Court Opinion

ID: 4415440
Source: CourtListenerOpinion
Date Created: 2019-07-10 19:02:54.261121+00
Date Added: 2024-06-11T09:24:47.091026
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

SHAWN M. GARVIN,                              :
SECRETARY OF THE                              :
DELAWARE DEPARTMENT OF                        :       S18M-10-040 JJC
NATURAL RESOURCES &                           :       In and for Sussex County
ENVIRONMENTAL CONTROL,                        :
                                              :
                     Plaintiff,               :
                                              :
                     v.                       :
                                              :
JOSEPH W. BOOTH,                              :
MARGARET A. BOOTH, and                        :
THORO-KLEEN, INC.,                            :
              Defendants.                     :
                                              :

                                  Submitted: June 28, 2019
                                   Decided: July 10, 2019

                     MEMORANDUM OPINION AND ORDER
                      Plaintiff’s Motion for Summary Judgment:
                         GRANTED in part, DENIED in part
            Plaintiff’s Motion for Protective Order and Stay of Discovery:
                         GRANTED in part, DENIED in part

Robert F. Phillips, Deputy Attorney General, Department of Justice, New Castle,
Delaware, Attorney for the Plaintiff.

Christopher M. Coggins, Esquire, Coggins Law, LLC, Wilmington, Delaware,
Attorney for the Defendants.

Clark, J.
         Plaintiff is the Secretary of the Department of Natural Resources and
Environmental Control (“DNREC”). He moves for summary judgment against
Defendants Joseph and Margaret Booth (collectively the “Booths”).             This suit
implicates the relationship between Delaware’s environmental administrative
process and DNREC’s authority to sue allegedly responsible parties in the Superior
Court. In this case, DNREC’s Secretary (the “Secretary”) issued an order (the
“Order”) finding the Booths liable for the release of hazardous substances at their
Georgetown dry cleaning site (the “Site”). The Booths timely appealed the Order to
the Environmental Appeals Board (the “EAB”). The Booths, however, abruptly
withdrew their appeal immediately before the scheduled hearing.
         DNREC now sues (1) for damages available under Delaware’s Hazardous
Substances Cleanup Act (“HSCA”),1 and (2) for all expenses, including cleanup
costs, recoverable pursuant to 7 Del. C. § 6005(c). Here, the Booths did not contest
the Secretary’s Order finding them liable for releases at the Site. As a result, the
statutory appeal provisions in DNREC’s enabling statute and the doctrine of issue
preclusion make the Secretary’s findings and conclusions binding in this Superior
Court action. Partial summary judgment as to the Booth’s liability is therefore
granted. The amount of damages due DNREC, however, remains a factual issue.
For that reason, DNREC’s motion for summary judgment is also denied, in part.
         Furthermore, this decision separately resolves a pending discovery dispute
between the parties. Here, the parties disputed what was discoverable to such a large
degree that the Court granted DNREC’s motion for a protective order staying further
discovery until it issued this decision. Because DNREC’s motion is denied, in part,
the stay is lifted. The breadth of discovery sought by the Booths, however, was too
broad because (1) the Booths’ liability for releases at the Site has been fixed, and (2)
DNREC now concedes that it does not seek statutory civil penalties. Accordingly,

1
    7 Del. C. § 9101.
                                           2
the parties may pursue discovery relevant to the amount of HSCA provided damages
resulting from the Booths’ refusal to comply with the Secretary’s Order.              The
Court’s existing protective order is therefore modified to accommodate the proper
scope of this lawsuit.

           FACTS OF RECORD AND PROCEDURAL BACKGROUND

       The facts relied upon by the Court are those of record, viewed in the light most
favorable to the Booths. Mr. Booth worked for Thoro-Kleen, Inc., who operated a
dry cleaning business at the Site prior to September 2, 1986. Prior to then, Mr.
Booth’s father owned the Site.        After the Booths acquired title to the Site in
September 1986, and assumed control of Thoro-Kleen,2 they continued to operate
the dry cleaning business until late 2010. They retained ownership of the land after
Thoro-Kleen ceased operation.
       In 2014, DNREC sent the Booths a notice of liability alleging there were
perchloroethylene (“PCE”), trichloroethylene (“TCE”), dichloroethylene (DCE),
and vinyl chloride releases at the Site. HSCA defines PCE and TCE as hazardous
substances. After DNREC issued this notice of liability, DNREC and the Booths
corresponded regularly over the next several years regarding the Booths’ potential
participation in DNREC’s Voluntary Cleanup Program. When negotiations failed,
the Secretary issued an October 31, 2017, Order pursuant to 7 Del. C. § 9109. In it,
he made certain findings of fact, and required the Booths to initiate corrective
actions.

