero I that were deposed testified that the Beckers had actually dumped TCE or other contaminants into the Disposal Pit. (Defs.' Br. Supp. at 7, 9-11.) The Beckers assert that they had no actual knowledge of how or where waste materials were removed or handled. (Defs.' Br. Supp. at 7; Corke Dep. at 115-16, Defs.' Br. Supp. Ex. 6.) They allege that Herb Williamson, hired as the General Manager in 1969, assumed day-to-day control over the operations of Aero I. Further, the Beckers note that none of the individuals deposed testified that the Beckers were directly involved in any waste disposal. (Defs.' Br. Supp. at 11.) The supervision and direction of the plant's employees and daily operations were left to the foremen on the plant floor. (Corke Dep. at 19; Kelley Dep. at 66-69, Defs.' Br. Supp. Ex. 7.) According to the Beckers, they never dumped any waste into the Disposal Pit themselves and never directed anyone regarding waste disposal practices. (Defs.' Br. Supp. at 11.)
The Beckers dispute that the Disposal Pit was even created in August 1967. According to the Beckers, a permit for the construction was not obtained until October 1967. (Defs.' Br. Supp. Ex. 25.) They present the affidavit of Bob Wertz, an Aero I employee from 1964 until 1968, who stated that he did not ever see a pit on the Site. (Wertz Aff. ¶¶ 2-3, Defs.' Br. Supp. Ex. 24.) The Beckers likewise stated that they do not remember such a pit being on the Site during the Aero I era. (Roger Becker Dep. at 49-50; William Becker at Dep. 37, Defs.' Br. Supp. Exs. 1, 2.)
The Beckers testified that the outside contractor, Sid Rose, hauled all Aero I's waste, except combustibles, offsite. (Roger Becker Dep. at 32-33, 39.) Additionally, the Beckers contend that all painting was done offsite by a subcontractor during the majority of Aero I's life. (Corke Dep. at 194-95.) When Aero I did begin painting on site, it was not a full-time painting operation. (Id.) As such, the Beckers' contend that dumping of paint waste would have been nonexistent for most of Aero I's operation and otherwise minimal.
The Beckers also contend that Aero II replaced Aero I's degreaser with a larger, partially submerged unit that required larger amounts of TCE. (Corke Dep. at 168-72.) The new degreasing unit sat in a concrete pit with a drain at the bottom through which TCE escaped whenever the degreaser was cleaned. (Kelley Dep. at 96; Shull Dep. at 60, 65, Defs.' Br. Supp. Ex. 10.) The Beckers contend that this TCE is the primary source of the contamination at the Site. The Beckers also point to Aero II's leaking underground storage tank and the dumping of paint waste from Aero II's own painting operation as the causes of the pollution.
Standard
Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. The rule requires that the disputed facts be material. Material facts are facts which are defined by substantive law and are necessary to apply the law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986). The rule also requires the dispute to be genuine. A dispute is genuine if a reasonable jury could return judgment for the non-moving party. See id.
The court must draw all inferences in a light most favorable to the non-moving party, but may grant summary judgment when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Agristor Fin. Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir. 1992) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986)).
Discussion
Plaintiffs allege that the Beckers are liable for the disposal of hazardous substances as "owners", "operators", or "arrangers" under CERCLA § 107(a) and as owners or operators "responsible for an activity causing a release of hazardous substances" under Part 201 of NREPA, Michigan's counterpart to CERCLA. Aero II also claims that the Beckers are liable under RCRA. Finally, Aero II includes state law claims for nuisance, negligence, unjust enrichment, and contribution.
A. Aero II's CERCLA NREPA Claims
Because NREPA was patterned after CERCLA and is construed in accordance with CERCLA, for purposes of these motions Aero II's claims under Part 201 of NREPA stand or fall under the same analysis applied to the CERCLA claims. Kelley v. Tiscornia, 827 F. Supp. 1315, 1318 n. 1 (W.D.Mich. 1993); Flanders Indus., Inc. v. Michigan, 203 Mich. App. 15, 21, 512 N.W.2d 328, 331 (1993).
To prove a claim under CERCLA § 107(a), Aero II must show that: 1) there was a release or threatened release of a hazardous substance; 2) the site of the release is a "facility" under 42 U.S.C. § 9601(9); 3) the release caused Aero II to incur response costs; and 4) the Beckers a) owned or operated the facility, b) owned or operated the facility at the time of disposal of the hazardous materials, c) arranged for disposal or treatment of the hazardous materials, or d) accepted the hazardous material for transport to disposal or treatment facilities. Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648, 653 (6th Cir. 2000). The plaintiff need not show that the defendant caused the release or the response costs incurred. Id.
