Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-02371/USCOURTS-ca8-06-02371-0/pdf.json

Parties Involved:
CBS Corporation
Appellant
Kennedy Building Associates
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-2371

___________

Kennedy Building Associates, *

*

Plaintiff - Appellee, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

CBS Corporation, *

*

Defendant - Appellant. *

___________

Submitted: December 14, 2006

Filed: February 2, 2007

___________

Before WOLLMAN, JOHN R. GIBSON, and RILEY, Circuit Judges.

___________

JOHN R. GIBSON, Circuit Judge.

In Kennedy Building Associates v. Viacom, Inc., 375 F.3d 731 (8th Cir. 2004)

(Kennedy I), we remanded in part for modification of the injunction enforcing the

Minnesota Environmental Rights Act (MERA). CBS Corporation, the most recent

incarnation of the entity responsible for contaminating the Kennedy Building property

in Minneapolis, appeals from the injunction as modified on remand. The modified

injunction required CBS to perform those duties prescribed in the Minnesota Decision

Document, issued by the Minnesota Pollution Control Agency, which were necessary

to prevent the release of further contaminants into soil and groundwater; to test as

required by the Decision Document, and to remedy migration revealed by those tests,

if any; to remedy any remaining contamination exposed during future excavation on

Appellate Case: 06-2371 Page: 1 Date Filed: 02/02/2007 Entry ID: 3274758
-2-

the property; and to post a performance bond to secure performance of these

obligations. Kennedy Bldg. Assocs. v. Viacom, Inc., No. 99-CV-1833 JMR/FLN,

2006 WL 305279, at *3-4 (D. Minn. Feb. 8, 2006). CBS contends that the injunction

did not sufficiently specify which acts were required of it, that the evidence showed

there was no need for MERA relief, and that the district court had no power to require

CBS to post a performance bond. We reject the latter two arguments, but remand for

modification making the injunction's commands more specific.

Westinghouse, the corporate predecessor of CBS's corporate predecessor,

operated an electrical transformer repair facility on the Kennedy Building property,

which resulted in contamination of the property with polychlorinated biphenyls

(PCBs) and chlorobenzenes. Westinghouse sold the property in 1980, and a partner

in Kennedy Building Associates bought the property and transferred it to Kennedy in

1982. Kennedy I, 375 F.3d at 736-37. Kennedy discovered the contamination in

1997. Kennedy sued Viacom and recovered a jury verdict for state law strict liability;

a judgment for response costs under the federal Comprehensive Environmental

Response, Compensation and Liability Act (CERCLA) and the Minnesota

Environmental Response and Liability Act (MERLA); and an injunction under MERA

to remediate the property so that the deed restriction required by state law for

contaminated property could be removed. Id. at 737. On appeal, we reversed the jury

verdict and ordered the injunction to be modified so that it ordered only the relief

authorized by MERA, that is, "the prevention of ongoing releases of PCBs and

chlorobenzenes into soil and groundwater." Id. at 748; see id. at 750. Just before the

trial, Viacom had entered into a consent order with the Minnesota Pollution Control

Agency agreeing to develop and implement a remediation plan for the property;

Viacom argued that this consent order rendered the injunction moot and that the

consent order preempted relief under MERA; we rejected both arguments and held

that because the injunction did not conflict with an order of the Minnesota Pollution

Control Agency, it was not preempted by MERA. 375 F.3d at 742-46. 

Appellate Case: 06-2371 Page: 2 Date Filed: 02/02/2007 Entry ID: 3274758
-3-

On remand, the district court held the matter in abeyance for a year and a half

until Viacom and the Minnesota Pollution Control Agency could arrive at a

substantive plan for remediation. See 2006 WL 305279, at *1. The Minnesota

Decision Document of April 20, 2005, required removal of contaminated soil down

to twelve feet below the surface of the property, except for the soil under the building.

The rationale for these specifications was that soil deeper than twelve feet and soil

under the building was not immediately accessible to human or ecological "receptors"

and therefore did not pose a current threat to public health. However, the remediation

plan was subject to two caveats. First, long-term monitoring was required "to

ascertain plume stability and provide data to show that contamination in ground water

is not continuing to migrate." Second, although the Decision Document did not

impose substantive requirements, it acknowledged that if the building on the property

were demolished or the floor had to be removed, then the contaminants under the

building would become exposed, and Viacom would be required to come up with a

response plan, which would then start the whole process of administrative remediation

all over again. The Decision Document did not address indoor contamination at the

building because "indoor contamination currently falls outside the purview of the

[Minnesota Pollution Control Agency]." 

