Appendix — Amcast Industrial Corp. v. Detrex Corp.
Supreme Court brief1995
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APPENDIX
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
No. 94-2026
AMCAST INDUSTRIAL CORPORATION and
ELKHART PRODUCTS CORPORATION,
Plaintiffs-A ppellees,
Vv.
DETREX CORPORATION,
Defendant-A ppellant.
Appeal from the United States District Court
for the Northern District of Indiana,
South Bend Division
No. 88 C 620. Robert L. Miller, Jr., Judge
November 29, 1994, Submitted
January 10, 1995, Decided
Before POSNER, Chief Judge, and FLAUM and
KANNE, Circuit Judges.
POSNER, Chief Judge: This is a sequel to the deci-
sion of the same panel reported at 2 F.3d 746 (7th Cir.
1993), in which we largely aflirmed a judgment that the
district court had entered in December of 1992 declaring
that Detrex Corporation was liable to the plaintiffs for
2a
“response costs” under the Superfund statute, 42 U.S.C.
§ 9613(g)(2), and that these response costs included
the attorneys’ fees that the plaintiffs had incurred to es-
tablish Detrex’s liability. No assessment of attorneys’ fees
had yet been made, however. More than a year later—
March 1994—the district court entered an order directing
Detrex to pay more than $500,000 in attorneys’ fees,
from which Detrex appeals. In June, while this appeal
was pending, the Supreme Court decided Key Tronic
Corp. v. United States, 128 L. Ed. 2d 797, 114 S. Ct.
1960 (1994), holding that response costs do not include
attorneys’ fees. Detrex argues that the doctrine of law
of the case permits us to reconsider, in light of Key
Tronic, our earlier ruling that response costs include at-
torneys’ fees. The plaintiffs call the ruling res judicata,
precluding reconsideration. We affirmed the district court’s
declaratory judgment in all but one respect, and this un-
related to the amount of response costs for which Detrex
was liable or to the issue whether those costs include at-
torneys’ fees. (The district judge had based liability on
Detrex’s status not only as an owner and operator of
tanker trucks but also as an arranger of transportation
by a common carrier, and we held that it was liable only
as an owner and operator.) The plaintiffs ask us to hold
that when we affirmed the relevant portions of the de-
claratory judgment, and the Supreme Court denied cer-
tiorari, the judgment became “final” for purposes of res
judicata.
If in our first decision we had merely ruled that re-
sponse costs include attorneys’ fees, and had remanded
for the entry of an appropriate judgment, it would be
reasonably clear that the ruling was merely an interim
ruling in an ongoing case. The doctrine of law of the
case, which governs the weight that interim rulings in a
litigation are given in the subsequent stages of that liti-
gation, Williams v. Commissioner, 1 F.3d 502, 503-04
(7th Cir. 1993); Devines v. Maier, 728 F.2d 876, 880
(7th Cir.. 1984), would apply—not res judicata—and
3a
would permit reconsideration on the basis of an interven-
ing decision by the Supreme Court. Key v. Sullivan,
925 F.2d 1056, 1060 (7th Cir. 1991); Young v. Herring,
938 F.2d 543, 547-48 (Sth Cir. 1991) (en banc). We
did more. We affirmed, with an immaterial exception, a
declaratory judgment one element of which was a declara-
tion that the plaintiffs were entitled to an award of at-
torneys’ fees in an amount not yet determined. The
Supreme Court denied certiorari. All this happened be-
fore the Key Tronic decision.
The denial of certiorari is a red herring. It marks the
end of the appellate process and so, if the judgment from
which certiorari was sought were itself a final judgment
(the significance of this qualification will become clear
in due course), it establishes finality in a strong sense.
But we shall see that a final judgment is res judicata
even if it is still appealable. A more important though
not necessarily decisive point is that our ruling when
last this case was before this panel was not a final judg-
ment in the sense in which 28 U.S.C. § 1291 (the “final
judgment” rule of federal appealability) makes certain
decisions by district courts final and appealable; and the
black-letter rule is that the doctrine of res judicata re-
quires a final judgment. Federated Department Stores
v. Moitie, 452 U.S. 394, 398-99, 69 L. Ed. 2d 103, 101
S. Ct. 2424 (1981); Hermann v. Cencom Cable Asso-
ciates, Inc., 999 F.2d 223, 224 (7th Cir. 1993). This
is true whether one is speaking of res judicata in its nar-
row sense (“claim preclusion”) as a bar against relitigat-
ing or splitting claims, or of collateral estoppel (“issue
preclusion”), which bars the relitigation, in subsequent
proceedings between the same parties concerning the same
dispute, of specific issues heard and decided in their pre-
vious suit. “Subsequent proceedings may, it is true, in-
clude collateral proceedings in the same litigation—a _per-
tinent observation since the dispute in this appeal con-
cerns attorney’s fees. Suppose a final judgment were
rendered in a plaintiff's favor and later he moved for an
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award of attorney’s fees or for an order that the defend-
ant disclose the whereabouts of assets needed to pay the
judgment. The plaintiff could not in those subsequent,
collateral proceedings reopen issues settled by the final
judgment, on the ground that the suit was ongoing. The
suit would have ended. Collateral proceedings are—
collateral. They do not disturb finality. The application
of collateral estoppel to prevent relitigation in such pro-
ceedings is consistent, therefore, with the principle that
collateral estoppel like res judicata applies only when
there has been a final judgment.
And yet the principle itself is not unwavering. It is
adhered to much more strictly when the issue is the ap-
plicability of res judicata than when it is the applicability
of collateral estoppel, Restatement (Second) of Judg-
ments § 13, comments a, g (1982), but even there there
have been occasional exceptions. See, e.g., Alyeska Pipe-
line Service Co. v. United States, 231 Ct. Cl. 540, 688
F.2d 765 (Ct. Cl. 1982). (There are few generalizations
in American law to which there are no exceptions.) Yet
a good deal more latitude is allowed when collateral
estoppel is invoked rather than res judicata. In Méiller
Brewing Co. v. Joseph Schlitz Brewing Co., 605 F.2d
990, 996 (7th Cir. 1979), and Gilldorn Savings Ass'n
v. Commerce Savings Ass'n, 804 F.2d 390, 393 (7th
Cir. 1986), we adopted Judge Friendly’s suggestion in
Lummus Co. v. Commonwealth Oil Refining Co., 297
F.2d 80, 89 (2d Cir. 1961), that “whether a judgment,
not ‘final’ in the sense of 28 U.S.C. § 1291, ought never-
theless be considered ‘final’ in the sense of precluding
further litigation of the same issue, turns upon such fac-
tors as the nature of the decision (i.e., that it was not
avowedly tentative), the adequacy of the hearing, and
the opportunity for review.’ See also Avitia v. Metropoli-
tan Club of Chicago, Inc., 924 F.2d 689 (7th Cir.
1991); United States v. Sherman, 912 F.3d 907, 909
(7th Cir. 1990); Restatement, supra, § 13, comment g.
And it is collateral estoppel rather than res judicata to
5a
which the plaintiffs are appealing in this case. New
claims or split claims are not in question. The plaintiffs
want us to prevent Detrex from relitigating a specific
issue, whether response costs include attorneys’ fees.
And although, as the “requirement” of a final judgment
implies, res judicata or collateral estoppel is normally as-
serted in a separate case from the one in which the judg-
ment or ruling sought to be used as a bar to further
litigation was rendered, there are exceptions to this prin-
ciple too. See, e.g., Avitia v. Metropolitan Club of Chi-
cago, Inc., supra; Alyeska Pipeline Service Co. v. United
States, supra; Lair v. Oglesby, 14 F.3d 15, 17 n. 2 (8th
Cir. 1993); Bullen v. de Bretteville, 239 F.2d 824, 829
(9th Cir. 1956). As one expects, they mainly concern
collateral estoppel. Avitia will illustrate. The district
judge denied a preliminary injunction, and the disap-
pointed movants could of course have appealed even
though there was no final judgment. 28 U.S.C. § 1292
(a)(1). They did not. Instead they renewed their mo-
tion for a preliminary injunction. We said that recon-
sideration of the ground on which the district judge had
denied the first motion was barred by collateral estoppel.
The movants had had a full and fair opportunity to liti-
gate the issue, and it had been decided in a final, appeal-
able order. They had deliberately delayed in seeking an
authoritative resolution.
We must situate the present case in this welter of prin-
ciples and exceptions. It is helpful to orderly discussion
to ask first whether there is a final judgment in the sense
of 28 U.S.C. § 1291 and then whether, if not, the absence
can be overlooked on the authority of cases such as
Avitia.
We did not actually affirm the declaratory judgment
that the district judge had issued in December 1992.
We reversed in part and remanded for further proceed-
ings, which resulted in the issuance of a new declaratory
judgment in April 1994, the month after the attorneys’
6a
fees order was entered. Although the new declaratory
judgment was not significantly different from the old one,
it was a new, final judgment from which Detrex could
have appealed and in fact did appeal. (Its appeal is
from both the award of attorney’s fees and the second
declaratory judgment, although the only relief it seeks
concerns the attorney’s fees.) Moreover, even if the re-
mand could be ignored, as immaterial to attorney’s fees,
the propriety of treating as final and appealable a declara-
tory judgment that declares a right to attorneys’ fees in
an amount yet to be determined is questionable, to say
the least. Szabo v. U.S. Marine Corp., 819 F.2d 714,
717 (7th Cir. 1987), compares such a declaration to a
ruling on liability, leaving damages for later determina-
tion, and points out that such a ruling is not a final,
appealable judgment. If so, there was no final judg-
ment in this case when Key Tronic was decided even
if the remand for modification of the declaratory judg-
ment is ignored.
We can approach the question slightly differently,
though with the same result. Orders concerning attorneys’
fees are normally deemed collateral to the litigation in
which they are awarded. Budinich v. Becton Dickinson
& Co., 486 U.S. 196, 100 L. Ed. 2d 178, 108 S. Ct.
1717 (1988). Probably, therefore, the declaratory judg-
ment should have been deemed to consist of two orders,
one declaring Detrex’s liability for response costs other
than attorney’s fees, the other its liability for attorney’s
fees. Cf. Szabo v. U.S. Marine Corp., supra, 819 F.2d
at 717. The latter order, though possibly reviewable to-
gether with the former under the doctrine of pendent ap-
pellate jurisdiction, id. at 717, would have been deemed
nonfinal until the amount of fees was determined and the
fees were ordered paid. Apex Foundation Sales, Inc. v.
Kleinfeld, 27 F.3d 931, 935-36 (3d Cir. 1994); see also
Szabo v. U.S. Marine Corp., supra, 819 F.2d at 717.
That did not happen until March of 1994.
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So either the lawsuit as a whole was still pending
when Key Tronic was decided, or the order awarding
attorneys’ fees—the only part of the lawsuit affected by
that decision—was still pending. Either way, there was
no final judgment; but we have seen that a final judg-
ment is not an absolute requirement of collateral estoppel.
(Another way to put this, though it comes to the same
thing, is that finality has a different meaning when the
issue is appealability and when the issue is collateral
estoppel, or in rare cases res judicata. See Restatement,
supra, comment b.) And, superficially at least, the
Lummus criteria seem fulfilled in this case. We had de-
cided, upon full hearing and, we thought, with finality,
that response costs do include attorneys’ fees. Certiorari
had been sought and denied. The issue was concluded,
and could not have been reexamined by the district court;
only the amount of attorneys’ fees, not the plaintiffs’ en-
titlement to them, remained for further consideration.
We had decided the issue of entitlement “finally.”
We had. But Detrex had not exhausted its appellate
remedies. The Supreme Court has jurisdiction to review
nonfinal decisions by the courts of appeals, 28 U.S.C.
§ 1254(1); Forsyth v. Hammond, 166 U.S. 506, 41
L. Ed. 1095, 17 S. Ct. 665 (1897); 17 Charles Alan
Wright, Arthur R. Miller, and Edward H. Cooper, Fed-
eral Practice and Procedure § 4036 (2d ed. 1994), such
as our decision affirming in part and reversing in part
the first declaratory judgment. A denial of certiorari
from one of these nonfinal decisions does not preclude
a grant of certiorari to review the identical issue at a
later stage in the case. Hughes Tool Co. v. Trans World
Airlines, Inc., 409 U.S. 363, 365 n. 1, 34 L. Ed. 2d
577, 93 S. Ct. 647 (1973); 16 Charles Alan Wright
et al., Federal Practice and Procedure § 4004, p. 511
(2d ed. 1994). Clearly, then, this case is not yet final
in the eyes of the Supreme Court. If we refuse to apply
Key Tronic, Detrex can ask the Supreme Court to grant
review and direct us to do so. The Court is quite likely
8a
to oblige, since its policy is to apply new decisions to
all cases that were not yet final when the new decision
came down. Harper v. Virginia Dept. of Taxation, 125
L. Ed. 2d 74, 113 S. Ct. 2510, 2517 (1993); United
States v. Burnom, 27 F.3d 283 (7th Cir. 1994).
