Petition for Writ of Certiorari — Philadelphia Electric Co. v. Hercules Inc.

ms ‘ | Supreme Court, U.S.

7 ao sate 7 t F ILED

SEP 18

No. JOSEPH F. SPANIOL, JR.

CLERK

IN THE »

SUPREME COURT OF THE UNITED STATES

October Term, 1985

PHILADELPHIA ELECTRIC COMPANY,

Petitioner-Appellant

v.

HERCULES INCORPORATED,

Respondent-A ppellee

and

GOULD, INC.

ON WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Patrick W. Kittredge, Esquire

Joseph M. Donley, Esquire

KITTREDGE, KAUFMAN & DONLEY

800 North American Building

121 South Broad Street

Philadelphia, PA 19107

(215) 732-2700

Counsel of Record for Petitioner

Robert Emmet Hernan, Esquire

Co-Counsel for Petitioner

PACKARD PRESS / LEGAL DIVISION, 10th & SPRING GARDEN STREETS, PHILA. PA. 19123 (215) 236-2000

18

ah wh

QUESTIONS PRESENTED FOR REVIEW ~

1. Does physical damage to Petitioner’s property

constitute an injury in fact and, therefore, satisfy the fed-

eral constitutional requirement of standing for Petitioner

to sue the party responsible for the damage?

2. Does physical damage to Petitioner’s property re-

sulting from pollution constitute a particularized harm of

a kind different from that suffered by members of the

public and, thus, give Petitioner a claim for relief under

public nuisance?

3. Does a present owner of land have the right to

sue, for indemnification, a former owner of the same

land who polluted the land, the groundwater beneath

and the Delaware River adjacent to the land, when the

present owner was required by law to abate tiie pollu-

tion?

PARTIES TO THE PROCEEDING BELOW

The petition to this Court for a writ of certiorari to the

United States Court of Appeals for the Third Circuit is

sou Tht by Philadelphia Electric Company, the plaintiff

before the District Court for the Eastern District of Penn-

sylvania and the appellee before the United States Court

of Appeals for the Third Circuit. Respondent Hercules

Incorporated was a defendant before the District Court,

and appellant before the Third Circuit Court. Gould, Inc.

was a defendant before the District Court.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW...... eA

PARTIES TO THE PROCEEDING BELOW...... ii

EE Re ea 1

Te 2

CONSTITUTIONAL PROVISIONS INVOLVED... 2

BRA eeEINE GOP EOEE CAGE 2... cess ccc c cence: 3

REASONS FOR GRANTING CERTIORARI...... 6

I. The Third Circuit Court Of Appeals Erred In

Holding That Petitioner Lacked Standing To

Maintain An Action For Public Nuisance.... 6

Il. Petitioner Has Stated A Claim For Relief Un-

Se ne ceaeesesasses 17

Ill. The Third Circuit Erred In Holding That Pe-

titioner PECO Is Not Entitled To Indemnifi-

cca nes uantesnce 22

EE 26

ee Go 27

APPENDIX (separately bound)

TABLE OF AUTHORITIES

Cases: Page

Akau v. Olomana Corporation, 65 Hawaii 383

CRED Ce ect cues aw eke These <x Santetenasaes 22

Association of Data Processing Service Organiza-

tions, Inc. v. Camp, 397 U.S. 150 (1970). ... 6, 10

Baker v. Carr, 369 U.S. 186 (1962)............ 9,15

Barlow v. Collins, 397 U.S. 159 (1970). .......... 10

Bell v. Hood, 327 U.S. 678 (1946) ............... 15

Builders Supply Co. v. McCabe, 366 Pa. 322, 77 A.2d

PREC a ok tava cunts coneethateVeanses 23

Burgess v. M/V Tamano, 370 F. Supp. 247 (D.Me.

1973), affd., 559 F.2d 1200 (1st Cir. 1977)... 19,

20, 21

County Court of Ulster County v. Allen, 442 U.S.

by BRU ape i at Mier eerie eee 9

Flast v. Cohen, 392 U.S. 83 (1968) .............. 8,9

Frady v. Portland General Electric Cc., 637 P.2d

ee as HE UES ocak uw cesiswdacebinn 22

Frothingham v. Mellon, 262 U.S. 447 (1923) ..... 9

Heinl v. Pecher, 330 Pa. 232, 198 A. 797 (1938) .. 22

McCarney v. Ford Motor Company, 657 F.2d 230

ac hc eho e cc ck Ueki oaks oun 15, 16

Mixter v. Mack Trucks, Inc., 224 Pa. Super. 313,

Me PE OUPOED. 4 ov cc nsavsccuckcasaawas 23

\National Wood Preservers, Inc. v. Commonwealth

Department of Environmental Resources, 489

Pe Bee. ee CU Oe CI hh vin Ne Kacewn cucu 24

Schlesinger v. Reservists Committee to Stop the

rey, GE SiG, Bee CETUA 5 sass cacuskss 8, 10, 18

iv

TABLE OF AUTHORITIES—(Continued )

Cases: Page

Sierra Club v. Morton, 405 U.S. 727 (1972)...... 10

Tennessee Electric Power Company v. TVA, 306

6 Be 3) ee reer ere rere 9

Tileston v. Ullman, 318 U.S. 44 (1943) .......... 8

United States v. Richardson, 418 U.S. 166 (1974). 8,

10, 18

Valley Forge Christian College v. Americans United

for Separation of Church and State, Inc., 454

ee Te PeeT ee ere err ere 6

Village of Arlington Heights v. Metropolitan Hous-

ing Development Corporation, 429 U.S. 252

1 Serre er ee eee ere 7, 10

Warth v. Seldin, 422 U.S. 490 (1975)........ 7, 8, 16

Constitution:

Sh a I: Fs aka cceecackauacaeeaeenee 2,7

Statutes:

Clean Streams Law, 35 Pa.C.S.A. § 691.1, et seq.

i. 8 gg re ee 4, 22, 23, 24

Miscellaneous:

Wright, The Law of Federal Courts, § 13 (4th ed.

