Chi. City of v. United States Steel Corp.

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CHICAGO CITY OF, Plaintiff, v. UNITED STATES STEEL CORPORATION, Defendant.

No. 2:22-CV-357 JD

United States District Court, N.D. Indiana, Hammond Division

September 15, 2023

OPINION AND ORDER

JON E DEGUILIO JUDGE UNITED STATES DISTRICT COURT

This case arises from the City of Chicago's refiling of its negligence claim, as previously instructed by the Court in a prior order in a related case. Defendant U.S. Steel filed a motion to dismiss, levying a number of procedural attacks against the complaint. At its core, the complaint represents the very same negligence complaint the Court has always intended to allow to proceed. However, the City committed a significant error in pleading Count II, negligence per se apparently inadvertently pleading a barred private right of action claim. This error renders that count subject to dismissal under Federal Rule of Civil Procedure 12(b)(6). The Court therefore grants in part and denies in part U.S Steel's motion to dismiss.

A. Facts

The story of this case begins in 2017 at U.S. Steel's Midwest Plant in Portage, Indiana. In April of that year, the plant released a dangerous amount of hexavalent chromium into Lake Michigan. This environmental incident resulted in a series of lawsuits against U.S. Steel. There were two suits predicated on the enforcement of the federal Clean Water Act (“CWA”), the Enforcement Action and the Citizen Suit. The United States and the State of Indiana filed one case against U.S. Steel in April 2018 (“The Enforcement Action”) (United States v. United States Steel Corp., 2:18-cv-127). The Surfrider Foundation and the City of Chicago filed suit against U.S. Steel in January 2018 under the CWA's “citizen suit” provisions, which allow people and entities other than the state and federal governments to enforce the CWA (the “Citizen Suit”) (The Surfrider Foundation v. United States Steel Corp., 2:18-cv-20). The Citizen Suit also included a negligence claim for damages the City incurred due to the spill. Surfrider and Chicago agreed to stay the Citizen Suit while the Enforcement Case proceeded, and later joined the Enforcement Case as Intervenor-Plaintiffs. The Enforcement Case ultimately concluded with a Revised Consent Decree which the Court entered on September 2, 2021. (United States v. United States Steel Corp., 2:18-cv-127 DE 105; 107).

The Court lifted the stay on the Citizen Suit and dismissed the claims in an order dated September 22, 2022. The Court found the Citizen Suit's CWA claims were res judicata, as they had already been addressed in the Enforcement Action. The Court also addressed the City's negligence claim and found it was not preempted by the Clean Water Act but declined to exercise supplemental jurisdiction over the claim.^[1]The Court therefore dismissed the negligence claim, writing: “the City's state law negligence claim will be dismissed without prejudice. The City will have 30 days to refile its negligence claims if it sees fit to do so.” (Surfrider Foundation et. al v. United States Steel Corp., 2:18-cv-20 DE 66 at 22). On October 21, 2022, the City filed this suit in Indiana state court, bringing a claim for general negligence and a negligence per se claim based on the 2017 spill and further spills in 2021. On the basis of diversity jurisdiction, U.S. Steel removed the action to federal court. The action was then transferred to this Court due to its familiarity with the prior litigation. U.S. Steel filed a motion to dismiss, which is now ripe for decision.

B. Legal Standard

In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6), the Court construes the complaint in the light most favorable to the plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). That statement must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Evaluating whether a plaintiff's claim is sufficiently plausible to survive a motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).

C. Discussion

U.S. Steel argues the City's negligence and negligence per se claims are legally foreclosed because they are private right of action claims under the CWA, they are res judicata by the Enforcement Action and Citizen Suit, and they are barred by the statute of limitations. The Court finds U.S. Steel's argument that the negligence per se claim is improperly pled as a private right of action meritorious but rejects U.S. Steel's other arguments. Accordingly, the motion to dismiss is granted in part and denied in part; Count II is subject to dismissal and Count I survives.

