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FOSTER v. UNITED STATES

March 29, 1996

P. WESLEY FOSTER, JR., Plaintiff,
v.
UNITED STATES OF AMERICA, GENERAL SERVICES ADMINISTRATION, and DISTRICT OF COLUMBIA, Defendants.



The opinion of the court was delivered by: RICHEY

 Before the Court in the above-captioned case *fn1" are the parties' cross-motions for summary judgment. Upon careful consideration of the parties' pleadings, the entire record herein, and the law applicable thereto, the Court shall grant the defendants' Motions for Summary Judgment on the plaintiff's claims under the CERCLA for past costs he has incurred investigating contamination located at his property in Southwest Washington, D.C., and on the defendants' counter-claims against the plaintiff that he is liable under the CERCLA as a current owner of the property. The Court shall deny the plaintiff's and the defendants' Motions regarding the defendants' liability under the CERCLA for future response costs. Finally, the Court shall grant the defendants' Motions for Summary Judgment on the plaintiff's claims under RCRA.

 BACKGROUND2

 The plaintiff, the sole general partner of Riverside Associates ("Riverside"), brings action under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9607, 9613, and the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6972(a)(1)(B), against the District of Columbia (the "District"), and the United States, seeking both declaratory and monetary relief with regard to the environmental contamination of property belonging to him in Southwest Washington, D.C. ("the Site"). The defendants, in turn, assert counterclaims against the plaintiff under the CERCLA. The District also asserts a cross-claim against the United States under the CERCLA.

 Under the CERCLA, the plaintiff seeks to recover response costs incurred by him in connection with the investigation of contamination at the Site. The plaintiff also seeks prejudgment interest on such costs from the date of the Complaint, in accordance with 42 U.S.C. § 9607, as well as a declaratory judgment pursuant to 42 U.S.C. § 9613(g)(2) and 28 U.S.C. § 2201 that the defendants are liable for all costs consistent with the National Contingency Plan, 40 C.F.R. Part 300, that may be incurred by the plaintiff as a result of releases or threatened releases of hazardous substances at, onto, and from the Site. The plaintiff also alleges that the defendants are liable under the RCRA as "person[s] . . . who have contributed . . . to the . . . handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment" at the Site. 42 U.S.C. § 6972(a)(1)(B).

 The Site consists of 7.98 acres of fill property; it sits, in part, on what used to be the James Creek Canal, *fn3" and is bounded on the east by the western boundary of Second Street, S.W., on the north by the northern boundary of Q Street, S.W., on the west by Fort Leslie J. McNair, and on the south by the northern boundary of S Street, S.W. The plaintiff claims that the defendants are former owners and/or operators, within the meaning of CERCLA, of the Site and its adjacent properties, whose actions dating back as early as the nineteenth century have contaminated the Site with lead, mercury, polychlorinated biphenyls ("PCBs"), polynuclear aromatic hydrocarbons ("PAHs"), and total petroleum hydrocarbons ("TPHs"). The plaintiff alleges that the United States contaminated the Site by the operation of an arsenal at Fort McNair, the filling of the property with material containing lead, mercury, PAHs and petroleum substances, *fn4" and the disposal and release of PCBs from electrical transformers formerly located at the Site. He alleges that the District is liable for the contamination at the Site by virtue of its former operation of a sewage system that deposited allegedly hazardous substances into the Canal, its having sprayed the Canal with kerosene, and its role in filling the Canal.

 The history of the Site and its surroundings is somewhat complex. As noted, a military reservation owned by the federal government is located directly west of the Site and currently comprises the entire western boundary thereof. That property was formerly known as the Washington Arsenal, the Washington Barracks, the Army War College, and Fort Humphries; it is currently known as Fort McNair. From the early nineteenth century until 1881, portions of the reservation were used as an arsenal for the manufacture and storage of artillery, small arms, and ammunition. While it is undisputed that the materials used to produce the artillery and ammunition included lead and mercury, there is no direct evidence in the record regarding the specific types of wastes produced by the manufacture of munitions at the reservation, nor is there any evidence in the record concerning the manner of disposal of such wastes.