Although judgments that have not yet been, and still
can be, appealed, are res judicata (or have collateral-
estoppel effect), Williams v. Commissioner, supra, 1 F.3d
at 504, the reasons are to discourage the filing of a new
suit when the loser of the prior suit still has a remedy
in that suit, id. at 504, and to discourage the parties to
dawdle awaiting the decision on appeal of another suit,
and neither reason is applicable to a case such as this
where the doctrine is invoked in an effort to prevent the
loser from exhausting his appellate remedies. Detrex is
not bringing a new suit. Nor did it, so far as we can
tell, delay the resolution of this suit in the hope that the
Supreme Court would bail it out. It is asking us to give
it an appellate remedy in its only suit. If we do not,
the Supreme Court will.
We admit that there is an element of circularity in
relying on this last point, for if we decided that the
doctrine of collateral estoppel forbade us to apply Key
Tronic, this would furnish an independent basis for a
decision not to award the plaintiffs attorney’s fees, and if
the Court agreed it would not reverse us even if the re-
sult was an outcome contrary to Key Tronic. But the
essential point is that Detrex should not be deprived of
its full appellate remedies in the name of collateral
estoppel.
What has made this case complicated to analyze is the
apparent merger of law of the case and collateral estop-
pel that has been brought about by allowing collateral
estoppel to be based on judgments that are not final and
appealable, that are, therefore, in a sense merely interim
rulings, as in this case. For interim rulings are the do-
main of the law of the case doctrine. As both law of the
ew
9a
case and collateral estoppel are flexible doctrines, classifi-
cation need not be critical. Both doctrines express a re-
luctance motivated by a desire to promote the inexpen-
sive and expeditious dispatch of litigation to reopen issues
that have been resolved with a fair approach to defini-
tiveness. That definitiveness is missing where as in this
case a litigant has not exhausted his appellate remedies—
recall that “opportunity for review” was cne of the fac-
tors mentioned by Judge Friendly in Lummus as bearing
on the decision whether to give collateral estoppel effect
to a nonfinal order.
It is true as we have noted that exhaustion of appellate
remedies is not a normal requirement of res judicata or
collateral estoppel. A final judgment by a district court
has preclusive effect even though the judgment is pend-
ing on appeal. But of course the only preclusion is of
other suits, or of specific issues in other suits; the los-
ing party is not precluded from pressing his appeal!
Which describes this case. Until our ruling on the scope
of response costs became final, Detrex was entitled to
pursue its appellate remedies, and hence to obtain the
benefit of a favorable decision by the Supreme Court
rendered before the pursuit was complete.
The order awarding attorney’s fees is REVERSED.
lua
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
Cause No. $88-620 (RLM)
AMCAST INDUSTRIAL CORPORATION, et al.,
Plaintiffs
VS.
DETREX CORPORATION, et al.,
Defendants
MEMORANDUM AND ORDER
Plaintiffs Amecast Industrial Corporation and Elkhart
Products Corporation (collectively referred to as “Am-
cast”) seek $755,755.57 in attorneys’ fees and litigation
expenses, $30,636.76 in additional response costs, and
$374,013.64 in prejudgment interest. Amcast also moves
for oral argument on its motion, but because the court
can address Amcast’s motion adequately based upon the
parties’ written submissions, the court denies Amcast’s
motion for oral argument. For the reasons that follow,
Amcast’s motion for attorney fees must be granted in
part and denied in part.
I. ATTORNEY FEES
Amcast, which bears the burden of establishing the
amount of compensable attorney time, Tomazzoli v.
Sheedy, 804 F.2d 93, 96 (7th Cir. 1986); Ohio-Sealy
Mattress Mfg. Co. v. Sealy, Inc., 776 F.2d 646, 650 (7th
Cir. 1985), should have excluded any excessive, redund-
ant, or unnecessary hours from its free request; to the
extent that it did not, the court has the power to deduct
| a
os
lla
such hours from the fees requested. Tomazzoli v. Sheedy,
804 F.2d at 96; Lomas v. Kolb-Lena Cheese Co., 720
F. Supp. 110, 113 (N.D. Ill. 1989). Amcast also must
use “billing judgment” in submitting its fees—hours not
properly billed to one’s client should not be billed to one’s
adversary. Hutchinson v. Wells, 719 F. Supp. 1435, 1441
(S.D. Ind. 1989). Such hours include time spent organiz-
ing files or reviewing billing records. /d.
Amcast’s counsel used block billing ( grouping a num-
ber of tasks together as one entry on the invoice, without
breaking down the time spent on each individual task),
which poses a challenge to courts:
[Where activities are grouped, time should be ap-
propriately apportioned. Otherwise, the court is left
with the choice of estimating a portion of the time
for ap. ~ticular activity, or excluding the entire entry.
In the interests of justice, the court will opt for the
second a,proach, emphasizing that more detailed
documentation would be wise and appropriate in the
future.
Claus by Claus v. Goshert, 657 F. Supp. 237, 244 (N.D.
Ind. 1987); see also Hutchinson v. Wells, 719 F. Supp.
at 1441; Bovey v. City of Lafayette, 638 F. Supp. 640,
646-47 (N.D. Ind. 1986). Thus, when there is a valid
objection to a specific task within a block billing, the
court will estimate the time of the objectionable task, and
exclude it from the total fee request.
Finally, the court must address Amcast’s method of
checking citations. Amcast’s paralegals apparently do
more than simply Shepardize cases; they also “check that
the proposition being cited is not being misstated or
overstated, which requires a reading and an understand-
ing of both the brief and the caselaw.” See Amcast’s
Reply, at 25-26. The court commends Amcast’s counsel
for its thoroughness of review, but finds the bulk of this
time duplicative. Given that Améast’s experienced lead
12a
counsel were charging up to $170 per hour for their
services, defendant Detrex Corporation should not have
to pay paralegals to insure that Amcast’s counsel do not
misstate or overstate authority to the court.
Amcast seeks $755,755.57 in attorneys fees and ex-
penses. In support of its motion, Amcast submitted sev-
eral hundred pages of billing entries and invoices. Detrex
maintains that “$352,151.65 is the most that Amcast
can recover for attorney fees and litigation expenses.”
See Detrex’s Surreply, at 2. Using Amcast’s billing entries
and invoices, Detrex color-coded more than a thousand
individual objections to entries on the billings and
invoices.
Fortunately, most of the objections involve questions of
law, which Detrex grouped into the following categories:
(1) fees incurred with respect to state law claims; (2)
fees incurred in the USEPA/Main Street proceedings; (3)
fees and expenses that should never have been incurred;
and (4) fees and expenses incurred that are not response
costs or not consistent with the National Contingency
Plan. Unfortunately, other objections—excessive/duplica-
tive time and deficient billing records—must be addressed
on an individual basis. These objections will be addressed
in turn.
The court will proceed to determine the amount of
recoverable attorney fees and litigation expenses in the
following manner. The court will presume that the amount
Amcast requested—$755,755.57—is a correct figure.
Using Detrex’s color-coded objections to Amcast’s sub-
missions and Detrex’s numerous objections, it is the best
method for resolving this dispute.
A. State Law Claims (Red Highlights)
In addition to claims under the Comprehensive En-
vironmental Response, Compensation, and Liability Act
(“CERCLA”), Amcast sued Detrex under state law for
13a
breach of contract, trespass, negligence, strict liability
for harm resulting from an abnormally dangerous activ-
ity, nuisance, indemnity, and punitive damages. Amcast
also brought state law claims against the shareholders,
and brought separate state court proceedings against the
representing shareholders. Amcast seeks attorney fees for
bringing these non-CERCLA actions because these claims
arose and depend upon the same core of facts as Amcast’s
successful CERCLA claim.
Detrex contends that Amcast cannot recover for un-
successful state law claims brought in this court, oF in
state court, citing Gopher Oil Co., Inc. v. Union Oil Co.
of California, 757 F. Supp. 998 (D. Minn. 1991), aff'd
in part and remanded, 955 F.2d 519 (8th Cir. 1992).
In that case, the plaintiff brought an action under
CERCLA, MERLA (Minnesota Environmental Response
and Liability Act, Minn. Stat. $§ 115B.01-115B.37, Min-
nesota’s counterpart to CERCLA), as well as a number
of state common law theories including negligence, nui-
sance, trespass, and fraud. The court directed a verdict
for the defendant on all the state common law claims
except fraud; judgment ultimately was rendered for the
plaintiff under CERCLA and MERLA, and on the fraud
claim. The plaintiff sought recovery of attorney fees in-
curred in litigating all the claims, but the district court
held that the plaintiff could only recover those attorney
fees associated with the CERCLA, MERLA, and fraud
claims:
In addition to claims under CERCLA, MERLA,
and common law fraud, [the plaintiff's] complaint
contained claims based on negligent misrepresenta-
tion, negligence, nuisance, trespass, environmental
tort and negligence per se. Only the CERCLA,
MERLA and fraud claims were allowed to go to
the jury. [The plaintiff] has failed to present the
court with any authority which would allow recovery
—————
l4a
of attorneys’ fees on its non-fraud common law
claims. Moreover . . . the United States Supreme
Court held that where the plaintiff has failed to pre-
vail on a claim that is distinct in all respects from
the successful claims, the hours spent on the un-
successful claims should be excluded in considering
the amount of a reasonable fee. The court finds no
persuasive reason why [the plaintiff] should be al-
lowed to recover attorneys’ fees for its non-fraud
common law claims.
Gopher Oil Co. v. Union Oil Co. of California, 757 F.
Supp. at 1009 (citation and internal quotations omitted).
The United States Court of Appeals for the Eighth
Circuit affirmed the district court, but also held that the
plaintiff could not recover attorney fees related to the
fraud litigation:
[The defendant] questions the propriety of the
award of attorney fees incurred in pursuing the fraud
claim because, absent statutory authority, the pre-
vailing party is not entitled to attorney fees. In this
case, the successful pursuit of the fraud claim served
a purpose overriding the CERCLA and MERLA
claims by insulating plaintiff from contribution and
making the “as is” clause inapplicable and irrelevant.
Under these circumstances, the defendant should
not incur liability for fees related to the fraud claim,
notwithstanding the interrelationship of that legal
work with the environmental claims. Accordingly,
we remand for a redetermination or an apportion-
ment of attorney fees to exclude work related to the
fraud litigation.
Gopher Oil Co. v. Union Oil Co. of California, 955 F.2d
at 527.
Gopher Oil is closely on point. Like the Gopher Oil
plaintiff, Amcast brought claims under CERCLA, as
15a
well as claims under state common law. Amcast did not
prevail on its state law claims, and has presented no
authority that would allow it to recover attorney fees
for unsuccessful, distinct state law claims. Moreover,
most of the state law claims (such as negligence, tres-
pass, breach of contract, strict liability, nuisance, indem-
nity, and punitive damges) do not further CERCLA’s
twin goals of prompt clean-up and imposition of such
costs on the responsible party; rather, they simply pro-
vide compensation for injury to a party. Accordingly,
recovery of attorney fees in this case is not warranted on
Amcast’s state law claims.
Detrex calculates that the fee entries which relate solely
to the state law matters total $17,733.50. The court has
reviewed each objection raised by Detrex and calculates
a slightly lower figure—$ 1 6,673.00. The difference,
$1,060.50, is based on the following:
_Smith & Schnake (“S&S”) (8/31/89 )—Because
of block billing, Detrex objects to the total amount
of $375.00; the court believes that only $200.00
concerned state matters.
—Faruki, Gilliam & Ireland ( “FG&I") (04/5/91)
—Detrex’s objections total $180.00, not $645.00.
—FG&I (4/30/91)—Detrex’s objections total
$1,464.50, not $1,465.00.
FG&I (8/5/91)—Detrex objected to $180.00 for
discovery requests, no showing that these discovery
requests concerned state law matters.
__FG&I (9/6/91)—Because of block billing, De-
trex objected to $360.00; the court believes that only
$120.00 concerned state matters.
Accordingly, Amcast’s fee request will be reduced by
$16,673.00.
16a
B. USEPA/Main Street Proceeding (Purple Highlights)
Amcast’s billing invoices include entries related to the
Main Street Well Field administrative proceedings. In
those proceedings; the United States Environmental Pro-
tection Agency (“EPA”) apparently seeks to hold Amcast
responsible for trichloroethylene allegedly migrating from
Elkhart Product’s property to the Main Street Well Field
site. Although the Main Street proceedings are not part
of this action, Amcast contends that its investigations and
remedial actions are intertwined with this action. Amcast
explains that documents in this case were turned over to
the EPA for use in the Main Street proceedings. Thus,
Amcast contends, attorney fees connected with the Main
Street proceedings are recoverable in this action. The
court disagrees.
Attorney fees related to the Main Street proceedings
are not recoverable because those proceedings are not
part of this CERCLA action. Because the court denied
Amcast’s motion to amend its complaint to include the
Main Street proceedings, those proceedings remain out-
side the pleadings in this case. The parties presented no
evidence regarding liability at the Main Street site; the
court issued no substantive orders regarding the Main
Street site. Finally, Amcast has not cited any authority
to support its argument that attorney fees connected with
matters outside the pleadings are recoverable.
