Court Opinion

ID: 8990580
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:08:19.598445+00
Date Added: 2024-06-11T17:10:53.791912
License: Public Domain

BERTELSMAN, District Judge.
This appeal involved the construction of the provisions of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) governing contribution actions among responsible parties following a cleanup of a hazardous waste site and an Immediate Removal Action by the Environmental Protection Agency (EPA). 42 U.S.C. §§ 9607, 9613(f)(1).
BACKGROUND
The facts and background necessary to place this opinion in context were well stated by Chief Judge Hillman in his unpublished opinion awarding contribution, as follows:
“This matter stems from a suit brought by the United States against Northernaire Plating Company (“North-ernaire”) for recovery of its costs in conducting an ‘Immediate Removal Action’ pursuant to the Comprehensive Environmental Response, Compensation & Liability Act (hereinafter, “CERCLA”), 42 U.S.C. § 9601, et seq. Northernaire owned and operated a metal electroplating business in Cadillac, Michigan. Beginning in 1972, it operated under a 10-year lease on property owned by R.W. Meyer, Inc. (“Meyer”). Norther-naire continued operations until mid-1981 when its assets were sold to To-plocker Enterprises, Inc. (“Toplocker”). From July of 1975 until this sale, Willard S. Garwood was the president and sole shareholder of Northernaire. He personally oversaw and managed the day-to-day operations of the company.
“Acting upon inspection reports from the Michigan Department of Natural Resources (“MDNR”), the United States Environmental Protection Agency (“EPA”) conducted an Immediate Removal Action at the Northernaire site from July 5 until August 3, 1983. Cleanup of the site required neutralization of caustic acids, bulking and shipment of liquid acids, neutralization of caustic and acid sludges, excavation and removal of a contaminated sewer line, and decontamination of the inside of the building. All of the hazardous substances found at the site were chemicals and by-products of metal electro-plating operations.
“In an earlier opinion and order dated May 6, 1988, this court found the defen*570dants Garwood, Northernaire, and Meyer jointly and severally liable to plaintiff for the costs of the Immediate Removal Action under Section 107(a) of CERCLA. 42 U.S.C. § 9607(a). United States v. Northernaire Plating Co., 670 F.Supp. 742 (W.D.Mich.1987). The court awarded plaintiff $268,818.25 plus prejudgment interest. The court later determined the prejudgment interest due to be $74,-004.97, making the total award to plaintiff $342,823.22.
“Each defendant, (Northernaire and Garwood moving together) has brought cross-claims for contribution against the other. Currently before the court are the summary judgment motions on these cross-claims.
“CERCLA specifically allows actions for contribution among parties who have been held jointly and severally liable:
“(1) Contribution
“Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this sub-section shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 or section 9607 of this title.
“42 U.S.C. 9613(f)(1).”
Joint App., at 414-16.
Further details may be found in the opinions of the trial court and this court which imposed joint and several liability on the instant parties.1 United States v. Nortkernaire Plating Company, 670 F.Supp. 742 (W.D.Mich.1987); aff'd sub nom., United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th Cir.1989), cert. denied, — U.S. -, 110 S.Ct. 1527, 108 L.Ed.2d 767 (1990).
Apparently, the parties allowed the building to degenerate into a true environmental disaster area. As this court observed in the former appeal:
“In March 1983, officials from the EPA and the Michigan Department of Natural Resources (MDNR) examined the property. Their examination was prompted by earlier reports of MDNR officials indicating that the building had been locked and abandoned and that a child had received chemical burns from playing around discarded drums of electroplating waste that were left outside the building. State tests on samples of the soil, sludge, and drum contents disclosed the presence of significant amounts of caustic and corrosive materials. During their examination of the site, EPA and MDNR officials observed drums and tanks housing cyanide littered among disarray outside the facility. Based on their observations outside the building, the officials determined that Northernaire had discharged its electroplating waste into a “catch” basin and that the waste had seeped into the ground from the bottom of the basin. The waste then entered a pipe that drained into a sewer line that discharged into the sewage treatment plant for the city of Cadillac.”
Meyer, 889 F.2d at 1498-99 (footnote omitted).