The parties do not dispute that there was a release of a hazardous substance, that the Site and buildings on the Site fall within the definition of facility, and that Aero II incurred costs in responding to the leak. The only issue is whether the Beckers were owners or operators of the facility at the time of disposal.
1. Owner Liability
Aero II contends that the Beckers are strictly liable under CERCLA as "owners" for any dumping that occurred between their purchase of the Site in October 1963 and the sale of the property to Aero I in October 1968. CERCLA establishes strict liability for owners of property where hazardous substances are dumped. Anspec Co. v. Johnson Controls, Inc., 788 F. Supp. 951, 956 (E.D.Mich. 1992) (citing CERCLA, 42 U.S.C. § 9607(a)(2)). Aero II does not have to show that the Beckers were negligent or had any direct involvement in the disposal activities for liability to attach. Id. Since the Beckers do not dispute their ownership of the Site, the remaining issue as to owner liability is whether hazardous substances were disposed of on the Site during their ownership.
To support its claim that hazardous materials were dumped into the Disposal Pit between October 1963 and October 1968, Aero II presents testimony from employees who worked for Aero I. John Corke testified that he personally cleaned the degreaser by pumping TCE from the degreaser into 55-gallon drums which were placed into the Disposal Pit. (Corke Dep. at 91-92.) Other employees stated that paint wastes, including paint filters and paint cans, were dumped in the Disposal Pit. (Kelley Dep. at 49-50, 115; Shull Dep. at 9-10, 18.)
As noted by the Beckers, however, Aero II is unable to produce evidence as to the time frame of any dumping into the Disposal Pit. Bill Kelley began work for Aero I in late 1969, after the Beckers sold the Site. (Pl.'s Br. Resp. at 5.) Rick Shull confirmed that paint filters and cans and paint thinner were placed in the Disposal Pit, but he did not begin work in the paint room until October 9, 1968, around the same time that the Site was sold to Aero I. (Shull Dep. at 9-10.) John Corke testified that waste was taken out to the Disposal Pit, but he could not identify any specific dates on when this activity took place. (Corke Dep. at 153.) Plaintiff's expert, Dr. Michael Sklash, stated in his report that the release of TCE at the Site occurred "prior to June 8, 1972" but gave no opinion on contamination at the Site prior to October 1968. (Pl.'s Br. Supp. Ex. F at 5.) Finally, the Beckers testified that Sid Rose hauled all the waste offsite. (Roger Becker Dep. at 32-33, 39.)
The Court is not ruling on the admissibility of Dr. Sklash's opinion here. The report is cited merely to show Aero II's lack of evidence concerning any waste disposal at the time of the Beckers' ownership of the Site. A Daubert hearing is set for a later date to determine the admissibility of Dr. Sklash's testimony.
A moving party who does not have the burden of proof at trial may properly support a motion for summary judgment by showing the court that there is no evidence to support the non-moving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 324-25, 106 S.Ct. 2548, 2553-54 (1986). If the motion is so supported, the party opposing the motion must then demonstrate with "concrete evidence" that there is a genuine issue of material fact for trial. Id.; see also Frank v. D'Ambrosi, 4 F.3d 1378, 1384 (6th Cir. 1993). The Beckers have shown that Aero II has not presented evidence to support its claim for owner liability. Aero II has presented testimony regarding hazardous waste disposal but not to the crucial issue of time. For the Beckers to be held liable as owners, there must be evidence demonstrating that waste was dumped on the Site before October 16, 1968. Aero II has not demonstrated with evidence that a genuine issue of material fact exists for trial on this point. Summary judgment for the Beckers will be granted on Aero II's owner liability claim.
2. Operator or Arranger Liability
Aero II contends that the Beckers were "operators" of Aero I and, as such, are liable under CERCLA for the dumping of hazardous materials into the Disposal Pit. CERCLA establishes strict liability for operators of facilities that dispose of hazardous substances. See United States v. Township of Brighton, 153 F.3d 307, 312 (6th Cir. 1998) (citing CERCLA, 42 U.S.C. § 9607(a)(2)). In United States v. Bestfoods, 524 U.S. 51, 118 S.Ct. 1876 (1998), the Supreme Court held that to be considered an "operator" under CERCLA, it is not enough for liability to attach that the defendant actively participated in and exercised control over the general affairs of the company. Id. at 67-68, 118 S.Ct. at 1887. An owner must "manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations." Id. at 66-67, 118 S.Ct. 1887. Additionally, to be considered an operator pursuant to CERCLA, a party must perform affirmative acts: "[t]he failure to act, even when coupled with the ability or authority to do so, cannot make an entity into an operator."Brighton, 153 F.3d at 314. After operator liability is established, however, a party is equally liable for omissions as for affirmative acts. See id. at 315.
