Court Opinion

ID: 3041954
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:07:28.215491+00
Date Added: 2024-06-11T09:33:03.283944
License: Public Domain

United States Court of Appeals
                              FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 06-2371
                                    ___________

Kennedy Building Associates,             *
                                         *
      Plaintiff - Appellee,              *
                                         * Appeal from the United States
      v.                                 * District Court for the
                                         * District of Minnesota.
CBS Corporation,                         *
                                         *
      Defendant - Appellant.             *
                                    ___________

                               Submitted: December 14, 2006
                                  Filed: February 2, 2007
                                   ___________

Before WOLLMAN, JOHN R. GIBSON, and RILEY, Circuit Judges.
                          ___________

JOHN R. GIBSON, Circuit Judge.

       In Kennedy Building Associates v. Viacom, Inc., 375 F.3d 731 (8th Cir. 2004)
(Kennedy I), we remanded in part for modification of the injunction enforcing the
Minnesota Environmental Rights Act (MERA). CBS Corporation, the most recent
incarnation of the entity responsible for contaminating the Kennedy Building property
in Minneapolis, appeals from the injunction as modified on remand. The modified
injunction required CBS to perform those duties prescribed in the Minnesota Decision
Document, issued by the Minnesota Pollution Control Agency, which were necessary
to prevent the release of further contaminants into soil and groundwater; to test as
required by the Decision Document, and to remedy migration revealed by those tests,
if any; to remedy any remaining contamination exposed during future excavation on
the property; and to post a performance bond to secure performance of these
obligations. Kennedy Bldg. Assocs. v. Viacom, Inc., No. 99-CV-1833 JMR/FLN,
2006 WL 305279, at *3-4 (D. Minn. Feb. 8, 2006). CBS contends that the injunction
did not sufficiently specify which acts were required of it, that the evidence showed
there was no need for MERA relief, and that the district court had no power to require
CBS to post a performance bond. We reject the latter two arguments, but remand for
modification making the injunction's commands more specific.

        Westinghouse, the corporate predecessor of CBS's corporate predecessor,
operated an electrical transformer repair facility on the Kennedy Building property,
which resulted in contamination of the property with polychlorinated biphenyls
(PCBs) and chlorobenzenes. Westinghouse sold the property in 1980, and a partner
in Kennedy Building Associates bought the property and transferred it to Kennedy in
1982. Kennedy I, 375 F.3d at 736-37. Kennedy discovered the contamination in
1997. Kennedy sued Viacom and recovered a jury verdict for state law strict liability;
a judgment for response costs under the federal Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA) and the Minnesota
Environmental Response and Liability Act (MERLA); and an injunction under MERA
to remediate the property so that the deed restriction required by state law for
contaminated property could be removed. Id. at 737. On appeal, we reversed the jury
verdict and ordered the injunction to be modified so that it ordered only the relief
authorized by MERA, that is, "the prevention of ongoing releases of PCBs and
chlorobenzenes into soil and groundwater." Id. at 748; see id. at 750. Just before the
trial, Viacom had entered into a consent order with the Minnesota Pollution Control
Agency agreeing to develop and implement a remediation plan for the property;
Viacom argued that this consent order rendered the injunction moot and that the
consent order preempted relief under MERA; we rejected both arguments and held
that because the injunction did not conflict with an order of the Minnesota Pollution
Control Agency, it was not preempted by MERA. 375 F.3d at 742-46.

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       On remand, the district court held the matter in abeyance for a year and a half
until Viacom and the Minnesota Pollution Control Agency could arrive at a
substantive plan for remediation. See 2006 WL 305279, at *1. The Minnesota
Decision Document of April 20, 2005, required removal of contaminated soil down
to twelve feet below the surface of the property, except for the soil under the building.
The rationale for these specifications was that soil deeper than twelve feet and soil
under the building was not immediately accessible to human or ecological "receptors"
and therefore did not pose a current threat to public health. However, the remediation
plan was subject to two caveats. First, long-term monitoring was required "to
ascertain plume stability and provide data to show that contamination in ground water
is not continuing to migrate." Second, although the Decision Document did not
impose substantive requirements, it acknowledged that if the building on the property
were demolished or the floor had to be removed, then the contaminants under the
building would become exposed, and Viacom would be required to come up with a
response plan, which would then start the whole process of administrative remediation
all over again. The Decision Document did not address indoor contamination at the
building because "indoor contamination currently falls outside the purview of the
[Minnesota Pollution Control Agency]."

