Petition for Writ of Certiorari — Mumaw v. Nurad, Inc.

Q 2- 3 G Bupreme Court, US.

No FILED

1992

IN THE OFFICE OF THE CLERK

| Supreme Court of the United States

OcroBER TERM, 1992

KENNETH B. MUMAW,

Petitioner

NURAD, INCORPORATED,

Respondent.

PETITION FOR A Writ OF CERTIORARI TO THE

UnNrrep States Court or APPEALS

FOR THE FourtTH Circuit

PETITION FOR A WRIT OF CERTIORARI

CHARLES R. ‘Tayor, JR.

(COUNSEL OF RECORD)

Joy T. HACHETTE

GORDON, FEINBLATT, ROTHMAN,

HOFFBERGER & HOLLANDER

233 E. Redwood Street

Baltimore, Maryland 21202

(410) 576-4228

Attorneys for Petitioner

EELS LL LILA LO. LLIN OL ILL ICE IT NDE SALE LL LIE INLET LEST SLI LE IESE BA TENE LILIA DELLA

THE DAILY RECORD COMPANY, 11 EAST SARATOGA STREET, BALTIMORE, MD 21202

QUESTION PRESENTED

The issue presented here is whether a

prior owner of property is liable under 42

U.S.C.A. § 9607 (a) (2) when no active

disposal of hazardous substances occurred

during his Ownership of the property.

QUESTION P

TABLE OF A

OPINIONS B

JURISDICTI

PERTINENT

STATEMENT

REASONS FO

I.

Il.

III.

CONCLUSION

APPENDIX A

APPENDIX B

APPENDIX C

TABLE OF CONTENTS

RESENTED

UTHORITIES

ELOW

ON

STATUTES

OF THE CASE

R GRANTING WRIT

THE FOURTH CIRCUIT'S

HOLDING CONFLICTS WITH

THE HOLDINGS OF OTHER

COURTS

THE FOURTH CIRCUIT'S °

HOLDING BROADENS THE

SCOPE OF CERCLA BEYOND

ITS PLAIN MEANING

THE FOURTH CIRCUIT'S

11

DEFINITION OF DISPOSAL IN

WASTE INDUSTRIES IS NOT

THE CONTROLLING LAW IN THE

PRESENT CASE

~-A-145

EEE es

TABLE OF AUTHORITIES

CASES: Page

3550 Stevens Creek Assocs. v.Barclays

Bank of California, 915 F.2d

1355 (9th Cir. 1990), cert.

denied, 111 S.ct. 2014

I a le 10

Ecodyne Corp. v. Shah, 718 F. Supp.

pees (8.0. Cal. 1989) .... 7-9

Freytag Vv. Comm'r of Internal

Revenue, 111 S.Ct. 2631

[OD ek kk we ht lt wk 14

In_re Diamond Reo Trucks, ing., i115

B.R. 559 (Bkrtcy. W.D. Mich.

1990) ee a a ae ne @ya0

Snediker Developers Ltd. Partnership

Vv. Evans, 773 F. Supp. 984 (E.D.

Mees SUG 2. ww kt tk 7,10

United States v. Waste Indus., Inc.,;

734 F.2d 159 (4th Cir.

SE ee 15-17

STATUTES:

Resource Conservation and Recovery Act,

("RCRA")

42 U.S.C.A. § 6902 tea & tal

1992) Ae ee ee er ee ‘ * + ° 2

42 U.S.C.A. § 6903(3) (1983 &

Supp. 1992) “Tb Sekt Tar Peer eer ee 2,8,16

- i123 =

Comprehensive Environmental Response,

Compensation and Liability Act,

("CERCLA")

42 U.S.C.A. § 9601(29) (1983 &

Supp. 1992) a ae oe oe ee ee ee ee ee 2

42 U.S.C.A. § 9601(35)(C) . 2,13,14

42 U.S.C.A. § 9607(a) (1983 &

Supp. 1992) ese *@ © © @ © 2

42 U.S.C.A. § 9607(a) (2) (1983

& Supp. 1992) ..... . . passim

RULES

Fed. R. Civ. P. 54 5

—

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1992

KENNETH B. MUMAW,

Petitioner,

Vv.

NURAD, INCORPORATED,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

The opinion of the United States

Court of Appeals for the Fourth Circuit

will be reported at 966 F.2q 837, and is

reprinted in the Appendix ("A- "> «2

pages A-1 thru A-40. The unreported

opinion and order of the United States

District Court for the District of

Maryland is reprinted at pages A-41 thru

A-144.

- JURISDICTION

The judgment of the United States

Court of Appeals for the Fourth Circuit

was entered on May 29, 1992. A-2. This

Court has jurisdiction pursuant to 42

U.S.C.A. § 9601 et al.

PERTINENT STATUTES

The statutes involved in this case

are 42 U.S.C.A. § €902: 42 U.S.C.A.

§ 6903(3);7; 42 U.S.C.A. § 9601(29); 42

U.S.C.A. § 9601(35)(C); and 42 U.S.C.A.

§ 9607(a). The text of these provisions

are set forth at A-145 thru A-151.

STATEMENT OF THE CASE

Nurad, Inc. ("Nurad") seeks to impose

liability, under the Comprehensive

Environmental Response, Compensation and

Liability Act ("CERCLA"), 42 U.S.C.A.

§ 9601 et seq., on ~Kenneth B. Mumaw

("Mumaw") and others for the cost of

removing several old underground storage

tanks ("USTs") from property it purchased

from Mumaw.

Mumaw purchased property in

Baltimore, Maryland on October 13, 1976,

and sold that property to Nurad on the

Same day. Nurad's complaint alleges that

USTs containing hazardous substances were

present at the time of Mumaw's purchase

and sale. In 1987, Nurad was cited by the

Maryland Department of the Environment,

which required removal or proper

abandonment of the USTs. The contents of

the tanks were removed and several of the

USTs were either removed or abandoned in

place. __Soils around the USTs were

excavated, tested and found to be non-

hazardous, and disposed of.

- In February 1990, Nurad initiated

suit against former owners, tenants and

individuals in the United States District

Court for the District of Maryland. Nurad

sought recovery of response costs under

CERCLA, and cited various common law

theories.

Following discovery, several of the

parties, including Mumaw, moved for

summary judgment.

On August 15, 1991, Judge Nickerson

granted Mumaw's, as well as several of the

other parties', motion for summary

judgment against Nurad. The District

Court found that Mumaw was not an owner at

the time of disposal because there was no

affirmative participation in the disposal

of a hazardous substance, which the Court

concluded was a prerequisite to liability

under 42 U.S.C.A. § 9607(a) (2). Summary

judgment was also granted to Nurad as to

another defendant.

On September 6, 1991, Judge Nickerson

granted Nurad's Motion for Entry of

Judgment under Fed. R. Civ. P. 54. On

September 11, 1991, Nurad filed its appeal

and a cross-appeal was filed by one of the

defendants. The appeals were consolidated

pursuant to an October 3, 1991 Court

Order. Nurad was designated appellant and

the appellees and cross-appellant were

required to file a joint brief.

The Court of Appeals reversed the

District Court's grant of summary judgment

as to Mumaw, finding that active disposal

was not required under 42 U.S.C.A.

§ 9607(a) (2) and remanded the case.

REASONS FOR GRANTING WRIT

This case presents an important

question of interpretation of the

Superfund Law. Several courts have

considered the phrase owner "at the time

of disposal" and have generally agreed

upon its meaning. In Nurad, however, the

Fourth Circuit announced a contrary

interpretation.

CERCLA, § 9607(a) (2) imposes

liability on "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." CERCLA also imposes liability on a

current owner of a facility, any person

who arranged for disposal or treatment of

hazardous substances, or any person who

accepted hazardous substances for

transport to disposal facilities. Based

on its interpretation of "disposal," the

Fourth Circuit held Mumaw liable. The

Court, however, misconstrued § 9607 (a) (2)

by discussing only the word "disposal"

rather than the phrase that actually

appears in the statute - "at the time of

disposal." Manifestly, "at the time of

disposal" is different from "disposal."

The Fourth Circuit's decision

Significantly alters the meaning of CERCLA

and should be reviewed and revised.

I. THE FOURTH CIRCUIT'S HOLDING

CONFLICTS WITH THE HOLDINGS

OF OTHER COURTS

The same question presented in this

case was considered in Snediker Developers

Ltd. Partnership v. Evans, 773 F. Supp.

984 (E.D. Mich. 1991); Ecodyne Corp. v.

Shah, 718 F. Supp. 1454 (N.D. Cal. 1989);

In_re Diamond Reo Trucks, Inc., 115 B.R.

5959 (Bkrtcy. W.D. Mich. 1990). All of

these Courts reached conclusions contrary

- J =

iil

to the Fourth Circuit's decision as to the

—— meaning of owner "at the time of

disposal."

In Ecodyne Corp. v. Shah, 718 F.

Supp. at 1457, the District Court

dismissed an intermediate owner at the

summary judgment stage. In construing the

term "disposal," the Court looked to the

grammar and structure of the Resource

Conversation and Recovery Act ("RCRA"), 42

U.S.C.A. § 6903(3):

The meaning of a word is or

may be known from the

accompanying words - this is the

principle of noscitur a sociis.

In ascertaining what disposal

means, the Court looks at its

definitional components and

finds that these three nouns

(discharge, deposit and

injection) and four’ gerunds

(dumping, spilling, leaking, and

placing}, when read together all

have in common the idea that

someone do something with

hazardous substances. Taking

the clearest example, the Court

notes that "placing", read in

the context of the statute,

means a person introducing -

putting - formerly controlled or

contained hazardous substances

into the environment. For

plaintiff solipsistically to

read, for example, "leaking" as

meaning the general migration of

chemicals’ and, aS such, a

disposal under 45 9607(a) (>),

renders not only the defini-

tional phrase of RCRA § 6903(3)

"into or on any land or water"

superfluous, but would also

conflict with the general

structure of § 9607(a).

id. The Court concluded that the scope of

liability under CERCLA, § 9607(a)(2) does

not automatically reach intermediate

former owners because:

To define disposal as plaintits

wishes would effectively make

all property Owners from the

time a site became polluted (up

to and including the current

owner) potentially liable

under § 9607(a)(2) even if these

Owners did not introduce- the

chemicals onto the site.

Id.

Other cases have read § 9607(a)(2) as

imposing liability on prior owners or

operators who actively dispose of or

introduce hazardous substances into the

environment. In In re Diamond Reo Trucks

Inc., 115 B.R. at 565, the Court concluded

that "the mere ownership of the site

during a period of time in which migration

or leaching may have taken place, without

any active disposal activities, does not

bring [the deferdant] within the liability

provision of § 9607(a)(2)." 3550 Stevens

Creek Associates v. Barclays Bank of

California, 915 F.2d 1355 (9th Cir. 1990),

cert. denied, 111 S.Ct. 2014 (1991), also

construed "disposal" for purposes. of

§ 9607(a) (2) as requiring some affirmative

act of discarding a substance as a waste.

In Snediker, 773 F. Supp. at 989, the

Court points out that the plaintiff's

"sweeping interpretation of the term

disposal would effectively impose cleanup

liability on any owner in a chain of

title.*

- 10 -

II. THE FOURTH CIRCUIT'S HOLDING

BROADENS THE SCOPE OF CERCLA

BEYOND ITS PLAIN MEANING

In enacting CERCLA, Congress

expressly limited the CERCLA liability of

former owners to those who owned "at the

time of disposal." In its ruling, the

Fourth Circuit holds that a current owner

is liable irrespective of whether disposal

occurs during the term of ownership. In

addition, the Fourth Circuit imposes

liability on all prior owners and reasons

that its decision is in accord with the

broad remedial purpose of CERCLA because

CERCLA imposes strict liability. This

result is not, however, what Congress

enacted.

The Fourth Circuit's holding will

have far reaching consequences. Interim

owners who previously had been regarded as

not liable will now be_ subject’ to

liability and litigation. Parties in

- ll-

pending CERCLA litigation will seek to add

additional interim owners as defendants,

increasing the number of parties in such

cases and further complicating already

complex litigation. The issue will remain

unsettled until resolved by this Court.

In future business transactions and

real estate sales, purchasers who discover

contamination will seek redress’ from

everyone in the chain of title from the

time of disposal until the present. It is

true, as the Fourth Circuit points out,

that the purpose of CERCLA is to encourage

""voluntary private action to remedy

environmental hazards.'" A-31 (quoting In

re Dant v. Russell, Inc., 951 F.2d 246,

248 (9th Cir. 1991)). That statutory

purpose does not necessitate broadening

the list of parties liable to include all

prior owners.

The Fourth Circuit expresses its fear

that:

(A]n owner could avoid liability

Simply by standing idle while an

environmental hazard festers on

his property. Such an owner

could insulate himself from

liability by virtue of his

passivity, so long as he trans-

fers the property before any

response costs are incurred.

A-32. This statement demonstrates that

the Fourth Circuit ignored the provisions

Of § 9601(35)(C) imposing liability for

actual knowledge of and nondisclosure of a

release.

CERCLA, § 9601(35)(C) which imposes

liability for nondisclosure also becomes

meaningless under the Fourth Circuit's

decision. Section 9601(35)(C) of CERCLA

provides, in pertinent part, that:

[I]f the defendant obtained

actual knowledge of the release

or threatened release of a

hazardous substance at such

facility when the defendant

owned the real property and then

subsequently transferred

- 13 -

ownership of the property to

another person without

disclosing such knowledge, such

defendant shall be treated as

liable under section 9607(a) (1)

of this title and no defense

under section 9607(b) (3) of this

title shall be available to such

defendant.

A-148. In reaching its holding, the

Fourth Circuit totally disregarded

§ 9601(35) (C).

If all prior owners are held liable,

as the Fourth Circuit's decision requires,

the non-disclosure provisions of

§ 9601(35)(C) are rendered meaningless.

Elementary cannons of statutory

construction forbid this result. eyta

v. Comm'r of Internal Revenue, 111 S.Ct.

2631 (1991). While it is true, as the

Fourth Circuit remarks several times, that

CERCLA is to be read broadly to accomplish

its remedial purposes, Congress did not

intend to make all prior owners liable.

ee

The policy underlying CERCLA,

obtaining voluntary cleanup, does not

authorize the Court to alter the language

of the statute. By expanding the meaning

of owner "at the time of disposal" to "all

prior owners after the disposal," the

Fourth Circuit has rewritten CERCLA,

§ 9607(a) (2).

III. THE FOURTH CIRCUIT'S DEFINITION

OF DISPOSAL IN WASTE INDUSTRIES

I8 NOT THE CONTROLLING LAW IN

THE PRESENT CASE

In this case, the Fourth Circuit

cited United States v. Waste Industries,

Inc., 734 F.2d 159 (4th Cir. 1984) as

precedent for its interpretation of

"disposal." The Fourth Circuit then

applied the term "disposal" to CERCLA,

§ 9607(a) (2). The wording contained in

CERCLA, § 9607(a)(2), and applicable to

this case, is not, however, "disposal" but

owner or operator "at the time of

disposal."

In Waste Industries, the Fourth

Circuit interpreted the term "disposal" as

it appears in RCRA, 42 U.S.C.A. § 6903(3).

In that case, the Fourth Circuit concluded

that some of the words in the definition

were of an active voice and others were of

a passive voice. The Court concluded that

disposal had a range of meanings including

not only active conduct but also the

reposing of hazardous waste and its

subsequent movement through the environ-

ment.

Waste Industries was not a CERCLA

action and addressed a different factual

and legal context than the one presented

here. In Waste Industries, the Court

considered whether, in 1979, the Environ-

mental Protection Agency ("EPA") had

authority under RCRA to require remedia-

- 16 -

'

tion by former owners or operators of an

inactive landfill. The Fourth Circuit

ruled that RCRA

Section 7003 .. . is designed

to deal with situations in which

the regulatory schemes’ break

down or have been circumvented.

* « Congress expressly

intended that this and other

language [RCRA § 7003] close

loopholes in environmental

protection.

Id. at 164-165. Applying the law as it

was prior to the enactment of CERCLA, it

appears that the only way for the Waste

Industries Court to preserve the EPA's

ability to demand cleanup by former owners

was to define "disposal" in RCRA to cover

completely passive repose or movement

through the environment.

In contrast, the language contained

in CERCLA and the language applicable to

this case is "at the time of disposal."

The Fourth Circuit failed to mention this

language in its opinion. The additional

phrase "at the time of" qualifies and

modifies the meaning of "disposal." The

Fourth Circuit’s disregard of this phrase

effectively rewrites CERCLA to impose

liability on all prior owners.

