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City of Waukegan, Illinois v. National Gypsum Co.

November 24, 2008


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


In this action under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA) and the Illinois Water Pollutant Discharge Act (IWPDA), the City of Waukegan (Waukegan) has sued several entities for damages and declaratory relief connected with contamination in Waukegan Harbor. National Gypsum Co. (National Gypsum), LaFarge North America, Inc. (LaFarge), LaFarge Building Materials, Inc. (LBM and, collectively with LaFarge, the LaFarge Defendants), and St. Mary's Cement, Inc. (St. Mary's) have jointly moved to dismiss all of Waukegan's claims and have also filed individual motions to dismiss.*fn1

The Court previously granted the joint motion to dismiss on the ground that Waukegan's complaint was time-barred. City of Waukegan v. Nat'l Gypsum Co., No. 07 C 5008, 2008 WL 4201680 (N.D. Ill. Sept. 8, 2008). The Court later vacated that ruling on Waukegan's motion for reconsideration, concluding that given the standard applicable on a motion to dismiss, the Court could not definitively determine--as it had in its original ruling--that Waukegan's CERCLA claim sought only to recover response costs relating to a "remedial action" as CERCLA defines that term.

The Court therefore turns to the remaining grounds for dismissal cited by the defendants. For the reasons set forth below, the Court grants in part and denies in part the common motion to dismiss and the LaFarge Defendants' motion to dismiss; denies National Gypsum's motion to dismiss; and grants St. Mary's motion to dismiss.

Factual Background

When considering a motion to dismiss, the Court accepts as true the complaint's factual allegations and draws reasonable inferences in favor of the plaintiff. See, e.g., Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 617 (7th Cir. 2007). The Court treats exhibits to a complaint as part of the complaint. Fed. R. Civ. P. 10(c). The Court is not bound by Waukegan's characterizations of the exhibits attached to its complaint and can independently examine those exhibits for inconsistencies between them and Waukegan's allegations.*fn2 See, e.g., 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002); Rosenblum v., Ltd., 299 F.3d 657, 661 (7th Cir. 2002).

In its complaint, Waukegan alleges that the harbor is contaminated with polychlorinated biphenyls (PCBs) that were discharged into and around the harbor by the now-defunct Outboard Marine Corp. (OMC), a marine products manufacturer. Substantial quantities of PCBs are present in the sediment located on submerged lands throughout the harbor. In the 1980's, the United States Environmental Protection Agency (USEPA) put the harbor and some of the surrounding land on the National Priorities List (NPL). "The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation." See (visited Nov. 14, 2008). Waukegan's claims against the defendants in this case encompass a portion of the NPL site in and around portions of the harbor (the Facility). In 1992, OMC completed a remediation project that involved dredging, treating, and disposing of around a million pounds of PCB-contaminated sediments. Despite these efforts, sediments in portions of the harbor are still contaminated with PCBs above the regulatory limit of one part per one million. In 2000, OMC closed its plants in the area of the harbor and filed for bankruptcy.

National Gypsum, the LaFarge Defendants, and St. Mary's are entities with business operations adjacent to or near the harbor. Each utilizes the harbor as part of those operations. In its complaint, Waukegan traces the ownership of the land around and underneath the harbor back to 1846, when it was purchased by John Lewis. At that time, portions of the harbor that are submerged today were dry land and were part of what Lewis purchased. The shoreline that constituted the eastern boundary of Lewis' property along Lake Michigan was extended eastward over time. The harbor, as it exists today, was subsequently created when, on several occasions, certain portions of Lewis' land were excavated and dredged.

Waukegan alleges that following various transfers over time, title to portions of Lewis' land came to reside with the Elgin, Joliet & Eastern Railway Company (EJ&E) and the Port District. EJ&E and the Port District subsequently entered into long-term leases of land bordering or located near the harbor with National Gypsum, the LaFarge Defendants, and St. Mary's. The particulars of each of those leases are discussed in further detail below.

Waukegan alleges that conduct by the defendants has exacerbated the PCB-contamination problem in the Facility. Waukegan alleges that National Gypsum, the LaFarge Defendants, and St. Mary's operate docking and mooring facilities in the harbor, maintain portions of the harbor, and have arranged for "large deep draft cargo vessels" to traverse and dock in the harbor. 2d Am. Compl. ¶ 78. Those vessels allegedly "generate prop wash that disturbs, suspends and redistributes PCB-contaminated sediments throughout the Harbor. Such disturbances have mixed sediments into the water column, disrupted the benthic zone, and influenced Harbor water quality, thus exacerbating the PCB contamination in the Harbor." Id. ¶ 79. Waukegan also claims that National Gypsum and LaFarge own some of the vessels that have engaged in this activity. Additionally, Waukegan alleges that National Gypsum maintains submerged lands that are part of its leased premises. In or around 2000, a portion of the harbor was dredged following a request to do so by National Gypsum, LBM, and LaFarge. That dredging allegedly "caused PCB contaminated sediment to escape... during the dredging process, resulting in the disturbance, suspension and redistribution of PCB-contaminated sediments in the Harbor." Id. ¶ 76.

As a result of the PCB-contamination present in the Facility and due to defendants' alleged conduct, Waukegan says, it "has incurred, and will continue to incur, response costs in connection with the investigation of the PCBs at the Facility and potential remedial actions... within the meaning and scope of CERCLA." Id. ¶¶ 94-95. Waukegan makes similar claims under the IWPDA.


The Seventh Circuit has emphasized that, even after the Supreme Court's ruling in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), federal courts continue to adhere to a notice pleading standard. E.g., Tamayo v. Blagojevich, 526 F.3d 1074, 1083-84 (7th Cir. 2008). "A plaintiff must still provide only enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests...." Id. at 1083 (quotation omitted). "CERCLA does not contain any heightened pleading requirements." City of Waco v. Schouten, 385 F. Supp. 2d 595, 600 (W.D. Tex. 2005).

1. CERCLA Claims

Under section 107(a) of CERCLA, various categories of persons and entities are liable for "necessary costs of response" incurred by any other person or entity consistent with the "national contingency plan," a phrase defined by the statute to denote sites identified by the USEPA as requiring cleanup. See 42 U.S.C. §§ 9607(a), 9601(31). The categories of those liable include "the owner and operator of a vessel or a facility [and] any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance...." Id. § 9607(a)(1)-(2). A "facility" includes "any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." Id. § 9601(9). A "[r]elease" is defined in CERCLA to include, with exceptions irrelevant in this case, "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment." Id. § 9601(22).

The motions to dismiss do not challenge whether the Facility, as alleged in the complaint, is a "facility" for purposes of CERCLA or that "releases" have occurred. Instead, National Gypsum, the LaFarge Defendants, and St. Mary's argue that Waukegan has not sufficiently alleged that they were owners or operators within the meaning of CERCLA. They also contend that Waukegan has not alleged the requisite causation.

a. National Gypsum

Waukegan alleges that National Gypsum is liable under CERCLA both as an owner and as an operator. As set forth below, Waukegan has stated a ...

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