Detrex calculates that the fee entries which relate to
the Main Street proceedings total $85,371.79. The court
has reviewed each cdjection raised by Detrex and calcu-
lates a slightly lower figure—$84,236.79. The $1,135.00
difference is based on the following:
—FG&I (3/21/89)—Because of block billing,
Detrex objected to $765.00; the court believes that
only $405.00 concerned Main Street proceedings.
17a
—FG&I (3/08/91)—Because of block billing,
Detrex objected to $300.00; the court believes that
only $120.00 concerned Main Street proceedings.
—Katten, Muchin & Zavis (““KM&Z”) (3/31/92)
—Detrex objects to $595.00 in facsimile charges;
that amount already was accounted for in KM&Z’s
4/20/92 invoice.
Accordingly, Amcast’s fee request will be reduced by
$84,236.79.
C. Certain Expenses Which Should Have Never Been
Incurred (Yellow Highlights)
Detrex contends that Amcasts’ fee application includes
entries for work that never should have been incurred
at all. and that Detrex should not have to pay for these
matters. See Hamilton v. Daley, 777 F.2d 1207, 1213
(7th Cir. 1985) (court should disallow expenses that
should not have been incurred at all).
Detrex contends that attorney fees and litigation ex-
penses connected with Amcast’s motion for leave to
amend the complaint should not have been incurred be-
cause Amcast had ample time to amend its complaint
before the June 1, 1989 deadline. Detrex also claims that
it should not have to pay for Amcast’s efforts used in
opposing the shareholder’s dispositive motions, the related
appeal, and the later state court action. Detrex contends
this work was unnecessary because Amcast simply could
have included the word “operator” in the initial com-
plaint, or amended the complaint before June 1 to in-
clude operator liability. Thus, Detrex contends that it
should not have to pay for Amcast’s pleading errors.
The court agrees that Detrex should not have to pay
for the fees incurred in the foregoing matters. With re-
spect to fees incurred by Amcast in attempting to amend
its complaint, and in responding to the shareholder's dis-
ll
18a
positive motion, Magistrate Judge Pierce’s thorough and
reasoned analysis of these issues makes clear that the
fees incurred by Amcast were brought on by its own
faulty pleadings:
In this case, the plaintiffs [Amcast] have offered
no suitable explanation for their delay in moving to
amend, nor have they provided an adequate reason
for failing to request leave prior to the June 1, 1989
deadline. Although the plaintiffs’ motion suggests
that it was occasioned, in part, by an April 1989
EPA study, that again does not explain why the
plaintiffs waited until January 30, 1990, eight
months after the deadline for amendments and more
than six months after the Shareholder Defendants
moved for summary judgment, to request leave.
Moreover, it is clear that the plaintiffs could have
raised their claim that the Former Shareholder de-
fendants were “operators” of EPC’s plant in their
original complaint and, from all that has been shown,
could have raised their claim for contribution prior
to the June 1, 1989 deadline.
Amcast Industrial Corp. v. Detrex Corp., 132 F.R.D.
213, 219 (N.D. Ind. 1990).
Detrex also contends that it should not have to reim-
burse Amcast for work that was never utilized. Amcast’s
counsel apparently billed Amcast for work on a draft
motion for summary judgment that was never filed, and
a proposed settlement agreement that was never consum-
mated. The fees incurred for work on these matters are
not recoverable. See United States (EPA) v. Environ-
mental Waste Control, Inc., 737 F. Supp. 1485, 1497
(N.D. Ind. 1990) (party not entitled to fees for Rule
11 motion that was never filed).
Detrex calculates that the expenses that should not
have been incurred total $62,186.21. The court has re-
viewed each objection raised by Detrex and calculates a
19a
slightly lower figure—$56,461.86. The difference of
$5,724.35 is based upon the following:
KM&Z (3/31/92)—Detrex objects to $1,895.60;
the court cannot find the billing invoice to which
Detrex objects.
FG&I (1/31/90)—Because of block billing, Detrex
objects to the total amount of $735.00; the court
believes that only $525.00 concerned amending the
complaint.
—FG&I (11/06/90)—Detrex objects to $137.50;
the court does not find this amount objectionable.
—FG&I (12/26/90)—Because of block billing,
Detrex objects to the total amount of $660.00; the
court believes that only $330.00 concerned the share-
holder defendants.
—FG&l (12/26/90)—Because of block billing,
Detrex objects to the total amount of $1,240.00; the
court believes that only $310.00 concerned matters
to which Detrex objected.
—FG&l (invoice dated 10/07/91)—Detrex ob-
| jected to a total of $1,701.25; the court finds that
these fees associated with trial preparation are rea-
sonable.
—FG&I (invoice dated 11/06/91)—Detrex ob-
jected to a total of $520.00; the court finds that
these fees associated with trial preparation are rea-
sonable.
Accordingly, Amcast’s fee request will be reduced by
$56,461.86.
D. Fees and Expenses that are not Response Costs or
Consistent with the National Contingency Plan
(Red Asterisk)
Detrex objects to certain billing entries, contending
that they are not response cost or not consistent with
|
20a
the National Contingency Plan (“NCP”). Basically,
Detrex attempts to narrow the court’s earlier opinion
which held that attorney fees are recoverable under
CERCLA. These objections are not well-taken.
E. Excessive/Duplicative Time (Orange Highlights)
Detrex objects to a number of entities as being exces-
sive or duplicative. For example, Detrex claims, among
other things, that: $15,000.00 in attorney fees to draft
the complaint is excessive; there was too much intra-
office communication between Amcast attorneys; there
were too many conferences and discussions; there were
too many law firms and attorneys working on the case;
and paralegals billed too much for cite-checking. Amcast
contends that its billings were not excessive or duplicative.
Proper analysis of these objections requires an evaluation
of the objections individually.
Detrex calculates that the fee entries which are exces-
sive or duplicative total $85,371.79. The court has re-
viewed each objection raised by Detrex and calculates a
lower figure, $17,362.25, as being excessive or duplica-
tive. This lower figure is based upon the following de-
ductions:
SMITH & SCHNAKE
DATE (ATTORNEY) AMOUNT REASON
11/11/88 (KM) $357.50 Organize file—duplicative
11/14/88 (KM) $ 55.00 Organize file—duplicative
11/17/88 (KM) $ 96.25 Organize file—duplicative
11/18/88 (AS) $ 67.50 Review pleadings; complaint
only pleading at this point
TOTAL $576.25
KATTEN, MUCHIN & ZAVIS
DATE (ATTORNEY) AMOUNT REASON
1/20/92 (MCF) $100.00 No description of misc.
expenses
11/16/89
11/17/89
11/20/89
11/21/89
11/28/89
11/29/89
11/30/89
1/12/91
2/27/91
3/08/91
4/03/91
4/04/91
5/10/91
6/25/91
6/26/91
6/27/91
6/28/91
8/01/91
8/14/91
2la
FARUKI, GILLIAM & IRELAND
DATE (ATTORNEY) AMOUNT
(AW)
(AW)
(AW)
(AW)
(AW)
(AW)
(AW)
(SKI)
(MLW)
(SKI)
(SKI)
(SKI)
(EDM)
(SRK)
(SRK)
(SRK)
(SRK)
(AW)
(SKI)
$
RRPRA RADA HK
RRA KR
$
735.00
630.00
735.00
840.00
630.00
945.00
835.00
140.00
33.50
50.00
430.00
400.00
150.00
56.25
146.25
123.75
180.00
1,020.00
275.00
REASON
Review documents produced by
plaintiffs themselves—
duplicative
(Same as above)
(Same as above)
(Same as above)
(Same as above)
(Same as above)
(Same as above)
$50.00/hour te reproduce docu-
ments excessive; court will al-
low $10.00/hour
Three telephonic conferences
on discovery motion excessive;
court will allow one conference
1.75 hours to revise notice of
deposition excessive; court will
allow .75 hours
$50.00/hour to reproduce docu-
ments excessive; court will al-
low $10.00/hour
$50.00/hour to reproduce docu-
ments excessive; court will al-
low $10.00/hour
6.0 hours to do tasks identified
excessive; court will allow 3.0
hours
Organize documents plaintiffs
themselves produced-duplica-
tive
(Same as above)
(Same as above)
(Same as above)
11.5 hours to prepare two let-
ters and conduct three tele-
phone conferences excessive;
court will allow 3.0 hours
6.5 hours to cite check exces-
sive; court will allow 1.0 hour
22a
DATE (ATTORNEY) AMOUNT
8/15/91
8/16/91
9/09/91
/10/91
9/11/91
9/12/91
9/13/91
9/14/91
9/16/91
9/17/91
10/01/91
10/02/91
10/02/91
10/04/91
10/18/91
10/19/91
10/21/91
10/21/91
11/06/91
11/14/91
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SKI)
(SK1)
(CLH)
(SRK)
(CLH)
(CLH)
(CLH)
(SRK)
(CLH)
(SKI)
$
$
337.50
412.50
125.00
212.50
237.50
262.50
300.00
125.00
237.50
412.50
387.50
125.00
237.50
123.75
125.00
212.50
275.00
225.00
250.00
362.50
REASON
8.25 hours to cite check exces-
sive; court will allow 1.5 hours
9.75 hours to cite check exces-
sive; court will allow 1.5 hours
3.0 hours to cite check exces-
sive; court will alow .5 hours
5.25 hours to cite check exces-
sive; court will allow 1.0 hour
5.75 hours to cite check exces-
sive; court will allow 1.0 hour
6.25 hours to cite check exces-
sive; court will allow 1.0 hour
7.00 hours to cite check exces-
sive; court will allow 1.0 hour
3.0 hours to cite check exces-
sive; court will allow .5 hours
5.75 hours to cite check exces-
sive; court will allow 1.0 hour
10.25 hours to cite check exces-
sive; court will allow 2.0 hours
9.25 hours to cite check exces-
sive; court will allow 1.5 hours
3.5 hours to cite check exces-
sive; court will allow 1.0 hour
5.75 hours to cite check exces-
sive; court will allow 1.0 hour
3.75 hours to cite check exces-
sive; court will allow 1.0 hour
3.5 hours to cite check exces-
sive; court will allow 1.0 hour
5.25 hours to cite check exces-
sive; court will allow 1.0 hour
6.5 hours to cite check exces-
sive; court will allow 1.0 hour
6.0 hours to cite check exces-
sive; court will allow 1.0 hour
6.0 hours to cite check exces-
sive; court will allow 1.0 hour
8.75 hours to cite check exces-
sive; court will allow 1.5 hours
23a
DATE (ATTORNEY) AMOUNT REASON
11/15/91 (SKI) $ 125.00 3.0 hours to cite check exces-
sive; court will allow .5 hours
12/12/91 (SKI) $ 316.25 6.75 hours to cite check exces-
sive; court will allow 1.0 hour
12/13/91 (SKI) $ 288.75 6.25 hours to cite check exces-
sive; court will allow 1.0 hour
2/19/92 (CLH) $ 250.00 6.0 hours to cite check exces-
sive; court will allow 1.0 hour
2/20/92 (CLH) $ 287.50 6.75 hours to cite check exces-
sive; court will allow 1.0 hour
2/21/92 (CLH) $ 250.00 6.0 hours to cite check exces-
sive; court will allow 1.0 hour
2/21/92 (CLH) $ 187.50 3.75 hours to cite check exces-
sive; court will allow 1.0 hour
2/25/92 (CLH) $ 200.00 5.0 hours to cite check exces-
sive; court will allow 1.0 hour
2/26/92 (CLH) $ 200.00 5.0 hours to cite check exces-
sive; court will allow 1.0 hour
2/27/92 (CLH) $ 300.00 7.50 hours to cite check exces-
sive; court will allow 1.5 hours
3/04/92 (SKI) $ 302.50 6.5 hours to cite check exces-
sive; court will allow 1.0 hour
8/05/92 (SKI) $ 151.25 3.25 hours to cite check exces-
sive; court will allow .5 hours
8/06/92 (SKI) $ 137.50 3.5 hours to cite check exces-
sive; court will allow 1.0 hour
3/09/92 (SKI) $ 151.25 3.75 hours to cite check exces-
sive; court will allow 1.0 hour
8/10/92 (SKI) $ 247.50 5.5 hours to cite check exces-
sive; court will allow 1.0 hour
TOTAL $16,686.00
F. Deficient Billing Records (Blue Highlights)
Detrex objects to a number of entries as being deficient
because there was an insufficient description of the work
performed, there were no times or rates associated with
‘the entry, or there were block billing entries contain-
ing objectionable entries. Some of the other objections
_
24a
coded in blue relate to state law matters, the Main
Street Productions, and other previously raised objections.
Amcast contends that its entries were not deficient.
Proper analysis of these objections requires an evaluation
of these objections individually.