ER ee ae ee ee ede 7, 10, 11, 15

Restatement (Second) of Torts, § 821C (1965). 17, 18

Prosser, Private Action for Public Nuisance, 52

We Rie ee Cee av CA ea dew ew ees 18, 22

Prosser and Keeton on Torts § 90 (5th ed. 1984).. 18

Restatement of Restitution §§ 95, 96 (1937)...... 23

Case No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

PHILADELPHIA ELECTRIC COMPANY,

Petitioner-Appellant

v.

HERCULES INCORPORATED,

Respondeni-aAppeliee

and

GOULD, INC.

ON WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

PETITION FOR WRIT OF CERTIORARI

OPINIONS BELOW

The opinion of the District Court for the Eastern Dis-

trict of Pennsylvania, denying Respondent’s Post-Trial

Motions, is reported at 587 F. Supp. 144 (E.D.Pa. 1984)

and is set forth in the Appendix, at 33, for this Court's

convenience.

The opinion of the Court of Appeals for the Third

Circuit is reported at 762 F.2d 303 (3d Cir. 1985) and is

1

2

set forth in the Appendix, at 1, for this Court’s conve-

nience.

JURISDICTION

The judgment of the Court of Appeals for the Third

Circuit was entered on May 28, 1985. Petitioner Phila-

delphia Electric Company timely filed a petition for re-

hearing, which petition was denied on June 21, 1985.

The jurisdiction of this Court is invoked pursuant to 28

U.S.C. §1254(1).

CONSTITUTIONAL PROVISIONS INVOLVED

This case involves, in part, an interpretation of Ar-

ticle III, Section 2 of the United States Constitution

which provides, in relevant part, that:

The judicial Power shall extend to all Cases, in Law

and Equity, arising under this Constitution, the

Laws of the United States, and Treaties made, or

which shall be made, under their Authority; — to all

Cases affecting Ambassadors, other public Ministers

and Consuls; — to all Cases of admiralty and mari-

time Jurisdiction; — to Controversies to which the

United States shall be a Party; — to Controversies

between two or more States; — between a State and

Citizens of another State; — between Citizens of dif-

ferent States; — between Citizens of the same State

claiming Lands under Grants of different States, and

between a State, or the Citizens thereof, and foreign

States, Citizens or Subjects.

3

STATEMENT OF THE CASE

This lawsuit resulted from the pollution of a certain

parcel of property located in Chester, Pennsylvania. In

the years from 1945 to 1971 Pennsylvania Industrial

Chemical Corporation (“PICCO”) operated a synthetic

hydrocarbon resin manufacturing and processing plant

on the property in Chester, Pennsylvania (“Chester

site”). The property lay adjacent to the Delaware River

and at the time PICCO acquired the Chester site an inlet

was located at the south end of the Chester site which

opened into the Delaware River. Sometime after acquir-

ing the Chester site, but during the period of time when

PICCO conducted its resin manufacturing operation at

the Chester site, PICCO filled in the shoreline at or about

the inlet, thereby creating a lagoon or lake (“PICCO

Lake”); PICCO also filled in other low lying areas on the

property. During the course of its ownership and control

of the Chester site, PICCO buried, depusited or placed

resins, resin-laden materials and/or other by-products

and chemicals used in its operation in the PICCO Lake

and in various locations about the Chester property.

In 1971 PICCO ceased its operations at the Chester

site and sold the property to Gould, Inc. (“Gould”). Gould

did not conduct any operations at the Chester facility,

other than leasing certain tanks to ABM Disposal Ser-

vices Company (“ABM”). ABM did not store or dispose of

resins or resinous by-products at the Chester site. In

1974 Gould sold the Chester site to Petitioner Philadel-

phia Electric Company (“PECO”). PECO has owned the

property since 1974, and while PECO has leased sec-

tions of the property to third parties,' it has not under-

taken any operations on the site.

In 1972, Hercules Incorporated (“Hercules”) ac-

quired PICCO, including PICCO’s operations in West-

ern Pennsylvania and Louisiana. As part of the

1. None of these third parties conducted resin manufacturing

or storage operations.

4

acquisition of PiCCO, Hercules expressly assumed “ail

of the debts, obligations and liabilities of PICCO,” with

certain exceptions not applicable to the instant claim.

Then, in 1980, the Pennsylvania Department of En-

vironmental Resources (“DER”) discovered that resin-

ous materials were leaching from the banks of the

Delaware River at the Chester site, and that the PICCO

Lake was contaminated with resinous materials. On Au-

gust 22, 1980, DER issued a citation against PECO, as

owner of the property, for violation of the Pennsylvania

Clean Streams Law, 35 Pa.C.S.A. §691.01 (Purdon

1977). The citation required PECO to abate the polluting

condition at the Chester site, including the pumping of

the PICCO Lake and the removal of soil contaminated by

the resinous materials. After further investigation by

PECO and DER, PECO removed the resinous materials

from the site at a cost in excess of $340,000.00.

Thereafter, PECO instituted a Complaint against

Hercules? alleging that the contamination caused by

PICCO, in dumping its resinous materials, had polluted

PECO’s property, including the soils at the property; that

the contamination continued to pollute the groundwater

underneath the Chester site and had leached onto the

banks of and into the Delaware River; and that PECO

had been required by DER to abate the pollution. Juris-

diction was founded on diversity of citizenship.

Prior to trial and pursuant to Cross-Motions for Sum-

mary Judgment on the issue of Hercules’ liability for

PICCO’s actions, the District Court held that Hercules

had expressly assumed PICCO’s liabilities and that

Hercules’ acquisition of PICCO constituted a de facto

merger, which also imposed liability upon Hercules for

PICCO’s conduct.

2. PECO also sued Gould, Inc., from whom it purchased the

property, on the ground that Gould had failed to disclose the latent

contamination. Prior to trial, and as a result of the discovery process,

PECO determined its case against Gould was quite weak and settled

with Gould for a nominal sum.

