Opinion ID: 779912
Heading Depth: 2
Heading Rank: 4

Heading: The District Court's Allocation of Response Costs

Text: 28 Predictably, the Coalitions submitted extensive objections to the Report. And equally predictably, the Municipal Defendants filed submissions urging the district court to adopt the Report, albeit with minor modifications. Thereafter, the court issued its ruling (the First Ruling) on the parties' objections to the Master's Report. The Court later amended certain of its findings in response to the parties' motions for reconsideration (the Second Ruling). 29 The court adopted the Master's findings regarding the high toxicity of the Coalitions' waste and the mobility and releaseability of the hazardous constituents found in their liquid waste. The court went on to supplement the Master's Report with extensive findings describing the type and volume of waste dumped by the Coalitions at each landfill and the effect that burning the waste had on reducing the waste's residual volume. In this regard, the court found that the Coalitions dumped both liquid and hazardous wastes at their respective landfills. Notably, however, the court found that while LPC members deposited large amounts of liquid hazardous wastes at Laurel Park, the greater bulk was comparable to MSW. 30 The court also supplemented the Master's findings by determining the volume of MSW dumped by each Municipal Defendant, accepting, in large part, the amounts suggested by the Coalitions. The court found that the Municipal Defendants dumped MSW as follows: (1) Hamden — 4,770,009 gal.; (2) New Haven — 6,473,583 gal.; (3) Orange — 20,235,349 gal.; (4) Seymour —13,166,688 gal.; (5) Westport — 73,116,636 gal., reduced after burning to 286,066 cu. yds.; 12 and (6) Middlebury — 19,796 cu. yds. 31 Regarding Laurel Park, the district court accepted the LPC's estimates and found that the Municipal Defendants dumped MSW at the landfill as follows: (1) Orange — 177,407 cu. yds.; (2) Seymour — 143,577 cu. yds. compacted and an additional 47,651 cu. yds. uncompacted; and (3) Middlebury — 228,854 cu. yds. compacted and an additional 47,651 cu. yds. uncompacted. 32 The court also assessed the Master's findings regarding the quality of the Municipal Defendants' MSW. Assessing evidence concerning the relative presence of hazardous wastes in the Municipal Defendants' MSW, the court accepted the Master's observations that: (1) a typical town's MSW will not necessarily comport to a general national profile; and (2) the Coalitions failed to account for any sorting and separation procedures the Municipal Defendants may have implemented to reduce the presence of hazardous substances in MSW. While the court found that these concerns were equitable factors for its consideration, it was unimpressed with the Municipal Defendants' sorting and separation procedures, finding them neither uniform nor all-encompassing over the period of waste disposal in question.... In the end, the court affirmed the Master's finding that the record reflected, at most, a concentration of hazardous substances in the Municipal Defendants' MSW of 0.1% to 0.4%. 33 Ultimately, however, the court rejected the Report's recommended allocation, finding that the Municipal Defendants' experts' evidence suggests that some allocation was appropriate. The court then set forth the list of equitable factors it applied in allocating the parties' contribution shares. Among other factors, the court considered: (1) the total volume of waste each party disposed; (2) the amount of hazardous substances contained in each party's waste; (3) the form of the hazardous substances — i.e., liquid or solid; (4) the releaseability of the hazardous substances, including the amount, if any, of decomposition required and the effect of the substances' interaction with other matter such that new, non-hazardous, compounds form; and (5) the mobility of the hazardous substances in each party's waste. The district court was also impressed by each Coalition's decision to enter into the Consent Decrees and to remediate their respective landfills. The court believed that their cooperation with the Government entitled them to some benefit of the doubt as to the equitable factors and factual uncertainty in allocating [response costs.] 34 To determine each Municipal Defendant's contribution share, the court fashioned an allocation model of its own creation, which incorporated: (1) the combined total volume of waste deposited by the Coalitions and Municipal Defendants at the respective landfills; (2) the volume of MSW each Municipality dumped; and (3) a toxicity factor for each Coalition's liquid and industrial waste as contrasted with its members' and each Municipal Defendant's MSW. 35 Applying this formula, the court allocated contribution shares among the Municipal Defendants as follows: 36 &#x2022; For response costs incurred by the LPC: (1) Orange — 4.29%; (2) Seymour — 3.1%; and (3) Middlebury — 4.8%. 37 &#x2022; For response costs incurred by the BHC: (1) Orange — 2.26%; (2) Seymour — 1.52%; (3) Westport — 6.51%; (4) Hamden — 0.27%; (5) New Haven — 0.45%; and (6) Middlebury — 0.45%. 13 38 &#x2022; The court also allocated a 1.1% share to Naugatuck, but held, as an equitable factor, that its contribution payment would be offset by $325,000 to reflect a settlement payment the Naugatuck Treatment Company (NTC) made to the BHC using funds that belonged to Naugatuck. 39 The court also issued findings regarding the Coalitions' response costs in its initial and subsequent decisions. All told, the court calculated BHC's recoverable response costs as $39,818,648.26 and LPC's recoverable response costs as $14,005,975.27. The court then subtracted from these figures the total settlement proceeds the Coalitions previously received from other third-party defendants. 14 The resulting totals — $32,600,263.26 for BHC and $5,237,587.37 for LPC — were the amounts against which the Municipal Defendants' percentage contribution shares were assessed. 40 In its Second Ruling, the court granted the Coalitions' request for pre-judgment interest. The court rejected their claim of entitlement to compound interest, opting instead to apply simple interest. Thereafter, on August 2, 2000, the court entered its final judgment on the BHC's contribution claims in the following amounts, inclusive of pre-judgment interest: (1) Middlebury — $186,779.94; (2) Westport — $2,702,083.23; (3) New Haven — $186,779.94; (4) Orange — $938,050.39; (5) Seymour — $630,901.16; and (6) Naugatuck — $46,933.87. In the same judgment, the court awarded the LPC the following amounts, inclusive of pre-judgment interest: (1) Orange — $239,471.69; (2) Seymour — $204,507.50; and (3) Middlebury — $316,656.78. Later, however, the court amended its judgment regarding the LPC's claims to include a declaratory judgment establishing the Municipal Defendants' liability for LPC's future response costs. 41 The Municipal Defendants appeal the district court's allocation, arguing they should not be required to contribute any share of the response costs. They also contend the court erred by failing to hold a hearing prior to ruling on the Coalitions' objections to the Master's Report. 42 The LPC appeals from the district court's denial of its claim to certain response costs and the court's interest awards. 43 The BHC also appeals, asserting that the district court erred by allowing Naugatuck to offset its contribution share.