CONCLUSION

For the foregoing reasons, this’

Petition for a Writ of Certiorari should

be granted.

Respectfully submitted,

Dede Utah

CHARLES R. TAYLOR, JR.

(Counsel of Record)

JOY Y. HATCHETTE

GORDON, FEINBLATT, ROTHMAN,

HOFFBERGER & HOLLANDER

233 E. Redwood Street

Baltimore, Maryland 21202

(410) 576-4228

Attorneys for Petitioner

August 27, 1992

- 18 =

APPENDICES

APPENDIX A

UNITED STATES COURT OF sAPPEALS

FOR THE FOURTH DISTRICT

No. 91-1775

NURAD, INCORPORATED,

Plaintiff-Appellant,

Vv.

WILLIAM E. HOOPER & SONS

COMPANY; James E. Hooper, Jr.;

Kenneth B. Mumaw;

All States Moving & Storage;

Raymond McMillan; Lawrence L.

Hooper; Universal Laboratory

Installations, Incorporated; Monumental

Millwork, Incorporated,

Defendants-Appellees,

and

FRANK S. NICOLL, JR.; Shareholders of

Monumental Enterprises,

Incorporated; Sudler Moving & Storage,

Incorporated, Defendants,

Vv.

J. LANGRALL & SONS; Zemco

Corporation; Chesapeake Envelope &

Print Company; Les Care Laminates,

Third Party Defendants.

No. 91-1790

NURAD, INCORPORATED,

Plaintiff-Appellee,

We

WILLIAM E. HOOPER & SONS

COMPANY, Defendant-Appellant,

A=}

and

JAMES E. HOOPER, JR.; Frank S. Nicoll,

Jr.; Shareholders of Monumental

Enterprises, Incorporated; Kenneth B.

Mumaw; All States Moving & Storage;

Raymond McMillan; Lawrence L.

Hooper; Universal Laboratory

Installations, Incorporated;

Monumental Millwork, Incorporated;

Sudler Moving & Storage,

Incorporated, Defendants,

Vv.

J. LANGRALL & SONS; Zemco

Corporation; Chesapeake Envelope &

Print Company; Les‘ Care Laminates,

Third Party Defendants.

Appeals from the United States

District Court for the

District of Maryland,

at Baltimore.

William M. Nickerson, District Judge.

(CA-90-661-WN)

Argued: March 4, 1992

Decided: May 29, 1992

Before WILKINSON, Circuit Judge,

WILLIAMS, United States District Judge

for the Eastern District of Virginia,

sitting by designation, and MACKENZIE,

Senior United States District Judge for

the Eastern District of Virginia, sitting

by designation.

Affirmed in part, reversed in part, and

remanded by published opinion. Judge

Wilkinson wrote the opinion, in which

A-2

————————

Judge Williams and Senior Judge MacKenzie

joined.

COUNSEL

ARGUED: Gina Monath Zawitoski, PIPER &

MARBURY, Baltimore, Maryland, for

Appellant. Mark Herbert Kolman, ANDERSON,

KILL, OLICK & OSHINSKY, Washington, D.C.;

Pamela Joyce White, George Whitthorne

Kelly, OBER, KALER, GRIMES & SHRIVER,

Baltimore, Maryland; Samuel A. Bleicher,

MILES & STOCKBRIDGE, Washington, D.C.;

Robert John Carson, SMITH, SOMERVILLE &

CASE, Baltimore, Maryland; Howard Kenneth

Kurman, OFFIT & OFFIT, P.A., Lutherville,

Maryland, for Appellees.

ON BRIEF: Deborah E. Jennings, William W.

Toole, PIPER & MARBURY, Baltimore,

Maryland, for Appellant. Marian Hwang,

MILES & STOCKBRIDGE, Baltimore, Maryland;

Charles R. Taylor, Jr., GORDON, FEINBLATT,

ROTHMAN, HOFFBERGER & HOLLANDER,

Baltimore, Maryland, for Appellees.

OPINION

WILKINSON, Circuit Judge:

This is a suit brought by the current

Owner of a piece of property for

reimbursement of costs it incurred in

removing from the property some

underground storage tanks and their

A-3

hazardous contents. The current owner

sought reimbursement from previous owners

and tenants at the site, claiming that

they were liable under the Comprehensive

Environmental Response, Compensation, and

Liability Act. (CERCLA) as "owners" or

"operators" of the facility at the time of

"disposal" of the hazardous substances.

42 U.S.C. § 9607(a) (2). The district

court entered summary judgment against the

original owner of the tanks and in favor

of the other defendants.

We think the district court was

correct both in holding that the original

owner was liable under CERCLA and in

holding that the tenant defendants were

not liable as "operators" of the facility

in question. We think it erred, however,

in absolving certain of the previous owner

defendants on the ground that they were

not owners "at the time of disposal." By

A-4

requiring proof of affirmative participa-

tion in hazardous waste disposal as a

prerequisite to liability under

§ 9607(a) (2); the district court miscon-

strued both the statutory definition of

"disposal" and a decision of this court

interpreting that definition. We think

the statute plainly imposes liability ona

party who owns a facility at the time

hazardous waste leaks from an underground

storage tank on the premises. Any other

result would substantially undermine

CERCLA'S goal of encouraging voluntary

Cleanup on the part of those ina position

to do so.

Le

Plaintiff Nurad, Inc., brought this

lawsuit to recover the costs it incurred

in removing several underground storage

tanks (USTs) from a piece of property it

A~-5

owns in Baltimore, Maryland. From 1905 to

1963, Wm. E. Hooper & Sons, Co. ° (the

Hooper Co. or the Company) owned the site

and adjacent pronertian, collectively

known as Hooperwood Mills. At some point

before 1935, the Hooper Co. began to

install tanks for the storage of mineral

spirits which it used to coat fabrics in

its textile finishing plant. The Company

continued to use the tanks for that

purpose until 1962, when it shut down its

finishing operations. At that time, the

Hooper Co. abandoned the USTs and did not

remove the mineral spirits.

In 1963, the Hooper Co. sold

Hooperwood Mills to Property Investors,

Inc. Frank Nicoll, as president and

principal shareholder of Property

Investors and its successor, Monumental

Enterprises, Inc., leased several of the

buildings on Hooperwood Mills to various

A-6

tenants, none of which ever used the USTs.

Then in 1976, Monumental Enterprises sold

Hooperwood Mills to Kenneth Mumaw, who

subdivided the property and sold a portion

of it to Nurad.

Nurad's operations at the~ site

involve the manufacture of antennae. In

all its years at the site, Nurad

apparently never used the USTs. In 1987,

however, the Maryland Department of the

Environment informed Nurad that the tanks

had not been properly abandoned = and

required that they be removed from the

ground or filled with sand or concrete

within 180 days. Nurad sought assistance

with the cleanup from several of the

previous owners and tenants of the site,

but they all refused. Nurad then hired an

environmental consultant and a tank

removal contractor to analyze the contents

of the tanks and dispose of several of the

tanks and the surrounding soil.

In 1990, Nurad filed this CERCLA

suit, seeking reimbursement for approxi-

mately $226,000 in cleanup costs’ from

former owners of the site (the Hooper Co.,

Nicoll, Mumaw, and Monumental

Enterprises); from former tenants at the

site (Allstates Moving & Storage, Raymond

B. McMillan, Universal Laboratory

Installations, inc., and Monumental

Millwork); and from James Hooper, Jr., and

Lawrence Hooper (the Hooper brothers), who

were shareholders and directors of the

Hooper Co. The district court decided the

issues of liability on summary judgment.

In its view, only the Hooper Co. was

liable under CERCLA for costs incurred by

Nurad in removing the tanks. The court

found that the tenant defendants did not

qualify as “operators" because they did

A-8

not possess sufficient authority to

control the hazardous waste at’ the

facility. Further, the court ruled that

certain of the previous owners were not

liable because they were not owners "at

the time of disposal." According to the

district court, "disposal" necessarily

contemplated some element of affirmative

participation on the part of the

defendant, and only the original owner

actively dealt with hazardous substances

at the site. Accordingly, the court

granted summary judgment against the

Hooper Co. and in favor of the other

defendants. The court also granted

Nurad's motion to bifurcate the issues of

liability and damages, and entered final

judgment pursuant to Rule 54(b) of the

Federal Rules of Civil Procedure.

Both Nurad and the Hooper Co.

appeal.!

Ii.

Congress enacted CERCLA to address

the increasing environmental and health

problems associated with inactive

hazardous waste sites. The statute

encourages private cleanup of such hazards

by providing a cause of action for the

recovery of costs incurred in responding

to a “release" of hazardous substances at

any "facility." 42 U.S.C. § 9607; H.Rep.

'Nurad appeals from the district

court's order granting the motions for

summary judgment filed by the Hooper

brothers, Kenneth Mumaw, Allstates Moving

& Storage, Raymond McMillan, Universal

Laboratory Installations, Inc., and

Monumental Millwork. Frank Nicoll did

not move for summary judgment, and is not

a party to this appeal. The Hooper Co.

appeals from the district court's order

denying its motion for summary judgment

and granting Nurad's motion as against

the Company.

A-10

No. 1016, 96th Cong., 2d Sess. ee

reprinted in 1980 U.S.C.C.A.N. 6119, 6120.

Under CERCLA, a person who incurs’ such

cleanup costs is entitled to recover from

anyone who qualifies as a “responsible

person" under the statute. 42 U.&.C.

§ 9607. Responsible persons include the

current “owner" or "operator" of the

facility, id. § 9607(a)(1), any person who

"owned" or "operated" the facility at the

time of "disposal" of a hazardous

substance, id. § 9607(a)(2), any person

who "arranged for disposal or treatment"

of hazardous substances at the faciiity,

id. § 9607(a)(3), and any person who

accepts hazardous substances "for

transport to disposal or treatment

facilities, incineration vessels or

sites," id. § 9607(a) (4). Any of these

responsible persons is strictly liable for

costs incurred in responding to _ the

A~ii

release of a hazardous substance at the

facility. United States v. Monsanto Co.,

858 F.2d 160, 167 (40m Gar. 1988),

"subject only to the defenses set forth in

subsection (b)." 42 U.S.C. § 9607(a).

The court has the authority to "allocate

response costs among liable parties using

such equitable factors as the court

determines are appropriate." ia.

§ 9613(f)(1).?

*The statute also provides that

costs will be recoverable only if they

are "necessary" and "consistent with the

national contingency plan." 42 U.S.C. §

9607(a)(4)(B). The district court in

this case granted Nurad's motion to

resolve the issues of necessity of the

costs and consistency with the national

contingency plan at the damages phase.

The court's decision to bifurcate was

based on its view that the record on

these issues was incomplete. Under the

circumstances, the decision to bifurcate

was well within the court's discretion.

See County Line Inv. Co. v. Tinney, 933

F.2d 1508, 1513 (10th Cir. 1991), and —~

cases cited therein.

A-12

Here the district court found that

Nurad's costs were in response to a

release oor threatened release of a

hazardous substance under CERCLA. The

issues on appeal concern the scope of the

terms defining responsible persons under

§ 9607(a) (2)--specifically, the meaning of

the terms "owned," "operated," "facility,"

and "disposal." We think it best to

approach the meaning of those terms by

considering Nurad's claims against the

various parties who were prior owners or

tenants at Hooperwood Mills.

A.

We shall first address Nurad's claims

against the former tenants at the site.

The district court dismissed Nurad's

claims against the tenant defendants on

the grounds that they lacked the authority

to control the USTs and therefore did not

"operate([]" a Facility” under §

A~iJ3

9607(a) (2). Nurad raises three objections

to this aspect of .the ‘district ceurt's

ruling. First, Nurad contends that the

district court applied the wrong legal

standard in interpreting the word

"operator." In Nurad's view, the court

too narrowly defined that term to include

only those persons who actually exercised

control over the facility.

We do not agree with Nurad that the

district court applied an improper

standard. The district Court applied the

correct standard in holding that’ the

tenant defendants need not have exercised

actual control in order to qualify as

operators under § 9607(a)(2), so long as

the authority to control the facility was

present. Although the court did note that

the tenant defendants "never actively

participated in the disposal of hazardous

substances" at the site, the court's

A-14

—V——

decision quite properly turned on the fact

that they lacked "authority to control the

operations or decisions involving the

disposal of hazardous substances at the

Site or the contents of the _ USTs"

(emphasis added). Indeed, the district

court's examination of the terms of the

various leases in question indicated that

it recognized that authority to control--

not actual control--was the appropriate

standard. This is the definition of the

word “operator" that most courts have

adopted, see, e.g., CPC Int'l, Inc. vv.

Aerojet-General Corp., 731 F. Supp. 783,

788 (W.D.Mich. 1989); Idaho v. Bunker Hill

Co., 635 F. Supp. 665, 671-72 (D.Idaho

1986), and it is one which properly

declines to absolve from CERCLA liability

a party who possessed the authority to

abate the damage caused by the disposal of

hazardous substances but who declined to

aA-is

actually exercise that authority by

undertaking efforts at a cleanup. Under

this standard, the district court was

entitled to consider a defendant's actual

conduct as evidence of the authority to

control, see, e.g. Riverside Market Dev.

Corp. v. International Bldg. Prods., Inc.,

931 F.2d 327, 330 (5th Cir. 1991); New

York v. Shore Realty Corp., 759 F.2d 1032,

1052 (2d Cir. 1985), but it clearly did

not inflate that item of evidentiary

Significance into a dispositive legal

requirement.

Second, Nurad objects to the district

court's interpretation of the word

"facility." Liability under § 9607(a) (2)

extends to any person who "operated any

facility" at which hazardous substances

were disposed of, and the district court

proceeded on the premise that- the

"facility" in this case was confined to

A-16

the USTs.? Nurad contends that the

"facility" at issue here encompassed the

entire Nurad site, so that the proper

inquiry is whether the tenant defendants

had control over any portion of that site,

not just the storage tanks.

we disagree. CERCLA defines

"faciiity* to include a "building,

structure, ... storage container" or other

“area where a hazardous substance has been

deposited, stored, diSposed of, or placed,

or otherwise come to be located." 42

U.S.C. § 9601(9). In this case, the only

"area" where hazardous substances have

"come to be located" is in and around the

‘The district court purported to

sidestep the issue of whether to define

the "facility" to encompass the entire

Nurad property, but its analysis reveals

that it considered the facility to be

limited to the USTs. In concluding that

the tenant defendants did not "operate"

the "facility," for example, the court

reasoned that they “lacked the requisite

degree of control over the USTs."

A-17

storage tanks, so the relevant "facility"

is properly confined to that area. To be

sure, the tanks are a part of the larger

piece of property that is now the Nurad

site. During the relevant period,

however, the site was subdivided and

separate portions of it were leased out to

individual tenants. The fact that those

tenants may have had control over a

building that was adjacent to the USTs is

irrelevant under the statute; a defendant

operates a "facility" only if it has

authority to control the area where the

hazardous substances were located. Thus,

while liability under § 9607(a)(2) is

strict, Monsanto, 858 F.2d at 168, it

nonetheless extends only to those who have

authority over the area where hazardous

substances are stored. The statute places

accountability in the hands of those

capable of abating further environmental

A-18

iia leila

harm, while Nurad's proposed definition of

"facility" would rope in parties who were

powerless to act.

Finally, Nurad contends that even if

the court applied the correct legal

standard, it erred in its factual

determination that the tenant defendants

lacked the authority to control the USTs.

Nurad contends that as lessees the tenants

had a property interest that necessarily

included the implicit authority to control

the portion of the site that contained the

USTs. We agree with the district court,

however, that the terms of the tenants’

lease agreements conclusively establish

that their authority as tenants did not

extend to the USTs. Defendant Allstates

Moving & Storage, for example, leased

parts of several buildings on the Nurad

site to conduct its freight transfer and

storage operations from 1966 to 1979, but

A-19

|

Allstates' lease agreements never

conferred upon it -any authority over the

USTs, which were under the active

management of the landlord. The initial

lease demised to Allstates the "1st floor

of Building 4C," and limited it to use "as

an office and warehouse for the storage of

furniture[,] appliances, and other such

equipment and material consistent with the

business of the tenant." In addition, the

lease demised to Allstates use of the

following common areas: the lavatory

marked I and the parking area narked II

and ... the railsiding in the said complex

to spot boxcars plus the ... driveways to

the siding in order to load and unload

goods stored in the demised premises.

Subsequent lease agreements denised to

Allstates portions of other buildings on

the site, but none expanded its authority

to use any common areas other than those

A-20

) |

specifically identified in the initial

agreement, and none purported to give

Allstates authority to use the areas where

the tanks were situated.

