Paddock Enterprises, LLC v. United States

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

PADDOCK ENTERPRISES, LLC, ) CASE NO. 5:22-cv-1558

)

)

PLAINTIFF, ) JUDGE SARA LIOI

)

)

vs. ) MEMORANDUM OPINION

) AND ORDER

UNITED STATES OF AMERICA, )

)

)

DEFENDANT. )

Before the Court is defendant United States of America’s motion to dismiss the amended

complaint1 pursuant to Fed. R. Civ. P. 12(b)(6). (Doc. No. 21 (Motion).) Plaintiff Paddock

Enterprises, LLC (“Paddock”) filed an opposition (Doc. No. 24 (Opposition)), and the United

States filed a reply. (Doc. No. 28 (Reply).) For the reasons discussed herein, the United States’

motion to dismiss is GRANTED IN PART AND DENIED IN PART.

1 On September 7, 2023, Paddock filed a motion for leave to amend its complaint and answer and counterclaims. (See

Doc. No. 36.) Paddock claims the United States did not oppose this motion so long as certain conditions were met

(see Doc. No. 36-1, at 3), but the written communications between the parties, which Paddock claimed to attach to the

motion, were not included within the filing. (See generally Doc. No. 36. All page number references within this

memorandum opinion are to the consecutive page numbers applied to each individual document by the electronic

filing system.) Additionally, Paddock failed to either: (A) attach a redline version of its new, nearly fifty page long,

amended complaint to its motion; or (B) point the Court to the specific sections of the proposed second amended

complaint that are new or updated. In any event, under Local Rule 7.1(d), the United States has 14 days from Paddock’s

filing to file an opposition brief, if it chooses to do so. Because Paddock assures the Court and the United States that

“none of Paddock’s proposed amendments to its [a]mended [c]omplaint relate to the Special Use Permit or Paddock’s

pursuit of other potentially responsible parties, which are the focus of the United States’ pending partial motion to

dismiss[,]” the Court will not consider the second amended complaint for the purposes of the United States’ motion

to dismiss. (Doc. No. 36-1, at 6; see also id. at 3 (recounting that one of the terms of the parties’ deal was that the

United States “does not need to refile its currently pending motion to dismiss[]”).) If, at a later date, the Court grants

Paddock’s motion for leave to file a second amended complaint, and Paddock’s proposed amendments do in fact

materially alter this Court’s analysis, any future arguments for reconsider shall be considered waived due to Paddock’s

representations. Given the unripe state of Paddock’s motion for leave to amend, and Paddock’s assurances within the

same, the Court will not further address that motion in the present memorandum opinion and order and will decide

the current motion to dismiss based on Paddock’s first amended complaint.

I. BACKGROUND

Paddock initiated this action against the United States, seeking various forms of relief

under the Comprehensive Environmental Response, Compensation and Liability Act

(“CERCLA”) related to the contamination and subsequent cleanup efforts of the Jaite Mill property

located in the Cuyahoga Valley National Park (“CVNP”). (Doc. No. 1 (Complaint).)

A. Procedural History

Paddock filed its initial complaint on September 2, 2022. (Id.) In response, the United

States filed an answer on November 18, 2022, which also included counterclaims against Paddock

under CERCLA. (Doc. No. 15 (Answer and Counterclaims).) On December 9, 2022, Paddock filed

an amended complaint, which similarly requested relief under CERCLA, but added a new cause

of action for contribution. (Doc. No. 18 (Amended Complaint).) On the same day, Paddock also

filed an answer to the United States’ counterclaims. (Doc. No. 19 (Answer to Counterclaims).) On

January 9, 2023, the United States filed the present motion to dismiss (Doc. No. 21) and an

amended answer with counterclaims. (Doc. No. 22 (Amended Answer and Counterclaims).)

Paddock filed an opposition to the United States’ motion to dismiss (Doc. No. 24), and the United

States filed a reply. (Doc. No. 28.)

B. CERCLA

CERCLA was enacted to “facilitate[] cleanup and remediation [actions] of contaminated

lands” by “shift[ing] the financial burden of such environmental response actions to the parties

responsible for releasing hazardous substances.” See ITT Indus., Inc. v. BorgWarner, Inc., 506

F.3d 452, 456 (6th Cir. 2007). One method of cost shifting for private parties is through a cost

recovery claim under CERCLA Section 107(a), codified at 42 U.S.C. § 9607(a). See id. To recover

under Section 107(a), a plaintiff must establish four elements: “(1) the property is a ‘facility’; (2)

there has been a ‘release’ or ‘threatened release’ of a hazardous substance; (3) the release has

caused the plaintiff to incur ‘necessary costs of response’ that are ‘consistent’ with the [National

Contingency Plan]; and (4) the defendant is in one of four categories of potentially responsible

parties.” Reg’l Airport Auth. v. LFG, LLC, 460 F.3d 697, 703 (6th Cir. 2006) (citing Franklin Cnty.

Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534, 541 (6th Cir. 2001)).

Private parties may also receive judicial relief under CERLCA in the form of contribution.

In 1986 Congress passed the Superfund Amendments and Reauthorization Act (“SARA”), which

amended CERCLA and created a contribution cause of action for private parties. See Cooper

Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 162–63, 125 S. Ct. 577, 160 L. Ed. 2d 548 (2004).

A private party may bring a contribution claim in two factual situations. First, “any person” can

seek contribution “from any other person who is liable or potentially liable” under CERCLA

Section 107(a) “during or following any civil action” under that same section. CERCLA Section

113(f)(1), codified at 42 U.S.C. § 9613. Second, a party that “has resolved its liability to the United

States or a State for some or all of a response action or for some or all of the costs of such action

in an administrative or judicially approved settlement” may also seek contribution under

CERCLA. CERCLA Section 113(f)(3)(b), codified at 42 U.S.C. § 9613.

C. Contamination and Cleanup at Jaite Mill

In the summer of 2018, “the United States authorized the National Park Service [(“NPS”)]

to perform a time-critical removal action under CERCLA at Jaite Mill” because the site was

contaminated with “a variety of hazardous substances in multiple environmental media.”2 (Doc.

No. 18 ¶¶ 163, 165.) Although Jaite Mill has been owned entirely by the United States since 1985

(see id. ¶ 118), and reserved for public recreation during that time (see id. ¶ 134), Jaite Mill’s

2 This recitation of facts as alleged in the amended complaint is not meant to constitute findings of fact. The facts

alleged in the amended complaint are taken as true simply for purposes of resolving this motion. See Cooper v. Pate,

378 U.S. 546, 546, 84 S. Ct. 1733, 12 L. Ed. 2d 1030 (1964) (per curiam) (noting that “the allegations of the complaint”

must be “tak[en] as true” on a motion to dismiss).

previous owners manufactured paper materials and other products on the property, which resulted

in significant contamination to the property. (See id. ¶¶ 2, 79.) Various governmental agencies

attempted to remedy the contamination during the 1970s and 80s. (See id. ¶¶ 79–130.) The United

States and Ohio agencies never completed these remedial measures, however, because the United

States purchased Jaite Mill for the CVNP and, according to Paddock, the property was largely

ignored after this purchase. (See id. ¶¶ 131–63.)