 In 1907, the Commissioners of the District of Columbia approved a plan to permanently fill the Canal after its use as a sewer was discontinued; this policy was ratified by the Commissioners in September 1916 and the portion of the Canal bordering the Site was filled by 1930 under the supervision of the District's Sanitary Engineer. The materials used to fill the Canal included street sweepings, ash, soot, garbage, refuse from street catch basins, and residential garbage. While the filled portions of the Canal remained under the ownership of the United States and within the jurisdiction of the National Park Service after 1930, the District exercised control over these areas and the city streets that formerly traversed the Site.

 On December 9, 1941, a Declaration of Taking was filed in this Court by the Acting Federal Works Administrator pursuant to an Act of Congress "to provide for the Construction of Public Buildings," which resulted in the acquisition of the Site by the United States. The United States owned the Site from that date until 1985.

 Shortly after it acquired the Site, the United States constructed three temporary office buildings on the eastern side of the Site and the adjoining property immediately to the south, which had also been acquired by the United States. *fn5" All three of the buildings utilized transformers, which provided power to the buildings by stepping down the amperage from existing power lines.

 These transformers, which were housed in concrete vaults, each contained approximately 250 gallons of liquid polychlorinated biphenyls ("PCBs"). Such transformers typically "weep", or "seep" dielectric fluids containing PCBs. And while the transformers were operational, there was periodic maintenance and testing by GSA employees, which involved, among other things, determining the dielectric strength of PCB fluid in the transformers by draining fluid from such transformers into a cup for testing. Apparently, GSA employees often dumped the contents of the cup onto the ground outside the vault after the testing was completed. *fn6" In any event, there was visible staining of the concrete areas under the transformers.

 In August 1983, the GSA, on behalf of the United States, conducted an auction for the sale of the Site. However, because of low bidding, the GSA determined not to sell the Site. On June 27, 1984, after notice and invitation, GSA conducted a sealed bid auction for sale of the Site. The high bidder at the auction was an investment partnership; however, the partnership was unable to secure the financing necessary to close the deal. Theodore Mariani, an architect and engineer who had been retained by the partnership to help with planning for the development of the Site, then helped the partnership to find other investors. The resulting investment group was Riverside, which purchased the Site in June 1985. *fn7"

 Suspecting that PCB contamination of the Site might have resulted from the prior use and maintenance of the PCB-containing electrical transformers, GSA contracted in early 1986 with Versar, Inc. ("Versar"), an environmental consultant, to test for the presence of PCB contamination at the Site and the adjacent property to the south still owned by the United States. The testing revealed PCBs in concentrations exceeding 10 parts per million ("ppm") in several areas where PCB transformers were thought to have been located. *fn8"

 Later that year, the United States, acting through GSA, notified Riverside that "unacceptable levels" of PCBs had been found on the Site and the adjoining property to the south. After seeking and obtaining the permission of Riverside to enter onto the Site for the purpose of conducting a cleanup of the PCB contamination, GSA contracted with Integrated Waste Systems, Inc. ("IWS") for the removal of PCB-contaminated soil from the six designated areas tested by Versar, two of which were on the Site; the specified size of the two areas on the Site encompassed and area slightly larger than the estimated perimeter of the former transformer vaults. IWS contracted to reduce the PCB contamination in the six designated areas to a level below 10 ppm.

 In order to avoid the cost of excavating and disposing of more soil than necessary, the GSA official who supervised the daily administration of the contract sought to insure that IWS did not remove PCB-contaminated soils from areas other that those specifically delineated in the Versar report unless he obtained the prior approval of the GSA Contracting Officer. However, due to the size of the scoop used for excavation, IWS did excavate beyond the specified perimeter of each of the designated areas; otherwise, however, PCB-contaminated soils outside of the areas specifically designated in the Versar report and the bid specifications were not excavated or removed.