5

A jury trial commenced on June 29, 1983 and en-

compassed three days. During the course of that trial,

PECO submitted expert evidence which virtually

“fingerprinted” the pollutants found on the site as

PICCO products. At the conclusion of the trial, the jury

found, by Special Interrogatories, that PICCO caused

the contamination of the Chester site and that the con-

tamination was continuing to pollute the groundwater or

the Delaware River (Appendix, at 57). Based on the

jury’s answers to the Special Interrogatories, the Court

then entered a judgment against Hercules for the clean-

up costs of $345,906.69, together with delay damages as

provided by Pennsylvania Rule of Civil Procedure 238,

and the Court required Hercules to abate the continuing

contamination found by the jury to be present on and

about the Chester site.

Hercules filed a Motion for Judgment Notwithstand-

ing the Verdict or, In the Alternative, for a New Trial, on

various grounds, including that the District Court had

erred in holding Hercules liable for the conduct of

PICCO, and that PECO had failed to state a claim for

relief for private or public nuisance. The District Court

denied Hercules’ Post-Trial Motions and Hercules ap-

pealed to the Third Circuit Court of Appeals (Appendix,

at 33).

On May 28, 1985, the Third Circuit Court of Appeals

affirmed the District Court’s determination that

Hercules had expressly assumed the liabilities of PICCO

and, additionally, that the acquisition of PiCCO by

Hercules constituted a de facto merger, thereby impos-

ing liability on Hercules for the contamination caused by

its predecessor in interest, PICCO. However, the Third

Circuit Court of Appeals also held that PECO failed to

state or prove a claim for relief for private nuisance, that

PECO had no standing to sue for relief under public nui-

sance, and that PECO was not entitled to relief for in-

demnification (Appendix, at 16-31).

6

PECO timely filed a Petition for Rehearing in Banc

with the Third Circuit on the grounds that PECO did

have standing to maintain an action for public nuisance

and that PECO was entitled to indemnification from

Hercules. On June 21, 1985, the Third Circuit Court of

Appeals denied PECO’s Petition for Rehearing (Appen-

dix, at 55).

REASONS FOR GRANTING CERTIORARI

I. The Third Circuit Court Of Appeals Erred In Holding

That Petitioner Lacked Standing To Maintain An

Action For Public Nuisance

The Third Circuit Court of Appeals’ decision in this

_ case contravenes the well-established rulings of the Su-

preme Court on the fundamental, federal constitutional

issue of standing. Regardless of what uncertainties exist

at the boundaries of the issue of standing, this Court has

never waivered from the central position that a plaintiff

which alleges an “actual injury” satisfies the constitu-

tional mandate that a federal court exercise its power

only over a “case” or “controversy.” Valley Forge Chris-

tian College v. Americans United for Separation of

Church and State, Inc., 454 U.S. 464 (1982); Associa-

tion of Data Processing Service Organizations, Inc. v.

Camp, 397 U.S. 150 (1970). Yet, the Third Circuit has

held otherwise.

The Third Circuit found, in the instant case, that the

owner of a property polluted by chemicals has no stand-

ing to sue, for damages and injunctive relief, the former

owner of the property which caused the pollution, de-

spite the uncontroverted facts that the property itself, the

groundwater and an adjacent river were damaged by the

pollution, the present owner spent over $340,000 to

abate the pollution, and the pollution was continuing to

cause damage. This unprecedented ruling by the Third

Circuit turns the standing requirement on its head and

is violative of Petitioner’s federal constitutional right to

7

prosecute its claim in the federal courts. Moreover, the

Third Circuit’s ruling that Petitioner PECO had no

standing to sue for a public nuisance neither estops, nor

bars, Petitioner from relitigating its claims against

Hercules, since such a ruling does not constitute a de-

cision on the merits of Petitioner’s claims. This Supreme

Court, in its supervisory role, cannot permit such uncer-

tainty to prevail in the Circuit Courts.

The question as to standing is required by the

United States Constitution, Article III, Section 2, limi-

tation which restricts federal court jurisdiction only to

“cases” or “controversies.” Whether a plaintiff will be ac-

corded standing to litigate its claim in a federal court de-

pends upon whether the plaintiff has “ ‘alleged such a

personal stake in the outcome of the controversy’ as to

warrant [its] invocation of federal-court jurisdiction and

to justify exercise of the court’s remedial powers on [its]

behalf.” Warth v. Seldin, 422 U.S. 490, 498-99 (1975),

citing Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7

L.Ed. 663 (1962).

Moreover, since standing is an element of the federal

constitutional concept of “case” and “controversy,” “the

federal courts must reach their own decisions without

regard to what the state law in point may be.” WRIGHT,

THE LAW OF FEDERAL COURTS, §13 at 60 (4th ed.

1983). As Justice Powell noted in Village of Arlington

Heights v. Metropolitan Housing Development Corpora-

tion, 429 U.S. 252 (1977): “|s]tate law of standing, how-

ever, does not govern such determinations in the federal

courts. The constitutional and prudential considerations

canvassed at length in Warth v. Seldin ... respond io

concerns that are peculiarly federal in nature.” 429 U.S.

at 262, n. 8 (citation omitted).

While this Supreme Court has applied “prudential”

lirnits on who may invoke federal jurisdiction, in addition

to the Article III constitutional mandate of a “personal

stake in the outcome of the controversy,” such limits

have been applied only in two particular and narrowly

8

defined circumstances, neither of which is applicable to

the instant case. First, a plaintiff may be precluded from

litigating a claim in federal court if the asserted harm is

in the nature of a generalized grievance shared in sub-

stantially equal measure by all or a large class of citizens

because of the necessarily abstract nature of the injury

all citizens share.? Thus, in Schlesinger v. Reservists

Committee to Stop the War, 418 U.S. 208 (1974), a Com-

mittee of Reservists and five individuals were held not to

have standing to claim that armed forces reserve mem-

berships of members of Congress violated the incompat-

ibility clause of the Constitution because, as citizens,

their claim involved only the generalized interest of all

citizens and, thus, their claim constituted a mere ab-

stract injury rather than a concrete injury. In addition, as

taxpayers, thcir claims failed to satisfy the demands of

Flast v. Cohen, 392 U.S. 83 (1968). See also United

States v. Richardson, 418 U.S. 166 (1974). Second, a

plaintiff may be precluded from federal court litigation if

such plaintiff attempts to assert the legal rights or inter-

ests of third parties. See, e.g., Tileston v. Ullman, 318

U.S. 44 (1943).

