Petition for Writ of Certiorari — Washington Suburban Sanitary Commission v. Westfarm Associates Ltd. Partnership
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NO. 981 00 7 DEC 22 9m
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IN THE
Supreme Court of the United States
OCTOBER TERM, 1995
WASHINGTON SUBURBAN SANITARY COMMISSION,
Petitioner,
v.
WESTFARM ASSOCIATES LIMITED
PARTNERSHIP, et al.,
Respondents.
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit
PETITION FOR A WRIT OF CERTIORARI
Randall M. Lutz
Counsel of Record
Patricia McHugh Lambert
Smith, Somerville & Case, L.L.C.
100 Light Street, Fifth Floor
Baltimore, Maryland 21202
(410) 727-1164
Nathan J. Greenbaum
Washington Suburban Sanitary
Commission
14501 Sweitzer Lane
Laurel, Maryland 20707
(301) 206-8155
Attorneys for Petitioner
CASILLAS PRESS INC., 1717 K STREET, N.W., WASHINGTON, D.C. 20036
i
QUESTIONS PRESENTED
1. Does the Comprehensive Environmental Response Com-
pensation and Liability Act (‘““CERCLA’’), 42 U.S.C. § 9607(a),
contemplate only a single ‘‘release,’’ which would trigger
liability under CERCLA, or can ‘‘multiple releases’’ occur
when the hazardous substance migrates from its original
source, through adjoining properties, thereby imposing joint
and several liability on each victimized adjoining property owner
through whose property the hazardous substance passed?
2. Does the leaking of a hazardous substance by passive
migration through the cracks and joints in a publicly-owned
sewer system constitute a ‘‘release’’ from a ‘‘facility’’ render-
ing the sewer system liable under CERCLA, 42 U.S.C. §
9607(a), when the hazardous substance was originally released
into the sewer system by an industrial user of the system?
::
PARTIES TO THE PROCEEDING
The petitioner is the Washington Suburban Sanitary Com-
mission (‘‘WSSC“‘), an agency of the State of Maryland. The
respondents are Westfarm Associates Limited Partnership and
International Fabricare Institute. WSSC has no knowledge of
any parent company or subsiu-ary of the respondents.
TABLE OF CONTENTS
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REASONS FOR GRANTING THE PETITION............. 8
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APPENDIX A: September 27, 1995 Opinion
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APPENDIX B: November 10, 1993 Memorandum
and Order of District Court........... 42a
APPENDIX C: October 22, 1993 Order of
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APPENDIX E: 1984 Needs Survey Report to
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IV
TABLE OF AUTHORITIES
Cases: Page
Brookfield-North Riverside Water Comm'n v.
Martin Oil Mktg. Ltd., No. 90 C 5884,
1992 WL 63274 (N.D. Tl. 1992)................... 12, 13
Cadillac Fairview/California, Inc. v. Dow Chem. Co.,
21 Env’t. Rep. Cas. 1108 (BNA 1984), rev'd on
other grounds, 840 F.2d 691 (9th Cir. 1988)............. 14
Dedham Water Co. v. Cumberland Farms Dairy, Inc.,
Be Pi’ gi’ os =e Pr ere 15, 16
Ecodyne Corp. v. Shah, 718 F. ent 1454
ee Ge ss doa wage uns iehaveskabananueaeeenns 14
In re Diamond Reo Trucks, Inc.,
115 B.R. 559, 564-65 (W.D. Mich. 1990)............... 14
Lincoln Properties, Lid. v. Higgins,
O23 F. Supp. 1688 GD. Cal. BGGR).. 2. cc ccccesccsccces 9
New York v. Shore Realty Corp.,
> ps gf F- Cs Re = RT Terre 15, 16
Nurad, Inc. v. William E. Hooper & Sons Co.,
ee § fF Fo reer rere rte 15
Pennsylvania v. Union Gas Co., 491 U.S. 1,
163 S. Ct. ZB7S, 16S LB BG 1 GOB, oc we cc cccencs. 14
Snediker Developers Ltd. Partnership v. Evans,
773 F. Sapp. SB6 CED. Blick: 1694)... 5... cc ccc ccece 14
Tanglewood East Homeowners v. Charles-Thomas, Inc.,
849 F.2d 1568 (Sth Cw. 1968). ..............22000. 15, 16
United States v. Fleet Factors Corp., 901 F.2d 1550
GREE Ga, Bs 4 odes chk cn cue dG i db sknibcbouees 14
Page
United States v. Mexico Feed and Seed Co., Inc.,
Be Ff Ft ee ere TTP Eee Perey er 14
United States v. Petersen Sand and Gravel, Inc.,
SOG F. Samm. BOOS CD. Tie. KOGUs occ cccsascccecucss 14
Vermont v. Staco, Inc., 684 F. Supp. 822 (D. Vt. 1988),
rescinded, vacated and dismissed, in part,
on other grounds, 1989 WL 225428 (D.Vt. 1989)..... 13, 16
Statutes and Regulations:
Md. Ann. Code art. 29, § 1-101 et seq.
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Other Authorities:
Robert M. Frye, Note, Municipal Sewer Liability
Under CERCLA: Should Taxpayers Be Liable For
Superfund Cleanup Costs? Westfarm Associates
Limited Partnership v. International Fabnicare
Institute, 14 Stan. Envtl. L.J. 61 Jan. 1995).......... 9, 11
Peter R. Hinckley, Comment, State and Municipal
Sewer System Authority Liability Under CERCLA:
Who Should Pay For the Cleanup Of Hazardous
Industrial and Commercial Sewer Discharges,
22 B.C. Envtl. Aff. L. Rev. 89 (Fall 1994)............... 9
Sewer Authority Appeal Ruled Too Early in Dispute
Involving Municipality Liability, Env't Rep. (BNA)
oe £. ¥ h eeeerr yy oe rl ll
IN THE
Supreme Court of the Bnited States
OCTOBER TERM, 1995
No.
WASHINGTON SUBURBAN SANITARY COMMISSION,
Petitiener,
Vv
WESTFARM ASSOCIATES LIMITED
PARTNERSHIP, et al.,
Respondents.
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit
PETITION FOR A WRIT OF CERTIORARI
Petitioner, Washington Suburban Sanitary Commission
(‘‘WSSC’’), respectfully petitions for a writ of certiorari to
review the judgment of the United States Court of Appeals
for the Fourth Circuit in this case.
OPINIONS BELOW
The opinion of the United States Court of Appeals for the
Fourth Circuit is reported at 66 F.3d 669 (4th Cir. 1995) and
was entered on September 27, 1995. See, Appendix (App.)
A at la. The District Court’s memorandum opinion and order,
which is at issue, is reported at 846 F. Supp. 422 (D. Md.
1993) and is dated July 16, 1993. See, App. D at 50a. After
considering WSSC’s timely motion for reconsideration, the
District Court entered a subsequent order dated October 22,
1993, which denied the motion. That decision is unreported,
2
but is attached as Appendix C at 48a. On August 5, 1993,
WSSC moved to reduce the amount of the jury’s judgment
on state law claims based on a Maryland statutory cap. The
District Court’s denial of this motion is reported at 846 F.
Supp. 439 (D. Md. 1993) and is dated November 10, 1993.
See, App. B at 42a.
JURISDICTION
The judgment of the Court of Appeals was entered by an
order issued on September 27, 1995. The jurisdiction of this
court is invoked under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS INVOLVED
oy 646
This case involves the interpretation of ‘‘release,’’ ‘‘en-
vironment,’’ and ‘‘facility’’ as those terms are used in
CERCLA.!
Section 9607(a) of CERCLA states:
Notwithstanding any other provision or rule of law,
and subject only to the defenses set forth in subsec-
tion (b) of this section—
(1) the owner and operator of a vessel or a
facility,
(2) any person who at the time of disposal of any
hazardous substance owned or operated any facility at
which such hazardous substances were disposed of,
(3) Any person who by contract, agreement, or
'The statutory provisions cited are those that were in effect in 1993.
Some modifications to the statutes were subsequently enacted. These
amendments, however, are not relevant to the issues presented.
3
otherwise arranged for disposal or treatment, or ar-
ranged with a transporter for transport for disposal
or treatment, of hazardous substances owned or
possessed by such person, by any other party or
entity, at any facility or incineration vessel owned
and operated by another party or entity and contain-
ing such hazardous substances, and
(4) any person who accepts or accepted any
hazardous substances for transport to disposal or
treatment facilities, incineration vessel or sites
selected by such person, from which there is a
release, or a threatened release which causes the
incurrence of response costs, of a hazardous
substance, shall be liable for—
(A) all costs of removal or remedial action in-
curred by the United States Government or a
State not inconsistent with the national con-
tingency plan;
(B) any other necessary costs of response in-
curred by any other person consistent with the
national contingency plan; and
(C) damages for injury to, destruction of, or
loss of natural resources, including the
reasonable costs of assessing such injury,
destruction, or loss resulting from such a
release.
Section 9601(22) states:
The term ‘‘release’’ means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing
into the environment (including the abandonment or
4
discarding of barrels, containers, and other closed
receptacles containing any hazardous substance or
pollutant or contaminant), but excludes (A) any
release which results in exposure to persons solely
within a workplace, with respect to a claim which
such persons may assert against the emplover of
such persons, (B) emissions from the engine exhaust
of a motor vehicle, rolling stock, aircraft, vessel, or
pipeline pumping station engine, (C) release of
source, byproduct, or special nuclear material from
a nuclear incident, as those terms are defined in the
Atomic Energy Act of 1954 [42 U.S.C.A. § 2011 et
seq.], if such release is subject to requirements with
respect to financial protection established by the
Nuclear Regulatory Commission under section 170
of such Act [42 U.S.C.A. § 2210], or, for the pur-
poses of section 9604 of this title or any other
response action, any release of source byproduct,
or special nuclear material from any processing site
designated under section 7912(a)(1) or 7942(a) of
this title, and (D) the normal application of fertilizer.
‘‘Environment,’’ as used in § 9601(22), is defined by 42 U.S.C.
§ 9601(8) as:
(A) the navigable waters, the waters of the
contiguous zone, and the ocean waters of which
the natural resources are under the exclusive
management authority of the United States
under the Magnuson Fishery Conservation and
Management Act [16 U.S.C.A. § 1801 et seq.],
and (B) any other surface water, ground water,
drinking water supply, land surface or subsur-
face strata, or ambient air within the United
States or under the jurisdiction of the United
States.
A “‘facility’’ is defined as:
(A) any building, structure, installation, equip-
ment, pipe or pipeline (including any pipe into
a sewer or publicly owned treatment works),
well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, roll-
ing stock, or aircraft, or (B) any site or area
where a hazardous substance has been
deposited, store, disposed of, or placed, or
otherwise come to be located; but does not in-
clude any consumer product in consumer use
or any vessel.
42 U.S.C. § 9601(9).
STATEMENT SHOWING ORIGINAL
FEDERAL JURISDICTION
Federal jurisdiction in the first instance was based on 28
U.S.C. § 1331 (federal question), 28 U.S.C. § 1332 (diversi-
ty), and 42 U.S.C. §§ 9613, 9659, and 6972.
STATEMENT OF THE CASE
The Washington Suburban Sanitary Commission (‘‘WSSC’’)
is an agency of the State of Maryland. Md. Ann. Code art.
29, § 101 et seg. It was created in 1918 for the purpose of
providing, inter alta, for the construction, maintenance, and
operation of a water supply and sewer system in Montgomery
and Prince George’s Counties, Maryland. 1918 Md. Laws Ch.
122. WSSC’s Tech Road sewer, which is at issue in this case,
is part of a network of approximately 4,000 miles of sewer
pipes owned and operated by WSSC. The portion of the Tech
Road sewer at issue was built in 1968.
Westfarm Associates Limited Partnership (‘‘Westfarm’’) is
a developer of property in the District of Columbia metropolitan
6
area. Westfarm owned several parcels of property near
WSSC’s Tech Road sewer. Several of these parcels had been
sold and developed when Westfarm attempted to sell another
parcel, Parcel A. During the negotiations for the sale of Parcel
A, an environmental survey was undertaken. The survey
disclosed the presence of perchloroethylene (‘‘PCE’’) in the
groundwater of Parcel A. PCE is a ‘‘hazardous substance’’
as defined in the Comprehensive Environmental Response
Compensation and Liability Act (‘‘CERCLA’’), 42 U.S.C. §
9601(14).
Westfarm investigated the source of the contamination and
traced it to its neighbor, International Fabricare Institute
(‘‘IFI’’), whose headquarters, teaching facility and research
laboratory abutted Parcel A and was connected to the Tech
Road sewer. IFI is and was a trade organization of drycleaners,
which moved to the Tech Road facility in 1974, after a cor-
porate merger with the National Institute of Drycleaning. After
the move in 1974, IFI began conducting laboratory research
with PCE at this location into the efficacy of various dryclean-
ing techniques. In the course of this research, IFI laboratory
technicians and scientists experimented with quantities of PCE
in various applications. Some PCE was used in connection with
drycleaning machines. IFI scientists also used pure PCE in
the evaluation of drycleaning processes.
Westfarm correctly concluded that the PCE from IFI had
caused the contamination of its various properties. (Contamina-
tion was initially found on Parcel A. Subsequent subsurface
testing revealed a ‘‘plume’’ of contamination that reached ad-
ditional Westfarm parcels.) Westfarm sued IFI in January 1992
and, during the course of discovery against IFI in 1992, prior
to WSSC’s involvement in the case, proved the existence of
several waste streams of PCE from IFI onto Westfarm’s pro-
perty:
e PCE-containing wastes, such as ‘‘cooked filter
muck’’ generated by the drycleaning apparatus,
were disposed of in a dumpster on site.
e PCE-containing waste water was spilled inside
IFI’s building and leaked on a variety of occa-
sions, causing PCE to migrate through cracks
and bolt holes in the concrete floor.
e Pure PCE was poured down the laboratory
drains by IFI scientists who used it in connec-
tion with certain tests they performed.
e PCE-containing ‘‘separator water,’’ generated
by IFI’s drycleaning apparatus, was discharg-
ed directly into the sewer.
IFI repeatedly lied to WSSC about its practice of pouring
PCE down the drain and into the sewer. When IFI’s
predecessor, the National Institute of Drycleaning (‘‘NID’’),
constructed the building in 1969, it had no research laboratory.
IFI created a research laboratory at that location in 1974. When
WSSC inquired about the laboratory’s use of chemicals, IFI
lied about its practice of pouring pure PCE down the research
laboratory drains. When WSSC repeated its inquiries in 1981,
1984, and 1992, IFI again lied, covering up its introduction
of PCE into the sewer.
This petition concerns what happened to the PCE after it
was released into the Tech Road sewer. Westfarm alleged
that PCE migrated through cracks and loose joints in the
sewer, and into the groundwater. Although WSSC presented
contrary evidence regarding this migration theory, WSSC’s
evidence was rejected by the District Court as well as by the
Court of Appeals. Accordingly, for purposes of this petition,
this Court should accept that PCE migrated out of the sewer
pipes.
8
In order for liability to be imposed on WSSC, Westfarm was
required to show, inter alia, that there had been a ‘‘release’’
or ‘‘threatened release’’ of a hazardous substance from a
“facility.” 42 U.S.C. § 9607(a). WSSC has contended and con-
tinues to contend that the facts of the instant case establish
only one release — namely, a release which occurred when
IFI disposed of PCE at its property site into its sewer lateral
which was connected downstream to the Tech Road sewer.
Westfarm agreed that a release occurred at the IFI site, but
has argued that a second release occurred when PCE migrated
through cracks and loose joints in the Tech Road sewer,
thereby rendering WSSC liable under CERCLA. Westfarm’s
position was accepted by both the District Court and the Court
of Appeals.
REASONS FOR GRANTING THE PETITION
I. The Questions Presented Are Of National
Importance.
A. The Court of Appeals’ Decision Saddles
Municipalities and Sewer Authorities
With The Potential For Immense
CERCLA Liability.
WSSC has a network of approximately 4,000 miles of sewer
pipe, with over 20,000 commercial users. Under the Court
of Appeals’ decision, every toilet, sink, shower, bath or drain
along those 4,000 miles represents a potential source of
CERCLA lability. If hazardous waste is placed in the sewer
system at any of these locations, or through any industrial
source along the system, the sewer system would be respon-
sible for the cleanup of any property which was contaminated
by even a single molecule of waste which leaked out of the
sewer, even if other sources for the contamination existed.
The decision of the Court of Appeals, then, raises the spec-
9
tra of immense CERCLA liability for municipalities and local
governments. Concrete pipes, by their nature, can leak.
Accordingly, once hazardous waste is disposed of into a con-
crete sewer system, a sewer operator has no means by which
it can insure that all hazardous waste remains within the pipe.
Moreover, a sewer operator simply cannot monitor every
sewer connection, twenty-four hours a day, 365 days a year.
Nor can a sewer operator entirely control the actions of
wrongdoers such as IFI who illegally dump hazardous
substances into the sewer.
The lower court and the Court of Appeals decisions have
generated considerable discussion in the environmental arena,
partly because the decision conflicts with Lincoln Properties,
Ltd.v. Higgins, 823 F. Supp. 1528 (E.D. Cal. 1992). In that
case, the lower court found that a sewer system was not liable
under CERCLA where hazardous substances were illegally
placed into the sewer system and subsequently migrated out
of the sewer line through cracks and loose joints. Commen-
tators have debated whether the instant case or Lincoln Pro-
perties represents the proper application of CERCLA to sewer
systems. See, e.g., Robert M. Frye, Note, Municipal Sewer
Liability Under CERCLA: Should Taxpayers Be Liable For
Superfund Cleanup Costs? Westfarm Associates Limited Part-
nership v. International Fabricare Institute, 14 Stan. Envtl.
L.J. 61 Jan. 1995); Peter R. Hinckley, Comment, S/ate and
Municipal Sewer System Authonty Liability Under CERCLA:
Who Should Pay For the Cleanup Of Hazardous Industrial and
Commercial Sewer Discharges, 22 B.C. Envtl. Aff. L. Rev.
89 (Fall 1994). As stated in 14 Stan. Envtl. L.J. at 95-96:
The decision in Westfarm, if upheld, could lead to
judgments against municipal sewerage authorities
amounting to billions of dollars. Municipal sewerage
authorities would have to pay the costs of litigation
and judgment every time an industrial user of a
10
sewer system became liable under CERCLA. As a
result, critical financial resources needed for sewer
system upgrade and maintenance, wastewater treat-
ment facilities, and the development and enforce-
ment of pretreatment regulations would be needless-
ly diverted.