Detrex calculates that the fee entries which are defi-
cient total $117,725.56. The court has viewed each ob-
jection raised by Detrex and calculates a lower figure,
$26,526.96, as being deficient. This lower figure is based
upon the following deductions:
SMITH & SCHNAKE
DATE (ATTORNEY) AMOUNT REASUN
12/20/85 (RB) $ 60.00 Review materials re: research
validation lawsuit; no showing
of connection with this suit
8/07/86 (SRP) $ 70.00 Insufficient description of work
performed
4/15/87 (FLM) $ 45.00 Insufficient description of work
performed
8/30/88 (TF) $ 427.50 Insufficient description of work
performed
8/31/88 (TF) $ 360.00 Insufficient description of work
performed
9/28/88 (AG) & 92.50 Insufficient description of work
performed
2/21/89 (AWG) $ 92.50 Insufficient description of work
performed
3/21/89- (EAH) $ 686.25 From Jan. 19 to Jan. 23, 1989,
4/5/89 EAH spent 18.5 hours review-
ing and summarizing docu-
ments; less than 8 months
later, EAH spent 15.25 hours
reviewing and summarizing
documents; this second review
is excessive
4/14/89 (TF) $ 630.00 Block billing; delete 7.0 hours
for EPA matter
4/17/89 (DJI) $ 130.00 Block billing; delete 1.0 hour
for EPA matter
25a
DATE (ATTORNEY) AMOUNT
4/18/89
4/18/89
5/08/89
5/09/89
5/10/89
5/19/89
5/23/89
6/05/89
6/08/89
7/06/89
7/10/89
7/11/89
7/12/89
7/18/89
7/20/89
7/25/89
7/25/89
8/23/89
9/05/89
(TF)
(DJ1)
(TF)
(TF)
(DJI)
(DJI)
(DJI)
(TF)
(DJI)
(AWG)
(AWG)
(AWG)
(AWG)
(TF)
(CM)
(CM)
(TF)
(EAH)
(EAH)
$
$
90.00
130.00
100.00
500.00
70.00
350.00
70.00
50.00
140.00
185.00
555.00
185.00
370.00
46.25
110.00
220.00
300.00
125.00
50.00
REASON
Block billing; delete 1.0 hour
for EPA matter
Block billing; delete 1.0 hour
for EPA matter
Block billing; delete 1.0 hour
for EPA matter
Block billing; delete 5.0 hours
for EPA matter
Block billing; delete .5 hours
for EPA matter
Block billing; delete 2.5 hours
for EPA matter
Block billing; delete .5 hours
for EPA matter
Block billing; delete .5 hours
for EPA matter
Insufficient description of work
performed
Insufficient description of work
performed
Insufficient description of work
performed
Insufficient description of work
performed
Insufficient description of work
performed
Insufficient description of work
performed
Block billing; delete 1.0 hour
for shareholder matter
Block billing; delete 2.0 hours
for shareholder matter
Block billing; delete 3.0 hours
for shareholder matter and
non-response cost matter
Insufficient description of work
performed
Insufficient description of work
performed; work appears to be
related to shareholder matter
26a
DATE (ATTORNEY) AMOUNT REASON
9/06/89 (BS) $ 40.00 Insufficient description of work
performed; work appears to be
related to shareholder matter
9/08/89 (EAH) $ 125.00. Insufficient description of work
performed; work appears to be
related to shareholder matter
TOTAL $ 6,405.00
_—_———
—_—————
BERICK, PEARLMAN & MILLS
DATE (ATTORNEY) AMOUNT REASON
2/06/91 (FIRM) $286.19 Insufficient description of work
performed
1/15/31 (FIRM) $198.42 Insufficient description of work
performed
TOTAL $484.6
—<—< $=
FARUKI GILLIAM & IRELAND
DATE (ATTORNEY) AMOUNT REASON
12/06/89- $ 1,785.00 AW worked 17 hours reviewing
12/14/89 (AW) documents and preparing chro-
nology of significant events;
this is not a reasonable fee
that should be paid by defend-
ant
1/23/90 (AW) $ 105.00 Block billing; delete 1.0 hour
for unrelated matter—confer-
ence with paralegals regard-
ing cite checking
2/12/90 (AW) . 26.25 Insufficient description of work
performed; delete .25 hours
2/15/90 (AW) $ 26.25 Insufficient description of work
performed
4/23/90 (SKI) 40.00 $50.00/hour to copy documents
excessive; court will allow
$20.00/hour
2/15/91 (AW) $ 240.00 Insufficient description of work
performed
2/26/91 (MLW) $ 65.00 Insufficient description of work
performed
2/28/91 (MLW) $ 32.50 Insufficient description of work
performed
27a
DATE (ATTORNEY) AMOUNT
3/01/91
3/04/91
3/04/91
3/05/91
3/07/91
3/10/91
3/11/91
3/12/91
3/13/91
3/19/91
4/01/91
4/04/91
4/10/91
4/11/91
4/15/91
4/16/91
4/17/91
4/17/91
(AW)
(AW)
(DJI)
(AW)
(AW)
(AW)
(AW)
(SKI)
(AW)
(PLC)
(AW)
(MLW)
(MLW)
(MLW)
(AW)
(AW)
(DJI)
(AW)
$
$
$
120.00
60.00
77.50
120.00
30.00
120.00
120.00
80.00
90.00
35.00
300.00
65.00
65.00
97.50
120.00
240.00
310.00
420.00
REASON
Block billing; delete 1.0 hour
for state law matter
Block billing; delete .5 hours
for state law matter
Block billing; delete .5 hours
for EPA matter
Block billing; delete 1.0 hour
for EPA matter
Block billing; delete .25 hours
for EPA matter
Biock billing; delete 1.0 hur
for EPA and state law matters
Block billing; delete 1.0 hour
for EPA, state law, and other
matters
$50.00/hour to copy documents
excessive; court will allow
$10.00/hour
Block billing; delete .75 hours
for non-recoverable matters
$45.00/hour to copy documents
excessive; court will allow
$10.00/hour
Block billing; delete 2.5 hours
for state law and other matters
Block billing; delete 1.0 hour
for state law and other matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete 1.5 hours
for state law matters
Block billing; delete 1.5 hours
for non-recoverable matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete 2.0 hours
for state law and other matters
Block billing; delete 3.5 hours
for state law and other matters
28a
DATE (ATTORNEY) AMOUNT
4/18/91
4/18/91
4/23/91
4/24/91
5/30/91
5/08/91
5/14/91
5/14/91
5/15/91
5/17/91
5/18/91
5/20/91
5/22/91
6/05/91
6/05/91
6/06/91
6/06/91
6/07/91
6/10/91
(DJI)
(AW)
(EDM)
(DJI)
(DJI)
(DJTI)
(DJI)
(AW)
(DJI)
(AW)
(AW)
(DJI)
(DJT)
(AW)
(MLW)
(AW)
(DJT)
(AW)
(AW)
$
$
116.25
300.00
40.00
155.00
38.75
77.50
155.00
180.00
77.50
240.00
300.00
38.75
77.50
60.00
56.25
60.00
77.50
60.00
120.00
REASON
Block billings; delete .75 hours
for state law matters
Block billing; delete 2.5 hours
for state law matters
$50.00/hour to copy documents
excessive; court will allow
$10.00/hour
Block billing; delete 1.0 hour
for state law and other matters
Block billing; delete .25 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete 1.5 hours
for state law matters
Block billing; delete .5 hours
for EPA matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete 2.5 hours
for state law matters
Block billing; delete .25 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete .75 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete 1.0 hour
Tor state law matters
29a
DATE (ATTORNEY) AMOUNT
6/11/91
6/11/91
6/17/91
6/17/91
6/20/91
6/24/91
6/25/91
6/26/91
7/01/91
7/03/91
7/05/91
7/08/91
7/10/91
7/12/91
7/15/91
7/22/91
7/23/91
7/26/91
7/30/91
8/01/91
(AW)
(DJI)
(SSS)
(AW)
(SSS)
(AW)
(SSS)
(DJI)
(SSS)
(DJI)
(DJI)
(AW)
(AW)
(DJI)
(AW)
(AW)
(AW)
(SSS)
(DJI)
(SRK)
$
$
$
600.00
310.00
33.75
120.00
90.00
120.00
157.50
77.50
135.00
320.00
531.25
120.00
60.00
160.00
60.00
120.00
120.00
168.75
40.00
22.50
REASON
Block billing; delete 5.0 hours
for state law matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete .75 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete 3.5 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete 3.0 hours
for state law matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete .75 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete
for EPA matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete 1.0 hour
for EPA matters
Block billing; delete 1.0 hour
for EPA matters
Block billing; delete 3.75 hours
for state law matters
Block billing; delete .25 hours
for state law matters
Block billing; delete .5 hours
for state law matters
.5 hours
8/04/91
8/29/91
8/30/91
9/03/91
9/03/91
9/04/91
9/10/91
9/11/91
9/19/91
9/20/91
9/23/91
9/24/91
10/11/91
10/14/91
10/22/91
10/23/91
10/24/91
11/05/91
11/05/91
(AW)
(MLW)
(MLW)
(MLW)
(AW)
(MLW)
(MLW)
(MLW)
(JDF)
(JDF)
(MLW)
(MLW)
(JDF)
(JDF)
(MLW)
(MLW)
(AW)
(CLH)
(JDF)
$
$
$
$
260.00
75.00
225.00
150.00
60.00
75.00
112.50
150.00
480.00
465.00
360.00
300.00
180.00
180.00
150.00
150.00
120.00
75.00
120.00
30a
DATE (ATTORNEY) AMOUNT
REASON
Block billing; delete 3.0 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete 3.0 hours
for state law matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete .5 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; delete 1.5 hours
for state law matters
Block billing; delete 2.0 hours
for state law matters
Insufficient description of work
performed
Insufficient description of work
performed
Delete 6.0 hours; insufficient
description of work performed
Delete 5.0 hours; insufficient
description of work performed
Block billing; delete 3.0 hours
for state law matters
Block billing; delete 3.0 hours
for state law matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete 2.0 hours
for state law matters
Block billing; delete 1.0 hour
for state law matters
Block billing; 2.0 hours to cite
check excessive; court will
allow .5 hours
Block billing; delete 2.0 hours
for state law matters
aes sate NRA
3la
DATE (ATTORNEY) AMOUNT REASON
11/06/91 (JRT) x 60.00 Block billing; delete 1.0 hour
for state law matters
11/07/91 (JDF) $ 180.00 Block billing; delete 3.0 hours
for state law members
11/07/91 (CLH) $ 125.00 Block billing; 3.5 hours to cite
check excessive; court will
allow 1.0 hour
11/07/91 (JRT) $ 240.00 Block billing; delete 4.0 hours
for state law matters
11/12/91 (JDF) $ 150.00 Block billing; delete 2.5 hours
for state law matters
11/14/91 (MLW) $ 356.25 Block billing; delete 4.75 hours
for state law matters
11/14/91 (DJI) $ 240.00 Block billing; delete 1.5 hours
for state law matters
11/14/91 (JDF) $ 420.00 Block billing; delete 7.0 hours
for state law matters
11/14/91 (CLH) $ 200.00 Block billing; 5.0 hours to cite
check excessive; court will
allow 1.0 hour
11/14/91 (AW) $ 210.00 Block billing; delete 1.75 hours
for state law matters
11/15/91 (MLW) $ 300.00 Block billing; delete 4.0 hours
for state law matters
11/15/91 (DJI) $ 40.00 Block gilling; delete .25 hours
for state law matters
11/15/91 (CLH) $ 150.00 Block billing; 4.0 hours to cite
check excessive; court will
allow 1.0 hour
11/15/91 (AW) $ 240.00 Block billing; delete 2.0 hours
for state law matters
11/16/91 (JDF) $ 285.00 Block billing; delete 4.75 hours
for state law matters
11/16/91 (AW) $ 180.00 Block billing; delete 1.5 hours
for state law matters
11/17/91 (DJI1) $ 240.00 Block billing; delete 1.5 hours
for state law matters
11/17/91 (AW) $ 240.00 Block billing; delete 2.0 hours
for state law matters
32a
DATE (ATTORNEY) AMOUNT
11/18/91
11/18/91
11/18/91
2/20/92
TOTAL
1/16/90
2/02/90
2/07/90
2/08/90
2/12/90
2/14/90
2/14/90
3/28/90
1/08/90
1/23/90
REASON
(MLW) 187.50 Block billing; delete 2.5 hours
for state law matters
(DJI) 160.00 Block billing; delete 1.0 hour
for state law matters
(JDF) 120.00 Block billing; delete 2.0 hours
for state law matters
(CLH) $ 225.00 Block billing; 4.5 hours to cite
check excessive; court will
allow 1.0 hour
$18,722.50
THOMPSON, HINE & FLORY
DATE (ATTORNEY) AMOUNT REASON
(JWB) $108.75 Block billing; delete .75 hours
for EPA matter
(KM) $ 60.00 Block billing; delete 1.0 hour
for EPA matter
(JEG) $ 56.25 Block billing; delete .75 hours
for unrelated matter
(JEG) $225.00 Block billing; delete 3.0 hours
for unrelated matter
(JEG) $ 75.00 Block billing; delete 1.0 hour
for unrelated matter
(JWB) $108.75 Block billing; delete .75 hours
for unrelated matter
(JEG) $ 18.75 Block billing; delete .25 hours
for unrelated matter
(FIRM) $152.35 Insufficient description of work
performed; appears to be un-
related matter
(CM) $ 13.75 Block billing; delete for un-
related matter
(JWB) $ 36.25 Block billing; delete .25 hours
for unrelated matter
(KM) $ 60.00 Block billing; delete 1.0 hour
1/25/90
TOTAL
$914.85
for unrelated matter
33a
G. Total Attorney Fees
Amcast is entitled to $554,494.71 in attorney fees,
calculated as follows:
Total Fees Requested $755,755.57
Less: |
(1) State Law Claims $16,673.00
(2) USEPA/Main Street Proceeding $84,236.79
(3) Expenses which should
not have been incurred $56,461.86
(4) Fees and Expenses that
are not Response Costs or
not Consistent withthe NCP $ 0.00
(5) Excessive/duplicative time $17,362.25
(6) Deficient Billing Records $26,526.96
Less Deductions — $201,260.86
TOTAL FEE AWARD $554,494.71
II. ADDITIONAL RESPONSE COSTS
Amcast seeks $30,636.76 in additional response costs
incurred between November 23, 1991 and April 30,
1992. Charles Rytlewski, Elkhart Product Corporation’s
controller, affirms that EPC and Amcast expended
$6,413.55 on system service charges (sewer and utili-
ties); $1,893.12 on labor expenses; $17,067.09 on con-
sultants (investigation, design, monitoring); and $5,263.00
on equipment, installation, and monitoring costs. The
court finds these additional response costs reasonable, and
Amcast is entitled to recover these additional response
costs.
