Craig Lyle Ltd. Partnership v. Land O'Lakes, Inc.

877 F. Supp. 476

The CRAIG LYLE LIMITED PARTNERSHIP, a Minnesota limited partnership, Plaintiff, v. LAND O'LAKES, INC., a Minnesota corporation, Defendant, v. HILLCREST DEVELOPMENT, INC., Third-Party Defendant.

Civ. No. 4-93-88.

United States District Court, D. Minnesota, Fourth Division.

February 21, 1995.

COPYRIGHT MATERIAL OMITTED

Ruth S. Marcott, Seth Marvin Colton, Charles Bans, Maun & Simon, St. Paul, MN, and Philip T. Colton, Maun & Simon, Minneapolis, MN, for plaintiff/third-party defendant.

Linda T. Hatten, Sunday J. Prchal, Doherty Rumble & Butler, St. Paul, MN, Timothy J. Dolan, Steffens Wilkerson & Lang, Edina, MN, Lawrence A.G. Moloney, Doherty Rumble & Butler, Minneapolis, MN, and Mark William Haigh, Davenport Evans Hurwitz & Smith, Sioux Falls, SD, for defendant/third-party plaintiff.

ORDER

DOTY, District Judge.

This matter is before the court on cross motions for summary judgment. Based on a review of the file, record and proceedings herein, and the reasons stated below, the court denies plaintiff's motion for summary judgment and denies defendant's motion for summary judgment.

BACKGROUND

This lawsuit involves alleged contamination to certain properties located in northeast Minneapolis, Minnesota. The properties at issue are located at 614 and 640 McKinley Place Northeast and also include one parcel of property, known as "Lot 15," located directly east of McKinley Place. Originally, the properties were owned by defendant Land O'Lakes, Inc. ("Land O'Lakes") from 1949 until December 1982. In 1949, Land O'Lakes located its corporate headquarters on the 614 McKinley Place property and constructed a garage on the 640 McKinley Place property. As part of the garage operation, an underground storage tank ("UST") was installed on the north side of the garage. Lot 15 was used as a fuel station for Land O'Lakes' fleet of trucks. In 1954, Land O'Lakes had installed three petroleum storage tanks on Lot 15. Records indicate that the tanks were removed in September 1969. In 1970, Lot 15 was surfaced for parking, which is its current use.

On December 30, 1982, Hillcrest Development, Inc. ("Hillcrest") purchased the properties from Land O'Lakes. From December 1982 until December 1985, Land O'Lakes leased all of the property, including the service garage, from Hillcrest. From November 1986 to December 1991, Land O'Lakes leased back only a portion of the property. In December 1989, Hillcrest sold both properties to the Craig Lyle Limited Partnership ("Craig Lyle").

Before purchasing the properties, Craig Lyle and Hillcrest conducted environmental audits of the properties. In August 1989, Nova Environmental Services, Inc. ("Nova") performed a "Phase I Environmental Assessment" of the properties. Nova reported the existence of a 120 gallon capacity underground storage tank located on 640 McKinley Place. In November 1989, Twin City Testing Corporation ("TCT") performed a "Phase II Preacquisition Site Assessment" of the properties. TCT conducted seven soil borings to assess potential soil or groundwater contamination. The most significant indication of contamination came from Boring No. 6, where petroleum odor was detected. Boring No. 6 was located on Lot 15.

On December 13, 1989, a representative of both Hillcrest and Craig Lyle notified the Minnesota Pollution Control Agency ("MPCA") and requested that the MPCA review the Phase II audit and determine whether additional investigation of the contamination was necessary. As a condition of its financing agreements, Craig Lyle was required to remove the underground storage tank located on the 640 McKinley Place property. Craig Lyle also agreed to conduct any tests or do any clean-up work recommended or required by the MPCA. Craig Lyle was also to obtain a letter from the MPCA indicating that no further action was required.