CERCLA’s combination of a tax on generators and
strict liability for site remediation ‘‘places the costs
of releases of hazardous wastes on the sector most
responsible for pollution and which benefits most
from chemical production, rather than the victim or
taxpayers.’’ As stated by the District Court for the
Central District of California, ‘‘an unmistakable pur-
pose behind CERCLA’s strict liability standard was
to force the parties who profit from the use and
generation of hazardous wastes, or directly cause
or contribute to their release, to account, in the pric-
ing of their products, for the environmental exter-
nalities associated with improper disposal.’’
Imposing liability on the WSSC, or requiring any
municipality to absorb CERCLA liability under similar
circumstances, violates the fundamental principle
underlying CERCLA by impermissibly shifting the
burden of remediating releases of hazardous sub-
stance directly to the taxpayer. This burden should
be placed on those profit-making enterprises respon-
sible for the discharge in the first place. The
Westfarm decision misconstrues the congressional
intent of CERCLA, misapplies several of its statutory
provisions, excessively narrows the availability of the
CERCLA third party defense, and contravenes
sound public policy. The decision of the United States
District Court for the District of Maryland in
11
Westfarm Associates Limited Partnership v. Interna-
tional Fabricare Institute should be overturned.
(footnotes omitted).
WSSC, then, is not alone in its concern over the Court of
Appeals’ decision. Other governmental sewer systems
throughout the country are equally concerned that they will
be responsible for cleanup costs for any contaminated property
located along a sewer line. Presently, there are over 19,000
such systems in the United States. By the year 2000, over
26,800 are expected to be operational. See, App. E at 79a.
It would be impossible for these sewer systems to (1) dig up
all the hundreds of thousands of miles of concrete sewers lines
and replace them with leakproof sewers, which would be pro-
hibitively expensive and technologically infeasible; or (2) pro-
hibit the introduction of hazardous substances into all sewer
lines (which is environmentally unnecessary and impossible
to enforce). As stated in Env’t Rep. (BNA) No. 42:
David Kolker of American Communities for Cleanup
Equity, a Washington, D.C. lobbying organization,
said the ruling could subject taxpayers to open-ended
liability for environmental contamination because vir-
tually all municipal sewage systems carry, and con-
sequently leak, hazardous substances.
Sewer Authority Appeal Ruled Too Early in Dispute Involving
Municipality Liability, Env’t Rep. (BNA) No. 42 (Feb. 6,
1995).
WSSC submits that, under the rationale of CERCLA,
responsibility for cleanup should be placed on the person who
disposes of waste into the sewer system, not the sewer
operator who passes the cost on to the ratepayers or
taxpayers.
12
B. A Split Of Authority Exists Concerning
Whether Only The Original Source of The
Discharge Of A Hazardous Substance
Constitutes A Release Under CERCLA.
In order for there to be liability under CERCLA, there must
be a “‘release’’ or ‘‘threatened release’’ from a ‘‘facility’’
which ‘‘causes the incurrence of response costs.’’ 42 U.S.C.
§ 9607(a). At issue in this case is when does a ‘‘release’’ from
a ‘‘facility’’ occur?
Courts throughout the country have wrestled with this issue.
Some courts have held that only the original source of the
discharge of a hazardous substance constitutes the release for
which CERCLA liability attaches. For example, in Brookfield-
North Riverside Water Comm’n v. Martin Oil Mktg. Ltd., No.
90 C 5884, 1992 WL 63274 (N.D. Ill. 1992), Martin Oil
Marketing Ltd. (‘‘Martin Oil’’) was a former owner and
operator of a gasoline service station that used several
underground storage tanks (‘‘USTs’’) to hold waste oil. The
USTs leaked hazardous substances that migrated from the pro-
perty and contaminated the plaintiff's water main. The plain-
tiff sued Martin Oil, which in turn, filed a third-party complaint
against Abbott Contractors, Inc. (‘‘Abbott’’). Abbott had con-
structed and installed the water main that was subsequently
contaminated by the hazardous substances that leaked from
the USTs. Martin Oil argued that Abbott’s facility released
hazardous substances by leakage from the water main and
should be held liable under CERCLA. Martin Oil’s theory of
liability was based in part on the claim that the same hazar-
dous substances that it allegedly released from its USTs were
again ‘‘released’’ by Abbott. In dismissing Martin Oil’s third-
party complaint against Abbott, the court held that there was
no independent release at the water main site and that the
release occurred solely from the leaking USTs located at the
facility owned by Martin Oil. The court stated:
13
Martin Oil’s reading of the statute defies the bounds
of common sense. . . . I cannot accept the notion
of several different releases of hazardous substances
when it is undisputed that all the wastes can [sic]
from a single source. ... Indeed, only those hazar-
dous substances which originated from the USTs
contaminated the soil surroundings at the water
main. Martin Oil’s argument that Abbott should be
held responsible for the release of hazardous
substances which migrated onto the water main site
from the Service Station is a perverted reading of
CERCLA which this court will not follow.
Id. at 5 (citations omitted).
Viewing the original source of the discharge of hazardous
substances as the release or disposal for which CERCLA liabili-
ty attaches is consistent with the holdings in other well-
reasoned opinions. For example, in Vermont v. Staco, Inc.,
684 F. Supp. 822 (D. Vt. 1988), rescinded, vacated and dismiss-
ed, in part, on other grounds, 1989 WL 225428 (D. Vt. 1989),
the defendant released mercury from a manufacturing plant
onto the bodies, clothing, and footwear of its workers. Such
release resulted in the contamination of the workers’ home
plumbing systems and privately owned domestic septic
systems, as well as the publicly owned sewer system and con-
necting public waste water treatment facility. In finding the
defendant liable for releasing mercury into the environment,
the court viewed the release as encompassing the ‘‘[mjigration
of hazardous chemicals by drainage to publicly owned sewers
from home plumbing systems, and the seepage and leaching from
domestic septic systems.’’ Id. at 832 (emphasis added). In other
words, the defendant, as the original source of contamination,
was liable for the contamination that occurred as a result of
the migration, even through a sewer system. Jd. at 834 (‘‘[It
is] established that the defendants released mercury to the
14
environment through the movement of workers to and from
the ... facility.”’).
In many well-reasoned opinions, courts have rejected, as
a matter of law, the imposition of CERCLA liability upon a
party who was not the initial disposer or releasor but merely
passively allowed the material to migrate into or through the
environment. United States v. Petersen Sand and Gravel, Inc.,
806 F. Supp. 1346, 1350-51 (N.D. Ill. 1992) (passive disposal
does not trigger CERCLA liability); Snedtker Developers Ltd.
Partnership v. Evans, 773 F .. Supp. 984, 988-89 (E.D. Mich.
1991); Ecodyne Corp. v. Shah, 718 F. Supp. 1454, 1456-58
(N.D. Cal. 1989); Cadillac Fairview/California, Inc. v. Dow
Chem. Co., 21 Env’t. Rep. Cas. 1108, 1113 (BNA 1984),
rev'd, in part, on other grounds, 840 F.2d 691 (9th Cir. 1988);
In re Diamond Reo Trucks, Inc., 115 B.R. 559, 564-65 (W.D.
Mich. 1990).
This view of CERCLA is consistent with the purpose of the
statute as stated by the United States Supreme Court in Penn-
sylvania v. Union Gas Co. — namely, ‘‘impos|[ing) the costs
of the cleanup on those responsible for the contamination.’’
491 U.S. 1, 7, 109 S. Ct. 2273, 105 L.Ed.2d 1 (1989). See
also, United States v. Fleet Factors Corp., 901 F.2d 1550, 1553
(11th Cir. 1990), cert. denied, 498 U.S. 1046 (1991) (‘‘[t}he
essential policy underlying CERCLA is to place the ultimate
responsibility for cleaning up hazardous waste on ‘those
responsible for problems caused by the disposal of chemical
poison’’’) United States v. Mexico Feed and Seed Co., Inc.,
980 F.2d 478, 486 (8th Cir. 1992) (CERCLA seeks ‘‘to place
the cost of that response on those responsible for creating
or maintaining the hazardous condition’’).
Admittedly, not all courts have adopted the position that
CERCLA liability should be limited to the initial disposer or
releasor. For example, the United States Court of Appeals
15
for the Fourth Circuit in Nurad, Inc. v. William E. Hooper
& Sons Co., 966 F.2d 837, 844-846 (4th Cir. 1992), cert.
denied, 121 L. Ed.2d 288, interpreted the ‘‘disposal’’ require-
ment of CERCLA so broadly as to require no conduct of any
kind by any potentially responsible person. Westfarm has relied
upon decisions from the First, Second and Fifth Circuits which
have also read CERCLA ‘“‘release’’ and ‘‘disposal’’ re-
quirements broadly to include passive conduct. See e.g.,
Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889
F.2d 1146, 1150 (1st Cir. 1989); Tanglewood East Homeowners
v. Charles-Thomas, Inc., 849 F.2d 1568, 1573 (5th Cir. 1988);
New York v. Shore Realty Corp., 759 F.2d 1032, 1045 (2d Cir.
1985).
Each of these cases, however, is factually distinguishable
from the present case. In Nurad, the former owners of pro-
perty on which underground storage tanks were discovered
were held liable despite the fact that they did not actively par-
ticipate in the disposal of the hazardous substances. 966 F.2d
at 844-46. Unlike the instant case, however, the defendants
in Nurad owned the property where the initial disposal took
place. In addition, former tenants of the property, who also
did not actively participate in the disposal, were not held liable
because, similar to WSSC, they did not control that portion
of the property where the hazardous substances were initial-
ly disposed. Jd. at 842-43.
In Dedham, there was no question that a release had oc-
curred from the defendant's facility and that the plaintiff's pro-
perty had been contaminated. 889 F.2d at 1148-50. The issue
was whether the plaintiff had to prove that this release physical-
ly migrated onto the plaintiff's property or whether it was suf-
ficient for the plaintiff to prove that there were releases or
threatened releases from the defendant’s facility and that the
plaintiff was caused to incur response costs, regardless of
16
whether physical migration actually occurred. Jd. at 1150,
1154.
In Tanglewood, the defendants were present and past
owners of the property where disposal took place. 849 F.2d
at 1572-73. The Fifth Circuit refused to dismiss them from
liability under CERCLA despite not actively participating in
the initial discharge of the hazardous substances. /d. at
1573-74. The Court in Shore Realty likewise held that the pre-
sent owners of the property where the disposal took place
were liable despite purchasing the property after disposal oc-
curred. 759 F.2d at 1045.
WSSC also submits that leakage from a sewer system can-
not be a ‘‘release,’” as defined by 42 U.S.C. § 9601(22), which
requires that the leakage must be ‘‘into the environment.”’
‘“‘Environment”’ is defined by 42 U.S.C. § 9601(8) as ‘‘any
... Surface water, ground water ... or subsurface strata.’’ In
most sewer systems, there are interconnections between sur-
face water, ground water and sewer systems. Design stan-
dards for sewers have some allowance for leakage. See, 846
F. Supp. at 427, App. D at 52a-53a. As admitted by all ex-
perts below, concrete sewers by their nature leak. In this case,
the Court of Appeals specifically recognized that ground water
and surface water infiltrated into the Tech Road sewer. WSSC
contends that the Tech Road sewer should be determined to
be part of ‘‘the environment’’ as defined by 42 U.S.C.
§ 9601(8). Thus, a release occurred when IFI disposed of PCE
by placing it into the sewer system which contained ground
water and surface water. Because the sewer line was part
of the environment, a release, as that term is defined by
CERCLA, did not occur when PCE leaked from the sewer
line. It was merely movement within different media in the
environment. See, Staco, Inc., 684 F. Supp. at 832 (‘‘[mlig-
ration of hazardous chemicals by drainage to publicly owned
sewers from home plumbing systems’’ constitutes a ‘‘release”’
into the environment under CERCLA).
17
This case, then, raises significant issues which should be
of concern to all landowners. If the Court of Appeals’ deci-
sion is accepted, CERCLA would impose on landowners the
obligation to not only police their own property, but to affir-
matively monitor the waste disposal actions of others in the
community. WSSC submits that CERCLA was never intend-
ed to have this breadth.
CONCLUSION
The petition for a writ of certiorari should be granted in order
to address the issues presented, which are of extreme im-
portance to the nation’s sewer systems. This Court should
also resolve the split of authority that exists over who has
liability under CERCLA.
Respectfully submitted.
Randall M. Lutz
Patricia McHugh Lambert
Nathan J. Greenbaum
Attomeys for Washington
Suburban Sanitary Commission
December, 1995
la
APPENDIX A
WESTFARM ASSOCIATES LIMITED
PARTNERSHIP, Plaintiff-Appellee,
International Fabricare Institute
Defendant & Third Party
Plaintiff-Appellee,
Vv.
WASHINGTON SUBURBAN SANITARY
COMMISSION, Third Party
Defendant-Appellant,
and
Prudential Insurance Company of
America, Party in Interest.
No. 94-1425.
United States Court of Appeals,
Fourth Circuit.
Argued April 4, 1995.
Decided Sept. 27, 1995.
ARGUED: Randall Matthew Lutz, Smith, Somerville &
Case, Baltimore, Maryland, for Appellant. Jeffrey Moore
Johnson, Dickstein, Shapiro & Morin, L.L.P., Washington,
DC, for Appellee. ON BRIEF: Patricia McHugh Lambert,
Smith, Somerville & Case, Baltimore, Maryland; Nathan J.
Greenbaum, General Counsel, Joel A. Kramer, Associate
Counsel, Washington Suburban Sanitary Commission, Laurel,
Maryland, for Appellant. Joel A. Fischman, Angus E. Crane,
Dickstein, Shapiro & Morin, L.L.P., Washington, DC for
Appellee.
2a
Before MURNAGHAN and NIEMEYER, Circuit Judges,
and BUTZNER, Senior Circuit Judge.
Affirmed by published opinion, Judge MURNAGHAN wrote
the opinion, in which Judge NIEMEYER and Senior Judge
BUTZNER joined.
OPINION
MURNAGHAN, Circuit Judge:
Defendant-appellant Washington Suburban Sanitary Com-
mission (‘‘WSSC’’) operates a sewer system for Montgomery
County, Maryland and Prince George’s County, Maryland.
Plaintiff-appellee Westfarm Associates Limited Partnership
(‘‘Westfarm’’), a developer of property, owns land adjacent
to one of WSSC’s sewers. The sewer carries wastes from,
among other places, the International Fabricare Institute
(‘‘IFI’’), a trade association of dry cleaners and co-defendant
below. Westfarm discovered on its property a trace of a hazar-
dous substance, tetrochloroethylene (also known as per-
chloroethylene, perc, or ‘‘PCE’’), which, Westfarm conclud-
ed, was flowing from IFI through leaks in the sewer system
and contaminating the Westfarm property.
Westfarm sued IFI and WSSC as joint co-defendants for,
inter alia, costs of response under the Comprehensive En-
vironmental Response, Compensation and Liability Act
(‘‘CERCLA,’’ popularly known as Superfund), 42 U.S.C.
§ 9607(a), and economic damages under a common law theory
of negligence. The district court granted summary judgment
for Westfarm on the CERCLA hability claim, and a jury found
for Westfarm on the common law negligence claim.
WSSC now appeals on a variety of grounds, including, most
prominently, public policy arguments for exempting sewer
operators from liability for damage caused by wastes
3a
dumped in the sewers by third parties. Finding no abuse of
discretion or legal errors by the district court, and finding that
this Court is not the appropriate forum for WSSC’s public policy
arguments, we affirm in all respects.
I. FACTUAL AND PROCEDURAL
BACKGROUND
In 1991, Westfarm engaged in negotiations to sell a particular
parcel of property to a buyer. Just prior to closing the sale,
an environmental audit uncovered the presence of PCE in the
groundwater beneath the parcel.! PCE is a toxic organic
solvent that is widely used in the dry cleaning business. As
a result of the PCE contamination, the buyer terminated the
contract to purchase the property. Further testing by
Westfarm’s environmental consultants traced the PCE to IFI,
and adjacent landowner that had been conducting laboratory
research with PCE to explore the efficacy of various dry clean-
ing techniques. On January 2, 1992, Westfarm filed suit against
IFI. Westfarm has since cleaned up its property.
IFI and its predecessor had operated a commercial dryclean-
ing facility at a site abutting Westfarm’s parcel until 1974, at
which time IFI began conducting research at the site. IFI’s
research department analyzed hundreds of PCE samples each
year. At the conclusion of each analysis, the remnants of the
samples were poured down a sink drain into the connected
sewer line. Each test remnant typically included ten milliliters
of PCE. From 1974 to early 1992, IFI annually disposed of
at least three gallons of PCE into the sewer line in this man-
ner. IFI also placed trash contaminated with PCE into a dump-
ster located on IFI’s land.
Whenever IFI poured PCE down the drain, the PCE
‘Subsequent testing revealed the presence of PCE on two other, ad-
joining Westfarm properties.
4a
entered a sewer lateral connecting IFI’s building with a main
sewer line running along Tech Road (the ‘“Tech Road sewer’’),
which is owned and operated by WSSC. Most of the sewer
lateral is owned and operated by IFI, but WSSC owns and
operates a part of the sewer lateral (the ‘‘sewerhouse con-
nection’’) which extends from WSSC’s Tech Road sewer to
the IFI property line, and which contains a manhole through
which the sewer lateral can be reached. The sewerhouse con-
nection meets the terminal end of the Tech Road sewer, which
runs beside the portion of Westfarm’s property abutting Tech
Road.
In July of 1992, environmental consultants conducted a joint
groundwater survey and eliminated other surrounding land-
owners as a potential source of the PCE on Westfarm’s pro-
perty; groundwater in the area flows to the southeast, and
whereas groundwater just north of the sewer lateral contain-
ed no PCE, groundwater to the southeast of the sewer lateral
contained high concentrations of PCE. In August of 1992,
Westfarm conducted a video camera inspection of IFI’s sewer
lateral. In order to do so, Westfarm served a subpoena upon
WSSC to gain access to the sewer lateral through WSSC’s
sewerhouse connection, which cameras could enter through
the manhole. That inspection revealed a number of flaws in
IFI’s sewer lateral. Water samples taken within WSSC’s
manhole contained PCE.
On November 16, 1992, IFI sought leave to file a third-party
complaint against WSSC asserting both Maryland common law
claims and federal statutory claims under CERCLA. WSSC
was informed of IFI’s motion by Westfarm’s counsel on
December 14, 1993 at IFI’s deposition of one of WSSC’s
employees. The motion was granted on January 12, 1993, and
WSSC became a party to the suit. Westfarm subsequently
amended its complaint by adding WSSC as a direct defendant
as well.
