Atl. Holdings Ltd. v. Apollo Metals, Ltd.

ATLANTIC HOLDINGS LIMITED, Plaintiff, v. APOLLO METALS, LTD., Defendant.

CIVIL ACTION No. 16-6247

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

April 10, 2019

MEMORANDUM

I. INTRODUCTION

This action involves a groundwater contamination dispute between neighboring owners of industrial properties. Plaintiff, Atlantic Holdings Limited ("Atlantic"), filed claims against Defendant, Apollo Metals, Ltd. ("Apollo"), under state and federal law. Specifically, Plaintiff set forth the following claims: violation of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") (Count I), violation of the Resource Conservation Recovery Act "(RCRA") (Count II), violation of Pennsylvania's Hazardous Sites Cleanup Act ("HSCA") (Count III), violation of Pennsylvania's Clean Streams Law ("CSL") (Count IV), negligence (Count V), trespass (Count VI), nuisance (Count VII), and strict liability (Count VIII). ECF No. 1.

Defendant filed a Motion for Summary Judgment contending, among other things,¹ that Plaintiff's state law tort claims for negligence, trespass, nuisance, and strict liability (Counts V through VIII) were barred by the applicable two-year statute of limitations because Plaintiff was undeniably aware in 2007 of contamination on its property stemming from Defendant's property.

Defendant also contends that Plaintiff's various statutory claims should be dismissed. Specifically, Defendant contends that Plaintiff's CERCLA and HSCA claims should be dismissed because Plaintiff has not incurred any necessary response costs as defined by those statutes and because any costs incurred by Plaintiff were not consistent with the National Contingency Plan. Defendant contends that Plaintiff's RCRA claim should be dismissed because Plaintiff cannot prove any substantial and imminent danger to human health or the environment. Defendant contends Plaintiff's CSL claim should be dismissed because Plaintiffcannot prove any current or ongoing violation or likely future violation of that statute.²

For the following reasons, Defendant's Motion for Summary Judgment will be granted.

II. BACKGROUND³

All of Plaintiff's claims arise under the overarching allegation that its groundwater has become polluted by hexavalent chromium and TCE, pollutants that migrated from Defendant's property. ECF No. 1 at ¶¶ 13-14. Plaintiff is a Pennsylvania company that operates a commercial storage facility on the property it purchased in 1997, ECF No. 1 ¶¶ 4 & 9, which is located "immediately adjacent to, and downgradient from" Defendant's property, which was purchased by Defendant in 1994 and is home to a steel manufacturing facility. ECF No. 1 at ¶ 10 & 12.

According to William Flederbach, who served as the plant engineer, plant manager, and chief operating officer at Defendant over the span of thirty years, following the discovery of elevated levels of hexavalent chromium in thegroundwater below a neighboring industrial property not involved in this suit in 2003, Defendant began investigating possible chromium sources associated with historic or ongoing manufacturing activities on Defendant's property. ECF No. 91-3, Decl. William Flederbach, at ¶¶ 2 & 6. That same year, Defendant discovered a disused concrete condensate basin located outside of Defendant's building; the basin had been used by a prior unrelated owner of the facility to collect chromium water vapor emitted from the chromium electroplating line. Id. at ¶ 7. Defendant's investigation revealed that the prior owner had discontinued use of the chromium condensate basin in the 1960s or early 1970s after installing upgraded technology that controlled vapor emissions directly at the chromium electroplating line and eliminated the need for the condensate basin. Id.

After discovering the disused chromium condensate basin, Defendant retained an environmental consultant from Environmental Maintenance Company ("EMC") to remove its contents and remediate the surrounding soil. Id. at ¶ 8. "EMC removed and disposed of the contents of the basin and analyzed the surrounding soil, detecting chromium concentrations in several soil samples that exceeded the then-prevailing cleanup standards." Id. Defendant reported those soil analysis results in writing to the Pennsylvania Department of Environmental Protections ("PADEP") in September 2003. As part of its remediation of the disused chromium condensate basin, Defendant reviewed its property records andidentified eight monitoring wells that had originally been installed in the 1990s by a prospective purchaser during the pre-transaction due diligence. Id. at ¶ 9. In May and August 2003, EMC obtained new groundwater samples from the monitoring wells and confirmed elevated concentrations of chromium. Id. In July 2004, EMC removed the chromium condensate basin and excavated the underlying soil down to the bedrock, ultimately removing and disposing of 30 tons of material. ECF No. 91-3 at ¶ 10. Defendant reported these remediation activities in writing to PADEP in September 2004. Id.