The other tenant defendants also

lacked authority to control the USTs.

Universal Laboratory Installations, Inc.,

occupied portions of two of the buildings

at Hooperwood Mills under an oral lease

for nine months during 1972. Universal

used the buildings as an office and

storage facility for its cabinet

installation business. Under Universal's

oral agreement, it had the right to occupy

specific portions of the two buildings,

rights of ingress and egress to those

buildings, and the right to use the

loading dock. Monumental Millwork leased

a portion of one of the buildings at the

site from 1969 to 1978 for use as an

office and for the assembly and storage of

A-21

doors and windows. Nurad makes broad

assertions about both Universal's and

Millwork's authority over the Nurad site,

but has adduced no evidence sufficient to

contradict the trial court's conclusion

that they had no authority to control the

USTs or their contents.

Given the precise language of the

lease agreements and the absence of any

express authority to use the USTs, we

think it would be unreasonable to assume

that the tenant defendants possessed any

implicit authority to exercise control

over the tanks. Indeed, Nurad's

suggestion that these tenants had some de

facto authority over the USTs is

inconsistent with the landlord's actual

practice, which required a separate lease

agreement when in 1966 the Hooper Co.,

then a tenant, sought to use one of the

tanks. Under the circumstances, the

A-22

| 7

tenant defendants may even have been

trespassing if they had attempted to

assume the role of "operator" of the USTs.

We thus agree with the district court that

each of the tenant defendants--Allstates

Moving & Storage, Universal Laboratory

Installations, and Monumental Millwork--

was entitled to summary judgment. Since

Nurad's only allegations against McMillan

were that he was president and sole

shareholder of Allstates, our holding

requires that McMillan be granted summary

judgment also.

B.

Next we address Nurad's’ claims

against James and Lawrence Hooper. Nurad

contends that the district court erred in

finding that the Hooper brothers did not

qualify as operators. Even if we assume

that a corporate officer may be held

personally liable as an operator, see

A-23

Shore Realty, 759 F.2d at 1052, we agree

with the district court that the Hooper

brothers lacked the requisite authority to

control the USTs or to prevent the

disposal of hazardous waste at the site.

It is true that the Hooper brothers were

vice presidents of the Hooper’ Co.

beginning in the early 1960s. Any

authority they possessed was’ entirely

subordinate to that of their father,

however, who - president and majority

stockholder exercised ultimate authority

over the finishing plant. The senior

Hooper was not anxious to cede this

authority to his sons; an uncontradicted

affidavit described him as "a man of

strong will and temperament suited to

running the entire affairs of the

corporation, which he did." Nurad has

failed to direct our attention to any

evidence that would undermine the district

A-24 .

court's conclusion that "James Hooper,

Sr., as president during the relevant

times, retained all decision-making

authority over the company including the

daily operations at the finishing plant,"

and that the younger Hoopers’ should

accordingly not face CERCLA liability.‘

S.

Finally, we address Nurad's claims

against the previous owners of the site,

“Nurad insists that the district

court failed to give proper weight to the

fact that the Hooper Co. resumed its

finishing operations as a tenant in 1966

in two buildings that the Company leased

from Property Investors. Nurad suggests

that during that period the Hooper

brothers controlled the underground tank

then in use, denominated the "building 28

tank." The district court found,

however, that Mr. Hooper, Sr., was at

that time still in a position to exercise

absolute control over the Company.

Moreover, Nurad has conceded that the

building 28 tank is not on the Nurad site

and is not a subject of this suit, so

that the Hooper brothers' control of that

tank cannot affect their status as

operators of the facility in question.

A-25

the Hooper Co. and Kenneth Mumaw. Neither

the Hooper Co. nor Mumaw appeals from the

district court's conclusion that they are

prior owners of the facility. At oral

argument, Mumaw did direct our attention

to the fact that he held legal title to

the property for only a short period of

time. We do not think, however, that the

work “owned" is a word that admits of

varying degrees. Such equitable

considerations as the duration of

Ownership may well be relevant at a later

stage of the proceedings when the district

court allocates response costs among

liable parties, see 42 J.8.C.

§ 9613(f)(1), but we reject any suggestion

that a short-term owner is somehow not an

owner for purposes of § 9607(a)(2).

Because both the Hooper Co. and Mumaw

are prior owners of the facility, we must

ask whether recovery against them is

A-26

: ilar A eas

nonetheless barred because no "disposal"

of hazardous wastes took place on their

watch. The district court took a narrow

view of the word "disposal," limiting it

to disposal by affirmative human conduct.

Thus, the court concluded that the Hooper

Co. was liable because it actively

disposed of hazardous substances and then

abandoned them in the USTs. The court

held, however, that Mumaw was not liable--

even though passive migration of hazardous

substances may have occurred during his

ownership--since he did not take an active

role in managing the tanks or their

contents.

We think the district court's

restrictive construction of "disposal"

ignores the language of the _ statute,

contradicts clear circuit precedent, and

frustrates the fundamental purposes of

CERCLA. The statute defines "disposal" in

A-27

42 U.S.C. § 9601(29) by incorporating by

reference the definition found in the

Resource Conservation and Recovery Act

(RCRA). That definition states: The term

"disposal" means the discharge, deposit,

injection, dumping, spilling, leaking, or

placing of any solid waste or hazardous

waste into or on any land or water so that

such solid waste or hazardous waste or any

constituent thereof may enter the

environment or be emitted into the air or

discharged into any waters, including

ground waters. 42 U.S.C. § 6903(3). Some

of the words in this definition appear to

be primarily of an active voice. See

Ecodyne Corp. v. Shah, 718 F. Supp. 1454,

1457 (N.D.Cal. 1989). This is true of

"deposit," "injection," "dumping," and

"placing." Others of the words, however,

readily admit to a passive component:

hazardous waste may leak or spill without

A-28

any active human participation. The

district court arbitrarily deprived these

words of their passive element by imposing

a requirement of active participation as a

prerequisite to liability.

Indeed, this circuit has already

rejected the "strained reading" of

disposal which would limit its meaning to

“active human conduct." United States v.

-

Waste Ind., Inc., 734 F.2d 159, 164-65

(4th Cir. 1984). In Waste Industries, the

court held that Congress intended the 42

U.S.C. § 6903(3) definition of disposal

"to have a range of meanings," including

not only active conduct, but also the

reposing of hazardous waste and its

subsequent movement through the

environment. Id. at 164. Here the

district court attempted to distinguish

Waste Industries on the ground that it

involved the authority of the

A-29

Environmental Protection Agency to demand

cleanup by former owners and operators

under RCRA. The district court thought

that the Waste Industries definition was

necessary to close a loophole in RCRA's

environmental protection scheme, see id.

at 165, and believed "that the only way

for the Waste Industries court to preserve

the EPA's ability to demand cleanup by the

actual former owners and operators was to

define 'disposal' in RCRA to cover

completely passive repose or movement

through the environment." In this CERCLA

action, by contrast, the district court

noted that the current owner and all prior

owners were already defendants and in some

cases were liable for cleanup costs.

We think the district court was bound

to follow Waste Industries in interpreting

the term "disposal." It is true that

Waste Industries interpreted the

A-30

definition in the context of RCRA, but

Congress expressly provided that under

CERCLA the term "shall have the meaning

provided in section 1004" of RCRA (42

U.S.C. § 6903(3)). 42 U.S.C. § 9601(29).

Moreover, the aim of both RCRA and CERCLA

is to encourage the cleanup of hazardous

waste conditions. Whether the context is

one of prospective enforcement of

hazardous waste removal under RCRA or an

action for reimbursement of response costs

under CERCLA, a requirement conditioning

liability upon affirmative human

participation in contamination equally

frustrates the statutory purpose.

It is easy to see how the district

court's requirement of active

participation would frustrate the

statutory policy of encouraging "voluntary

private action to remedy environmental

.

hazards," In re Dant & Russell, Inc., 951

A-31

F.2d 246, 248 (9th Cir. 1991). Under the

district court's view, an owner could

avoid liability simply by standing idle

while an environmental hazard festers on

his property. Such an owner could

insulate himself from liability by virtue

of his passivity, so long as he transfers

the property before any response costs are

incurred. A more conscientious owner who

undertakes the task of cleaning up the

environmental hazard would, on the other

hand, be liable as the current owner of

the facility, since "disposal" is not a

part of the current owner liability scheme

under 42 U.S.C. § 9607(a)(1). See Shore

Realty, 759 F.2d at 1044. The district

court's view thus introduces the anomalous

Situation where a current owner, such as

Nurad, who never used the storage tanks

could bear a substantial share of the

cleanup costs, while a former owner who

A-32

+ pone

was similarly situated would face no

liability at all. A CERCLA regime which

rewards indifference to environmental

hazards and discourages voluntary efforts

at waste cleanup cannot be what Congress

had in mind.

The district court's view of the

CERCLA definition of disposal is also at

odds with CERCLA's” strict liability

emphasis. The trigger to liability under

§ 9607(a) (2) is ownership or operation of

a facility at the time of disposal, not

culpability or responsibility for the

contamination. See Monsanto, 858 F.2d at

168 ("The traditional elements of tort

culpability on which the site-owners rely

Simply are absent from the statute.");

Shore Realty, 759 F.2d at 1044 (noting

that Congress specifically rejected a

causation requirement). We must decline

therefore to engraft onto the statute

A-33

additional prerequisites to the

reimbursement of response costs’ which

Congress did not place there.

Thus, we hold that § 9607(a) (2)

imposes liability not only for active

involvement in the "dumping" or "placing"

of hazardous waste at the facility, but

for ownership of the facility at a time

that hazardous waste was "spilling" or

"leaking." The only remaining question is

whether a statutory disposal of hazardous

waste occurred during the period of

Hooper's and Mumaw's ownership.

We think for the following reasons

that it did. Initially, the record

supports the conclusion that both the

Hooper Co. and Mumaw owned the facility at

a time when the mineral spirits were

"leaking" from the tanks. Nurad has

established that the Hooper Co. began to

install the USTs some time before 1935 and

A-34

that mineral spirits reposed in the tanks

until they were removed by Nurad in 1988-

89. Nurad has further presented

uncontroverted evidence that at the time

the tanks were removed the soil around

several of the tanks was contaminated with

mineral spirits. Indeed, the district

court found that the "mineral spirits in

the excavated soil show an exact

chromatographic match" with those in one

tank, and that another of the tanks had

"corrosion holes in the bottom and was

underlain by discolored soils that

emanated solvent odors." Neither the

Hooper Co. nor Mumaw has pointed to

anything to overcome the presumption that

the leaking that has occurred was not a

sudden event, but the result of a gradual

and progressive course of environmental

contamination that included these

defendants' period of ownership. We do

A~33S

not think in such circumstances that

Congress intended to impose upon a CERCLA

plaintiff the onerous burden of

pinpointing at what precise point a

leakage may have begun. This circuit has

been careful not to vitiate what was

intended as remedial legislation by

erecting barrier upon barrier on the road

to reimbursement of response costs. As

this court emphasized in rejecting a

requirement that a CERCLA plaintiff prove

a nexus between waste sent by a particular

defendant to a particular site and the

resulting environmental harm: Congress

knew of the synergistic and migratory

capacities of leaking chemical waste, and

the technological infeasibility of tracing

improperly disposed waste to its

source..."To require a plaintiff under

CERCLA to ‘'fingerprint' wastes is to

s

eviscerate the statute." Monsanto, 858

A-36

_— s

F.2d at 170 (quoting United States v.

Wade, 577 F. Supp. 1326, 1332 (E.D.Pa.

1983)).

Finally, we agree with the district

court that the Hooper Co.'s claim that

there was no_- statutory disposal is

especially insubstantial. The Company

disposed of hazardous substances at the

Site by depositing them in the USTs and

abandoning them upon closing its finishing

plant in 1962. The statute provides that

"disposal" includes the "placing" of any

hazardous waste "into or on any land" so

that such hazardous waste "may enter the

environment," 42 U.S.C. § 6903(3), and

courts have specifically held that

depositing hazardous waste into enclosed

containers fits tris definition. See,

e.g., Westwood Pharmaceuticals, Inc. v.

National Fuel Gas Distribution Corp., 737

.

F. Supp. 1272, 1278 (W.D.N.Y. 1990),

A-37

aff'd, No. 91-9157, --- F.2d --- (2d Cir.

March 11, 1992). Even if we accept the

Hooper Co.'s argument that the storage of

useful mineral spirits for active use as a

raw material cannot constitute disposal

because it is not "waste," see 3550

Stevens Creek Assoc. v. Barclays Bank, 915

F.2d 1355, 1362 (9th Cir. 1990), we think

there clearly was a disposal in 1962 when

the Company closed down the finishing

plant and abandoned the tanks. At that

point, the mineral spirits clearly became

"waste," as they were abandoned and were

apparently never again used. See 40

C.F.R. § 261.2 (defining waste as any

"discarded" material, or material which

has been "abandoned").

The Hooper Co. is quick to point out

that it later "sold" the USTs and their

contents to Property Investors, but we

.

agree with the district court that the

A-38

sale of the previously abandoned tanks to

a real estate investor--who had no use for

the mineral spirits or the tanks and

apparently never used them--cannot reverse

the earlier disposal. A defendant who has

abandoned hazardous materials at a site

cannot escape CERCLA liability by simply

labelling a subsequent transfer of the

property as a "sale" of the hazardous

waste. See United States v. Aceto Agric.

Chems. Corp., 872 F.2d 1373, 1381 (8th

Cir. 1989) ("({C]jourts have imposed CERCLA

liability where defendants sought’ to

characterize their arrangement with

another party who disposed of their

hazardous substances as a '‘'sale' rather

than a 'disposal.'")

Lee

In sun, Nurad is entitled to

reimbursement from some of the _ prior

occupants of Hooperwood Mills, but not

A-39

from all. We affirm the district court's

dismissal of ies ige es claims against each

of the tenant defendants and against the

Hooper brothers, and we affirm the entry

of summary judgment in Nurad's’ favor

against the Hooper Co. We reverse the

district court's denial of Nurad's motion

for summary judgment as to Mumaw. We

remand the case for further proceedings

consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART,

AND REMANDED.

*

%

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

NURAD, INC. +

v. * CIVIL ACTION

NO. WN 90-661

WM. E. HOOPER & *

SONS CO. et al.

*

* * * * * * * * *

MEMORANDUM

Plaintiff Nurad, Inc. ("Nurad")

initiated this action pursuant to Section

107 of the Comprehensive Environmental

Response, Compensation, and Liability Act

of 1980 ("CERCLA"), 42 U.S.C. § 9607,° to

*This section provides, in pertinent

part:

[A]ny person who at the time of

disposal of any hazardous substance

owned or operated any facility at

which such hazardous substances were

disposed of, . . . 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 --

(continued...)

A-41

recover costs incurred and to be incurred

responding to alleged releases and the

threat of release from seven Underground

Storage Tanks at property currently owned

by Nurad. Named as defendants in this

action are the prior owners of the

property and others associated with the

site.

Plaintiff has filed two motions for

partial summary judgment and a declaration

that defendants are jointly and severally

liable for Nurad's response costs

consistent with the National Contingency

Plan ("NCP"). Nurad's first motion is

directed at defendants Wm. E. Hooper &

Sons Co. (the "Hooper Co." or “Hooper"),

°(...continued)

(B) any other necessary costs

of response incurred by any

other person consistent with

the national contingency plan;

42 U.S.C. § 9607(a) (2) (B).

A-42

James E. Hooper, Jr., Allstates Moving and

Storage ("“Alistates"), Kenneth B. Mumaw,

Raymond B. McMillan, and Frank S. Nicholl,

Jr.®° Nurad has also moved for partial

summary judgment against defendants

Lawrence L. Hooper, Universal Laboratory

Installations, Inc. ("Universal") and

Monumental Millwork, Inc. ("Monumental

Millwork") .’” Defendants oppose these

motions.®

Several defendants, including

the Hooper Co., James and Lawrence Hooper,

Allstates, Mr. McMillan, Mr. Mumaw,

Monumental Millwork and Universal have

filed cross-motions for summary judgment

‘Paper Nos. 96, 158

"Paper No. 145.

8See Paper Nos. 110, 111, 114, 146,

148, 150, 151, 159.

A-43

against Nurad.?’ Plaintiff has filed

oppositions to these motions. '?

The Court heard oral argument on all

summary judgment motions on March 1, 1991.

After hearing arguments and reviewing the

pleadings and supporting papers, the Court

will rule as set forth below."

