Ashley II of Charleston LLC v. PCS Nitrogen Incorporated

Friday, April 5, 2013

Ashley II of Charleston LLC v. PCS Nitrogen Incorporated

Apr 4: In the U.S. Court of Appeals, Fourth Circuit, Case Nos. 11-1662, 11-2087, 11-2099, 11-2104, & 11-2297. Appealed from the United States District Court for the District of South Carolina, at Charleston.

The Appeals Court summarizes saying, these appeals arise from disputes as to liability for cleanup of hazardous substances at a former fertilizer manufacturing site in Charleston, SC. After incurring response costs, Ashley II of Charleston, Inc., the current owner of a portion of the site, brought a cost recovery action against PCS Nitrogen, Inc., under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). PCS counterclaimed and also brought third-party contribution actions against parties with past and current connections to the site.

The district court bifurcated the case for trial. At the conclusion of the first bench trial, it found PCS a potentially responsible party jointly and severally liable for response costs at the site. At the conclusion of the second bench trial, the court found some

of the other parties, including Ashley, potentially responsible parties, each liable for an allocated portion of the site's response costs. PCS, Ashley, and many of the other parties now appeal. The Appeals Court affirmed the judgment of the district court in all respects.

Between October 2009 and January 2010, the district court held a sixteen-day bench trial on the allocation phase. The court ultimately allocated liability for past and future response costs at the site to PCS, Ashley, Ross, Holcombe and Fair, RHCE, and Allwaste in various amounts. On appeal, no party disputes that Ashley incurred response costs for the cleanup of hazardous substances at the site that were consistent with the National Contingency Plan. Rather, the parties solely dispute whether and to what amount each is liable for response costs at the site.

In one part of the decision, the Appeals Court held, ". . .we ultimately need not decide today whether a PRP under § 9607(a)(2) can avoid joint and several liability by apportioning only its own harm. For, even assuming that a PRP could do so, the district court did not err in holding that PCS failed to establish a reasonable basis for apportioning its own harm in this case. Both primary disposals (from fertilizer manufacturing) and secondary disposals (from earth-moving and construction) occurred during Old CNC's ownership and operation of the site. Therefore, even to establish its own share of the harm, PCS (Old CNC's successor) needed to provide an apportionment methodology that addressed both types of disposals. Because it did not do so, PCS failed to provide a 'reasonable basis for apportionment' of its own harm (let alone all of the harm), and we affirm the district court's denial of apportionment. See Chem-Nuclear Sys., 292 F.3d at 260 (finding defendant failed to prove its own share of the harm); Rohm & Haas Co., 2 F.3d at 1280 (same)."

In the second part of the decision, the Appeals Court said, ". . .we finally consider the several appeals of the court's ultimate allocation of liabilities under 42 U.S.C. § 9613(f). The district court equitably allocated liability for the response costs to the PRPs as follows: forty-five percent to Ross; thirty percent to PCS; sixteen percent to Holcombe and Fair; five percent to Ashley; three percent to Allwaste; one percent to RHCE; and zero percent to the City of Charleston. As the party bringing the § 9613(f) action, PCS bears the burden of proving each party's equitable share of response costs. . .

"PCS, RHCE, and Holcombe and Fair each contend that the court clearly erred by allocating too much liability to each of them, and not enough to the other parties. Considering, as we must, the record as a whole, we cannot conclude the district court clearly erred. The court's ultimate allocation of liability reasonably weighs relevant factors, including the degree of involvement each party had in disposals (both primary and secondary) on the site, the degree of care each party exhibited with respect to hazardous substances, the degree to which each party cooperated with government officials with respect to hazardous substances, and the benefit each party reaped from disposals of hazardous substances on the site. Although the record also might have supported a different allocation, the ultimate 'allocation [is] among the reasonable conclusions supported by the evidence.' Boeing, 207 F.3d at 1188. We therefore affirm the district court's allocation of liabilities under § 9613(f)."

Access the complete opinion (click here). [#Remed, #CA4]