The 2004 Phase I Report

Sometime in 2004, Plaintiff retained Douglas Sammak to conduct a Phase I environmental assessment of Plaintiff's property. ECF No. 91-3, Dep. Tr. Douglas Sammak (Day 1), at 13:12-14:21. The 2004 Phase I study was motivated in part by the discovery of five-gallon paint drums, containing lead paint, abandoned alongside Plaintiff's property adjoining a neighboring property not involved in this suit. Id. at 34:11-23, 79:24-80:20. In May 2004, Sammak completed the Phase I environmental assessment for Plaintiff's property. Id. at 31:4-10; ECF No. 91-3, Dep. Tr. Mark Silvester (Day 1), at 15:17-21, 18:24-19:3. The 2004 Phase I Report included a finding that "Apollo Metals is currently investigating the extent of groundwater contamination and has proposed soil remediation for media that has been impacted by their manufacturing operations, ongoing since the early1920s." ECF No. 91-3, Dep. Tr. Douglas Sammak (Day 1), at 35:10-23; ECF No. 91-8, 2004 Phase I Report, at ATLANTIC 840. The report also included Sammak's opinion that:

the fact that historic use of the adjacent properties for industrial purposes has resulted in soil and groundwater contamination is a potential environmental concern for [Plaintiff's property]. It is possible that groundwater contamination originating from these sites extends beneath the subject property, however, based on available information, there is no reason to suspect [Plaintiff's property] as a possible source. Based on the fact that the source of groundwater contamination in the area has been identified, public water is available in the area, and that the PA DEP has established oversight of the open cases, it is AA&E's opinion that the groundwater contamination associated with these properties will not have an adverse impact on [Plaintiff's property].

ECF No. 91-3, Dep. Tr. Douglas Sammak (Day 1), at 37:12-38:2; ECF No. 91-8, 2004 Phase I Report, at Atlantic 841. During the course of the Phase I Report investigation, Sammak discussed with Mark Silvester, the sole owner and officer of Plaintiff,⁴ the possibility of groundwater contamination migrating from Defendant's property. ECF No. 91-3, Dep. Tr. Douglas Sammak (Day 1), at 31:4-16; ECF No. 91-3, Dep. Tr. Mark Silvester (Day 1), at 25:6-9. Despite the fact that Silvester understood the 2004 Phase I Report to state that groundwater contamination originating from Defendant had migrated below Plaintiff's property, Silvester did not follow up on that finding. ECF No. 91-3, Dep. Tr. Mark Silvester (Day 1), at 25:6-9 (stating that Silvester understood that the 2004 Phase I Report"is saying that ground water contamination originating from [Defendant] may be extending beneath [Plaintiff]."); id. at 25:1-5 ("Q: Okay. Now, so my question to you is, what, if anything, did you do to follow-up on that opinion after this assessment was prepared? A: Well, nothing."). Further, Plaintiff did not request that Sammak or anyone else monitor PADEP's "open cases" as referenced in the 2004 Phase I Report. ECF No. 91-3, Dep. Tr. Mark Silvester (Day 1), at 28:11-20.

Toward the end of 2005, Defendant, through EMC, contacted Plaintiff in writing to seek permission to install a monitoring well on Plaintiff's property, at Defendant's expense, to analyze groundwater quality. ECF No. 91-3, Decl. William Flederbach, at ¶ 11. Plaintiff received that letter from EMC, which explained Defendant's request and was accompanied by a map showing EMC's plan for a network of monitoring wells on and around Defendant's property, Plaintiff's property, and a third property not involved in this suit. ECF No. 91-3, Dep. Tr. Mark Silvester (Day 1), at 35:17-36:4, 36:22-37:23, 40:2-24; ECF No. 91-8, EMC Letters, at APOLLO-PADEP 15-19. In response to the request, Plaintiff, via Plaintiff's site manager Bernie Kimmet, denied permission to install the monitoring well directly on its property but granted permission for the installation of a monitoring well on a portion of Plaintiff's property that Plaintiff did not believe it actually owned. ECF No. 91-3, Dep. Tr. Mark Silvester (Day 1), at 41:1-42:4. Kimmet testified that he discussed with Silvester the possibility thatPlaintiff's groundwater was contaminated shortly before Defendant requested to install monitoring wells on the property. ECF No. 91-3, Dep. Tr. Bernie Kimmet, at 88:24-90:6, 90:13-22, 91:5-92:3. Kimmet further testified that Defendant was "looking to drill wells on Westside Warehouse property, and [Silvester] did not want them to drill wells on Westside Warehouse property," id. at 93:11-94:7, because "[h]e did not want to get involved in anything that had to do with environmental issues on his property. It wasn't - he didn't feel like it was a matter related - that it was our problem, I guess. Apollo apparently had a problem, at least that was apparent at the time, we didn't know what it was, because it wasn't spelled out to us via e-mail...