5a
On April 9, 1993, a video camera inspection of WSSC’s Tech
Road Sewer was conducted, revealing numerous flaws along
the length of the line, including open joints, improper align-
ment resulting in sags in the line and offset joints, cracks,
broken pipes, improperly installed gaskets and improper
manhole construction. Although IFI had stopped its practice
of dumping PCE several months earlier, water and sediment
samples taken within the Tech Road Sewer revealed elevated
levels of PCE, including the highest level found in any sample
at the site—110,000 parts per billion (ppb) PCE in the sedi-
ment at WSSC’s manhole.? One of Westfarm’s experts,
George Frigon, opined that the Tech Road Sewer was neither
built in a workmanlike manner nor properly repaired.
WSSC’s Tech Road Sewer was constructed in 1968. In
1969, IFI’s predecessor applied to WSSC to connect its facility
to the sewer, indicating to WSSC that it intended to operate
a drycleaning plant at the site. In mid-1974, IFI informed
WSSC that it intended to operate a laboratory at the site. IFI
wrote to WSSC describing, among other things, the quantities
and types of chemicals that would be going down the drain
at IFI’s laboratory, including many hazardous substances, but
not including PCE. WSSC received and approved both plum-
bing permit applications.
WSSC initiated a survey of its sewer system in 1977. The
survey was intended to identify those portions of the lines
within the system that exhibited excessive infiltration, 1.e.,
leakage of groundwater or surface waters into the sewer
2By way of comparison, the maximum contaminant level for PCE in drink-
ing water, as established by the Environmental Protection Agency, is 5
ppb. 42 U.S.C. § 300g-1; 40 C.F.R. § 141.61. The PCE concentration
in the groundwater beneath IFI’s and Westfarm’s properties ranged from
several hundred ppb to approximately 7000 ppb.
6a
system (which results in added costs of transporting and
treating the extraneous flows). During the survey, the Tech
Road sewer segment closest to IFI was identified as exhibiting
excessive flow, and the final report from the survey indicated
that ten internal grouting repairs were needed, and supposedly
were made, in the segment. However, neither Westfarm’s
nor IFI’s sewer experts found any evidence in their 1993 video
inspection that such repairs had been made.
In 1977, the EPA issued a report to Congress detailing waste
disposal practices (including sewers) and their effects on
groundwater. The EPA stated that ‘‘[t]he major cause of
ground-water contamination from sanitary sewer systems (if
above the water table’) is through outflow leakage (exfiltra-
tion) from gravity sewers.’’ Common factors causing such
leakage include poor workmanship, cracked or defective pipe
and poorly constructed manholes. In response, in 1978, Con-
gress amended the Clean Water Act to regulate toxic pollutants
(including PCE) discharged into sewer systems.
In 1979, WSSC hired environmental consultants to develop
a pretreatment program to respond to the amendments to the
Clean Water Act. In 1980, the consultants prepared a booklet
containing guidelines for industrial users about the program.
Toxic pollutants such as PCE were identified specifically as
objects of the program.The booklet, along with a question-
naire demanding information about discharges to WSSC’s
sewer system, were designed to be sent to industrial users,
such as IFI. WSSC’s industry file on IFI, however, included
no such questionnaire and no evidence that IFI had even
received the booklet.
In 1981 and again in 1984, two industrial investigation reports
3The Tech Road Sewer is above the water table.
7a
on IFI were conducted by WSSC or its consultants. The reports
noted that gallons of PCE were stored next to floor drains
on the premises, that commercial size drycleaning machines
were in use, and that IFI’s labs were performing tests on
solvents. Neither report listed PCE wastes as one of the types
of waste being disposed down the sewer.
Prior to 1983, WSSC’s regulations placed no clear limit on
the concentrations of toxic organics like PCE that could be
disposed into the sewer. In 1983, WSSC, for the first time,
limited the total toxic organics (‘“TTOs’’) permitted to be
discharged to the sewer system to 0.58 milligrams per liter
(mg/l). In 1988, WSSC revised the regulations to correspond
with new EPA standards, changing the concentration of TTOs
which could be discharged to the sewer system to 2.13 mg/l,
where it remained at the time of trial. Dr. Leonard Breit-
stein, a senior engineer with Westfarm’s environmental con-
sultants, testified that from 1983 to 1989 IFI was not in com-
pliance with the PCE concentration limits, but that IFI was
in compliance from 1990 to 1991. Michael Armorer, manager
of WSSC’s Industrial Discharge Control Unit, stated that
WSSC was aware that laboratories routinely dispose of small
amounts of chemicals into the sewer system and that WSSC
knew IFI was doing so as far back as June 1974.
*We note that WSSC’s regulations directly limit the concentration of
TTOs discharged, not the quantity of TTOs discharged. The quantity of
TTOs which may be discharged is therefore only limited by the total
discharges of a sewer user.
WSSC regulations prohibit disposal into the sewer of ‘‘any noxious or
malodorous gas or substance, which either singly or in interaction with
other wastes, is capable of creating a public nuisance or hazard to life or
preventing entry into sewers for their maintnance and repair.’’ However,
in light of the fact that concurrent regulations discussed supra permitted
the discharge of PCE and other TTOs, PCE is apparently not within the
definition of a noxious or malodorous substance.
8a
While Westfarm and IFI were conducting the discovery
which brought forth the foregoing evidence, WSSC, despite
having been added as a party in January of 1993, conducted
little, if any, discovery. On April 27, 1993, less than two weeks
before the May 7 discovery cut-off date, WSSC moved for
a continuance of the discovery cut-off, but withdrew the mo-
tion before the district court had ruled on it.
In July of 1993,Westfarm, WSSC, and IFI all moved for sum-
mary judgment. WSSC also moved to dismiss the complaint
on the grounds that, inter alia, Westfarm had not given WSSC
timely notice of the claims. The district court denied WSSC’s
motion to dismisss. On July 16, 1993, the district court granted
Westfarm’s motion for summary judgment against WSSC and
IFI on its CERCLA claims. See Westfarm Assocs. Ltd. Part-
nership v. International Fabncare Inst., 846 F.Supp. 422
(D.Md.1993). WSSC filed a motion for reconsideration of the
CERCLA judgment, which was denied. After a hearing in Oc-
tober of 1993, Westfarm was awarded $140,930 in recoverable
response costs under CERCLA.
The common law causes of action against IFI and WSSC
were tried before a jury beginning on July 19, 1993. Prior to
trial, the district court granted WSSC’s motion in limine to
prevent the admission of evidence or argument that WSSC
had a duty to enact or enforce regulations which would have
prevented IFI from putting PCE in the sewer system. WSSC
moved for a directed verdict after the close of Westfarm’s
case, on the grounds that, imter alia, Westfarm had failed to
produce sufficient expert testmony of the standards of care
owed by sewer operators. The district court denied the mo-
tion. On July 30, 1993, the jury returned a verdict against
WSSC for negligence, in favor of WSSC for nuisance and
trespass and strict liability. The jury awarded damages on the
common law claims to Westfarm against IFI and WSSC,
9a
jointly and severally, in the amount of $2.5 million. Judgment
was entered accordingly on August 4, 1993.
On August 5, 1993, WSSC moved to reduce the amount
of the jury’s judgment based on a Maryland statutory cap on
the liability of certain governmental entities. The district court
denied the motion. Westfarm Assocs. Ltd. Partnership v. In-
ternational Fabricare Inst., 846 F.Supp. 439, 441
(D.Md.1993).
WSSC now appeals.
Il. DISCUSSION
A. Notice:
WSSC is an agency of the State of Maryland. Md.Ann.Code
art. 29, § 1-101 et seqg.; Katz v. Washington Suburban Sanitary
Comm’n, 284 Md. 503, 397 A.2d 1027, 1031 (1979). For pur-
poses of Maryland’s Local Government Tort Claims Act
(‘‘LGTCA’’), however, WSSC is treated as a local govern-
ment, and is therefore subject to the provisions of the LGTCA.
Md.Cts. & Jud.Proc. Code Ann. § 5-401(d)(7).
The LGTCA generally requires that plaintiffs give local
governmental defendants notice of any action for unliquidated
damages within 180 days of the claim’s accrual. Jd. § 5-404(a).
An exception in the statute provides that ‘‘unless the defen-
dant can affirmatively show that its defense has been prejudiced
by lack of required notice, upon motion and for good cause
shown the court may entertain the suit even though the re-
quired notice was not given.’’ Jd. at § 5-404(c). In the instant
case, Westfarm did not give notice to WSSC within 180 days,
but the district court waived the LGTCA notice requirement
on the grounds that Westfarm had shown good cause for the
delay and WSSC had not shown prejudice from the delay.
WSSC now challenges the distict court’s waiver, which
10a
we review for abuse of discretion, see Madore v. Baltimore
County, 34 Md.App. 340, 367 A.2d 54, 57-58 (1976).
[1] The test for showing ‘‘good cause’’ for the purposes
of an LGTCA notice waiver is ‘‘ ‘whether the claimant pros-
ecuted his claim with that degree of diligence that an ordinari-
ly prudent person would have exercised under the same or
similar circumstances.’ '’ Madore, 367 A.2d at 57 (quoting Lee
v. Houston Fire & Casualty Co., 530 S.W.2d 294, 296 (1975)).
In the instant case, the circumstances involved environmen-
tal contamination, the source and causation of which typically
require lengthy investigation for even an extraordinarily diligent
person to discern. Cf. Lamb v. Global Landfill Reclaiming,
111 N.J. 134, 543 A.2d 443, 451-52 (1988) (holding that courts
should take into account particular difficulties of proof inherent
in environmental pollution claims when waiving the analogous
notice provision of New Jersey law). Westfarm promptly in-
vestigated the source of PCE as soon as PCE was discovered
on its property. Once IFI was identified as a source, Westfarm
immediately instituted suit against IFI. In the course of fur-
ther investigation, Westfarm put WSSC on notice of the con-
tamination by requesting extensive discovery, including a video
camera inspection of WSSC’s sewers in August of 1992. In
November 1992, IFI instituted suit against WSSC, and
Westfarm amended its complaint to add WSSC as a defendant
in early 1993. Under these circumstances, it was not an abuse
of discretion for the district court to have found that Westfarm
exercised reasonable diligence, and thus had shown ‘‘good
cause’’ for waiving the LGTCA notice requirement.
[2] WSSC claims that it was prejudiced by the failure to com-
ply with the 180-day notice requirement. According to WSSC,
Westfarm conducted key depositions before WSSC was on
notice of suit, and WSSC would have been able to protect
lla
its interests if it had received notice of the depositions. WSSC,
however, has not pointed to anything it would have done at
these depositions which could have ‘‘protected its interests.”’
Moreover, circumstantial evidence indicates that WSSC would
have done nothing; WSSC did not engage in discovery until
months after it became party to the suit, and although WSSC
moved to continue the discovery cut-off, it withdrew the mo-
tion prior to obtaining a ruling by the district court. In light
of those facts, WSSC has failed to show prejudice. Under the
circumstances, the district court did not abuse its discretion
in waiving the notice requirement.
B. CERCLA:
[3, 4] Congress enacted CERCLA to protect public health
and the environment from inactive hazardous waste sites.
H.R.Rep. No. 1016(1), 96th Cong., 2d Sess. 1 (1980),
reprinted in 1980 U.S.C.C.A.N. 6119, 6119. CERCLA is a
comprehensive remedial statutory scheme, and as such, the
courts must construe its provisions liberally to avoid frustrating
the legislature’s purpose. E.g., United States v. Carolina
Transformer Co., 978 F.2d 832, 838 (4th Cir.1992); Dedham
Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074,
1081 (1st Cir.1986). CERCLA encourages private individuals
to clean up environmental hazards by permitting them to
recover specified costs of cleanup from parties defined by
CERCLA to be responsible for the hazards. E.g., Nurad, Inc.
v. William E. Hooper & Sons Co., 966 F.2d 837, 841 (4th
Cyr.), cart. domed, _... U.S. —... 118 S.Ct. 377, 121
L.Ed.2d 288 (1992). Potentially responsible parties under
CERCLA are strictly liable for cleanup costs, e.g., United
States v. Monsanto Co., 858 F.2d 160, 167 & n. 11 (4th
Cir.1988) (‘‘[T]he overwhelming body of precedent . . . has
interpreted [CERCLA] as establishing a strict liability
scheme.’’), cert. denied, 490 U.S. 1106, 109 S.Ct. 3156, 104
12a
L.Ed.2d 1019 (1989), subject only to the statute’s narrow
defenses for damages caused solely by acts of God, war, or
third parties. 42 U.S.C. § 9607(a), (b).
In order to recover the costs of cleanup under CERCLA,
a plaintiff must show (1) that the defendant ‘‘owned or
operated’’ a ‘‘facility’’ from which there was a ‘‘release’’ or
‘threatened release’’ of a hazardous substance, (2) that the
defendant is a ‘‘potentially responsible person,’’ and (3) that
the plaintiff incurred necessary cleanup costs ‘‘consistent with
the national contingency plan.”’ 42 U.S.C. §§ 9601(9),
9601(20), 9601(22), 9605, 9607(a); see generally New York v.
Shore Realty Corp., 759 F.2d 1032, 1039-42 (2d Cir.1985)
(overview of CERCLA). Upon Westfarm’s motion for sum-
mary judgment against WSSC on liability under CERCLA, the
district court found that the undisputed facts established all
of these elements.
In reviewing a grant of summary judgment, we must apply
a de novo standard of review, drawing all reasonable inferences
in favor of the nonmoving party. E.g., Carolina Transformer,
978 F.2d at 835. Summary judgment is proper when no ge-
nuine disputes of material fact remain, and the moving party
is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).
WSSC contends that summary judgment should have been
granted for, rather than against, it on Westfarm’s claim under
CERCLA. WSSC argues that on the undisputed facts, it was
not an operator of a‘‘facility’’ and its actions did not constitute
a “‘release.’” WSSC also argues that genuine disputes of
material fact existed as to whether WSSC had caused a release
or was instead entitled to the third party ‘‘innocent landowner”’
defense.
13a
1. Definition of ‘‘Factlity‘’ Under CERCLA.
A “‘facility’’ is defined under CERCLA as: (A) any
building, structure, installation, equipment, pipe, or pipeline
(including any pipe into a sewer or publicly owned treat-
ment works®), well, pit, pond, lagoon, impoundment,
ditch, landfill, storage container, motor vehicle, rolling
stock, or aircraft, or (B) any site or area where a hazar-
dous substance has been deposited, stored, disposed of,
or placed, or otherwise come to be located; but does not
include any consumer product in consumer use or any
vessel.
42 U.S.C. § 9601(9).
WSSC argues that the language of the statute evinces a Con-
gressional intent to exclude ‘‘publicly owned treatment
works,’’ or POTWs, such as WSSC’s sewer, from the defini-
tion of ‘‘facility.’” WSSC notes that to conclude that a POTW
is a ‘‘facility’’ would be to render the parenthetical language
above, ‘‘including any pipe into a sewer or publicly owned
treatment works’’ surplusage, contrary to traditional rules of
statutory interpretation. See, e.g., Ratzlaf v. United States,
sonia: A ,114S.Ct. 655, 659, 126 L.Ed.2d 615
(1994) (cautioning that courts should hesitate to interpret
statutes in ways that make some of their language mere
surplusage). Looking only to the subpart of the statute quoted
above, WSSC is correct that to read the statute to include
POTWs renders the parenthetical language surplusage; if
POTWs are included in the definition of ‘‘facility,’’ the words
‘‘pipe or pipeline’’ with no further explanation would suffice.
[5] Reading CERCLA as a whole, however, as we must
when interpreting a statute, see, e.g., United States v.
5A sewer system is a publicly owned treatment works.
l4a
Thompson/Center Arms Co., 504 U.S. 505, 512 n. 5, 112 S.Ct.
2102, 2107 n. 5, 119 L.Ed.2d 308 (1992) (‘‘normal canons
of construction caution [courts] to read the statute as a
whole’’), leads to the inescapable conclusion that Congress
did not intend to exclude POTWs from liability. Congress ex-
pressly abrogated state sovereign immunity under CERCLA,
see Pennsylvania v. Union Gas Co., 490 U.S. 1, 8, 109 S.Ct.
2273, 2278, 105 L.Ed.2d 1 (1989) (‘‘Congress intended that
States be liable along with everyone else for cleanup costs
recoverable under CERCLA.’’), thereby subjecting ‘‘facilities’’
owned and operated by state governments to liability. A nar-
row exception to the definition of ‘‘owner or operator,”’
however, was carved to exclude state and local governments
from liability when they have acquired ownership of a facility
‘involuntarily through bankruptcy, tax delinquency, abandon-
ment, or other circumstances in which the government involun-
tarily acquires title.’’ 42 U.S.C. § 9601(20)(D). The traditional
maxim of statutory interpretation that ’’the inclusion of one
is the exclusion of the other,’’ Glickstein v. United States, 222
U.S. 139, 142, 32 S.Ct. 71, 73, 56 L.Ed. 128 (1911), reminds
us that if Congress had intended to exclude state and local
governments from liability in other situations—such as when
they, through their POTWs, are otherwise liable under
CERCLA—Congress would have either: (a) excluded all state
and local governments from the definition of ‘‘owner or
operator,’’ rather than limiting the exclusion to the involun-
tary acquisition situation; or (b) included POTWs in the list
of entities excluded from the definition of ‘‘owner or operator.’’
Cf. Key Tronic Corp. v. United States, ___ U.S. j ;
114S Ct. 1960, 1967, 128 L.Ed.2d 797 (1994) (Congressional
inclusion of provisions for fee awards in some situations under
CERCLA strongly suggests a deliberate decision not to award
fees in other situations). In the context of the entire statute,
it appears that Congress added the language, ‘‘including any
15a
pipe into a sewer or publicly owned treatment works,’’ to em-
phasize the point that pipes leading into sewers or POTWs
are the responsibility of the owner or operator of the pipes,
not the sewer or POTW. See United States v. Powell, 379 U.S.
48, 56, 85 S.Ct. 248, 254, 13 L.Ed.2d 112 (“‘Our reading of
the statute is said to render [one clause] surplusage to a large
exent, for, as interpreted, the clause adds little. . . . [BJut
we think its primary purpose was no more than to emphasize
[a point].’’).