Aero II cites a number of cases from this district and various United States Circuit Courts of Appeals that were decided prior toBestfoods and, therefore, are inapplicable to the extent that they provide a lesser standard for operator liability.
Aero II suggests that the Bestfoods standard does not apply to this case because Bestfoods is limited to the liability of a parent corporation and not individuals. The Sixth Circuit, however, has extended the Bestfoods rationale to individual officers, directors, and shareholders of a company, and requires that a plaintiff prove such direct relation to the contamination. See Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840, 846 (6th Cir. 1999) (applying theBestfoods standard to an individual defendant who was president, chief executive officer, and sole shareholder of the polluting company).
Aero II presents deposition testimony that the Beckers were active in the daily operation of Aero I and walked through the plant and spoke with workers on a daily basis. (Evans Dep. at 11-12; Kelley Dep. at 38.) Aero II also provides evidence that Roger Becker instructed Sid Rose "to get everything out of this plant with the exception of the combustibles." (Roger Becker Dep. at 17, 39.) Aero II has presented enough evidence that the Beckers were actively involved in daily operations of Aero I to have directed or conducted waste disposal procedures sufficient to support a claim for CERCLA operator liability. Looking at this evidence in the light most favorable to the Beckers, though, it is possible that while the Beckers were actively involved in Aero I's daily operations, they were not involved in disposal of hazardous waste products. The Beckers presented evidence that they never directed anyone regarding waste disposal and left day-to-day plant operations to other employees. Genuine issues of material fact remain on this point. The cross motions for summary judgment, therefore, will be denied with respect to operator liability for both the CERCLA and NREPA claims.
3. Derivative Liability
According to the Court in Bestfoods, a party may also be held derivatively liable for hazardous waste cleanup costs under a traditional piercing the corporate veil rationale. Bestfoods, 524 U.S. at 63-64, 118 S.Ct. at 1885-86. Aero II seeks to hold the Beckers liable as individuals for the acts of their company under such a theory.
The Beckers contend that this claim is beyond the scope of the pleadings because neither the Amended Complaint nor any of the Status Reports explicitly indicate the assertion of the veil piercing claim. The Beckers misconstrue the point: under Bestfoods and Carter-Jones, piercing the corporate veil is one means of holding an individual liable under CERCLA. It is not a separate claim in and of itself.
The criteria for piercing the corporate veil includes absence of normal corporate formalities, commingling of personal and corporate assets, siphoning of corporate funds by a dominant shareholder, and the economic reality that the corporation is really an alter ego of the individual, a facade for personal operations. Oren v. United States, No. 1:90-cv-558, 1992 WL 79110 at *2 (W.D.Mich. Jan. 7, 1992) (citing United States v. Walton, 909 F.2d 915, 928 (6th Cir. 1990)). A court should pierce the corporate veil if the corporation is a "mere instrumentality" of the shareholders. Id. The doctrine is especially applicable to situations in which the individual seeks to avoid his or her obligations, protect a fraud, or defend a crime by hiding behind the corporate entity.Id.(citing Bodenhamer Bldg. Corp. v. Architectural Research Corp., 873 F.2d 109, 112 (6th Cir. 1989)).
Aero II contends that the Beckers should not be able to hide behind the veil of Aero I's corporate structure. The most significant factor compelling this conclusion is the failure of the Beckers to observe corporate formalities. The Beckers never held formal shareholders meetings, and directors meetings were simply lunch with their attorney three or four times each year. (William Becker Dep. at 25-26; Roger Becker Dep. at 51-52.) There was no voting on corporate actions, and William Becker stated that he seriously doubted whether a formal meeting took place to authorize the sale of the company to Aero II in 1972. (William Becker Dep. at 25-26.) Aero II basically contends that the Beckers and Aero I were alter egos and that the Beckers cannot avoid their obligations to pay cleanup costs by hiding behind the corporation.