In the former appeal, this court affirmed the decision of the trial court finding that the damage to the site had been “indivisible” and imposing joint and several liability on the present parties to reimburse the EPA for the removal costs for the cleanup of the building.2
*571The total cost of the cleanup plus prejudgment interest was $342,823.22. In this subsequent contribution action, the trial court held that two-thirds of the liability should be borne by Northernaire and its principal shareholder, each contributing one-third each. But the court held that the remaining one-third ($114,274.41) should be borne by the appellant property owner.
The appellant attacks this apportionment, arguing strenuously that its responsibility should be limited to an amount apportioned according to the degree that the sewer line mentioned in the above quote contributed to the cleanup costs. Applying this approach, the appellant generously offers to pay $1,709.03.. Appellees accept the trial court's apportionment.
The appellant also quibbles about certain statements made by the trial court in its opinion, stating that some facts recited were not supported by the record.
ANALYSIS
The trial court held that it was within its discretion to apply certain factors found in the legislative history of CERCLA in making its contribution apportionment. Although these factors were originally intended as criteria for deciding whether a party could establish a right to an apportionment of several liability in the EPA's initial removal action, the trial court found "these criteria useful in determining the proportionate share each party is entitled to in contribution from the other." Joint App., at 417.
The criteria mentioned are:
"(1) the ability of the parties to demonstrate that their contribution to a discharge release or disposal of a hazardous waste can be distinguished;
"(2) the amount of the hazardous waste involved;
"(3) the degree of toxicity of the hazardous waste involved;
"(4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste;
"(5) the degree of care exercised by the parties with respect to the hazardous waste concerned, taking into account the characteristics of such hazardous waste; and
"(6) the degree of cooperation by the parties with Federal, State, or local officials to prevent any harm to the public health or the environment."
Id. (citing Amoco Oil Co. v. Dingwell, 690 F.Supp. 78, 86 (D.Me.1988), aff'd sub nom. Travelers Indemnity Co. v. Dingwell, 884 F.2d 629 (1st Cir.1989); United States v. A & F Materials Co., Inc., 578 F.Supp. 1249 (S.D.Ill.1984); H.R. No. 253(III), 99th Cong., 2d Sess. 19, (1985), reprinted in 1986 U.S.Code Cong. & Admin.News 2835, 3038, 3042).
The trial court recognized that the lessee was the primary actor in allowing this site to become contaminated. (Appellant argues that the lessee was the only actor.) The trial court found, however, that in addition to constructing the defective sewer line which contributed to the contamination, appellant bore significant responsibility "simply by virtue of being the landowner." Id. at 418. The trial court observed further that appellant "neither assisted nor cooperated with the EPA officials during their investigation and eventual cleanup of the ... site." Id.
Chief Judge Hillman concluded, "As it is well within the province of this court, I have balanced each of the defendants' behavior with respect to the equitable guidelines discussed." Id. at 421. As a result of the balancing, he made the apportionment described above.
The trial judge was well within the broad discretion afforded by the statute in making the apportionment he did.
Congress intended to invest the district courts with this discretion in making CERCLA contribution allocations when it *572provided, “the court may allocate response costs among the liable parties using such equitable factors as the court determines are appropriate.” 42 U.S.C. § 9613(f)(1) (emphasis added).
Essentially, appellant argues here that a narrow, technical construction must be given to the term “contribution,” so that, as in common law contribution, contribution under the statute is limited to the percentage a party’s improper conduct causally contributed to the toxicity of the site in a physical sense. This argument is without merit. On the contrary, by using the term “equitable factors” Congress intended to invoke the tradition of equity under which the court must construct a flexible decree balancing all the equities in the light of the totality of the circumstances.3
“It is well established that flexibility is proper in the successful shaping ... of an equitable decree. Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 15, 91 S.Ct. 1267, 1275, 28 L.Ed.2d 554, reh’g denied 403 U.S. 912, 91 S.Ct. 2200, 29 L.Ed.2d 689 (1971); United States v. City of Parma, 661 F.2d 562, 563, 576 (6th Cir.1981).”4