{6] WSSC also argues that the fact that the Clean Water
Act (‘‘CWA’’) and the Resource Conservation and Recovery
Act (‘‘RCRA’’) permit certain levels of hazardous materials,
including PCE, to be discharged into sewer systems,
demonstrates that Congress could not have intended then to
make sewer systems operators liable for the foreseeable sewer
leaking of the PCE which was permitted to be in the pipes
in the first place. WSSC fails to recognize, however, that-
Congress is unlikely to have assumed that sewer systems
would keep their pipes in poor repair, thus drastically increas-
ing the possibility that chemicals which travel through the pipes
would leak into the environment. Moreover, WSSC’s argu-
ment fails to take account of the different purposes served
by CWA and RCRA on the one hand, and CERCLA on the
other. As explained by the Second Circuit, in rejecting a similar
argument:
RCRA is preventative; CERCLA is curative. It does not
follow that because the environmental risk posed by
household waste is deemed insufficient to justify the most
stringent regulations governing its day-to-day handling
that the environmental harm caused when that risk is
realized is insufficient to require holding liable those
responsible for that harm. . . . Even total compliance with
[RCRA] regulations will not prevent releases or avoid
CERCLA liability.
16a
B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1202-03 (2d
Cir.1992).6 Congress’s remedial purposes in enacting
CERCLA are best served by including POTWs within the term
‘“facilities,’’ irrespective of the prospective regulations in CWA
and RCRA.
[7] Finally, WSSC warns us that we should not interpret
‘‘facilities’’ to include POTWs because to require state and
local governments to pay for the cleanup of wastes dumped
by others into sewers would be unfair—because taxpayers
generally will foot the bill for the polluters — and unwise —
because polluters will not internalize their own externalities.
From an fairness perspective, WSSC’s argument may appear
meritorious. To make taxpayers, including taxpayers who do
not use dry cleaners, pay for remedying damage caused by
dry cleaning seems unfair—the people who used dry cleaners
and the dry cleaning companies were the only ones who
benefitted from the dry cleaning prices which, when IFI was
dumping PCE in the sewer, were presumably lower than the
dry cleaning prices would have been if IFI had been paying
to dispose of PCE properly. From an economic efficiency
perspective, WSSC may also have a strong argument. When
industries pay for all costs, including any environmental cost,
incurred in producing goods and services, the prices of those
goods and services will reflect the real costs, and welfare-
maximizing consumers will steer the economy in the most ef-
ficient direction. For example, if dry cleaning prices, once the
cost of disposing of wastes safely was internalized, were $25
per shirt rather than $2 per shirt, people probably would start
wearing more shirts which could be washed in the washing
SRCRA excludes household wastes from stringent regulation, see 42
U.S.C. § 6903(27), yet a garbage dump can still be liable under CERCLA
for cleanup costs for damages caused by hazardous substances released
from household wastes. See Goodrich, 958 F.2d at 1201-03.
17a
machine, and utility would be maximized.
However, contrary public policy arguments come to mind
quickly. First, in light of the fact that many small business
polluters are no longer in business or have pockets too shallow
to pay for costs of environmental cleanup, all taxpayers, who
are all hurt by pollution, benefit from paying for the cleanup
rather than facing no cleanup at all. Cf. Shore Realty, 759 F.2d
at 1045 (‘‘Congress had well in mind that persons who dump
or store hazardous waste sometimes cannot be located or may
be deceased or judgment-proof.’’). Second, all taxpayers
benefitted from lower tax rates during the period when WSSC
failed to spend funds needed to mend leaks in the sewer pipes.
Finally, although Congress can regulate pollution so as to in-
ternalize environmental costs in the future, Congress cannot
turn back the clock and truly internalize the costs of past pollu-
tion because the people who bought dry cleaning at the former,
artificially low prices are not necessarily the same people who
would buy dry cleaning at the artificially high prices which would
occur if the dry cleaner were now forced to pay all of the costs
of past pollution. The infeasibility of perfectly internalizing past
costs compared to the potentially perfect ability to internalize
future costs may explain why Congress limited the liability of
POTWs under RCRA and CWA, both forward-looking
statutes, yet did not exempt POTWs from liability under
CERCLA, a remedial statute. See Goodrich, 958 F.2d at 1202.
We sit as a court, not a super-legislature. While the public
policy arguments raised by WSSC may be meritorious, we can
only presume that those arguments were weighed and rejected
by Congress when it enacted CERCLA without including a
broad exemption for state and local governments or their
POTWSs. Therefore, we affirm the district court’s finding that
WSSC’s sewer pipes are a ‘‘facility’’ under CERCLA.
18a
2. Definition of ‘‘Release’’ Under CERCLA.
[8] According to WSSC, the movement of PCE through
cracks in WSSC’s sewer onto Westfarm’s land should not be
considered a ‘‘release’’ under CERCLA. We, like the district
court, reject WSSC’s contention. .
A ‘‘release’’ is defined under CERCLA as:
any spilling, leaking, pumping, pouring, emitting, emp-
tying, discharging, injecting, escaping, leaching, dump-
ing, or disposing into the environment... .
42 U.S.C. § 9601(22). The Fourth Circuit has interpreted the
words ‘‘leaking’’ and ‘‘spilling’’ in CERCLA’s parallel, ex-
tremely broad definition of ‘‘disposal’’ to include passive con-
duct. See Nurad, 966 F.2d at 845. For example, if tanks which
have been placed on a defendant’s land by a previous owner
leak contaminants, the subsequent owners, who did not place
the tanks or their contents on the land, potentially are liable
as Owners or operators at the time of a ‘‘disposal.’’ See id.
at 845. The plain meaning of the statute supports the Nurad
reading; ‘‘leaking,’’ ‘‘leaching,’’ and ‘‘escaping’’ are all words
which imply passive conduct.
WSSC urges us to distinguish Nurad on its facts, arguing
that Nurad involved subsequent owners of facilities which
released hazardous material, but did not address the ques-
tion of migrating releases which travel through various pro-
perties. WSSC claims that to find that the leaking from WSSC’s
sewers was a release would lead to the ‘‘unfair’’ result that
Westfarm would be liable if contaminants leaked onto its land
and then flowed onto another’s land. However, we see no
reason to limit the holding in Nurad to those ‘‘multiple
releases’’—1.e., releases from a defendant’s property where
the defendant was not the first person to release the hazar-
dous material, but is releasing a hazardous material which
19a
previously has been released by another—which are non-
migrating. CERCLA is designed to insure cleanup of the en-
vironment, and our inclusion of ‘‘multiple releases’’—whether
separated in time or in space—within the definition of
‘‘release’’ best effectuates CERCLA’s remedial goals. Our
sister circuits which have considered the question agree that
CERCLA imposes liability for multiple releases. See e.g.,
Dedham Water, 889 F.2d at 1151 (1st Cir.); Tanglewood East
Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1573
(5th Cir.1988) (refusing to limit ‘‘disposal’’ to a one-time oc-
currence because ‘‘there may be other disposals when hazar-
dous materials are moved, dispersed or released. . . .’’);
Shore Realty, 759 F.2d at 1045 (2d Cir.); see also Lincoln Pro-
perties Ltd. v. Higgins, 823 F.Supp 1528, 1536-39
(E.D.Cal.1992). But see, e.g., Kaiser Aluminum & Chem.
Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1342 n. 7 (9th
Cir.1992) (declining to reach issue of whether a passive se-
cond releaser in a multiple release scenario may be held liable).
Moreover, we may speculate that Westfarm cleaned up the
PCE on its property in part because of fear of future CERCLA
liability if the PCE on its land one day were to flow onto
another’s land. As we explained in Nurad, ‘‘[a} CERCLA
scheme which rewards indifference to environmental hazards
and discourages voluntary efforts at waste cleanup cannot be
what Congress had in mind.’’ Nurad, 996 F.2d at 845-46.
Although the simplistic slogan, ‘‘make the polluter pay,’’ may
have helped propel CERCLA into law, see, e.g., Long Beach
Unified Sch. Dist. v. Dorothy B. Godwin Living Trust, 32 F.3d
1364, 1369 (9th Cir.1994), the statutory scheme does not take
a simplistic view of who is and is not a “‘polluter.’’ In the ins-
tant case, WSSC’s failure to maintain its pipes in good condi-
tion earned it sone responsibility for the contamination, and
therefore we find no inconsistency between the notion that
CERCLA “‘imposes the costs of cleanup on those responsible
20a
for the contamination,’’ Union Gas, 491 U.S. at 7, 109 S.Ct.
at 2277, and the notion that the leaking of PCE from WSSC’s
sewers constituted a release. Therefore the district court did
not err in holding that the PCE leaking from WSSC’s sewers
was a release within the meaning of CERCLA.
3. General Dispute of Matenal Fact as to Causation.
[9] Contrary to the rule followed in most areas of the law,
the burden of proof as to causation in a CERCLA case lies
with the defendant. See, e.g., In re Bell Petroleum Servs. Inc.,
3 F.3d 889, 893 n. 4 (5th Cir.1993) (citing cases); Monsanto,
858 F.2d at 170 & n. 17. The plaintiff must prove only that
contaminants which were once in the custody of the defen-
dant could have travelled onto the plaintiff's land, and that
subsequent contaminants (chemically similar to the con-
taminants once existing in defendant’s custody) on the plain-
tiff’s land caused the plaintiff to incur cleanup costs. See Mon-
santo, 858 F.2d at 169. Cf. White v. County of Newberry, South
Carolina, 985 F.2d 168, 174 (4th Cir.1993) (finding tht
because plaintiffs had not shown that contaminants were ever
located on defendant County’s land, grant of summary judg-
ment in favor of County on CERCLA claim was proper). The
plaintiff need not produce any evidence that the contaminants
did flow onto its land from the defendant’s land. Rather, once
plaintiff has proven a prima facte case, the burden of proof falls
on the defendant to disprove causation.
Congress adopted this unique allocation of the burdens of
proof after specifically rejecting a version which would have
required the plaintiff to prove causation. See Monsanto, 858
F.2d at 170 n. 7. As we have explained elsewhere:
In deleting causation language from section 107(a) [of
CERCLA], we assume as have many other courts, that
2la
Congress knew of the synergistic and migratory capacities
of leaking chemical waste, and the technological infeasibili-
ty of tracing improperly disposed waste to its source.
Id. at 170. Because the defendant bears the burden of proof
as to causation, a defendant, to survive summary judgment,
must come forward with sufficient evidence from which a jury
could find that the defendant was mot the source of the
contamination.
[10] WSSC asserts that it met that burden by producing the
following evidence: (1) an affidavit of an expert, Dr. Ram,
stating that ‘‘[c]urrent evidence does not substantiate the
WSSC sewer as a source of PCE contamination to the underly-
ing acquifer,’’’; (2) ‘‘WSSC’s ability to produce evidence that
the sewer did not leak.’’ The second contention is false; WSSC
never produced any evidence that the sewer did not leak, and,
on the contrary, Westfarm produced abundant evidence that
the sewer did leak. The first piece of evidence, too, did not
serve to meet WSSC’s burden because Dr. Ram’s statement
does not indicate that WSSC could disprove causation—only
that the evidence did not prove causation. Because the burden
lay on WSSC to disprove that it was a source of PCE, the fact
that the evidence on summary judgment produced a genuine
dispute as to whether the evidence proved WSSC to be a
source was not material, and could not serve as a basis to deny
summary judgment to Westfarm. See Celotex Corp. v. Catrett,
477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d
7At trial, Dr. Ram expounded on his testimony, and indicated that in
his expert opinion, the PCE on Westfarm’s land had travelled there from
a dumpster on IFI property into which IFI had placed PCE-contaminated
trash, rather than from WSSC’s sewer. However, apparently the jury did
not believe his testimony, as the jury held WSSC liable in negligence for
the PCE cobntamination. Moreover, his testimony was not before the
district court on Westfarm’s motion for summary judgment, and it cannot
be used now to manufacture a genuine issue of material fact as to whether
WSSC had disproved causation.
22a
265 (1986) (holding summary judgment is proper against non-
moving party who fails to produce evidence ‘“‘sufficient to
establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof
at trial’’).
A similar situation existed in Artesian Water Co. v. New Cas-
tle County, 659 F.Supp. 1269 (D.Del. 1987), aff'd 851 F.2d
643 (3d Cir.1988). In that case, summary judgment was
granted despite the defendant’s submission of an expert af-
fidavit opining that the toxic wastes at issue could not be
shown, with ‘‘any reasonable degree of probability,’’ to have
emanated from defendant’s site. Jd. at 1281. The fact that
the evidence did not prove causation, did not create a genuine
dispute as to whether the defendants could state with any
reasonable degree of probability that the toxic wastes did not
emanate from defendant’s site. Jd. at 1282. As in Artesian
Water, summary judgment was appropriate here, because the
defendant did not produce a genuine dispute of material fact
as to noncausation.®
4. Innocent Landowner Defense Under CERCLA.
[11] CERCLA provides ‘‘a limited affirmative defense bas-
ed on the complete absence of causation,’’ Monsanto, 858
8WSSC attempts to distinguish Artesian Water by claiming that the ex-
pert in that case was testifying about contamination of ‘‘sites’’ beyond
the defendant’s land, not about the plaintiff's land. However, the plain-
tiff’s land was one of the ‘‘sites’’ beyond the defendant’s land, and thus
was included in the expert’s opinion. Artesian Water, 659 F Supp at 1281.
The expert was simply stating the no longer remarkable proposition that
tracing pollution from one site to its source is technologically infeasible.
See, e.g., Monsanto, 858 F.2d at 170. The district court in Artesian Water
properly found that such expert opinion did not create a genuine issue of
material fact as to whether the defendant could disprove that it was the
source of contamination at plaintiff's site.
23a
F.2d at 168, known as the ‘‘innocent landowner defense.’’
The elements of this ‘‘third party defense’’ are the follow-
ing, each of which must be proven by the defendant by a
preponderance of the evidence: (1) that another party was the
‘‘sole cause’’ of the release of hazardous substances and the
damages caused thereby; (2) that the other, responsible par-
ty did not cause the release in connection with a contractual,
employment, or agency relationship with the defendant; and
(3) that the defendant exercised due care and guarded against
the foreseeable acts or omissions of the responsible party.
42 U.S.C. § 9607(b)(3). We find that WSSC failed to produce
sufficient evidence of the ‘‘due care’’ element of the defense.°
The ‘‘due care’’ element of the third party defense requires
the defendant to prove that it ‘“exercised due care with respect
to the hazardous substance concerned,’’ and that it ‘‘took
precautions against foreseeable acts or omissions of
any .. . third party.’’ Jd. WSSC claims that it presented suf-
ficient evidence from which a reasonable jury could find that
it exercised due care and took precautions against foreseeable
acts of IFI. WSSC claims that IFI’s acts of dumping PCE into
the sewers were unforeseeable, and therefore due care did
not require WSSC to take any precautions.
[12] As we previously have explained in connection with
a landowner’s claim that a tenant’s waste disposal was un-
forseeable, CERCLA does not sanction ‘‘willful or negligent
blindness.’’ Monsanto, 858 F.2d at 169; see also Shore Real-
ty, 759 F.2d at 1049 (finding that defendant landowner who
was aware of the nature of tenants’ activities could have fore-
seen dumping of hazardous waste). The undisputed evidence
at summary judgment indicated that WSSC knew from
*We therefore do not need to reach the question of whether the other
two elements were shown.
24a
inspecting IFI’s facility that IFI used PCE and knew that IFI
poured hazardous substances into the sewer. In fact, WSSC
regulations permitted discharges of certain quantities of toxic
organics and other hazardous substances. WSSC was also
aware that cracks were present in its sewer. Yet WSSC took
no precautions—such as mending the pipes or banning the
discharge of toxic organics—agairlst the foreseeable result that
hazardous substances such as PCE would be discharged into
the sewer. CF. Lincoln Properties, 823 F Supp. at 1542-43
(holding County sewer authority entitled to assert innocent
landowner defense where the County ‘‘took reaSonable
precautions to prevent releases of hazardous substances’’ and
‘‘no evidence [existed] that the County could or should have
foreseen the releases.’’). WSSC had the power to abate the
foreseeable release of PCE, yet failed to exercise that power.
In light of such failure, we cannot find that any genuine dispute
was created that WSSC exercised due care or took precau-
tions against the foreseeable acts of third parties such as would
have entitled it to the ‘‘innocent landowner’’ defense. Cf.
Nurad, 966 F.2d at 842 (in interpreting definition of
‘‘operator,’’ declining ‘‘to absolve from CERCLA liability a
party who possessed the authority to abate the damage caus-
ed by the disposal of hazardous substances but who declined
to actually exercise that authority by undertaking efforts at
a cleanup.’’).
[13] Finally, WSSC’s policy argument that CERCLA liability
in the instant case will force sewer operators to fear liability
from ‘‘every toilet, sink, shower and bath,”’ falls flat. If
domestic users of sewers do not foreseeably release hazar-
dous materials into the sewer system, the third party defense
will allow WSSC to avoid liability for an unforeseeable dump-
ing of hazardous substances into domestic plumbing.
Because no genuine issue of material fact remained, the
district court properly entered summary judgment for West-
farm on the CERCLA liability claim.
25a
C. Negligence:
Westfarm asserted negligence as a state law claim—under
both diversity and pendent jurisdiction—against WSSC. Thus,
Maryland law applies to the issues of duty and proximate cause
raised on appeal. See Ene R.R. v. Tompkins, 304 U.S. 64,78,
58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). Negligence under
Maryland law consists of the familiar common law elements:
‘First, the defendant must be under a duty to protect
the plaintiff from injury. Second, the defendant must fail
to discharge that duty. Third, the plaintiff must suffer ac-
tual loss or injury proximately resulting from that failure.’’
Hartford Insurance Co. v. Manor Inn of Bethesda, Inc., 335
Md. 135, 642 A.2d 219, 225 (1994) (quoting Lamb v. Hopkins,
303 Md. 236, 492 A.2d 1297, 1300 (1985)).
WSSC challenges the district court’s holding that it had a
duty to Westfarm, and the district court’s finding that suffi-
cient evidence of proximate cause had been produced to send
the case to the jury. Thus, WSSC argues that it was entitled
to a directed verdict on the negligence claim. We review a
denial of a motion for a directed verdict de novo, employing
the same standard used by the district court—whether view-
ing the evidence in the light most favorable to the opposing
party, a reasonable jury could come to but one conclusion.
See County of Newberry, 985 F.2d at 172-73; Gairola v.
Virginia Dep’t of General Servs., 753 F.2d 1281, 1285 (4:h
Cir.1985).