As indicated by this Court in Warth v. Seldin, supra,

these “prudential” limitations, above and beyond the

constitutional requirement, have been judicially im-

posed out of concern that:

[w]ithout such limitations — closely related to

Art. III concerns but essentially matters of judi-

cial self-governance — the courts would be

called upon to decide abstract questions of wide

3. While it will be seen later that the language of this analysis

is superficially similar to the analysis of the merits of Petitioner’s

claim under publi nuisance, and that this superficial similarity may

have led the Third Circuit astray, the requirements of standing are

federal in r.ature while the requirements of a claim for public nui-

sance are state-law dcierminative. And in the difference therein

hangs the Third Circuit’s self-created confusion.

9

public significance even though other govern-

mental institutions may be more competent to

address the questions and even though judicial

intervention may be unnecessary to protect in-

dividual rights.

422 U.S. at 500. Such concerns derive from the federal

judiciary’s reluctance to intrude into areas of public in-

terests more properly the province of the legislative or

executive branches of government. County Court of Ul-

ster County v. Allen, 442 U.S. 140 (1979).

In the instant case, which involves a dispute be-

tween private parties over a concrete injury to private

property, such concerns are irrelevant. Thus, the

“prudential” limitations imposed on the issue of standing

are not implicated by the facts of the instant case, and so

this Supreme Court need only consider whether Peti-

tioner has satisfied the constitutional requirement of

standing.

Standing, in the constitutional sense, is “an aspect of

justiciability . . . surrounded by the same complexities

and vagaries that inhere in justiciability.” Flast v. Cohen,

392 U.S. at 98. And since the issue of justiciability goes

to the heart of a federal court’s existence, i.e. its power to

hear cases, the constitutional dimension of the issue, and

its articulation, has ebbed and flowed to some extent

with the historical tides of a federal court’s power vis-a-

vis the legislative and executive branches of govern-

ment. Thus, in the period prior to the 1960s a restrictive

view of standing prevailed and a “direct injury” or “legal

right” standard applied. See, e.g., Tennessee Electric

Power Company v. TVA, 306 U.S. 118 (1930);

Frothingham v. Mellon, 262 U.S. 447 (1923). During the

1960s, a line of cases expanded the notion of standing

and, therefore, access to federal courts, so long as a plain-

tiff could show “injury in fact”, or a personal stake in the

outcome of the controversy in order to assure a concrete

adverseness. See, e.g., Flast v. Cohen, supra; Baker v.

10

Carr, 369 U.S. 186 (1962). As the doctrine of standing

evolved, private parties were also granted standing to

contest federal administrative actions so long as they suf-

fered an “injury in fact” as a result of the challenged

action and their interest was within the zone of interests

to be protected or regulated by the statute or constitu-

tional guarantee in question. See, e.g., Sierra Club v.

Morton, 405 U.S. 727 (1972); Association of Data Pro-

cessing Service Organizations, Inc. v. Camp, supra;

Barlow v. Collins, 397 U.S. 159 (1970). But also, in the

1970s, and continuing into the present decade, a con-

traction of standing has occurred. See, e.g., United States

v. Richardson, supra; Schlesinger v. Reservists Commit-

tee to Stop the War, supra. These cases, “building

heavily on a renewed emphasis on separation of powers

principles, make it clear that a direct injury, and not

merely a general interest common to all members of the

public, is required for standing.” WRIGHT, LAW OF

FEDERAL COURTS, §13, at 67 (4th ed. 1983).

In spite of the complexities and vagaries which may

exist at the borders of the doctrine of standing, the cen-

tral theme of the doctrine of standing has remained

fixed: A plaintiff which has suffered an injury in fact, is

accorded standing by the federal constitution to seek re-

dress in a federal court. Or, in perhaps the clearest and

most succinct articulation of the constitutional standard,

“(t]he plaintiff must show that he himself is injured by

the challenged action of the defendan:.” Village of

Arlington Heights v. Metropolitan Housing Develop-

ment Corporation, 429 U.S. 252 (1977).

When private plaintiffs assert a right to contest a fed-

eral statute or federal administrative agency action, such

plaintiffs must demonstrate their interest in, and the ef-

fect on them of such statute or action in order to satisfy

the standing requirement. But, when the claims before

the federal court are asserted by one private party against

another private party for damages to private property re-

sulting from, and for injunctive relief against, the

11

defendant’s conduct, the issue of standing is rarely ad-

dressed because standing to bring the lawsuit is

uncontrovertible:

[t]he law of standing is almost exclusively con-

cerned with such public law questions as deter-

minations of constitutionality and review of

administrative or other governmental action. In

theory, of course, it is not so limited. The person

suing for breach of contract or for a tort must

satisfy the court that he has standing to bring

such a suit, but in practice such suits are

brought only by a person harmed by the sup-

posed wrong and his standing to sue is

self-evident.

WRIGHT, LAW OF FEDERAL COURTS, §13, at 60

(4th ed. 1983). Yet, the holding by the Third Circuit

Court of Appeals in the instant case certainly distorts and

confuses what otherwise was a clear corollary of the doc-

trine of standing in the federal courts.

The Third Circuit has held in effect in this case that

even if a private party plaintiff alleges, and proves, that it

has suffered monetary damages, in excess of $340,000,

as a result of the private defendant’s conduct, neverthe-

less such a plaintiff has no constitutional right to stand

in federal court to seek redress of its complaints. On its

face, such a holding destroys the axis around which the

doctrine of standing turns. It is a holding which violates

Petitioner’s rights under the federal constitution, and it

flies in the face of every decision on standing enunciated

by the Supreme Court. ;

Even looking beyond the face of the decision, the

holding cannot withstand constitutional scrutiny as a

simple recital of the pertinent facts of the case reveais.

