PHILLIPS 66 PIPELINE LLC, formerly known as ConocoPhillips Pipe Line Company, Plaintiff,
ROGERS CARTAGE COMPANY, Defendant.
MEMORANDUM & ORDER
DAVID R. HERNDON, CHIEF JUDGE.
Three motions are currently pending before the Court: defendant Rogers Cartage Company’s motion for summary judgment and brief in support (Doc. 74), plaintiff Phillips 66 Pipeline LLC’s motion for partial summary judgment as to Rogers Cartage’s CERCLA liability and memorandum in support (Docs. 77, 78), and finally Phillips’ motion to strike the affidavit of Charles Johnson, Sr., whose averred statements Rogers Cartage offers in response to Phillips’ requested relief (Doc. 87).
II. FACTUAL BACKGROUND
Phillips 66 Pipeline LLC (“Phillips”) filed this action in June 2011, seeking recovery of costs from Rogers Cartage Company (“Rogers Cartage”) Phillips incurred in performing response actions at a site in Cahokia, Illinois (the “Phillips Property”). In the 1960s, and possibly before, Rogers Cartage leased a five-acre parcel of land located at the southern edge of the Phillips Property, bounded on the south side by Cargill Road (or Cargill Elevator Road), formerly known as Red House Road (the “Cahokia Site”) (Doc. 78-8, Petersen Aff., ¶ 7, ; Doc. 78-9, Map of Red House Road, Ex. 1, p. 4; Doc. 78-9, Addendum to Aerial Analysis Report of Mary D. Sitton (“Sitton Report”), Ex. 3, p. 47). Eric Petersen (“Petersen”) a program manager in the Remediation Management Group for Phillips (Doc. 78-8), states that he located a microfilm copy of the written 1960 lease between Rogers Cartage and Phillips’ predecessor, Phillips Pipe Line Company (“1960 Lease Agreement”). Petersen avers that the 1960 Lease Agreement was accompanied by a cover page stating it superseded a previous agreement from 1950 (Doc. 78-8, Petersen Aff., ¶ 11).
A copy of the microfilm copy of the notarized 1960 Lease Agreement is attached to Petersen’s affidavit (Doc. 78-8, Ex. 1, pp. 5-11). The cover page states that the ten-year lease (spanning from March 1960 to April 1970) covers a “five acre site for garage and office building” in Cahokia, Illinois (Id. at p. 5). It further states that Rogers Cartage, as lessee, shall erect and maintain at its own costs a garage building and office and that upon termination of the lease, shall remove said buildings and debris and restore the premises to the same condition as before the buildings were erected (Id. at p. 8, ¶ 2(b)). It is further noted that Rogers Cartage shall “not assign the lease nor sublet the premises or any portion thereof without the prior written consent of Phillips Pipe Line Company” (Id. at p. 8, ¶ 2(f)).
Of the five-acre Cahokia Site, Phillips has identified a roughly 2.7 acre area with elevated polychlorinated biphenyl compound (“PCB”) levels in the soil (Doc. 78-10, Forrester Depo., Ex. 3, at pp. 4-5, and Fig. 2).
In the 1960s, Rogers Cartage was one of the “major truckers” hauling “products” for Monsanto Company (“Monsanto”), specifically PCBs or PCB waste (Doc. 78-9, Ex. 2, Malloy Depo., at 37-38; Doc. 78-6, Rogers Cartage’s First Interrog. Resp. ¶ 4). Rogers Cartage admits that “trucks and trailers belonging to Rogers Cartage were washed out at the [Cahokia] Site” (Doc. 62, ¶ 22).
Phillips states sampling performed at the Cahokia Site in 2004, 2005, and 2008 showed PCBs and other hazardous substances present in the soil (Doc. 78-8, Petersen Aff., ¶ 10). Phillips paid for an “investigation and evaluation of the historic contamination at the [Cahokia Site] and hired consultants to prepare a draft work plan for removal of contaminated soil” (Id. at ¶ 13).