1. Duties oj Sewer Operators.
WSSC asserts that, as a matter of law, a sewer operator
has no duty to protect adjacent landowners from pollutants
originating with other landowners, and that Westfarm was per-
mitted to present inadmissible evidence to the jury on the du-
ty issue. Westfarm replies that WSSC owed Westfarm a duty
26a
of reasonable care in the construction, maintenance, and opera-
tion of its sewer, and that its evidence regarding the duty was
proper. A trial court’s finding of a duty of reasonable care is
a legal question reviewed de novo. See Eisel v. Board of Educ.,
324 Md. 376, 597 A.2d 447, 452-56 (1991) (determining ex-
istence of a duty as a matter of law). A decision to admit
evidence is reviewed for an abuse of discretion. See Hottle v.
Beech Aircraft Corp., 47 F.3d 106, 111 (4th Cir.1995).
[14] a. Public duty exception. WSSC, as a state agency, or-
dinarily would be entitled to sovereign immunity from any com-
mon law claims such as negligence. See Katz, 397 A.2d at 1032.
In 1927, however, Maryland waived WSSC’s sovereign im-
munity, Md. Code Ann. art. 29, § 1-201, and Maryland courts
have since held that WSSC can be sued, Katz, 397 A.2d at
1034. Specifically, WSSC can be sued for negligent construc-
tion, maintenance, and operation of its sewer systems, Katz
397 A.2d at 1028-29 (holding that plaintiffs could state claims
against WSSC for negligence when WSSC’s water main burst
and caused flooding, and when rocks and debris in WSSC’s
fire hydrants caused fire hoses to become clogged), as can
local governments operating sewer systems, ¢.g., True v.
Mayor of Westernport, 196 Md. 280, 76 A.2d 135, 136 (1950)
(‘‘A municipality is liable not only for negligence in the con-
struction of a sewer, but also for negligence in failing to keep
it in proper repair.’’) (citation omitted). The rationale for per-
mitting suits against sewer systems run by localities was bas-
ed upon the governmental-proprietary function distinction in
Maryland municipal government law, see Maryla>>!-National
Capital Park & Planning Comm'n v. Kranz, 308 Md. 618,
521 A.2d 729, 731 (1987) (explaining governmental-proprietary
distinction); Birge v. Town of Easton, 274 Md. 635, 337 A.2d
435, 438 (1975) (holding that ‘‘a municipality which operates
a utility acts in a business or proprietary, rather than a govern-
mental capacity. . . .’”); Taylor v. Mayor of Baltimore, 130
‘
27a
Md. 133, 99 A. 900, 904-05 (1917) (holding that municipality,
to same extent as a private entity, is not immune from suit
for tortious construction or maintenance of sewers), a distinc-
tion which is not applicable to state agencies such as WSSC,
see Maryland-National, 521 A.2d at 733; Prince George’s
County v. Blumberg, 44 Md. App. 79, 407 A.2d 1151, 1177
(1979) (Blumberg I), rev'd on other grounds, 288 Md. 275,
418 A.2d 1155 (1980) (Blumberg I) (reversing for failure to
exhaust administrative remedies). The rationale for permit-
ting suits against WSSC is that the Maryland legislature has
expressly waived WSSC’s sovereign immunity.
[15] WSSC’s waiver of sovereign immunity does not,
however, subject it to suit for all of its actions. Rather, under
the public duty doctrine, WSSC may not be held liable for
negligent acts or omissions in the enactment or enforcement
of regulations. But cf. Blumberg IT, 418 A.2d at 1166-67 (ad-
ministrative remedies may be pursued against WSSC on claims
of wrongful issuance or revocation of permits). The public duty
doctrine is based on the premise that
‘‘Absent statutory intention to the contrary, the duty to
enforce statutory law is a duty owed to the public general-
ly, the breach of which is not actionable on behalf of the
private person suffering damage.’’
Willow Tree Learning Ctr. Inc. v. Prince George’s County, 85
Md. App. 508, 584 A.2d 157, 161 (1991) (quoting Duranv. City
of Tucson, 20 Ariz.App. 22, 509 P.2d 1059, 1063 (1973)).
WSSC argues that the ’’public duty doctrine’ exempts it from
liability to Westfarm for negligence.
[16] WSSC had no common law duty to Westfarm to enact
or enforce regulations which might have prevented IFI from
putting PCE or other dangerous chemicals into the sewer. Cf.
E. Eyring & Sons Co. v. City of Baltimore, 253 Md. 380,
28a
252 A.2d 824, 825-26 (1969) (no common law duty to enact
or enforce building codes to protect the personal or property
interests of individuals). Similarly, WSSC’s existing regula-
tions did not ‘‘ ‘set forth mandatory acts clearly for the pro-
tection of a particular class of persons rather than the public
as a whole,’ ’’ and therefore did not create a statutory duty
from WSSC to Westfarm. See Ashburn v. Anne Arundel Coun-
ty, 306 Md. 617, 510 A.2d 1078, 1087 (1986) (standard for
finding duty created by statute) (citations omitted). However,
where a governmental body’s conduct is a common law tort,
it cannot claim immunity from suit by relying on the fact that,
simultaneously, it was failing to enforce the law. See Quelvog
v. City of Long Beach, 6 Cal.App.3d 584, 86 Cal.Rptr. 127,
132 (1970). And the mere existence of a statute which relates
to similar injuries but does not give rise to a statutory duty
does not preclude the existence of a common law duty. Eisel,
597 A.2d at 454 (finding that existence of statute concerning
student suicide did not give rise to a statutorily-based duty
on the part of school counselors, but neither did the absence
of a statutory duty preclude a common law duty). Thus, the
public duty doctrine does not preclude the exisence of a com-
mon law duty from WSSC to Westfarm to exercise due care
in the construction, maintenance, and operation of the sewer.
[17, 18] The district court properly so held: The court ap-
propriately directed Westfarm, on WSSC’s pretrial motion im
limine, not to argue that WSSC failed to enact or enforce
regulations, !’ and properly instructed the jury that WSSC could
10Westfarm did allude to an improper, ‘‘public duty’’ theory in closing
argument. However, ‘‘juries are presumed to follow their instructions.’’
Richardson v. Marsh, 481 U.S. 200, 211, 107 S.Ct. 1702, 1709, 95
L.Ed.2d 176 (1987). An isolated allusion in closing argument, followed by
the proper instructions given by the district court, could not have preju-
diced WSSC, and therefore cannot form the basis for reversal here.
Fed.R.Civ.P. 61.
29a
be found negligent, not for a breach of its public duties of enact-
ing and enforcing regulations, and not for a breach of any par-
ticular regulation, but rather for a breach of its common law
duties ‘‘to construct the Tech Road sewer in a workmanlike
manner and inspect, maintain, and properly operate that
sewer.’”11
b. Admission of Evidence. WSSC argues that Westfarm was
permitted to present evidence to the jury to substantiate a
theory of negligence in enactment and enforcement of regula-
tion, contrary to the public duty doctrine, WSSC points to
evidence presentedby Westfarm that WSSC took no action
to require IFI to comply with WSSC’s regulations, that WSSC
failed to require IFI to obtain a discharge authorization per-
mit, and that WSSC failed to monitor IFI’s discharges to en-
sure that they were in compliance with the regulations.
[19, 20] However, the evidence pointed to by WSSC was
all relevant and admissible to show foreseeability of the
presence of contaminants in the sewer system, and such
foreseeability relates to two elements of common law
negligence: duty and proximate causation. Foreseeability of
contaminants is necessary not to show that WSSC had a duty
11WSSC’s brief criticizes the district court for refusing to instruct the
jury specifically on the public duty doctrine. However, the district court
did not abuse its discretion in determining that such an instruction was
unnecessary, particularly in light of the voluminous instructions already
given in the case, and the potential for a public duty doctrine instruction
to mislead the jury into believing that the public duty doctrine would apply
to any actions taken by WSSC to address a harm which could have been
addressed by enacting or enforcing regulations instead. See Hardin v. Ski
Venture, 50 F.3d 1291, 1293-94 (4th Cir. 1995) (‘‘District courts are
necessarily vested with a great deal of discretion in constructing the specific
form and content of jury instructions . . . . So long as the charge is ac-
curate on the law and does not confuse or mislead the jury, it is not er-
roneous.’’ (citations omitted)).
30a
to exercise its power to enforce or enact regulations, but to
show that WSSC’s common law duty to exercise due care in
the construction and maintenance of its sewer foreseeably
would be breached by failure to take reasonable action in
response to the contaminants. The fact that the foreseeabili-
ty of the presence of contaminants was proved in part by
WSSC’s failure to enforce its own regulations does not allow
WSSC to escape liability for negligence; as the Federal Rules
of Evidence implicitly recognize, a piece of evidence may be
admitted though it is inadmissible for one purpose, where it
is admissible for another. See Fed.R.Evid. 105 (‘‘When
evidence which is admissible . . . for one purpose but not ad-
missible . . . for another purpose is admitted, the court, upon
request, shall restrict the evidence to its proper scope and
instruct the jury accordingly.’’)!2 The district court did not
abuse its discretion in admitting the evidence.
c. Common Law Duty. Under Maryland law, the following
factors must be considered in determining whether a tort du-
ty should be recognized:
The foreseeability of harm to the plaintiff, the degree of
certainty that the plaintiff suffered the injury, the
closeness of the connection between the defendant’s con-
duct and the injury suffered, the moral blame attached
to the defendant’s conduct, the policy of preventing future
harm, the extent of the burden to the defendant and con-
sequences to the community of imposing a duty to ex-
12Although WSSC might have been entitled, upon a request pursuant
to Federal Rule of Evidence 105, to a jury instruction that the evidence
was to be used to determine foreseeability but not public duty, the failure
to give such a limiting instruction does not constitute reversible error
where, as here, one was never requested. See United States v. Mark,
943 F.2d 444, 449 (4th Cir.1991).
——————
3la
ercise care with resulting liability for breach, and the
availability, cost, and prevalence of insurance for the risk
involved.
Eisel, 597 A.2d at 452 (citations and internal quotation marks
omitted). WSSC argues that we should not recognize a duty
from WSSC to Westfarm to construct, maintain, and operate
sewers with due care, on the basis that two of the factors—
foreseeability and the extent of the burden to the defendant—
weigh against finding a duty.
Turning to the first, and most important element of the du-
ty calculus under Maryland law, see Etsel, 597 A.2d at 452,
foreseeability, we note that Maryland courts further the familiar
social policy of limitation of liability for, unforeseeable conse-
quences which was announced in Palsgraf v. Long Island R.R..,
248 N.Y. 339, 162 N.E. 99 (1928): ‘* ‘The risk reasonably
to be perceived defines the duty to be obeyed, and risk im-
ports relation; it is risk to another or to others within the range
of apprehension.’ ’’ Hartford Ins., 642 A.2d at 226 (quoting
Palsgraf, 162 N.E. at 100). Maryland courts have long
recognized that flooding damage is a type of risk which sewer
operators should reasonably perceive from negligently con-
structed, maintained, or operated pipes which leak or burst.
| See, e.g., Katz, 397 A.2d at 1028; True, 76 A.2d at 136. Thus
the question we now must answer is whether the risk of PCE
entering and injuring an adjacent landowner’s land is of a type
of risk which would reasonably have been foreseen at the time
WSSC engaged in the allegedly negligent conduct of failing to
construct, maintain, and operate its Tech Road sewer with
due care. See Henley v. Prince George’s County, 305 Md. 320,
503 A.2d 1333, 1341 (1986) (foreseeability factor requires
‘‘prospective consideration of the facts existing at the time
of the negligent conduct.’’).
32a
[21] WSSC disavows liability for negligent construction of
the sewer because in 1968, when the sewer was built, it was
unforeseeable that Westfarm or other landowners would be
hurt by WSSC’s faulty construction-work. Of course, in 1968,
it was unforeseeable that IFI would open a laboratory in 1974
and put PCE in the sewer, or that PCE would harm the land
it entered.
However, Westfarm’s claim was for negligent construction,
maintenance, and operation of the sewer, not a discrete claim
for negligent construction. Although WSSC may not have been
negligent when the sewer was constructed originally, the con-
struction of the sewer became negligent over time as it began
to crack and the dangers of leaky sewers became known.
WSSC knew from its 1977 sewer survey that the Tech Road
sewer contained cracks requring repair; a reasonable person
would have perceived that cracks lead to leaks. WSSC was
given notice of the dangers to groundwater from leaky sewers
in 1979, when WSSC hired environmental consultants to help
it respond to the Clean Water Act, which was passed, in part,
to respond to the dangers of leaky sewers. WSSC’s own
employee, Michael Armorer, admitted that WSSC was aware
as far back as 1974 that IFI disposed small amounts chemicals
into the sewer. WSSC’s own regulations permitted the
discharge of toxic organics such as PCE in limited concentra-
tions, and WSSC knew IFI used PCE. Even though IFI did
not report discharges of PCE, WSSC permitted PCE
discharges, WSSC knew IFI used PCE, and WSSC knew that
no sampling had ever been performed to test whether IFI
discharged PCE. Thus, WSSC should reasonably have perceiv-
ed some risk that groundwater contaminants such as PCE
were being released into the sewer.
Once WSSC knew or should have known of the leaks, the
dangers to groundwater of toxic organics, and the risk that
groundwater contaminants were being released, it reasonably
33a
should have perceived that its original construction of the
sewer, and its subsequent failure to inspect and repair the
sewer, could cause groundwater contamination to neighbor-
ing land. Because Westfarm was clearly within the class of
landowners whose land foreseeably would have been harmed
by WSSC’s negligence, WSSC owed Westfarm a duty to
reconstruct, maintain and operate the sewer in a manner
reasonably calculated to avoid the harm.
{22] Although WSSC claims that ‘‘every toilet, sink, shower
and bath’’ will become a potential source of liability to WSSC—
and thus that the extent of the burden to WSSC weighs against
imposing a duty—we note that the scope of WSSC’s duty is
limited by ordinary principles of negligence. As Maryland
Courts have recognized, ‘‘ ‘[a]ls the duty owed varies with
circumstances and with the relation to each other of the in-
dividuals concerned, so the alleged negligence varies,’ ’’ Hart-
ford Ins., 642 A.2d at 226 (quoting West Virginia Cent. & Pitts-
burgh Ry. v. Fuller, 96 Md. 652, 54 A. 669, 671 (1903)), and
a governmental entity ‘‘does not insure its citizens against
damage from works of its construction, and is only liable as
other proprietors for negligence or willful misconduct,’’
Hanrahan v. Mayor of Baltimore, 114 Md. 517, 80 A. 312,
318 (1911). WSSC argues that because Westfarm admitted
that all sewers leak—because water can pass through a solid
wall of concrete to a small extent—all sewer operators will
be held liable. The duty to exercise reasonable care, however,
does not require a leakproof sewer system, only a sewer which
does not leak unreasonably due to being constructed, main-
tained, and operated without due care. Moreover, the scope
of the duty reasonably to prevent leaks will vary with the
reasonable expectation of what materials foreseeably might
find their way into the sewer; the reasonable construction,
maintenance, and repair of a sewer carrying only ‘“‘toilet, sink,
shower and bath’’ household waste might differ from the
34a
reasonable construction, maintenance, and repair of a sewer
carrying dangerous industrial chemicals. !*
2. Sufficiency of Evidence of Proximate Cause.
To be held liable for negligence, the defendant’s breach of
duty must have been the proximate cause of the alleged in-
jury. As Maryland courts have explained:
Proximate cause ultimately involves a conclusion that
someone will be held legally responsible for the conse-
quences of an act or omission. This determination is sub-
ject to considerations of fairness or social policy as well
as mere causation. Thus, although an injury might not
have occurred ‘‘but for’’ an antecedent act of the defen-
dant, liability may not be imposed if for example the
negligence of one person is merely passive and poten-
tial, while the negligence of another is the moving and
effective cause of the injury .. . or if the injury is so
remote in time and space from defendant’s original
negligence and another’s negligence intervenes.
Peterson v. Underwood, 258 Md. 9, 264 A.2d 851, 855 (1970)
(citations omitted).
(23, 24] Proximate cause will not be found when a third par-
ty’s negligent conduct is an independent intervening cause of
13WSSC also asserts that, as a matter of law, insufficient evidence was
introduced to show negligence, because no expert testified to the scope
of WSSC’s duties, and because a sewer operator’s duties are the type
of specialized duties which are beyond the ken of a layperson. We need
not decide whether the scope of a sewer operator’s.duties is beyond the
ken of a juror, however, because a review of the record reveals that
Westfarm did present expert testimony from a witness, George Frigon,
on the issue. Frigon testified as to the proper construction of a sewer
manhole, the proper position of an ‘‘O-ring’’ in a maintained sewer, and
other sewer construction and maintenance practices which retard leaking.
35a
the injury. Hartford Ins., 642 A.2d at 229. Yet two defendants
may be found jointly liable if each is a proximate cause of the
injury. E.g, Atlantic Mut. Ins. Co. v. Kenney, 323 Md. 116,
591 A.2d 507, 513 (1991); cf True, 76 A.2d at 136 (‘‘The
fact that a property owner’s land is flooded because of an ex-
traordinary rainfall does not relieve the municipality from liabili-
ty, where such rainfall would not have caused the damage in
the absence of the clogging up or stoppage of the sewer, caus-
ed by the negligence of that municipality.’’) (citations omit-
ted). The key to determining whether a third party’s negligent
conduct is a supervening cause or merely a contributing cause
is foreseeability:
[T]he liablity of the person first in fault will depend upon
the question whether the negligent act of the other was
one which a man of ordinary experience and sagacity, ac-
quainted with all the circumstances, could reasonably an-
ticipate or not.
Atlantic Mut., 591 A.2d at 514 (quoting State v. Hecht Co.,
165 Md. 415, 169 A. 311, 313 (1933)). Proximate cause may
be found even where the conduct of the third party is tortious
or criminal, so long as the conduct was facilitated by the first
party and reasonably foreseeable, and some ultimate harm was
reasonably foreseeable. Scott v. Watson, 278 Md. 160, 359
A.2d 548, 556 (1976).
WSSC contends that insufficient evidence was presented
to find that it was the proximate cause of Westfarm’s injury;
indeed, it contends that IFI was an independent intervening
superseding cause. WSSC contends that its actions were too
passive and remote to be deemed a proximate cause, because
IFI’s placement of PCE in the sewer system, which at times
exceeded the concentration levels of WSSC’s regulations, was
unforseeable to WSSC.
