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United States v. Pharmacia Corp.

May 12, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
PHARMACIA CORPORATION, ET AL., DEFENDANTS.
PHARMACIA CORPORATION AND SOLUTIA, INC., CERRO FLOW PRODUCTS, INC., AND EXXONMOBIL OIL CORPORATION, CROSS-CLAIM PLAINTIFFS,
v.
ROGERS CARTAGE, CROSS-CLAIM DEFENDANT.



The opinion of the court was delivered by: Murphy, District Judge

MEMORANDUM AND ORDER

Before the Court is Cross-claim Defendant Rogers Cartage Company's (Rogers Cartage) Motions to Dismiss (Docs. 774, 782 and 791) the Amended Crossclaims filed by Cross-claim Plaintiff's Pharmacia Corporation and Solutia, Inc. (Doc. 780) (collectively, Pharmacia), Cerro Flow Products, Inc. (Doc. 781) (Cerro), and ExxonMobil Oil Corporation (Doc. 789) (ExxonMobil). Also before the Court is Pharmacia's Motion to Strike (Doc. 794) the two Statements of Supplemental Authority filed by the United States (Docs. 777 and 790).

BACKGROUND

The procedural history of this action is long and tumultuous; spanning over one decade and involving over thirty parties. The Cross-claim Plaintiffs are parties potentially responsible for the release or threat of release of hazardous substances at an industrial site known as Sauget Area One (SA1). In January 1999, these parties were sued by the United States pursuant to Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) (42 U.S.C. § 9607, as amended) for the recovery and clean-up costs allegedly incurred by the United States at this nearly century-old industrial site. In turn, these parties filed Crossclaims for contribution under Section 113 of CERCLA (42 U.S.C. § 9613), along with other Third Party claims, against a number of other parties, including Rogers Cartage. The United States, following Cross-claim Plaintiffs' lead, then brought CERCLA Section 107 claims against the same additional "potentially responsible parties" (PRPs), including Rogers Cartage.

In November 2003, the United States was allowed try its CERCLA Section 107 claims against Rogers Cartage. After a five-day bench trial, this Court found that Rogers Cartage was not liable to the United States (Doc. 615). Then, in August 2004, this Court denied the United States' Motion for Reconsideration of its ruling (Doc. 667), and granted Roger Cartage's Motion to Dismiss (Doc. 658) Cross-claim Plaintiffs' CERCLA Section 113(f) contribution claims against it. Those contribution claims were dismissed as derivative of the United States' claims against Rogers Cartage, which it lost (see Doc. 681). Over the next five years, the remaining PRPs, including Cross-claim Plaintiffs, worked toward a settlement agreement while continuing to investigate and clean-up the contamination at the SA1 site.*fn1

On December 2, 2009, Pharmacia filed a Motion for Leave to File a Third Amended Joint Cross-claim and Counterclaim against Rogers Cartage. In its motion, Pharmacia argued, in part, that, based on a "momentous shift" in CERCLA interpretation under the Supreme Court's landmark decision in United States v. Atlantic Research Corp., 551 U.S. 128 (2007), private PRPs, such as Pharmacia, now may bring CERCLA Section 107 cost-recovery actions against other private parties for expenses they have directly incurred (see Doc. 765).*fn2 On January 11, 2010, this Court conducted a hearing on Pharmacia's motion with all relevant parties. Because the Atlantic Research decision did, in fact, mark a significant change in CERCLA interpretation, and finding no undue prejudice to Rogers Cartage, this Court granted Pharmacia's Motion for Leave to File a Third Amended Joint Cross-claim and granted Cerro's Motion for Leave to File the same (Doc. 778). Shortly thereafter, this Court granted ExxonMobil's Motion for Leave to File its Amended Cross-claim (Doc. 786).

Rogers Cartage moves to dismiss the Amended Crossclaims pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Cross-claim Plaintiffs have failed to state a claim upon which relief may be granted because "parties, such as [Cross-claim Plaintiffs], who have been sued by the United States, may not bring nor maintain a § 107 claim against another party" (Doc. 774, p. 2). Rogers Cartage's motion, therefore, presents a unique legal issue: whether under the Atlantic Research Court's interpretation of CERCLA, Cross-claim Plaintiffs - who earlier, after being sued by the United States, brought a § 113 contribution action against Rogers Cartage that was dismissed - may now bring a § 107(a) action against Rogers Cartage to recover, past and ongoing, directly incurred expenses which, according to Cross-claim Plaintiffs, are "neither derivative of, nor co-extensive with [the United States'] costs" (Doc 780, ¶ 7). The issue has been fully briefed by all parties and, having determined that a hearing is unnecessary, the Court rules as follows.

ANALYSIS

It is a plaintiff's burden to plead sufficient factual matter to state a claim to relief that is plausible on its face. See Ashcroft v. Iqbal, 129 S.Ct.1937, 1949 (2009), citing Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 556 (2007). Under Iqbal, "a claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id., citing Twombly, 550 U.S. at 556. The Seventh Circuit Court of Appeals, in light of Iqbal and its progeny, has provided further guidance:

First, a plaintiff must provide notice to defendants of [its] claims. Second, courts must accept a plaintiff's factual allegations as true, but some factual allegations will be so sketchy or implausible that they fail to provide sufficient notice to defendants of the plaintiff's claim. Third, . courts should not accept as adequate abstract recitations of the elements of a cause of action or conclusory legal statements.

Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). Finally, "'determining whether a complaint states a plausible claim for relief will . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Cooney v. Rossiter, 583 F.3d 967, 971 (7th Cir. 2009), quoting Iqbal, 129 S.Ct. at 1950.

Here, the correct resolution of the Motion to Dismiss turns almost entirely upon the current state of CERCLA law. In other words, Rogers Cartage does not argue that Cross-claim Plaintiffs cannot put forth sufficient facts to demonstrate that it might be liable, at least in part, for some of the response costs at issue. Rather, Rogers Cartage argues that Cross-claim Plaintiffs' claims legally fail to demonstrate such liability because CERCLA does not allow direct cost-recovery claims between private PRPs who earlier sought (and, here, lost) contribution claims against the same party. As such, the only issue to be resolved is whether CERCLA, as interpreted by the Atlantic Research Court, allows for a § 107(a) cost recovery action in this unique procedural context.

In Atlantic Research, the Supreme Court attempted to clarify "the complementary yet distinct nature of the rights established in §§ 107(a) and 113(f)." 551 U.S. at 138 The Court held:

The remedies in §§ 107(a) and 113(f) complement each other by providing causes of action to persons in different procedural circumstances. Section 113(f)(1) authorizes a contribution action to PRPs with common liability stemming from an action instituted under § 106 or § 107(a). And § 107(a) permits cost recovery (as distinct from contribution) by a private party that has itself incurred cleanup costs. Hence, a ...


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