Phillips alleges that the U.S. Environmental Protection Agency (“EPA”) first issued a General Notice of Potential Liability asking both Phillips and Rogers Cartage to remove elevated levels of PCBs from the Cahokia Site pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) in 2009. Rogers Cartage does not address this allegation (See Doc. 69-2, August 28, 2012, letter from U.S. D.O.J. attorney stating she had reviewed Rogers Cartage’s December 8, 2009, responses to the EPA’s November 6, 2009, General Notice of Potential Liability and that “it appears your clients [Rogers Cartage] at that time denied liability and were unwilling to perform removal work at the [Cahokia] Site pursuant to EPA’s proposed administrative order.”).
Phillips’ initial complaint asserted one claim for cost recovery against Rogers Cartage under Section 107 of CERCLA. 42 U.S.C. § 9607(a), and a citizen-suit claim under the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6972(a)(1)(B). After this Court denied Rogers Cartage’s motion to dismiss Phillips’ RCRA claim (Doc. 60), Phillips moved to file an amended complaint in November 2012. Phillips sought leave to amend its claims to bring a contribution claim under CERCLA Section 113(f). In explanation of its delay, Phillips stated that its contribution claim had only most recently become available to it, as the United States filed a complaint against it under CERCLA §§ 106 and 107 also in November 2012. See 42 U.S.C. 9613(f)(1) (“Any person may seek contribution . . . during or following any civil action under section 9606 of this title or under 9607(a) of this title.”). This Court approved the proposed consent decree filed concurrently with the United States’ CERCLA action in December 2012, requiring Phillips to perform an environmental cleanup of the property at issue (“Phillips Consent Decree”). See United States of America v. Phillips 66 Pipeline LLC, 12-cv-1159-DRH-PMF (Doc. 10).
Rogers Cartage opposed Phillips’ request to amend its claims, alleging it had not made Rogers Cartage aware of Phillips’ negotiations with the United States prior to November 2012 (Doc. 68). Phillips denied Rogers Cartage’s allegations, asserting it misrepresented its knowledge of the settlement and the amount of discovery Phillips’ proposed additional claim would require. In support, Phillips supplied the Court with the August 2012 letter from the United States (cited above) offering Rogers Cartage a final opportunity to join the Phillips Consent Decree (Doc. 69-2).
A hearing was held before Magistrate Judge Wilkerson to flesh-out the parties’ suggestions that “nefarious conduct was afoot” (Doc. 71). While the dispute over Phillips’ proposed amendment was pending, the parties filed their instant motions for summary judgment (Docs. 74, 77). Ultimately, the Court granted Phillips’ request for leave to file an amended complaint, finding that while Phillips had “been at most tardy in supplementing discovery, such tardiness has not prejudiced [Rogers Cartage].” And further, Rogers Cartage “exaggerated the amount of discovery that would be required in light of [Phillips’] new proposed claim and engaged in hyperbole with respect to the surprising nature” of Phillips’ settlement with the United States (Doc. 84).
Thus, Phillips filed its first amended complaint on February 6, 2013 (Doc. 85). Phillips’ amended complaint re-alleges its claim for cost recovery under CERCLA Section 107(a), 42 U.S.C. § 9607(a), and brings an additional claim for contribution under CERCLA Section 113(f)(1), 42 U.S.C. § 9613(f)(1). Phillips’ RCRA claim is no longer before the Court.
This brings us to the pending motions. Phillips requests partial summary judgment as to Rogers Cartage’s CERCLA liability. Phillips argues Rogers Cartage’s status as a responsible party under CERCLA cannot be disputed in light of the admissible evidence available. By way of context, Rogers Cartage has been a party to prolonged CERCLA litigation before U.S. District Judge G. Patrick Murphy surrounding the alleged contamination of Sauget Area I (“SAI”). See United States v. Pharmacia, et al., 99-cv-63-GPM-PMF (S.D. Ill. 1999) (“Pharmacia”). While Phillips is not a party to Pharmacia, Rogers Cartage serves as a defendant/ crossclaim plaintiff/ third-party plaintiff in that litigation.