2
 The Court granted DNREC’s motion for default judgment as to liability against Thoro-Kleen.
The amount of damages due DNREC from Thoro-Kleen, will be fixed after trial.
                                            3
       Relevant portions of the Order include the following:
                        FINDINGS OF FACT AND VIOLATION
                                           . . .
       Mr. and Mrs. Joseph Booth are not innocent landowners pursuant to §
       9105(c)(2)b. because prior to their purchase of the property where
       Thoro-Kleen is located they knew of the potential presence of PCE and
       TCE at the Site yet failed to conduct an appropriate inquiry . . . [O]nce
       they became owners and operators of the property and the business they
       became liable for any and all releases of hazardous substances at or
       from the Site.
                                           . . .

                                           CONCLUSIONS

       Based on the foregoing, . . . Respondents are potentially responsible
       parties and . . . they have violated HSCA and the Regulations.

       The Order then directed the Booths to: (1) identify a consultant to perform a
remedial investigation of the facility within sixty days; (2) submit a draft work plan
within forty-five days thereafter; (3) submit a completed remedial investigation and
feasibility study within one year from the date of the Order; (4) pay outstanding
response costs incurred to date by DNREC and agree to pay any reasonably incurred
response costs incurred in the future; (4) implement a final plan of remedial action
upon issuance; and (5) notify DNREC within seven days regarding circumstances
preventing them from meeting the Order’s deadlines. The Booths complied with
none of the deadlines.
       They did, however, timely appeal the Order to the EAB. Throughout their
pre-Order correspondence with DNREC, they claimed they were innocent
landowners.3 At the Booths’ request, the EAB scheduled a hearing on November

3
  See 7 Del. C. § 9105(c) (providing certain instances when a person will not be held liable for the
release of hazardous substances on their premises, including where “[a]ny person who is an
operator, past operator, owner, or past owner of a facility and who can establish that at the time
the facility was acquired or operated by the person, the person had no knowledge or reason to
know of any release or imminent threat of release”).
                                                 4
27, 2018, to address the Booths’ alleged liability and their defenses. The Booths
appeared at the hearing, but then abruptly withdrew their request for a hearing with
little explanation.           The Booths believed that DNREC and the EAB were so
structurally intertwined that the EAB could not fairly adjudicate the matter.
          Prior to the hearing date, DNREC had filed a Superior Court suit seeking
remedial costs and civil penalties from the Booths. Specifically, the suit sought
damages provided for in two separate chapters in Title 7. First, DNREC sought
damages pursuant to HSCA (Chapter 91). HSCA provides that the Secretary may
sue any potentially responsible party in Superior Court for (1) remedial costs
incurred by the Secretary, or (2) for a party’s refusal to comply, without sufficient
cause, with an order issued pursuant to subsections (a) or (b) of Section 9109 of
HSCA.4 DNREC also sought civil penalties under this HSCA provision of up to
$10,000 per day for the Booths’ refusal to comply with the Secretary’s Order.
Second, DNREC sought damages pursuant to Section 6005 of Title 7 for abatement
of the violations, cleanup costs, and other expenses. 5
          DNREC then moved for summary judgment while simultaneously seeking to
stay discovery pending the Court’s summary judgment decision. Prior to the oral
argument on those two motions, the Booths pressed extremely broad discovery. The
discovery seemed in large part targeted at the Booths’ underlying liability,
notwithstanding their decision not to prosecute an appeal of the Secretary’s Order.
As a result, DNREC moved for a protective order. The Court granted a protective
order staying discovery pending its decision on this motion. When doing so, the
Court recognized that the parties’ positions regarding the scope of what claims and
defenses were relevant to this case were irreconcilable short of a Court decision.