Ill. PREJUDGMENT INTEREST
Amcast seeks to recover $374,013.64 in prejudgment
interest. This figure includes $314.912.76 in interest on
the April 9, 1992 judgment; $446.71 in interest on the
additional response costs; and $58,654.17 in interest on
the attorney fees and litigation expenses incurred. Detrex
does not object to Amcast’s calculation of prejudgment
34a
interest on the April 9 judgment or the additional re-
sponse costs. The amount of prejudgment interest on
the attorney fees and litigation expenses will have to be
recalculated consistent with this opinion.
Accordingly, Amcast is entitled to $315,359.47 in pre-
judgment interest, and will be ordered to recalculate the
prejudgment interest on the attorney fees and litigation
expenses consistent with this opinion.
IV. CONCLUSION
Given the massive volume of the fee petition and the
equally huge number of objections, the court has tried to
evaluate each fee entry for its reasonableness and con-
sistency with CERCLA’s goal—that being the “prompt,
thorough, and cost-effective cleanup of a hazardous waste
site.’ Woodman v. United States, 764 F. Supp. 1467,
1470 (M.D. Fla. 1991).
Accordingly, the court GRANTS Amcast’s motion for
attorney fees and litigation expenses, additional response
costs, and prejudgment interest (filed June 4, 1992),
and ORDERS Detrex Corporation to pay the plaintiffs
$554,494.71 in attorneys fees and litigation expenses,
$30,636.76 in additional response costs, and $315,359.47
in prejudgment interest. The court also ORDERS the
plaintiffs to recalculate the prejudgment interest on the
attorney fees and litigation expenses consistent with this
opinion, and resubmit that figure to the court within
fifteen (15) days of the date of this order.
The court DENIES Amcast’s motion for oral argument
(filed October 16, 1992).
SO ORDERED.
ENTERED: March 30, 1994
/s/ Robert L. Miller, Jr.
ROBERT L. MILLER, JR.
Judge
United States District Judge
ee
[XX]
35a
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
Case Number: S88-620 RLM
AMCAST INDUSTRIAL CORPORATION and
ELKHART PRODUCTS CORPORATION
V.
DETREX CORPORATION, et ai.
JUDGMENT IN A CIVIL CASE
Jury Verdict. This action came before the court
for a trial by jury. The issues have been tried and
the jury has rendered its verdict.
Decision by Court. This action came to trial or
hearing before the Court. The issues have been
tried or heard and a decision has been rendered.
IT IS ORDERED AND ADJUDGED BY ROB-
ERT L. MILLER, JR. that Detrex Corporation is
to pay the plaintiffs $554,494.71 in attorneys fees
and litigation expenses, $30,636.76 in additional
response costs, and $315,359.47 in prejudgment
interest. The plaintiffs are to recalculate the pre-
judgment interest on the attorney fees and litiga-
tion expenses and resubmit that figure to the court
within 15 days of date of order (Memorandum
and Order entered March 31, 1994).
36a
This document entered pursuant to Rules 79(A) and 58
of the Federal Rules of Civil Procedure on:
Date March 31, 1994
GERALDINE J. CROCKETT
Clerk
/s/ Carol Farmer
(By) Deputy Clerk
37a
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Chicago, Illinois 60604
August 5, 1994
Before
Hon. Richard A. Posner, Chief Judge
Hon. Joel M. Flaum, Circuit Judge
Hon. Michael S. Kanne, Circuit Judge
No. 94-2026
AMCAST INDUSTRIAL CORPORATION and
ELKHART PRODUCTS CORPORATION,
Plaintiffs-A ppellees,
v.
DETREX CORPORATION,
Defendant-A ppellant.
Appeal from the United States District Court
for the Northern District of Indiana.
South Bend Division
No. 88 C 620 Robert L. Miller, Jr., Judge
ORDER
Before us is a motion by the appellees to dismiss por-
tions of the appeal as barred by the doctrines of res ju-
dicata or, more plausibly, law of the case. In a previous
38a
appeal, this panel held the appellate, Detrex, “was liable
[to the appellees] under the Superfund statute for the
spillage from its own trucks,” as the district court had
found, but reversed another part of the judgment and
remanded the case for further proceedings consistent with
our opinion. 2 F.3d 746, 751 (7th Cir. 1993). The
district judge then entered a judgment requiring Detrex
to pay response costs, including attorneys’ fees, and
Detrex again appealed. The appellees have moved to dis-
miss so much of the appeal as seeks to (1) excuse Detrex
from any liability for response costs, on the ground that
the appellees had failed to comply with the National Con-
tingency Plan, and (2) excuse Detrex from having to pay
attorneys’ fees.
The motion is well taken with respect to (1). Detrex
is seeking to relitigate the issue of its liability for response
costs, which was settled by our previous decision. It is
true that our opinion does not mention the NCP issue,
but in upholding Detrex’s liability for response costs we
necessarily rejected every ground on which Detrex had
opposed that liability. If Detrex thought we had some-
how overlooked that ground, it should have filed a peti-
tion for rehearing. It did not.
With respect to (2), an intervening Supreme Court
decision has strengthened Detrex’s argument that it is not
liable for attorneys’ fees, and the law of the case doctrine
does not bar reconsideration of any issue when there has
been an intervening change in law.
The motion to. dismiss the appeal is granted in part
and denied in part, as indicated.
39a
UNITED STATES COURT OF APPEALS
SEVENTH CIRCUIT
No. 92-2365
AMCAST INDUSTRIAL CORPORATION and
ELKHART PRODUCTS CORPORATION,
Plaintiffs-A ppellees,
V.
DETREX CORPORATION,
Defendant-A ppellant.
Argued Jan. 4, 1993
Decided Aug. 12, 1993
Before POSNER, FLAUM, and KANNE, Circuit
Judges.
POSNER, Circuit Judge.
This appeal requires us to explore the outer limits of
the “Superfund” statute—the Comprehensive Environ-
mental Response, Compensation and Liability Act
(CERCLA), 42 U.S.C. §§ 9601 et seq. We must decide
whether, as the district court concluded, the Act extends
to any chemical spill that creates an environmental haz-
ard. 779 F.Supp. 1519. This is an important question
that has not until now been the subject of an appellate
case. Our conclusion is that the spiller, but not. the
shipper of the chemical that spilled, is within the Act’s
long reach.
40a
The facts are simple enough, and we shall make them
even simpler where we can do so without affecting the
analysis. The principal plaintiff, Elkhart (Amcast is its
parent, and can be ignored), manufacturers copper fit-
tings at a plant in Indiana. One of the chemicals that
it uses in the manufacturing process is the solvent tri-
chloroethylene (TCE). Elkhart used to buy TCE in liquid
form from a number of chemical maufacturers, including
the defendant, Detrex. Detrex sometimes delivered the
solvent in its own tanker trucks and sometimes hired a
common carrier, Transport Service, to deliver it. In 1984,
TCE was discovered in the groundwater beneath a phar-
maceutical plant adjacent to Elkhart’s plant. There is
evidence that both Detrex’s and Transport Services’ driv-
ers sometimes spilled TCE accidentally on Elkhart’s prem-
ises while trying to fill Elkhart’s storage tanks and that
some of this spillage found its way into the groundwater
beneath the pharmaceutical plant, although an expert
hired by Detrex has estimated that out of almost 800
gallons of TCE that have been found in the soil and
groundwater beneath the pharmaceutical plant, no more
than 49 came from these delivery spills, the rest having
leaked from the storage tanks or a waste-disposal pit or
the plant itself or been spilled by other suppliers’ drivers.
The Superfund statute, so far as bears on this case,
imposes liability for “response costs” (the costs of elimi-
nating an environmental hazard) on the “owner and op-
erator of a... facility’ from which a hazardous sub-
stance has been released, § 9607(a)(1), and on “any
person who by contract . . . 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.” § 9607(a)(3). “Facility”
is broadly defined as “(A) any building, structure, in-
stallation, equipment, pipe or pipeline . . . , well, pit,
pond, lagoon, impoundment, ditch, landfill, storage con-
tainer, motor vehicle rolling stock, or aircraft, or (B)
4la
any site or area where a hazardous substance has been
deposited, stored, disposed of, or placed, or otherwise
come to be located.” § 9601(9). Elkhart is admittedly
a “responsible person,” as an entity liable for response
costs is called; but the statute permits one responsible
person to recover all or part of its response costs from
another. § 9607(a)(4)(B). Having spent more than
$1 million on cleaning up the contamination caused by
the spillage of TCE from its facility, Elkhart brought
this suit to establish that Detrex was a responsible per-
son, too, and to shift Elkhart’s response costs (that is,
the $1 million it had incurred in cleaning up the con-
tamination) from itself to Detrex.
A potentially responsible person who, like Detrex, has
been sued is entitled to seek, by way of counterclaim,
contribution from the plaintiff for the amount of response
costs fairly attributable ot the conduct of the plaintiff
as distinct from that of the defendant. § 9613(f).
Rather than file a counterclaim against Elkhart, Detrex
argued to the district judge that in the course of adjudi-
cating Elkhart’s claim he had to apportion responsibility
for the costs between the parties. The judge rejected this
argument, together with Detrex’s more fundamental ar-
gument that it is not a responsible person within the
meaning of the statute, and entered judgment in favor
of Elkhart for the entire response costs that Elkhart had
incurred. 822 F.Supp. 545. Eventually Detrex filed a
separate action for contribution from Elkhart; that suit
is pending in the district court. § 9613(f)(1); United
States v. R.W. Meyer, Inc., 932 F.2d 568, 571 n.2
(6th Cir.1991). Detrex was entitled to proceed in that
fashion. The statute is explicit that a counterclaim for
response costs is not compulsory, §§ 9613(f)(1), (g)
(3)(A), a result consistent with general law, since De-
trex’s claim against Elkhart, dependent as it was on Elk-
hart’s establishing Detrex’s liability to it, had not ma-
tured when Elkhart’s suit was filed. Fed.R.Civ.P. 13(a);
Harbor Ins. Co. Continental Bank Corp., 922 F.2d 357,
|
42a
360 (7th Cir.1990); 6 Charles Alan Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practices and Proce-
dure § 1411 at p. 83 (2d ed. 1990).
The argument that the judge had to apportion liability
between Detrex and Elkhart in Elkhart’s suit makes no
sense, sO we dispatch it at the outset. The statute is clear
that whoever (like Elkhart) incurs costs in cleaning up
a contaminated site can seek to recover them from any
responsible person, and if the responsible person believes
as Detrex does that his contribution to the mess was
trivial and wants the point established promptly he can
counterclaim for as large a percentage of the costs as
he thinks he can prove was due to the plaintiff's own
conduct. United States v. R.W. Meyer, Inc., supra, 932
F.2d at 571 n.2; United States v. Mexico Feed & Seed
Co., 764 F.Supp. 565, 573 (E.D.Mo.1991), rev'd in part
on other grounds, 980 F.2d 478 (8th Cir.1992). The
counterclaim if promptly filed will doubtless be tried at
the same time as the main claim, so the defendant will
at no time be out of pocket by more than the share of
the response costs attributable to his own conduct. Ob-
viously Detrex could have counterclaimed without giving
up its main argument—that it is not a responsible person
and therefore is not liable for any part of the response
costs. We do not know why it waited and filed a sep-
arate suit.