Then, in 2018, a little over thirty years into the United States’ ownership, excessive

flooding of the Cuyahoga River eroded the riverbank to such an extent that a known dumpsite on

Jaite Mill eroded into the Cuyahoga River (Id. ¶¶ 166–67.) In light of this erosion, and associated

“releases of hazardous substances to the Cuyahoga River[,]” the United States found the threat to

public health to be “imminent and substantial[,]” thus meriting a time-critical removal action. (Id.

¶¶ 167–68.)

On August 3, 2018, the United States advised Paddock (“verbally and in writing”) that it

must “perform or fund the United States’ river bank [sic] time-critical removal action.” (Id. ¶ 173.)

Paddock is a successor in interest to one of Jaite Mill’s previous owners, National Container

Corporation, which owned Jaite Mill from 1951 until 1967. (See id. ¶¶ 81–82.) Believing that the

United States “lacked sufficient information to determine whether any removal action, let alone a

time-critical removal action, was warranted[,]” Paddock requested access to sample Jaite Mill

themselves. (Id. ¶¶ 174–75 (emphasis in original).) The United States initially denied Paddock’s

request (id. ¶ 176) and the two parties continued to negotiate whether Paddock could conduct its

own sampling. (See id.)

In October 2018, the United States changed course and agreed to grant Paddock access to

Jaite Mill so long as it “first obtain[ed] the National Park Service’s approval of a Sampling and

Analysis Plan (“SAP”) on an expedited basis and executed the National Park Service’s required

Special Use Permit.” (Id. ¶ 177.) After more negotiations (see id. ¶¶ 178–91), the parties executed

a NPS Special Use Permit (“the Permit”) with an incorporated SAP. (Id. ¶ 192.)

The Permit contained multiple provisions waiving or transferring the United States’

liability under certain circumstances. (Doc. No. 21-2 ¶¶ 12, 35, 49.) In addition to these specific

provisions, the Permit also contained a general provision, providing that Paddock “covenants not

to sue and agrees not to assert any defenses, claims or causes of action against the United States .

. . [for] any costs incurred . . . pursuant to this Permit.” (Id. ¶ 51.) The Permit also contained a

reservation of rights provision that Paddock “expressly reserves any and all rights, defenses, and

claims that do not relate solely to the activities conducted under this Permit[.]” (See id. ¶ 52.)

With the successful execution of the Permit, Paddock was able to collect samples from five

different locations in or near Jaite Mill. (Doc. No. 18 ¶ 196.) Paddock attempted to acquire

additional samples, in accordance with the SAP, but the United States allegedly refused Paddock

access after November 17, 2018. (Id. ¶ 200.) For all of Paddock’s collected samples, the United

States also collected split samples. (See id. ¶¶ 196, 199.) Paddock sent its samples for laboratory

analysis. (Id.) On November 28, 2018, Paddock provided the United States with the analytical data

from its sampling. (Id. ¶ 202.) The United States completed the time-critical removal action on

March 14, 2019. (Id. ¶ 203.)

In September 2021, the United States authorized the NPS to begin “the final $45 million

remedy” for Jaite Mill, which was detailed in an earlier government report. (See id. ¶ 217.) Paddock

attached this report to its complaint. (See Doc. No. 18-8, at 2–17.) Prior to the plan’s approval,

Paddock submitted “legal and technical comments” on the United States’ proposed course of

action, which Paddock found to be “arbitrary, capricious, and fail[ing] to comply with CERCLA

and the NCP” for numerous reasons. (Doc. No. 18 ¶¶ 214–15.) Ultimately, the United States

rejected Paddock’s concerns and approved its plan for final remediation. (Id. ¶ 218.)

The parties attempted to resolve this dispute without litigation. (Id. ¶¶ 219–22.) Their

attempts fell short and the instant action was filed shortly thereafter. (Id. ¶¶ 222–23.)

II. STANDARD OF REVIEW

A complaint must contain “a short and plain statement of the claim showing that the pleader

is entitled to relief[.]” Fed. R. Civ. P. 8(a)(2). Although this pleading standard does not require

great detail, the factual allegations in the complaint “must be enough to raise a right to relief above

the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed.

2d 929 (2007) (citing authorities). In other words, “Rule 8(a)(2) still requires a ‘showing,’ rather

than a blanket assertion, of entitlement to relief.” Id. at 555, n.3 (criticizing the Twombly dissent’s

assertion that the pleading standard of Rule 8 “does not require, or even invite, the pleading of

facts” (internal citation omitted)).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.

662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). Rule 8

does not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.”

Id. at 678–79. “While legal conclusions can provide the framework of a complaint, they must be

supported by factual allegations. When there are well-pleaded factual allegations, a court should

assume their veracity and then determine whether they plausibly give rise to an entitlement to

relief.” Id. at 679. “The court need not, however, accept unwarranted factual inferences.” Total

Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir.

2008) (citing Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)).

When resolving a motion to dismiss pursuant to Rule 12(b)(6), a court “may consider the

[c]omplaint and any exhibits attached thereto, public records, items appearing in the record of the

case and exhibits attached to defendant’s motion to dismiss so long as they are referred to in the

[c]omplaint and are central to the claims contained therein.” Bassett v. Nat’l Coll. Ath. Ass’n, 528

F.3d 426, 430 (6th Cir. 2008) (citing Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)).

III. DISCUSSION

Paddock’s amended complaint asserts three causes of action. First, Paddock seeks to

recover past and future “necessary response costs” of “at least $350,000” related to cleanup efforts

at Jaite Mill pursuant to CERCLA Section 107(a), codified at 42 U.S.C. § 9607(a). (Doc. No. 18

¶¶ 229–30.) Second, Paddock seeks an entry of declaratory judgment that “the United States is

liable for Paddock’s future necessary response costs, other costs, and damages incurred at or in

connection with Jaite Mill, including but not limited to necessary response costs to address

hazardous substances at Jaite Mill.” (Id. ¶ 240.) Third, in response to the United States’

counterclaims against Paddock (see Doc. No. 15), Paddock asserts a contribution claim under

CERCLA Section 113 against the United States. (Doc. No. 18 ¶¶ 241–45.)

The United States moves to dismiss Paddock’s first two causes of actions for two related

reasons.3 First, the United States contends that some of Paddock’s alleged necessary costs of

response are unrecoverable under the terms of the governing Permit granted by the NPS in

November 2018 (Doc. No. 21-1, at 17–23) and the remaining costs are not adequately pled as

3 The United States does not challenge Paddock’s third cause of action for contribution in this motion. (See Doc. No.

21-1, at 16.)

necessary costs of response. (See id. at 23–25.) Second, assuming that Paddock’s first cause of

action will be dismissed, without any remaining CERCLA Section 107(a) claim, the United States

contends that Paddock’s request for declaratory relief must be dismissed. (Id. at 25.)

