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AGRICULTURAL EXCESS & SURPLUS INS. CO. v. A.B.D. T

February 14, 1995

AGRICULTURAL EXCESS AND SURPLUS INSURANCE COMPANY, an Illinois Corporation and DELTA SONIC AUTOMATIC CAR WASH SYSTEMS, a New York Corporation, Plaintiff,
v.
A.B.D. TANK & PUMP CO., an Illinois Corporation, and XERXES CORPORATION, a Delaware Corporation, Defendants.



The opinion of the court was delivered by: JOHN A. NORDBERG

 Before the Court are Defendant A.B.D. Tank & Pump Company's and Defendant Xerxes Corporation's Motions to Dismiss Plaintiff Agricultural Excess and Surplus Insurance Company's and Delta Sonic Automatic Car Wash Systems' Amended Complaint.

 ALLEGED FACTS

 Plaintiffs Agricultural Excess and Surplus and Insurance Company ("AESIC") and Delta Sonic Automatic Car Was Systems ("Delta Sonic") have brought a fourteen count complaint against Defendant A.B.D. Tank & Pump Company ("ABD Tank") and Defendant Xerxes Corporation ("Xerxes") based on the leakage of an underground storage tank at Delta Sonic's retail operation located at 600 West North Avenue, Elmhurst, Illinois.

 AESIC and Delta Sonic allege that in or about August, 1984, Delta Sonic entered into an agreement with ABD Tank to purchase an underground storage tank for the purpose of holding petroleum products and dispensing the same for retail sale at Delta Sonic's retail operation located at 600 West North Avenue, Elmhurst, Illinois. (Amended Complaint at P 11.) The tank was to be deigned and manufactured by Xerxes and installed by ABD Tank. Id.

 Sometime after Xerxes delivered and ABD Tank installed the underground storage tank and underground storage tank system, AESIC and Delta Sonic determined that the underground storage tank and the underground storage tank system leaked causing petroleum to escape into the soil and groundwater both at the site and on adjacent property Id. at P 17. AESIC and Delta Sonic allege that they have incurred great expense determining the cause and extent of the damage and remedying the damage. Id. at P 18. According to AESIC and Delta Sonic, all of the damage incurred was caused by ABD Tank's intentional or negligent acts or omissions and its failure to perform in a workmanlike manner and by Xerxes' intentional or negligent acts or omissions and its material breach of its agreement including its express and implied warranties. Id. at PP 19-20. (The First Amended Complaint does not describe in detail the cause of the leaks.) Pursuant to a Commercial General Liability Insurance Policy, AESIC is obligated to indemnify Delta Sonic for certain costs and expenses incurred because of petroleum leaks.

 AESIC and Delta Sonic bring Count I of their Amended Complaint pursuant to the Resource Conservation Recovery Act ("RCRA"), 42 U.S.C. §§ 6901-6992k, alleging that the conditions caused by the leaking underground storage tank "may present an imminent and substantial endangerment to health or the environment" because petroleum products have migrated through the soil and into the groundwater at the site and through the soil and into the groundwater of adjacent properties. (Amended Complaint Count I at P 21.) As a result of the leakage, petroleum products allegedly remain in the soil and groundwater and continue to migrate beyond the site. Id. at P 24. According to the Amended Complaint, ABD Tank and Xerxes have improperly disposed of a solid or hazardous waste in violation of the RCRA, and thus AESIC and Delta Sonic assert that they are entitled to a preliminary and permanent injunction requiring ABD Tank and Xerxes to undertake all necessary actions to address and abate the petroleum contamination at the site, see 42 U.S.C. § 6972(a). Id. at P 26, Prayer for Relief (A). The remaining counts are based on the following state law theories, contractual subrogation (Count II), breach of contract (Count III), breach of warranty (Counts IV and V), negligence (Counts VI and VII), breach of third party beneficiary contract (Count VIII), strict liability - ultra hazardous activities (Count IX), strict liability - products liability (Count X), nuisance (Count XI), continuing private nuisance (Count XII), continuing trespass (Count XIII) and equitable indemnity (Count XIV).

 ABD Tank and Xerxes have filed separate motions to dismiss the Amended Complaint. ABD Tank, in its Motion to Dismiss, offers two reasons why this Court should dismiss the Amended Complaint. First, ABD Tank argues that § 6972(a) of the RCRA does not provide for a private cause of action to compel the remediation of soil and ground water contamination emanating from leaking petroleum underground storage tanks. Second, ABD Tank argues that, even if § 6972(a) does provide a private cause of action to compel the remediation of soil and ground water contamination caused by leaking petroleum, AESIC and Delta Sonic cannot state a claim under § 6972(a) as they have not alleged a substantial and imminent damage to public health or the environment.

