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Sycamore Industrial Park Associates v. Ericsson

March 30, 2007

SYCAMORE INDUSTRIAL PARK ASSOCIATES, AN ILLINOIS GENERAL PARTNERSHIP, PLAINTIFFS,
v.
ERICSSON, INC., A DELAWARE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Honorable David H. Coar

MEMORANDUM OPINION AND ORDER

Sycamore Industrial Park Associates ("SIPA") sued Ericsson, Inc. ("Ericsson") pursuant to the Resource Conservation and Recovery Act (the "RCRA"), codified at 42 U.S.C. §6901 et seq. (2006) and the Comprehensive Environmental Response, Compensation and Liability Act (the "CERCLA"), codified at 42 U.S.C. §9601 et seq., 26 U.S.C. §§4611- 4612, 4661- 4662 (2006) to compel Ericsson to remove the asbestos; to pay SIPA recovery costs that SIPA incurred or will incur in removing the asbestos; to pay a civil fine for each day Ericsson violated and continues to violate RCRA and the Illinois Environmental Protection Act; and other such remedies. SIPA also brought Illinois common law claims of nuisance and negligence against Ericsson and seeks damages, recovery restitution and an injunction to remove and abate the nuisance of asbestos. Defendant makes its motion pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated in the opinion below, Defendant's motion is GRANTED in part.

I. BACKGROUND*fn1

Ericsson sold SIPA an industrial park (the "Site") complete with finished buildings on 28 acres of land in 1985. At some point prior to selling the property, Ericsson stopped using a heating system that was built into the very structure of the buildings and began using a new heating system. Ericsson never removed the old heating system. The old heating system was made of pipes, boilers and other equipment containing asbestos. The new system does not contain asbestos.

SIPA now alleges that by not removing the old heating system, Ericsson abandoned it under the terms of CERCLA and RCRA. SIPA also alleges that the old heating system is a common law nuisance and that leaving the system was an act of negligence that continues to harm SIPA.

II. STANDARD OF REVIEW

In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted, the court accepts all well-pleaded allegations in the plaintiff's complaint as true. McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 758 (7th Cir. 2006). The court must draw all reasonable inferences in favor of the plaintiff. Id. The purpose of a 12(b)(6) motion is to decide the adequacy of the complaint, not to determine the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990) (citation omitted). A complaint should not be dismissed "unless it appears beyond all doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

III. ANALYSIS

Ericsson brings a 12(b)(6) motion to dismiss SIPA's Complaint because in its view, SIPA's claims present no facts upon which relief can be granted. To establish a prima facie claim under the RCRA, a plaintiff must allege (1) that the defendant has generated solid or hazardous waste, (2) that the defendant is contributing to or has contributed to the handling of this waste, and (3) that this waste may present an imminent and substantial danger to health or the environment. Albany Bank & Trust Co. v. Exxon Mobil Corp., 310 F.3d 969, 972 (7th Cir. 2002) (citations omitted). SIPA has alleged all three elements of its RCRA claim in Count I of its Complaint. To establish a defendant's liability under CERCLA, a four-part test must be met:

(1) the site in question is a "facility" as defined by CERCLA; (2) the Defendant is a "responsible person" as defined by CERCLA; (3) there was a release or threatened release of hazardous substances; and (4) such release caused the Plaintiff to incur response costs. Envtl Transp. Sys., Inc. v. ENSCO, Inc., 969 F.2d 503, 506 (7th Cir. 1992) (citations omitted); 3550 Stevens Creek Assocs. v. Barclays Bank, 915 F.2d 1355, 1358 (9th Cir.1990). SIPA has alleged all four elements of its CERCLA claim in Count II of its Complaint. Nevertheless, Ericsson asserts that these claims are legally deficient given relevant precedent.

CERCLA Claim

In G. J. Leasing Co. v. Union Electric Company, a purchaser of a decommissioned power plant that contained asbestos in its structure sued a former owner under CERCLA. 54 F.3d 379 (7th Cir. 1995). The Court held that "the sale of a product which contains a hazardous substance cannot be equated to the disposal of the substance itself or even the making of arrangements for its subsequent disposal." Id. at 384. But SIPA does not allege that Ericsson disposed of the asbestos by selling or arranging the sale of the Site. Rather SIPA alleges that Ericsson unlawfully disposed of asbestos when it "affirmatively abandoned, took out of service and discarded an obsolete heating system that contained asbestos throughout" the Site. The question of whether discontinuing use of a product and leaving it in place prior to sale is "abandonment" is a novel question of law of which this Court has not uncovered any directly relevant precedent.

In 3550 Stevens Creek Associates, the Ninth Circuit declined to recognize a private cause of action under Section 107(a) of CERCLA for the voluntary removal of asbestos from a commercial building. 915 F.2d at 1365. After conducting a teleological exegesis of the relevant sections and subsections of CERCLA and the Solid Waste Disposal Act, as amended by the RCRA, from which the definitions of certain terms used by CERCLA and RCRA are taken, the Court held that the installation of asbestos containing materials into a building did not amount to disposal of waste materials such as to maintain a CERCLA private cause of action. Id. The Court stated that "[o]n its face "disposal" pertains to 'solid waste of hazardous waste,' not to building materials which are neither." 915 F.2d at 1361. The Court also found that CERCLA's legislative history was devoid of evidence of a congressional intent to permit private causes of action for the recovery of response costs for the removal of asbestos from buildings. Id. at 1365.

SIPA attempts to distinguish 3550 Stevens Creek Associates on the basis that the asbestos there was in operation as a useful product in the structure. Here, the asbestos in question belongs to a heating system that is no longer in use. Indeed, Ericsson stopped using the old system and put into operation a new heating system. By leaving the inoperable old asbestos-laden system in th exact same place where it had been originally installed, SIPA argues that Ericsson disposed of it because it is "solid waste," i.e. "discarded material" under the statutory scheme. Even assuming arguendo that the old asbestos-laden system is "solid waste" under 49 U.S.C. §6903(27), as SIPA contends, abandoning a heating system within a structure would still probably not satisfy the definition of "disposal" under 49 U.S.C. §6903(27) because leaving a structure in place within a building (or several buildings) is not an action that comes within the scope of the term "placing of [the abandoned contaminant] into or on any land or water so that [the abandoned contaminant] or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters." See 3550 Stevens Creek Assocs., 915 F.2d at 1361. That Court explicitly held that building materials installed into the ...


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