Opinion ID: 852396
Heading Depth: 2
Heading Rank: 2

Heading: South Bend May Proceed With Its ELA Claim.

Text: In 1997, the General Assembly enacted a statute providing for an environmental legal action to recover reasonable costs of a removal or remedial action involving hazardous substances or petroleum. Ind. Code § 13-30-9-2. The parties join two issues pertinent to the ELA claim. First, for purposes of accrual and the statute of limitation, is ELA largely a consolidation of existing rights to sue, such that the statute might have begun to run decades ago, or is it a new cause of action for which the statute of limitation could not start to run until its enactment? Second, is South Bend a party who can file an action under ELA?
The ELA is part of the Brownfield Revitalization Zone Tax Abatement  Environmental Revolving Loan Program bill, enacted in 1997 to become effective February 28, 1998. P.L. 59-1997, 1997 Ind. Acts 1789 (1997 Act). The bill's overall purpose was the rescue and redevelopment of brownfields, which the legislation defined as: an industrial or a commercial parcel of real estate: (1) that: (A) is abandoned or inactive; or (B) may not be operated at its appropriate use; and (2) on which expansion or redevelopment is complicated; because of the actual or perceived presence of a hazardous substance or petroleum released into the surface or subsurface soil or groundwater that poses a risk to human health and the environment. 1997 Act § 3. Section 23 of the 1997 Act did not amend any existing parts of the Code, but rather added to the Code an entirely new chapter (consisting of eight entirely new sections). See Ind.Code § 13-30-9-1, et seq. (the ELA Chapter). To be sure, the ELA chapter overlaps in some ways with enactments such as Indiana's Underground Storage Tank Act  Ind. Code § 13-23-13-8, the Petroleum Release statute  Ind. Code § 13-24-1-4(b), the catch-all environmental statute  Ind. Code § 13-30-1-1, [3] and the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)  42 U.S.C. § 9601 et seq. (2009). Still, there are certain circumstances under which only the ELA would provide a cause of action. In addition to the ELA Chapter, the 1997 Act included several provisions adding to and amending the Indiana Code to further redevelopment. These provisions created certain tax abatements (§ 1 of the Act), supplemented an existing voluntary remediation plan scheme (§§ 17 through 22 of the Act), implemented a revolving loan fund program (§ 29 of the Act; Ind. Code § 13-19-5-2), and directed IDEM to develop procedures and a brownfield redevelopment work group (§§ 27-28 of the Act). This legislative effort to address brownfields included a set of policies and programs designed to encourage their remediation, partly by amending existing code and partly by adding new sections. The fact that a cause of action is embedded in a comprehensive bill that adds new material as well as amends existing statutes does not necessarily make it an amendment rather than the creation of a new cause of action. Section 6 of the 1997 Act defined what the legislature meant by Environmental Legal Action: ... any legal action brought to recover reasonable costs associated with a removal or remedial action involving a hazardous substance or petroleum released into the surface or subsurface soil or groundwater that poses a risk to human health and the environment. Ind.Code § 13-11-2-70.3. Cooper contends that this is a redundancy, that it merely restates all existing causes of action. Certainly there are claims available to plaintiffs apart from the ELA in cases similar to South Bend's, but together they do not exhaust the meaning given to an environmental legal action under the 1997 Act. For instance, South Bend points out that a proportionately small amount of its cleanup costs have been related to underground storage tanks or petroleum, so a correspondingly low portion of the recoverable costs would have been available under either the USTA or the petroleum release statute. Moreover, the City's remediation efforts have been voluntary, so as to exclude a contribution claim for compelled remedial action under contribution provisions of