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USOR Site PRP Group v. A&M Contractors, Inc.

United States District Court, S.D. Texas, Houston Division

August 2, 2017

USOR SITE PRP GROUP, Plaintiff,
v.
A&M CONTRACTORS, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Kenneth M. Hoyt United States District Judge.

         I. INTRODUCTION

         Before the Court is USOR's amended motion for summary judgment and the defendant, the City of Pasadena's, cross-motion for summary judgment[1]. The Court notes that it has issued an omnibus memorandum opinion identifying and discussing undisputed facts and as well, the rudiments of the applicable law, associated solely with the issue of liability under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”) and the Texas Solid Waste Disposal Act (“TSDWA”). With that memorandum opinion in place and the issue of general liability resolved, the Court will hereafter addresses USOR's amended motion for summary judgment [DE# 3286] and the City's cross-motion for summary judgment [DE# 3758].

         II. JURISDICTIONAL BASES

         This suit was filed by USOR to collect response costs and expenses due to alleged environmental contamination at the U.S. Oil Recovery Superfund Site (“USOR Site”) and the MCC Recycling Facility located at 200 N. Richey and 400 N. Richey in Pasadena, Texas respectively. On August 14, 2014, the USOR filed this complaint against hundreds of defendants asserting that they are collectively responsible, under federal and state law, for response costs and expenses associated with remediating environmental contamination at the identified USOR Sites.

         Since the original complaint was filed, the USOR has amended its suit on two occasions, the last on August 1, 2016. The USOR seeks contribution, cost recovery that has occurred or will occur, and declaratory relief under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) and cost recovery under the Texas Solid Waste Disposal Act (“TSWDA”). See [42 U.S.C. §§ 9601 et. seq.; Tex. Health & Safety Code Ann. §§ 361.001 et. seq., respectively]. This Court has jurisdiction to entertain the issues raised by the USOR under both CERCLA and TSWDA.

         III. HISTORICAL BACKGROUND INCLUDING ADMINISTRATIVE RECORD

         The USOR consists of firms, corporations, associations, and/or partnerships. The EPA has determined that the members of the USOR are “persons” as defined by Section 101(21) of CERCLA, 42 U.S.C. § 9601(21). See (a) [Removal Action AOC, Conclusions of Law and Determinations “c, ” p.7 (Dkt. No. 1429-1, at 7)]; (b) [AOI-1 RI/FS AOC Conclusions of Law and Determinations ¶ 28 (Dkt. No. 1429-2, at 8)]; and, (c) [Second Removal Action AOC, Conclusions of Law and Determinations ¶ 23 (Dkt. No. 3187-1, at 6)]. Likewise, TCEQ has determined that the members of the USOR are “persons” as defined by Section 361.003(23) of the TSWDA for purposes of USOR's action under Section 361.344 of the TSWDA, TEX. HEALTH & SAFETY CODE ANN. § 361.003(23). See [TCEQ Approval Letter (Dkt. No. 3187-3)].

         The members of the USOR are respondents to Removal Action AOC, AOI-1 RI/FS AOC, and Second Removal Action AOC. The USOR is conducting response activities at the USOR Site. See generally (a) [Removal Action AOC (Dkt. No. 1429-1)]; (b) [AOI-1 RI/FS AOC (Dkt. Nos. 1429-1 and 1429-2)]; (c) [Second Removal Action AOC (Dkt. Nos. 3187-1 and 3187-2)]; and, (d) [TCEQ Approval Letter (Dkt. No. 3187-3)].

         The USOR Site consists of approximately 18 acres, located generally at the U.S. Oil Recovery facility at 400 N. Richey Street and the MCC Recycling facility at 200 N. Richey Street in Pasadena, Texas, and EPA has determined the USOR Site is a “facility” as defined in Section 101(9) of CERCLA, 42 U.S.C. § 9601(9). See (a) [Administrative Settlement Agreement and Order on Consent for Removal Action, U.S. EPA Region 6, CERCLA Docket No. 06-10-11, effective August 25, 2011 (“Removal Action AOC”), Definition “p.” at p.3, Finding of Fact “a.” at p.4, and Conclusion of Law and Determination “a.” at p.7 (Dkt. No. 1429-1, at 3, 4, 7)][2]; (b) [Administrative Settlement Agreement and Order on Consent for Remedial Investigation/Feasibility Study, U.S. EPA Region 6, CERCLA Docket No. 06-03-15 (“AOI-1 RI/FS AOC”), Definition “u.” at p.5, Finding of Fact p.6, ¶ 13, and Conclusions of Law and Determinations at p.8, ¶ 25 (Dkt. No. 1429-2, at 5, 6, 8)][3]; and, (c) [Administrative Settlement Agreement and Order on Consent for Removal Action, U.S. EPA Region 6, CERCLA Docket No. 06-11-16 (“Second Removal Action AOC”), at Definition “s.” at p.4, Finding of Fact “a.” at p.4, and Conclusions of Law and Determinations, at p.6, ¶ 20 (Dkt. No. 3187-1, at 4, 6)].[4]