36a
[25] Viewing the evidence in the light most favorable to the
nonmovant, however, sufficient evidence existed for a
reasonable jury to determine, as it did, that WSSC’s negligence
was a proximate cause of Westfarm’s injury. Although once
WSSC built its sewer system, it apparently did become quite
‘‘passive’’ in its actions regarding operation and maintenance
of the sewer, this passivity was negligent in and of itself
because WSSC knew that the sewer contained cracks and
should have known that the sewer needed maintenance. WSSC
knew that IFI used PCE, knew that IFI discharged other hazar-
dous chemicals, and knew that IFI’s waste stream had never
been monitored for TTOs. WSSC’s regulations permitted the
discharge of certain concentrations of PCEs such as TTOs.
Under the test for foreseeability established by the Maryland
Court of Appeals, ‘‘looking back from the harm to the actor’s
negligent conduct [to determine whether] it appears to the
court highly extraordinary that [the conduct] should have
brought about the harm,’’ Stone v. Chicago Title Ins. Co., 330
Md. 329, 624 A.2d 496, 500 (1993) (citation omitted), it does
not seem ‘‘extraordinary’’ that the sewer would carry PCE
and leak PCE into the groundwater and then into the adjoin-
ing land of Westfarm. A reasonable jury could have found, as
it did, for the nonomvant, and therefore the district court’s
denial of WSSC’s motion for a directed verdict was proper.
D. Ratsing of Statutory Damage Cap Post-Judgment:
Judgment was entered on the jury’s verdict on August 4,
1993. On August 5, WSSC moved to amend the judgment
under Rule 59(e) of the Federal Rules of Civil Procedure to
reduce its liability on the neglegence judgment to $200,000
based upon the following provision in the Maryland LGTCA:
The liability of a local government may not exceed
$200,000 per an individual claim, and $500,000 per total
a ep ry
37a
claims that arise from the same occurrence for damages
resulting from tortious acts or omissions... .
Md.Cts. & Jud.Proc.Code Ann. § 5-403(a). The liability cap
was enacted on July 1, 1987, and is applicable prospectively
only. Surratt v. Prince George’s County, 320 Md. 439, 578
A.2d 745, 751 n. 5 (1990) As noted supra, although WSSC
is a state agency, it is treated as a local government for pur-
poses of the LGTCA, and therefore is entitled to the benefit
of LGTCA provisions.
WSSC had never directly raised the cap as an issue prior
to the entry of judgment. WSSC claims that it indirectly
raised the statutory cap by pleading governmental immunity
and by raising the notice provisions of the LGTCA. WSSC
also claims that Westfarm knew about the cap, and therefore
has shown no prejudice from any failure of WSSC to raise the
cap prior to trial. We, like the district court, disagree: Rais-
ing the LGTCA’s notice requirement does not effectively raise
the issue of the LGTCA’s damages cap; the two provisions
of the LGTCA are different defenses. Compare Md.Cts. &
Jud.Proc.Code Ann. § 5-403(a) with 1d. § 5-404(a). And while
it is true that prior to WSSC’s entry into this suit Westfarm
indicated, in a motion opposing the addition of WSSC as a party,
an awareness of the statutory cap, this awareness of the law
did not put Westfarm on notice that WSSC would ever raise
the defense.
More substantially, WSSC argues that the cap is a recap-
ture of sovereign immunity, which is not waivable under
Maryland law. As the Maryland Court of Appeals has explain-
ed, under Maryland law
[i]t is of no moment that the matter of sovereign immunity
was not raised below by the pleadings or other-
wise... . “‘[T]he law is well established that counsel
38a
for the State or one of its agencies may not either by af-
firmative action or by failure to plead the defense, waive
the defense of governmental immunity in the absence of
express statutory authorization, or by necessary implica-
tion from a statute.”’
Board of Trustees of Howard Community College v. John K.
Ruff, Inc., 278 Md.580, 366 A.2d 360, 362 (1976) (quoting
Board of Educ. v. Alcrymat Corp., 258 Md. 508, 266 A.2d
349, 353 (1970)). WSSC therefore asserts that any failure of
WSSC to raise the cap prior to entry of judgment does not
waive the cap.
The district court found that the cap is an affirmative defense,
which therefore must be raised, according to Federal Rule of
Civil Procedure 8(c), in the defendant’s answer, unless the
record indicates that the defense has been introduced without
objection and tried by the ‘‘express or implied consent’’ of
the parties, see Fed.R.Civ.P. 15(b). The district court found
that because the defense had not been raised or tried by the
parties, it was waived.
We review a district court’s factual findings on a Rule 59(e)
motion for abuse of discretion, Simon v. United States, 891
F.2d 1154, 1159 (5th Cir.1990), but we review the district
court’s legal holdings de novo, Taylor v. United States, 821
F.2d 1428, 1430 n. 1 (9th Cir.1987) (Taylor I), cert. denied,
485 U.S. 992, 108 S.Ct. 1300, 99 L.Ed.2d 510 (1988) (White,
J., dissenting from denial of certiorari) (Taylor IJ).
We first note that our sister circuits are split as to whether
state or federal law controls the characterization of a state
statutory liability cap when raised in federal court in connec-
tion with a state law claim,. Further, the circuits which hold
tht federal law governs, are split as to how federal law
characterizes a cap. As explained by Justice White in his
39a
dissent from the denial of certiorari in Taylor v. United States:
Under the accepted interpretation of Rule 8(c) of the
Federal Rules of Civil Procedure, any matter ‘‘con-
stituting an avoidance or affirmative defense’’ to the mat-
ters raised in the plaintiff's complaint must be pleaded
in a timely manner or it is deemed to be waived. As a
matter of California law, the state statute at issue in this
case is understood to be an affirmative defense. The Ninth
Circuit held, however, that this determination is not bind-
ing on a federal court because the proper characteriza-
tion of the statute in this case, which was brought in
federal court, is a matter of federal procedural law. The
court ruled that this statute is a mere limitation of liabili-
ty, rather than an avoidance or an affirmative defense.
This conclusion conflicts with the decisions of two other
Courts of Appeals. In Ingraham v. United States, 808 F .2d
1075, 1078-1079 (1987), the Fifth Circuit held that an
identical statutory limitation on damages recoverable in
the State of Texas is an affirmative defense that is wavied
under the Federal Rules by failure to plead it in a timely
manner. And in Jakobsen v. Massachusetts Port Authon-
ty, 520 F.2d 810, 813 (1975), the First Circuit held that
| a statutory limitation on liability is an affirmative defense
under Rule 8(c).
Taylor II, 485 U.S. at 992-93, 108 S.Ct. at 1301 (White, J.,
dissenting from denial of certiorari). More recently, the Tenth
Circuit considered the issue of whether a state statutory cap
on the liability of local governments could be raised in a post-
trial motion. Bentley v. Cleveland County Bd. of County
Comm'rs, 41 F.3d 600, 604-05 (10th Cir.1994). Without
analyzing how the cap is treated under state law, the Tenth
Circuit held that the cap was a waivable limit on liability rather
than sovereign immunity. Jd. at 694. The Tenth Circuit
40a
held further that even if the cap were sovereign immunity,
sovereign immunity is waived when not raised, as a matter of
federal law. Jd. at 604-05.
Thus we are presented with two questions undecided in the
Fourth Circuit: (a) whether state or federal law governs the
characterization of the cap; (b) if federal law governs, whether
it characterizes the cap as (i) an affirmative defense, which is
waived by a failure to raise it at a ‘‘pragmatically sufficient time,”’
Lucas v. United States, 807 F.2d 414, 48 (5th Cir.1986), (i)
sovereign immunity, which is waived by failure to raise it, see
Bentley, 41 F.3d at 604-05, or (iii) a limitation of liability, which
is not waived by a failure to raise it, see Taylor I, 821 F.2d at
1433. Moreover, if we find that Maryland state law governs,
we are led to a question undecided as a matter of Maryland state
law; whether the cap is an affirmative defense, which is waived
by a failure to raise it, or a recapture of sovereign immunity,
which is not waived by a failure to raise it.
[26] We need not decide these thorny and undecided issues
of federal and Maryland law, however, because a review of the
record indicates that any error in failing to permit WSSC to raise
the cap postjudgment was harmless. See Fed.R.Civ.P. 61;
O’Neal v. McAninch, ____ U.S. : , 115 S.Ct. 992,
997,130 L.Ed.2d 947 (1995). Whether or not the cap is governed
by state or federal law, and whether or not the governing law
treats the cap as an affirmative defense, a reenactment of
sovereign immunity or a limit of liability, only two outcomes are
possible—WSSC’s failure to raise the cap until after judgment
either did or did not waive WSSC’s right to an application of
the cap. If the cap was waived, the district court committed no
error. Yet even if the cap was not waived, no reversal is due
here if the application of the cap would not have led to a dif-
ferent result.
[27] Reviewing the record, it is clear that the same damages
<= ——_
4la
would have been awarded whether or not the statutory cap had
been applied. The LGTCA liability cap applies only to ‘‘ ‘actions
arising from events occurring on or after’ [the LGTCA’s] ef-
fect date, [July of 1987].”’ Surratt, 578 A.2d at 751 n. 5. All
of the evidence presented to the jury indicates that the rele-
vant events in this case—the leaking of PCE and WSSC’s
negligence—occurred both before and after July of 1987.
Maryland courts have held that environmental property damage
occurs not at the time of discovery of the property damage,
but at the time ‘‘the discharge of contaminants into the soil and
underlying groundwater is of sufficient gravity to [produce] detec-
table [damage].’’ Harford County v. Harford Mut. Ins. Co., 327
Md. 418, 610 A.2d 286, 295 (1992). The only evidence
presented to the jury on the common law damages issue was
that Westfarm’s property was diminished in value by the very
presence of PCE; as soon a potential buyers learned of the
presence of PCE, the buyers would not purchase the proper-
ty. Because the evidence was undisputed that PCE leaked into
the Westfarm property prior to 1987 and that the damages were
created by the presence of PCE, the jury’s verdict as to the
amount of damages would not have changed if the statutory cap
on post-1987 damages were to have been applied. Therefore
we conclude that the district court’s denial of WSSC’s motion
to amend the judgment is not reversible error.
III. CONCLUSION
For the foregoing reasons, we affirm in all respects. We em-
phasize that we express no opinion as to the wisdom of impos-
ing CERCLA hability on POTWs or of waiving WSSC’s immunity
from common law tort claims. These questions are for the Con-
gress and the Maryland legislature, respectively, to decide.
AFFIRMED.
iii |
42a
APPENDIX B
WESTFARM ASSOCIATES LIMITED
PARTNERSHIP
Vs
INTERNATIONAL FABRICARE
INSTITUT
V.
WASHINGTON SUBURBAN SANITARY
COMMISSION.
Civ.No. HM-92-9.
United States District Court,
D. Maryland.
Nov. 10, 1993.
Jeffrey M. Johnson, Dickstein, Shapiro & Morin,
Washington, DC, for plaintiff.
Duane A. Siler, Deborah M. Lodge, Michael N. Romita,
Patton, Boggs & Blow, Washington, DC, for defendant.
MEMORANDUM AND ORDER
HERBERT F. MURRAY, Senior District Judge.
Presently before the Court is the motion of defendant
Washington Suburban Sanitary Commission (‘‘WSSC’’) for
Revision of Amount of Judgment in Conformance with the Local
Government Tort Claims Act. Plaintiff Westfarm Associates
i
|
;
|
i
43a
Limited Partnership (‘‘Westfarm’’) and defendant International
Fabricare Institute (‘‘IFI’’) have opposed the motion and
WSSC has replied. With these memoranda, the Court finds
the motion is ready for disposition. No hearing is deemed
necessary. Local Rule 105.6 (D.Md.1992).
I. BACKGROUND
The trial of this matter concluded on July 30, 1993, with
the jury returning a verdict of $2.5 million against defendants
IFI and WSSC. The Court entered judgment on the verdict
on August 4, 1993. On August 5, 1993, WSSC filed the ins-
tant motion, which seeks an Order reducing WSSC’s liability
on the judgment to $200,000 based upon the Maryland Local
Government Tort Claims Act (‘“LGTCA’’), Md.Cts. & J.Proc.
§ 5-403(a). The LGTCA imposes a cap on the liability ap-
plicable to local governments. Specifically, § 5-403(a) provides:
The lliability of a local government may not exceed
$200,000 per an individual claim, and $500,000 per total
claims that arise from the same occurrence for damages
resulting from tortious acts or omissions, including liability
arising under subsection (b) of this section and indem-
nification under subsection (c) of this section.
II. DISCUSSION
[1] The Court finds WSSC’s attempt to assert the LGTCA
as a defense at this stage of the proceedings is unavailing for
several reasons.First, the Court agrees that WSSC’s failure
to plead the LGTCA as a defense in its answer or at any time
before the trial concluded and judgment was entered amounted
to a waiver. See Jakobsen v. Mass. Port Authonty, 520 F.2d
810, 813 (1st Cir.1975).?
1Although WSSC asserted in the Pretrial Order that Westfarm’s claims
were barred by the LGTCA’s notice provisions, WSSC did not raise the
44a
Fed.R.Civ.P. 8(c) requires that the defendant include in its
answer certain enumerated defenses and ‘‘any other matter
constituting an avoidance or affirmative defense.’’ In Jakobsen,
the court determined that the Massachusetts version of the
LGTCA imposing a limitation on the Port Authority’s liabili-
ty, while not included among the defenses listed in Rule 8(c),
nevertheless fell within the Rule’s residuary clause and
amounted to an affirmative defense. 520 F.2d at 813; see also
Ingraham v. United States, 808 F.2d 1075, 1079 (5th Cir.1987)
(Texas’ statutory limit on medical malpractice damages is an
affirmative defense which must be pleaded timely or is waiv-
ed); Simon v. United States, 891 F.2d 1154, 1156 (5th
Cir.1990) (failure to affirmatively plead Louisiana Medical
Malpractice Act resulted in waiver of that defense). The
Jakobsen court held that the Port Authority’s failure to plead
the statute as an affirmative defense and its belated assertion
of the defense in a motion for a directed verdict amounted to
a waiver. 520 F.2d at 813.
(2, 3] This court holds that the LGTCA is an avoidance
which WSSC was required to plead affirmatively. See Jakob-
LGTCA as a defense to limit its liability. Moreover, WSSC did not raise
the defense by pleading the ‘‘governmental immunity doctrine’’ in its
answer. Although the Court of Appeals of Maryland has held that the WSSC
is a state agency and therefore immune from tort liability by § 1-3 of the
Washington Suburban Sanitary District Code, the General Assembly
waived that immunity ‘‘with respect to tort actions.’’ Katz v. Washington
Suburban Sanitary Comm'n, 284 Md. 503, 397 A.2d 1027, 1032 (1979);
Prince George’s County v. Blumberg, 44 Md.App.79, 407 A.2d 1151, 1177
(1979), rev’d on other grounds, 288 Md. 275, 418 A.2d 1155 (1980).
Though the WSSC is included among the agencies defined as a ‘‘local
government’’ for purposes of the LGTCA, see Md.Cts. & J.Proc.
§ 5-401(d)(7), the LGTCA bears no relationship to WSSC’s immunity or
the waiver of that immunity pursuant to Md.Ann.Code Art. 29, § 1-201
(1990). Accordingly, WSSC did not raise the issue of the LGTCA by
pleading the governmental immunity doctrine in its answer.
_—
45a
sen, 520 F.2d at 813; Ingraham, 808 F.2d at 1079 (limitation
on liability is an ‘‘avoidance’’ within the intendment of Rule
8(c)’s residuary clause). Generally, the failure to plead an af-
firmative defense results in the waiver of that defense and its
exclusion as an issue in the case. 5 C. Wright & A. Miller,
Federal Practice and Procedure, § 1278 (1990). This rule,
however, is not automatically applied. If the record indicates
the defense has been introduced without objection,
Fed.R.Civ.P. 15(b) requires that the pleadings be treated as
if they had actually raised the issue. But if the unpleaded af-
firmative defense has not been tried by the ‘‘express or im-
plied consent’’ of the parties, the pleadings will not be so con-
strued. Jd.
[4] In the instant case, the record dicloses that WSSC did
not raise the LGTCA’s cap on liability when it filed its answer
to IFI’s third-party complaint on February 17, 1993, or when
it filed its answer to Westfarm’s complaint on July 13, 1993.
The Court agrees that if WSSC intended to rely on the LGTCA
as a defense, Westfarm and IFI were entitled to notice of that
intention when WSSC filed its answer or at a time sufficiently
early to permit Westfarm and IFI an opportunity to address
the defense. See Wright & Miller, § 1278; Canal Ins. Co. v.
Earnshaw, 629 F.Supp. 114, 119 (D.Kan.1985) (defense under
state Automobile Injury Reparations Act waived where defen-
dant failed to assert the Act in its answer or pretrial order);
compare Lucas v. United States, 807 F.2d 414, 418 (5th
Cir.1986) (failure to plead affirmative defense did not result
in waiver where defense was raised at trial at a ‘‘pragmatical-
ly sufficient time’’ and plaintiffs were not prejudiced). At no
time before or during the trial of this action did WSSC raise
any issue relating to the LGTCA, either through a pretrial mo-
tion, trial motion, witness, argument of counsel, or jury in-
struction. Although, as noted abo. _WSSC alluded to the
LGTCA when it asserted in the pretrial order that Westfarm’s
46a
claims were barred by the LGTCA’s notice provisions, WSSC
never claimed that its liability in this action was limited based
upon the LGTCA’s damages cap. Therefore, the Court finds
WSSC’s reference in the pretrial order to the LGTCA’s notice
provisions and insufficient basis for holding that the issue of
the cap was before the Court when this action was tried. See
Jakobsen, 520 F.2d at 813; Earnshaw, 629 F.Supp. at 119.
Westfarm and IFI further argue that they would be preju-
diced if WSSC was permitted to assert the cap at this late date,
contending that had they known WSSC would seek to rely upon
the LGTCA’s cap, their pledings could have been amended
to allege multiple occurrences and their discovery and trial
presentations planned to address the issue. In particular, the
parties could have focused on the number of occurrences and
the extent of damages attributable to WSSC’s negligence prior
to July 1, 1987, the effective date of the LGTCA.
The Court agrees that these are valid considerations where,
as here, the applicability of the cap would require the resolu-
tion of numerous factual issues relating to damages prior to
the statute’s effective date and the specific damage to each
of the six separate parcels of Westfarm’s property. See Lucas,
807 F.2d at 418 (government’s failure to plead statutory cap
on malpractice damages did not waive defense where ap-
plicability of the cap was ‘‘purely a legal issue’’ upon which
the court could pass without need for factual proof); Taylor
v. United States, 821 F.2d 1428, 1433 (9th Cir.1987), cert.
denied, 485 U.S. 992, 108 S.Ct. 1300, 99 L.Ed.2d 510 (1988)
(government’s delay in asserting California statute limiting
recovery for noneconomic damages until filing posttrial mo-
tion did not result in waiver where application of the statute
required no additional factual inquiry).