In February 1990, the UST was removed from the 640 McKinley Place property. In the final report regarding the tank removal, dated February 28, 1990, the consultants for Hillcrest and Craig Lyle characterized the leakage of waste oil as relatively minor. In a letter dated September 17, 1990, the MPCA stated that the level of contamination in the area of the UST was minor and no further excavation was warranted.¹ In July 1991, Hillcrest Development, which had provided indemnification for environmental liabilities and incurred the costs of the tank removal north of the service garage, applied for reimbursement from the Minnesota Petroleum Tank Release Compensation Board. The board approved Hillcrest's request in October 1991.

Based on its earlier findings, TCT drilled twelve more soil borings, numbered B-10 through B-21, as part of a "Subsurface Environmental Assessment." TCT also installed three temporary monitoring wells ("TMVs") in boring sites B-11, B-17 and B-18 to monitor groundwater. In its assessment report, dated March 30, 1990, TCT stated that significant concentrations of volatile organic compound were discovered in the newer boring sites B-11, B-19, B-20 and B-21.² Further, TCT analyzed water samples from the three groundwater monitoring wells. The results indicated that groundwater has been impacted by the contaminates. TCT concluded its report with a discussion of three alternatives including limited soil excavation, continuous groundwater monitoring and groundwater recovery and treatment. In its September 17, 1990 letter, the MPCA stated that no additional investigative or corrective action work for area surrounding Boring no. 6 was necessary.³

Craig Lyle originally brought this lawsuit in state court based on claims of nuisance, strict liability, negligence, trespass and environmental tort. After the parties agreed to a stay of the state court proceedings, Craig Lyle filed a new suit in this court under the citizens suit provision of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6972(a)(1)(B).

DISCUSSION

The court should grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). This standard mirrors the standard for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), which requires the trial court to enter judgment as a matter of law if there can be but one reasonable conclusion as to the verdict. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. Id. at 249, 106 S.Ct. at 2510-11.

On a motion for summary judgment, the court views the evidence in favor of the nonmoving party and gives that party the benefit of all justifiable inferences that can be drawn in its favor. Id. at 250, 106 S.Ct. at 2511. The nonmoving party, however, cannot rest upon mere denials or allegations in the pleadings. Nor may the nonmoving party simply argue facts supporting its claim will be developed later or at trial. Rather the nonmoving party must set forth specific facts, by affidavit or otherwise, sufficient to raise a genuine issue of fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If reasonable minds could differ as to the import of the evidence, judgment as a matter of law should not be granted. See Anderson, 477 U.S. at 250-51, 106 S.Ct. at 2511-12. If a plaintiff fails to support an essential element of a claim, however, summary judgment must issue because a complete failure of proof regarding an essential element renders all other facts immaterial. Celotex, 477 U.S. at 322-23, 106 S.Ct. at 2552-53.

I. RCRA

RCRA establishes a "cradle-to-grave" regulatory structure for the treatment, storage and disposal of solid and hazardous wastes. The statutory purpose of RCRA is to protect the environment from the dangers associated with solid and hazardous wastes. 42 U.S.C. § 6901(b). Among RCRA's tools for controlling solid and hazardous waste are citizen suits. A citizen suit under 42 U.S.C. § 6972(a)(1)(B) permits a plaintiff to bring an action:

against any person ... including any past or present generator, past or present transporter, or past or present owner or operator of a treatment, storage, or disposal facility, who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.

In order to establish a prima facie case, a plaintiff needs to demonstrate: (1) the alleged endangerment stems from a solid or hazardous waste as defined by RCRA, (2) conditions which may present an imminent and substantial endangerment, and (3) the defendant has contributed to or is contributing to such handling, storage, treatment, transportation, or disposal. See United States v. Aceto Agr. Chemicals Corp., 872 F.2d 1373, 1382 n. 9 (8th Cir.1989) (listing elements for prima facia case under 42 U.S.C. § 6973). Land O'Lakes argues that Craig Lyle cannot satisfy any of these elements.

A. Petroleum, "Solid Waste" and RCRA

RCRA defines "solid waste" as:

any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities ...

42 U.S.C. § 6903(27). RCRA regulations also define solid waste as "any discarded material," and discarded material is defined as material which is "abandoned." 40 C.F.R. § 261.2(a). Materials that are abandoned have been "disposed of." 40 C.F.R. § 261.2(b).⁴ The regulatory definition of solid...