BACKGROUND

The following is a summary of the

important background facts; other facts

will be discussed in the context of the

liability issues.

%Paper Nos. 93, 97, 102, 118, 123,

137, 139, 154.

"See Paper Nos. 108, 109, 127, 142,

147, 157.

"There are three other pending

motions: 1) Zemco Corporation's

("Zemco") Motion for Summary Judgment

(Paper No. 113); 2) Nurad's Motion for

Bifurcation (Paper No. 94); and 3) James

E. Hooper Jr.'s Motion to Dismiss (Paper

No. 133). All of these motions are ripe

and will be ruled on at this time.

A-44

This case arises out of the existence

of seven Underground Storage Tanks

("USTs") located at the northwest corner

of 2165 Druid Park Drive in Baltimore,

Maryland (the "Nurad site" or the "Site")

where Nurad currently owns and operates an

antenna manufacturing facility. The Site

also encompasses a connected group of

buildings designated as Buildings 4, 4A,

4B, 4C, 24, and 24a." According to

Nurad, the USTs were installed by the

Hooper Co. which owned the Site and the

surrounding properties (the "Hooperwood

Mills" or the "Mill") from 1905 until

November 30, 1963. Before its sale in

1963, the Hooper Co. ran ae textile

manufacturing operation at the Mill and

For a map of the Site, see Exhibit

H to Appendix of Exhibits to Nurad's

Memorandum in Support of Motion for

Partial Summary Judgment and Declaration

of Liability (hereinafter "Nurad Exhibit

re a

A-45

LDC

conducted finishing operations at Building

4 which involved the flameproofing and

waterproofing of canvas. Nurad alleges

that during these operations, the Hooper

Co. used certain chemicals and stored them

in two of the USTs from as early as 1935

until 1962. Four additional USTs appear

on a site map dated April 14, 1945" and

another UST appears on a site map dated

June 3 1948." The dates of

installation, however, are not shown on

these maps. A map prepared by Hooper's

insurance agent and dated December 3, 1962

depicts the location of each UST and its

contents.”

In 1963, the Mill, including the

Site, was sold to Property Investors, Inc.

See Nurad Exhibit F.

“See Nurad Exhibit G.

See Nurad Exhibit H.

A-46

Defendant Frank S. Nicholl was’ the

president and principal shareholder of

Property Investors and its successor

corporation Monumental Enterprises during

the relevant times. In 1966, the Hooper

Co. leased from Property Investors

Buildings 24 and 24A on the Site to

conduct a small finishing operation there.

On August 9, 1976, Monumental Enterprises

sold Hooperwood Mills, including the Site,

to Kenneth B. Mumaw who subdivided it into

three parcels and sold the Site or Parcel

"Cc" to Nurad, Parcel "B" to the Hooper Co.

and Parcel "A" to Chesapeake T.V. See

Nurad Exhibit U. Parcel "B" consists of

Buildings 2, 2A and 28 and associated

property, and is adjacent to the Nurad

site. Before purchasing Parcel "C" or the

Site, Nurad occupied as a tenant all or a

part of the second floor of Buildings 4,

4B and 4C. In 1988, the Hooper Co. sold

Parcel "B" to Kenneth Mumaw. a

In the Fall of 1988, Nurad learned

that at least one of the USTs contained

hazardous substances. On December 16 and

19, 1988, Nurad hired Geraghty and Miller

("G&M") and Chem Clear to perform

historical research of the Site, identify

and analyze the contents of the tanks,

conduct tank closures, Cleaning '- and

sealing. Nurad alleges that it has

incurred response costs of approximately

$277,680.77 relating to these activities

but claims that it has not developed a

permanent remedy for the Site. Plaintiff

presently seeks a declaration that

defendants are jointly and_- severally

liable for these costs and any future

costs to be incurred by Nurad consistent

with the NCP. At this time, Nurad does

not ask for a determination of the amount

A-48

a ok cael in alli aac Ue

of recoverable costs (i.e., the necessity

of the response costs and their

consistency with the NCP).

DISCUSSION

Ee Plaintiff's Motions for Partial

Summary Judgment and Defendants'

Motions for Summary Judgment

A. Summary Judgment Standard

Summary judgment is proper if the

evidence before the court, consisting of

the pleadings, depositions, answers to

interrogatories, and admissions of record,

establishes that there is no genuine issue

as to any material fact and that the

moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(C);3

Celotex Corp. v. Catrett, 477 U.S. 317,

322 (1986). Rule 56 mandates the entry of

summary judgment against a party who,

after reasonable time for discovery and

upon motion, "fails to make a showing

A-49

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." Id. at 322.

"(A] complete failure of proof concerning

an essential element of the non-moving

party's case necessarily renders all other

facts immaterial [and] [t]he moving party

is ‘entitled to judgment as a matter of

law.'" Id. at 323. (citations omitted).

If the evidence favoring the

non-moving party is "merely colorable, or

is not significantly probative, summary

judgment may be granted." Anderson v.

Liberty Lobby Inc., 477 U.S. 242, 249-50

(1986) (citations omitted). Unsupported

speculation is insufficient to defeat a

motion for summary judgment. Felty v.

Graves-Humphreys Co., 818 F.2d 1126, 1128

(4th Cir. 1987) (citing Ash _ v. United

Parcel Serv., Inc., 800 F.2d 409, 411-12

A-50

i i a i Usd a ei

(4th Cir. 1986)). Moreover, the mere

existence of some factual dispute is

insufficient to defeat a motion for

summary judgment; there must be a genuine

issue of material fact. Anderson, 477 U.S.

at 247-48. Thus, only disputes over those

facts that might affect the outcome of the

case under the governing law are

considered to be "material." Id.

Finally, in assessing such a motion,

the Court must view the evidence and all

justifiable inferences in the light most

favorable to the party opposing the

motion. United States v. Diebold. Inc.,

369 U.S. 654, 655 (1962) (per curiam).

B. CERCLA Section 107(a)

In order to grant partial summary

judgment on the issue of defendants’

liability under Section 107, Nurad must

prove the following four elements:

(1) the site is a "facility";

(2) a "release" or a "threatened

release" of any "hazardous substance"

from the facility has occurred;

(3) the release or threatened release

has caused plaintiff to incur

"response costs"; and

(4) the defendant is a person who

owned or operated the facility when a

hazardous substance was disposed of.

United States v. Conservation Chem. Co.,

619 F. Supp. 162, 184 (W.D. Mo. 1985);

Southland Corp. v. Ashland Oil. Inc., 696

F. Supp. 994, 999 (D. N.J. 1988). Absent

the demonstrated presence of an

affirmative defense listed in 42 U.S.C. §

9706(b)(1)-(3), and upon proof of the

Several defendants contend that

Nurad must also prove that its response

costs are consistent with the NCP to

establish liability, That argument will,

be addressed infra at 49 during the

Court's discussion of Nurad's motion to

bifurcate.

above elements, CERCLA imposes strict,

joint and several liability upon the

offending party. United States v.

Northeastern Pharmaceutical & Chemical Co.

("NEPACCO"), 810 F.2d 726, 732 (8th Cir.

1986), cert. denied, 484 U.S. 848 (1987);

New York v. Shore Realty Corp., 759 F.2d

1032, 1042 (2d Cir. 1985).

With these principles in mind, the

Court will review the arguments presented

by the parties.

1. Facility

CERCLA defines "facility" as, among

other things, "any site or area where a

hazardous substance has been deposited,

stored, disposed of, or placed or

otherwise come to be located." 42 U.S.C. §

9601(9) (B). This definition has. been

broadly interpreted and includes almost

every place where a hazardous substance

could ultimately become located. See,

A-53

e.g., Dedham Water Co. v. Cumberland Farms

Dairy Inc., 889 F.2d 1146 (1st Cir.

1989); United States v. NEPACCO, 810 F.2d

726; United States v. Ward, 618 F. Supp.

884, 895 (E.D.N.C. 1985); New York v.

General Electric Co., 592 F. Supp. 291,

296 (N.D.N.Y. 1984).

"Hazardous substance" is defined in

Section 101(14), CERCLA, 42 U.S.C. §

9601(14) and includes, inter alia, any

substance specifically listed by the

Environmental Protection Agency ("EPA") as

a hazardous waste under Section 3001 of

the Resource Conservation and Recovery Act

(“Rome ), 42. 3.3.6; 8 602i; In addition

to the listed hazardous wastes, other

substances are hazardous under CERCLA if

they exhibit any of the hazardous

characteristics identified by RCRA: EP

toxicity, corrosivity, reactivity, and

.

ignitability. See 42 0.8.€,

§ 9601(14)(C), 40 C.F.R. § 261.20 et seg.

Nurad argues that the Site is a

"facility" as defined by CERCLA because

laboratory analyses of tank contents

confirm that mineral spirits-based

solvents (e.g., Xylol, Solvesso, Amsco)

and methyl isobutyl ketone ("MIBK") are or

were in several of the tanks on Nurad's

property.'’ Nurad also points out that

“puring their investigation of the

Site, Chem Clear and G&M identified the

location and contents of the seven USTs.

Nurad Tank 1 was located to the west of

Buildings 4, contained fuel oil and was

removed on December 21, 1988. Nurad

Tanks 3, 4, and 7 were addressed together

because of their close proximity. Tank 3

contained 40 gallons of substance

containing 90% MIBK and the contents were

removed on January 18, 1989. Tank 4

contained approximately one inch of

sludge overlain with water. Tank 7 is

described to have contained 1200 gallons

of water and 1% MIBK and the contents

were removed on January 31, 1989. These

tanks were then cleaned and sealed in

place.

(continued...)

both substances are present in the soils

around the tanks and loading dock at the

Site.'® Because MIBK and mineral spirits

7... continued)

The undisputed results of the

analyses of the tanks' contents are

summarized below:

TANK NO. LAST KNOWN CONTENTS (1962)

1989 CONTENTS

1 Fuel OilWeathered Fuel Oil

2 (determined to be a former

aboveground tank)

3 MIBKMIBK (90%)

4 (Liquid) Mineral SpiritsMineral

Spirits in Water

4 (Sludge) Mineral Spirits Petroleum

Hydrocarbons

5 Mineral Spirits Water

6 Mineral Spirits Water

7 MIBK

MIBK and Mineral Spirits

in Water

See Nurad Exhibit A at 37, 61, 62, 70,

ree

See Nurad Exhibit A at 13-14, 18

and Nurad Exhibit B.

A-56

are hazardous wastes under RCRA,’ Nurad

argues that they are also hazardous

substances under Section 101(14) of

CERCLA. 42 U.S.C. § 9601(14).

None of the defendants dispute that

hazardous substances have come to be

located on Nurad's property. Given the

past and current presence of these

substances at the Site, the Court finds

that the Nurad property, 2165 Druid Park

Drive, is a "facility" within the meaning

of CERCLA.@

Nurad asserts that mineral spirits

is a hazardous waste because it has a

flash point of less than 60°C (140°F) and

is ignitable. See Nurad Exhibit C; 40

C.F.R. § 261.21.

2Tn arguing that they are not

operators, the tenant defendants

(Allstates, Universal and Monumental

Millwork) suggest that the Court should

define the "facility" as only those areas

of the Nurad parcel which actually

contain hazardous substances. The Court

need not address this argument, however,

sinte the Court concludes that these

(continued...)

A-57

2. Release or Threatened Release

Nurad must also demonstrate there has

been a release or a threatened release of

hazardous substances from the Site.

CERCLA defines "release" to include any of

the following:

any spilling, leaking, pumping,

pouring, emitting, emptying,

discharging, injecting,

escaping, leaching, dumping, or

disposing into the environment

(including the abandonment or

discarding of barrels,

containers, and other closed

receptacles containing any

hazardous substance or pollutant

or contaminant) ....

42 U.S.C. § 9601(22). The term

"environment" refers to "surface water,

groundwater, drinking water supply, land

surface or subsurface strata, or ambient

air." 42 U.S.C. § 9601(8).

20(.. continued)

defendants are not operators of the

"facility" even when defined to include

the entire Nurad parcel. See infra at

30-37.

A-58

{

This definition has also been broadly

construed. A release occurs, for example,

when asbestos fibers are blown from one

site by the wind, United States v. Metate

Asbestos Corp., 584 F. Supp. 1143, 1149

(D. Ariz. 1984), Or when hazardous

“substances leach into soil and the

groundwater, United States v. Wade, 577 F.

Supp. 1326, 1334 sD. Pa. 1983).

Moreover, the release or threatened

release “of a or any hazardous substance"

is sufficient to establish liability. See

United States v. South Carolina Recycling

and Disposal, Inc. ("SCRDI"), 653 F. Supp.

984 (D.S.C. 1984), 'd_in t__and

vacated in part sub nom, 858 F.2d 160 (4th

Cir. 1988), cert. denied, 490 U.S. 1106

(1989); United States v. Wade, 577 F.

Supp. at 1333 ("the release which results

in the incurrence of response costs and

liability need only be of "a" hazardous

A-59

substance and not necessarily one

contained in defendant's waste.").

Leaking tanks also constitute "releases"

under 42 U.8.C. § 9601(22), Emhart

Industries, Inc. v. Duracell Intern. Inc.,

665 F. Supp. 549 (M.D. Tenn. 1987), and

corroding and deteriorating tanks amount

to a threat of release. See New York v.

Shore Realty Corp., 759 F.2d at 1045; see

also United States v. Medley, 13 Chem.

Waste Lit. Rep. 143, 146 (D.S.C. Nov. 4,

1986) ("The emitting or release of

volatile organics into the ambient air and

the storage of hazardous substances in

deteriorating or leaking drums and unlined

lagoons . es * clearly constituted a

'release' or ‘substantial threat' of

release.").

In the present case, the Hooper Co.

operated a finishing plant at the Site

from the early 1930s until mid-1962.

A-60

i

$

|

3

j

There is undisputed testimony that Hooper

used two USTs to store mineral

spirits-based solvents from 1935 to

1962.2" Although there is no evidence

that the other five tanks were used during

this time, a site map prepared in 1962 by

the Hooperwood Mills' insurance company

shows the contents of four of the seven

USTs as mineral spirits-based solvents and

*ISee Appendix, of Exhibits to

Nurad's Opposition to the Hooper

defendants' Motion for Summary Judgment

(hereinafter "Nurad Opposition Exhibit _

") Exhibit A at 8-14, 67-70 (deposition

transcript of Gary W. Pope, Sr.) and

Exhibit Y at 23-26 (deposition transcript

of Kenneth B. Mumaw).

The parties, however, disagree as to

which two tanks were used to store

chemicals and/or solvents. Nurad claims

that Tanks 6 and 8 were used by Hooper to

store solvents and chemicals during the

finishing plant operations while Hooper

claims that Tank 8 and a tank ona

property adjacent to the Site were used.

The Court does not find that this

disagreement presents a material issue of

fact since both parties agree that Tank 8

was used by Hooper during this time and

the record supports this finding. Id.;

Nurad Exhibit H.

A-61

two USTS as containing MIBK. Nurad

Exhibit H. Moreover, in a November 1963

Bill of Sale, the Hooper Co. characterized

the contents of six of the tanks as

"solvents or processing materials." Nurad

Opposition Exhibit G. Therefore, by 1988

the two buried USTs at the Site which were

used by Hooper at the finishing plant were

over 40 years old, and the other tanks

were at least 20 years old. In light of

these facts, the Court concludes that when

Nurad discovered in 1988 that at least one

of ‘tn USTs contained hazardous

substances, there was a threat of release.

The Court further finds that an

actual release occurred at the Site.

Nurad has presented undisputed evidence

that mineral spirits were discovered in

the excavated soils in the _ roll-off

containers around the tanks and loading

dock at the Site. Nurad Exhibit B. These

A-62

|

i

i

2

:

9

|

mineral spirits in the excavated soil show

an exact chromatographic match with the

mineral spirits in the liquids found in

Tank 4. Nurad Exhibit A at 18. Moreover,

Tank 8 was confirmed to have corrosion

holes in the bottom and was underlain by

discolored soils that emanated solvent

odors. Nurad Exhibit A at 10-11.

Additionally, soils around the tanks near

the loading dock also emitted odors of

solvents and fuel oil strong enough to

require respiratory protection for

workers. Nurad Exhibit A at 13-14.

Based on this uncontroverted

evidence, the Court concludes that an

actual release occurred. See U.S. Vv.

Hardage, 761 F. Supp. 1501, 1510 (W.D.