47a
Ill. CONCLUSION
For the foregoing reasons, the Court finds WSSC’s failure
to plead the LGTCA’s damages cap in its answer or to raise
it at any tirne until after the trial concluded waived that defense
and it will not now be considered by the Court.
Accordingly, it is this 10th day of November, 1993, by the
United States District Court for the District of Maryland,
ORDERED:
(1) that defendant Washington Suburban Sanitary Commis-
sion’s Motion for Revision of Amount of Judgment be, and
the same hereby is, Denied; and
(2) that the Clerk of the Court shall mail a copy of this
Memorandum and Order to the parties.
48a
APPENDIX C
WESTFARM ASSOCIATES LIMITED
PARTNERSHIP
Vv.
INTERNATIONAL FABRICARE
INSTITUTE
V.
WASHINGTON SUBURBAN SANITARY
COMMISSION
Civil No. HM-92-9
Oct. 22, 1993
MEMORANDUM AND ORDER
Presently before the Court is the motion of defendant
Washington Suburban Sanitary Commission (‘‘WSSC’’) for
reconsideration of this Court’s July 16, 1993 Memorandum
and Order granting the motion for partial summary judgment
of plaintiff Westfarm Associates Limited Partnership
(‘‘Westfarm’’) against WSSC. Westfarm and defendant Inter-
national Fabricare Institute (‘‘IFI’’) have opposed the motion
and WSSC has replied. With these memoranda, the Court finds
the motion is ready for disposition.No hearing is deemed
necessary, Local Rule 105.6 (D.Md. 1992).
WSSC’s motion is predicated upon the following claims: (1)
the Court neglected to consider the issue of material fact
created by the affidavit of Dr. Ram; (2) the Court incorrectly
assumed that WSSC designed the Tech Road sewer to ex-
filtrate; (3) there was a dispute of fact as to the cracks in the
sewer; (4) the Court failed to consider the illegal nature of
ee te ee
49a
IFI’s discharges; and (5) the Court should not have held WSSC
liable under CERCLA for the cleanup costs for the Allegany
parcel.
To merit relief by way of a motion for reconsideration, this
Court has held that the ‘‘motion must be timely and prem-
ised on a meritorious defense, an absence of prejudice to the
opposing party, and exceptional circumstances. F.D.J.C. v.
Heidrick, 812 F.Supp 586, 588 (D. Md. 1991) citing Smith
v. Bounds, 813 F.2d 1299 (4th Cir. 1987). Although WSSC’s
motion is timely and Westfarm and IFI have suffered no pre-
judice, the Court finds no merit to any of the reasons WSSC
has advanced in support of its motion. The Court will therefore
not depart from or amend any of the rulings in its July 16, 1993
Memorandum and Order.
Accordingly, it is this 22nd day of October, 1993 by the
United States District Court for the District of Maryland,
ORDERED:
(1) that WSSC’s Motion for Reconsideration of this Court’s
July 19, 1993 Memorandum and Order be, and the same
hereby is, Denied; and
(2) that the Clerk of the Court shall mail a copy of this
Memorandum and Order to the parties.
/s/ Herbert F. Murray
Senior United States District Judge
50a
APPENDIX D
WESTFARM ASSOCIATES LIMITED
PARTNERSHIP
v.
INTERNATIONAL FABRICARE INSTITUTE, et al.
v.
The WASHINGTON SUBURBAN
SANITARY COMMISSION.
No. HM-92-9.
United States District Court,
D. Maryland.
July 16, 1993.
Jeffrey M. Johnson, Dickstein, Shapiro & Morin,
Washington, DC, for plaintiff.
Duane A. Siler, Deborah M. Lodge, Michael N. Romita,
Patton, Boggs & Blow, Washington, DC, for defendant.
MEMORANDUM
HERBERT F. MURRAY, Senior District Judge.
After discovering a hazardous substance in groundwater
under its land, the plaintiff, Westfarm Associates L.P.
(‘‘Westfarm’’), brought this action against the defendant, the
International Fabricare Institute (‘‘IFI’’). Subsequently, both
Westfarm and IFI asserted claims against the Washington
Suburban Sanitary Commission (‘‘WSSC’’). At two hearings
held in open Court, this Court entertained argument from all
three parties on a variety of pending motions. Having con-
sidered the oral and written arguments of counsel, this Court
today will resolve the four pending motions for summary
judgment.
REALL AEN AEA RE MLE LAELIA SLE IEE LEN IIE EB ONI FLEE IE ES IPT 8
RON LALA OTR RS HPN
5la
I. STATEMENT OF THE CASE
The standards governing the consideration of motions for
summary judgment are well known and need not be reiterated
in this opinion. See Weyerhaeuser Corp. v. Koppers Co., Inc.,
771 F.Supp. 1406, 1409-10 (D.Md. 1991).
Westfarm owns a number of adjacent parcels of land in Mont-
gomery County, Maryland. Groundwater testing under three
of those parcels (‘‘Parcel A,’’ ‘‘Allegany,’’ and ‘‘Somerset’’)
has revealed concentrations of tetrachloroethylene (also known
as perchloroethylene, perc, or ‘‘PCE’’), a solvent used by
IFI in its dry cleaning operations.
IFI occupies land at 12251 Tech Road (the ‘“Tech Road
site’), immediately to the northwest of Parcel A; Allegany
and Somerset lie to the south-southeast of Parcel A. Both IFI’s
property and Parcel A abut Tech Road, beneath which runs
a sewer line owned and operated by WSSC (the ‘“Tech Road
Sewer’’). Beginning near the northwest corner of IFI’s land,
Tech Road runs southeast along IFI’s property and Parcel A,
then turns to the southwest. Information gathered from
monitoring wells in the area indicates that the groundwater
under these parcels flows generally to the southeast.
As the nationwide trade association for commercial dry
cleaners and launderers, IFI uses PCE in several of the dry
cleaning and related operations conducted on its property. Dif-
ferent operations generate different kinds of PCE waste, and
IFI employees over the years disposed of those wastes in dif-
ferent ways. First, since 1969 the ordinary dry cleaning opera-
tions of IFI or its predecessor, the National Institute of Dry
Cleaning, have generated drained spent cartridge filters,
‘“‘cooked’’ filter residues, and still residues. Until 1985, IFI
disposed of spent filters and cooked filter residue in a dump-
ster at the Tech Road site, and poured the PCE-laden still
residues down the drain. Secondly, the operation of certain
52a
solvent recycling equipment and air pollution control equip-
ment has generated so-called ‘‘separator water’’ — liquid con-
taining PCE dissolved in solution. Until 1990, IFI poured its
separator water down the drain. Finally, in its research
laboratory IFI performs various tests on samples of PCE sent
to IFI by its members and others. Until 1992, IFI poured PCE
down the drain after completing each of the tests. IFI knows
of no use of PCE on its land prior to 1969.
PCE, water, and other liquids poured down the drain at IFI
flow through a lateral pipe (‘‘sewer lateral’) underground in
a straight line to the Tech Road Sewer. As noted above, the
groundwater in the area flows generally to the southeast. A
video-tape examination of the sewer lateral revealed many
cracks in its interior. Groundwater slightly southeast of the
sewer lateral contains high concentrations of PCE, while
groundwater just north of the sewer lateral contains no PCE.
WSSC is an agency of the State of Maryland, created in 1918
and charged with the responsibility for providing water and
sewer services to the residents of Montgomery and Prince
George’s Counties in Maryland. The Tech Road Sewer is part
of a network of approximately 4000 miles of sewer pipes owned
and operated by WSSC.
IFI’s sewer lateral empties into the Tech Road Sewer at
a sewer house connection at the sewer’s terminal end. The
house connection extends 27 feet toward IFI’s land, where
it links with the sewer lateral. Wastes from the sewer lateral
enter the sewer house connection and then flow inside the
Tech Road Sewer underneath Tech Road, first to the southeast
and then to the southwest.
When it commissioned construction of the Tech Road Sewer
in 1969, WSSC called for a design that would allow leakage
from the pipe at a rate of 200 gallons per inch diameter, per
mile, per day. Additionally, a video-tape examination of the
53a
Tech Road Sewer revealed cracks in the interior of the pipe.
Testing of sediment in the sewer house connection of the Tech
Road Sewer revealed concentrations of PCE over 100,000
parts per billion — the highest concentration of PCE found
at any of the testing sites in the area.
As a governmental agency, WSSC regulates the discharge
of industrial waste into its sewer system. Since the first set
of regulations, WSSC has prohibited discharges of ‘‘[a]ny nox-
ious or malodorous . . . substance . . . capable of creating
a public nuisance of hazard to life. . ...” 1972 WSSC Regula-
tions § 701.3.4; see also 1983 WSSC Regulations § 702.1 (same
language). Most recently, WSSC amended that regulatory
language to prohibit discharges of ‘‘malodorous or toxic. . .
substances that . . . are capable of creating a public nuisance
or hazard to human health or the environment. . . .”’ 1992
WSSC Regulations § 906.c. Also, beginning in 1983, WSSC
imposed limits on discharges of ‘‘toxic organics’’ into the
sewers. WSSC recently increased the limit on such discharges
to 2.13 milligrams per liter (mg/l), up from its 1983 level of
0.58 mg/l. 1992 WSSC Regulations, Table 9.1.
Westfarm filed this action in 1992 for relief available under
the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. §§ 9601 et seg. (“‘CERCLA’’),
and the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et seg. (“‘RCRA’’), as well as for relief under certain
state law claims. After this Court ruled on the motion of IFI
to dismiss, see Westfarm Assoc. L.P. v. International Fabricare
Inst., 22 Envt’] L.Rep. (Envt’l L.Inst.) 21,350, 1992 WL
315188 (D.Md. May 6, 1992), Westfarm filed its amended
complaint, adding claims regarding the contamination of
Allegany and Somerset. Later, IF1 filed a third-party complaint
against WSSC seeking contribution and indemnification, and
Westfarm filed a second amended complaint adding WSSC as
a defendant.
54a
Presently pending before this Court are the following four
motions: the motion of Westfarm for partial summary judg-
ment on Counts I and III of the second amended complaint
against IFI;! the motion of WSSC for summary judgment
against Westfarm; the motion of WSSC for summary judgment
against IFI; and the motion of Westfarm for partial summary
judgment on Count I of the second amended complaint against
WSSC. Tracking the claims asserted in the second amended
complaint, this Court will address the issues raised in those
motions.
[1] Preliminarily, a procedural issue raised by IFI requires
brief attention. Emphasizing that Westfarm filed the second
amended complaint after filing the motion for partial summary
judgment against it, IFI argues that this Court should deny
the motion as moot. However, Counts I and III of the second
amended complaint remain substantially the same between the
first and second amended complaints (as they relate to IFI),
and no prejudice follows from reqiring IFI to respond to the
pending motion. Accordingly, this Court will not require the
plaintiff to refile its motion against IF.
Il. COUNT I — CERCLA
In Count I, Westfarm seeks relief under CERCLA. With
respect to its motion for partial summary judgment, Westfarm
seeks a declaratory judgment regarding the liability of IFI and
WSSC for its response costs, leaving the calculation of the
amount of recoverable costs for trial. Naturally, the defend-
azts dispute CERCLA hability on several grounds, and WSSC
seeks summary judgment on this issue.
‘Count I seeks relief under § 107 of CERCLA, 42 U.S.C. § 9607, and
Count III seeks relief under § 7002 of RCRA, 42 U.S.C. § 6972. Westfarm
has abandoned Count II, which sought relief under § 310 of CERCLA.
42 U.S.C. § 9659. Counts IV through VII assert state law claims for
negligence, trespass, nuisance, and strict liability, respectively.
55a
[2,3] Congress enacted CERCLA in part to encourage the
cleanup of environmental hazards by private individuals, who
then may recover the costs of the cleanup from the parties
responsible for the hazard. Nurad, Inc. v. William E. Hooper
& Sons Co., 996 F.2d 837, 839 (4th Cir.1992). Essentially
a “‘remedial statute designed by Congress to protect and
preserve public health and the environment,’’ CERCLA re-
quires this Court ‘‘to construe its provisions liberally to avoid
frustration of the beneficial legislative purposes.’’ Dedham
Water Co. v. Cumberland Farms Dairy, Inc. 805 F.2d 1074,
1081 (1st Cir.1986). As part of its remedial scheme, CERCLA
imposes strict liability on responsible parties. United States
v. Monsanto Co., 858 F.2d 160, 167 & n. 11 (4th Cir.1988).
[4] Westfarm asserts its claims for response costs pursuant
to § 107 of CERCLA, 42 U.S.C. § 9607.2 In order to recover
2Section 107 provides as follows:
(a) Covered persons; scope; recoverable costs and damages; interest
rate; ‘‘comparable maturity’’ date
Notwithstanding any other provision or rule of law, and subject only
to the defenses set forth in subsection (b) of this section—
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any hazardous substance
owned or operated any facility at which such hazardous substances were
disposed of, ans:
(3) any person who by contract, agreement, or otherwise arranged
for disposal or treatment, or arranged with a transporter for transport
for disposal or treatment, of hazardous substances owned or possess-
ed by such person, by any other party or entity, at any facility or in-
cineration vessel owned and operated by another party or entity and
containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous substances
for transport to disposal or treatment facilities, incineration vessels or
sites selected by such person, from which there is a release, or a
threatened release which causes the incurrence of response costs, of
a hazardous substance, shall be liable for—
footnote continued on next page
56a
under that section, a plaintiff must show that (1) a release or
a threatened release? of a hazardous substance (2) from a
facility* (3) required it to incur response costs necessary
(B) any . . . necessary costs of response incurred by any other per-
son consistent with the national contingency plan... .
(b) Defenses
There shall be no liability under subsection (a) of this section for a per-
son otherwise liable who can establish by a preponderance of the
evidence that the release or threat of release of a hazardous substance
and the damages resulting therefrom were caused solely by—
* * * * - *
(3) an act or omission of a third party other than an employee or agent
of the defendant, or than one whose act or omission occurs in connec-
tion with a contractual relationship, existing directly or indirectly, with
the defendant . . . if the defendant establishs by a preponderance of
the evidence that (a) he exercised due care with respect to the hazar-
dous substance concerned, taking into consideration the characteristics
of such hazardous substance, in light of all the relevant facts and cir-
cumstances, and (b) he took precautions against forseeable act or omis-
sions of any such third party and the consequences that could
foreseeably result from such acts or omissions... .
42 U.S.C. § 9607.
3Section 101(22) of CERCLA provides:
The term ‘‘release’’ means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dump-
ing, or disposing into the environment... .
42 U.S.C. § 9601(22). Section 101(8) of CERCLA provides:
The term ‘‘environmert’’ means... (B) any... surface water,
ground water, drinking water supply, land surface of subsurface strata,
or ambient air within the United States or under the jurisdiction of the
United States.
42 U.S.C. § 9601(8).
‘Section 101(9) of CERCLA provides:
The term ‘‘facility’’ means (A) any building, structure, installation,
equipment, pipe or pipeline (including any pipe into a sewer or publicly
owned treainent works), well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock, or aircraft, or
(B) any site or area where a hazardous substance has been deposited,
stored, disposed of, or placed, or otherwise come to be located; but
does not include any consumer product in consumer use or any vessel.
42 U.S.C. § 9601(9).
57a
and consistent with the nationa! contingency plan (‘‘NCP’’).5
Lastly, the defendant must be a ‘potentially responsible per-
son,’ t.é., it must fall within the scope of at least one of the
four subparagraphs of § 107(a). Weyerhaeuser, 771 F.Supp.
at 1410; accord White v. Count of Newberry, 985 F.2d 168,
172 (4th Cir.1993). All of the parties agree that PCE is a
hazadous substance under CERCLA.®
In opposition to the plaintiff's motion, both defendants argue
that Westfarm has failed to demonstrate several of the
elements listed above, or that genuine issues of material fact
preclude summary judgment. Additionally, WSSC asserts the
affirmative innocent landowner defense. This Court now will
turn to a discussion of those arguments.
A. Facility
IFI concedes tuat the Tech Road site is a facility under
CERCLA. In contrast, WSSC argues that Congress intended
to shield municipal sewer authorities from potentially enor-
mous liability under CERCLA by excluding publicly owned
treatment works (‘‘POTWs’’) from the statutory definition
of facility.
In particular, focusing the parenthetical phrase in the defini-
tion of ‘‘facility’” — ‘‘including any pipe into a sewer or publicly
owned treatment works’’ — WSSC first notes that such pipes
would be included in the ordinary meaning of ‘“‘pipe or
pipeline.’” WSSC argues that, by adding the parenthetical
phrase, Congress must have intended to include every sort
of pipe or pipeline except sewers and POTWs.
Authorized by § 105 of CERCLA, 42 U.S.C. § 9605, the NCP is set
forth at 40 C.F.R. Part 300.
®For a more thorough discussion of the hazards of PCE, see Interna-
tional Fabricare Inst. v. United States EPA, 972 F.2d 384, 395-98
(D.C.Cir.1992) (affirming EPA regulation of PCE as a human carcinogen).
a
ry 4
58a
That argument repeats an argument raised in an earlier mo-
tion filed by WSSC, and in an earlier opinion, this Court re-
jected such a narrow construction of the term ‘‘facility.’’
Westfarm Assoc. L.P. v. International Fabricare Inst., Civ.
No. HM-92-9, slip op. at 4-9 Jul. 6, 1993). Accord 3550 Stevens
Creek Assoc. v. Barclays Bank, 915 F.2d 1355, 1360 n. 10
(9th Cir.1990); New York v. Shore Realty Corp., 759 F.2d
1032, 1043 n. 15 (2nd Cir. 1985); HRW Systems, Inc. v.
Washington Gas Light Co., 823 F.Supp. 318, 338
(D.Md.1993).
B. Release
In its motion papers, Westfarm proposes a number of PCE
wastestreams from the Tech Road site to the environment.
Those wastestreams include cracks and joints in the sewer
lateral and the Tech Road Sewer, leaks in the dumpster, and
cracks in the floor at the Tech Road site. in response, IFI
argues that Westfarm has failed to demonstrate conclusively
that PCE escaped from the Tech Road site. Additionally,
WSSC argues that leakage of PCE from the Tech Road Sewer
could not constitute a ‘‘release’’ from the facility within the
scope of CERCLA. This Court will consider these arguments
in turn.