       Kennedy was not satisfied with the remediation plan because it would leave
contamination in place underground and inside the building. Once the Minnesota
Pollution Control Agency had issued the Decision Document, Kennedy sought a
contested-case hearing in the agency. When that was denied, Kennedy sought review
by writ of certiorari of the agency's remedy selection. The Minnesota Court of
Appeals dismissed the writ on the grounds that the agency's decision was not final and
that "the [agency] order does not preclude [Kennedy] from litigating appropriate
remediation in [its] pending federal district court action." In the Matter of the
Kennedy Building Superfund Site Petition for Contested Case Hearing, No. A05-994
(Minn. Ct. App. Aug. 2, 2005).

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       Back in the district court, Kennedy moved to modify the original injunction to
incorporate the requirements of the Decision Document, to order Viacom to remediate
the interior of the building, and to require Viacom to post a bond to assure
performance of the remedial work that was left contingent in the Decision Document
on future demolition or disturbance of the building or its floor. Counsel for Viacom
explained at the hearing that Viacom had undergone a corporate reorganization, with
the result that the entity called "Viacom" would no longer be responsible for the
Kennedy site and that the entity with such responsibility would now be known as
"CBS Corporation." The district court noted that the Decision Document gave
Kennedy no right to enforce the remediation plan, that no remediation had taken place
so far, and that if Kennedy were to decide to redevelop the property in a way that
required excavating deeper than twelve feet, there was no way to assure that
remediation would happen promptly enough to make such development commercially
feasible.

      In light of the evidence adduced at the hearing, the district court issued an
injunction including the following requirements:

      (1) Viacom was ordered to "perform those actions prescribed in the
      [Decision Document] which will prevent the release of PCBs and
      chlorobenzenes into uncontaminated soil and groundwater consistent
      with the purposes of MERA." 2006 WL 305279, at *3.
      (2) Viacom was ordered to provide to the court and to Kennedy copies
      of the results of tests required by the Decision Document. In the event
      a test should show migration of the contaminants, Viacom was obliged
      to submit a remediation plan within 30 days of receiving the test result.
      Id.
      (3) In the event the future development of the parcel should result in
      excavation of soils left in place under the Decision Document's
      remediation plan (i.e., soil deeper than twelve feet or underneath the

                                         -4-
      building), Kennedy was obliged to notify Viacom, whereupon Viacom
      was required to submit to the court a remediation plan within 30 days of
      receiving the notification. Id.
      (4) To ensure that the relief in paragraph 3 above would be timely
      provided and adequately funded, the court required Viacom and its
      corporate successors to post a bond or irrevocable letter of credit. Id. In
      a subsequent order, the court set the amount of the bond at $1,311,000
      and required that it be maintained for five years. Kennedy Building
      Associates v. CBS Corp., No. 99-CV-1833 (April 21, 2006).

        CBS appeals the injunction making a large number of arguments that can be
categorized into three types of objection: the injunction is not sufficiently specific,
it is not supported by the evidence before the court, and the court had no power to
require CBS to post a performance bond.

       We review for abuse of discretion a district court's issuance of a permanent
injunction. Taylor Corp. v. Four Seasons Greetings, LLC, 403 F.3d 958, 967 (8th Cir.
2005). A district court abuses its discretion when it bases its decision on a legal error
or a clearly erroneous finding of fact. Id.

       CBS attacks the first item of the injunction, requiring it to perform those
requirements of the Decision Document that will prevent the release of PCBs and
chlorobenzenes into uncontaminated soil and groundwater "consistent with the
purposes of MERA." See 2006 WL 305279, at *3. CBS contends that since the
Decision Document was designed to comply with MERLA, not MERA, it is not clear
which of the provisions of the Decision Document the district court considered
necessary to accomplish the goals of MERA--preventing the release of PCBs and
chlorobenzenes into uncontaminated soil and groundwater. We need not wrestle with
this argument, for Kennedy conceded at oral argument before us that the injunction
was inadequately specific in this regard and agreed that the injunction should be

                                          -5-
remanded for clarification of this point. Accordingly, we remand for the district court
to specify in accord with Federal Rule of Civil Procedure 65(d) which of the
requirements of the Decision Document are required under the MERA injunction in
this case. On remand, the district court should expressly list those actions required by
the injunction.