Petitioner owned land in Chester, Pennsylvania which

land bordered the Delaware River. In 1980 it was dis-

covered that the land (private property), the groundwa-

ter beneath the land and the Delaware River adjacent to

12

the land (public property) had been contaminated as a

result of the industrial practices of a former owner of the

land. Petitioner attempted to abate the pollution, at a cost

in excess of $340,000, and pursuant to the express re-

quirements of Pennsylvania law and at the direction of

the Pennsylvania Department of Environmental Re-

sources. Petitioner then brought the instant lawsuit

against Respondent, the party responsible for the pollu-

tion, claiming that Respondent’s conduct constituted a

private and/or public nuisance.

A jury found that Respondent was responsible for

the pollution of Petitioner’s property and that, indeed, the

pollution was continuing to contaminate the groundwa-

ter beneath the property or the Delaware River adjacent

to the property. See Jury Answers to Special Interroga-

tories, Appendix, at 57. The District Court entered judg-

ment on the jury’s verdict and ordered Respondent to

abate the continuing pollution. Respondent then filed

Post-Trial Motions with the District Court on the

grounds, in part, that Respondent had not assumed the

liabilities of PICCO, and that Petitioner had failed to state

a claim for relief for private or public nuisance. The Dis-

trict Court denied Respondent’s Post-Trial Motions (Ap-

pendix, at 33).

On appeal the Third Circuit affirmed the District

Court’s ruling that Respondent was responsible, as a

successor corporation, for the acts of PICCO, the polluter

‘Appendix, at 8-16). The Third Circuit also hel’ that Pe-

titioner had failed to plead, or prove, a cause of action in

private nuisance (Appendix, at 16-22).

The Third Circuit then turned its consideration to —

Petitioner’s public nuisance theory of recovery and pos-

ited: “[t]he question before us is whether PECO has

standing to bring an individual action for damages or

injunctive relief for interference with a public right.”

(Appendix, at 24, emphasis added).

The Court’s answer to the question can be formu-

lated, in summary fashion, as follows:

swe

13

[tlo recover for public nuisance a party must

have been exercising a right common to the

public, which right was interfered with by

Respondent’s conduct.

Petitioner was not actually using the Delaware

River, the use of which waters constituted the

public right.

Therefore, Petitioner had no standing to sue Re-

spondent.

Nowhere in this implied syllogism nor in the expo-

sition of the Third Circuit’s holding is there any consid-

eration of whether Petitioner suffered an injury in fact,

or satisfied any other standard for determining whether

Petitioner fulfilled the constitutional requirement of

standing. Nevertheless, at the beginning of its discus-

sion in regard to the public nuisance issue, the Circuit

Court contended that the issue depends on whether Pe-

titioner had standing, and at the end of its discussion the

Court held that Petitioner “lacks standing” (Appendix, at

25).

Petitioner respectfully submits that the Third Circuit

could not have meant what it said in regard to

Petitioner’s standing to bring a claim for public nui-

sance. Rather than addressing the issue of standing, as

the Circuit Court claimed, it seems that the Third Circuit

was attempting to address the merits of Petitioner’s claim

for public nuisance. It can be postulated only that the

Circuit Court intended to hold that Petitioner had failed

to allege or prove one element of a cause of action in

public nuisance. This is the only sensible interpretation

of the Circuit Court’s analysis and opinion. The Circuit

Court reasoned that to recover under a public nuisance

claim, Petitioner must have suffered harm of a kind dif-

ferent from that suffered by other members of the public —

“exercising the right common to the general public that

was the subject of interference.” The Court then found

14

that the public right at issue was the right to “pure

water,” and Petitioner did not aliege that “it used the wa-

ters of the Delaware River itself, or that it was directly

harmed in any way by the pollution of those waters” (Ap-

pendix, at 24-25).4 Rather, the Circuit Court found, in a

display of convoluted logic, that the contamination of

Petitioner’s property was the cause of the pollution of the

Delaware River, not the result of the pollution, and Pe-

titioner was “harmed only in the exercise of its private

property rights over the Chester site” (Appendix, at 25).

Therefore, the Court held that Petitioner “lacks standing

to sue for public nuisance” (Appendix, at 25; emphasis

added).

Thus, the Circuit Court took Petitioner’s claim for

public nuisance and erroneously held that Petitioner

lacked standing to sue, when it presumably intended to

dispose of Petitioner’s claim on the merits, i.e. failure to

state a claim for public nuisance. Such error by the Third

Circuit is neither a mere slip of the pen, nor harmless.

Such error is reversible.

There can be no question that Petitioner has alleged

and proven that it suffered an actual, concrete injury in

fact sufficient to satisfy the federal constitutional re-

quirement of standing. Therefore, the Third Circuit's de-

cision must be reversed as it violates Petitioner’s federal

constitutional rights. If the error is not reversed, it not

only violates individual Petitioner’s rights, it also threat-

ens to wreak havoc on the federal court system.

For if the Third Circuit, or any other Circuit Court,

is permitted to deny plaintiff an entitlement to relief, af-

ter a full trial on the merits, on the ground of lack of

standing, when the Court presumably meant to dispose

of the case on the merits, then the Circuit Court thereby

4. The Third Circuit completely ignored the allegation and

uncontradicted proof that the pollution caused by Respondent

harmed Petitioner’s property, namely the soils at the property, and

contaminated the public groundwater beneath Petitioner's property.

See District Court Opinion, Appendix, at 33.

15

destroys the finality to the case and reopens the case for

further litigation. For denial of relief on the ground of

standing does not reach the merits of the case, and there-

fore, does not serve to bar a relitigation of the same dis-

pute.

“For it is well settled that the failure to state a proper

cause of action calls for a judgment on the merits and not

for a dismissal for want of jurisdiction.” Bell v. Hood, 327

U.S. 678 (1946); see also Baker v. Carr, supra. It is

equally well settled that dismissal of an action for lack of

standing does not call for a judgment on the merits and

therefore does not act as a bar to a later suit, on the very

same facts. WRIGHT, LAW OF FEDERAL COURTS,

§13, at 67-68 (4th ed. 1983).