A. Recovery of Necessary Costs of Response under CERCLA Section 107(a)

In its first cause of action, Paddock contends it incurred four different categories of

necessary costs of response under CERCLA Section 107(a) related to the cleanup at Jaite Mill.

(See Doc. No. 18 ¶¶ 226–36.) First, Paddock seeks costs for its preparation of investigatory plans

and securing access to Jaite Mill.4 (Id. ¶ 229.) Second, Paddock seeks costs related to its

“investigation activities[.]” (Id.) Third, Paddock seeks costs for when it “analyze[d] and report[ed]

on those activities to the United States[.]” (Id.) Fourth, Paddock seeks costs for its “pursu[it] [of]

liable parties, including the United States, to benefit the overall cleanup effort at Jaite Mill.” (Id.)5

The Court will address each argument in turn, beginning with the fourth category of costs.

1. Recovery of Costs for Pursuing Liable Parties

Paddock seeks to recover costs for “pursu[ing] liable parties, including the United States,

to benefit the overall cleanup effort at Jaite Mill.” (Doc. No. 18 ¶ 229.) The United States contends

4 Although Paddock lists these two types of expenses separately, the Court will consider them together. According to

the amended complaint, having an “investigation plan” (in the form of the government approved special use permit

and associated SAP) was a prerequisite for gaining access to Jaite Mill. (See Doc. No. 18 ¶ 177 (“[T]he United States

agreed that Paddock could collect samples from the Jaite Mill river bank [sic], provided that Paddock first obtain the

National Park Service’s approval of a Sampling and Analysis Plan (‘SAP’) . . . and execute the National Park Service’s

required Special Use Permit.”).) Further, Paddock does not allege any costs preparing investigatory plans outside of

the costs it incurred to “secure access to Jaite Mill[.]” Therefore, the only costs Paddock alleges that it incurred

“preparing investigation plans” are a subset of expenses Paddock incurred to “secure access” to Jaite Mill.

5 For all these expenses, Paddock seeks the “past and future necessary response costs [it] incurred at Jaite Mill.” (Id.

¶ 236.) To the extent that Paddock seeks to recover future necessary costs of response under CERCLA Section 107(a),

such recovery is barred as a matter of law. CERCLA’s statutory language allows parties to recover “any other

necessary costs of response incurred by any other person consistent with the national contingency plan[.]” CERCLA

107(a)(4)(b), codified at 42 U.S.C. § 9607(a)(4)(B) (emphasis added). Future necessary costs cannot be recovered

under Section 107(a). See, e.g., Stanton Rd. Assocs. v. Lohrey Enters., 984 F.2d 1015, 1021 (9th Cir. 1993) (holding

that plaintiffs must “actually incur response costs before they can recover them”) (internal quotation omitted); Lozar

v. Birds Eye Foods, 678 F. Supp. 2d 589, 608 (W.D. Mich. 2009) (“CERCLA authorizes reimbursement of past

response costs and declaratory relief as to future response costs.”).

that these costs are not recoverable because Paddock “provides no facts supporting [its]

argument[]” and these expenses are unrecoverable as a matter of law. (See Doc. No. 21-1, at 18.)

In response, Paddock contends that these costs are recoverable and that its claim was adequately

pled. (See Doc. No. 24, at 17–18.) The Court finds that to the extent that these costs are recoverable

under CERCLA Section 107(a), Paddock failed to adequately plead any supportive factual

allegations for them and, therefore, any such claim for these costs must be dismissed.

Costs incurred to identify Potentially Responsible Parties (“PRPs”) may be recovered as

necessary costs of response under CERCLA Section 107(a) if properly pled. The rationale for

classifying these costs as necessary costs of response begins with CERCLA’s statutory language.

See Key Tronic Corp. v. United States, 511 U.S. 809, 817–18, 114 S. Ct. 1960, 128 L. Ed. 2d 797

(1994). CERCLA Section 107(a), and its associated definitions in Section 101, does not limit a

party’s cost recovery to just the costs they incurred for the actual cleanup; it also explicitly permits

recovery for “enforcement activities thereto.” See 42 U.S.C. § 9601(25). The phrase “enforcement

activities” is not defined within CERCLA. See id.

In the controlling Supreme Court case on this issue, Key Tronic, the Court allowed cost

recovery for a private party’s “lawyers’ work that [was] closely tied to the actual cleanup[.]” 511

U.S. at 820 (emphasis added). The Court held that CERCLA does not allow recovery for

“litigation-related fees” (e.g., “attorney’s fees associated with bringing a cost recovery action” or

costs incurred negotiating with governmental regulators), but the Court allowed a private party to

recover for their lawyers’ work that “significantly benefited the entire cleanup effort and served a

statutory purpose apart from the reallocation of costs.” Id.

Subsequent case law from outside the Sixth Circuit has reiterated Key Tronic’s holding that

costs associated with the identification of PRPs are only recoverable if those costs are closely tied

to benefitting the actual cleanup efforts. For example, in Castaic Lake Water Agency v. Whittaker

Corp., 272 F. Supp. 2d 1053 (C.D. Cal. 2003), the court allowed a claim for the recovery of

identification costs to advance past a motion for summary judgment despite “the fact that [the

identifier] likely hired consultants to search for PRPs in the hope that it might one day sue those

PRPs for contribution” because there was “evidence sufficient to establish that it has incurred some

response costs ‘closely tied to the actual cleanup.’” Id. at 1078.

District courts within the Sixth Circuit have held that when a party investigates and

identifies a new source of pollution and alleges that these investigative activities were closely tied

to the site’s cleanup, those costs can be recoverable. See Ford Motor Co. v. Mich. Consol. Gas

Co., No. 08-cv-13503, 2011 WL 1743735, at *5 (E.D. Mich. May 5, 2011). In Ford Motor Co.,

the counter-plaintiff’s amended complaint, which was filed because its original complaint was

partially dismissed for failing to meet the pleading standard under Iqbal and Twombly (see id. at

*1), sought to recover costs related to identifying PRPs and their specific contributions to the

polluted site. See No. 08–cv–13503, Doc. No. 58-3 (Amended Complaint), Ford Motor Co. v.

Mich. Consol. Gas Co., (E.D. Mich.), ¶ 93 (seeking costs for “investgat[ing] and evaluat[ing] the

nature and source of releases and the cause of contamination at the [polluted site] requiring

remediation” (emphasis added)). The amended complaint further alleged that the counter-

plaintiff’s identification efforts bore fruit and were “closely tied to any actual cleanup of the

[polluted site]” because its investigation revealed “that the [p]roposed [r]emedy fail[s] to account

for ongoing contamination” caused by another’s PRP’s conduct and it provided this information

to the relevant regulatory agency. See id. ¶¶ 94–95. Taken together, the counter-plaintiff’s

allegations of identifying a new source of pollution, recommending a remedy modification to

regulators to address this pollution, and the benefits to the overall clean-up were found to be

sufficient to survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6). See Ford Motor Co., 2011

WL 1743735, at *5.