Phillips argues that at trial in 2003 in Pharmacia (“Pharmacia Trial”), the United States sought to prove Rogers Cartage was liable for response costs at SAI, based on alleged releases of hazardous substances from both the Cahokia Site and from a second Rogers Cartage facility in nearby Sauget, which Phillips asserts is not at issue in this litigation. According to Phillips, in the Pharmacia Trial, Rogers Cartage’s liability hinged on whether hazardous substances that Rogers Cartage employees washed out of tankers at the Cahokia Site had migrated offsite and into Dead Creek. While Rogers Cartage was ultimately deemed not liable because, as Phillips characterizes the proceedings, the United States failed to prove that hazardous substances from Rogers Cartage’s drainage ponds migrated offsite, Phillips argues the evidence in the Pharmacia Trial conclusively established Rogers Cartage’s operation of the Cahokia Site and its employees’ washing of hazardous substances into a low-lying portion of the property as part of their regular job duties (Doc. 77).
In response to Phillips’ motion for partial summary judgment, Rogers Cartage offers what it construes as “direct eyewitness evidence” in contradiction of Phillips’ assertion that Rogers Cartage is indisputably a former owner or operator of the Cahokia Site under CERCLA. Specifically, Rogers Cartage offers an affidavit of Charles Johnson, Sr. (“Charles”), and a deposition of Donald Mayer (“Mayer”), a former Monsanto employee. Rogers Cartage argues the statements of Charles and Mayer sufficiently rebut Phillips’ assertions because they state Ernie Cambridge (“Cambridge”) and J.D. Tolbird (“Tolbird”), two men Rogers Cartage has identified in previous litigation as “employees” of Rogers Cartage (Doc. 78-23, pp. 10-11) (and who are now and were at the time of the Pharmacia Trial-according to Phillips- deceased) “owned or operated” the Cahokia Site. Phillips moves to strike Charles’ affidavit, arguing it consists of conclusory statements that are not substantiated by specific facts and are not based on personal knowledge. Moreover, Phillips argues Rogers Cartage failed to properly disclose Charles as a potential witness (Doc. 87).
As to Rogers Cartage’s motion for summary judgment, Rogers Cartage argues Phillips’ cost recovery claim under CERCLA Section 107(a) must fail as a matter of law because Phillips has been sued by the United States and persons sued by the United States under CERCLA may not sue other responsible parties under CERCLA Section 107(a). Additionally, Rogers Cartage seeks summary judgment as to Phillips’ now-abandoned RCRA claim, due to the EPA’s supervising cleanup and also because Phillips judicially admitted that it would no longer pursue its RCRA claim (Doc. 74).
As the above motions are ripe for judicial resolution, the Court turns to the substance of these disputes.
III. LEGAL STANDARD
Summary judgment is proper when the pleadings, discovery, and disclosures establish that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Winsley v. Cook Cnty., 563 F.3d 598, 602–03 (7th Cir. 2009); see Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). The movant bears the initial burden of establishing the absence of fact issues and its entitlement to judgment as a matter of law. Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997) (citing Celotex, 477 U.S. at 323). Once the movant has shown the facts entitle it to judgment in its favor, the burden shifts to the non-moving party to identify some evidence in the record that establishes a triable factual issue. Trentadue v. Redmon, 619 F.3d 648, 652 (7th Cir. 2010).
A genuine dispute as to a material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Pugh v. City of Attica, Indiana, 259 F.3d 619, 625 (7th Cir. 2001). The Court will enter summary judgment against a party who does not “come forward with evidence that would reasonably permit the finder of fact to find in [its] favor on a material question.” McGrath v. Gillis, 44 F.3d 567, 569 (7th Cir. 1995). In conducting this inquiry, “a court may consider any material that would be admissible or usable at trial, including properly authenticated and admissible documents or exhibits.” Smith v. City of Chicago, 242 F.3d 737, 741 (7th Cir. 2001) (quotations and citations omitted); see also Williams v. Vasquez, 62 Fed. App’x. 686, 692 (7th Cir. 2003) (“[A]long with other courts, we have recognized that transcripts of testimony may be considered in support of, or opposition to, a motion for summary judgment.”) (citing Askew v. Bloemker, 548 F.2d 673, 679 (7th Cir. 1976) (“[T]he record before us contains voluminous material cognizable on a motion for summary judgment, including numerous depositions and some transcripts from the criminal trial at which defendants were previously acquitted of violating the civil rights of the Askews and other citizens.”)).
