U.S v. Union Corp.

259 F.Supp.2d 356

UNITED STATES of America, v. UNION CORP.; Metal Bank of America; Irvin G. Schorsch, Jr.; and John B. Schorsch. v. CONSOLIDATED EDISON CO. OF NEW YORK; Public Service Electric & Gas Co. of New Jersey; and Monsanto Co.

No. CIV.A. 80-1589.

United States District Court, E.D. Pennsylvania.

January 21, 2003.

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Eric Williams, Catherine Malinin Dunn, John Sither, and Nadine Overton, Dept. of Justice, John Monsees, EPA, Washington DC, for U.S.

Kenneth S. Cooper, Philadelphia, PA, for City of Philadelphia, Intervenor-Plainiff

John Mattioni, Robert W. Weidner, Mattioni, Mattioni & Mattioni, Ltd., Philadelstatus, for "contributing to" endangerment phia, PA, for Union Corporation, Metal to health and environment currently posed Bank of America, Irvin G. Schorsch, Jr.,

Jeffrey N. Martin, Hunton and Williams, Washington, DC, Edward J. Cullen, Jr., Philadelphia, PA, Dan J. Jordanger, Hunton & Williams, Richmond, VA, for Cottman Avenue PRP Group, Amicus.

John Mattioni, Robert W. Weidner, Mattioni, Mattioni & Mattioni, Ltd., Philadelphia, PA, for Union Corporation, Metal Bank of America, Irvin G. Schorsch, Jr., John B. Schorsch, Third-Party Plaintiffs.

Robert Toland, II, White and Williams, Philadelphia, PA, for the Monsanto Company, Third-Party Defendant.

Christopher R. Graham, Dan J. Jordanger, Hunton & Williams, Richmond, VA, Jeffrey N. Martin, Thomas M. MacKall, Kara L. Cunningham, Beth H. Regas, Hunton and Williams, Washington, DC, for Consolidated Edison Company of New York, Public Service Electric and Gas Company of New Jersey, Third-Party Defendants.

MEMORANDUM

GILES, Chief Judge.

TABLE OF CONTENTS
I.  INTRODUCTION.........................................................364
II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW........................364
A. Location and Description of the Site......................................364
1. The Courtyard Area................................................365
2. The Southern Area .................................................365
3. The River Sediments Area...........................................365
B. Ownership and Early Use of the Property.................................366
C. Summary of Investigative and Enforcement History........................370
D. Unsuccessful Remediation Attempt.......................................371
E. Nature of the Contamination.............................................374

1. PCBs .............................................................374
2. PAHs.............................................................376
3. Other Contaminants ................................................376
F. Migration of Contaminants..............................................377
G. Health and Environmental Risks.........................................379
1. Risks to the Ecosystem..............................................379
2. Risks to Human Health .............................................382
ANALYSIS...............................................................384
A. CERCLA Liability.....................................................384
1. Factual Basis for Finding Union Corporation is a "Covered Person".....384
a. Under Corporate Veil Piercing .................................384
a-1. Legal Analysis................................................388
b. As Owner/Operator (Judicial Estoppel)..........................390
b-1. Legal Analysis................................................391
c. As an "Arranger".............................................391
c-1. Legal Analysis................................................392
d. As Lessee/ Be Facto Owner....................................393
d-1. Legal Analysis................................................394
2. Factual Basis for Finding Metal Bank is a "Covered Person".............394
a. As Owner/Operator...........................................394
a-1. Legal Analysis................................................395
b. As an "Arranger".............................................395
b-1. Legal Analysis................................................395
3. Factual Basis for John B. and Irvin G. Schorsch, Jr. are "Covered
Persons" ........................................................396
a. As Owners/Operators..........................................396
a-1. Legal Analysis................................................396
4. Factual/Legal Basis for Finding Site is a "Facility"......................396
5. Actual or Threatened Release........................................396
a. Factual Basis.................................................396
a-1. Legal Analysis................................................397
6. Response Costs ....................................................398
a. Factual Basis for finding EPA has Incurred......................398
a-1.Legal Analysis................................................398
B. RCRA Liability........................................................399
1. Imminent and Substantial Endangerment..............................399
a. Factual Basis.................................................399
a-1. Legal Analysis................................................399
2. Endangerment Stemming from Handling, Storage, Treatment
Transportation or Disposal of Solid or Hazardous Waste...............400
a. Factual Basis.................................................400
a-1. Legal Analysis................................................401
3. Factual Basis for Liability of the Schorsch Brothers.....................403
a. As Owners/ Operators and Corporate Decision-makers who
Contributed to the Contamination.............................403
a-1. Legal Analysis................................................403
4. Factual Basis for Liability of Metal Bank..............................404
a. As Owner/ Operator who Contributed ...........................404
a-1. Legal Analysis................................................405
5. Factual/Legal Basis for Liability of Union Corporation as
Owner/ Operator who Contributed to the Contamination...............405
CONCLUSION............................................................406