Conversely, in Syms v. Olin Corp., 408 F.3d 95 (2d Cir. 2005), the Second Circuit upheld

the district court’s denial of plaintiff’s claim for costs related to the identification of a PRP because

“the government was already aware of [the polluter’s] activities, and there [was] no evidence in

the record that [the identifier’s] duplicative identification of [the polluter] significantly benefited

the overall clean-up effort.” Id. at 104. Other cases have denied recovery for similar reasons. See,

e.g., Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 92 (2d Cir. 2000) (upholding a ruling that

“none of the fees [related to identifying a PRP] were recoverable as they were not closely tied to

the actual cleanup of the [applicable] [p]roperty so as to constitute a necessary cost of response.”

(internal quotation marks omitted)); Wilson Road Dev. Corp. v. Fronabarger Concreters, Inc., 209

F. Supp. 3d 1093, 1115–16 (E.D. Mo. 2016) (denying cost recovery under CERCLA 107(a) for

alleged “necessary costs of response[,]” including costs identifying PRPs, because, among other

things, the plaintiffs’ work “was not necessary to reveal that the open and obvious owners of a

Superfund site may be liable for the contamination thereon or migrating therefrom” and “none of

plaintiffs’ response costs were closely tied to the actual cleanup[.]” (internal quotation marks

omitted)).

Here, Paddock acknowledges that under Key Tronic its “identification” and “pursuit” costs

are only recoverable as necessary costs of response “if those pursuit efforts ‘benefit[] the entire

cleanup effort.’” 6 (See Doc. No. 24, at 17–18 (citing Key Tronic Corp., 511 U.S. at 820).) Despite

6 Throughout its opposition, Paddock refers to “pursuit” costs and implies that Key Tronic used similar language. (See

Doc. No. 24, at 17 (“[The Court] determined that costs incurred to pursue other PRPs do constitute ‘response’ costs.’”))

Key Tronic made no such statement. Instead, the Court discussed the costs for the lawyers’ work “performed in

identifying other PRP’s[.]” Key Tronic, 511 U.S. at 820 (emphasis added). This difference may be legally significant

because you cannot pursue a particular party until after you’ve identified that party. See Ekotek Site PRP Comm. v.

Self, 1 F. Supp. 2d 1282, 1295 (D. Utah 1998) (denying recovery of costs associated with tracking PRPs because the

expenses went “beyond mere PRP identification and therefore are not recoverable under CERCLA”). Paddock did not

this recognition, Paddock fails to allege any facts that suggest its identification or pursuit of PRPs

benefited the actual cleanup effort. Paddock claims that it “pled, with supporting facts,” that it

incurred these costs, but it fails to point the Court to a single supportive factual allegation. (Doc.

No. 24, at 17.) In its opposition, Paddock cites only two paragraphs of “supporting facts” within

its amended complaint for these costs:

207. In addition, Paddock has incurred necessary response costs to identify and urge

liable parties, including the United States and [Tecumseh Corrugated Box

Company, “TCBC”], to contribute funding to the overall cost of response actions

at Jaite Mill.

208. On multiple occasions, Paddock has urged the United States to accept its

CERCLA liability for contamination at Jaite Mill. The United States has steadfastly

refused to acknowledge its liability and how its decades of inaction to address

contamination the United States has known about since at least 1985 has worsened

the state of the contamination at Jaite Mill.

(See id. at 17–18 (citing Doc. No. 18 ¶¶ 207–08).)

First, Paddock’s conclusory allegation that it incurred costs “identify[ing] . . . liable parties,

including the United States and TCBC” (Doc. No. 18 ¶ 207) stands in direct contrast to the factual

allegations elsewhere in Paddock’s amended complaint. According to Paddock’s amended

complaint, the United States notified Paddock of the contamination at Jaite Mill after the United

States had investigated the site (id. ¶¶ 160–63), initiated remedial action itself (id. ¶ 164), and

developed a “time-critical removal action” plan. (Id. ¶¶ 164–69.) Thus, based on Paddock’s own

allegations, the United States was already aware of the contamination at Jaite Mill, a property it

owned for nearly forty years, before Paddock ever “identified” the United States as a PRP.

Additionally, Paddock’s amended complaint dedicates fifty-one paragraphs to discussing

TCBC’s contribution to the contamination of Jaite Mill and subsequent interactions with various

cite to a single case which supports the idea that the later chronological activity, pursuit, qualifies as a necessary cost

of response. Nonetheless, to the extent that “pursuit” costs are recoverable under Key Tronic, Paddock has failed to

allege sufficient facts as required under Iqbal and Twombly.

regulatory agencies, including the United States. (Doc. No. 18 ¶¶ 79–130.) According to these

allegations, the United States’ first “conversations” with TCBC were in 1976, nearly fifty years

ago, for noncompliance with the Clean Air Act. (Id. ¶ 88.) This began a string of back-and-forth

communications between TCBC and the United States, which included inspections by the United

States (id. ¶¶ 88, 104–05, 110) and demands that TCBC pay for its pollution at Jaite Mill. (Id. ¶

93.) The government’s investigative activities at Jaite Mill only ceased when the United States

informed the Ohio EPA that it intended to purchase Jaite Mill. (Id. ¶¶ 116–17.) The amended

complaint states that adequate remedial measures were never completed because of this

acquisition. (Id. ¶ 117.)

By Paddock’s own allegations then, the United States not only knew about TCBC for well

over forty years, but also that the environmental damage TCBC caused went unfixed. As noted

above, costs for “identifying” already known PRPs are not recoverable under CERCLA Section

107(a). See Champion Lab’ys, Inc. v. Metex Corp., 677 F. Supp. 2d 748, 754 (D.N.J. 2010)

(denying recovery of investigative costs, in part, because a governmental regulator “had already

identified [the PRP] and was taking action against it, obviating any need for [the requesting party]

to ‘prompt’ the [government regulator] into action”); see also Calabrese v. McHugh, 170 F. Supp.

2d 243, 267 (D. Conn. 2001) (denying recovery of costs incurred for an expert to identify PRPs

because those expenses were incurred over a year and a half after the plaintiff had filed its lawsuit

against the identified PRP).

But even if Paddock did somehow “identify” the United States and/or TCBC as a PRP,

Paddock has not alleged any facts that would plausibly suggest these identifications then benefitted

the actual cleanup efforts at Jaite Mill. For example, unlike the counter-plaintiff in Ford Motor

Co., Paddock does not allege that it identified any new source of pollution from the previously

identified parties or that it brought forth any information on previously unaddressed pollution to

the attention of government regulators. See Ford Motor Co., 2011 WL 1743735, at *5. Nor does

Paddock allege how its “urging” of these parties to accept responsibility was closely tied to

benefitting the actual cleanup efforts.7

Contrarily, as discussed above, Paddock’s own factual allegations suggest that the United

States knew about the contamination at Jaite Mill, knew about TCBC’s contribution to the

contamination, identified Paddock as another PRP, developed at least two separate plans to address

the contamination, asked Paddock to pay for or implement one of those plans (i.e., the time-critical

action removal completed in 2019), and then subsequently executed a removal action. Nowhere in

the Paddock’s amended complaint does it allege that its “identification” or “pursuit” of either the

United States or TCBC benefitted the actual cleanup of Jaite Mill in any way. In total, the

allegations for identification costs in this case are analogous to Syms, where duplicative and non-

beneficial identification costs were held to be unrecoverable by the Second Circuit. See Syms, 408

F.4d at 104. But this case presents even more compelling grounds for dismissal of Paddock’s

identification costs claim at the motion to dismiss stage because there are not even any allegations

that Paddock found a new PRP or a previously unaccounted for source of pollution. Further,

Paddock does not allege any facts that its efforts were closely tied to, or benefitted, the actual clean

up.