Besides the absence of corporate formalities, there is nothing to suggest that Aero I was merely an alter ego of the Beckers. Aero II presents no evidence or allegation of the commingling of corporate and personal funds or the misappropriation of corporate funds. The Beckers paid themselves salaries and held personal and corporate property separately. Managerial structure indicates a distinct corporate entity, with the hiring of Herb Williamson as General Manager in 1969 and the Beckers' significantly diminished managerial control. Finally, there is no indication of any fraud or crime from which the Beckers are hiding. Failure to follow corporate formalities alone is not sufficient to justify piercing the corporate veil. K Mart Corp. v. Knitjoy Mfg. Inc., 542 F. Supp. 1189, 1192 (E.D.Mich. 1982) (citing Solomon v. Western Hills Dev. Co., 110 Mich. App. 257, 263, 312 N.W.2d 428, 432 (1981)). Fraud, illegality, or injustice must also be shown. Id. Aero II only alleges that Aero I failed to follow corporate formalities. There is no evidence of fraud, illegality, or injustice. Aero II has failed to meet its burden and summary judgment will be granted to the Beckers as to their derivative liability under CERCLA.
4. NREPA Statute of Repose
When the Beckers first brought their motion for summary judgment, they argued that Aero II's NREPA claims were time-barred by M.C.L. § 324. 20140(2). The statute previously barred actions for cleanup costs accrued before July 1, 1991. The language had been interpreted by the Michigan Court of Appeals as a statute of repose barring all claims that had accrued before July 1, 1991, irrespective of when the damage giving rise to the claim was discovered. Shields v. Shell Oil Co., 237 Mich. App. 682, 604 N.W.2d 719 (1999) (per curiam). Since the costs allegedly accrued during the operation of Aero I, the Beckers argued that the action was barred.
The language of the statute has been changed by the legislature from barring costs " accrued" before July 1, 1991, to barring costs " incurred" prior to July 1, 1991. M.C.L. § 324. 20140(3) (West Supp. 2001). Subsection (4) of Section 140 explicitly states that the revised language is "curative and intended to clarify the original intent of the legislature and applies retroactively." M.C.L. § 324. 20140(4). The Michigan Supreme Court reversed Shields based on the revised language of the statute. Shields v. Shell Oil Co., 463 Mich. 939, 621 N.W.2d 215 (2000). The court stated that it is clear under both the old and new language of the statute that only actions for the recovery of response activity costs incurred before July 1, 1991, are subject to the July 1, 1994, limitation period. Id. Here, Aero II incurred its cleanup costs after July 1, 1991, and its claim is not barred by the statute.
The Beckers argue that retroactive application of the amended statute would violate the Due Process Clause of the Michigan and United States Constitutions by depriving them of substantive rights given to them under the previous language of the statute. The legislature's statement that the new language is "curative" and designed to clarify its original intent, taken together with the Michigan Supreme Court's ruling, reject this assertion. The statute's language has not been amended to take away substantive rights; the language has been clarified to reveal that those rights were never given in the first place.
5. CERCLA Contribution Bar § 113(f)(2)
The Beckers claim that even if Aero II's first four counts are not dismissed based on the arguments above, the statutory claims should be dismissed as barred under CERCLA § 113(f)(2) and NREPA § 29(6). Under § 113(f)(2), CERCLA contribution claims against parties that have resolved their potential liability with the state or federal government are barred. See Centerior Serv. Corp. v. Acme Scrap Iron Metal Corp., 153 F.3d 344, 348 (6th Cir. 1998). Under § 29(6), a party who is not liable under § 26(1)(a) is considered to have resolved its liability with the state and is granted protection under § 113(f)(2) of CERCLA.
The Beckers argue that because they are not liable under § 26(1)(a), they are shielded from liability under § 113(f)(2). However, because liability under § 26(1)(a) is not yet resolved and the Beckers submit no proof of any other resolution of their liability with the state, it would be premature to uphold a § 113(f)(2) bar of liability.
The parties both discuss Judge Cook's unpublished opinions with regard to the constitutionality of NREPA 29(6) and federal preemption.See GH Landfill PRP Group v. Am. Premier Underwriters, Inc., No. 96-CV-72947 1999 U.S. Dist. LEXIS 5539 (E.D.Mich., Jan. 29, 1999); GH Landfill PRP Group v. Am. Premier Underwriters, Inc., 96-CV-72947, slip op. (E.D.Mich., Feb. 18, 1999). However, as it would be premature to consider a § 113(f)(2) bar at this time, there is no need to address this issue.
B. Aero II's RCRA Claim
The Beckers assert that Aero II's RCRA claim fails because the claim seeks recovery of past and present costs of Aero II's environmental cleanup efforts, which are not recoverable under RCRA. Aero II does not respond to this argument.