Okla. 1990) ("(p]resence of hazardous

substances in the soil, surface water or

ground water of a site demonstrates a

release" under CERCLA). Contrary to the

A-63

defendants' suggestion, whether the

release was in a reportable quantity or

whether Nurad notified the state or

federal authorities when the alleged

release occurred are not relevant to a

determination of CERCLA liability. - See

id. at 1511 ("Liability under CERCLA does

not depend upon any particular quantity of

the hazardous substance. Even a de minimis

contributor can be held liable."); United

States v. Wade, 577 F. Supp. at 1339-41.

The Court thus finds that Nurad has met

its burden of showing that there has been

a release or threatened release of

hazardous substances from the Site.

3. Response Costs

CERCLA also requires Nurad to

demonstrate that the release or threatened

release of hazardous substances caused it

to incur response costs. 42 U.S.C. §

9607 (a) (4). Nurad argues that its

A-64

response actions were directly

precipitated by its discovery that the

USTs contained hazardous substances and

its concern that those substances were

entering the environment. Nurad alleges

that it incurred costs from conducting a

"removal" action, i.e., steps taken on an

expedited basis to eliminate a continuing

release of hazardous substances from these

tanks. See 40 C.F.R. § 300.415. Nurad

points out that it investigated the age,

location and contents of the tanks, then

removed several of them and their

contents. pi

The Hooper defendants contend that to

satisfy this requirement Nurad must show

that Hooper's conduct caused Nurad to

incur response costs. Because no causal

nexus exists between Hooper's actions and

Nurad's response action, according to

Hooper, Nurad cannot demonstrate this

element of CERCLA liability.

The Hooper defendants' argument

misses the point. As the district court

recently explained in United States v.

Alcan Aluminum Corp., 755 F. Supp. 531,

544 (N.D.N.Y. 1991):

all that Section 107(a) requires

is that there be a release or

threatened release of hazardous

substance which causes the

incurrence of response costs. .

. ([t)here is absolute]y no

requirement that plaintiff,

demonstrate a causal nexus

between the defendant's conduct

and the contamination at the

property involved. What appears

to be required, at most, is that

the plaintiff demonstrate some

relationship between a release

and a response.

See also Gham Water Co. v. umbe

Farms Dia nce., 889 F. 2d at 1154.

In this regard, tne Court notes that

a release of hazardous substances occurred

and a threat of release of hazardous

substances existed in 1988. | Nurad

A-66

responded to this release and threatened

release. Under the statute, therefore,

the required nexus has been established.

4. Owners and/or Operators

In addition to the above elements

common to any party potentially liable

under Section 107 of CERCLA, Nurad must

also establish that each party falls

within at least one of the four classes of

covered persons under CERCLA. Nurad seeks

to impose liability upon all defendants

under Section 107(a)(2) which provides

that cny person who at the time of

disposal of any hazardous substance owned

or operated any facility at which such

hazardous substances were disposed of is

Laecle for response costs under CERCLA.

The present action involves two types of

defendants; 1) individuals who owned the

Site; and 2) others associated with the

Site. The Court will discuss’ each

category separately below.

a. Defendants in the Chain of Title

1. The Hooper Co,

As discussed previously, the Hooper

Co. owned and operated the Site from at

least 1905 to November 30, 1963. During

this time, the company ran a textile

manufacturing operation at the Mill, and

from as early as 1926 to 1963 conducted

finishing operations at Building 4

utilizing MIBK and mineral spirits.

Although there is some dispute over which

tanks were actually used during the

finishing operations at Building 4,

Hooper concedes that it used two USTs to

the east of that Building, including Nurad

Tank. 8, to store mineral spirits-based

See supra n.17.

A-68 7

solvents.“ Hooper also admits that it

used a variety of chemicals and/or

solvents including MIBK in its finishing

operations.”

The company purchased MIBK

and stored it in 55 gallon drums

above-ground in connection with these

operations. See Nurad Exhibit E at 37,

L331.

In 1962, the Hooper Co. shut down the

finishing plant operations and ceased its

use of the tanks. Hooper did not remove

the tank contents. Rather, in November,

1963, Hooper sold the Mill, including the

Site and the tanks, to Property Investors.

At the time of the sale, there were seven

USTs at the Site. Nurad Opposition

*3See Hooper's Memorandum in

Opposition to Nurad's Motion for Summary

Judgment and for Bifurcation at 4;

Hooper's Memorandum of Law in Support of

Motion for Summary Judgment at 8.

see id.

Exhibits B, G. Subsequently, in 1966, the

company leased two buildings on the Site

(Buildings 24 and 24A) and conducted a

small finishing operations there. It used

the "Building 28 tank" in that operation.

See Nurad Exhibit I at 81-85.

Based on these undisputed facts, the

Court concludes that the Hooper Co. is a

prior owner and operator of the site.*

2. Lawrence L. Hooper and James E.

Hooper, Jr.

Nurad also seeks to hold defendants

Lawrence L. Hooper and James E. Hooper,

Jr. liable as prior owners and operators

under CERCLA. Nurad argues that these

defendants had the capacity to make a

“The Court will discuss infra at

38-45 Hooper's argument that no

"disposal" occurred during its ownership

of the Site and, that its transfer of the

Site to Property Investors defeats

Nurad's argument that it is a prior owner

or operator.

A-70

timely discovery of the USTs and could

have prevented the abandonment of the

tanks and the disposal of hazardous

substances at the Site during their

ownership. Nurad points out that each

defendant held stock in the company and

that they were remaindermen in a family

trust. As former officers and directors

of the Hooper Co., according to Nurad,

both defendants were in positions to

influence company decisions, including the

disposition of Hooperwood Mills, the USTs

and their contents.

Defendants James and Lawrence Hooper

contest their liability under CERCLA.

They argue that from 1947 to 1961 as

Salesmen for Hooper and upon their return

in 1963 neither defendant participated in

decisions regarding the use of the USTs,

nor did either have a controlling stock

interest in the company. These defendants

A-71

also contend that neither had the general

nor specific power to control the

operations of the Hooper Co. before or

after the sale of the Site in 1963.

The undisputed facts regarding the

individual Hooper defendants' association

with the Site support the _ following

findings: Both Lawrence L. Hooper and

James E. Hooper, Jr. became associated

with the Hooper Co. as teenagers, working

summers at the Hooperwood Mills. From

this exposure, they were aware that the

compas used solvents to coat fabrics.

James, Jr. was aware that the solvent was

stored in tanks and drums at the Mill,

while Lawrence was aware that the company

used chemicals, including MIBK, obtained

in 55 gallon drums. See Nurad Opposition

Exhibit M at 5-6, 8-9, 14-20, 115-119

(deposition of Lawrence Hooper); Nurad

Opposition Exhibit I at 34-35 (deposition

A-72

of James Hooper, Jr.). Lawrence Hooper,

however, did not know that the company

used USTs at the Site.

From 1947 to 1961, the Hooper

brothers worked for the company as

salesmen outside of Maryland. Nurad

Opposition Exhibits M, lI. From 1961 to

1963, they left Hooper and began working

for Mount Vernon Mills. Upon their return

in late 1963, they both became vice

presidents of the company. Prior to and

during their employment at Mount Vernon

Mills, the Hoopers remained on the Hooper

Co.'s Board of Directors having been

elected on March 29, 1960 and every year

thereafter until 1963. Nurad Opposition

Exhibits K, L. The Board had six members,

three of whom were always James E. Hooper,

Sr., James E. Hooper, Jr. and Lawrence L.

Hooper. Id.; Nurad Opposition Exhibits M,

I.

The Hoopers were also contingent

remaindermen beneficiaries of the Robert

P. Hooper Trust, administered by their

father, James E. Hooper, Sr., as_ sole

trustee from 1958 until his death in 1977.

See id. The Trust held a majority of the

voting stock of the company. Apart from

this interest, each defendant

independently owned additional shares of

non-voting preferred stock in the company

prior to 1963. Id. ni

From 1958 to April, 1969, James E.

Hooper, Sr., their father, was the

president of the Hooper Go. The Hooper

defendants have submitted an affidavit

which indicates that Mr. Hooper, Sr. ran

the day-to-day operations of the company.

On April 21, 1969, he resigned and became

Chairman of the Board and continued as

Chief Executive Officer until his death in

1977. In 1969, James, Jr. succeeded his

father as president.

CERCLA § 107(a)(2), 42 U.S.C._ §

9607(a)(3), imposes strict liability upon

prior owners or operators of a facility at

the time of disposal. Under CERCLA "owner

or operator" is defined as "any person

owning or operating" an onshore facility,

and the term "person" includes both

individuals and corporations. It does not

exclude corporate officers and employees.

Id. at § 9601. Significantly, the

definition of "owner or operator" excludes

"a person, who, without participating in

the management of a... facility, holds

indicia of ownership primarily to protect

his security interest in the facility."

Id. at § 9601(20(A).

Although CERCLA does not explicitly

address whether a court may hold a

corporate officer liable for response

A-75

costs, nor does it set forth any standard,

courts have generally held that corporate

officers may be personally liable under

CERCLA for response costs. See, e.g., New

York v. Shore Realty Corp., 759 F.2d 1032;

Vermont v. Staco, Inc., 684 F. Supp. 822

(Db. Ve. _1988); United States v.

Northernaire Plating Co., 670 F. Supp.

742 (W.D. Mich. 1987), aff'd, 889 F.2d

1497 (6th Cir. 1989), cert. denied, 110 S.

Ct. 1527 (1990); United States v. Carolawn

Co., 14 Env't L. Rep. 20,699 (D.S.C. June

15, 1984); but see Joslyn Corp. v. T.L.

James & Co., 696 F. Supp. 222 (W.D. La.

1988), aff'd, 893 F.2d 80 (5th Cir. 1990),

cert. denied, 111 S. Ct. 1017 (1991).

The standards of liability

established by the decisions addressing

this issue range from basing liability on

personal participation in the waste

disposal activities to emphasizing the

A-76

authority to control the wrongful conduct

(the “authority to control analysis") or

the ability to prevent contamination (the

"prevention test"). This Court agrees

with the line of cases which looks to an

individual's authority to control a

facility's waste disposal activities in

determining a corporate officer's

liability under CERCLA.

In United States v. NEPACCO, 810 F.2d

726 (8th Cir. 1986), cert. denied, 484

U.S. 848 (1987), the Eighth Circuit

applied the "authority to control

analysis". In that case, the court held

the president and major shareholder of

NEPACCO liable as a "generator" under RCRA

despite a finding that he had no knowledge

of the plan to dispose of hazardous waste,

nor was he present at the plant during the

period of waste disposal. The Court

weasoned that although the president was

not “personally involved in the actual

decision to . . . dispose of hazardous

substances," he in fact was "in charge of

and directly responsible for all of

NEPACCO's operations .. . and he had the

ultimate authority to control the disposal

of NEPACCO's hazardous substances." Id. at

744.

In a Second Circuit case, the court

adopted a similar standard. In New York

v. Shore Realty Corp., 759 F.2d 1032 (2d

Cir. 1985), the court held the principal

officer and shareholder liable as an

operator under CERCLA where ae close

corporation purchased contaminated

“The Court observed that its

"analysis of the scope of personal

liability under the RCRA is similar to

our analysis of the scope of individual

liability under CERCLA." Id. at 745.

A-78

property, but did not actually dispose of

hazardous substances. As in NEPACCO, the

Shore Realty court determined that the

defendant was liable as an _ operator

because he was "in charge of the operation

Of the facility ...« . * 34. wt 1082.

Moreover, several district courts

have also focused on an_- officer's

authority to control in determining

liability under CERCLA. In United States

v. Carolawn Co., 14 Env't L. Rep. 20,699

(D.S.C. June 15, 1984), the court held two

corporate officers personally liable

because they were responsible for the

day-to-day operations of a hazardous waste

disposal business. The court stated that

a corporate officer may be liable under

CERCLA if he “has control or authority

over the activities of a facility from

which hazardous substances are released or

participates in the management of such a

A-79

facility." Id. at 20,699. Likewise, in

Vermont _v. Staco, Inc., 684 F. Supp. 822

(D. Vt. 1988), the court imposed personal

liability on the managing shareholders

because they participated in the general

management and control of the corporation.

The defendants testified that they made

"decisions that relate to the managing

business and the marketing business and

the selling businesses and all the overall

operations of the company." Id. at 831-

32.

One district court has formulated a

new standard for corporate officer

liability. In Kelley v. Arco Industries

Corp., 723 F. Supp. 1214, 1219 (W.D. Mich

1989) the court held that in a close

corporation an individual is liable under

CERCLA if he could have prevented or

Significantly abated the hazardous waste

discharge forming the basis of the claim.

A-80

According to the Kelly court, factors

relevant to a determination of "operator"

liability include:

evidence of an _ individual's

authority to control, among

other things, waste handling

practices -- evidence such as

whether the individual holds the

position of officer or director,

especially where there is a co-

existing management position;

distribution of power within the

corporation, including position

in the corporate hierarchy and

percentage of shares owned. .

Weighed along with the power

factor will be evidence of

responsibility undertaken for

waste disposal practices,

including evidence of respon-

Sibility undertaken and

neglected, as well as

affirmative attempts to prevent

unlawful hazardous waste

disposal.

Id. Consequently, the focus in this

court's analysis is whether the corporate

individual could have prevented the

hazardous waste discharge at issue. Id.

Applying either the "authority to

control analysis" or the "prevention test"

to the facts of the present case leads the

Court to the same conclusion. Based on

the summary judgment record = and ~ the

undisputed facts regarding the individual

Hooper defendants' involvement at the

Site, the Court concludes that at or prior

to the sale of the Hooperwood Mills in

1963, neither individual Hooper defendant

waS an owner or operator of the Site.

From the early 1950s to June 1961,

although both of these defendants were

employed as salesmen for the company, both

worked and lived outside of the Baltimore

area. Moreover, even though they were

board members during this time and vice

presidents upon their return in 1963, it

is clear from the record that neither

defendant participated in the finishing

plant operations at the Mill prior to

1969. See Nurad Exhibit. I at 10-14,

50-52; Hooper Appendix D to Motion for

A-82

Summary Judgment (hereinafter "Hooper

Appendix __."), Lawrence Hooper Dep. at

33-48, 50-69; Hooper Appendix E.

In addition, the record demonstrates

that neither had the ability nor the

capacity to exercise such control over the

operations since their father, James

Hooper, Sr., as president during the

relevant times, retained all

decision-making authority over the company

including the daily operations at the

finishing plant. Mr. Hooper, Sr. also

provided all pertinent instructions

concerning his decision to sell the

property, and voted, as trustee, the

majority of stock interest in the company.

See Hooper Appendix A, Finney Aff. qq 5,

ion)

i)

N

*7aAs identified in the uncontradicted

Affidavit of Jervis S. Finney presented

by the individual Hooper defendants, "in

(continued...)

A-83

Although CERCLA was meant to be

interpreted broadly, Nurad has failed to

Support its assertion that James Hoover,

Jr. and Lawrence Hooper controlled or had

the ability to control the operations at

the Site prior to its saje. Nor is there

support for Nurad's contention that during

this time the individual defendants could

have prevented the abandonment of the USTs

27’... .continued)

1958 and at least until 1966, the

President and Chief Executive Officer of

the Company was James E. Hooper [Sr.].

{Legal counsel to the Hooper Co. ]

received our instructions and all

corporate approvals from James E. Hooper

[Sr]. He was a man of strong will and

temperament suited to running the entire

affairs of the corporation, which he did.

All major corporate decisions were made

by Mr. Hooper. [He] also controlled and

voted, as trustee, the majority of shares

of stock of the corporation which had

been placed in trust upon the death of

his father, Robert Hooper." Hooper

Appendix A, Finney Aff. at 4 5.

A-84

and the disposal of hazardous substances

at the Site.%

The Court will therefore grant the

individual Hooper defendants' motion for

summary judgment on this issue and deny

Nurad's motion for partial summary

judgment as to these two defendants.

3. Frank S. Nicholl, Jr.

The Hooper Co. sold the entire Mill

parcel, including the Site at issue in

this case, to Property Investors, Inc.

“The Court also rejects Nurad's

argument that Lawrence and James, Jr.

were owners and operators of the Site

after the company's sale of the Mill in

1963. After the sale, the Hooper Co.

leased Buildings 24 and 24A on the Site

and conducted finishing operations there

in 1966. Although Nurad correctly points

out that during this time both defendants

were vice presidents and directors of the

company, Mr. Hooper, Sr. was still

president in 1966 and was still sole

trustee of the trust containing the

voting stock. Based on this record,

therefore, the Court concludes that

during this time neither Hooper defendant

had a position of power or the capacity

to affect the decisions of the Hooper Co.