In a highly persuasive decision, Charles v. Charles, 788 F.2d 960, 965 (3d Cir.1986), the court held that a Virgin Islands statute directing courts to consider the “equity of the case” in allocating marital property required the trial court to consider marital fault. The court observed that the statute authorized the trial court to “use a variety of means to obtain an equitable result.” Id. at 966.
Noting the accepted definition of “equitable,” the court observed:
“In this regard, Black’s Law Dictionary, 482 (5th ed. 1979) defines ‘equitable’ as ‘¡j']ust; conformable to principles of justice and right. Existing in equity; available or sustainable in equity, or upon the rules and principles of equity. ‘Equity’ is defined as ‘[jjustice administered according to fairness as contrasted with the strictly formulated rules of common law.’ Id. at 484.”
Id. at 965, n. 13.
“The hallmark of a court of equity is its ability to frame its decree to effect a balancing of all the equities and to protect the interest of all affected by it, including the public.” 5 Congress reemphasized that the trial court should invoke its moral as well as its legal sense by providing that the court use not just “equitable factors,” which phrase already implies a large degree of discretion, but “such equitable factors as the court determines are appropriate.” This language broadens the trial court’s scope of discretion even further.
Thus, under § 9613(f)(1) the court may consider any factor it deems in the interest of justice in allocating contribution recovery. Certainly, the several factors listed by the trial court are appropriate, but as it recognized, it was not limited to them. No exhaustive list of criteria need or should be formulated. However, in addition to the criteria listed above, the court may consider the state of mind of the parties, their economic status, any contracts between them bearing on the subject, any traditional equitable defenses as mitigating *573factors6 and any other factors deemed appropriate to balance the equities in the totality of the circumstances.
Therefore, the trial court quite properly considered here not only the appellant’s contribution to the toxic slough described above in a technical causative sense, but also its moral contribution as the owner of the site. Review of the trial court’s equitable balancing process is limited to a review for “abuse of discretion.”7 This is in accord with the principle of equity that the chancellor has broad discretion to frame a decree.8
This case, even though it involves over $300,000, is but a pimple on the elephantine carcass of the CERCLA litigation now making its way through the court system. Some of these cases involve millions or even billions of dollars in cleanup costs and hundreds or even thousands of potentially responsible parties.
I do not believe Congress intended to require meticulous findings of the precise causative contribution each of several hundred parties made to a hazardous site. In many cases, this would be literally impossible.9 Rather, by the expansive language used in § 9613(f)(1) Congress intended the court to deal with these situations by creative means, considering all the equities and balancing them in the interests of justice. As recognized by a recent comprehensive scholarly article, this multi-factor approach takes into account more varying circumstances than common law contribution.10
“Courts are also following CERCLA Section 113(f) and taking ‘equitable factors’ into account in apportioning liability for response costs. The equitable factors which courts are examining in order to decide what kind of apportionment to make depend on the actual facts of each case. Nevertheless, many federal courts do consider common law equitable defenses such as unclean hands and caveat emptor as mitigating factors in deciding liability for response costs. This approach is in line with Congressional intent as long as courts do not consider these equitable defenses to be a total bar to a liability action, but merely mitigating factors in awarding damages. Courts are also using a modified comparative fault analysis that takes numerous factors such as culpability and cooperation into account in apportioning damages.” 11
Although such an approach “cannot be applied with mathematical precision, it is the fairest and most workable approach for apportioning CERCLA liability.12 Such an approach furthers the legislative intent of encouraging the prompt cleanup of hazardous sites by those equitably responsible.13 The parties actually performing the cleanup can look for reimbursement from other potentially responsible parties without fear *574that their contribution actions will be bogged down by the impossibility of making meticulous factual determinations as to the causal contribution of each party. Chief Judge Hillman was well within the equitable discretion afforded him by Congress in the way he handled this CERCLA contribution action.
AFFIRMED.