For these reasons, the United States’ motion to dismiss is GRANTED as it relates to these

expenses.

7 Although not controlling, in Ford Motor Co., the counter-plaintiff strengthened their claim by explicitly alleging that

the incurred costs it sought under CERCLA Section 107(a) “were not incurred for litigation purposes.” No. 08–CV–

13503, Doc. No. 58-3 (Amended Complaint), Ford Motor Co. v. Mich. Consol. Gas Co., (E.D. Mich.), ¶ 96. Paddock

did not make a similar allegation in its amended complaint.

2. Recovery of Necessary Costs of Response Related to Securing Access to Jaite Mill,

Investigation Activities, and its Associated Analysis and Reporting

Paddock asserts that it incurred necessary costs of response for “secur[ing] access to Jaite

Mill, conduct[ing] investigation activities [and] analyz[ing] and report[ing] on those activities to

the United States[.]” (Doc. No. 18 ¶ 229.) The United States contends that these expenses are not

recoverable under the “clear and unambiguous[]” language of the Permit. (Doc. No. 21-1, at 19.)

In its opposition, Paddock contends that the Court cannot consider the Permit on the motion to

dismiss, but, even if the Court did consider it, the Permit’s reservation of rights provision allows

Paddock to seek recovery for these expenses. (See Doc, No. 24, at 11, 13–14.)

Paddock did not attach the Permit to its amended complaint (see generally Doc. No. 18),

but the United States attached the Permit to its motion to dismiss and asks the Court to consider it.

(See Doc. No. 21-1, at 19; see generally Doc. No. 21-2.) The United States argues that

consideration of the Permit is proper because “[the Permit] is referred to and discussed at length

in Paddock’s pleading.” (Doc. No. 21-1, at 19; see also Doc. No. 28, at 4–7.)8 Paddock does not

challenge the authenticity or completeness of the Permit but argues that the Permit cannot be

considered at this stage because it is “not ‘central’ to Paddock’s CERCLA cost recovery claim[.]”

(Doc. No. 24, at 12.) For the reasons stated below, the Court finds that it may consider the Permit

8 In its reply, the United States asserts, for the first time, that the Permit is a “public document[.]” (Doc. No. 28, at 4.)

After making this conclusory statement, the United States fails to explain its reasoning for this legally significant

designation. “Public records” are another subset of documents that may be considered at the motion to dismiss stage

without converting the motion to one for summary judgment. See Bassett, 528 F.3d at 430. This exception does not

require the Court to determine if the document is central to the claim or if they are referenced to in the complaint. See

Elec. Merch. Sys. LLC v. Gaal, 58 F.4th 877, 883–84 (6th Cir. 2023) (explaining the public records exception). The

Court’s own research suggests that the Permit, and other special use permits granted by the NPS, might be stored on

a government database, see NAT’L PARK SERV., National Park Service Research Permit and Reporting to System,

https://irma.nps.gov/RPRS/ (last visited Sept. 21, 2023), but it is not clear who can access this database or what

information the database provides to public users. Regardless, the Court need not decide if the Permit is a public

document because, for the reasons discussed below, the Court will consider the Permit because Paddock refers to the

Permit in its complaint and the Permit is central to some of Paddock’s claims. See Bassett, 528 F.3d at 430.

in its analysis without converting the United States’ 12(b)(6) motion into one for summary

judgment.

Generally, courts considering a 12(b)(6) motion must exclude “matters outside the

pleadings” if the motion to dismiss is not converted to a motion for summary judgment under Rule

56. See Fed. R. Civ. P. 12(d). The Sixth Circuit, however, recognizes some exceptions to this

general rule. See Bassett, 528 F.3d at 430. In Bassett, the Sixth Circuit held that when courts are

reviewing a 12(b)(6) motion they “may consider the [c]omplaint and any exhibits attached thereto,

public records, items appearing in the record of the case and exhibits attached to defendant's

motion to dismiss so long as they are referred to in the [c]omplaint and are central to the claims

contained therein.” See id. (citing Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)).

Although Bassett does not provide further guidance on when a document is “central to the

claims contained” within the complaint, subsequent cases demonstrate that consideration by a

district court can be permissible when an attached document informs or limits a party’s legal rights.

See, e.g., Clark v. Jackson, No. 22-5553, 2023 WL 2787325, at *1 (6th Cir. Apr. 5, 2023). In

Clark, the district court considered multiple exhibits that the defendant, an employer, attached to

its 12(b)(6) motion, before granting the motion to dismiss without converting it to a motion for

summary judgment. See id. The plaintiff, a former employee who refused to comply with the

employer’s COVID-19 vaccination requirements, challenged this consideration on appeal; the

Sixth Circuit affirmed in relevant part. See id. at *2. Among the exhibits the district court

considered were the defendant’s “employment policy and bylaws” because the “[plaintiff’s] claims

centered around employment actions taken by [the defendant].” See id. at *2. The plaintiff’s claims

were primarily rooted in alleged constitutional violations and the amended complaint did not

attach, or even directly reference, any of the defendant’s employment policies or bylaws. See

generally Amended Complaint, Clark v. Jackson, No. 21-cv-303, (E.D. Tenn. Feb. 08, 2022), Doc.

No. 15. Nonetheless, the Sixth Circuit held that the district court properly considered these

documents. See Clark, 2023 WL 2787325, at *3.

Other Sixth Circuit cases have followed this commonsense approach to considering

documents outside the pleadings. See, e.g., Stein v. HHGREGG, 873 F. 3d 523, 528 (6th Cir. 2017)

(considering a referenced compensation policy that was not attached to, or directly quoted in, the

complaint); Kassem v. Ocwen Loan Servicing, LLC, 704 F. App’x 429, 432–33 (6th Cir. 2017)

(considering documents transferring a security interest in a mortgage that were not attached to the

complaint because “the complaint refer[red] to numerous defects” in those documents).

Unsurprisingly, so have other courts within this district. See, e.g., MTD Prods. Inc. v. Am. Honda

Motor Co., Inc., 627 F. Supp. 3d 867, 876 (N.D. Ohio 2022) (considering emails attached to the

motion to dismiss because “[plaintiff] refer[red] to these emails in its complaint” and “these

specific emails [were] ‘central’ to [plaintiff’s] claims because they relate directly to [the disputed

agreement]”). To hold otherwise could permit a plaintiff to evade a Rule 12(b)(6) motion by not

attaching key documents. See Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997) (“Otherwise,

a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to

attach a dispositive document upon which it relied.”), abrogated on other grounds by Swierkiewicz

v. Sorema, 534 U.S. 506, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002).