A-&5

("Property Investors") on November 30,

1963. Property Investors owned the parcel

until October 9, 1964, when it merged with

Monumental Enterprises, Enc.

("Monumental"). Monumental then owned the

parcel from October 9, 1964 until October

13, 1976.

Defendant Frank S. Nicholl, Jr. was

the president and principal stockholder of

both’ Property Investors and Monumental.

During its ownership, Property Investors

rented property at the Mill to Hooper,

Nurad and others.

Nurad argues that partial summary

judgment against Frank Nicholl is

appropriate based on his status as a prior

owner and operator of the Site from 1963

until 1976. Nurad contends that defendant

Nicholl personally participated and

controlled property management decisions

relating to the Site and Mill on a routine

A-86

basis during the time he owned it. Nurad

further suggests that Mr. Nicholl actively

managed the corporations and routinely met

and corresponded with the tenants. on

matters relating to the Site and their

leases. According to Nurad, since Mr.

Nicholl personally handled insurance and

other business issues relating to the

Mill, he had the authority and opportunity

to empty the tanks and to address the

contamination then existing. Nurad points

out that in June, 1966, the Factory

Insurance Association, the insurer of the

Hooperwood Mills, conducted an inspection

of the property and specifically

recommended closure of the USTs. Mr.

Nicholl failed to do so, and the tanks

remained open during his ownership. Nurad

Suggests that had defendant Nicholl

performed the tank closures at that time

the potential environmental damage from

A-87

the USTs would have been substantially

reduced.

Although Mr. Nicholl does not dispute

that he was president and the principal

shareholder of both Property Investors and

Monumental during the relevant times, he

argues that based on the present facts he

can not be held liable as a prior owner or

operator. He points out that there is no

evidence that either Property Investors or

Monumental operated a hazardous waste

disposal business. Nor is there any

evidence, according to defendant Nicholl,

that he was involved in managing hazardous

substances at the Mill. Even though his

tenants might have handled such wastes,

Nicholl points to the lease agreements

with the tenants and argues that he had no

authority to influence their decisions

over these matters.

A-

88

Applying either the "authority to

control analysis" or the "prevention test"

discussed above, the Court finds that

based on this record Frank Nicholl was an

Owner or operator of the Site from 1963

until 1976. Mr. Nicholl's relationship to

Property Irvestors and Monumental is

Similar to Mr. Hooper, Sr.'s relationship

to Hooper Co.; both were officers actively

involved in the day-to-day operations of

the companies they owned and controlled.

Here, like Mr. Hooper, Sr., Mr. Nicholl

was aware of the USTs and.their contents.

Defendant Nicholl also recognized the need

to empty them, and as the president and

principal stockholder of Property

Investors and Monumental who ran all

aspects of those companies' operations,

Mr. Nicholl certainly had the capacity and

authority to properly dispose of the

hazardous substances in them. ee Nurad

A-89

Exhibits N, 0 at 2-3, P, Q, R; Deposition

Transcript of Kenneth B. Mumaw (Paper No.

112) (hereinafter referred to as "Mumaw

Deposition").

The Court rejects Mr. Nicholl's

suggestion that as a landlord he had no

authority to control his tenants'

activities.

However, even assuming, argquendo,

that he could not influence his tenants'

decisions on these matters, it is clear

that absentee landlords can be held liable

under Section 107(a)(2) of CERCLA as prior

owners at the time of disposal even though

they have not participated in conduct

resulting in the release of hazardous

substances.

In United States v. Monsarto Co., 858

F.2d 160, 166 (4th Cir. 1988), cert.

denied, 490 U.S. 1106 (1989) the Fourth

Circuit rejected an argument similar to

A-90

the one made here by defendant Nicholl.

In Monsanto. the site owners contended

that they were innocent absentee landlords

unaware or unconnected to the waste

disposal activities that took place on

their land. They argued that their lease

with the tenants did not allow the tenants

to store chemical waste on the premises,

but they admitted that they became aware

of waste storage and accepted lease

payments. Nevertheless, the Fourth

Circuit held

In light of the strict liability

imposed by section 107(a), we

cannot agree with the

site-owners contention that they

are not within the class of

owners Congress intended to hold

liable. . . . The plain language

of section 107(a)(2) extends

liability to owners of waste

facilities regardless of their

degree of participation in the

subsequent disposal of hazardous

waste.

Id. at 169.

_

Based on this case law and the

uncontradicted facts presented on the

summary judgment record, the Court

concludes that Frank Nicholl was an owner

or operator of the Site from November 30,

1963 to October 13, 1976.°

4. Kenneth B. Mumaw

Monumental entered into a contract

with Kenneth B. Mumaw to purchase the

Hooperwood Mills on July 30, 1976. Nurad

Exhibit S. Although the deed reflects a

transfer date of October 13, 1976, Mr.

Mumaw testified at his deposition that the

documents were backdated and the actual

property transfer took place in mid-

November, 1976. ee Mumaw Deposition at

“The Court will address Mr.

Nicholl's argument that there was no

"disposal" and no evidence of the

presence of hazardous substances in any

tanks during his ownership infra at

45-46.

>

1

92

114-16. In August, 1976, defendant Mumaw

contracted to sell three of the subdivided

parcels and decided to keep the land and

buildings to the south of the Site for

himself. In September, 1976, Mr. Mumaw

entered into a lease agreement with the

Hooper Co. and agreed to rent certain

buildings Mr. Mumaw had contracted to buy.

Nurad Exhibit V. Defendant Mumaw also

collected rent payments from tenants from

July to October, 1976.

According to Nurad, Mr. Mumaw held an

"equitable ownership" in the Site from the

time he entered into the Contract for

Sale, July, 1976, until he obtained full

legal title to the property in

mid-November, 1976. Nurad points out that

in recognition of Mr. Mumaw's equitable

interest, Mr. Nicholl obtained a fire

insurance general endorsement for the Mill

which named defendant Mumaw as an

A-93

additional insured. See Exhibit C to

Nurad's Memorandum in Opposition to

Mumaw's Motion for-Summary Judgment.

Mumaw contends that two documents

terminated his equitable ownership of the

Site: 1) a Letter of Intent dated June 18,

1976 from Mr. Mumaw to Nurad to convey the

Site and Mill to Nurad; and 2) the

Contract of Sale with Nurad dated August

9, 1976. Relying on Kingsley v. Makay,

253 Md. 24, 251 A.2d 585 (1969), defendant

Mumaw argues that he could not have

acquired any equitable interest in the

property in July since he had already

agreed to sell it to Nurad in June.

Under Maryland law the doctrine of

equitable conversion provides that a

purchaser who has a valid, enforceable and

‘binding agreement to convey, and thus can

compel conveyance in an action - for

specific performance, should be treated as

A-94

the owner of the property. Watson Vv.

Watson, 304 Md. 48, 61, 496 A.2dad 794

(1985). The doctrine, however, does not

apply to agreements to convey in which a

condition precedent to enforceability has

not been met since in this situation the

purchaser does not have ae right to

specific performance. ee H. McClintock

Handbook of the Principles of Equity § 106

at 287 (2d ed. 1948). Under the equitable

conversion doctrine, the purchaser is

treated as the equitable owner of the

property. If at the time of contract,

however, the vendor did not have the title

which he contracted to convey, there is no

conversion. Id. at 286-87.

In the present’ case, defendant

Mumaw's Letter of Intent to Nurad and the

Contract of Sale with Nurad did not

terminate his equitable ownership in the

Site for several reasons. First, the

A-95

Letter of Intent was expressly "contingent

upon Mumaw's purchasing the Hooperwood

Mills complex from Frank S. Nicholl Jr.'s

(Property Investors]." Nurad Exhibit U.

Because the Letter of Intent acknowledged

that Mr. Mumaw's purchase was a condition

precedent to the sale to Nurad, it did not

preclude Mr. Mumaw's acquisition of an

equitable interest in the- property.

Second, the August 9th Contract was not,

on that date, specifically enforceable;

there were conditions precedent to the

Sale which had not been performed and thus

Nurad could not have obtained equitable

title to the property then. For example,

Nurad had not obtained financing and Mumaw

had not obtained subdivision approval.

See Nurad Exhibit U. And third, the

August 9th Contract of Sale provided that

Mr. Mumaw bear the risk of harm to the

property until the actual settlement in

November. See id.

Mr. Mumaw's reliance on Kingsley is

misplaced. The status of the contract

purchaser's equitable interest between the

time he agreed to sell and the actual sale

was not at issue in Kingsley. Rather, in

that case the Maryland Court of Appeals

determined whether the sale of an

equitable interest in property must be

recorded to be valid. Contrary to

defendant Mumaw's Suggestion, the Court

did not hold that a buyer, prior to

receipt of a deed, who contracted to

resell the property had given up all

equitable title to the property.

Based on these facts, the Court finds

that Kenneth Mumaw was both a legal and

equitable owner of the Site prior to its

sale to Nurad in November, 1976. As such,

he is liable as a prior owner under

A-97

Section 107(a)(2) of CERCLA.*° cf. United

States v. Carolawn, 14 Env't L. Rep.

20,699 (D.S.C. June 15, 1984) (short-term

owners can be subject to CERCLA

liability).

b. Defendants Associated with the Site

1. Allstates Moving

and Storage and

Raymond B. McMillan

From 1966 to 1979, Sudler Moving and

Storage d/b/a Allstates Moving and

Storage, Inc. ("Allstates") leased certain

buildings and portions of these buildings

near the USTs at the Site and conducted a

freight transfer and storage operation

*Nurad also argues that Defendant

Mumaw was an operator, of the Site from

the mid-1960s to 1976. Because the Court

s finds that this defendant is a prior

owner, the Court need not address Nurad's

operator argument. Mr. Mumaw's argument

that there was neither a "disposal" nor a

release of hazardous substances during

his ownership will be discussed infra at

45-46.

A-98

there.*' Raymond B. McMillan was the

president and sole shareholder of

Allstates from 1960 throughout Allstates'

tenancy. Mr. McMillan ran Allstates'

office at this location.

Nurad contends that Allstates and Mr.

McMillan are liable under Section

107(a) (2) as former operators of the Nurad

site. Arguing that Allstates' had

"control" over the facility, Nurad points

to the fact that defendant Allstates had

"access" to the area where the USTs were

SAllstates leased the following

buildings:

Building No. Dates of Occupancy

First Floor of 4C 1966-1979

First Floor of 4B 1966-1979

First Floor of 4 & 4A 1966-1979

Buildings 24 & 24A 1975-1979

Buildings 28 & 28A Before 1976-1977

See Exhibit D to Allstates'

Memorandum of Law in Support of Motion

for Summary Judgment (paper No. 102)

(hereinafter "Allstates' Exhibit D").

A-99

located, that it had parking facilities in

the vicinity of the USTs, and that

Allstates condasead freight loading and

unloading operations in the vicinity of

the USTs. Nurad also alleges that prior

to leasing the buildings, Allstates had

inquired of the owner of the property

whether the tanks would be available for

use for fueling Allstates' vehicles.

Nurad cites United States v. SCRDI, 653

F. Supp. 984 (D.S.C. 1984) to support its

arguments.

Allstates, on the other hand,

contends that it never "operated" the

CERCLA site.** Citing to its leases with

s%tallstates also argues that Nurad's

characterization of the entire Nurad

property, 2165 Druid Park Drive, as a

CERCLA "facility" is erroneous and that

no "disposal" took place during

Allstates' tenancy. Because the Court

concludes that Allstates was not an

"operator" of the Site even when defined

to include the entire Nurad parcel, the

(continued...)

A-100

|

|

|

'

|

|

H

i

'

Nurad,* Allstates points out that it did

not have legal authority or actual

physical control over the area of the Site

where the USTs are or ‘ere located.

According to Allstates, it was a tenant in

only a portion of one group of buildings

on the Site, with the right to use a

certain parking area that did not include

the land on which the USTs are located.

Allstates further argues that it had no

legal authority over the USTs or their

contents, and thus it never actually

exercised control over then.

Several courts have held tenants

liable under CERCLA as owners or operators

of a facility. see, e.g., United States

v._SCRDI, 653 F. Supp. at 1003;

32’... .continued)

Court need not address the "facility"

argument. As to Allstates' "disposal"

argument, see infra at n.35.

See Allstates, Exhibit D.

A-101

International Clinical Laboratories, Inc.

v. Stevens, 20 Env't L. Rep. 20,560,

20,561 (E.D.N.Y. 1990); Versatile Metals,

Inc. v. Union Corp., 693 F. Supp. 1563,

1571 (E.D.Pa. 1988); United States v.

Northernaire Plating Co., 670 F. Supp. 742

(W.D. Mich. 1987).

However, in determining liability the

courts emphasize the tenant's control over

or participation in the disposal of

hazardous substances at the facility. See

BCW Associates, Ltd. v. Occidental Chem.

Corp., 1988 U.S. Dist. LEXIS 11275 (E.D.

Pa. 1988) (tenant was not operator

because tenant's activities at facility

were "limited in scope, well-confined, and

unrelated to the disposal or release of

hazardous substances") ; International

Clinical Laboratories, Inc. v. Stevens, 20

Env't L. Rep. at 20561 (tenant liable as

operator because it generated and

A-102

discharged hazardous wastes at site);

Versatile Metals, Inc. v. Union Corp., 693

F. Supp. at 1571 (purchaser-lessee liable

where it actively contributed to the

contamination of facility).

For example, in United States v.

SCRDI, the case relied on by Nurad, the

tenant and subtenant had leased all of the

property where the facility was located

and the subtenant was actively operating

it. Finding both liable under CERCLA, the

Court reasoned that the tenants

"maintained control over and

responsibility for the use of the

property." 653 F. Supp. at 1003. It is

clear from the decision that the degree of

a tenant's control over a facility was

critical to the court's determination. In

fact, the court explained that "site

control is an important consideration in

A-103

determining who qualifies as an owner

under § 107(a)." Id.

In the present case, although

Allstates had access to the USTs by virtue

of Allstates' use of the common areas at

the Site, the undisputed evidence clearly

demonstrates that Allstates' tenancy was

confined to a small group of buildings and

its activities in and around those

buildings were limited in scope and

unrelated to the disposal or release of

hazardous substances from the USTs. See

Allstates' Exhibit D. Here, unlike the

tenants in SCRDI, Allstates never owned,

leased, used or managed the USTs or their

contents; rather, the evidence

demonstrates that the Mill owners’ had

control over the common areas. See Mumaw

Deposition at 60-66, 80-82. Also unlike

the tenants in SCRDI, Allstates never

actively participated in the disposal of

A-104

hazardous substances at the Site. In the

Court's view, Allstates' mere access to

the USTs, without more, is insufficient to

support a finding of "“operator" status

under CERCLA. See Edward Hines Lumber Co.

v. V a aterials Co., 685 F. Supp. 651

(N.D. Ill. 1988), aff'd, 861 F.2d 155 (7th

Cir. 1988). Because the Court concludes

that Allstates lacked the requisite degree

of control over the USTs, and that it was

not involved in the disposal or release of

hazardous substances at the Site, the

Court will grant Allstates' motion for

summary judgment as to the CERCLA count

and deny Nurad's motion for partial

summary judgment as to Allstates'

liability under CERCLA.

The Court further finds that the

grounds for granting Allstates' motion for

summary judgment on the CERCLA count also

support granting summary judgment in

A-105

Allstates' favor on Nurad's' negligence

claim against Allstates. In Count 2,

Nurad alleges that Allstates had a duty to

warn Nurad of the existence, contents and

condition of the USTs. Because the Court

has concluded that Allstates lacked the

legal authority and actual control over

the USTs, their contents or the land on

which they are located, Allstates had no

legal duty, as a matter of law, to warn

Nurad about them. See Heinrich vv.

Goodyear Tire & Rubber Co., 532 F. Supp.

1348, 1357 (D. Md. 1982) (common law duty

to warn others of dangerous condition

arises only where defendant owns’ the

property on which the dangerous condition

exists or "at least the right or a duty to

control, if not actual control over, the

activity causing the hare. *).

Accordingly, the Court will grant

A-106

Allstates' motion for summary judgment as

to Count 2.

The Court will also grant “Mr.

McMillan's motion for summary judgment as

to the CERCLA and common law counts and

deny Nurad's motion for partial summary

judgment as to his liability under CERCLA.

Nurad has not alleged any facts, aside

from the fact that Mr. McMillan was

president and the sole shareholder of

Allstates, to support its allegation that

defendant McMillan is a responsible party

under CERCLA Section 107(a). Because the

Court has concluded that Allstates is not

liable under either CERCLA or Maryland

common law, Mr. McMillan is also not

liable under CERCLA as a prior operator or

A-107

under Maryland common law for negli-

gence.