[5] In particular, IFI disputes the evidence of cracks in the
sewer lateral. IFI Opposition at 4-5 (‘‘the videotape evidence
is insufficient to support an inference that any of the cracks
go all the way through the exterior of the pipe’’). Additional-
ly, IFI disputes that PCE could have leached from the dump-
ster. Id., Aff of William E. Fisher, { 8 (‘“To the best of my
knowledge, no dumpster located on IFI’s property has ever
leaked PCE .. .’’). Finally, IFI disputes that PCE could have
seeped through the floor. Jd. ¢ 12 (‘‘To the best of my
knowledge, no liquid from any PCE spill has ever made its
way through the floor . . .’”). IFI maintains that these disputed
facts preclude summary judgment.
59a
Preliminarily, this Court notes that IFI does not argue that
the PCE presently contaminating the ground water beneath
Westfarm’s property originated anywhere other than the Tech
Road site. Instead, IFI argues that Westfarm has failed to pin-
point how and when that PCE arrived in the groundwater.
This Court has heard such arguments before from CERCLA
defendants. The plaintiff in Weyerhaeuser produced evidence
that only the defendant used the hazardous substances found
on the property at issue in that case, and also that those
substances did not migrate to the property from elsewhere.
The defendant countered, arguing that the plaintiff made ‘‘no
showing as to how or when any release of . . . hazardous
substances occurred, and without this specific showing [the
plaintiff} has not met its burden of proof with regard to the
issue of release.’’ Weyerhaeuser, 771 F.Sup. at 1411. The
defendant also produced deposition testimony from employees
who swore that, to their knowledge, none of the chemicals
had leaked into the ground. See id. at 1411 n. 4. Holding in
the context of a summary judgment motion that a release oc-
curred, this Court rejected the attempt to create factual issues
with general denials. Jd. at 1412-13. |
Similarly, in the case at bar, this Court rejects IFI’s attempt
to raise issues of fact with regard to how and when PCE
entered the environment. Undisputed soil and groundwater
tests show concentrations of PCE slightly downgradient from
the sewer lateral and in the area where the dumpster former-
ly stood. Mere conjecture that cracks evident in the interior
of the sewer lateral might not have allowed PCE to escape,
or that, to the knowledge of one IFI employee, PCE never
leaked from the dumpster, simply do not create factual issues
that require trial. PCE was released from the Tech Road site.
[6] WSSC also argues that Westfarm has failed to
demonstrate a release of PCE from the Tech Road Sewer.
60a
Because the PCE at issue in this case all originated at the Tech
Road site, WSSC argues, the only ‘‘release’’ for CERCLA
purposes occurred when IFI poured PCE wastes down the
drain. Extending CERCLA liaiblity to a passive third party
simply because a hazardous substance travels through its pro-
perty, WSSC concludes, would expand the reach of the statute
impermissibly.
[7] However, the case law generally contradicts the argu-
ment made by WSSC. Indeed, the Fourth Circuit recently
adopted a construction of the term ‘‘disposal’’ that does not
require any participation by potentially responsible persons.
Nurad, 996 F.2d at 844-46. Because the definition of
‘release’ includes disposal, see § 101(22) of CERCLA 42
U.S.C. § 9601(22), the breadth of the later term translates
directly to the former. Accordingly, a ‘‘release’’ under
CERCLA does not require active participation by any respon-
sible parties. Finally, because WSSC presents no evidence that
PCE did not escape from the Tech Road Sewer into the sur-
rounding environment — indeed, as noted above, the interior
of the Tech Road Sewer has many cracks and WSSC intend-
ed it to leak — this Court concludes that a release of PCE
occurred from the Tech Road Sewer.’
C. Response Costs
Although the calculation of the recoverable amount of
response costs is reserved for trial, in the context of the pre-
7At one point in its papers, WSSC argues that Westfarm has failed to
demonstrate that PCE from IFI reached the Tech Road Sewer from the
sewer lateral, see WSSC Opposition at 10, or that PCE inside the Tech
Road Sewer did not come from some other source. Jd. at 11. However,
the extraordinarily high concentration of PCE in the sewer house connec-
tion supports Westfarm’s position, and WSSC presents no evidence at
all to explain those test results. In the absence of conflicting evidence,
this Court takes as established that PCE from IFI travelled through the
sewer lateral into the Tech Road Sewer.
6la
sent motion Westfarm must demonstrate that at least some
of its response costs were necessary and consistent with the
NCP. Weyerhaeuser, 771 F.Supp. at 1414. Both IFI and WSSC
dispute that Westfarm has satisfied that burden.
[8] In particular, IFI argues that Westfarm’s response costs
were not necessary in light of the contents of a letter from
the Maryland Department of the Environment (‘‘MDE’’) dated
June 28, 1991, informing Westfarm that MDE would in-
vestigate the contamination and require appropriate action.
Because MDE would require appropriate action, IFI argues,
the plaintiff unnecessarily has expended costs investigating the
source and extent of the contamination. As of this writing,
however, two years have passed since that letter and the par-
ties have not indicated to this Court that MDE has re-
quired any action of any kind with regard to the groundwater
contamination in this case. In any event, state approval is not
required for a plaintiff to recover response costs. Richland-
Lexington Atrport Dist. v. Atlas Properties, Inc., 901 F.2d 1206,
1208 (4th Cir.1990).
[9] Additionally, although the defendants do not argue that
the plaintiff investigated the contamination excessively, IFI
and WSSC argue that the failure to solicit public comment as
required by the NCP, see 40 C.F.R. § 300.700(c)(3)(i), before
conducting its investigation precludes any recovery of those
costs. This Court previously has permitted a plaintiff to recover
its investigatory costs under CERCLA. Weyerhaeuser, 771
F.Supp. at 1414-15; see also Gache v. Town of Harrison, 813
F.Supp. 1037, 1046 (S.D.N.Y.1993) (‘‘Courts have held that
initial preliminary investigatory and monitoring costs are
recoverable irrespective of the recoverability of other response
costs or compliance with the requirements of the [NCP]’’).
In accordance with that precedent, this Court finds no merit
in the defendants’ public comment argument.
62a
D. Causation
In support of its own motions and in opposition to the plain-
tiff's motion, WSSC argues that Westfarm has failed to
demonstrate that any release of PCE from the Tech Road
Sewer caused the incurrence of any response costs. In par-
ticular, the case at bar involves two sites — the Tech Road
Sewer and the groundwater underneath Westfarm’s land —
and therefore, WSSC argues, Westfarm must demonstrate
that PCE migrated from one site to the other. Without such
proof, WSSC concludes, the plaintiff cannot satisfy the ele-
ment of causation.
[10] CERCLA does not require Westfarm to prove the ele-
ment of causation. Monsanto, 858 F.2d at 170 n. 17 (‘‘The leg-
islature thus eliminated the element of causation from the plain-
tiff’s liability case’’) (citing discussion of legislative history in
Shore Realty, 759 F.2d at 1044). Under § 107(a) of CERCLA,
42 U.S.C. § 9607(a), liability is subject only to the defenses
in § 107(b) of CERCLA, 42 U.S.C. § 9607(b), each of which
requires the defendant affirmatively to prove the absence of
causation. Monsanto, 858 F.2d at 170; see also id. (‘‘In deleting
causation language from section 107(a), we assume as have
many other courts that Congress knew of the synergistic and
migratory capabilities of leaking chemical waste, and the
technological infeasibility of tracing improperly disposed waste
to its source’’).
[11] Although it allocates the burden of disproving causa-
tion to the defendant, CERCLA uses the word ‘‘causes’’:
[any person, linked in any one of several specified ways,
to a facility], from which there is a release, or a threatened
release which causes the incurrence of response costs, of
a hazardous substance, shall be liable. . .
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§ 107(a)(4) of CERCLA, 42 U.S.C. § 9607(a)(4). That language
imposes liability for releases, and also imposes liability for
threatened releases that cause the incurrence of response
costs. Therefore, only in the case of threatened releases does
it appear that a plaintiff must demonstrate any degree of causa-
tion. City of New York v. Exxon Corp., 766 F.Supp. 177, 193
(S.D.N.Y.1991) (‘‘better reading of this phrase is that only
a threatened release must cause response costs’’).
[12] In the case at bar, which involves actual releases and
not merely threatened releases, the plaintiff has proven that
the hazardous substance from the facility is identical to the
hazardous substance presently contaminating the groundwater
beneath its land. As a potentially responsible person, WSSC
bears the burden of disproving the element of causation,
through one of the available defenses listed in § 107(b) of
CERCLA, 42 U.S.C. § 9607(b).
Addressing WSSC’s argument in passing; even if CERCLA
required causation in this case, it does not follow that the plain-
tiff must demonstrate that PCE from the Tech Road Sewer
has contaminated the groundwater under its land. Dedham
Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146,
1154 (1st Cir.1929) (‘‘There is nothing in the statute, its
legislative history, or the case law, which requires proof that
the defendant’s hazardous wastes actually have migrated to
plaintiff's property, causing contamination of plaintiff's pro-
perty, before CERCLA liaiblity is triggered’’). Rejecting the
defense asserted by WSSC in another ‘‘two-site’’ case, the
United States District Court for the District of Delaware noted
that:
the policies underlying section 107 conflict with [the defen-
dant’s) demand that [the plaintiff] prove beyond dispute that
the contaminants found near [the defendant’s land] actual-
ly flow from [the defendant’s land]. From a technological
standpoint, [the plaintiff's] ability to ‘‘fingerprint’’ the
64a
leachate in the groundwater as emanating from either [the
defendant’s land] or [another source of contamination] is
exceedingly doubtful. To impose such a requirement might
permit the owners and operators of both facilities to avoid
financial responsibility for the cleanup, and would thus
eviscerate section 107.
Artesian Water Co. v. New Castle County, 659 F.Supp. 1269,
1282 (D.Del.1987), aff'd 851 F.2d 643 (3rd Cir.1988).
In another two-site case, the district court adopted the
reasoning now submitted to this Court by WSSC; on appeal,
however, the United States Court of Appeals for the First Cir-
cuit vacated and remanded that decision. Dedham Water Co.
v. Cumberland Farms Dairy, Inc. 689 F.Supp. 1223
(D.Mass.1988), rev’d, 889 F.2d 1146 (1st Cir.1989) Criticiz-
ing the arguments that WSSC now asserts, the appellate court
in Dedham Water Co. observed that, ‘‘[t]o our knowledge,
every court that has addressed this issue, with the exception
of the district court in the instant case, has held that it is not
necessary to prove actual contamination of plaintiff's proper-
ty by defendant’s waste in order to establish liability under
CERCLA.”’ 889 F.2d at 1154.
In Artesian Water Co. and Dedham Water Co., both courts
held that CERCLA requires a causal link between a release
or a threatened release and response costs, expressly rejec-
ting the argument made by WSSC in this case. As noted above,
the Fourth Circuit in Monsanto rejected the notion that the
language of CERCLA requires Westfarm to demonstrate
causation at all. Although this Court has noted that CERCLA
apparently requires proof of causation in cases of threatened
releases, the case at bar involves actual releases of PCE, and
so the holding of the Fourth Circuit in Monsanto controls.
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E. Innocent Landowner Defense
[13,14] In its papers, WSSC seeks the protection of § 107(b)(3)
of CERCLA, 42 U.S.C. § 9607(b)(3). That section ‘‘sets forth
a limited affirmative defense based on the complete absence
of causation.’’ Monsanto, 858 F.2d at 168. Westfarm disputes
that WSSC has satisfied the elements of that defense.
Preliminarily, this Court notes that WSSC — not IFI —
designed the Tech Road Sewer to leak. Additionally, IFI did
not put the cracks in the interior of the Tech Road Sewer,
and WSSC — not IFI — neglected to repair them. Finally,
WSSC’s representative conceded at his deposition that WSSC
expected small industrial customers — like IFI — to pour
hazardous substances such as PCE into the sewer. Although
the WSSC regulations ban discharges of ‘‘malodorous or tox-
ic. . . substance,’’ those same regulations allow discharges
of toxic organics and other hazardous chemicals.
Moreover, WSSC has failed to demonstrate that PCE from
the Tech Road Sewer did not migrate to the groundwater,
or that all fo the PCE presently contaminating the groundwater
underneath Westfarm’s land flowed there from IFI’s facility.
Based on the evidence of record, construed in the light most
favorable to WSSC, this Court cannot concludes that releases
of PCE from the Tech Road site caused all of the groundwater
contamination at issue, or that WSSC exercised due care with
respect to the hazardous substance concerned in light of all
of the relevant facts and circumstances, or that WSSC took
precautions against the foreseeable acts or omissions of in-
dustrial customers like IFI or the foreseeable consequences
of those acts or omissions. Without evidence to support its
innocent landowner defense, WSSC cannot avoid its liability
for response costs under CERCLA.®
®Because WSSC has failed to satisfy any of the other elements of the
defense in § 107(b)(3) of CERCLA, 42 U.S.C. § 9607(b)(3), this Court
need not reach the issue of whether IFI poured PCE into the Tech Road
Sewer ‘‘in connection with a contractual relationship.’’
F. Contribution
[15,16] Although CERCLA does not mandate the imposi-
tion of joint and several liaiblity on responsible parties, such
liability is allowed in appropriate cases. Monsanto, 858 F.2d
at 171. Indeed, joint and several liability will control in this
case unless the defendants can carry their burden of
demonstrating either the existence of distinct ernvironmen-
tal harms or a reasonable basis for determining the contribu-
tion of each defendant to that harm. Weyerhaeuser, 771 F.Supp.
at 1416.
[17] As noted above, IFI has filed a third party complaint
against WSSC, seeking contribution under § 113(f) of
CERCLA, 42 U.S.C. § 9613(f). Asserting ‘‘unclean hands,’’
WSSC argues that IFI may not seek contribution.
[18-20] In actions for contribution under CERCLA, this
Court has broad discretion to apply a wide variety of factors
in order to reach an equitable resolution. See United States
v. R.W. Meyer, Inc., 932 F.2d 568, 571-72 (6th Cir.1991)
(‘‘the court may consider any factor it deems in the interest
of justice in allocating conribution recovery’’). In a given ac-
tion for contribution, therefore, the district court may con-
sider the traditional equitable defenses: caveat emptor, estop-
pel, laches, unclean hand, et cetera. United States v. Fairchild
Indus., Inc., 766 F.Supp. 405, 414 (D.Md.1991) (declining
to strike equitable defenses at an early stage of the case, the
court was ‘‘reluctant to in any way limit its ability to deal
effectively with the problem at hand by eliminating or cir-
cumscribing its equitable jurisdiction’’).? Nevertheless, in the
*Parenthetically, to the extent that the decision in Fairchild Indus. ap-
proved the assertion of equitable defenses in an action brought by the
government, that holding appears contrary to the majority of the case law.
See United States v. Davis, 794 F Supp. 67, 71 (D.R.1.1992) (citing cases).
67a
context of CERCLA, those doctrines are not defenses to liaibli-
ty but are merely factors for the court to consider. See Smith
Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86,
89-90. (3rd Cir.1988). (‘‘under CERCLA the doctrine of caveat
emptor is not a defense to liability for contribution but may
only be considered in mitigation of amount due’’). Consequent-
ly, the doctrine of unclean hands does not shield WSSC from
liability for contribution under CERCLA.
G. Conclusion
The foregoing discussion makes it clear that both IFI and
WSSC are liable to Westfarm for the costs of responding to
the PCE contamination, under § 107(a)(4)(B) of CERCLA, 42
U.S.C. § 9607(a)4)(B). Having resolved all of the motions with
respect to Count I of the second amended complaint, this Court
will examine the issues in connection with Count III.
III. COUNT III — RCRA
Under Count III, Westfarm seeks a declaratory judgment
and injunctive relief against IF] in connection with alleged viola-
tions of the requirements of RCRA, under § 7002(a) of RCRA,
42 U.S.C. § 6972(a).'° Specifically, Westfarm seeks a declar-
Section 7002(a) provides that
any person may commence a civil action on his own behalf—
(1)(A) against any person . . . who is alleged to be in violation of any
permit, standard, regulation, condition, requirement, prohibition, or
order which has become effective pursuant to this chapter; or
(B) against any person, including . . . any past or present generator,
past or present transporter, or past or present owner or operator of
a treatment, storage, or disposal facility, who has contributed or is con-
tributing to the past or present handling, storage, treatment, transpor-
tation, or disposal of any solid or hazardous waste which may present
an imminent and substantial endangerment to health or the
The district court shall have jurisdiction, without regard to the amount
footnote continued on next page
68a
atory judgment regarding alleged violations by IFI of applicable
regulations and an injunction enjoining IF1 both to comply with
those regulations and to formulate and execute cleanup efforts
at the Tech Road Site. IFI has abandoned its third party claim
against WSSC under RCRA; consequently, the following
discussion does not implicate WSSC.
In contrast to CERCLA, which addresses the cleanup of
hazardous substances released into the environment, RCRA
establishes a program for the management of hazardous waste
from its origin to its ultimate disposal (so-called ‘‘cradle to
grave’’ regulation) to ensure that the means of disposal of
hazardous waste will prevent escape of those wastes into the
environment, and provides an enforcement mechanism to en-
sure compliance with that program. See Hazardous Waste
Treatment Council v. South Carolina, 945 F.2d 781, 783 (4th
Cir.1991). Section 3006 of RCRA, 42 U.S.C. § 6926, allows
the states to develop hazardous waste programs at least as
stringent as RCRA, subject to authorization by the Ad-
ministrator of the EPA. After receiving authorization, the state
may implement its hazardous waste program ‘“‘in lieu of the
Federal program.’’ Section 3006(b) of RCRA, 42 U.S.C. §
6926(b). Maryland has received final authorization for its hazar-
dous waste program. See 50 Fed.Reg. 3511 (Jan. 25, 1985).
Westfarm alleges that IFI has violated and continues to
violate two types of regulations under Maryland’s hazardous
in controversy or the citizenship of the parties, to enforce the permit,
red to in paragraph (1)(A), to restrain any person who has contributed
or who is contributing to the past or present handling, storage, treat-
ment, transportation, or disposal of any solid or hazardous waste refer-
red to in paragraph (1)(B), to order such person to take such other
action as may be necessary, or both, . . . and to apply any appropriate
civil penalties under sction 6928(a) and (g) of this title.
42 U.S.C. § 6972(a).
69a
waste program: first, regulations of generators of hazardous
waste, COMAR 26.13.03, and second, regulations of
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