         The USOR Site was an oil processing and waste treatment facility that received and performed pretreatment of municipal and industrial Class I and Class II wastewater, characteristically hazardous waste, used oil and oily sludges, and municipal solid waste. See (a) [Removal Action AOC, Findings of Fact “a” and “c” at p.4 (Dkt. No. 1429-1, at 4)]; (b) [AOI-1 RI/FS AOC, Findings of Fact 13 and 15 at p.6 (Dkt. No. 1429-2 at 6)]; and, (c) [Second Removal Action AOC, Findings of Fact ¶ 11 at p.5 (Dkt. No. 3187-1, at 5)]. The EPA has determined that there has been a release or threatened release of hazardous substances from the USOR Site as defined by Section 101(22) of CERCLA, 42 U.S.C. § 9601(22). See [(a) Removal Action AOC, Findings of Fact “k.” - “r.” at p.6, and Conclusion of Law and Determination “b.” and “e.” at p.7 (Dkt. No. 1429-1, at 6, 7)]; (b) [AOI-1 RI/FS AOC, Conclusions of Law and Determinations ¶¶ 26-27 (Dkt. No. 1429-2, at 8)]; (c) [Second Removal Action AOC, Findings of Fact ¶¶ 12-14, Conclusions of Law and Determinations ¶¶ 21-22 (Dkt. No. 3187-1, at 5-6)]; and (d) [EPA, Designation of Hazardous Substances, 40 CFR § 302.4 (Dkt. No. 1431-4)].[5]

         The TCEQ has also determined that there has been a release or threatened release from the USOR Site as defined by Section 361.003(28) of the TSWDA for purposes of USOR's action under Section 361.344 of the TSWDA, TEX. HEALTH & SAFETY CODE ANN. § 361.003(28). See [TCEQ Approval Letter (Dkt. No. 3187-3)].[6] Moreover, it has approved the USOR Site PRP Group's response activities as the USOR Site. See [TCEQ Approval Letter [Dkt. No. 3187-3)].

         The USOR Site PRP Group has incurred and will continue to incur response costs as a result of the release or threatened release of hazardous substances and solid waste at the USOR Site. See (a) [Affidavit of Joe Biss dated October 26, 2016 (Dkt. No. 3187-4)][7]; (b) [Removal Action AOC (Dkt. No. 1429-1)]; (c) [AOI-1 RI/FS AOC (Dkt. Nos. 1429-1 and 1429-2)]; (d) [Second Removal Action AOC (Dkt. Nos. 3187-1 and 3187-2)]; and (e) [TCEQ Approval Letter (Dkt. No. 3187-3)].

         The EPA has determined that the USOR's response costs are necessary to address the release or threatened release of hazardous substances from the USOR Site. See (a) [Removal Action AOC, Conclusions of Law and Determinations “f, ” p.7 (Dkt. No. 1429-1, at 7)]; (b) [AOI-1 RI/FS AOC, Conclusions of Law and Determinations ¶¶ 30-31 (Dkt. No. 1429-2, at 8)]; and (c) [Second Removal Action AOC, Conclusions of Law and Determinations ¶ 25 (Dkt. No. 3187-1, at 6-7)]. As well, TCEQ has determined that the USOR's response costs are necessary to address the release or threatened release of solid waste from the USOR Site. See [TCEQ Approval Letter (Dkt. No. 3187-3)]. The EPA has also determined that the USOR's response costs are consistent with the National Contingency Plan (“NCP”). See (a) [Removal Action AOC, Conclusions of Law and Determinations “f, ” p.7 (Dkt. No. 1429-1, at 7)]; (b) [AOI-1 RI/FS AOC Conclusions of Law and Determinations ¶ 31 (Dkt. No. 1429-2, at 8)]; (c) [Second Removal Action AOC, Conclusions of Law and Determinations ¶ 25 (Dkt. No. 3187-1, at 6-7)]. The Court adopts the EPA's findings as to response costs necessity and consistency.

         IV. SUMMARY JUDGMENT STANDARD

         Both the USOR and certain defendants have filed motions and/or cross-motions for summary judgment. These motions are not addressed in this Memorandum. However, the law that controls the outcome is set forth hereinafter.

         Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. A fact is “material” if its resolution in favor of one party might affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Factual disputes that are irrelevant or unnecessary will not be counted.” Id. at 248. An issue is “genuine” if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. If the evidence rebutting the motion for summary judgment is only colorable or not significantly probative, summary judgment should be granted. Id. at 249-50; see also Shields v. Twiss, 389 F.3d 142, 149-50 (5th Cir. 2004).