2. Universal Laboratory Installations.

7

Although Universal was not a tenant

on the Site like Allstates, for

approximately nine months during 1972

Universal occupied Buildings 28 and 28A

(herein collectively referred to as

"Building 28") which are located directly

- east of Nurad's'~ property. Universal

installs cabinets, shelving and other

materials at installations where it is

Raymond McMillan filed a third

party complaint against Zemco claiming

that Zemco was also a tenant at the Site.

zemco has filed a motion for summary

judgment arguing that it never leased

property at the Site. In responding to

this motion, Allstates and Mr. McMillan

acknowledged that if their motion for

summary judgment was granted then

"Allstates would have no objection to

dismissal of Zemco." Paper No. 124 at 5.

Accordingly, the Court will grant Zemco s

motion for summary judgment.

A-108

engaged by contract to perform such work.

During nine months in 1972, Universal used

the upstairs portion of Building 28 as an

office and a portion of the first floor

for tool and hardware storage. Universal

had no other rights in the property, other

than ingress and egress, the right to use

the loading dock on the west side of

Building 28, and the right to use the door

located on the south side of Building 28

for entering and leaving the building.™®

Even when the Court characterizes

Building 28 as part of the Nurad

"facility," applying the test discussed

above to these facts leads the Court to

the conclusion that Universal is not

liable under CERCLA as an operator of the

see Universal's Memorandum of Law

In Support of Motion for Summary

Judgment, Exhibit C (Affidavit of Charles

F. Metzger, Sr.) (hereinafter "Metzger

Affidavit")

A-109

Site during its occupancy of Building 28.

Although Universal never executed a

written lease in connection with its use

of Building 28, the record demonstrates

that like Allstates', Universal's

association with the Site was confined to

a specific area; the first and second

floors of Building 28. Metzger Affidavit.

Also like Allstates, Universal never

participated in the disposal of hazardous

substances at the Site. Id. Nor did it

use, store or transport any hazardous

substances or any other chemicals in

connection with its occupancy of Building

a6. i4. Moreover, during this time,

Universal had no Knowledge of the

existence of the USTs at the Site. Id.

Based on these undisputed facts, the

Court concludes that Universal did not

have the control or the authority to

control the operations oor decisions

A-110

involving the disposal of hazardous

substances at the Site or the contents of

the USTs. Thus, the Ccurt will grant

Universal's motion for summary judgment on

the CERCLA and negligence counts and deny

Nurad's motion for partial summary

judgment as to CERCIA liability.

3. Monumental Millwork, Inc.

Monumental Millwork was not a tenant

on Nurad's property and it never used or

occupied any portion of the Site. From

1968 to 1978 it occupied a portion of

Building 2 located at 2139 Druid Park-

Drive, southeast of the site.*

Monumental Millwork used Building 2 to

assemble doors and windows and to store

them for subsequent distribution. Like

Universal, Monumental Millwork neither had

%Ssee Monumental Millwcrk's

Memorandum of Law in Support of Motion

for Summary Judgment Exhibits. A, C

(hereinafter "Monumental Exhibit __").

A~iii

knowledge of the USTs nor did it use

hazardous substances or the USTs. in

connection with its tenancy of Building 2.

See Monumental Exhibit B; Mumaw Deposition

at 211-213. Even assuming that Building 2

is part of the Nurad "facility," the Court

concludes that Monumental Millwork is in

the same position as Universal; during its

occupancy of Building 2 it did not

maintain control over or responsibility

for the USTs or hazardous substances at

the Site and it never participated in the

disposal of hazardous substances there.

Accordingly, the Court will grant

Monumental Millwork's motion for summary

judgment on the CERCLA and negligence

counts and will deny Nurad's motion for

partial summary judgment as to CERCLA

liability.

A"il¢d

5S. Owners or Operators At the Time of

Disposal

In addition to finding that a party

is an owner or operator, under Section

107(a) (2) of CERCLA a plaintiff must also

demonstrate that a "disposal" of hazardous

substances occurred at the facility during

the defendant's ownership or operation. 42

U.S.C. § 9607(a) (2). Because the Court

has found that the Hooper Co., Mr. Nicholl

and Mr. Mumaw are prior owners or

operators, the Court will now address

whether a "disposal" of hazardous

Substances occurred during each of these

defendant's ownership or operation of the

Site.

a. The Hooper Co.

CERCLA adopts by reference the RCRA

definition of "disposal" which includes:

the discharge, deposit,

injection, dumping, spilling,

leaking or placing of any solid

A-113

waste or hazardous waste into or

on any land or water so that

such solid waste or hazardous

waste or any constituent thereof

may enter the environment or be

emitted into the air or

discharged into any waters,

including groundwaters.

42 U.S.C. §§ 9601(29), 6903(3).

The few reported decisions concerning

the definition of "disposal" have held

that depositing hazardous substances into

subsurface receptacles constitutes

"disposal" within the meaning of CERCLA.

: See Westwood Pharm., Inc. v. National Fuel

Gas Distr. Corp., 737 F. Supp. 1272, 1278

(W.D.N.Y. 1990); Amland Properties Corp.

v. Aluminum Co. of Am., 711 F. Supp. 784,

791 (D. N.J. 1989). Moreover, it is

clear from the language of the statute

that disposal occurs even when hazardous

substances are placed in underground

receptacles that are structurally sound,

A-114

Since in doing so they "may" enter the

environment. Westwood, at 1278.

Here, Nurad alleges a "disposal" of

hazardous substances occurred during the

Hooper Co.'s ownership of the Site

because: 1) Hooper employees occasionally

Spilled MIBK at the Site; 2) the company

placed MIBK and mineral spirits in USTs

between 1926 and 1962; 3) Hooper ceased

using the USTs in 1962; and 4) Hooper

abandoned the USTs by selling them to

Property Investors in 1963.

The Hooper Co. contests that it

disposed of any hazardous substances at

the Site. Hooper disputes that its

employees spilled MIBK at the property or

that the USTs were leaking during its

ownership. Hooper further suggests that

it did not dispose of the USTs by selling

them to Property Investors since in doing

SO Hooper was transferring a "useful

A“1i5

substance for a useful purpose." To

support this argument, Hooper points to

both the Contract of Sale and the Bill of

Sale between Hooper and Property Investors

which specifically listed the USTs as

items sold. Such a sale, according to

Hooper, does not constitute an

"abandonment" of the USTs as Nurad

suggests.

The Court finds that genuine issues

of material fact exist as to whether any

Hooper employee spilled MIBK onto the Site

and whether MIBK was stored in any of the

USTs during Hooper's ownership of the

Site. Nurad has presented the testimony

of Gary W. Pope, a supervisor at Hooper's

finishing plant from 1935 to 1962, to

Support its claim that Hooper spilled MIBK

at the Site. At his deposition, however,

Mr. Pope testified that Hooper employees

"may" have spilled MIBK onto the ground

A-116

reel

while transferring it from 55 gallon drums

to 5 gallon buckets. Moreover, to

contradict insurance records presented by

Nurad to show that MIBK was stored in the

USTs, Hooper relies on the testimony of

Mr. Pope who stated that Hooper never

Stored MIBK in any UST during his tenure

with the company. Based on this

conflicting evidence, the Court can not

conclude at this time that MIBK was

spilled on the ground at the Site or was

stored in the USTs by the Hooper Co.

during its ownership.

It is undisputed, however, that the

Hooper Co. stored mineral spirits in two

USTs on the Site from 1935 through mid-

1962.3’ In a 1963 Bill of Sale to

Property Investors, the Hooper Co.

acknowledged that these tanks contained

*’See supra at ll, 15.

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solvents and processing materials.

Moreover, Mr. Pope testified that Hooper

stored mineral spirits in two USTs.

Because the Court has determined that

mineral spirits is a hazardous substance

under CERCLA, the Court concludes that

the Hooper Co. "disposed" of hazardous

substances at the Site by storing mineral

spirits in the USTs. See Westwood, 737 F.

Supp. at 1278.

The Court also rejects the Hooper

Co.'s argument that the sale of the USTs

and the Site "reverses" the company's

previous disposal of hazardous substances

at the Site. Hooper relies on Brockton

Wholesale Beverage Co. v. Chevron U.S.A.,

Inc., 1990 U.S. Dist. LEXIS 9998 at 2 (D.

Mass. 1990) and C. Greene Equip. Corp. v.

Electron Corp., 697 F. Supp. 983 (N.D.

38see supra at 9.

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Ill. 1988) to support its argument on this

point. These cases, however, are

inapposite for two reasons. First, they

do not involve the sale of previously

disposed of materials. Second, the courts

in these cases’. were interpreting a

different section of CERCLA; the courts

were determining whether a defendant had

"arranged for disposal or treatment

of hazardous substances" pursuant to

Section 107(a)(3) of CERCLA which relates

to "generators," a group of potentially

responsible parties entirely different

from those under Section 107(a)(2) who

"own or operate a facility at the time of

disposal" which is at issue in this case.

In sum, on the basis of the summary

judgment record, the Court concludes that

Hooper deposited mineral spirits into the

USTs during its ownership of the Site.

Since the Court finds that Hooper's

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subsequent sale of the USTs and the Site

does not "reverse" these previous actions,

the Court finds that the Hooper Co.

disposed of hazardous substances during

its ownership of the Site. The Court will

therefore deny the Hooper Co.'s motion for

summary judgment as to the Hooper Co. and

will grant Nurad's motion for partial

summary judgment against Hooper Co. on the

issue of CERCLA liability.

Nurad also argues that Hooper

"operated" the Site when it leased two

buildings on the Site (Buildings 24 and

24A) and conducted finishing operations

there for a few years beginning in 1966.

Hooper used the Building 28 tank in that

operation. Although it is undisputed that

Hooper did not actively dispose of

hazardous substances during its operation

of this building, Nurad argues that the

passive migration and reposing of

A-120

hazardous substances at the Site during

this time constitute "disposal" under

CERCLA.

Nurad relies on United States v.

Waste Industries, Inc., 734 F.2d 159, 164

(4th Cir. 1984), to support its’ broad

interpretation of "disposal." In that

case, the Fourth Circuit held that

"disposal," as so defined in RCRA,

encompasses both hazardous waste in a

state of repose at a site and the gradual

leaking of wastes into the environment:

The inclusion of "leaking" as

one of the diverse definitional

components of "disposal"

demonstrates that Congress

intended "disposal" to have a

range of meanings, including

conduct, a physical state, and

an occurrence. Discharging,

dumping and injection (conduct),

hazardous waste reposing (a

physical state) and movement of

waste after it has been placed

in a state of repose (an

occurrence) are all encompassed

in the broad definition of

disposal.

A~lLél

Id. at 164 (holding that Section 7003 of

RCRA applies to inactive disposal sites) ;

see also United States v. Ottati & Goss,

Inc., 630 F. Supp. 1361, 1399 (D. N.H.

1985), aff'd in part, vacated in part, 900

F.2d 429 (1st Cir. i990) ("'disposal'

includes within its purview leaking, which

ordinarily occurs not through affirmative

action but as a result of inaction or

negligent past actions.") (quotations

omitted).

_The Court disagrees with Nurad's

assertion that the Fourth Circuit's

definition of disposal in Waste Industries

is controlling law in the present case.

That case, which was not a CERCLA action,

addressed a different factual and legal

context than the one presented here. In

Waste Industries, the court considered

whether in 1979 the EPA had authority

under RCRA to require remediation by

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former owners or operators of an inactive

landfill. The Fourth Circuit ruled that

RCRA § 7003 is "designed to deal with

Situations in which the regulatory schemes

break down or have been circumvented...

Congress expressly intended that this

other language (RCRA § 7003] close

loopholes in environmental protection."

Id. at 164. Applying the law as it was

before the enactment of CERCLA, it appears

that the only way for the Waste Industries

court to preserve the EPA's ability to

demand cleanup by the actual former owners

and operators was to define "disposal" in

RCRA to cover completely passive repose or

movement through the environment.

The circumstances that motivated the

Fourth Circuit to define "disposal" so

broadly in RCRA § 7003 do not exist in

this situation. Here, the current owner

and all prior owners and operators are

a

A~123

parties to this CERCLA action and as noted

above some of them are liable for the

response costs. Although CERCLA adopts by

reference the definition of "disposal"

found in RCRA, it also adds the term

"release" to cover both active. and passive

conditions. The Waste Industries court

construed the term "disposal" in the RCRA

context, where there was otherwise no

responsibility for conditions

corresponding to a CERCLA "release." In

enacting CERCLA, Congress expressly

limited CERCLA liability to former owners

"at the time of disposal," a phrase which

must refer to an action or have no meaning

at all.

These contextual differences have

also been recognized by other courts which

have required some affirmative action to

constitute disposal under CERCLA. In

Ecodyne Corp. v. Shah, 718 F. Supp. 1454,

A-124

1457 (N.D. Cal. 1989), for example, the

district court dismissed an intermediate

Owner on summary judgment grounds. - In

construing the term "disposal," the court

looked to the grammar and structure of

RCRA § 1004(3), 42 U.S.C. § 6903(3):

The meaning of a word is or may

be known from the accompanying

words - this is the principle of

noscitur a sociis. In

ascertaining what disposal

means, the Court looks at its

definitional components and

finds that these three nouns

(discharge, deposit and

injection) and four’ gerunds

(dumping, spilling, leaking, and

placing), when read together all

have in common the idea that

someone do something with

hazardous substances. Taking

the clearest example, the Court

notes that "placing", read in

the context of the _ statute,

means a person introducing -

putting - formerly controlled or

contained hazardous substances

into the environment. For

plaintiff solipsistically to

read, for example, "leaking" as

meaning the general migration of

chemicals’ and, as such, a

disposal under § 9607(a)(2),

renders not only the

definitional phrase of RCRA §

A-125

6903(3)_"into or on any land or

water" superfluous, but would

also conflict with the general

structure of § 9607(a)"

Id. The Court concluded that the scope of

liability under CERCLA § 107(a) (2) does

not automatically reach intermediate

former owners recognizing that:

To define disposal as plaintiff

wishes would effectively make

all property owners from the

time a site became polluted (up

to and including the current

owner) potentially liable under

§9607(a) (2) even if these owners

did not introduce the chemicals

onto the site.

Other cases have also limited the

scope of Section 107(a) (2) liability to

prior owners or operators who actively

dispose of or introduce hazardous

substances into the environment. See In

re Diamond Reo Trucks, Inc., 115 Bankr.

559, 565 (Bkrtcy W.D. Mich. 1990)

(concluding “the mere ownership of the

A-126

site during the period of time in which

migration or leaching may have taken

place, without any active disposal

activities, does not bring [the defendant]

within the liability provision of §

9607(a)(2)")? Emhart Industries. Inc. v.

Duracell International, Inc., 665 F. Supp.

549; cf. 3550 Stevens Creek Association v.

Barclays Bank of California, 915 F.2d 1355

(9th Cir. 1990) (construing "disposal" for

purposes of Section 107(a)(2) as requiring

some affirmative act of discarding a

substance as a waste), cert. denied, 111

S. Ct. 2014 (1991).

This Court is persuaded by these

authorities and also reads Section

9607(a)(2) as only providing an action

against prior owners or operators of a

Site who actively dispose of hazardous

substances at the site during their

ownership or operation. Congress intended

A-127

OOOO eee

that courts impose CERCLA liability on

those responsible for the contamination.

This Court's reading of Section 107(a) (2)

is consonant with that purpose.

Because Nurad has not alleged, and

the record does not show, that any active

disposal took place during Hooper's

"operation" of Building 24, the Court

holds that the Hooper Co. is not liable

under CERCLA for its operations at

Building 24. Accordingly, the Court will

deny Nurad's motion for partial summary

judgment on this issue.

b. Frank Nicholl and Kenneth Mumaw

Although the Court has found

defendants Nicholl and Mumaw are prior

owners or operators of the Site, Nurad has

not produced any evidence that either

actively disposed of hazardous substances

during their ownership or operation.

Nurad relies solely on its assertion that

A-128

hazardous substances were "reposing" in

the USTs during their ownership or

operation to support its "disposal"

argument. As discussed above, in this

Court's view, reposing hazardous

substances in USTs do not’ constitute

"disposal" under Section 107(a)(2) of

CERCLA. Thus, the Court will deny Nurad's

motion for partial summary’ judgment

against defendants Nicholl and Mumaw on

the CERCLA liability issue and will grant

Mr. Mumaw's motion for partial summary on

the CERCLA issue.*®

39Tn reaching this conclusion, the

Court also notes that even if the Court

had adopted Nurad's position regarding

the operator status of the tenant

defendants (Allstates, Universal and

Monumental Millwork), these defendants

would still not be liable under CERCLA.