For instance, in McCarney v. Ford Motor Company,

657 F.2d 230 (8th Cir. 1981), a former automobile dealer

sued an automobile manufacturer claiming that the

manufacturer had forced the former dealer to sell his

dealership at a low pitce by harassing and unfairly treat-

ing the former dealer. In an earlier case, the former

dealer claimed that defendant manufacturer, through a

campaign of harassment and unfair dealing, compelled

the dealer to sell his dealership, which sale allegedly was

at an unfavorable price. In that earlier case the former

dealer filed suit in federal court claiming violation of the

Automobile Dealers’ Day in Court Act, 15 U.S.C. §1221

et seq., and the District Court had granted Defendant’s

motion for summary judgment on the ground that the

former dealer, as an individual, lacked standing under

the federal statute.

The former dealer did not appeal the first case, but

instead filed a second action claiming entitlement to re-

lief, upon the same facts, under the Sherman Act; a state

statute prohibiting termination of a supply contract with-

out good cause; wrongful termination; breach of fidu-

ciary duty; and wrongful interference with a contract.

In the second action, the defendant manufacturer

was granted summary judgment by the District Court,

16 :

on the grounds of res judicata and collateral estoppel be-

cause of the dismissal of the earlier case brought by the

same plaintiff against the same defendant. On review,

the Eighth Circuit Court defined the issue as follows:

“It]he case presents the difficult but narrow issue of

whether a dismissal for lack of standing to invoke a par-

ticular statute can act as a bar to a later suit based upon

the same factual allegations.” 657 F.2d at 231. The Cir-

cuit Court held that it did not, and reversed and re-

manded the case.

In so ruling, the Eighth Circuit found that the Dis-

trict Court’s holding in the first case was somewhat am-

biguous in that the District Court mixed its analysis of

lack of standing and failure to state a claim upon which

relief could be granted, but nevertheless, the Eighth Cir-

cuit Court concluded that in the original District Court

decision, “the judgment was based upon lack of standing

and not that the plaintiff failed to state a claim upon

which relief could be granted.” 657 F.2d at 232, n. 4.

The Eighth Circuit went on to reason that, “[t]he

Supreme Court has expressly delineated a distinction be-

tween the issue of standing and the merits of a particular

lawsuit.” 657 F.2d at 232-233, relying on Warth v.

Seldin, 422 U.S. 490 (1975). The Circuit Court then

held:

|wle hold, therefore, that a dismissal based upon

a lack of standing is not ‘on the merits’ of the

underlying substantive claim and is not a bar to

asserting another theory of relief based upon the

same operative facts assuming the other ele-

ments of claim preclusion are satisfied.

657 F.2d at 234.

The Third Circuit in the instant case has committed

the very same error #, the District Court in the first Mc-

Carney case: it has confused the issue of standing with

that of whether there was a failure to state a claim for

17

relief. This Supreme Court must not allow such confu-

sion to\exist in the Third Circuit, or any other Circuit,

because to do so would reopen the courtroom door to law-

suits that otherwise should be barred. Nor is such error

harmless as to Petitioner. As more tully discussed in the

following section, if the Third Circuit Court of Appeals

had analyzed the issue in terms of whether Petitioner

had stated a claim for relief for public nuisance instead

of confusingly determining that Petitioner lacked stand-

ing to sue, then it is submitted the result of the Circuit

Court’s decision would have been quite different.

Therefore, Petitioner respectfully requests that its

Petition for Certiorari be granted and, after full consid-

eration by this Court, that the judgment of the Third Cir-

cuit be reversed.

II. Petitioner Has Stated And Proven A Claim For Relief

Under Public Nuisance

If the Third Circuit Court nad not been confused and

had clearly examined and analyzed whether Petitioner

had stated and proven a claim for relief under public nui-

sance, then the Third Circuit undoubtedly would have

reached a different result. Under the iaw of public nui-

sance a plaintiff must only prove “particular” damages

from the alleged wrong, and physical harm to a plaintiff's

land has always been held to be such particularized

harm. Restatement (Second) of Torts, §821 C. In the in-

stant case, Petitioner PECO most assuredly alleged and

proved physical harm to its land as a result of the public

nuisance for which Respondent was held liable. Yet the

Third Circuit has confused this requirement with the

constitutional requirement that a party must have stand-

ing to sue in federal court.

Petitioner respectfully posits that the confusion re-

sulting in the Third Circuit’s decision is as follows:

standing focuses on the party seeking to get his com-

plaint before the federal court, rather than on the issue

18

the party seeks to nave adjudicated. Schlesinger v. Re-

servists Committee to Stop the War, supra. A claim for

public nuisance is, of course, the issue to be adjudicated

in the instant case.

In analyzing for the presence of standing, the federal

court must examine whether the impact on the plaintiff

of the action or statute is plainly undifferentiated and

common to all members of the public. If it is, then plain-

tiff has net alleged “some particularized injury that sets

him apart from the man in the street.” United States v.

Richardson, 418 U.S. at 2955 (Powell, J., concurring).

And plaintiff would have no standing because plaintiff

has alleged or proven only an abstract dispute.

In analyzing a public nuisance claim on its merits,

the plaintiff must plead, and prove, a particular damage,

different in kind and degree from that suffered by the

general public. Restatement (Second) of Torts §821C.

The requirement of demonstrating “particular” damage

was intended to limit access in the courts for complaints

about public matters, in as much as complaints about

public matters were the sole and proper province of duly-

constituted public officials. See PROSSER, Private Ac-

tion for Public Nuisance, 52 Va.L.Rev. 997 (1966).

However, physical injury or property damage have al-

ways been deemed damages “particular” enough to sat-

isfy a claim for relief under public nuisance. PROSSER

AND KEETON ON TORTS, §90, at 648 (5th ed. 1984);

PROSSER, Private Action for Public Nuisance, 52

Va.L.Rev. 997, 1011-12 (1966). Later, the scope of re-

covery for public nuisance was broadened to allow re-

covery so long as the plaintiff's damages were different in

kind and degree from those suffered by the general pub-

lic and such damages were suffered while the injured

party was exercising a right common to the general pub-

lic. Restatement (Second) of Torts, §821C; PROSSER,

supra.