In Meghrig v. KFC Western, Inc., 516 U.S. 479, 116 S.Ct. 1251 (1996), the Supreme Court held that while RCRA does not prevent contribution actions under other federal or state laws, "Congress did not intend for a private citizen to be able to undertake a cleanup and then proceed to recover its costs under RCRA." Id. at 487, 116 S.Ct. at 1256. The Supreme Court noted that RCRA was a mechanism for enjoining polluting activities or ordering cleanup of present or past pollution, not a remedy for recovering cleanup costs. Id. at 483-84, 116 S.Ct. at 1254. See also Furrer v. Brown, 62 F.3d 1092, 1096-97 (8th Cir. 1995) (explaining that the purpose of the RCRA is to prevent the generation of hazardous waste and dispose of it when produced, not promote the cleanup of existing sites). The statute specifically authorizes courts to issue injunctive relief:
to restrain any person who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste . . ., to order such person to take such other action as may be necessary, or both.Meghrig, 516 U.S. at 484, 116 S.Ct. at 1254 (citing RCRA § 6972(a)(1)(B)). The Court stated that CERCLA is the appropriate law for seeking contribution for past or present cleanup costs. Id. at 484-85, 116 S.Ct. 1254-55.
Because Aero II seeks contribution for its past and present cleanup operations as opposed to injunctive relief requiring the Beckers to remedy some pollution, Aero II's RCRA claim must be dismissed. For these reasons, summary judgment will be granted in favor of the Beckers on the RCRA claim.
C. Aero II's State Law Claims
The Beckers argue that Aero II's common law claims for nuisance, negligence, unjust enrichment, and contribution under Michigan law are each barred by their respective statutes of limitations. Michigan's general statute of limitations period for injury to property is three years. M.C.L. § 600.5805(9). See Horvath v. Delida, 213 Mich. App. 620, 623-24, 540 N.W.2d 760, 762 (1995). A plaintiff's cause of action for injury to property accrues when all the elements of the cause of action have occurred and can be alleged in a proper complaint. See id. at 624, 540 N.W.2d at 762; Sable v. Gen. Motors Corp., 90 F.3d 171, 176 (6th Cir. 1996) (citing Horvath).
Sable is factually similar to the instant case. The defendants had dumped contaminants onto land later purchased by the plaintiffs, who brought state law claims seeking contribution for cleanup costs. Id. at 173. The district court granted summary judgment because the plaintiff's claims were barred by the statute of limitations. The Sixth Circuit affirmed, relying on the Michigan Court of Appeals decision in Horvath. The defendants had not dumped any hazardous waste on the land since 1974, and despite the continuing harmful effects of the dumping, the claim was time barred. Id. at 176. "`[A] continuing wrong is established by continual tortious acts, not by continual harmful effects from an original completed act.'" Id.(quoting Horvath, 213 Mich. App. at 627, 540 N.W.2d at 760).
Any dumping by the Beckers and Aero I ceased in 1972 when the company was sold. There is no continual act, only continual damage. UnderSable and Horvath, Aero II's state law claims are barred by the statute of limitations.
The "discovery rule" does not help Aero II. Pursuant to the discovery rule, the statute of limitations begins to run when the plaintiff discovers or should have discovered a possible cause of action. Presque Isle Harbor Dev. Co. v. Dow Chem. Co., 875 F. Supp. 1312, 1319 (W.D.Mich. 1995) (citing Moll v. Abbott Laboratories, 444 Mich. 1, 5, 506 N.W.2d 816, 819 (1993)). Aero II sent the Beckers a letter in August 1995, describing the polluting activities and the remediation work underway. This "potentially responsible party" notice proves that Aero II was aware of the elements of its state law claims at that time. It did not file its complaint against the Beckers until May 1999.
Conclusion
For the reasons stated above, Aero II's Motion for Partial Summary Judgment will be denied. Additionally, the Beckers' Motion for Summary Judgment will be granted as to Aero II's claims for owner liability and derivative liability under CERCLA and Aero II's RCRA and state law claims. Summary judgment will be denied as to Plaintiff's claim for operator liability under CERCLA and NREPA.
An Order consistent with this Opinion will be entered.
ORDER
In accordance with the Opinion filed this date,
IT IS HEREBY ORDERED that Plaintiff's Motion for Partial Summary Judgment (docket no. 65) is DENIED.
IT IS FURTHER ORDERED that Defendants Motion for Summary Judgment (docket no. 64) is GRANTED IN PART and DENIED IN PART. The motion is granted as to Plaintiff's claim for owner and derivative liability under CERCLA and Plaintiff's RCRA and state law claims. The motion is denied as to Plaintiff's claim for operator liability under CERCLA and NREPA.