Nurad has not presented any evidence that

these defendants actively disposed of

hazardous substances during their

tenancy. Thus, like Mr. Mumaw and Mr.

Nicholl, there was no "disposal" during

their “operation" of the Site.

A-129

6. Equitable Defenses

The final argument made by the Hooper

Co. is that Nurad's CERCLA action is

barred by the equitable defenses of

laches, unclean hands and estoppel.

Hooper relies on this Court's decision in

United States v. Dickerson, 640 F. Supp.

448 (D. Md. 1986) (Judge Young) to support

its argument that these doctrines provide

defenses to Section 9607(a) liability. In

that case, the Court adopted the analysis

and holding of United States v. Mottolo,

605 F. Supp. 898 (D. N.H. 1985), which, in

turn, explicitly embraced the equitable

defenses of laches, unclean hands and

estoppel in CERCLA private cost recovery

actions. Dickerson, 640 F. Supp. at 451

(citing United States v. Mottolo, 605 F.

Supp. at 901-09). The court in Dickerson,

however, declined to apply the equitable

defenses to its present situation because

A-130

the United States brought suit in its

sovereign capacity. Id.

To the extent that the Dickerson

Court recognized equitable defenses to

CERCLA liability, the Fourth Circuit's

decision in United States v. Monsanto Co.,

858 F.2d 160, 170 (4th Cir. 1988)

effectively overrules that part of the

decision. In Monsanto, the Fourth Circuit

explicitly stated that there are no

defenses to CERCLA liability other than

the specifically enumerated defenses in

the statute.*® The Court explained that

““Section 107(b) of CERCLA, 42 U.S.C.

§ 9607(b) sets forth the following

defenses to Section 107 liability: where

the release or threatened release of a

hazardous substance was caused by: 1) an

act of God; 2) an act of war; 3) an act

or omission of a third party; or 4) any

combination thereof. The exclusivity of

section 107(b) defenses is explicitly

discussed in Section 107(a) which

provides for liability "({n]Jotwithstanding

any other provision or rule of law, and

subject only to the defenses set forth"

in Section 9607(b).

et SE |

while "equitable factors are relevant in

subsequent actions for contribution,"

"‘tjhey are not pertinent to the question

of joint and several liability, which

focuses principally on the divisibility

among responsible parties of the harm to

the environment." United States Vv.

Monsanto, 858 F.2d at 171 n.22 (rejecting

site-owners' contention that limited

degree of participation rendered finding

of joint and several liability

inequitable).

The majority of cases addressing this

issue have also concluded that the only

defenses to CERCLA liability are the

statutory defenses enumerated in Section

107 (b). See, e.g., Kelley v. Thomas

Solvent Co., 714 F. Supp. 1439, 1445 n.3

(W.D. Mich. 1989) (citing numerous

cases); see also United States v. R.W.

Meyer, Inc., 889 F.2d 1497, 1507 (6th Cir.

A-132

1989), cert. denied, 110 S. ct 1527

(1990). In addition, many of the courts.

considering this question have gone

further and have specifically held that

equitable defenses are not relevant to a

determination of CERCLA liability under

Section 107(a). See, e.g., United States

v. Monsanto, 858 F.2d at 171 n.22; Smith

Land & Improv. Corp. v. Celotex Corp., 851

F.2d 86, 90 (3d Cir. 1988), cert. denied,

488 U.S. 1029 (1989) ("doctrines such as

caveat emptor and 'clean hands' .. . do

not comport with congressional

objectives."); United -States v. Western

Processing Co., 734 F. Supp. 930, 939

(W.D. Wash. 1990) (rejecting unclean hands

defense); Allied Corp. v. Acme Solvents

Reclaiming Inc., 691 F. Supp. 1100, 1110

(N.D. Ill. 1988) (same); General Electric

Co. v. Litton Business Systems Inc., 715

F. Supp. 949, 956 (W.D. Mo. 1989) (same),

AWi133

aff'd, 920 F.2d 1415 (8th Cir. 1990),

cert. denied, 111 S. Ct. 1390 (1991);

Chemical Waste Management 7 e . 7.

Armstrong World Industries, Inc., 669 F.

Supp. 1285, 1291 n.7 (E.D. Pa. 1987)

(same) .*'

This Court is persuaded by these

authorities and concludes that the limited

defenses of Section 107(b) are exclusive

and that equitable defenses such as those

asserted here by Hooper - unclean hands,

laches and estoppel - cannot be asserted

“Imhese decisions are also consistent

with congressional intent. "The listed

defenses are the only defenses which are

available to avoid liability under

Section 107(a). There should be no other

defenses, including equitable defenses,

that defeat: liability under sections

106 and 107 of the act." 131 Cong. Rec.

H11074 (daily ed. Dec. 5, 1985) (comments

of Representative Eckhart, primary

sponsor of 1986 amendments) (emphasis

added) quoted by United States v. Western

Processing Co., 734 F. Supp. at 939.

A-134

in a private cost recovery action under

CERCLA.

II. Motion to Bifurcate

Nurad has moved, pursuant to Fed. R.

Civ. P. 42(b), to bifurcate the issues of

liability and damages in this action.

Nurad argues that bifurcation is

appropriate in CERCLA private cost

recovery suits because the statute

authorizes plaintiffs who have incurred

some response costs to seek a judgment of

liability against other responsible

parties for those costs and a declaration

of liability as to future costs. See 42

U.S.C. § 9613(g) (2). Nurad also argues

that because it has not incurred costs

associated with a "remediation"** of the

“costs incurred in responding to

releases of hazardous substances are

divided by CERCLA into two categories:

(continued...)

A~i39

site, the necessity and consistency of

those response costs with the NCP are

appropriately addressed during the damages

stage of the proceedings. Nurad further

contends that delaying this determination

will lead to a more economical and

expeditious resolution of the case because

proof of necessity and consistency

requires the presentation of evidence and

witnesses different from that required for

a liability determination. Nurad points

out that if any defendant is exculpated on

the issue of liability that defendant can

avoid the time and expense associated with

trial on the separate issue of damages.

42’. . .continued)

removal actions and remedial actions. 42

U.S.C. 9601(25). Removal actions

include those acts taken in response to

an immediate threat to the public welfare

or to the environment. Id. 9601(23).

Remedial actions, on the other hand, are

considered long-term permanent remedies.

Ta. § 9601(24).

A-136

Defendants,** on the other hand,

oppose bifurcation. Relying on Amland

Properties Corp. Vv. Aluminum Co. of

America, 711 F. Supp. 784, 794 (D. N.J.

1989), they argue that under CERCLA a

determination of consistency with the NCP

is an essential element of plaintiff's

case on liability. Defendants further

dispute Nurad's allegation that future

"remediation" costs have yet to be

incurred.

The better reasoned decisions

addressing this issue have held that

bifurcation of liability and consistency

with the NCP is appropriate where the

factual record does not permit a

determination of consistency with the NCP

at the time the motion for summary

‘Suniversal and the Hooper defendants

* have filed oppositions to Nurad's motion

to bifurcate. (Paper Nos. 101, 104).

A-137

judgment is filed or where the plaintiff

seeks only a declaration of the

defendant's liability for future costs

jncurred consistent with the NCP. See,

e.g., County Line Inv. Co. v- Tinney, 933

F.2d 1508, 1513 (10th Cir. 1991) (citing

cases); see also Emhart Industries, Inc.

v. Duracell International Inc., 665 - F.

Supp. at 574; Jones Vv. Inmont Corp., 584

F. Supp. 1425, 1430 (S.D. Ohio 1984)

(citing Philadelphia v. Stepan Chem. Co.,

544 F. Supp. 1135, 1144 n.16 (E.D. Pa.

1982)).

In the present case, the record on

consistency with the NCP is incomplete

since Nurad alleges that future response

costs associated with "remediation" of the

site have yet to be incurred. Thus, the

Court will grant Nurad's motion to

bifurcate.

A-138

CONCLUSION

For the reasons stated above the

Court will 1) grant Nurad's motion for

partial summary judgment against the

Hooper Co. and deny the Hooper defendants'

motion for summary judgment as to the

Hooper Co.; 2) grant the Hooper

defendants' motion for summary judgment as

to the individual Hooper defendants on the

CERCLA issue and deny Nurad's motion for

partial summary judgment as to James and

Lawrence Hooper; 3) deny Nurad's motion

for partial summary judgment as to Mr.

Nicholl; 4) grant Kenneth Mumaw's motion

for partial summary judgment on the CERCLA

count and deny Nurad's motion for partial

summary judgment as to Mr. Mumaw; 5) grant

Allstates' and Raymond McMillan's motion

for summary judgment as to the CERCLA and

negligence counts and deny Nurad's motion

for partial summary judgment as_ to

A-139

Allstates and Mr. McMillan; 6) grant

Universal's motion for summary judgment

and deny Nurad's motion for partial

summary judgment as to Universal; 7) grant

Monumental Millwork's motion for summary

judgment and deny Nurad's motion for

partial summary judgment as to Monumental

Millwork; 8) grant Zemco's motion for

summary judgment; 9) grant Nurad's motion

to bifurcate; and 10) deny as moot James

Hooper's motion to dismiss.

A separate Order will be entered.

/s/ William M. Nickerson

WILLIAM M. NICKERSON

United States District Judge

A-140

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

NURAD, INC. *

Vv. * CIVIL ACTION NO.

WN 90-661

WM. E. HOOPER & *

SONS CO. et al.

*

*x x * * * * * * *

In accordance with the foregoing

Memorandum and for the reasons’ state

therein, IT IS this 15th day of August,

1991, by the United States District Court

for the District of Maryland, ORDERED:

1. That Plaintiff's Motion To Bifurcate

the Issues of Liability and Damages

(Paper No. 94) is GRANTED;

2. That Plaintiff's Motions for Partial

Summary Judgment on the CERCLA issue

(Paper Nos. 96, 145) are DENIED as to

a. Defendants James E. Hooper, Jr.

and Lawrence Hooper

A-141

b. Defendant Kenneth B. Mumaw

SC. Defendant Frank S. Nicholl, Jr.

d. Defendant Universal Laboratory

Installations, Inc.

e. Defendant Monumental Millwork,

Inc.

¢. Defendant Allstates Moving and

Storage

g. Defendant Raymond B. McMillan;

That Plaintiff's Motion for Partial

Summary Judgment (Paper No. 96) is

GRANTED as to Defendant Wm. E. Hooper

& COo.;

That Defendant Wm. E. Hooper & Co.'s

Motion for Summary Judgment (Paper

No. 97) is DENIED as to Wm. E. Hooper

& Co. and GRANTED as to James E.

Hooper, Jr. and Lawrence L. Hooper;

That Defendant Kenneth B. Mumaw's

Motion for Partial Summary Judgment

(Paper No. 93) is GRANTED;

A-142

10.

ll.

That Defendant Allstates Moving and

Storage and Raymond B. McMillan's

Motion for Summary Judgment (Paper

No. 102) is GRANTED;

That Defendant Universal

Laboratories, Inc.'s Motion for

Summary Judgment (Paper No. 137) is

GRANTED ;

That Defendant Monumental Millwork

Inc.'s Motion for Summary Judgment

(Paper No. 138) is GRANTED;

That Defendant Zemco Corporation's

Motion for Summary Judgment (Paper

No. 113) is GRANTED;

That Defendant Lawrence L. Hooper's

Motion to Dismiss (Paper No. 133) is

DENIED as MOOT; and

That the Clerk of Court shall mail

copies of the foregoing Memorandum

A-143

and this Order to all counsel of

record in this case.

/s/ William M. Nickerson

WILLIAM M. NICKERSON

United States District Judge

A-144

APPENDIX C

§ 6902. Objectives and national policy

(a) Objectives

The objectives of this chapter are to

promote the protection of health and the

environment and to_ conserve valuable

material and energy resources by-

(1) providing technical and

financial assistance to State and

local governments and _ interstate

agencies for the development of solid

waste management plans (including

resource recovery and resource

conservation systems) which will

promote improved solid waste

management techniques (including more

effective organizational arrange-

ments), new and improved methods of

collection, separation, and recovery

of solid waste, and the

environmentally safe disposal of

nonrecoverable residues;

(2) providing training grants

in occupations involving the design,

Operation, and maintenance of solid

waste disposal systems;

(3) prohibiting future open

dumping on the land and requiring the

conversion of existing open dumps to

facilities which do not pose a danger

to the environment or to health;

(4) assuring that hazardous

waste management practices are

A-145

conducted in a manner which protects

human health and the environment;

(5) requiring that hazardous

waste be properly managed in the

first instance thereby reducing the

need for corrective action at a

future date;

(6) minimizing the generation

of hazardous waste and the land

disposal of hazardous waste by

encouraging process’ substitution,

materials recovery, properly

conducted recycling and reuse and

treatment;

(7) establishing a viable

Federal-State partnership to carry

out the purposes of this chapter and

insuring that the Administrator will,

in carrying out the provisions of

subchapter III of this chapter give a

high priority to assisting and

cooperating with States in obtaining

full authorization of State programs

under subchapter III of this chapter;

(8) providing for the

promulgation of guidelines for solid

waste collection, transport,

separation, recovery, and disposal

practices and systems;

(9) promoting a national

research and development program for

improved solid waste management and

resource conservation techniques,

more effective organizational

arrangements, and new and improved

methods of collection, separation,

A-146

and recovery, and recycling of solid

wastes and environmentally safe

disposal of nonrecoverable residues:

(10) promoting the demonstra-

tion, construction, and application

of solid waste management, resource

recovery, and resource conservation

systems which preserve and enhance

the quality of air, water, and land

resources; and

(11) establishing a cooperative

effort among the Federal, State, and

local governments and private

enterprise in order to recover

valuable materials and energy from

solid waste.

(b) National policy

The Congress hereby declares it to be

the national policy of the United States

that, wherever feasible, the generation of

hazardous waste is to be reduced or

eliminated as expeditiously as possible.

Waste that is nevertheless generated

Should be treated, stored, or disposed of

so as to minimize the present and future

threat to human health and the

environment.

§ 6903. Definitions

As used in this chapter:

(3) The term "disposal" means the

discharge, deposit, injection, dumping,

Spilling, leaking, or placing of any solid

waste or hazardous waste into or on any

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land or water so that such solid waste or

hazardous waste or any constituent thereor

may enter the environment or be emitted

into the air or discharged into any

waters, including ground waters.

§ 9601. Definitions

For purpose of this subchapter-

(29) The terms "disposal", "hazardous

waste", and "treatment" shall have the

meaning provided in section 1004 of the

Solid Waste Disposal Act [42 U.S.C.A.

§ 6903].

(35) (C) Nothing in this paragraph or

in section 9607(b)(3) of this title shall

diminish the liability of any previous

owner or operator of such facility who

would otherwise be liable under this

chapter. Notwithstanding this paragraph,

if the defendant obtained actual knowledge

of the release or threatened release of a

hazardous substance at such facility when

the defendant owned the real property and

then subsequently transferred ownership of

the property to another person without

disclosing such knowledge, such defendant

shall be treated as liable under section

9607(a)(1) of this title and no defense

under section 9607(b)(3) of this title

shall be available to such defendant.

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§ 9607. Liability

(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’ sub-

stance owned or operated any facility

at which such hazardous substances

were disposed of,

(3) any person who by contract,

agreement, or ot.erwise arranged for

disposal or treatment, or arranged

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

vessei owned or 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

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hazardous substance, shall be liable

for-

(A) all costs of removal

or remedial action incurred by

the United States Government or

a State or an Indian tribe not

inconsistent with the national

contingency plan;

(B) any other necessary

costs of response incurred by

any other person consistent with

the national contingency plan;

(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; and

(D) the costs of any

health assessment or health

effects study carried out under

section 9604(i) of this title.

The amounts recoverable in an action under

this section shall include interest on the

amounts recoverable under subparagraphs

(A) through (D). Such interest shall

accrue from the later of (i) the date

payment of a specified amount is demanded

in writing, or (ii) the date of the

expenditure concerned. The rate of

interest on the outstanding unpaid balance

of the amounts recoverable under this

section shall be the same rate as is

specified for interest on investments of

the Hazardous Substance Superfund

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established under subchapter A of chapter

98 of Title 26. For purposes of applying

such amendments to interest under this

subsection, the term "comparable maturity"

shall be determined with reference to the

date on which interest accruing under this

subsection commences.

L29120.261

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