The difficult question is whether Detrex is within the
grasp of the Superfund law at all; if not, Elkhart’s suit
must fail irrespective of any division of. responsibilities
between Elkhart and Detrex. Elkhart argues that Detrex
has forfeited this ground of appeal by failing to present
it to the district court. Detrex had argued to the dis-
trict court on a variety of grounds that it was not liable
to the plaintiff under that law, and one of these grounds
was that it was.not an. arranger for disposal or treatment.
The fact that it did not marshal in support of this ground
all the relevant legislative provisions and history did not
work a forfeiture. Dawson v. General Motors Corp., 977
43a
F.2d 369, 372 n. * (7th Cir.1992); Locke v. Bonello,
965 F.2d 534, 536 n. 1 (7th Cir.1992); cf. Bellotti v.
Baird, 428 U.S. 132, 143 n. 10, 96 S.Ct. 2857, 2864
n. 10, 49 L.Ed.2d 844 (1976); but see Elder v. Hollo-
way, 975 F.2d 1388, 1392-93 (1991), rehearing en banc
denied, 984 F.2d 991 (9th Cir.1993) (per curiam),
cert. granted, —— USS. , 113 S.Ct. 3033, 125
L.Ed.2d 721 (1993). But Detrex tacitly conceded in the
district court that it was, though not an arranger for
disposal, an owner of a facility, within the meaning of
the statute. Detrex thus conceded a ground that it now
seeks to raise with us, that it was not an owner of a fa-
cility; and failure to have presented to the district court a
ground on which reversal is being urged is a more serious
matter than failing to support a ground with the argu-
ments or authorities that the appellate court finds per-
suasive. The rule in civil cases is that except with re-
gard to jurisdictional issues and issues involving comity
—the mutual respect owed by soverigns and quasi-
sovereigns, such as the states—a ground not raised in the
district court cannot be used to reverse that court, Old
Republic Ins. Co. v. Federal Crop Ins. Corp., 947 F.2d
269, 276-77 (7th Cir.1991); Zbaraz v. Hartigan, 763
F.2d 1532, 1544 (7th Cir.1985), aff'd by an equally
divided Court under the name Hartigan v. Zbaraz, 484
U.S. 171, 108 S.Ct. 479, 98 L.Ed.2d 478 (1987). The
Supreme Court has told us, however, that the rule is not
absolute, Singleton v. Wulff, 428 U.S. 106, 121, 96
S.Ct. 2868, 2877, 49 L.Ed.2d 826 (1976); see also
Arcadia v. Ohio Power Co., 498 U.S. 73, 77, 111 S.Ct.
415, 418, 112 L.Ed.2d 374 (1990); id. at 86, 111 S.Ct.
at 422 (concurring opinion); U.S. National Bank v.
Independent Insurance Agents of America, Inc.,
US. 4 - 113 S.Ct. 2173, 2178-79, 124
L.Ed.2d 402 (1993), a point upon which we have built
in carving an exception for plain errors in civil cases.
(The civil rules contain no counterpart to Rule 52(a)
of the criminal rules, which allows reversal on the basis
44a
of plain errors even if they had not been drawn to the
attention of the trial court.) Deppe v. Tipp, 863 F.2d
1356, 1362 (7th Cir.1988). Occasional flat statements
in our cases that there is no plain error doctrine in civil
cases, e.g., United States v. Caputo, 978 F.2d 972, 974
(7th Cir.1992), which puzzled the court in Hudak v.
Jepsen of Illinois, 982 F.2d 249, 251 n. 1 (7th Cir.
1992), implicitly refer to error in jury instructions, a
setting to which Rule 51 of the civil rules has been inter-
preted to make the doctrine of plain error inapplicable.
Deppe v. Tripp, supra, 863 F.2d at 1361-62.
Forfiture is a sanction, and sanctions should be related
to harm done or threatened. In the rare case in which
failure to present a ground to the district court has caused
no one—not the district judge, not us, not the appellee—
any harm of which the law ought to take note, we have
the power and the right to permit it to be raised for the
first time to us. Rosser v. Chrysler Corp., 864 F.2d
1299, 1306 n. 7 (7th Cir.1988); Charlton v. United
States, 743 F.2d 557, 561 n. 5 (7th Cir.1984) (per
curiam). This is a suitable case in which to exercise our
power of lenity. The new ground is fully argued in the
brief of the appellant, so that Elkhart had—and it took
—a full opportunity to respond. The ground rests en-
tirely on a pure issue of statutory interpretation, as to
which the district judge’s view, while it would no doubt
be interesting, could have no effect on our review, which
is plenary on matters of law. It is unrealistic to think
that if Detrex had made the argument to the district
court and prevailed, there would have been no appeal.
The appeal just would have been filed by Elkhart rather
than by Detrex. The issue having been fully briefed and
argued, there is no reason to defer its resolution to an-
other case. There will be no better time to resolve the
issue than now.
Each of the tanker trucks owned by Detrex in which
it delivered TCE to Elkhart constituted prima facie a
45a
“facility” within the meaning of the Superfund law,
§ 9601(9)(A), contained a hazardous substance, namely
TCE, and “disposed of” it when the truck spilled it,
because the statute defines disposal to include spilling.
§§ 6903(3), 9601(29). The statutory definition of fa-
cility excludes, however, a “consumer product in con-
sumer use.” § 9601(9). Neither party suggests that the
term “consumer product” is limited to products used by
consumers as distinct from ones consumed by business
firms and other institutions. Dayton Independent School
District v. U.S. Mineral Products Co., 906 F.2d 1059,
1065-66 (5th Cir.1990), holds, correctly in our view,
that asbestos products incorporated into walls and ceilings
of school buildings are consumer products within the
meaning of the Superfund law. The difficult question is
whether the reference to consumer product in section
9601(9), the definition of “facility,” is to be read literally.
If it is read literally, the only consumer product ex-
empted by the statute is the consumer product that is a
facility. The alternative is to read the exemption as re-
ferring to facilities that contain consumer products. Un-
der this alternative reading, as long as Elkhart was using
TCE in its plant in the ordinary course, with no spills
or leaks, it was not the owner of a “facility” within the
meaning of the statute. The Dayton decision even sug-
gests that the school buildings themselves might have been
consumer products within the meaning of the statute, 906
F.2d at 1065, n. 4, and likewise Elkhart’s plant, so long
as it was merely manufacturing useful products and not
creating hazardous wastes. That, however, would be an
extraordinarily strained reading of “consumer product.”
Once Elkhart finished using the TCE in its manufactur-
ing process—once consumer use passed over into waste
disposal, as happened when Elkhart dumped the used
TCE into a waste-disposal pit on its premiscs—Elkhart
became, if the statutory reference to a facility that is a
consumer product is interpreted to mean a facility that
i
46a
contains a consumer product, a responsible person, as a
facility owner no longer sheltered by the exception for
consumer products in consumer use. Continuing with this
interpretation of the consumer-product exception, and as-
suming reasonably enough that the transportation of a
consumer product to the customer is as much a con-
sumer use as the consumption of the product in the cus-
tomer’s manufacturing process (the trucks themselves
might be thought consumer products, within the extended
meaning attached to this term in the Dayton footnote,
but we reject so strained an interpretation of the term),
we would conclude that until the TCE transported in
Detrex’s trucks spilled, it was a consumer product in
consumer use. It ceased to be in consumer use when it
spilled; but the spilled TCE was no longer in the trucks
or any other property owned by Detrex, and when it
hit the ground it was in premises owned by Elkhart, and
Elkhart thus became the facility owner and a responsible
person.
This approach does excessive violence to the statutory
language. The exception is for facilities that are con-
sumer products in consumer use, not for consumer prod-
ucts contained in facilities. Although read as it is writ-
ten the exception is narrow, it is not meaningless, for the
statute defines “facility” so broadly that it could be
thought to include a can of lye. Since Detrex, not Elk-
hart, was responsible for the environmental damage re-
sulting from the spillage of TCE from Detrex’s trucks,
there is no anomaly, so far as the purpose of the Super-
fund statute is concerned, in deeming Detrex a respon-
sible person along with Elkhart. A literal interpretation
that furthers the statute’s purpose is hard to beat.
Irrespective of the issue of consumer product and con-
sumer use, however, Detrex was a responsible person
with respect to the TCE that was spilled by trucks owned
by Transport Services to carry the stuff to the Elkhart
plant Detrex “arranged with a transporter for transport
47a
for disposal or treatment” of TCE. § 9607(a)(3). De-
trex hired a transporter, all right, but it did not hire it
to spill TCE on Elkhart’s premises. Although the stat-
ute defines disposal to include spilling, the critical words
for present purposes are “arranged for.” The words
imply intentional action. The only thing that Detrex
arranged for Transport Services to do was to deliver
TCE to Elkhart’s storage tanks. It did not arrange for
spilling the stuff on the ground. No one arranges for
an accident, except in the sinister sense, not involved
here, of “staging” an accident—that is, causing deliberate
harm but making it seem accidental.
Statutes sometimes use words in nonstandard senses,
and do so without benefit of a definitional section. (The
Superfund statute does not define “arrange for.”) Elkhart
argues that we can tell that Congress was doing that
here because the provision in question speaks of “dis-
posal” and we know that “disposal” includes accidentally
spilling. But since context determines meaning, the same
word can mean different things in different sentences—
to monopolize a conversation doesn’t mean the same
thing as to monopolize the steel industry—even in the
same statute, especially when the statute does not attempt
to impose a single meaning by defining the word. In
the context of the operator of a hazardous-waste dump,
“disposal” includes accidental spillage; in the context of
the shipper who is arranging for the transportation of a
product, “disposal” excludes accidental spillage because
you do not arrange for an accident except in the Esopian
sense illustrated by the staged accident.
The words “arranged with a transporter for transport
for disposal or treatment” appear to contemplate a case
in which a person or institution that wants to get rid of
its hazardous wastes hires.a transportation company to
carry them to a disposal site. If the wastes spill en route,
then since spillage is disposal and the shipper had ar-
ranged for disposal—though not in that form—the ship-
48a
per is a responsible person and is therefore liable for
clean-up costs. But when the shipper is not trying to
arrange for the disposal of hazardous wastes, but is ar-
ranging for the delivery of a useful product, he is not a
responsible person within the meaning of the statute and
if a mishap occurs en route his liability is governed by
other legal doctrines. It would be an extraordinary thing
to make shippers strictly liable under the Superfund stat-
ute for the consequences of accidents to common carriers
or other reputable transportation companies that the ship-
pers had hired in good faith to ship their products.
Indiana Harbor Belt R.R. v. American Cyanamid Co.,
916 F.2d 1174, 1180-81 (7th Cir.1990). The language
of the statute permits but does not compel such a result,
and we can find no evidence that it was intended.
This conclusion does not create a regulatory void.
Apart from common law liability of transportation com-
panies for chemical spills, noted in our Indiana Habor
Belt R.R. decision, there are a variety of direct regula-
tory controls over the transportation of hazardous sub-
stances, illustrated by the Hazardous Materials Transpor-
tation Act, 49 U.S.C.App. §§ 1801 et seq. And Elkhart
was responsible for the cost of cleaning up the contam-
ination resulting from the spillage from Transport Serv-
ice’s trucks if it couldn’t find any other responsible per-
sons to whom to shift that cost in whole or in part.
We conclude that Detrex was liable under the Super-
fund statute for the spillage from its own trucks (though
it may be able to shift some of that liability back to Elk-
hart by means of its suit for contribution) but not the
spillage from the trucks of the common carrier that it
hired. The judgment for Elkhart is therefore affirmed
in part and reversed in part and the case remanded to
the district court for further proceedings consistent with
this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND RE-
MANDED.
49a
UNITED STATES DISTRICT COURT
N.D. INDIANA
SOUTH BEND DIVISION
No. S88-620 (RLM)
AMCAST INDUSTRIAL CORPORATION and
ELKHART PRODUCTS CORPORATION
Vv.
DETREX CORPORATION
April 9, 1992
MEMORANDUM AND ORDER
MILLER, District Judge.
Following the order of November 18, 1991 granting
in part and denying in part the parties’ cross-summary
judgment motions, the court continued the trial and
afforded the plaintiffs, Amecast Industrial Corporation
and Elkhart Products Corporation (collectively “Am-
cast”), until December 16 to move for partial summary
judgment on the issue of damages. Amcast has filed its
motion, and the briefing is now complete. The court
assumes familiarity with the facts set forth in the No-
vember 18 order and with the procedural history of this
case. 779 F.Supp. 1519.
The court acknowledges both parties’ requests for
oral argument on this motion, but declines to hold an
oral argument in light of the court’s heavy calendar be-
50a
tween now and the scheduled trial and the court’s famil-
iarity with the case.
At the pretrial conference held on November 25, 1991,
the plaintiffs indicated that they would dismiss their
negligence and punitive damages claims without prejudice
if this second motion for partial summary judgment is
granted; if the motion is denied, these claims are sched-
uled for trial on May 11, 1992. In this motion, Amcast
bility of defendant Detrex Corporation (“Detrex”) in
asks the court to grant summary judgment as to the lia-
Count II of the complaint pursuant to 42 U.S.C. § 9607
(a)(3), as to the amount of response costs Amcast is en-
titled to recover under Counts I and II of the complaint,
and as to Detrex’s liability for Amcast’s future costs in
responding to the trichloroethylene (“TCE”) conatami-
nation at the Elkhart Products Corporation (“EPC”)
facility.