 At the conclusion of the soil-removal operation, an Industrial Hygienist certified that all post-excavation soil samples taken from the excavated areas had PCB concentrations less than 10 ppm. GSA accordingly notified Riverside that the cleanup had been completed. No steps were taken by the plaintiff or Riverside to verify the results of the cleanup operation.

 Riverside first began its own investigation into environmental conditions at the Site after the Markborough Group ("Markborough"), a Canadian real estate investment and development company, attempted to purchase an interest in the Site. In early 1990, Markborough signed a letter of intent to purchase a 50 percent interest in Riverside for $ 11.5 million. Pursuant to the letter of intent, Markborough subsequently retained SCS Engineers to conduct an environmental assessment of the Site. The assessment revealed lead, mercury, and zinc in subsurface soil samples taken in the area of the former Canal, on the western portion of the Site. Eight surface soil samples taken from the eastern side of the Site exceeded the PCB action level of 10 ppm, established by EPA and used as a cleanup level by GSA in 1986. In August of that year, SCS also installed, and took groundwater samples from, four hollow stem auger borings in the Canal area. These samples showed trace lead and mercury contamination. *fn9" SCS recommended that additional sampling be conducted to evaluate the vertical distribution and concentrations of contaminants underlying the Site. However, as a result of the assessment, Markborough withdrew its purchase proposal.

 A preliminary site investigation was thereafter conducted on behalf of Riverside by Environmental Strategies Corporation ("ESC") from September to November 1990. As part of its investigation of the Site, ESC installed 37 soil borings, including 18 borings in the area of the former canal on the western side of the Site, and collected a total of 196 soil samples form these borings for laboratory analysis. Analysis revealed levels of lead exceeding 1,000 ppm and mercury exceeding 1 ppm in a number of the samples taken from the Site. The majority of the lead and mercury contamination was detected in the area of the former Canal, at depths between 10 and 20 feet below ground surface, along the entire former length of the Canal. Levels of total TPHs in excess of 100 ppm were detected in soils on the southern portion of the Site, along the Canal area.

 ESC conducted additional groundwater sampling in September and November of 1990 at six monitoring wells installed at the Site. This additional testing revealed levels of total lead, total mercury, and TPH in excess of the Maximum Contaminant Levels for drinking water established by EPA, but levels of dissolved lead and dissolved mercury below those same drinking water standards.

 ESC conducted another site investigation on behalf of Riverside in June 1994 in order to determine whether the material used to fill the former Canal contains residual chemicals from military ordnance, and whether the fill material should be classified as hazardous because it contains arsenic. ESC concluded that the fill material did not contain residual chemicals from high explosive military ordnance such as nitrobenzenes, nitrotoluene, nitroglycerine, or nitrocellulose. ESC did find polycyclic aromatic hydrocarbons ("PAHs") in excess of 10 ppm in some soil samples taken from the western side of the Site, and leachable lead in certain samples exceeding 5.0 milligrams per liter ("mg/1") established under EPA's Toxicity Characteristic Leaching Procedure for defining hazardous waste, in addition to confirming that soils at the Site had been contaminated by TPH. It concluded, however, that the levels of mercury and arsenic found at the Site were not significant.

 Subsequent to the discovery of contamination at the Site, Riverside was restructured, making the plaintiff the sole general partner, and giving him a fifty percent interest in the partnership. As a result of this restructuring, the plaintiff obtained additional interests in the Site. The plaintiff also took steps after September 1990 to acquire additional property that now constitutes part of the Site. He petitioned the District to close an unused section of R Street, S.W., that formerly ran through the Site. The approximately one-half acre parcel, having an assessed value of $ 781,984, was transferred to Riverside in 1994.

 The Site currently sits behind a locked fence. There are two distinct areas of contamination at the Site. The eastern portion of the Site, where the PCB-containing vaults were formerly located, is contaminated only with PCBs. The western portion of the Site, which was formerly part of the Canal, is contaminated with lead and mercury. The bulk of the costs likely to be incurred in cleaning up the entire Site is associated with the lead in the western portion of the Site. U.S. Add'l St. of Mat'l Facts, P 4; Dep. of Kent David Campbell, at pp. 180-81.