the USTA and CERCLA. In the course of considering the legislation at issue, the General Assembly made various changes to the bill as introduced that support South Bend's characterization of the ELA as creating a new action. For instance, legislators added a new § 1 to the ELA Chapter as introduced describing the general application, saying the ELA applies to actions brought by the state or a private person, but does not apply to certain actions brought by the state in more extreme environmental contamination cases: where the site is listed on the National Priorities List, scores at least 25 on Indiana's solid waste management scoring model, or is deemed by the IDEM commissioner to be an imminent threat to human health or the environment. 1997 Act § 23. In this context, we conclude the legislature contemplated ELA as creating a new cause of action. The legislature altered § 2 of the ELA Chapter to clarify the nature of the release of a hazardous substance or petroleum and to place a reasonableness standard on cost recovery. Id. It changed § 3 of the ELA Chapter to narrow one factor a court must consider in evaluating the environmental risks posed by the activity in question by weighing the use of the site at the time of the release against the cost effectiveness of addressing the risks imposed. Id. Furthermore, the General Assembly inserted language providing that a contract allocating responsibility between parties controls despite the ELA. Id. (this language appears in Ind.Code § 13-30-9-3(b)). Most useful on the question whether the ELA is a new cause of action is § 6 of the ELA Chapter, also added by the General Assembly to the bill as introduced. Section 6 states the same proposition in two clear ways. First, it provides that an action to recover costs related to a release from an underground storage tank may be brought under the ELA or the USTA. I.C. § 13-30-9-6. It then reiterates this concept: A person may not bring the action under both this chapter and IC XX-XX-XX-X, (the USTA). Id. Requiring litigants to choose between ELA and USTA (which unquestionably creates a cause) indicates the General Assembly clearly intended to create a new and separate cause of action. If the ELA was intended to clarify and narrow such claims as those under the USTA, there would be no reason to require a litigant to choose. Cooper also contends that the language the action means there can only be one action under both chapters of the code and that the action actually existed before the legislature enacted the ELA. (Appellant's Reply Br. at 6.) Again, reading the ELA in such a way would render the alternative ELA claim in underground storage tank cases meaningless. In fact, the definite article in the clause ... may bring the action under ... refers to the particular action in the previous clause: In an action to recover costs associated with a release from an underground storage tank.... Ind.Code § 13-30-9-6. This clause does not refer to an action brought under the USTA but to an action brought based on facts that would also produce a claim under the USTA. In so addressing this contingency, the General Assembly signaled it did not intend to grant claimants two bites at the apple. Two final changes made during the General Assembly's deliberations added sections to the ELA Chapter: (1) clarifying that a covenant not to sue under Ind.Code § 13-25-5-18 would exempt a party from suit as a result of the ELA and (2) excluding the ELA from affecting any litigation filed before its effective date. 1997 Act § 23 (enacting Ind.Code § 13-30-9-7 and -8). This provision about covenants not to sue as not being affected by the ELA Chapter further indicates legislative intent to create a new cause of action, for to read the ELA in any other way would not require such language, and, like § 6 of ELA, to read it as including existing claims would render it meaningless. Similarly, stating that the ELA may not be construed to affect any litigation filed before its effective date is in line with such an interpretation, particularly in light of a situation in which the ELA would provide a more favorable alternative action to a plaintiff after filing its suit.