I. THE MOTION TO AMEND AND
ADD A COUNTERCLAIM
As a preliminary matter, on February 7, 1992, Detrex
moved for leave to amend its answer to include a counter-
claim under 42 U.S.C. § 9613. Trial is scheduled to
commence on May 11, and the suit has been pending
for four and a half years. Leave to amend is to be
freely given when justice so requires, Fed.R.Civ.P. 15(a),
but determination of the requirements of justice rest
within the trial court’s discretion. Campbell v. Ingersoll
Milling Machine Co., 893 F.2d 925, 927 (7th Cir.),
cert. denied 498 U.S. 844, 111 S.Ct. 127, 112 L.Ed.2d
95 (1990). Delay alone is not a sufficient basis for
denial of a requested amendment, Feldman v. Allegheny
Int'l, Inc., 850 F.2d 1217, 1225 (7th Cir. 1988), but
a presumption against amendment grows with delay.
Tamari v. Bache & Co. S.A.L., 838 F.2d 904, 908 (7th
Cir.1988).
Sla
The burden to the judicial system can justify a de-
nial of a motion to amend “even if the amendment
would cause no hardship at all to the opposing
party.” Because substantive amendments shortly be-
fore trial serve to defeat the public’s interest in
speedy resolution of legal disputes, “[a] district court
judge is entitled, in such circumstances, to refuse
to allow a plaintiff's amendment.”
Perrian v. O’Grady, 958 F.2d 192, 194 (7th Cir.1992)
(citations omitted).
The motion to amend was made three months before
trial, after years of discovery and the filing of serial
summary judgment motions. As is discussed below, de-
nial of the amendment will not prejudice Detrex’s right
to pursue its would-be counterclaim in a separate action.
Accordingly, while amendment to these pleadings would
jeopardize the trial date of a suit in its fifth year of pen-
dency, the motion’s denial will prejudice nobody.
For these reasons, the court now denies the motion to
amend.
Il. AMCAST’S SUMMARY JUDGMENT MOTION
A. Count Il
Amcast claims that it is entitled to summary judgment
on Detrex’s liability in Count II because the court has
already found that Detrex arranged for the disposal of
hazardous substances on the EPC site. In a cost recovery
action under 42 U.S.C. § 9607(a)(4)(B), a private
party must show that: (1) the defendant is a covered
person under 42 U.S.C. § 9607(a); (2) there has been
a release or threatened release of a hazardous subsmtance
from the defendant’s facility; (3) the plaintiffs incurred
response costs as a result of the release or threatened
release; and (4) the plaintiffs’ response costs were neces-
sary and consistent with the national contingency plan
(“NCP”). Dedham Water Co. v. Cumberland Farms
52a
Dairy, Inc., 889 F.2d 1146, 1150 (ist Cir.1989); B.F.
Goodrich Co. v. Murtha, 754 F.Supp. 960, 963-64 (D.
Conn.1991); Artesian Water Co. v. Government of New
Castle County, 659 F.Supp. 1269, 1278-79 (D.Del.
1987), affirmed, 851 F.2d 643 (3d Cir.1988). Amcast
notes that CERCLA liability is strict. Dedham Water
Co. v. Cumberland Farms Dairy, Inc., 889 F.2d at 1150;
Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 670,
n. 8 (5th Cir.1989); Rodenbeck v. Marathon Petroleum
Co., 742 F.Supp. 1448, 1456 (N.D.Ind.1990). The
elements of a prima facie case are straightforward and
several courts have found that liability may be resolved
in a summary judgment motion. United States v. Bliss,
667 F.Supp. 1298, 1308-09 (E.D.Mo.1987).
Amcost claims that each element of a prima facie case
for Detrex’s liability under 42 U.S.C. § 9607(a)(3)
(arranging for disposal of hazardous substances) has been
established by the November 18, 1991 order. Detrex
was found to have released hazardous substances into the
environment, and Amcast was found to have incurred
costs that were necessary and consistent with the NCP.
Detrex cannot avail itself of the statutory defenses to
liability: the environmental contamination did not re-
sult from an act of God, an act of war, or an act of a
completely independent third party. The November 18
order found that Detrex’s drivers or Detrex’s contractor,
Transport Services, were responsible for spills which oc-
curred between 1978 and 1986; therefore, Detrex is a
responsible party within the meaning of 42 U.S.C.
§ 9607(a)(3). Furthffier, Detrex “disposed” of a haz-
ardous waste when it spilled TCE at the EPC site. Am-
cast contends that the law of the case establishes the re-
maining elements of CERCLA liability. The November
18 order determined that Amcast incurred clean-up costs
that were necessary and consistent with the NCP.
Detrex responds that Amcast’s motion for summary
judgment on Count II goes beyond the order of Novem-
Te ee a
53a
ber 25. That order allowed the plaintiffs until Decem-
ber 16, 1991 to file a motion as to damages, but did
not allow the plaintiffs to file another motion for sum-
mary judgment on liability. Therefore, Detrex asks the
court to ignore the portion of the motion which requests
summary judgment as to liability under Count II.
Amcast suggests that the motion for summary judg-
ment on Count II is made in the interest of judicial econ-
omy, as it would tie up loose ends in this litigation and
allow for the presentation of a complete record on appeal.
Amcast also claims that a finding of Detrex’s liability
under Count II would not affect Detrex’s liability for
damages; whether Detrex is liable under Count I or II or
both, it is jointly and severally liable for Amcast’s re-
sponse costs.
In the alternative, Detrex asks the court to reconsider
the November 18 order and grant summary judgment in
Detrex’s favor on Count II. However, a motion for re-
consideration should not be used to relitigate matters
upon which the court has ruled. Evans, Inc. v. Tiffany
& Co., 416 F.Supp. 224, 244 (N.D.111.1976). If the
motion for reconsideration does not demonstrate mani-
fest error of law or fact or present newly discovered
evidence, it should be denied. Dresser Industries, Inc. v.
Pyrrhus AG, 936 F.2d 921, 936 (7th Cir.1991). De-
trex’s arguments as to Count II do not demonstrate mani-
fest error or present newly discovered evidence. There-
fore, the court will not reconsider Detrex’s motion for
summary judgment as to Count II.
The court finds that, in light of the order of November
18, 1991, summary judgment should be granted in the
plaintiffs’ favor as to Count II, except as to any allega-
tions related to an overfill spill.
54a
B. Count!
1. Joint and Several Liability
Detrex argues that CERCLA liability may be several
rather than joint and several, and that Detrex should be
allowed to show either the divisibility of the harm or the
degree of harm caused by Detrex. Detrex cites United
States v. Hardage, 116 F.R.D. 460, 465-66 (W.D.Okla.
1987), in which the court stated:
A careful review of the legislative history of CERCLA
establishes Congress wished to avoid mandatory joint
and several liability. The Court may impose joint
and several liability where the harm is single and
indivisible. However, defendants must be given the
opportunity to demonstrate the divisibility of the
harm and the degrees to which each defendant is
responsible. This determination of liability turns on
whether the harm caused . . . is “divisible” or “in-
divisible.” The Court notes that imposition of joint
and several liability is permissive, but not manda-
tory. Congress intended issues of liability under
CERCLA, including joint and several liability, to be
determined under traditional and evolving principles
of federal common law. The Court may also appor-
tion damages according to “the degree of involve-
ment by the parties in the generation, transportation,
treatment, storage, or disposal of the hazardous
wastes,” and “the degree of care exercised by the
parties with respect to the hazardous waste con-
cerned.” United States v. A & F Materials Co.,
578 F.Supp. 1249, 1256 (S.D.I11.1984).
(citation omitted).
Detrex suggests applying a case-by-case evaluation of
the facts in order to determine whether to impose joint
and several liability. State of Idaho v. Bunker Hill Co.,
635 F.Supp. 665, 676 (D.Idaho 1986). The Fourth Cir-
cuit applied joint and several liability in a case in which
the environmental harm was indivisible among multiple
55a
generators of hazardous wastes. However, the court
stated:
Whle CERCLA does not mandate the imposition of
joint and several liabiilty, it permits it in cases of
indivisible harm. In each case, the court must con-
sider traditional and evolving principles of federal
common law, which Congress has left to the courts
to supply interstitally.
Under common law rules, when two or more per-
sons act independently to cause a single harm for
which there is a reasonable basis of apportionment
according to the contribution of each, each is held
liable only for the portion of harm that he causes.
United States v. Monsanto Co., 858 F.2d 160, 171 (4th
Cir.1988) (citations and footnote omitted), cert. denied,
490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019
(1989).
Detrex acknowledges that it has the burden of dem-
onstrating that a reasonable basis for apportionment of
damages exists, United States v. Alcan Aluminum Corp.,
755 F.Supp. 531 (N.D.N.Y.1991); Kelly v. Thomas
Solvent Co., 727 F.Supp. 1532, 1552 (W.D.Mich.
1989), and claims that it can do so. Detrex submits the
affidavit of Mark Rowland, a groundwater hydrologist,
to demonstrate that the harms caused by Detrex are dis-
tinct from those caused by other parties. There were,
at one point, 783 gallons of TCE in the soil and ground-
water beneath the FPC facility. Detrex claims that none
of this TCE is attributable to the delivery spills for
which it is held liable. Mr. Rowland believes that the
TCE which spilled during deliveries did not reach the
soil, but evaporated without causing harm to the soil or
groundwater.
Mr. Rowland states that the maximum amount of
TCE spilled during deliveries was 49.3 gallons. This
constitutes a small percentage (6.296%) of the TCE
54a
B. Countl
1. Joint and Several Liability
Detrex argues that CERCLA liability may be several
rather than joint and several, and that Detrex should be
allowed to show either the divisibility of the harm or the
degree of harm caused by Detrex. Detrex cites United
States v. Hardage, 116 F.R.D. 460, 465-66 (W.D.Okla.
1987), in which the court stated:
A careful review of the legislative history of CERCLA
establishes Congress wished to avoid mandatory joint
and several liability. The Court may impose joint
and several liability where the harm is single and
indivisible. However, defendants must be given the
opportunity to demonstrate the divisibility of the
harm and the degrees to which each defendant is
responsible. This determination of liability turns on
whether the harm caused . . . is “divisible” or “in-
divisible.” The Court notes that imposition of joint
and several liability is permissive, but not manda-
tory. Congress intended issues of liability under
CERCLA, including joint and several liability, to be
determined under traditional and evolving principles
of federal common law. The Court may also appor-
tion damages according to “the degree of involve-
ment by the parties in the generation, transportation,
treatment, storage, or disposal of the hazardous
wastes,” and “the degree of care exercised by the
parties with respect to the hazardous waste con-
cerned.” United States v. A & F Materials Co.,
578 F.Supp. 1249, 1256 (S.D.II1.1984).
(citation omitted).
Detrex suggests applying a case-by-case evaluation of
the facts in order to determine whether to impose joint
and several liability. State of Idaho v. Bunker Hill Co.,
635 F.Supp. 665, 676 (D.Idaho 1986). The Fourth Cir-
cuit applied joint and several liability in a case in which
the environmental harm was indivisible among multiple
55a
generators of hazardous wastes. However, the court
stated:
Whle CERCLA does not mandate the imposition of
joint and several liabiilty, it permits it in cases of
indivisible harm. In each case, the court must con-
sider traditional and evolving principles of federal
common law, which Congress has left to the courts
to supply interstitally.
Under common law rules, when two or more per-
sons act independently to cause a single harm for
which there is a reasonable basis of apportionment
according to the contribution of each, each is held
liable only for the portion of harm that he causes.
United States v. Monsanto Co., 858 F.2d 160, 171 (4th
Cir.1988) (citations and footnote omitted), cert. denied,
490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019
(1989).
Detrex acknowledges that it has the burden of dem-
onstrating that a reasonable basis for apportionment of
damages exists, United States v. Alcan Aluminum Corp.,
755 F.Supp. 531 (N.D.N.Y.1991); Kelly v. Thomas
Solvent Co., 727 F.Supp. 1532, 1552 (W.D.Mich.
1989), and claims that it can do so. Detrex submits the
affidavit of Mark Rowland, a groundwater hydrologist,
to demonstrate that the harms caused by Detrex are dis-
tinct from those caused by other parties. There were,
at one point, 783 gallons of TCE in the soil and ground-
water beneath the FPC facility. Detrex claims that none
of this TCE is attributable to the delivery spills for
which it is held liable. Mr. Rowland believes that the
TCE which spilled during deliveries did not reach the
soil, but evaporated without causing harm to the soil or
groundwater.
Mr. Rowland states that the maximum amount of
TCE spilled during deliveries was 49.3 gallons. This
constitutes a small percentage (6.296%) of the TCE
56a
found in the soil and groundwater. If Detrex is not re-
sponsile for all of the delivery spills, then it is respon-
sible only for the 2.8 gallons of spillage from Detrex
trucks, or .358% of the 783 gallons of TCE. There-
fore, Detrex asserts that theer is a reasonable basis for
apportionment of damages.