19

A paradigm of the boundaries that constitute “par-

ticular damage” suffered by one exercising rights com-

mon to the public is found in the case of Burgess v. M/V

Tamano, 370 F. Supp. 247 (D.Me. 1973), affd, 559 F.2d

1200 (1st Cir. 1977) (see Appendix, at 23, n. 11). In Bur-

gess, plaintiffs, in class actions, sought recovery for dam-

ages incurred as a result of the discharge of

approximately 100,000 gallons of oil from a tanker, the

M/V Tamano, into the waters of Casco Bay in Maine.

Defendants were the ship, owners, captain, pilot and lo-

cal pilots’ association, as well as the charterer, the State

of Maine and the United States. Liability was asserted on

theories of negligence, unseaworthiness, trespass and

nuisance, as well as under the Rivers and Harbors Act of

1899, 33 U.S.C. §407 and Water Quality Improvement

Act of 1970, 33 U.S.C. §1161(b)(2). However, the Court

noted that: “[pjlaintiffs’ principal claims sound in nui-

sance, and, although they also assert claims based on

negligence, unseaworthiness, trespass and statutory vi-

olations, it is not suggested that their right to recover

damages for pecuniary losses sustained by them as a re-

sult of the spill may differ according to the theory upon

which they predicate defendants’ liability.” 370 F. Supp.

at 250, n. 2. Thus, the Court analyzed the clairns under

a public nuisance theory.

Defendants filed motions to dismiss the claims of

three of the plaintiff classes: the commercial fishermen;

the commercial clam diggers; and the owners of the mo-

tels, trailer parks, camp grounds, restaurants, grocery

stores and similar businesses which depended on the

tourist trade and which were adversely affected by the oil

spill. Defendants contended that economic loss, includ-

ing ioss of profits and impairment of earning capacity,

were not legally cognizable damages, under a theory o.

public nuisance, among other theories, because none of

the plaintiffs in question had any property interest in the

20

waters or marine life or shores claimed to have been pol-

luted. The District Court held that, “the motions to dis-

miss the claims of the commercial fishermen and clam

diggers must be denied, but that the motions to dismiss

the claims of the . . . businessmen, other than those who

owned shore property physically injured by the spill,

must be granted.” 370 F. Supp. at 249 (emphasis added).

The District Court differentiated the commercial

fishermen and clam diggers, on one hand, from the busi-

nessmen, on the other hand, as follows:

[t]he commercial fisherman and clam diggers in

the present cases clearly have a special interest,

quite apart from that of the public generally, to

take fish and harvest clams from the coastal wa-

ters of the State of Maine. The injury of which

they complain has resulted from defendants’ al-

leged interference with their direct exercise of

the public right to fish and to dig clams.

370 F. Supp. at 250.

On the other hand, the business owners:

do not assert any interference with their direct

exercise of a public right. They complain only of

loss of customers indirectly resulting from al-

leged pollution of the coastal waters and beaches

in which they do not have a property interest.

Although in some instances their damage may

be greater in degree, the injury of which they

complain, which is derivative from that of the

public at large, is common to all busimesses and

residents of the . . . [affected] area.

370 F. Supp. at 251 (emphasis added).

The line drawn by the District Court is such that those

parties which were directly affected by the pollution can

recover but not those parties only indirectly affected. In

the former category are those whe owned shore property

21

physically injured by the spill as well as commercial fish-

ermen and clam diggers; in the latter category are those

who suffered indirect business losses from the spill.

The Court’s emphasis on the fact that the commer-

cial fishermen and clam diggers were actually and di-

rectly exercising the use of the right to fish and to dig

clams was necessary to set them apart from the tourist-

trade businessmen because traditionally only one whose

property was damaged would recover and the fishermen

and clam diggers had no proprietary interest in the pub-

lic waters.

What remains clear in the District Court’s reasoning

is that it is uncontested that one whose property was

damaged can recover for public nuisance, irrespective of

whether the property owner was exercising rights com-

mon to the public.

In the instant case, Petitioner PECO proved that its

property was damaged, to the extent that Petitioner in-

curred over $340,000 in costs to remove contaminated

soil from the property, and that the public groundwater

beneath the Delaware River adjacent to Petitioner’s

property was also polluted by PICCO’s operations. Even

the Third Circuit Court of Appeals did not contest the

fact that a public nuisance was created by PICCO, and

that Respondent Hercules was liable for PICCO’s ac-

tions. ‘Appendix, at 8-16). Yet, the Third Circuit erro-

neously reasoned that Petitioner PECO did not have

standing because it was not exercising the right to use

the public waters of the Delaware River, unlike the com-

mercial fishermen in the Burgess case, and, therefore,

PECO could not maintain an action for public nuisance.

Thus arises the Third Circuit’s confusion of federal

standing requirements and the elements which must be

satisfied in order to recover for public nuisance.

This result is contrary to the uncontested rule of law

that if an owner of property suffers damage to that prop-

erty as a result of a nuisance which also affects public

rights, then the property owner is entitled to maintain an

22

action for public nuisance. See, e.g., Heinl v. Pecher, 330

Pa. 232, 198 A. 797(1938); Akau v. Olomana Corpora-

tion, 65 Hawaii 383 (1921); Frady v. Portland General

Electric Co., 637 P.2d 1345 (Or.App. 1981); Prosser, Pri-

vate Action for Public Nuisance, 52 Va.L.Rev. 997, 1018

(1966). Only if the claimant has not suffered property

damage, or personal injury, is it necessary to determine

if the damage which is alleged was of a nature different

in kind and degree from that suffered by the general pub-

lic in the exercise of a public right.

III. The Third Circuit Erred In Holding That Petitioner

PECO Is Not Entitled To Indemnification From

Hercules

The Third Circuit has also held that PECO is not

entitled to indemnification from Hercules because

PECO could not have been compelled through legal ac-

tion taken by DER pursuant to the Clean Streams Law

to incur the abatement expenses for the nuisance cre-

ated by Hercules. :

However, §691.316 of the Clean Streams Law spe-

cifically provides in pertinent part:

[w]henever the department finds that pollution

or a danger of pollution is resulting from a con-

dition which exists on land in the Common-

wealth the department may order the landowner

or occupier to correct the condition in a manner

satisfactory to the department or it may order

such owner or occupier to allow a mine operator

or other person or agency of the Commonwealth

access to the land to take such action. For the

purpose of this section, “landowner” includes

any person holding title to or having a propri-

etary interest in either surface or subsurface

rights.