Kennedy was not satisfied with the remediation plan because it would leave

contamination in place underground and inside the building. Once the Minnesota

Pollution Control Agency had issued the Decision Document, Kennedy sought a

contested-case hearing in the agency. When that was denied, Kennedy sought review

by writ of certiorari of the agency's remedy selection. The Minnesota Court of

Appeals dismissed the writ on the grounds that the agency's decision was not final and

that "the [agency] order does not preclude [Kennedy] from litigating appropriate

remediation in [its] pending federal district court action." In the Matter of the

Kennedy Building Superfund Site Petition for Contested Case Hearing, No. A05-994

(Minn. Ct. App. Aug. 2, 2005). 

Appellate Case: 06-2371 Page: 3 Date Filed: 02/02/2007 Entry ID: 3274758
-4-

Back in the district court, Kennedy moved to modify the original injunction to

incorporate the requirements of the Decision Document, to order Viacom to remediate

the interior of the building, and to require Viacom to post a bond to assure

performance of the remedial work that was left contingent in the Decision Document

on future demolition or disturbance of the building or its floor. Counsel for Viacom

explained at the hearing that Viacom had undergone a corporate reorganization, with

the result that the entity called "Viacom" would no longer be responsible for the

Kennedy site and that the entity with such responsibility would now be known as

"CBS Corporation." The district court noted that the Decision Document gave

Kennedy no right to enforce the remediation plan, that no remediation had taken place

so far, and that if Kennedy were to decide to redevelop the property in a way that

required excavating deeper than twelve feet, there was no way to assure that

remediation would happen promptly enough to make such development commercially

feasible. 

In light of the evidence adduced at the hearing, the district court issued an

injunction including the following requirements:

(1) Viacom was ordered to "perform those actions prescribed in the

[Decision Document] which will prevent the release of PCBs and

chlorobenzenes into uncontaminated soil and groundwater consistent

with the purposes of MERA." 2006 WL 305279, at *3.

(2) Viacom was ordered to provide to the court and to Kennedy copies

of the results of tests required by the Decision Document. In the event

a test should show migration of the contaminants, Viacom was obliged

to submit a remediation plan within 30 days of receiving the test result.

Id.

(3) In the event the future development of the parcel should result in

excavation of soils left in place under the Decision Document's

remediation plan (i.e., soil deeper than twelve feet or underneath the

Appellate Case: 06-2371 Page: 4 Date Filed: 02/02/2007 Entry ID: 3274758
-5-

building), Kennedy was obliged to notify Viacom, whereupon Viacom

was required to submit to the court a remediation plan within 30 days of

receiving the notification. Id.

(4) To ensure that the relief in paragraph 3 above would be timely

provided and adequately funded, the court required Viacom and its

corporate successors to post a bond or irrevocable letter of credit. Id. In

a subsequent order, the court set the amount of the bond at $1,311,000

and required that it be maintained for five years. Kennedy Building

Associates v. CBS Corp., No. 99-CV-1833 (April 21, 2006).

CBS appeals the injunction making a large number of arguments that can be

categorized into three types of objection: the injunction is not sufficiently specific,

it is not supported by the evidence before the court, and the court had no power to

require CBS to post a performance bond. 

We review for abuse of discretion a district court's issuance of a permanent

injunction. Taylor Corp. v. Four Seasons Greetings, LLC, 403 F.3d 958, 967 (8th Cir.

2005). A district court abuses its discretion when it bases its decision on a legal error

or a clearly erroneous finding of fact. Id.

CBS attacks the first item of the injunction, requiring it to perform those

requirements of the Decision Document that will prevent the release of PCBs and

chlorobenzenes into uncontaminated soil and groundwater "consistent with the

purposes of MERA." See 2006 WL 305279, at *3. CBS contends that since the

Decision Document was designed to comply with MERLA, not MERA, it is not clear

which of the provisions of the Decision Document the district court considered

necessary to accomplish the goals of MERA--preventing the release of PCBs and

chlorobenzenes into uncontaminated soil and groundwater. We need not wrestle with

this argument, for Kennedy conceded at oral argument before us that the injunction

was inadequately specific in this regard and agreed that the injunction should be

Appellate Case: 06-2371 Page: 5 Date Filed: 02/02/2007 Entry ID: 3274758
-6-

remanded for clarification of this point. Accordingly, we remand for the district court

to specify in accord with Federal Rule of Civil Procedure 65(d) which of the

requirements of the Decision Document are required under the MERA injunction in

this case. On remand, the district court should expressly list those actions required by

the injunction.