4
    7 Del. C. § 9109(e).
5
    7 Del. C. § 6005(c)(1).
                                              5
                               STANDARD OF REVIEW
       Summary judgment is appropriate only if there is no genuine issue of material
fact and the movant is entitled to judgment as a matter of law. 6           The Court must
view the evidence in the light most favorable to the non-moving party.7 The burden
of proof is initially on the moving party. 8 However, if the movant meets his or her
initial burden, then the burden shifts to the non-moving party to demonstrate the
existence of material issues of fact.9 The non-movant's evidence of material facts in
dispute must be sufficient to withstand a motion for judgment as a matter of law and
sufficient to support the verdict of a reasonable fact finder.10

      THE BOOTHS ARE PRECLUDED FROM CHALLENGING THE
       SECRETARY’S FINDINGS THAT THEY VIOLATED HSCA.

       DNREC argues that its motion for summary judgment should be granted
because the Booths withdrew their EAB appeal. DNREC’s structured its motion to
seek full summary judgment. In the alternative to full summary judgment, DNREC
seeks partial summary judgment as to liability because the Booths failed to exhaust
their administrative remedies.
       The Booths oppose the motion. They allege that DNREC’s motion should not
be granted because DNREC’s complaint does not properly plead the elements of a
claim under 7 Del. C. § 9109(e). They also argue that DNREC cannot recover
remedial costs under 7 Del. C. § 6005(c) because the Secretary did not first submit
a detailed billing to them itemizing the costs he alleges they owe.
       At the outset, there is no dispute on the record that the Secretary found the
Booths liable for HSCA violations. When doing so, the Secretary made factual

6
  Super. Ct. Civ. R. 56(c); Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).
7
  Brozaka v. Olson, 668 A.2d 1355, 1364 (Del. 1995).
8
  Super. Ct. Civ. R. 56(e); Moore, 405 A.2d at 680.
9
  Moore, 405 A.2d at 681 (citing Hurtt v. Goleburn, 330 A.2d 134 (Del. 1974)).
10
   Lum v. Anderson, 2004 WL 772074, at *2 (Del. Super. Mar. 10, 2004).
                                              6
findings and did so with reasonable particularity. The General Assembly created a
full and adequate process enabling the Booths to challenge the Order before the
EAB. They should have adjudicated the substantive issues in that forum; they have
now forfeited their ability to challenge many of those findings.
        The EAB is a “quasi-judicial review board which is constituted in order to
hear appeals of decisions of the Secretary.” 11 Chapter 60 of Title 7 establishes the
process for appealing such decisions.12 This process provided the Booths the
opportunity for an evidentiary hearing, conducted in accordance with Delaware’s
Administrative Procedure Act (the “APA”).13            Tellingly, Superior Court review of
decisions such as the one at hand is available only when a person is “aggrieved by
any decision of the Board.” 14
       Chapter 60 of Title 7 does not expressly provide that aggrieved parties, such
as the Booths, must exclusively pursue this administrative process when challenging
a Secretary’s order. Nevertheless, the General Assembly demonstrated its intent that
this process be a respondent’s sole recourse by creating such a pervasive
administrative process. The comprehensive nature of this overall process, coupled
with the inclusion of the EAB’s portion of the process within the APA, demonstrate
the General Assembly’s intent.
       With regard to the EAB’s enabling statute, “[a]ny person whose interest is
substantially affected by any action of the Secretary” is provided an appeal right to
the EAB. 15 The statute further provides that after a party appeals an order to the
EAB, the matter may proceed directly to the Superior Court only upon stipulation of

