US v. Olin Corp.

927 F. Supp. 1502

UNITED STATES of America, Plaintiff, v. OLIN CORPORATION, Defendant.

Civil Action No. 95-0526-BH-S.

United States District Court, S.D. Alabama, Southern Division.

May 20, 1996.

Eugene A. Seidel, U.S. Attorney's Office, Mobile, AL, Kathy Urbach, Assistant Regional Counsel, Environmental Protection Agency, Atlanta, GA, Robert A. Kaplan, Environmental Enforcement Section, U.S. Dept. of Justice, Washington, DC, Cheryl L. Smout, U.S. Dept. of Justice, Environmental Enforcement Section, Washington, DC, Robert R. Homiak, U.S. Dept. of Justice, Environmental Enforcement Section, Environment & Natural Resources Div., Washington, DC, for plaintiff.

T. Bruce McGowin, Mobile, AL, Caine O'Rear, III, Mobile, AL, Arthur A. Rheingold, Chief Counsel, Olin Corporation, Stamford, CT, Michael W. Steinberg, Morgan, Lewis & Bockius, L.L.P., Washington, DC, Alex S. Karlin, Morgan, Lewis & Bockius, L.L.P., Washington, DC, for defendant.

ORDER

HAND, Senior District Judge.

The United States filed this action under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601, et seq., against defendant Olin Corporation ("Olin"), a Virginia corporation which owns and operates a chemical plant in McIntosh, Alabama, in southwest Washington County, approximately 25 miles east of the Mississippi state line and 75 miles north of the Gulf of Mexico. With the complaint, the parties filed a proposed consent degree. This court requested the parties to brief certain statutory and constitutional issues relating to CERCLA. For the reasons stated below, this court has determined that rather than signing the consent decree, it must dismiss the action both because 1) Congress did not clearly express its intent that the liability provision of CERCLA be retroactive, as required by Landgraf v. USI Film Products, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) and 2) the application of CERCLA, at least on the facts of this case, violates the Commerce Clause as interpreted in United States v. Lopez, 514 U.S. ___, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995).

I. THE COMPLAINT AND PROPOSED CONSENT DECREE

A. The Olin Property in the Complaint

In its complaint, the Justice Department alleges that the Olin plant site in McIntosh, comprising 1,500 acres, contains two actionable sites. This action concerns only the first of two sites at the Olin property. "Site 1"¹ includes 20 acres on the southern edge of the property, on which an active chemical-production facility operates. This site contains a number of "solid waste-management units," both active and inactive, many of which have been closed and treated for the removal of hazardous substances.² To the north and northwest of the active chemical production facility are undeveloped tracts of land. To the west of the facility is a brinewell field. Four thousand feet east of the main plant area is a steep bluff which defines the edge of Site 2,³ the natural basin.⁴

The government alleges that in 1952 Olin Mathieson began operating a mercury-cell chloralkali plant on Site 1 which generated and released wastewater containing mercury into Site 2 until 1974. This plant ceased operating in 1982.⁵ In 1955, on Site 1, Olin Mathieson built a "crop-protection-chemicals" plant which discharged wastewater into Site 2 until 1974. This plant also ceased operating in 1982.⁶ As a result of the operation of these two plants (1950's — late 1982), mercury and chloroform, which are alleged to be hazardous substances under 42 U.S.C. § 9601(14), were released into Site 1.

Most of the alleged contamination resulting from the operation of these two plants occurred prior to the effective date of CERCLA, December 11, 1980.⁷ However, to the extent that both of these plants also operated after CERCLA's enactment, i.e., from December 11, 1980, until late 1982, and to the extent that a threat of continuing releases at and from Site 1 continues, as the government alleges,⁸ the government also seeks to recover CERCLA cleanup costs from Olin for post-enactment conduct.

In 1978, the company (whose name changed that year to Olin Corporation) built a diaphragm-cell caustic-soda/chlorine plant which it currently operates. There is no allegation in the complaint that the operation of this plant has any connection with the contaminants found on Site 1.

The Environmental Protection Agency ("EPA") listed the Olin plant site on the "national priorities list" in September 1984. Cf. 42 U.S.C. § 9605; 40 C.F.R. Part 300.

