Opinion ID: 2971540
Heading Depth: 2
Heading Rank: 1

Heading: Milford Incurred “Necessary” Response Costs

Text: To establish a prima facie case for cost recovery under CERCLA, a plaintiff must prove that: (1) a polluting site is a “facility” within the statute’s definition; (2) the facility released or threatened to release a hazardous substance; (3) the release caused the plaintiff to incur necessary costs of response; and (4) the defendant falls within one of four categories of potentially responsible parties. Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 347-48 (6th Cir. 1998). At issue is whether Milford’s costs in monitoring its wells and investigating the source of their contamination were “necessary costs of response.” Whether Milford’s response costs were necessary is a mixed question of law and fact. G.J. Leasing Co. v. Union Elec. Co., 54 F.3d 379, 386 (7th Cir. 1995). We thus consider the issue de novo. Franklin County Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534, 541 (6th Cir. 2001). No. 03-1597 Village of Milford v. K-H Holding Corp., et al. Page 5 In our view, certain of Milford’s costs may have been necessary inasmuch as they were related to monitoring and evaluation following a release of hazardous substances. Monitoring and evaluation costs may be recovered as “removal” costs under CERCLA if they were reasonable, and the activities were not scientifically deficient or unduly costly. See Johnson v. James Langley Operating Co., 226 F.3d 957, 963–64 (8th Cir. 2000); Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., 4 F.3d 1209, 1219 (3d Cir. 1993). The district court concluded that Milford’s response activities “were not cost effective and environmentally sound, and did not contribute in any significant manner to directly addressing the release of contaminants from the [K-H] facility.” But the court’s findings of fact conflict with this conclusion. The court found that Milford learned of contaminants in the water and then studied the situation. MDNR, upon learning of the contamination, directed Milford to increase its monitoring activities. Milford did this, and it also hired consultants, who performed and analyzed studies. As it undertook these activities, Milford met with MDNR to report on its investigation and held public meetings for discussion of the contamination and response activities. Milford undertook more studies as advised by MDNR. Milford also requested MDEQ’s involvement, and MDEQ later determined that K-H was a PRP based upon Milford’s studies. These activities are of the type one would reasonably conduct upon learning that one’s municipal water supply had been contaminated by hazardous substances. The close involvement of MDNR and MDEQ suggests to us that at least some of these activities could be considered recoverable monitoring and evaluation costs, not “unreasonable” and not “environmentally unsound” or “scientifically deficient.”
The district court also denied recovery based on its finding that Milford’s monitoring and investigation costs were not recoverable as “removal” costs subject to lesser requirements under the National Contingency Plan (NCP). But Milford’s costs fall squarely into the statutory definition of removal, which includes “such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances.” 42 U.S.C. § 9601(23). The district court itself concluded that, based on § 9601(23), that “this suit is a cost recovery action for ‘removal’ costs, which may include preliminary investigative and evaluative costs.” The court went on, however, to state that “[r]emoval actions are shortterm responses . . . taken in response to an immediate threat to the public welfare or to the environment.” It concluded that Milford failed at trial to present evidence “of an immediate threat,” and therefore Milford’s response “cannot properly be characterized as a ‘removal’ action.” (Id.) We acknowledge the point that this court repeatedly has observed that removal actions are frequently short-term actions in response to an emergency, see, e.g., Barmet Aluminum Corp. v. Reilly, 927 F.2d 289, 291 (6th Cir. 1991) (“Removal refers to short-term action taken to halt any immediate risks posed by hazardous wastes.”); Franklin County Convention Facilities Auth., 240 F.3d 540 n.3 (“Removal actions . . . usually occur in the context of an emergency, and are considered temporary solutions.”). But we have never held that such characteristics are requirements for finding the costs of an action recoverable as removal costs. See, e.g., Barmet, 927 F.2d at 291; Kelley v. E.I. DuPont de Nemours & Co., 17 F.3d 836, 843–44 (6th Cir. 1994) (giving removal a “broad interpretation”). The district court also denied recovery because Milford “made no effort to . . . comply with the . . . NCP in conducting its response actions.” But this court has held that consistency with the NCP is not required for recovery of monitoring and investigation costs. Donahey v. Bogle, 987 F.2d 1250, 1255 (6th Cir. 1993), vacated on other grounds, 512 U.S. 1201 (1994).1 1 We find nothing in CERCLA that exempts such costs from the requirements of the NCP. Nonetheless, Donahey is the established rule of this circuit, and we are bound to follow it. No. 03-1597 Village of Milford v. K-H Holding Corp., et al. Page 6 Thus the district court erred in denying recovery on the grounds (1) that Milford’s monitoring and investigation costs are not recoverable as “removal” costs and (2) that Milford failed to comply with the NCP. 3. Safeness of the water does not negate the necessity of all response costs The district court evaluated Milford’s response costs as not “necessary,” in part because Milford’s water always met federal safe drinking water standards. Water’s safeness for drinking may be an appropriate factor to consider in determining whether particular response costs were reasonable. For example, it might be unreasonable to remove all contaminants from water that is safe to drink and certain to be safe from further contamination. But where a release has occurred and there may be potential for further contamination, some response costs will almost always be reasonable, to ensure that the water remains safe. See Artesian Water Co. v. Gov’t of New Castle County, 851 F.2d 643, 651 (3d Cir. 1988) (response costs incurred to ensure that water supply “remained uncontaminated” were reasonable). CERCLA plaintiffs cannot be expected to wait until their water is unsafe to take responsive actions. Milford’s wells were contaminated and without further study Milford could not know whether its water would become unsafe for drinking in the near future. Some monitoring and studies to evaluate the situation were reasonable under these circumstances. As a result, the present safeness of the water was not a sufficient ground upon which the district court could find that all Milford’s costs were not necessary. 4. Duplicative studies do not negate necessity The district court also concluded that Milford’s monitoring activities were not necessary in part because the release “was already being successfully investigated and treated by K-H under the supervision of the MDEQ.” A CERCLA plaintiff’s investigatory activities are not unreasonable and therefore not necessary merely because they duplicate studies that the alleged polluter has already performed. See Artesian Water Co., 851 F.2d at 651 (“We find nothing in CERCLA requiring [a plaintiff] to rely solely on the state’s preliminary measures, rather than to make its own appraisal.”). Milford was reasonable to conduct studies of its own. MDNR directed Milford to monitor its wells and perform studies, and MDEQ relied upon Milford’s studies in determining that K-H was a PRP. Further, because K-H used its studies to deny responsibility for the contamination of Milford’s wells, it was especially reasonable for Milford to continue its efforts to learn the source of the contamination. Given that duplication in itself does not equate to unreasonableness, on remand the district court may review the duplicated efforts to reevaluate their necessity or excessiveness.