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North American Galvanizing & Coatings, Inc. v. Lake River Corp.

June 9, 2010

NORTH AMERICAN GALVANIZING & COATINGS, INC., PLAINTIFF,
v.
LAKE RIVER CORPORATION, INC. ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Joan B. Gottschall

MEMORANDUM OPINION AND ORDER

Plaintiff North American Galvanizing & Coatings, Incorporated ("North American") brought this diversity action seeking contribution for liability that North American incurred as a result of alleged violations of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601 et seq.*fn1 In its Amended Complaint, North American seeks recovery from, inter alia,defendant Lake River Corporation ("Lake River") under several legal theories including, in Count III, the Illinois Joint Tortfeasor Contribution Act, 740 Ill. Comp. Stat. 100/0.01 et seq. (the "Contribution Act"). (See Am. Compl., Doc. No. 37.) This matter is presently before the court on Lake River's motion to dismiss Count III.

I. RELEVANT ALLEGATIONS

North American, formerly known as Kinark Corporation ("Kinark"), owned Lake River from 1968 until 2000. (Am. Compl. ¶¶ 3, 15.) Lake River leased parcels of land in Forest View and Summit, Illinois from the Metropolitan Water Reclamation District of Greater Chicago (the "MWRD"), on which land Lake River conducted chemical processing and storage services. (Id. ¶¶ 4, 13, 14.) In conducting its business on the land in question, Lake River allegedly handled millions of gallons of chemicals and other substances per year. (Id. ¶ 18.) According to the Amended Complaint, Lake River's use of the land caused non-specified "environmental issues" which led the MWRD to file suit in this district against Lake River and others in 2003, seeking recovery of cleanup costs under CERCLA and damages sounding in contract and tort. (Id. ¶¶ 23, 24, 29.) The MWRD obtained a default judgment against Lake River and others (id. ¶ 31), then added North American as a defendant. (Id. ¶ 33.) North American eventually settled the MWRD's claims against it for $1,400,000. (Am. Compl. ¶ 36.)

North American brought this suit against Lake River and others to recover the amount it paid to settle the MWRD's claim. North American specifically seeks contribution from Lake River, first under CERCLA and, alternatively, under the Contribution Act. (Id. ¶¶ 44-56, 67-69.) Lake River seeks dismissal of North American's Contribution Act claim.

II. LEGAL STANDARD

Rule 12(b)(6) allows a defendant to seek dismissal of a complaint that fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In deciding a Rule 12(b)(6) motion, the court must "construe the complaint in the light most favorable to the plaintiff, accepting as true all well-pleaded facts alleged, and drawing all possible inferences in [the plaintiff's] favor." Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

III. ANALYSIS

Lake River seeks dismissal of North American's Contribution Act claim on two grounds. First, Lake River asserts that claims under the Contribution Act must be based on underlying liability in tort and that the MWRD's suit sounded in CERCLA, not in tort. Second, according to Lake River, a provision of CERCLA allows contribution claims for CERCLA liability and thereby preempts Contribution Act claims. The court considers each argument in turn.

A. Tort Liability under the Contribution Act

The Contribution Act states in relevant part: Except as otherwise provided in this Act, where 2 or more persons are subject to liability in tort arising out of the same injury to person or property, or the same wrongful death, there is a right of contribution among them, even though judgment has not been entered against any or all of them. 740 Ill. Comp. Stat. 100/2(a) (West 2006); see also, e.g., Guerino v. Depot Place P'ship, 730 N.E.2d 1094, 1099 (Ill. 2000) ("Contribution liability is predicated on tort, not contract, liability."). Lake River maintains that CERCLA liability, but not tort liability, arose from the underlying litigation.

Resolution of Lake River's first argument requires a determination whether, based on the pleadings and any other documents that are proper for consideration at this stage, Lake River was potentially liable in tort in the underlying action. As the Illinois Supreme Court has explained:

As the language of the [Contribution Act] indicates, a party's obligation to make contribution rests on his liability in tort to the injured or deceased party, i.e., the plaintiff in the underlying action. There is no requirement that the bases for liability among the contributors be the same. However, some basis for liability to the original plaintiff must exist. If a defendant is not a tortfeasor vis-a-vis the original plaintiff, it cannot be a joint tortfeasor vis-a-vis a co-defendant and may not be held liable to that co-defendant for contribution.

Vroegh v. J & M Forklift, 651 N.E.2d 121, 125 (Ill. 1995) (citations omitted) (emphasis added). In this case, the defendant from whom ...


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