United States District Court, W.D. Kentucky, Paducah Division
MEMORANDUM OPINION AND ORDER
JOSEPH H. McKINLEY, Jr., Chief District Judge.
On August 31, 2012, the LWD PRP Group filed this civil action under the Comprehensive Environmental Response, Compensation & Liability Act, as amended, 42 U.S.C. § 9601 et seq. ("CERCLA"). On April 8, 2013, seventy-seven of the Defendants filed a motion to dismiss [DN 776]. The list of the Defendants filing this motion was amended through a motion for leave to substitute [DN 849], which the Court granted on April 12, 2013 [DN 853]. Thereafter, two of the listed Defendants-AK Steel Corp. and Avery-Dennison Corp.-were dismissed from the action with prejudice and withdrew from the pending motion to dismiss. (See Order [DN 956].)
Subsequently, several additional Defendants filed their own motions to dismiss, in which they incorporated the arguments raised in the first motion. (Mots. to Dismiss of Defs. PSC, LLC & Philip Servs. Corp. [DN 857]; Def. Mega Fabrication, Inc. [DN 865]; Defs. Columbia Cnty., N.Y., Nat'l Ry. Equip. Co., Perma-Fix Envtl. Servs., Inc., Perma-Fix of Dayton, Inc., Perma-Fix of Orlando, Inc., & Perma-Fix of S. Ga., Inc. [DN 881]; Def. Yenkin-Majestic Paint Corp. [DN 921]; Def. Printpack, Inc. [DN 934]; & Def. Village of Sauget, Ill. [DN 950].) The LWD PRP Group responded. (See Pls.' Resp. [DNs 914, 922, 937, 952].) The Defendants replied. (Reply to Pl.'s Resp. [DN 935].) This matter is now before the Court on the pending motions to dismiss.
Plaintiff, the LWD PRP Group, is a group of companies that generated and/or transported hazardous waste to a former hazardous waste incinerator at the LWD Incinerator Site in Calvert City, Kentucky. The LWD PRP Group is comprised of over fifty potentially responsible parties ("PRPs"), in their own right, along with other PRPs who settled with the LWD PRP Group and assigned their rights to the LWD PRP Group. The LWD PRP Group is cooperating with the U.S. Environmental Protection Agency ("EPA") and the State of Kentucky to address environmental concerns related to the LWD Incinerator Site. (See 2d Am. Compl. [DN 758] ¶¶ 1-2, 22-27, 30.) The LWD Incinerator Site is the area of the LWD, Inc. Superfund Site where a hazardous waste incinerator operated from the 1970s until January 2004. (See id. ¶ 5.)
In January 2004, the on-site incineration of waste at the LWD Incinerator Site ceased. In October 2005, Defendant Bluegrass Incineration Services, LLC, the last-known owner and/or operator of the LWD Incinerator Site, abandoned the LWD Incinerator Site, leaving behind both hazardous and non-hazardous waste. (Id. ¶¶ 5, 7.) In February 2006, the Kentucky Department of Environmental Protection ("KDEP") requested assistance from the EPA's Emergency Response & Removal Branch ("ERRB") Superfund Division in an effort to categorize the environmental hazards at the LWD Incinerator Site. As a result, the ERRB performed a removal site evaluation and found that emergency action was needed to eliminate certain environmental threats that were caused by the hazardous waste. Between March 2006 and February 2007, the EPA conducted initial removal efforts at the LWD Incinerator Site. (Id. ¶¶ 14-15, 16-21.)
On March 1, 2007, following the EPA's initial removal efforts, the EPA entered into an Administrative Settlement Agreement and Order on Consent for Removal Action (the "Removal Action AOC") with fifty-eight former LWD customers, including the members of the LWD PRP Group. In the Removal Action AOC, the LWD customers agreed to perform specified remaining time-critical removal action activities at the LWD Incinerator Site and pay for the EPA's future response costs associated with the LWD Incinerator Site. (Id. ¶ 22.) The LWD PRP Group, and the other PRPs who entered into the Removal Action AOC, completed the removal activities in September 2009. The EPA issued a Notice of Completion on September 29, 2009. (Id. ¶ 23.)
