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U.S. v. NL INDUSTRIES

May 4, 2005.

UNITED STATES OF AMERICA, Plaintiff,
v.
NL INDUSTRIES, INC., et al. Defendants, and CITY OF GRANITE CITY, ILLINOIS, LAFAYETTE H. HOCHULI, and DANIEL M. McDOWELL, Intervenor-Defendants. HONEYWELL INTERNATIONAL, INC., JOHNSON CONTROLS, INC., and LUCENT TECHNOLOGIES, INC., Crossclaim and Third Party Plaintiffs, v. A & W BATTERY, et al. Third Party Defendants.



The opinion of the court was delivered by: JAMES FOREMAN, Senior District Judge

MEMORANDUM AND ORDER

Before the Court are motions to determine the applicability of the Superfund Recycling Equity Act (SREA) filed by A. Miller & Company, (Doc. 601), Bell City Battery, (Doc. 602), and Nikko Materials USA, Inc., (Doc. 611). Also before the Court is a motion for summary judgment based on SREA and a motion for a hearing filed by Alter Company, Ace Battery Incorporated, Rose Rosen & the Estate of Albert Rosen, and Shanke Metals, Inc. (Docs. 607,608). Honeywell International Inc., Johnson Controls, Inc., and Lucent Technologies, Inc., have filed a response, (Doc. 613), and movants have filed replies (Docs. 618, 619). These motions are discussed below.

I. Background.

  The NL Industries/Taracorp Superfund Site, (the "Site"), occupies roughly 16 acres in Granite City, Illinois, that were previously the location of a battery recycling facility and secondary lead smelter from 1903 to 1983. Also included in the site are approximately 55 square blocks of residential property surrounding the smelter, as well as certain fill locations in Granite City, Madison, and Venice, Illinois. The smelter was owned by NL Industries ("NL") from 1928 until August of 1979, when NL sold the plant to Taracorp Industries, Inc. Battery recycling operations began at the site in the 1950's. As a result of the smelting and battery recycling operations, there was an estimated 250,000-ton waste pile of material on the site containing antimony, arsenic, barium, cadmium, chromium, lead, mercury, nickel, and zinc (the "Taracorp Pile").

  On July 31, 1991, the United States filed suit, seeking both civil penalties and cost recovery under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, (CERCLA), 42 U.S.C. § 9601, et seq. The United States initiated this action against NL Industries and the nine hazardous waste generators: Johnson Controls, Inc., AT&T, (now Lucent Technologies, Inc.), Exide Corporation, Allied Signal, Inc., (now Honeywell International, Inc.), Gould, Inc., (GNB Technology), General Battery Corporation, Southern Scrap Iron & Metal Company, Inc., Ace Scrap Metal Processors, Inc., and St. Louis Lead Recyclers. On February 21, 1992, the Court entered its first case management order which stayed all third-party claims and all discovery concerning liability, penalties or damages (Doc. 78). The United States and Southern Scrap Iron & Metal Company, Inc. reached an agreement, and this Court entered their consent decree on October 16, 1995 (Doc. 204).

  On November 9, 1999, the United States reached an agreement with Johnson Controls, Inc., Lucent Technologies, Inc., Exide Corporation, Allied Signal, Inc., (now Honeywell International, Inc.), GNB Technology, and General Battery Corporation, (i.e., the Settling Defendants), and lodged a consent decree with the Court (Doc. 251). By way of background, Section XXXIV of this consent decree provides that if the United States enters into settlement with "de minimis" parties, the United States will make the proceeds of such settlement available to the Settling Defendants. As a result, in their public comment, the Settling Defendants asked the United States to renegotiate the Settling Defendants' commitment to pay $8,970,000 of the United States' past response costs. Specifically, the Settling Defendants argued that after the parties signed the proposed consent decree, Congress passed the Superfund Recycling Equities Act, (SREA), Pub.L. No. 106-113, 113 Stat. 1536, 1501A-599 (1999), (codified at 42 U.S.C. § 9627) (2004), which exempts certain scrap metal and lead acid battery transactions from CERCLA liability. As such, Settling Defendants argued that SREA may affect the proposed consent decree by making it more difficult for the United States to complete settlements with de minimis parties and to maintain actions against "recalcitrant" parties, thereby reducing the amount of money that Settling Defendants will receive under Section XXXIV of the proposed consent decree. When addressing this argument, the Court noted that SREA amends CERCLA, in part, by exempting from liability many persons who arrange for the recycling of certain materials, including spent batteries. The Court also found, however, that SREA does not apply to this case. Specifically, Section 127(i) of SREA explicitly provides that the new exemptions "shall not affect any . . . pending judicial action initiated by the United States prior to enactment . . ." (Doc. 294, p. 12). The Court further noted that a civil "action" includes "the entirety of a civil proceeding, which necessarily includes any third-party claims." Having so concluded, on March 20, 2003, the Court entered the consent decree between the United States and the Settling Defendants (Doc. 294).

  On December 19, 2002, the United States reached a final agreement with NL Industries and lodged a consent decree with the Court (Doc. 287). On May 12, 2003, this Court entered this consent decree (Doc. 300). The United States is still attempting to resolve its claims against Ace Scrap Metal Processors, Inc. and St. Louis Lead Recyclers.

  On June 2, 2003, this Court issued a second case management order which lifted the stay on third-party claims (Doc. 306). This second case management order also set a procedure for pre-contribution litigation settlement negotiations as well as set a procedure for pursuit of contribution claims against parties who declined the contribution plaintiffs' pre-litigation settlement offers.

  On May 14, 2004, Honeywell International, Inc., (formerly Allied Signal, Inc.), Johnson Controls, Inc., and Lucent Technologies, Inc., and NL Industries filed a joint contribution complaint against numerous third-party defendants (Doc. 339). On December 2, 2004, Honeywell International, Inc., Johnson Controls, Inc., and Lucent Technologies, Inc., filed a separate second amended contribution complaint against a revised list of thirdparty defendants, including the movants (Doc. 528).

  On September 24, 2004, the United States began to again pursue this action against Ace Scrap Metal Processors and St. Louis Lead Recyclers, by filing an initial pre-trial report with the Court (Doc. 501). In March, 2005, the United States served these two defendants with written discovery. For the remainder of this Memorandum and Order, the Court will refer to Honeywell International, Inc., Johnson Controls, Inc., and Lucent Technologies, Inc., as the "third-party plaintiffs."

  As noted, several of the third-party defendants have filed motions for a determination that SREA operates to exempt them from liability from this matter. These motions are discussed below.

  II. Applicable Statutes.

  Section 107 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, (CERCLA), states that:
Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section —
* * *
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by another other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for —
(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan; [and]
(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan[.]
42 U.S.C. § 9607.
  In addition, Section 113(f)(1) of CERCLA states:
(1) Contribution.
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response ...

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