The complaint indicates that Olin conducted a "remedial investigation" of Site 1, completed in July 1993, and then a "feasibility study" of proposed responses to contamination at Site 1, completed in February 1994. In December 1994, the EPA executed its "record of decision" based on the remedial investigation and the feasibility study. The record of decision provides a remedy for the contamination of the alluvial aquifer which the agency contends is consistent with CERCLA and the national contingency plan.

For present purposes, the court accepts the allegations of the complaint as true and notes, in fairness, that Olin's answer admits many, while denying some, of them. For example, the defendant admits that there have been releases in the past, but denies that there is any threat of future release of hazardous substances. The defendant also denies any imminent and substantial danger to the public health or welfare, or the environment, because of actual or threatened releases from Site 1.

B. The Proposed Consent Decree and Remedial-Investigation Report

With the complaint, the Justice department filed a proposed consent decree,⁹ which both parties had signed. The government published notice thereof in the Federal Register to afford the public opportunity for comment. 603 Fed.Reg. 36309, 36309-10 (1995). When the government received no comment within 30 days, the parties jointly moved for the court to enter the consent decree. See 42 U.S.C. § 9622(d)(2).

The consent decree runs to 71 pages. It makes the defendant, its officers, directors, and anyone else associated with the defendant, liable for everything even remotely associated with the clean-up of Site 1, including insuring the automobiles the government uses in fulfilling and supervising the consent decree.

Although the EPA estimates the present value of the cost of compliance to Olin at $10,339,000,¹⁰ the EPA has an almost unconstrained right to amend the consent decree. Of course, the defendant may appeal, but the defendant must direct the appeal to the EPA. The propriety of such procedures is beyond the scope of this inquiry, yet defense counsel has acknowledged that the consent decree gives the EPA carte blanche over the company treasury.

Olin has committed itself to performing the actions which the consent decree specifically requires, regardless of whether the court approves of the decree;¹¹ however, it has sought to do so under the supervision of the Alabama Department of Environmental Management ("ADEM") rather than under the EPA.¹² The ADEM has sought the same. Twice in May 1994, the ADEM's director wrote to the EPA to request that the EPA allow the ADEM to implement the record of decision for Site 1 under the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and the Alabama Hazardous Waste Management and Minimization Act, Ala.Code §§ 22-30-1 et seq., rather than CERCLA. In December 1994, the EPA's regional administrator in Atlanta, Georgia, wrote the ADEM director to convey the EPA's belief that it would be "premature at this time to defer" to the ADEM. The regional administrator stated that accepting the state's proposal would require modifying a permit under the Resource Conservation and Recovery Act, which would "add this additional layer of involvement and federal resources to the already complex situation." He further asserted that "continued implementation under CERCLA insures consistency and decreases the potential for conflict."¹³ Be that as it may, consistency and the decreased potential for conflict are not necessarily synonymous with constitutionality.

Four days after rejecting the ADEM's request, the EPA issued its record of decision, the major portions of which require Olin to (1) pump and treat additional ground water, (2) upgrade and extend the existing caps over closed portions of Site 1, (3) increase monitoring of ground water, and (4) establish certain institutional controls.¹⁴

When the court inquired at oral argument why the defendant negotiated a settlement and entered into this "consent" decree, counsel for the defendant responded that it was "a pragmatic business judgment." It believed that "the fastest and most expedient way to get the work performed would be to simply go along with what the EPA sought here."¹⁵ Olin wanted to complete the work and went along despite reservations about its legality¹⁶ and despite the government's rigid dictation of the terms and conditions it would accept.¹⁷

In addition to the consent decree, the government filed¹⁸ a remedial-investigation report, prepared by Woodward-Clyde Consultants of Baton Rouge, Louisiana, in July 1993. The report documents remedial-investigation activities under an amended work plan and was completed under EPA supervision and ultimately with EPA approval. The objectives of the remedial investigation were (1) to investigate the nature, lateral extent, and vertical extent of contamination in order to ascertain the types, concentrations, and distributions of waste in all potentially affected media, such as the air, groundwater, soil, surface water, and sediment; (2) to determine the potential of the wastes to migrate beyond Site 1 and Site 2; and (3) to assess the current and potential risk to public health, welfare, and the environment.¹⁹ Shortly after the government filed the remedial-investigation report, the parties jointly informed the court that they neither needed nor desired further discovery...