11
   7 Del. C. § 6007(b).
12
   7 Del. C. § 6008(a).
13
   See 29 Del. C. § 10161(a)(9) (including the EAB within the APA’s provisions applicable to case
decisions as contrasted with DNREC, where the Secretary’s orders and decisions are not subject
to that Subchapter of the APA).
14
   7 Del. C. 6009(a).
15
   See 7 Del. C. §§ 6008-6009 (outlining the appeals process a person should follow when
aggrieved by the actions of the Secretary, first to the EAB and then to the Superior Court).
                                               7
the parties.16 DNREC’s enabling statutes’ structure permits only DNREC to elect
separate remedies such as seeking an injunction in the Court of Chancery or filing a
civil action in Superior Court for damages. On the other hand, with only one limited
exception, DNREC’s enabling statutes provide no corresponding election of
remedies for an aggrieved party permitting him or her to bypass the administrative
process. This limited exception is located in the statutory provision providing for
cease and desist orders and implies that an aggrieved party may sue separately only
to enjoin a cease and desist order.17 Finally, the APA, to which the EAB is subject,
further demonstrates the exclusiveness of the administrative process in these matters.
Namely, the APA provides that (1) only final decisions of an agency may be
appealed and (2) appeals shall be limited in scope to a review of the record below. 18
       Given this statutory framework, the Booths must have first exhausted their
administrative remedies as a prerequisite to challenging the Order’s findings. Where
a remedy is available through means of an administrative hearing, a plaintiff “cannot
come immediately to this court, rather they must [first] establish a record below.” 19
Moreover, a person may not “simply decide to bypass” the administrative process. 20
Given the General Assembly’s clear intent that an aggrieved party must first avail
himself or herself of this administrative process, the Booths decision to withdraw
their appeal does not provide them a route around the administrative process.
       In a pure sense, the doctrine of exhaustion of administrative remedies is not
directly at issue in this case. Namely, this is not a situation where the Booths seek
to invalidate the Order by directly bypassing the administrative process. Rather, this

16
   7 Del. C. § 6008 (e).
17
   See 7 Del. C. § 6018 ( recognizing that when the Secretary issues an order to cease and desist
pursuant to that section it would be subject to a suspension by an injunction ).
18
   See 29 Del. C. § 10142 (providing that “the Court’s review, in the absence of actual fraud, shall
be limited to a determination of whether the agency’s decision was supported by substantial
evidence on the record before the agency.” (emphasis added)).
19
   Buckson v. Ropp, 2000 WL 1741935, at *3 (Del. Super. Nov. 21, 2000).
20
   Carter v. Dept. of Labor, 1993 WL 489222, at *2 (Del. Super. Nov. 12, 1993).
                                                 8
is a DNREC initiated civil suit, where DNREC seeks to apply issue preclusion
against the Booths, offensively. The policies behind these doctrines intertwine
significantly but are distinct in application. Nevertheless, the overlapping rationales
for these two doctrines both support application of issue preclusion against the
Booths. Given the Booths’ litigation choices, they have forfeited their right to now
challenge their liability when they had a full and fair opportunity to do so below.
Issue preclusion estops them from now contesting the Secretary’s factual findings in
the Order.
       The well-recognized justifications for issue preclusion in the context of court
decided issues applies equally in this administrative law context. As the United
States Supreme Court noted in Astoria Federal Savings & Loan v. Solimino, such
preclusive effect of an administrative decision
       is [also] justified on the sound and obvious principle of judicial policy
       that a losing litigant deserves no rematch after a defeat fairly suffered,
       in adversarial proceedings, on an issue identical in substance to the one
       he subsequently seeks to raise.21

       Furthermore, the Delaware Supreme Court recognized in its decision in
Messick v. Star Enterprise, that issue preclusion applies “not only to issues decided
by courts, but also to issues decided by administrative agencies acting in a judicial
capacity where the parties had an opportunity to litigate.” 22 In the context of an
Industrial Accident Board matter, the Court in Messick applied the same test for
collateral estoppel [issue preclusion] applied in other contexts. Namely,
       [t]he test for applying [issue preclusion] requires that (1) a question of
       fact essential to the judgment, (2) be litigated and (3) determined (4) by
       a valid and final judgment. 23

21
   501 U.S. 104, 107 (1991).
22
   655 A.2d 1209, 1211 (Del. 1995).
23
   Id. (citations omitted).
                                           9
       Here, the Order provides that its purpose is to “definitively address the issues
of [the Booths’] liability under HSCA.” It also includes the Secretary’s finding that
the Booths were not innocent landowners. Finally, the Order concludes that the
Booths are liable for “all releases of hazardous substances at or from the Site in
accordance with 7 Del. C. § 9105(a)(1).”
       Those findings apply collaterally to the instant suit when viewed through the
test articulated in the Messick decision.             First, the factual findings regarding
hazardous substance releases are essential to the underlying Order.                       Second,
although the Booths did not actually litigate the matter before the EAB, they had a
full and fair opportunity to do so. Such an opportunity to fully litigate the matter
and be heard satisfies the “litigated” element for preclusion.24 Regarding the third
and fourth elements combined, the Order constituted a determined valid and final
judgment. The Secretary’s Order made certain findings that became valid and final
when the Booths withdrew their appeal. For these reasons, the Booths are precluded
from challenging the Secretary’s findings in this suit, as a matter of law.