Here, Paddock discusses the Permit at length in its amended complaint. For example,

Paddock provides a detailed description of why the Permit was needed (i.e., to conduct sampling

“to address important data gaps”) (Doc. No. 18 ¶¶ 173–75), the process of acquiring the Permit

and negotiating its scope (id. ¶¶ 173–184), the alleged failure of the United States to grant the

timely access promised in the Permit (id. ¶¶ 185–95), the process of sample collection governed

by the Permit (id. ¶¶ 196–202), and the costs Paddock claims it incurred implementing the Permit.

(Id. ¶¶ 204–06.) Paddock clearly referred to the Permit in its pleading.

The Permit is also central to Paddock’s claims. Paddock seeks to recover expenses under

CERCLA Section 107(a) for costs it “incurred to, among other things, prepare investigation plans,

secure access to Jaite Mill, conduct investigation activities, and analyze and report on those

activities to the United States[.]” (See Doc. No. 18 ¶ 205.) By Paddock’s own account, the

implementation of its “investigation activities” could not begin until it received permission from

the United States via a special use permit. (See id. ¶ 177 (recounting that “the United States agreed

that Paddock could collect samples from the Jaite Mill river bank [sic], provided that Paddock first

obtain the National Park Service’s approval of a Sampling and Analysis Plan (‘SAP’) on an

expedited basis and execute the National Park Service’s required Special Use Permit.”).)

Ultimately, the United States allowed Paddock to conduct sampling, but only under the

terms of the Permit and its incorporated SAP. (See id. ¶ 190 (“[The] SAP . . . set forth the locations

and process for Paddock to collect and analyze the river bank [sic] and overbank samples.”).) The

Permit determined when the samples would be collected, where the samples would be collected,

how the samples would be collected, and how the samples would be analyzed. More to the point,

the Permit also contained numerous provisions regarding who would, or would not, be liable for

these activities. (See, e.g., Doc. No. 21-2 ¶¶ 51, 52.) In its amended complaint, Paddock even refers

to the sampling as “SAP-approved[.]” (See Doc. No. 18 ¶¶ 197, 200.) This satisfies the centrality

requirements for the Court’s consideration on a Rule 12(b)(6) motion.

Having determined that the Permit is central to Paddock’s claims and can be considered on

the United States’ motion to dismiss, the Court turns to whether the plain language of the Permit

bars Paddock’s remaining claims for incurred costs in its first cause of action.

As an initial matter, the Court must determine what law governs the interpretation of the

Permit. Despite the general agreement among the parties that the Permit should be interpreted like

a contract,9 neither party suggests what contract law should be applied in this case (e.g., Ohio

contract law, federal common law, or the law of some other jurisdiction). The Permit itself is

similarly unhelpful on this question because the Permit does not contain a choice of law provision.

(See generally Doc. No. 21-2.) The Court is not aware of any Sixth Circuit case that has addressed

this specific issue for special use permits. Generally speaking, however, contracts between

government agencies and private parties are governed by federal law. See Bituminous Cas. Corp.

v. Lynn, 503 F.2d 636, 640 (6th Cir. 1974) (“[C]ontracts of the United States are governed by

federal law.”). And, under federal law, “where Congress has not adopted a different standard, it is

customary to apply the principles of general contract law.” Id. In the absence of any comment by

the parties or different standard provided by Congress, the Court shall interpret the Permit applying

the principles of general contract law.

Under these principles, “[w]here the words of a contract in writing are clear and

unambiguous, its meaning is to be ascertained in accordance with its plainly expressed intent.”

M&G Polymers USA, LLC v. Tackett, 574 U.S. 427, 435, 135 S. Ct. 926, 190 L. Ed. 2d 809 (2015)

(quoting 11 Williston on Contracts § 30:6 (4th ed. 2012)). Further, when the contract’s language

is clear and unambiguous, the parties’ intentions, and the contract’s meaning, should be derived

from the document’s words alone, without the assistance of extrinsic evidence. See Davis v.

Siemens Med. Sols. USA, Inc., 399 F. Supp. 2d 785, 792 (W.D. Ky. 2005) (applying Kentucky

9 Under some circumstances, special use permits issued by federal agencies are considered a revocable license instead

of a contract. See, e.g., Winterhawk Outfitters, Inc. v. United States, No. 12-133C, 2013 WL 12158146, at *2–4 (Fed.

Cl. Jan. 2, 2013) (discussing the distinction), aff'd, 534 F. App’x 996 (Fed. Cir. 2013). Here, however, neither party

suggests that the Permit was ever revoked, nor that the Court should interpret in a manner different than contract

interpretation. Thus, the Court interprets the Permit as a contract. (See Doc. No. 21-1, at 15; Doc. No. 24, at 14.)

law), judgment aff’d, 279 F. App’x 378 (6th Cir. 2008); Progressive Rail Inc. v. CSX Transp., Inc.,

981 F.3d 529, 532 (6th Cir. 2020) (“[W]e do not use words discovered through extrinsic evidence

to contradict the direct and most reliable evidence of the meaning of a contract: the words within

its four corners.”). To that point, courts will construe the contract “to effectuate its spirit and

purpose, giving reasonable meaning to all parts” of the contract. Hunt Constr. Grp., Inc. v. United

States, 281 F.3d 1369, 1372 (Fed. Cir. 2002) (citing Gould, Inc. v. United States, 935 F.2d 1271,

1274 (Fed. Cir. 1991)). Stated slightly differently, the contract “should be read to give effect to all

its provisions and to render them consistent with each other.” See Underwriters at Lloyds

Subscribing to Cover Note B0753PC1308275000 v. Expeditors Korea Ltd., 882 F.3d 1033, 1051

(11th Cir. 2018) (citing Restatement (Second) of Contracts § 203(a) (Am. Law Inst. 1981)).

Here, the Permit contains a number of provisions relating to waiving or transferring

liability, including that

• “This Permit is granted upon the express condition that the United States, its

agents and employees, shall be free from all liabilities and claims for damages

and/or suits for or by any reason, arising from or related to activities conducted

pursuant to this Permit, including any releases of Waste Materials (as defined

in Paragraph 39 of this Permit), injury, or death to any person or property of the

[Paddock], its contractors, subcontractors, agents or employees, or third parties,

from any cause or causes whatsoever while in or upon the Site or any part

thereof during the term of this Permit or occasioned by any use of the Site or

any activity carried on by [Paddock] or its contractors or subcontractors in

connection herewith, and [Paddock] hereby covenants and agrees to indemnify,

defend, save and hold harmless the United States, its agents and employees,

from all liabilities, charges, expenses and costs on account of or by reason of

any such injuries, deaths, liabilities, claims, suits or losses however occurring,

or damages arising from any acts related to this Permit.” (Doc No. 21-2 ¶ 12.)