Cooper Industries contends that South Bend cannot bring an ELA claim because South Bend is not the state or a private person. (Appellant's Br. at 43-44.) South Bend argues that it is a person as that term is used in the section authorizing an ELA claim. (Appellees' Br. at 35-36.) The trial court agreed with South Bend. This debate focuses on the first two sections of Ind.Code § 13-30-9. Standing in juxtaposition, they do provide something of a conundrum. When South Bend filed its case, § 1 of the ELA Chapter began by saying: This chapter applies to actions brought by the state or a private person. [4] By contrast, § 2 said: A person may bring an environmental legal action.... [5] For most purposes of Indiana's environmental laws, the Code defines person very comprehensively, certainly in a way that includes South Bend: `Person' ... means ... a city, ... a town, ... political subdivision, ... or any other legal entity. Ind.Code § 13-11-2-158(a). It does not define private person. [6] When courts set out to construe a statute, the goal is to determine and give effect to the intent of the legislature. Sales v. State, 723 N.E.2d 416 (Ind. 2000). The first place courts look for evidence is the language of the statute itself, and courts strive to give the words their plain and ordinary meaning. We examine the statute as a whole and try to avoid excessive reliance on a strict literal meaning or the selective reading of individual words. We presume the legislature intended the language used in the statute to be applied logically, consistent with the statute's underlying policy and goals, and not in a manner that would bring about an unjust or absurd result. Prewitt v. State, 878 N.E.2d 184 (Ind.2007); Sales, 723 N.E.2d at 420. We look to the underlying purpose of these provisions and to similar Code sections for guidance. First, it is clear from the plain language of Ind.Code ch. 13-30-9 that the legislature enacted the ELA statute to shift the financial burden of environmental remediation to the parties responsible for creating contaminations. In effect, this scheme creates an incentive for potential buyers of contaminated land who might be deterred by the substantial costs to clean up the land, thus preventing not only the cleanup but also redevelopment and economic renewal. The General Assembly enacted other incentives for potential brownfield redevelopers at the same time that it enacted ELA. [7] One of those, Ind.Code ch. 13-19-5, creates the Environmental Remediation Revolving Loan Program, and it explicitly contemplates that cities and other local government entities will be major actors in brownfield remediation and redevelopment. Indiana Code § 13-19-5-1 states the purpose of the Program: The environmental remediation revolving loan program is established to assist in the remediation of brownfields to encourage the rehabilitation, redevelopment, and reuse of real property by political subdivisions by providing loans or other financial assistance to political subdivisions to conduct any of the following activities: (1) Identification and acquisition of brownfields ... as suitable candidates for redevelopment following the completion of remediation activities. (2) Environmental assessment of identified brownfields.... (3) Remediation activities conducted on brownfields. (4) The clearance of real property ... in connection with remediation activities. (5) Other activities necessary or convenient to complete remediation activities on brownfields. Ind.Code § 13-19-5-1 (1999 suppl.), amended by 2007 Ind. Acts 221 § 7. If, as Cooper contends, cities like South Bend cannot bring ELA claims, it would mean that most nearly anyone but cities could purchase and rehabilitate contaminated land and consequently seek to recover remediation costs from the original contaminator. Cities, by contrast, would have to act solely at local taxpayer expense (though they could borrow money from the state to finance purchases and remediation). We cannot think of a reason why the 1997 brownfields scheme would have been crafted with this result in mind. In light of the overall objective of the 1997 bill and the apparent purpose of the ELA Chapter, we conclude that the term private person in Ind.Code § 13-30-9-1 should not be read any narrower than the more definite and generally applicable definition found in Ind.Code § 13-11-2-158(a). The trial court correctly held that South Bend could pursue an ELA claim.
A statute of limitation does not begin to run against a cause of action before that cause of action exists, i.e., before a judicial remedy is available to the plaintiff. Martin v. Richey, 711 N.E.2d 1273, 1284 n. 12 (Ind.1999). The substance of a cause of action, rather than its form, determines the applicability of the statute of limitation. Shideler v. Dwyer, 275 Ind. 270, 417 N.E.2d 281 (1981). Cooper asserts that South Bend had several ways to sue exactly the same parties for the same contamination under the same (or more stringent) standards long before the ELA amendments. (Appellant's Br. at 21). In particular, Cooper cites Indiana's Underground Storage Tank Act, Ind.Code § 13-23-13-8; the Petroleum Release Statute, Ind.Code § 13-24-1-4(b); the catch-all environmental statute, Ind.Code § 13-30-1-1; and the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. ( Id. ) If the ELA simply