        SUMMARY JUDGMENT REGARDING THE ISSUE OF DAMAGES
                     IS INAPPROPRIATE.

       DNREC seeks the following in their complaint:

            Damages pursuant to 7 Del. C. § 9109 (e) and (h) for three times the
             costs incurred because they refused to comply with the Order, and civil
             penalties of up to $10,000 per day;
            DNREC’s costs as provided for by 7 Del. C. § 6005(c); and
            Any pre and post-judgment interest, court costs, and other relief as the
             Court deems just and proper.

24
  See Epstein v. Chatham Park, Inc. 153 A.2d 180, 184 (Del. Super. 1959) (recognizing that the
“doctrine of res judicata “rests upon the reasonable premise that a party who has once litigated, or
has had the opportunity to litigate, the same matter before a court of competent jurisdiction, must
thereafter hold his peace.” (emphasis added)).
                                                10
       In the complaint, DNREC did not allege damages specially. In fact, to date
in discovery, DNREC has not identified any evidence of record substantiating what
remedial costs it seeks.          Accordingly, it has not met its initial burden of
demonstrating that there are no genuine issues of material fact regarding damages.
For the first time, at oral argument, DNREC claimed that its recoverable remedial
costs incurred to date are approximately $260,000. DNREC further represented that
none relate to the actual clean-up of the Site. Rather, they are primarily study and
planning related costs. Regardless, absent identified evidence of record, summary
judgment against the Booths on the issue of damages is not justified. The burden to
prove these damages rests upon DNREC at trial. The trier of fact will determine the
amount of damages due, if any.

THE STAY OF DISCOVERY IS LIFTED, IN PART; DISCOVERY SHALL
  BE LIMITED TO MATTERS RELEVANT TO THOSE DAMAGES
    AVAILABLE PURSUANT TO 7 DEL. C. § 9109(E) AND (H)(1).

       The Booths served extensive discovery upon DNREC seeking information
relating to all aspects of this HSCA case. Much of it was not relevant to any party’s
claim or defense for two reasons. First, as discussed previously, liability is not at
issue. A significant amount of the Booths requested discovery focused on liability
related issues. Second, portions of DNREC’s damages claim will not be available
at trial.25 DNREC will be bound by its representations at oral argument regarding
the nature of damages it seeks. As a result, a more limited scope of potential

25
  DNREC voluntarily withdrew its claim for civil penalties against the Booths at oral argument.
Such a concession has a meaningful impact upon the scope of discovery. Civil penalties are in
essence statutorily provided punitive damages, assessed for purposes of punishment. As in the case
of a claim for punitive damages, a trier of fact would need to evaluate the willfulness of the
violator’s conduct in order to assess a penalty range from between $0 and $10,000 per day. Since
DNREC has withdrawn this claim, broader discovery regarding liability related issues is not
appropriate on the basis that DNREC seeks civil penalties.
                                               11
damages in turn limits the scope of discovery. The protective order will be modified
accordingly.
       The argument surrounding the motion for a protective order focused primarily
on what damages DNREC alleges are due. At the outset, on the current record,
DNREC has no claim for damages pursuant to 7 Del. C. § 6005.26 Section 6005(c)(1)
provides that DNREC may seek broad reaching cost recovery to include the full cost
of abatement, cleanup, and remediation. As a corollary to the doctrine of exhaustion
of administrative remedies, agencies are similarly limited by the strictures of their
enabling statutes.27 Section 6005(c) requires a Secretary seeking damages under that
subsection to submit a detailed billing of expenses to the “liable person.” 28 The
liable person may then challenge the amount’s accuracy by requesting a hearing with
the Secretary. 29 After a decision by the Secretary, the liable person may then appeal
the Secretary’s decision directly to the Superior Court. 30 The Secretary has not
submitted such a billing to the Booths.
       Admittedly, Section 6005(c)(1) provides the Secretary the discretion to
bypass an administrative hearing and sue for the itemized expenses in Superior
Court. Namely, that paragraph provides that “[i]n lieu of holding an administrative
hearing on the detailed billing, . . . the Secretary may [initiate] a civil action in any
court of competent jurisdiction within the State of Delaware.” 31 Nevertheless, while
this provision permits the Secretary to bypass an administrative hearing, it does not
permit him to bypass his obligation to provide a detailed billing of expenses as a