• “[Paddock] assumes liability for all activities, releases, incidents and events

caused by or associated with any permitted activity, including any and all

releases of Waste Materials into the environment resulting from permitted

activities. [Paddock] assumes responsibility for costs, repairs, and/or restoration

to any areas damaged by such releases and/or discharges, whether those areas

are within the permitted area or not.” (Id. ¶ 35.)

• “The United States shall have no liability for any claims or causes of action in

any forum regarding any activities conducted pursuant to this Permit, including

but not limited to liability for claims or causes of action for property damage,

bodily injury, or death caused by Permittee's use of parklands in connection

with this Permit.” (Id. ¶ 49.)

There are also two provisions within the Permit which transfer certain costs from the

United States to Paddock. (See id. ¶¶ 27, 42.) The first relates to the cost of splitting and analyzing

samples (id. ¶ 27), and the second relates to expenses the government incurred for Paddock to

conduct its sampling, such as NPS employees overseeing the sampling. (Id. ¶ 42.)

Towards the end of the document, the Permit provides, most broadly, that “[Paddock]

covenants not to sue and agrees not to assert any defenses, claims or causes of action in any forum

against the United States with respect to any costs incurred by it or its contractors regarding any

activities conducted pursuant to this Permit.” (Id. ¶ 51.) Unlike the first three waiver paragraphs

quoted above, this broad covenant is not modified by a subsequent clause. (Compare id. ¶ 51, with

id. ¶¶ 12, 35, 49.)

Finally, the permit also contains a reservation of rights provision, which provides in

relevant part:

Notwithstanding [Paddock’s] acceptance of the conditions set forth in this Permit,

[Paddock] expressly reserves any and all rights, defenses, and claims that do not

relate solely to the activities conducted under this Permit, and this Permit shall not

be deemed to be a waiver of any rights, defenses, or claims that do not relate solely

to the activities conducted under this Permit.

(Id. ¶ 52 (“reservation of rights provision”).)

The plain language of the Permit prevents Paddock from suing the United States for its

costs for securing access to Jaite Mill, investigating at the site, and its subsequent analysis and

reporting. Through the Permit, Paddock covenanted not to sue and “agree[d] not to assert any

defenses, claims or causes of action in any forum against the United States with respect to any

costs incurred by it or its contractors regarding any activities conducted pursuant to this Permit.”

(Id. ¶ 51.) The meaning of this provision is clear and unambiguous: Paddock agreed not to bring

any claim or cause of action for any of the costs it incurred for the activities conducted pursuant

to the Permit.

As the United States correctly points out, the only “investigative activities” Paddock

discusses in its amended complaint were those conducted at Jaite Mill on November 11 and

November 17. (Doc. No. 21-1, at 17–18 (citing Doc. No. 18 ¶¶ 196, 199).) According to the

amended complaint, all these investigative activities were conducted pursuant to the Permit and

its associated SAP. (See, e.g., Doc. No. 18 ¶¶ 196, 200 (referring to the sampling locations as

“SAP-approved”).)

Relatedly, the only analysis and reporting Paddock alleges for these investigative activities

occurred between November 11, when the first sample was taken (id. ¶ 196), and November 28,

when the Paddock sent their data to the United States. (Id. ¶ 202.) These activities were also

governed by the Permit and its associated SAP (see Doc. No. 21-2 ¶¶ 27, 33), and thus are not

recoverable. (See id. ¶ 27 (“[Paddock] shall provide the NPS the opportunity to split all samples.

All costs associated with the splitting of samples, including analytical costs shall be borne by

Permittee.” (emphasis added)).)

As to the final group of expenses, the costs that Paddock alleges it incurred to “secure

access to Jaite Mill,” these are limited to the creation and finalization of the SAP. (See Doc. No.

18 ¶ 177.) Without the SAP, which governed the activities at Jaite Mill, the Permit would be

meaningless. (See Doc. No. 21-2 ¶ 2.) The Permit itself does not detail when Paddock can enter

Jaite Mill, where it can go, or how it can physically collect samples. (See generally id.) This

information was contained within the incorporated SAP. (See id. (“The issuance of this Permit will

grant [Paddock] access to conduct those activities necessary to perform the work set forth in the

attached statement of work entitled [SAP] for the area of the park delineated in the SAP[.]”).)

Thus, the SAP was required by the Permit and any expenses creating or finalizing this document

were incurred pursuant to the Permit.

The reservation of rights provision does not save Paddock’s claims for any of these costs.

Paddock suggests that “[b]ecause Paddock’s CERCLA cost recovery claim ‘do[es] not relate

solely to the activities conducted under’ the [Permit] on November 11 and 17, 2018, Paddock’s

CERCLA cost recovery claim—in its entirety—falls within the [Permit’s] reservation of rights

provision.” (Doc. No. 24, at 16.) This interpretation of the Permit would allow Paddock to bring

“claims” for “necessary costs of response” that would otherwise be barred by the Permit so long

as the “claim” includes additional, noncovered, expenses. (See id.)

Paddock’s interpretation requires the terms “claim” and “cause of action” to be

interchangeable. Although “claim” can generally be used to refer to a “cause of action”

colloquially,10 provisions within the Permit suggest that “claim” has a meaning distinct from

“cause of action” as used in the Permit. First, two provisions within the Permit list “claims” and

“causes of action” separately, which, under the general rules of contract interpretation, requires

each term to have a separate meaning. (See Doc. No. 21-2 ¶¶ 49, 51.) See Tabernacle–The New

Testament Church v. State Farm Fire & Cas. Co., 616 F. App’x 802, 808 (6th Cir. 2015) (“Courts

must give effect to all words, phrases, and clauses in interpreting a contract, avoiding

10 For example, in their briefing for the instant motion, both parties frequently refer to Paddock’s first cause of action

as a claim. (See Doc. No. 24, at 16; see also Doc. No. 28, at 4 (urging the Court to “dismiss Paddock’s CERCLA

claim under §107(a)(1).”).)

interpretations that would render any part of the contract surplusage or nugatory.”). To interpret

the term otherwise would render the phrase “cause of action” useless within those provisions.

More, the phrase “causes of action” is notably missing from the Permit’s reservation of

rights provision, which further suggests the two phrases have distinct meanings. (See Doc. No. 21-

2 ¶ 52 (listing only “rights, defenses, or claims”).) As a final point, when the term “claims” is used

as a noun, it can be defined as “a right to something[,]” such as a right to recovery for group of

related expenses. See e.g., MERRIAM-WEBSTER DICTIONARY ONLINE, https://www.merriam-

webster.com/dictionary/claim (last visited Sept. 21, 2023). This common parlance definition is

also common in legal writings. See, e.g., Phelps v. Lengyel, 237 F. Supp. 2d 829, 838 (N.D. Ohio

2002) (discussing the three imbedded “claims” within a single cause of action). With all this in

mind, the Court finds that the Permit does not define “claims” the same as “cause of action” and

that, under the Permit’s language, a single cause of action can contain multiple “claims.”