        CBS further contends that the record does not support the issuance of any
MERA injunction because there is no record evidence of continuing releases of PCBs
or chlorobenzenes. In Kennedy I, we concluded that there were continuing releases
within the meaning of MERA. We relied on the district court's finding of fact after
trial that PCBs were continuing to migrate in the soil and groundwater because of the
presence of mineral oil in the soil. 375 F.3d at 747. The finding was supported by
expert testimony at trial, as well as Viacom's stipulation in the administrative consent
order. Id. It is not clear whether CBS is contending that something changed after trial
or that the findings on which we based our first holding were erroneous. Viacom did
nothing to clean up the site between the time of trial and the January 3, 2006, hearing
on the modification. Nevertheless, CBS points to statements from its expert saying
that groundwater testing in February and August 2005 showed that the groundwater
plume is stable. In contrast, Kennedy points to statements by its expert witness that
the August 2005 data show increases in several contaminants in several wells and that
CBS's expert's opinion is not justified by the data. Thus, the record shows merely a
conflict of expert opinion, rather than a lack of evidence of continuing migration.
Moreover, this conflict is peripheral to the actual injunction issued, since even CBS's
expert conceded that continuing testing is necessary to ascertain whether the plume
is stable.

       CBS also contends that the district court found the plume had stabilized, based
on the following statement by the court at the modification hearing: "Now, the MPCA
seems to think that that's all [remediation to twelve feet] that's needed at this time. It
says that the plume has not moved, and right now the condition of the situation is as

                                           -6-
it is." The district court made this statement in denying Kennedy's request for an
immediate order to clean up the soil more than twelve feet below the surface. The
statement cannot be characterized as a definite finding that the plume has stabilized,
any more than the Decision Document can be so characterized; both the Decision
Document and the injunction are provisional. Both are premised on the presumption
that we cannot be sure what the plume is doing without continuing testing;
contaminants may well migrate, and if so, further remediation will be required. The
Decision Document requires monitoring "for a minimum of five years and, if the
monitoring indicates that the contamination plume is expanding or migrating, the
MPCA will require ground water remedial action." The injunction, of course, requires
the same. CBS has by no means shown that the injunction is based on a clearly
erroneous finding of fact.

      CBS next contends that the district court lacked power to require it to post a
performance bond. We begin by examining the language of MERA. Minn. Stat. Ann.
§ 116B.07 provides:

      The court may grant declaratory relief, temporary and permanent
      equitable relief, or may impose such conditions upon a party as are
      necessary or appropriate to protect the air, water, land or other natural
      resources located within the state from pollution, impairment, or
      destruction.

(Emphasis added.) The statute certainly appears to be broad enough to allow the court
to require a bond to be posted for five years to assure that foreseeable events of
excavation or groundwater migration will not result in pollution to the soil and water
of Minnesota.

      CBS relies on Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,
527 U.S. 308, 332 (1999), which is instructive, although not in the way CBS suggests.
In Grupo Mexicano, creditors of an insolvent Mexican company obtained a preliminary

                                         -7-
injunction ordering the company not to distribute or transfer its assets while the
creditors pursued their damages claim against the company. The Supreme Court
reversed, holding that traditional equitable remedies did not include a freeze order to
preserve assets in aid of a legal claim which was not yet reduced to judgment. Justice
Scalia distinguished two kinds of cases, both of which would include the case at bar.
First, he distinguished cases in which the underlying suit was for equitable relief, rather
than damages. Id. at 324-25 (discussing Deckert v. Independence Shares Corp., 311
U.S. 282 (1940)). Here, the underlying relief sought is equitable, rather than legal, so
our case involves the use of equity in support of equity, rather than equity in support
of a legal remedy. Next, Justice Scalia distinguished cases in which a statute
authorized injunctions "necessary or appropriate for the enforcement" of the statute.
Id. at 325-26 (discussing United States v. First Nat'l City Bank, 379 U.S. 378 (1965)).
In this case, MERA has authorized the court to impose such conditions as are
"necessary or appropriate" to accomplish the goals of MERA, so our case is
distinguishable from Grupo Mexicano on that ground. CBS has not come forward with
any authority casting doubt on the district court's power to require a bond as part of an
effective MERA remedy.

      Finally, CBS contends that the district court should have abstained from
exercising jurisdiction on the grounds of comity and federalism. This argument is
substantially redundant of Viacom's argument on the first appeal that the administrative
consent order was entitled to preemptive effect barring MERA relief. We rejected that
argument in Kennedy I and remanded for refinement of the MERA injunction. 375
F.3d at 743-48. The district court took us at our word, as it was required to do, and
carefully avoided modifying the injunction in any way that could impinge on the state
administrative remedy. We will not, at this stage in the litigation, reverse on the
strength of an old argument dressed up as a new one.

      We remand for the district court to specify which requirements of the Decision
Document are included as items of the MERA injunction; in all other respects, the
order of the district court is affirmed.
                         ______________________________

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