CBS further contends that the record does not support the issuance of any

MERA injunction because there is no record evidence of continuing releases of PCBs

or chlorobenzenes. In Kennedy I, we concluded that there were continuing releases

within the meaning of MERA. We relied on the district court's finding of fact after

trial that PCBs were continuing to migrate in the soil and groundwater because of the

presence of mineral oil in the soil. 375 F.3d at 747. The finding was supported by

expert testimony at trial, as well as Viacom's stipulation in the administrative consent

order. Id. It is not clear whether CBS is contending that something changed after trial

or that the findings on which we based our first holding were erroneous. Viacom did

nothing to clean up the site between the time of trial and the January 3, 2006, hearing

on the modification. Nevertheless, CBS points to statements from its expert saying

that groundwater testing in February and August 2005 showed that the groundwater

plume is stable. In contrast, Kennedy points to statements by its expert witness that

the August 2005 data show increases in several contaminants in several wells and that

CBS's expert's opinion is not justified by the data. Thus, the record shows merely a

conflict of expert opinion, rather than a lack of evidence of continuing migration.

Moreover, this conflict is peripheral to the actual injunction issued, since even CBS's

expert conceded that continuing testing is necessary to ascertain whether the plume

is stable. 

CBS also contends that the district court found the plume had stabilized, based

on the following statement by the court at the modification hearing: "Now, the MPCA

seems to think that that's all [remediation to twelve feet] that's needed at this time. It

says that the plume has not moved, and right now the condition of the situation is as

Appellate Case: 06-2371 Page: 6 Date Filed: 02/02/2007 Entry ID: 3274758
-7-

it is." The district court made this statement in denying Kennedy's request for an

immediate order to clean up the soil more than twelve feet below the surface. The

statement cannot be characterized as a definite finding that the plume has stabilized,

any more than the Decision Document can be so characterized; both the Decision

Document and the injunction are provisional. Both are premised on the presumption

that we cannot be sure what the plume is doing without continuing testing;

contaminants may well migrate, and if so, further remediation will be required. The

Decision Document requires monitoring "for a minimum of five years and, if the

monitoring indicates that the contamination plume is expanding or migrating, the

MPCA will require ground water remedial action." The injunction, of course, requires

the same. CBS has by no means shown that the injunction is based on a clearly

erroneous finding of fact. 

CBS next contends that the district court lacked power to require it to post a

performance bond. We begin by examining the language of MERA. Minn. Stat. Ann.

§ 116B.07 provides:

The court may grant declaratory relief, temporary and permanent

equitable relief, or may impose such conditions upon a party as are

necessary or appropriate to protect the air, water, land or other natural

resources located within the state from pollution, impairment, or

destruction.

(Emphasis added.) The statute certainly appears to be broad enough to allow the court

to require a bond to be posted for five years to assure that foreseeable events of

excavation or groundwater migration will not result in pollution to the soil and water

of Minnesota. 

CBS relies on Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,

527 U.S. 308, 332 (1999), which is instructive, although not in the way CBS suggests.

In Grupo Mexicano, creditors of an insolvent Mexican company obtained a preliminary

Appellate Case: 06-2371 Page: 7 Date Filed: 02/02/2007 Entry ID: 3274758
-8-

injunction ordering the company not to distribute or transfer its assets while the

creditors pursued their damages claim against the company. The Supreme Court

reversed, holding that traditional equitable remedies did not include a freeze order to

preserve assets in aid of a legal claim which was not yet reduced to judgment. Justice

Scalia distinguished two kinds of cases, both of which would include the case at bar.

First, he distinguished cases in which the underlying suit was for equitable relief, rather

than damages. Id. at 324-25 (discussing Deckert v. Independence Shares Corp., 311

U.S. 282 (1940)). Here, the underlying relief sought is equitable, rather than legal, so

our case involves the use of equity in support of equity, rather than equity in support

of a legal remedy. Next, Justice Scalia distinguished cases in which a statute

authorized injunctions "necessary or appropriate for the enforcement" of the statute.

Id. at 325-26 (discussing United States v. First Nat'l City Bank, 379 U.S. 378 (1965)).

In this case, MERA has authorized the court to impose such conditions as are

"necessary or appropriate" to accomplish the goals of MERA, so our case is

distinguishable from Grupo Mexicano on that ground. CBS has not come forward with

any authority casting doubt on the district court's power to require a bond as part of an

effective MERA remedy. 

Finally, CBS contends that the district court should have abstained from

exercising jurisdiction on the grounds of comity and federalism. This argument is

substantially redundant of Viacom's argument on the first appeal that the administrative

consent order was entitled to preemptive effect barring MERA relief. We rejected that

argument in Kennedy I and remanded for refinement of the MERA injunction. 375

F.3d at 743-48. The district court took us at our word, as it was required to do, and

carefully avoided modifying the injunction in any way that could impinge on the state

administrative remedy. We will not, at this stage in the litigation, reverse on the

strength of an old argument dressed up as a new one.

We remand for the district court to specify which requirements of the Decision

Document are included as items of the MERA injunction; in all other respects, the

order of the district court is affirmed.

______________________________

Appellate Case: 06-2371 Page: 8 Date Filed: 02/02/2007 Entry ID: 3274758