 Xerxes offers three reasons why this Court should dismiss the Amended Complaint. First, Xerxes asserts that, as a manufacturer or supplier of the underground storage tank, it has not contributed to the handling, storage, treatment or disposal of waste, and thus it is not subject to liability under § 6972(a) of the RCRA. Second, Xerxes claims that, even if a manufacturer of an underground storage tank is subject to liability, AESIC and Delta Sonic cannot hold Xerxes liable because AESIC and Delta Sonic did not notify Xerxes of the suit ninety (90) days prior to filing its Amended Complaint, see 42 U.S.C. § 6972(b)(2)(A). Finally, as to the remaining state claims, Xerxes argues that, if this Court dismisses Count I, it should decline to exercise pendant jurisdiction over the remaining state claims and if this Court does not dismiss Count I, it should nevertheless dismiss the remaining state claims for failure to state a claim on which relief may be granted.

 The Court addresses ABD Tank's and Xerxes' arguments in support of their motions to dismiss below.

 ANALYSIS

 When considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must view all of the facts alleged in the complaint, as well as any inferences reasonably drawn from them, in the light most favorable to the plaintiff. Caldwell v. City of Elwood, Ind., 959 F.2d 670, 671 (7th Cir. 1992), citing Mosley v. Klincar, 947 F.2d 1338, 1339 (7th Cir. 1991). A court should only dismiss a claim if it appears beyond a doubt that the plaintiff cannot establish any set of facts which would entitle him to the relief requested. 959 F.2d at 671-672.

 ABD Tank's Motion to Dismiss

 a. Private Right of Action

 As noted above, ABD Tank asserts that the Court should dismiss Count I of the Amended Complaint because § 6972(a) of the RCRA does not provide for a private right of action to compel the remediation of soil and groundwater contamination from leaking petroleum underground storage tanks. RCRA § 6972(a) states in relevant part:

 
Except as provided in subsection (b) or (c) of this section, any person may commence a civil action on his own behalf -
 
(1)(A) against any person (including (a) the United States, and (b) any other governmental instrumentality or agency, to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of any permit, standard, regulation, condition, requirement, or order which has become effective pursuant to this chapter; or
 
(B) against any person, including the United States and any other governmental instrumentality or agency, to the extent permitted by the eleventh amendment to the Constitution, and 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 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.

 42 U.S.C. § 6972(a).

 At least two courts have provided different answers to the question of whether § 6972(a) applies to leaking petroleum underground storage tanks. In Dominick's Finer Foods, Inc. v. Amoco Oil Company and Shell Oil Company, 1993 U.S. Dist. LEXIS 17668, No. 93 C 4210, 1993 WL 524808 *2 (N.D. Ill. December 15, 1993), the court held that the plaintiff could bring a claim for injunctive and declaratory relief under § 6972 of the RCRA for contamination caused by petroleum leaks from defendant's underground storage tanks. In arriving at its conclusion, the Dominick's court noted that, under § 6972(a)(1)(B), a person may bring a cause of action based on the disposal of a solid waste that presents a substantial danger to the health or environment. 42 U.S.C. § 6972(a)(1)(B). The contested issue which the Dominick's court had to address was whether gasoline or petroleum from an underground tank constituted either a "hazardous or solid waste." Id. at *2.

 The Dominick's court concluded that leaked petroleum from an underground storage tank constitutes a "solid waste." Id. Following the reasoning of Zands v. Nelson, 779 F. Supp. 1254, 1261-64 (S.D. Cal. 1991), the Dominick's court noted that the RCRA's definition of "solid waste" includes discarded liquid from commercial operations, see 42 U.S.C. § 6903(3). *fn1" In Zands, the court observed that, even though the RCRA does not define "discarded," the statute does define "disposal" - a word synonymous with "discarded" - as the "leaking . . . of any solid waste or hazardous waste into or on any land or water. . . ." 779 F. Supp. at 1262 (citing 42 U.S.C. § 6903(3)). Moreover, the Code of Federal Regulations defines "discarded material" as any material that is abandoned, see 40 C.F.R. § 261.2(a)(2), and explains that materials are solid wastes if they are "abandoned" by being "disposed" of. Zands, 779 F. Supp. at 1262 (citing 40 C.F.R. §§ 261.2(a)(2) and (b)).


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