 The severity of the threat posed by the contamination is in dispute. Asphalt pavement covers the former area of the Canal, the groundwater at the Site is not used for drinking water or other purposes, and, due to current market conditions, Riverside is not actively seeking to market or develop the Site. Riverside has no current cleanup plans for the Site until it has funding from a prospective purchaser, a development partner, or the United States and/or the District.

 DISCUSSION

 Under the CERCLA, both the Government and private parties may take response action whenever there is a release or threatened release of "hazardous substances," and then sue certain persons for reimbursement of the cleanup costs ("Response Costs"). 42 U.S.C. §§ 9604, 9607(a)(4). In order to establish liability under the CERCLA, the plaintiff must establish that

 
(1) a release or threatened release *fn10" of a hazardous substance *fn11" has occurred at the Site;
 
(2) the Site is a "facility"; *fn12"
 
(3) the release or threatened release has caused the plaintiff to incur response costs, *fn13" and
 
(4) the defendants are potentially responsible parties ("PRPs"). *fn14"

 Town of Munster v. Sherwin-Williams Co., 27 F.3d 1268, 1273 (7th Cir. 1994); Amoco Oil v. Borden, Inc., 889 F.2d 664, 668 (5th Cir. 1989); New York v. Shore Realty Corp., 759 F.2d 1032, 1043 (2d Cir. 1985); Northwest Mutual Life Ins. Co. v. Atlantic Research Corp., 847 F. Supp. 389, 395 (E.D. Va. 1994). "Absent a showing by a preponderance of the evidence that one of the affirmative defenses contained in . . . 42 U.S.C. § 9607(b), has been satisfied, PRPs' potential liability for Response Costs is strict." United States v. A & N Cleaners and Launderers, Inc., 854 F. Supp. 229, 237 (S.D. N.Y. 1994) (citing B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992) and New York v. Shore Realty Corp., 759 F.2d 1032 (2d Cir. 1985)). When the environmental harm to be remediated is indivisible, liability is also joint and several. Id. (citing B.F. Goodrich, 958 F.2d at 1197).

 It is undisputed that both the soil and ground water at the site contain "hazardous substances" within the meaning of 42 U.S.C. § 9601(14), that the presence and potential or actual migration of such substances constitutes a "release" or threatened "release, and that the Site is a "facility." Moreover, the United States concedes that it is a liable party under 42 U.S.C. § 9607(a) and therefore subject to a declaratory judgment for future response costs incurred by the plaintiff pursuant to 42 U.S.C. § 9613(g)(2) with regard to PCB contamination at the Site. *fn15" However, the United States contests liability for the release of hazardous substances at the Site other than PCBs, and the District disputes liability for any contamination at the Site, maintaining that the plaintiff has failed to demonstrate either that his claims are ripe or that the District caused the contamination at the Site.

 Because the plaintiff fails to demonstrate that his past investigative costs were necessary and consistent with the NCP he is not entitled to recover them from the defendants. And because he fails to demonstrate that he is entitled to an affirmative defense thereto, the plaintiff is liable as a current owner of the Site. Therefore, summary judgment is warranted with respect to the defendants' liability for past response costs incurred by the plaintiff and the plaintiff's liability. However, disputed issues of material fact preclude the award of summary judgment with respect to the liability of the United States and the District for future response costs necessitated by the lead and mercury contamination at the Site.

 
A. BECAUSE THE PLAINTIFF FAILS TO ESTABLISH THAT HIS PAST INVESTIGATORY COSTS WERE CONSISTENT WITH THE NCP, THE COURT SHALL GRANT THE DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT WITH RESPECT TO THE PLAINTIFF'S CLAIM TO RECOVER THEM FROM THE DEFENDANTS.

 The plaintiff's claims under the CERCLA may be divided into two groups: his claims against the defendants for past response costs and his claims against them for future response costs. The first seeks to recover money he has already spent investigating the contamination at the ...


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