The LWD PRP Group alleges that in addition to entering into the Removal Action AOC, as of March 29, 2013, it was negotiating with the EPA regarding a settlement under § 122(h) of CERCLA for the EPA's past response costs at the LWD Incinerator Site, (id. ¶ 24), and also negotiating with the KDEP on "certain remediation, monitoring and maintenance activities...." (Id. ¶ 25.) The LWD PRP Group further alleges that as of March 29, 2013, it had paid over $9.5 million in response costs relating to the LWD Incinerator Site. (Id. ¶ 27.) The LWD PRP Group has now filed suit against the Defendants, seeking to recover some of these costs. The Defendants are other companies that allegedly generated and/or transported hazardous waste to the LWD Incinerator Site, or that allegedly owned and operated the LWD Incinerator Site. (See id. ¶¶ 7-9.)
In Count I of its Second Amended Complaint, the LWD PRP Group seeks cost-recovery under § 107(a) of CERCLA, 42 U.S.C. § 9607, for "past and future response costs incurred and to be incurred in response to the release or threatened release of hazardous substances at and from the LWD Incinerator Site." (Id. ¶ 864.) In Count II, the LWD PRP Group seeks contribution under § 113(f) of CERCLA, 42 U.S.C. § 9613, for the "Defendants' respective equitable shares of all costs and damages incurred" by the LWD PRP Group. (Id. ¶ 870.) With respect to Counts I and II, the LWD PRP Group also states that it is entitled to cost-recovery and contribution under state law because K.R.S. § 224.01-400(25) provides that any defenses to liability, limitations to liability, and rights to contribution shall be determined in accordance with §§ 107(a) and 113(f) of CERCLA. (Id. ¶¶ 865, 871.) Lastly, in Count III, the LWD PRP Group seeks a declaratory judgment against the Defendants, "holding them liable for their respective equitable shares of response costs...." (Id. ¶¶ 875-76.) The Moving Defendants argue that the LWD PRP Group's lawsuit must be dismissed under Fed.R.Civ.P. 12(b)(6).
II. STANDARD OF REVIEW
Upon a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), a court "must construe the complaint in the light most favorable to plaintiff, " League of United Latin Am. Citizens v. Bredesen , 500 F.3d 523, 527 (6th Cir. 2007) (citation omitted), accepting all of the plaintiff's allegations as true. Ashcroft v. Iqbal , 556 U.S. 662, 679 (2009). Under this standard, the plaintiff must provide the grounds for its entitlement to relief, which "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555 (2007). A plaintiff satisfies this standard when it "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678. A complaint falls short if it pleads facts that are merely "consistent with a defendant's liability" or if the facts do not "permit the court to infer more than the mere possibility of misconduct." Id . at 678-79. The allegations must "show that the pleader is entitled to relief.'" Id . at 679 (quoting Fed.R.Civ.P. 8(a)(2)).
The Moving Defendants set forth six main arguments in their motions to dismiss: (1) the Court must dismiss the LWD PRP Group's § 107(a) cost-recovery claim because the LWD PRP Group's exclusive remedy against the Moving Defendants is contribution under § 113(f); (2) the Court must dismiss the LWD PRP Group's contribution claim under § 113(f) because the claim is time-barred; (3) the Court must dismiss the LWD PRP Group's cost-recovery and contribution claims under state law because the viability of those claims depends on the viability of the LWD PRP Group's federal cost-recovery and contribution claims; (4) the LWD PRP Group cannot seek a declaratory judgment under CERCLA since it has no current substantive cause of action under CERCLA; (5) the LWD PRP Group cannot seek a declaratory judgment under CERCLA for the Moving Defendants' future liability at the LWD Incinerator Site since such claims are speculative and unripe; and (6) the LWD PRP Group cannot sue in the name of the "LWD PRP Group" since the LWD PRP Group is not the real party in interest. (Mem. in Supp. of Mot. to Dismiss ("Moving Defs.' Mem.") [DN 776-1].) The Court will consider these arguments in turn.