IV. ARGUMENTS AND APPLICATION
a. Phillips’ Motion for Partial Summary Judgment
Phillips seeks partial summary judgment as to Rogers Cartage’s liability under CERCLA. A party seeking cost recovery under CERCLA Section 107 or contribution under CERCLA Section 113 must prove the following: “(1) the site in question is a ‘facility’ as defined by CERCLA; (2) the defendant is a ‘responsible person’ for the spill as defined by CERCLA; (3) there was a release of hazardous substances; and (4) such release caused the Plaintiff to incur response costs.” Emergency Servs. Billing Corp., Inc. v. Allstate Ins. Co., 668 F.3d 459, 465 (7th Cir. 2012) (cost recovery claim) (quoting Envtl. Transp. Sys., Inc., v. ENSCO, Inc., 969 F.2d 503, 506 (7th Cir. 1992) (applying same standard to contribution claim)).
As to prong 1, CERCLA defines a “facility” as including “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located.” 42 U.S.C. § 9601(9)(B). Rogers Cartage does not dispute that the Cahokia Site is a “facility” as defined under CERCLA. As to prongs 3 and 4, Rogers Cartage admits that there has been a release of hazardous substances (specifically, PCB) at the Cahokia Site (Doc. 62, ¶¶ 20, 21), and that Phillips has incurred costs in response to a release of hazardous substances at the Cahokia Site (Doc. 62, ¶ 30).
I. Rogers Cartage’s Status as a PRP
The crux of this dispute lies in Roger Cartage’s status as a “covered person” under CERCLA. See 42 U.S.C. § 9607(a)(1)-(4). CERCLA imposes liability upon four classes of “persons, ” or so-called potentially responsible parties (“PRP”), including: (1) present owners and operators of facilities; (2) past owners or operators of the facility at the time of disposal of a hazardous substance; (3) arrangers of the disposal of hazardous substances at the facility; and (4) certain transporters of hazardous substances. See id.
Phillips argues Rogers Cartage is a former “owner or operator” of the Cahokia Site. Under 42 U.S.C. § 9607(a)(2), Phillips must prove Rogers Cartage owned or operated the Cahokia Site at the time of disposal of the hazardous substances. 42 U.S.C. § 9607(a)(2). In characteristically unhelpful fashion, CERCRLA defines the “owner or operator” of a facility as “any person owning or operating such facility.” 42 U.S.C. § 9601(20)(A)(ii); see United States v. Bestfoods, 524 U.S. 51, 56 (1998) (The phrase “owner or operator” is defined only by tautology, however, as “any person owning or operating” a facility, § 9601(20)(A)(ii), and it is this bit of circularity that prompts our review.”).
1. Former Owner, 42 U.S.C. § 9607(a)(2)
First, while the parties do not directly address the distinction, as this Court understands CERCLA, “owner or operator” liability denotes two separate concepts. See Id . at 64 (“If the Act rested liability entirely on ownership of a polluting facility, this opinion might end here; but CERCLA liability may turn on operation as well as ownership . . .”); Sidney S. Arts Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d 417, 420 (7th Cir. 1994); (citing United States v. Kayser-Roth Corp. Inc., 910 F.2d 24, 26 (1st Cir. 1990) (“Congress, by including a liability category in addition to owner (‘operators') connected by the conjunction ‘or, ’ implied that a person who is an operator of a facility is not protected from liability by the legal structure of ownership.”)).
In this case, Rogers Cartage is a former lessee of the Cahokia Site. It does not appear that the Seventh Circuit has directly addressed whether a former lessee of a facility can be held liable as a former owner under CERCLA. The Second Circuit in Commander Oil Corp. v. Barlo Equipment Corp., 215 F.3d 321, 328-29 (2d Cir. 2000), endorsed a five-factor balancing test in determining “de facto” ownership for purposes of “owner” liability of lessees under CERCLA, including:
(1) whether the lease is for an extensive term and admits of no rights in the owner/lessor to determine how the property is used; (2) whether the lease cannot be terminated by the owner before it expires by its terms; (3) whether the lessee has the right to sublet all or some of the property without notifying the owner; (4) whether the lessee is responsible for payment of all taxes, assessments, insurance, and operation ...