. The statutory scheme of CERCLA is well described in Barr, CERCLA Made Simple: An Analysis of the Cases Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 45 Bus.Law. 923 (1990); See also, Developments in the Law — Toxic Waste Litigation, 99 Harv.L.Rev. 1458 (1986) (published before 1986 amendments).

. Joint and several liability may be imposed on a responsible party, even though its role in creating the hazardous site was small, if the *571harm is indivisible. It may then seek contribution from other potential responsible parties in an action such as the instant case. See e.g., The Anspec Co., Inc. v. Johnson Controls, Inc., 922 F.2d 1240 (6th Cir.1991); United States v. Western Processing Co., Inc., 734 F.Supp. 930, 942 (W.D.Wash.1990); CERCLA Made Simple, supra, at 977-79, 990-93.

.The pertinent legislative history reads: "New subsection 113(g)(1) of CERCLA was also amended by the Committee to ratify current judicial decisions that the courts may use their equitable powers to apportion the costs of cleanup among the various responsible parties involved with the site. The Committee emphasizes that courts are to resolve claims for apportionment on a case-by-case basis pursuant to Federal common law, taking relevant equitable considerations into account. Thus, after all questions of liability and remedy have been resolved, courts may consider any criteria relevant to determining whether there should be an apportionment." H.R. 253(III), 99th Cong., 2d Sess. 19, (1985), reprinted in 1986 U.S.Code Cong. & Admin.News 2835, 3038, 3041-42.

. United States v. City of Birmingham, Mich., 727 F.2d 560, 566 (6th Cir.1984); accords. Childress & M. Davis, Standards of Review § 4.16 (1986).

. Kay v. Mills, 490 F.Supp. 844, 855 (E.D.Ky.1980) (citing W. DeFuniak, Handbook of Modern Equity § 25 (1956); H. McClintock, Equity § 70 (2d ed.1948); D. Dobbs, Remedies 52-57 (1973)).

. Appellant here did not argue the defense of "clean hands.” Apparently, it accurately recognized that in a contribution action the plaintiff will almost never have clean hands, since the action is brought as a responsible party, seeking to recoup some of its cleanup costs from other responsible parties. However, the relative culpability of the parties is one of the "equitable factors” the trial court may consider as the trial judge did here.

. S. Childress, supra note 5, § 4.16; cf. Voest-Alpine Trading USA Corp. v. Vantage Steel Corp., 919 F.2d 206 (3d Cir.1990); Fuller v. Quire, 916 F.2d 358 (6th Cir.1990); Hopper v. Euclid Manor Nursing Home, Inc., 867 F.2d 291 (6th Cir.1989).

. Cf., In re Chicago, Milwaukee, St. P. & Pac. R.R., 841 F.2d 789 (7th Cir.1988); Charles v. Charles, 788 F.2d 960 (3d Cir.1986); Rivers v. Washington County Bd. of Educ., 770 F.2d 1010 (11th Cir.1985); First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007 (7th Cir.1985); Grand Union Co. v. Cord Meyer Development Co., 761 F.2d 141 (2d Cir.1985).

. See e.g., United States v. Monsanto Co., 858 F.2d 160, 172 (4th Cir.1988), cert. denied, 490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019 (1989). In O’Neil v. Picillo, 883 F.2d 176 (1st Cir.1989), cert. denied, — U.S. -, 110 S.Ct. 1115, 107 L.Ed.2d 1022 (1990), the court noted the presence of at least 10,000 barrels of waste at a site, the origin of most of which was undet-erminable.

. Russo, Contribution under CERCLA, 14 ColJ. Env.L. 267, 276-81 (1989).

. Id. at 286.

. Id.

. Cf. The Anspec Co., Inc. v. Johnson Controls, Inc., 922 F.2d 1240 (6th Cir.1991).