U.S. Steel advances several arguments for dismissal of the claims. First, U.S. Steel argues the City's negligence claims are an attempt to bring a private right of action, repackaging the claims already addressed in the Enforcement Action. U.S. Steel also argues several errors in pleading the negligence per se claim require its dismissal. Second, throughout its filings, U.S. Steel argues it is “entitled to finality” on the claims and that the claims are res judicata. (DE 17 at 9.) Third, U.S. Steel argues the negligence claims are so different from that originally contemplated in the Citizen Suit that they are time barred. The Court rejects these arguments and finds the City may proceed with its negligence claims because they constitute the very negligence action the Court contemplated when it dismissed the claims without prejudice and granted the City leave to file its state law claims in state court.

(a) Count I does not attempt to bring a private right of action.

U.S. Steel argues Count I represents an attempt to bring a private right of action under the CWA. While it is true injured parties cannot seek damages in private right of action under the CWA, this claim seeks no such thing. See Middlesex Cnty. Sewerage Auth. v. Nat'l Sea Clammers Ass'n, 453 U.S. 1, 15, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981) (rejecting a private right of action under the CWA).

U.S. Steel does not offer much in the way of legal support for its assertion that the general negligence claim is instead an impermissible private right of action claim; the crux of the argument appears to be that the negligence claim is based on the same underlying events as the Enforcement Action and Citizen Suit. U.S. Steel writes, “the claims are based on U.S. Steel's alleged violations of its NPDES permit, [and therefore,] they can only be asserted under the CWA's citizen suit provisions.” However, there is no support in the law for the proposition that a negligence claim cannot be based on conduct also unlawful under the CWA, or that overlap in those factual allegations renders a negligence claim a private right of action. It is a matter of black-letter law that state negligence claims may co-exist with CWA claims, and that a negligence claim does not automatically become a private right of action just because the same conduct is also forbidden under the CWA. See See Exxon Shipping Co. v. Baker, 554 U.S. 471, 488-89, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008) (rejecting the idea that “a statute expressly geared to protecting ‘water,' ‘shorelines,' and ‘natural resources' was intended to eliminate sub silentio oil companies' common law duties to refrain from injuring the bodies and livelihoods of private individuals.”); see also Stillwater of Crown Point Homeowner's Ass'n, Inc. v. Stiglich, 999 F.Supp.2d 1111, 1137 (N.D. Ind. 2014) (summary judgment not warranted on plaintiff's negligence per se claim despite claims arising from the same conduct); Stillwater of Crown Point Homeowner's Ass'n, Inc. v. Kovich, 820 F.Supp.2d 859, 904 (N.D. Ind. 2011) (allowing CWA, negligence, and negligence per se claims to proceed concurrently). Further, the Court notes it already rejected a similar argument in the Citizen Suit when it found the CWA did not preempt the City's negligence claim. (Citizen Suit DE 66 at 20-21) (“International Paper Company v. Oullettee [] explicitly holds that the Clean Water Act does not bar plaintiffs from bringing state law claims pursuant to the law of the state in which the pollution source is located. 479 U.S. 481, 497 (1987).”) Reference to the same underlying facts alone is not sufficient to render the negligence claim a private right of action; therefore, the Court looks to the allegations of the complaint.

The difference between a negligence claim and a private right of action is the origin of the duty. Troth v. Warfield 495 F.Supp.3d 729, 735-36 (N.D. Ind. 2020). In a private right of action claim, “a plaintiff asserts that a statute or ordinance, itself, created an enforceable duty.” Id. The City pled a violation of the common law duty of reasonable care in Count I; as a matter of law, this is a negligence claim and not a forbidden private right of action. See Stachowski v. Est. of Radman, 95 N.E.3d 542, 545 (Ind.Ct.App. 2018) (private right of action claims rely on statutes for the duty as well as the applicable standard of care). Further, in reviewing Count I, the traditional elements of a negligence claim - common law duty, breach, causation, and injury - are all found. The...