amends, for clarification or other purposes, pre-existing environmental claims, any change would apply strictly on a prospective basis. Cf. Bourbon Mini-Mart v. Gast Fuel and Serv., Inc., 783 N.E.2d 253, 262 (Ind.2003) (because an amendment to the USTA expanded both the class of corrective action for which owners and operators could seek recovery, and the class of third persons from whom recovery could be sought, the statute as amended should be applied retroactively). On the other hand, if the ELA creates an entirely new action, no cause of action could have existed until its effective date. ELA seems to fall somewhere in the middle. As South Bend points out, the USTA and the Petroleum statutes provide only a right of contribution, whereas the ELA does not so limit seeking cost recovery from another party. See Taylor Farm LLC v. Viacom, 234 F.Supp.2d 950, 962 (S.D.Ind.2002). Furthermore, each of these are limited by the type of damage done. As such, the limitation found in the ELA's § 6 would only have a narrowing effect in those cases involving sufficient facts to support a claim under the USTA. If such facts existed, the plaintiff would have to choose between the ELA and the USTA. As to Ind.Code § 13-30-1-1, it allows declaratory and equitable relief only, requires a citizen suit notice of six months, and prohibits seeking relief when IDEM is also seeking declaratory relief. (Appellees' Br. at 33). Finally, CERCLA's § 107(a) would require South Bend to prove it was an innocent landowner, while the ELA explicitly permits recovery without regard to the plaintiff's part in causation of the damage. Cooper argues that the substance of a cause of action, rather than the form, determines the applicability of the statute of limitations, meaning South Bend's claim would accrue when a substantively similar claim would accrue. (Appellant's Br. 20-21, quoting Rice v. Strunk, 632 N.E.2d 1151, 1153 (Ind.Ct.App.1994), aff'd, 670 N.E.2d 1280 (Ind.1996). also citing King v. Terry, 805 N.E.2d 397 (Ind.Ct.App.2004).) For instance, Cooper cites both Shideler v. Dwyer and Rice, in which the plaintiffs had malpractice claims but crafted their complaints in a way to describe claims carrying a longer statute of limitation than the more obvious claim of malpractice. The courts in both cases found that, in fact, the underlying claims were actually for malpractice, and the two-year limitation for malpractice actions should apply. We think the case law Cooper cites on this point addresses the question of how parties characterize facts in their pleadings, not with a change in the underlying law. Here, if any similar spin has occurred on South Bend's part, it has a limited effect, for at least some of South Bend's claims could not have been brought before February 28, 1998. If the reverse were true and South Bend could have brought the substance of its claims before the end of an applicable statute of limitation but did not, the Shideler rule might bar the City's recovery. In this case, however, South Bend did not have a complete cause of action until the ELA became effective. Therefore, the statute of limitation could not have begun to accrue until that date. Cooper further asserts that the statute of limitation should have run against South Bend in accord with standard discovery rule principles  when it knew or should have known of the injury. (Appellant's Br. at 13-17.) This misses a broader point about applying statutes of limitation: a statute does not run until a cause of action is complete. The discovery rule may tell us when there was sufficient knowledge about facts, but it does not apply at all to the completion of the underlying law to a cause of action, except to the extent that the law depends on the claim being factually complete. Indiana courts have held consistently that the discovery of a legal theory will not serve as the accrual date, but not that a cause of action can accrue before the law provided for such kind of claim. [8] Cooper claims that under this logic a claim could be brought based on facts known for a hundred years. Such a claim still must be brought, however, within the applicable statute of limitation from the point of a new cause of action's effective date. In other words, any opening of the floodgates would have a time limit. That time for the ELA passed either on February 28, 2004 or February 28, 2008, depending on which statute of limitation applies. Parties who newly discover ancient contamination and seek to recover costs will be in the same position under the ELA as they would be under the USTA: the statute of limitation will begin to run on the earlier date of actual discovery or when a reasonable person would discover the facts. Though the parties join in debate over whether South Bend has agreed that the property damage statute of limitation applies in this case, we will adopt six years as the applicable time period. [9] Six years from the accrual date was February 28, 2004. Because South Bend filed this action March 19, 2003, it filed within even the shortest arguable limitation. Because we understand the ELA as addressing the issue of brownfields, that the legislature did not intend to bar cities from bringing these actions, and that the statute of limitation did not run until the cause existed, we hold that South Bend may proceed with its ELA claims.