23

Under the Pennsylvania Clean Streams Law, “pollution”

is defined as “contamination of any waters of the Com-

monwealth such as will create or is likely to create a

nuisance.” 35 Pa. C.S.A. §691.1 (Purdon 1977). The jury

specifically found that Hercules had created a nuisance

which was polluting or contaminating the Delaware

River and the groundwater beneath the Chester site.

PECO removed the contamination left by PICCO and

then sued Hercules to recover the costs of the cleanup,

as it is entitled to under principles of indemnification. As

articulated by the Court in Builders Supply Co. v. Mc-

Crhe, 366 Pa. 322, 325, 77 A.2d 368, 370 (1951):

[t]he right of indemnity rests upon a difference

between the primary and the secondary liability

.... tis a right which enures to a person who,

without active fault on his own part, has been

compelled, by reason of some legal obligation, to

pay damages occasioned by the initial negli-

gence of another, and for which he himself is

only secondarily liable.

The Court continued:

secondary as distinguished from primary liabil-

ity rests upon a fault that is imputed or construc-

tive only, being based on some legal relation

between the parties, or arising from some posi-

tive rule of common or statutory law or because

of a failure to discover or correct a defect or rem-

edy a dangerous condition caused by the act of

the one primarily responsible.

366 Pa. at 328, 77 A.2d at 371.

See also, Mixter v. Mack Trucks, Inc., 224 Pa. Super.

313, 308 A.2d 139 (1973); Restatement of Restitution,

§§95, 96 (1937).

The instant case falls squarely within the protection

afforded by the law of indemnification. PECO was re-

quired by Pennsylvania law to abate the nuisance only

24

because of PECO’s status as landowner. See Clean

Streams Law, 35 Pa.C.S.A. §691.316 (Purdon 1977);

National Wood Preservers, Inc. v. Commonwealth De-

partment of Environmental Resources, 489 Pa. 221, 414

A.2d 37 (1980). PECO’s liability was imputed, construc-

tive and statutory, i.e. secondary. Under the law of nui-

sance, PECO is entitled to recover from the party which

is primarily liable for creating the nuisance, PICCO/

Hercules. That is what the jury found and the District

Court affirmed.

The Third Circuit attempts to justify not shifting the

responsibility to Hercules where it properly lies on the

basis that Hercules was not the culprit, rather it was

PICCO. But such an “equitable” analysis contradicts the

Third Circuit’s holding that Hercules is PICCO by virtue

of the de facto merger doctrine and the Panel’s holding

that: “Hercules has [expressly] assumed any liability

PICCO may have had due to the pollution of the Chester

site.” (Appendix, at 11). Surely PICCO (ergo Hercules)

“was best suited to prevent the pollution.” There can be

no question but that PICCO, if it had not been merged

into Hercules, would have had to answer to PECO for

indemnification. Nev ertheless, the Third Circuit seemed

to be swayed by the “fairness” of making PECO bear the

responsibility because ‘PECO had an opportunity to pro-

tect itself through inspection and negotiation . . .” (Ap-

pendix, at 30). But even if that consideration had any

bearing on the issues, it ignores the reality of the case

and the evidence. PECO asserted, and evidence so es-

tablished, that the buried contaminants were a latent

condition undiscovered until years later. Indeed,

Hercules’ defense proffered through former PICCO em-

ployees was that PICCO had not deposited the pollutants

of which PECO and DER complained.

It is difficult to understand why the Third Circuit

believed it is fairer to shift the burden for this nuisance

to PECO, who certainly had nothing to do with its cre-

ation, rather than to the party who created it. Once the

25

Third Circuit determined that Hercules assumed the li-

ability for the Chester site, it acknowledged that

Hercules is primarily liable and it, not PECO, should

bear the burden of abatement.

26

CONCLUSION

The decision of the Third Circuit Court of Appeals in

this case presents a grave disruption of the well-

established principles of standing as defined by the prior

decisions of this Court. This unprecedented ruling by the

Third Circuit seriously muddles the federal constitu-

tional issue of standing with an analysis of whether Pe-

titioner failed to state a claim upon which relief could be

granted. Regardless of the intention of the Third Circuit,

its decision violates Petitioner’s federal constitutionally

protected right in specifically holding that Petitioner had

no standing to sue for public nuisance. Moreover, the

decision of the Third Circuit wreaks havoc on the federal

court system by destroying the finality of the case and

reopens the case for further litigation, since a denial of

relief on the ground of standing does not reach the merits

of the case. Nor was the fundamental error committed by

the Third Circuit harmless as to Petitioner. ‘A proper

analysis of Petitioner’s public nuisance claims would

have resulted in the inexorable conclusion that Peti-

tioner was entitled to its judgment against Respondent

for monetary and injunctive relief for the pollution of its

property.

Accordingly, Petitioner respectfully submits that this

Court should grant a writ of certiorari to review the de-

cision and judgment of the United States Court of Ap-

peals for the Third Circuit.

Respectfully submitted,

d=

Patrick W. Kittredge, Esquire

Joseph M. Donley, Esquire

KITTREDGE, KAUFMAN & DONLEY

800 North American Building

121 South Broad Street

Philadelphia, PA 19107

(215) 732-2700

Counsel of Record for Petitioner

27

CERTIFICATE OF SERVICE

I certify that three copies of this Petition for Writ of

Certiorari were mailed pursuant to Supreme Court Rule

28.3 by United States mail, first class postage, prepaid

this day of September, 1985, to:

John C. Sullivan, Esquire

1818 Three Penn Center Plaza

Philadelphia, PA 19102

John G. Gleeson, Esquire

Hercules Plaza

Wilmington, DE 19899

Kean K. McDonald, Esquire

700 I.V.B. Building

1700 Market Street

Philadelphia, PA 19103

ent OT

OSEPH M. DONLEY, ESQUIRE

Counsel of Record for Petitioner