A. LWD PRP GROUP'S COST RECOVERY CLAIM UNDER § 107(A) OF CERCLA
In Count I, the LWD PRP Group asserts that it is entitled to cost-recovery under § 107(a) of CERCLA for "past and future response costs incurred and to be incurred in response to the release of hazardous substances at and from the LWD Incinerator Site." (2d Am. Compl. [DN 758] ¶¶ 848-65.) The Moving Defendants argue that the Court must dismiss this § 107(a) cost-recovery claim because the LWD PRP Group's exclusive remedy against the Moving Defendants is contribution under § 113(f). (See Moving Defs.' Mem. [DN 776-1] 6-12.) For the following reasons, the Court finds that it would be premature at this point in the litigation to dismiss the LWD PRP Group's § 107(a) cost-recovery claim. The LWD PRP Group has sufficiently pleaded a § 107(a) cost-recovery claim to the extent that some of its alleged $9.5 million in clean-up costs were voluntarily incurred as a result of the LWD PRP Group's negotiations with the KDEP. As such, to the extent the Moving Defendants argue that the LWD PRP Group's exclusive remedy is § 113(f), the Court disagrees. The Moving Defendants' motions are DENIED in this respect.
Broadly speaking, CERCLA "facilitates cleanup and remediation of contaminated lands, and shifts the financial burden of such environmental response actions to the parties responsible for releasing hazardous substances." ITT Indus., Inc. v. BorgWarner, Inc. , 506 F.3d 452, 456 (6th Cir. 2007) (citation omitted). As the parties have correctly noted, in United States v. Atlantic Research Corp., the Supreme Court held that CERCLA provides two distinct remedies by which PRPs may recover some or all of their hazardous waste clean-up costs from other PRPs: (1) cost-recovery claims under § 107(a); and (2) contribution claims under § 113(f). 551 U.S. 128, 129 (2007). Here, the parties disagree as to which remedy, or remedies, the LWD PRP Group may seek.
The first option, § 107(a), provides that PRPs are liable for "any... necessary costs of response incurred by any other person...." 42 U.S.C. § 9607(a)(4)(B). The Sixth Circuit has held that § 107(a) "creates an implied private right of action to recover necessary costs of response.'" ITT Indus., Inc. , 506 F.3d at 456 (citing Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp. , 153 F.3d 344, 347 (6th Cir. 1998)). The second option, § 113(f), is the result of the Superfund Amendments & Reauthorization Act ("SARA"), which was enacted by Congress in 1986. See 42 U.S.C. § 9613(f). Under § 113(f)(1), any person "may seek contribution from any other person who is liable or potentially liable under [§ 107(a)], during or following any civil action under [§ 106] or under [§ 107(a)]." Id . § 9613(f)(1). In addition, under § 113(f)(3)(B), PRPs who resolve their liability to the United States or to a state through an administratively- or judicially-approved settlement may seek contribution from other PRPs. Id . § 9513(f)(3)(B).
In Atlantic Research Corp., the Supreme Court addressed the relationship between §§ 107(a) and 113(f), noting that the sections offer two "clearly distinct" remedies that "complement each other by providing causes of action to persons in different procedural circumstances." 551 U.S. at 138-39. According to the Supreme Court, a PRP that incurs response costs directly may have a cause of action against other PRPs under § 107(a); however, a PRP that simply reimburses response costs paid by other parties "has not incurred its own costs of response and therefore cannot recover under § 107(a)." Id . at 139. The Sixth Circuit has explained this framework, noting:
To distinguish when a cost recovery action under § 107(a) is appropriate, as opposed to a contribution action under § 113(f), ... a § 107(a) action may lie where a party has itself incurred' cleanup costs as opposed to reimbursing costs paid by other parties, which is more appropriately covered under § 113(f). To maintain the vitality of § 113(f), however, PRPs who have been subject to a civil action pursuant to §§ 106 or 107 or who have entered into a judicially or administratively approved settlement must seek contribution under § 113(f).
ITT Indus., Inc. , 506 F.3d at 458 (citations omitted).
The Moving Defendants argue that under this standard, the LWD PRP Group's exclusive remedy is contribution under § 113(f). Thus, the Moving Defendants urge the Court to dismiss the LWD PRP Group's § 107(a) cost-recovery claim. According to the Moving Defendants, all of the LWD PRP Group's alleged clean-up costs are compelled, as they all relate to the Removal Action AOC. (See Moving Defs.' Mem. [DN 776-1] 8-12.) In its Second Amended Complaint, the LWD PRP Group pleaded that it entered into the Removal Action AOC on March 1, 2007. (2d Am. Compl. [DN 758] ¶ 22.) The Moving Defendants argue that this Removal Action AOC is properly characterized as an "administratively approved settlement, " as it states that the parties "agree that this Settlement Agreement constitutes an administrative settlement for purposes of [§] 113(f)(3)(B) of ...