Thus, according to the terms of the Permit, Paddock’s first cause of action contains four

claims, as it is defined within the Permit. First, there is a claim for incurred expenses to “secure

access to Jaite Mill[.]” (Doc. No. 18 ¶ 229.) Next, Paddock has a claim for incurred expenses to

“conduct investigation activities” at Jaite Mill. (Id.) Third, Paddock has a claim for incurred

expenses to “analyze and report on those [investigative] activities to the United States[.]” (Id.)

And, finally, Paddock has a claim for incurred costs “pursu[ing] liable parties[.]” (Id.) The fact

that Paddock chose to bring all these claims together within a single cause of action does not side-

step the Permit’s covenant not to sue. Allowing such a result would effectively render multiple

provisions of the Permit meaningless, including Paddock’s broad covenant not to sue, because it

would allow Paddock to bring a variety of claims against the United States for activities it promised

it would not, so long as it packaged those expenses with other, noncovered, expenses.11 The Court

finds this interpretation unreasonable and declines to adopt it. See, e.g., Waste Mgmt., Inc. v. Rice

Danis Indus. Corp., 257 F. Supp. 2d 1076, 1083 (S.D. Ohio 2003) (“Of course, a contract must

not be interpreted in a manner which leads to an absurd result.”).

Beyond its interpretative arguments, Paddock also claims that the United States confirmed

that it understood the expansive breath of the reservation of rights provision. (See Doc. No. 18 ¶¶

179–83.) Paddock asserts that during a phone call on October 25, 2018, “the United States

indicated that it understood Paddock’s intent in adding the express reservation of rights provision

to the [Permit], and that Paddock’s express reservation of rights provision was acceptable.” (Id. ¶

182.) This argument is also unavailing. Even accepting Paddock’s allegations as true, the Permit’s

clear and unambiguous language prevents the Court from considering extrinsic evidence in its

analysis. See Cogent Sols. Grp., LLC v. Hyalogic, LLC, 712 F.3d 305, 310 (6th Cir. 2013) (“If a

contract is not ambiguous, it will be enforced strictly according to its terms, and a court will

interpret the contract's terms by assigning language its ordinary meaning and without resort to

extrinsic evidence.”) (applying Kentucky law) (internal quotation marks omitted). See Progressive

Rail Inc., 981 F.3d at 532. This prohibition covers the parties’ October 25, 2018 phone call. For

this reason, Paddock’s extrinsic evidence does not change the clear, unambiguous meaning of the

reservation of rights provision.

Because the Court finds that Paddock’s costs for “secur[ing] access to Jaite Mill,

conduct[ing] investigation activities [and] analyz[ing] and report[ing] those activities to the United

States” were incurred “pursuant to” the Permit, and that these claims are not covered under the

11 Here, the “noncovered” expenses are the pursuit costs, which have been dismissed.

reservation of rights provision, these cost claims must be dismissed from Paddock’s first cause of

action.

Having dismissed Paddock’s claims for pursuing other potentially liable parties and for

securing access to Jaite Mill, investigation activities, and associated analysis and reporting, the

Court grants the United States’ motion to dismiss Paddock’s first cause of action in its entirety.

B. Request for Declaratory Relief

In its second cause of action, Paddock requests an “entry of a declaratory judgment that the

United States is liable for Paddock’s future necessary response costs, other costs, and damages

incurred at or in connection with Jaite Mill, including but not limited to necessary response costs

to address hazardous substances at Jaite Mill.” (Doc. No. 18 ¶ 240.) Paddock contends it is entitled

to this relief pursuant to CERCLA Section 113(g)(2), codified at 42 U.S.C. § 9613(g)(2), and 28

U.S.C. § 2201.12 (Id. ¶ 238.) In its motion to dismiss, the United States contends that if the Court

dismisses Paddock’s first cause of action (which it has), “it must also dismiss Paddock’s

declaratory judgment claim.” (Doc. No. 21, at 25.) In a footnote, the United States attempts to

clarify this assertation, stating, “Paddock separately requests declaratory relief as to its CERCLA

113(f)(1) [contribution] claim. The United States moves to dismiss only Paddock’s request for

declaratory relief as it relates to Paddock’s claim under CERCLA 107(a) [cost recovery].” (Id. at

25 n.8.) Paddock’s opposition does not directly address these arguments; instead, it contends “[a]s

Paddock’s CERCLA cost recovery claim survives, so too does Paddock’s declaratory judgment

claim.” (See Doc. No. 24, at 19.)

12 To the extent that Paddock seeks to recover any costs its already incurred under this cause of action (see Doc. No.

18 ¶ 240), such recovery is barred as a matter of law. The plain language of this section allows for the recovery of

“further response costs or damages[,]” not previously incurred costs. See 42 U.S.C. § 9613(g)(2) (emphasis added).

CERCLA Section 113(g)(2) provides that “in any such action described in [section 9607],

the court shall enter a declaratory judgment on liability for response costs or damages that will be

binding on any subsequent action or actions to recover further response costs or damages.” 42

U.S.C. § 9613(g)(2). Section 9613(g)(2) is titled “Actions for recovery of costs[,]” and it is

immediately followed by a subsection titled “Contribution[.]” 42 U.S.C. § 9613(g)(3). Unlike the

cost recovery subsection, the contribution subsection is silent on declaratory relief. See id.

Although the declaratory judgment language from the “recovery of costs” subsection is

absent in the contribution subsection, the Sixth Circuit requires the two claims “be treated alike.”

GenCorp, Inc. v. Olin Corp., 390 F.3d 433, 451 (6th Cir. 2004). In GenCorp, the court held that

the two subsections “‘work in conjunction’ with the liability provisions of § 107(a), as ‘parties

seeking contribution’ must turn to ‘§ 107 to establish the basis and elements of liability of the

defendants.’” Id. (quoting Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344,

350 (6th Cir. 1998)). Thus, although Paddock’s first cause of action has been dismissed, its

unchallenged third cause of action for contribution under CERCLA Section 113(f)(1) is sufficient

on its own to maintain a cause of action for declaratory judgment under CERCLA Section

113(g)(2). See, e.g., Hobart Corp. v. Dayton Power & Light Co., No. 3:13-cv-115, 2017 WL

6335911, at *3–4 (S.D. Ohio Dec. 11, 2017) (citing to GenCorp and refusing “to stay the issuance

of a declaratory judgment concerning their liability for future response costs incurred” for a

CERCLA contribution claim).

For the foregoing reasons, the United States’ motion to dismiss is denied to the extent that

it requested the dismissal of Paddock’s second cause of action.

IV. CONCLUSION

For the reasons set forth herein, the United States motion to dismiss is GRANTED IN

PART AND DENIED IN PART. Paddock’s first cause of action (recovery of costs under

CERCLA Section 107(a)) is dismissed. This case will proceed with Paddock’s second cause of

action (declaratory judgment under CERCLA Section 113(g)(2)) and Paddock’s third cause of

action (contribution against the United States under CERCLA Section 113(f)(1)). Additionally, all

three of the United States’ counterclaims against Paddock remain.

IT IS SO ORDERED.

Dated: September 21, 2023 bt & “

HONORABLE SARA LIOI

CHIEF JUDGE

UNITED STATES DISTRICT COURT

28