         Under Rule 56(c) of the Federal Rules of Civil Procedure, the moving party bears the initial burden of “informing the district court of the basis for its motion and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue for trial.” Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 - 87 (1986); Adams v. Travelers Indem. Co. of Connecticut, 465 F.3d 156, 163 (5th Cir. 2006).

         Where the moving party has met its Rule 56(c) burden, the nonmovant must come forward with “specific facts showing that there is a genuine issue for trial.” Matsushita, 475 U.S. at 586-87 (quoting Fed.R.Civ.P. 56(e)) (emphasis in original); Celotex Corp. v. Catrett, 477 U.S. 317 (1986); and Adams, 465 F.3d at 164. To sustain the burden, the nonmoving party must produce evidence admissible at trial showing that reasonable minds could differ regarding a genuine issue of material fact. Anderson, 477 U.S. at 250-51; 255; Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). In deciding a summary judgment motion, “[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.

         V. FEDERAL LAW STANDARD AND RELATED EPA FINDINGS

         A. CERCLA and RCRA Defined

         To establish its CERCLA claim, a plaintiff must establish that a defendant is a “covered person” within the meaning of Section 107(a)(3) of CERCLA, which provides, in relevant part:

(a) Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section. . .
(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 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 for response costs, of a hazardous substance, shall be liable for-
(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan . . . .

42 U.S.C. § 9607(a). Section 107(a) requires a plaintiff to demonstrate that: (1) the USOR Site is a facility, at which (2) there was a release or threatened release, (3) causing the incurrence of response costs, necessary and consistent with the national contingency plan and, (4) the defendant either “arranged for disposal or treatment” or “arranged with a transporter for transport for “disposal or treatment” of “hazardous substances.” See, e.g., Uniroyal Chemical Co. v. Deltech Corp., 160 F.3d 238, 242-43 (5th Cir. 1998) as modified on rehr'g (Jan. 8, 1999).

         Concerning the question of “facility”, the EPA has determined that the USOR Site is a “facility” within the meaning of CERCLA in the Removal Action AOC, the AOI-1 RI/FS AOC, and in the Second Removal Action AOC. Therefore, the EPA's factual determinations warrant deference by this Court. See, e.g., Galveston-Houston Ass'n for Smog Prevention (GHASP) v. U.S. E.P.A., 289 Fed.Appx. 745, 749 (5th Cir. 2008) (deferring to EPA, but noting heightened deference for complex scientific findings as opposed to simple findings of fact). As discussed earlier, the Court adopts this factual determination.

         There has also been an EPA finding that a “release” or threatened “release” of hazardous substances from the USOR Sites occurred. CERCLA defines “release” broadly to mean “any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment . . . .” See 42 U.S.C. § 9601(22). As a result of the release or threatened release of hazardous substances at or from the USOR Site, the USOR has incurred response costs. This determination also warrants deference because of the complexity of the data. Id. Therefore, this undisputed factual determination is adopted by the Court.

         The USOR is the respondent in Removal Action AOC, the AOI-1 RI/FS AOC, and the Second Removal Action AOC. As such, and based on EPA findings, they have and will continue to incur response costs in order to comply with EPA administrative orders. These response costs, as found by the EPA, are “necessary” and this determination in the Court's opinion warrants deference by this Court and the Court adopts this determination. See GHASP, 289 Fed.Appx. at 749.

         The EPA has also determined that the USORs response costs under the Removal Action AOC, AOI-1 RI/FS AOC and Second Removal Action AOC are consistent with the National Contingency Plan. Unlike voluntary response actions, where the burden of demonstrating consistency with the NCP is on a plaintiff, “[w]here a private party is cleaning up a site pursuant to an administrative order . . . or . . . a consent order . . ., the regulations establish an irrebuttable presumption that the private party's actions were consistent with the NCP.” See, e.g., Aviall Services, Inc. v. Cooper Indus., LLC, 572 F.Supp.2d 676, 695 (N.D. Tex. 2008), see, also, Morrison Enters. v. McShares, Inc., 302 F.3d 1127, 1137 (10th Cir. 2002).

         Regarding the question of “disposal” or “treatment, ” CERCLA Section 101(29) defines “disposal” and “treatment” as they are defined under the Resource Conservation Recovery Act (“RCRA”), 42 U.S.C. §§ 6901 et seq. See 42 U.S.C. § 9601(29). RCRA defines “disposal” broadly to mean:

the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters.

42 U.S.C. § 6903(3) (emphasis added). In turn, the RCRA defines “solid waste” broadly as:

garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including sold, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities.

42 U.S.C. § 6903(27). Further, the RCRA defines “treatment to mean:

The term “treatment, ” when used in connection with hazardous waste, means any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste or so as to render such waste nonhazardous, safer for transport, amenable for recovery, amenable for storage, or reduced in volume. Such term includes any activity or processing ...

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