26
   See 7 Del. C. § 6005(c)(1) (providing that a person violating Chapter 60, rules or regulations
issued by DNREC, or an order of the Secretary, shall be liable for abatement costs, cleanup costs,
pollution control costs, and other costs incurred by the DNREC).
27
   See Delaware State Sportsmen’s Ass’n v. Garvin, 196 A.3d 1254, 1268 (Del. Super 2018)
(explaining that agencies “may only act within the confines of the legislative acts creating them”).
28
   7 Del. C. § 6005(c)(1).
29
   7 Del. C. § (c)(2).
30
   Id.
31
   Id.
                                                12
prerequisite to collecting those expenses. Rather, that paragraph creates a statutory
notice requirement imposed at the administrative level of the process regardless of
the Secretary’s election of remedy. 32 It provides that the Secretary can proceed
directly to suit under that paragraph only after first providing a detailed billing of
claimed expenses. Accordingly, because DNREC did not satisfy this condition, it
may recover no damages in the instant suit under that paragraph. It further follows
that discovery independently targeted at the expenses referenced in Section
6005(c)(1) will not be appropriate.
       DNREC’s claim for damages under HSCA, however, remains in the case.
Under HSCA,
       [t]he Secretary may bring an action in Superior Court against any
       potentially responsible party to collect remedial costs incurred by the
       Secretary, or for a party’s refusal to comply, without sufficient cause,
       with an order issued under subsection (a) or (b) of this section. 33

Subsection (h) of that same section provides for up to three times the amount of
remedial costs incurred by the State as a result of the person’s refusal to comply. 34
       Although HSCA does not expressly define “remedial costs,” the definitions
of “remedial action” and “remedy” elsewhere in Chapter 91 of Title 7 demonstrate
the General Assembly’s intention that such costs approach the expenses recoverable
under Section 6005, including public funds spent to fully remediate a site. 35 Here,
however, DNREC represents that it does not seek cleanup costs or other forward-
looking costs. In fact, at oral argument, DNREC clarified that it has not incurred
cleanup costs at the Site, to date. Rather, DNREC limits its claim in the present suit

32
   See id. (where the statute provides that the Secretary may file suit only to compel payment of
amounts “listed in the detailed billing.” It therefore follows that a billing must precede any such
suit).
33
   7 Del. C. 9109(e).
34
   7 Del. C. 9109(h).
35
   See 7 Del. C. 9103(26)-(27) (defining “remedial action” as actions to clean-up or prevent harm
to the environment, and “remedy” as an action that eliminates an imminent threat to the
environment).
                                               13
to study and investigation related costs already incurred. This focus tracks the
remedies sought in the Order that focused on study and planning related costs (with
one exception seeking to require the Booths to “agree to pay” future cleanup costs).
Given DNREC’s self-limitation of its claim, discovery is appropriate only regarding
matters relevant to the damages DNREC claims the Booths have caused to date by
refusing to comply with the Order.36 Given timing provisions in the discovery rules,
and the recent amendment to Superior Court Civil Rule 26 that will be effective on
August 1, 2019, the parties “may obtain discovery regarding any non-privileged
matter that is relevant to [these damage issues that is also] proportional to the needs
of this case.”37

                                        CONCLUSION

          For the reasons explained above, DNREC’s Motion for Summary Judgment
is GRANTED in part and DENIED in part. The stay of discovery is lifted and the
protective order is MODIFIED, consistent with the Court’s decision setting forth
the issues to be decided by the trier of fact.
          IT IS SO ORDERED
                                                         /s/Jeffrey J Clark
                                                               Judge

JJC:jb
Via File & Serve Xpress

36
     7 Del. C. § 9109(e).
37
     Super. Ct. Civ. R. 26 (as amended June 27, 2019).
                                                14