I. INTRODUCTION

The United States ("Plaintiff or "the Government") sues individual defendants Irvin G. Schorsch, Jr. and John B. Schorsch ("the Schorsch brothers"), and corporate defendants Union Corporation ("Union") and Metal Bank of America, Inc. ("Metal Bank"), seeking reimbursement for past and future response costs to investigate the Cottman Avenue Superfund site in Philadelphia and for enforcement pursuant to section 107 of the Comprehensive Environmental, Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607. The Government also seeks injunctive relief and remediation of the site pursuant to section 7003 of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6973.

Defendants have filed a third party complaint against Baltimore Gas & Electric Company, Jersey Central Power & Light, Long Island Lighting Company, Metropolitan Edison Company, Orange and Rockland Utilities Corporation, PECO Energy Company, Potomac Electric Power Company, PP & L Electric Utilities Corporation Virginia Power Company, Consolidated Edison of New York, Public Service Electric & Gas Company of New Jersey, (collectively "the utilities"), The Monsanto Company ("Monsanto") and against the City of Philadelphia ("the City").

Filed in 1980, this matter was placed in suspense in 1983 pending attempted remediation of the site but was restored to the court's active trial docket in 1998, upon the Government's claim that remediation had failed or had not addressed all contamination concerns. Following extensive discovery and pre-trial proceedings, trial was phased as follows: Phase One would determine whether defendants were liable and whether response costs were incurred by the Government; Phase Two would determine whether the Government's response costs, if any, were reasonable and recoverable, as well as the scope of any further remedial action; and Phase Three would determine the liability, if any, of the third-party defendants. Trial of Phase One issues commenced August 19, 2002. This memorandum explains the court's disposition of Phase One issues in favor of the Government.

This court has jurisdiction pursuant to section 113(b) of CERCLA, 42 U.S.C. § 9613(b) and section 7003 of RCRA, 42 U.S.C. § 6973, as well as under 28 U.S.C. § 1331 as a civil action arising under the laws of the United States and under 28 U.S.C. § 1345 as a civil action commenced by the United States.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Location and Description of the Site

The Metal Bank Superfund site ("the Site" or "the Property") is a former industrial property located on the Delaware River at 7301 Milnor Street in Philadelphia, Pennsylvania. The property is bordered by Cottman Avenue on the west, Milnor Street on the north, Safe Disposal Systems (an appliance recycling company) and Morris Iron & Steel Company (a metal salvage yard) on the east, and the Delaware River on the south and southwestern edge. The Site also includes the mudflat in the shallow embayment to the west. (Gov. Ex. 488 at 4, Gov. Ex. 481 at 2-1).

A six-foot high fence surrounds part of the property, but the fence is not sufficient to exclude trespassers. There is also a gate for vehicular access from Cottman Avenue and the property is also accessible from the river and mudflats to the south and southwest. Graffiti evidences that trespassers have recently entered the property. (T. Tr. at IV—111, V—236-238; Gov. Ex. 481 at 2-1). The Site is generally divided into three areas of concern: the Courtyard Area, the Southern Area, and the River Sediments area. (See Gov. Ex. 488 at 14; Gov. Ex. 481 at 2-1 to 2-2).

1. The Courtyard Area

The Courtyard Area consists of an open area at the northern section of the...