This case involved but one containment, unlike the
multi-waste cases in which apportionment was unreason-
able because of the synergistic effect of commingling con-
taminants. In Kelley v. Thomas Solvent Co., 727 F.
Supp. at 1553-54, the court found joint and several lia-
bility proper because the defendants presented no evidence
demonstrating that the environmental harm was divisible.
In one of the contaminated sites, a mixture of pollutants
had migrated from the defendants’ facilities. See also
O’Neil v. Picillo, 682 F.Supp. 706 (D.R.1.1988), af-
firmed, 883 F.2d 176 (1st Cir.1989), cert. denied, 493
U.S. 1071, 110 S.Ct. 1115, 107 L.Ed.2d 1022 (1990).
Detrex distinguishes this case from United States v.
Ottati & Goss, Inc., 630 F.Supp. 1361, 1395-96 (D.N.H.
1985), in which the hazardous waste was buried in drums
throughout the site. In the case at hand, Detrex main-
tains, the TCE contamination resulting from delivery spils
was limited to the delivery area of the FPC facility.
Detrex claims that the court can apportion liability in
this case based on the quantity of TCE spilled during
delivery compared to the total TCE contamination found.
In O’Neil v. Picillo, 682 F.Supp. at 725, the court found
it impossible to determine which defendant’s waste con-
tributed in a specific manner to the contamination, be-
cause different substances of differing levels of toxicity
could commingle and have a synergistic effect. However,
the court noted: “There is no question that the number
of drums may be an appropriate criterion for apportion-
ing liability if all of the drums contained identical wastes.”
See also United States v. Monsanto Co., 858 F.2d at
172, n. 27.
57a
For these reasons, Detrex asks the court to conduct a
trial to allow it to establish the negligible amount of dam-
ages arising from its “several” liability.
Amcast cites United States v. R.W. Meyer, Inc., 889
F.2d 1497 (6th Cir.1989), cert. denied, 494 U.S. 1057,
110 S.Ct. 1527, 108 L.Ed.2d 767 (1990), in which the
court noted that the responsible parties bear the burden
of proving the divisibility of harm, and that “CERCLA
has been interpreted to impose joint and several liability
when the environmental harm is indivisible . . . and to
allow for apportionment when two or more persons in-
dependently are responsible for a single harm that is di-
visible.” 889 F.2d at 1507 (citing United States v.
Monsanto Co., 858 F.2d 160, 171-73 (4th Cir.1988) ).
The court went on to state that CERCLA permits ac-
tions for contribution among parties who are found
jointly and severally liable. 889 F.2d at 1507. Amcast
claims that although imposing joint and several liability
may result in some defendants paying more than their
share of the harm, it would further Congressional intent
for “those proven at least partially culpable to bear the
cost of the uncertainty.” O’Neil v. Picillo, 883 F.2d at
179.
Amcast notes that the volume of TCE alone is an
insufficient basis upon which to find the harm divisible,
citing United States v. Monsanto, 858 F.2d at 172-73.
However, more than one containment was found to have
caused environmental harm in the Monsanto case:
Common sense counsels that a million gallons of
certain substances could be mixed together without
significant consequences, whereas a few pints of
others improperly mixed could result in disastrous
consequences. Under other circumstances propor-
tionate volumes of hazardous substances may well be
probative of contributory harm. In this case, how-
ever, volume could not establish the effective con-
58a
tribution of each waste generator to the harm at the
» s » S18B.
858 F.2d at 172-173 (footnotes omitted).
Amcast also submits the affidavit of its expert witness,
John Mundell, to show that volume alone is an insuffi-
cient basis to divide the harm. Mr. Mundell states that
the environmental harm is indivisible because “distinct
areas indicating separate, spill events are not apparent.”
Further, the soil and groundwater diffuse chemical spills
from the source point, making it impossible to determine
whether response costs can be attributed to a particular
spill.
Amcast claims that to avoid joint and several liability,
Detrex must demonstrate a reasonable basis for appor-
tionment in addition to demonstrating the divisibility of
the harm. In United States v. South Carolina Recycling
and Disposal, Inc., 653 F.Supp. 984 (D.S.C.1984), af-
firmed in part and vacated in part, United States v.
Monsanto, 858 F.2d 160 (4th Cir.1988), cert. denied,
490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019
(1989), the district court determined that the apportion-
ment of costs of responding to environmental harm could
not be based solely on the volume of wastes each party
generated. In that case, however, unlike the case at hand,
there were several types of hazardous wastes that were
laking from containers and commingling, so it was im-
possible to ascertain the degree of harm caused by each
generator.
Although only one contaminant is involved in this ac-
tion, unlike those cases in which the court expressed
concern over commingling of contaminants, the court is
not convinced that the harm causéd at the EPC site is
readily divisible or that there is a reasonable basis for
apportionment. In light of’ Mr. Mundell’s affidavit, it
appears that the TCE contamination caused by Detrex
is not limited to a single area; the earlier summary judg-
59a
ment holdings concerning the “open valve” spill support
that conclusion. Further, the TCE spilled during deliver-
ies was less resistent to mobilization through the soil than
stillbottoms created during EPC’s processing and spilled
by EPC employees. The TCE delivered by Detrex was
also more concentrated than the TCE in stillbottoms.
Therefore, the amount spilled by EPC employees, com-
pared to the amount spilled by Detrex employees, even
if it can be determined, may not be a reasonable basis
for apportionment of response costs.
In the usual case, equitable apportionment of damages
comes into play in a contribution action or claim pur-
suant to 42 U.S.C. § 9613 after joint and several lia-
bility is imposed in a cost recovery action pursuant to
42 U.S.C. § 9607. Detrex asserts, however, that in some
CERCLA cases between private parties who are poten-
tially responsible for response costs, it is appropriate to
try liability and apportion damages in the same action.
Detrex claims that it would overlook Congressional in-
tent to require it to reimburse Amcast for one hundred
percent of its costs. Congress did not intend for minor
contributors to fund the entire cleanup of a hazardous
waste cite. United States v. A & F Materials Co., Inc.,
578 F.Supp. 1249, 1256 (S.D.II1.1984). See also O’Neil
v. Picillo, 682 F.Supp. at 725-26.
Detrex notes that in Amoco Oil Co. v. Borden, 889
F.2d at 672, the court recognized that in a cost recovery
suit between private parties, “the action is one for con-
tribution, which is specifically recognized under CERCLA.
See § 9613(f). Under that provision, a court has con-
siderable latitude in determining each party’s equitable
share.” In that case, however, the court concluded that
the environmental harm was indivisible and that the
plaintiff/owner of the property shared joint and several
liability with the defendant/vendor of the property.
In Shapiro v. Alexanderson, 741 F.Supp. 472-478-79
(S.D.N.Y.1990), the court determined that the plaintiff
60a
who was responsible for environmental harm could re-
cover contribution from other parties for response costs
based on their degree of responsibility. The Shapiro court
did not suggest, however, that the plaintiff's right to re-
cover in the § 9607 action should be delayed while the
parties litigated the degree of culpability of each party.
In Environmental Transportation Systems, Inc. v. Ensco,
Inc., 763: F.Supp. 384 (C.D.IIl.1991.), the court stated:
Section 9613(f)(1) of CERCLA states that, “[i]n
resolving contribution claims, the court may allocate
response costs among liable parties using such equi-
table factors as the court determines are appropri-
ate.” Thus, it is apparent that a finding that a
defendant is a “responsible party” under § 9607(a),
as this Court decided ENSCO was... is only the
initial inquiry. Finding that a defendant is a respon-
sible party and thus strictly liable for contribution
under § 9607(a) does not mean that all parties are
equally responsible and should share costs on a pro
rata basis. Rather, such a finding means only that
a defendant is potentially liable for contribution un-
der CERCLA depending upon the relative fault of
the parties. Once a defendant is found to be a re-
sponsible party under §9607(a), the question
shifts to how much is that defendant responsible for
under the provisions in § 9613(f)(1). Thus, ETS’s
request for pro rata assessment is rejected as pa-
tently inconsistent with the dictates of CERCLA.
Section 9613 contemplates a court’s assessing the
relative culpability of each responsible party in de-
termining the proportionate share of costs each must
bear.” United States v. Monsanto Co., 858 F.2d
160, 170 n. 29 (4th Cir.1988).
Environmental Transportation Systems, Inc. v. Ensco,
Inc., 763 F.Supp. at 388 (emphasis in original). Detrex
contends that the court should allocate fault in this ac-
tion without Detrex having to bring a separate contribu-
6la
tion action pursuant to § 9613. Amcast claims that
equitable apportionment is only applicable in suits for
contribution brought pursuant to 42 U.S.C. § 9613(f),
and not in this action, noting that Detrex did not assert
a contribution claim. Detrex initially denied all liability.
Amcast suggests that Detrex should have to abide by the
decision it made earlier in this aciton not to bring a con-
tribution claim.
Amcast cites United States v. Pretty Products, Inc.,
780 F.Supp. 1488, 1503 (S.D.Ohi01991) (“Compara-
tive fault has no place in a 9607 suit, although it cer-
tainly may be relevant in a suit for contribution under
9613.”). In O’Neil v. Picillo, 682 F.Supp. at 725-26,
the court determined that apportionment should await an
action for contribution.
I am not insensitive to the possible unfairness in-
volved in holding a few relatively small contributors
jointly and severally liable for the entire harm. In-
deed there is no question that in CERCLA actions,
like other actions involving joint tortfeasors, a court
may consider equitable factors to apportion damages
and mitigate the effects of joint and several liability.
I believe, however, that issues of fairness and equita-
ble apportionment may be more properly addressed
in a subsequent contribution action... .
This is consistent with CERCLA’s key objective
of “facilitat{ing] the prompt cleanup of hazardous
dumpsites by providing a means of financing both
governmental and private responses, and by placing
the ultimate financial burden upon those responsible
for the danger.” City of Philadelphia v. Stepan
Chemical Co., 544 F.Supp. 1135, 1142-43 (E.D.Pa.
1982). By delaying thorny considerations of equita-
ble apportionment to a later contribution proceed-
ing, the government is provided immediate funds
after the initial liability hearing to take prompt re-
medial action at the earliest opportunity. In most
62a
instances, immediate response to potential disasters
caused by seepage and migration can forestall the
accrual of considerably higher compensation costs.
(citations omitted). See also United States v. String-
fellow, 661 F.Supp. 1053, 1060 (C.D.Cal.1987).
In United States v. Kramer, 757 F.Supp. 397, 412
(D.N.J.1991), the court noted that a contribution claim
may be brought during the pendency of a cost recovery
action under 42 U.S.C. § 9607. The court allowed the
plaintiff, in that case the federal government, to recover
its responses costs, regardless of its own potential lia-
bility for contribution. United States v. Kramer, 757
F.Supp. at 414. The court further reasoned that § 9607
and § 9613 have different purposes.
Collapsing the distinction between section 107 [42
U.S.C. § 9607] and section 113 [42 U.S.C. § 9613]
ignores the clear language and structure of the stat-
ute. Section 107 imposes liability “[n]Jotwithstand-
ing any other provision or rule of law and subject
only to” the defenses set forth in seciton 107(b).
Congress enacted section 113 as a separate section
to address contribution.
[I]t would be “anomalous” to permit apportion-
ment of clean-up costs among PRPs in a section 113
action and not to permit apportionment in a section
107 action, but only if defendants in a section 107
action could not seek contribution in a section 113
action. But the structure of CERCLA does not pre-
clude consideration of equitable factors, including
the liability of a PRP who was (or is) plaintiff in
a section 107 action. Rather, CERCLA separates
those equitable factors from section 107 and con-
siders them in a section 113 contribution action. . . .
. . . CERCLA was enacted to facilitate cleanup
of the tens of thousands of hazardous waste sites in
this country. Section 107 permits the Government
63a.
or a private party to go in, clean up the mess, pay
the bill, then collect all its costs not inconsistent
with the NCP from other responsible parties—even
if plaintiff was also responsible for the contamina-
tion. Any PRP is entitled under section 113 to
bring a contribution action against other PRPs—
including the PRP who previously cleaned up the
mess and was paid for its trouble through a section
107 proceeding—to apportion costs equitably among
all the PRPs. Practically speaking, section 107 per-
mits a PRP, including the Government, to collect
all its response costs, even those that that same PRP
may be required to pay back to other PRP’s as its
equitable share in a section 113 proceeding.
What might be called a windfall for a plaintiff
PRP in a section 107 action serves as an incentive
for private parties to clean up hazardous waste sites,
to risk their own capital initially, knowing that by
then prevailing in a section 107 action, they will be
reimbursed perhaps in excess of what might be
shown in a section 113 action to have been their
equitable share. If the courts collapse the distinction
between a section 107 and 113 proceeding, there
will be less incentive for private parties to initiate
cleanup, since they would lose the use of that tempo-
rary windfall gained in a section 107 action.
United States v. Kramer, 757 F.Supp. at 416-17 (empha-
sis in original) (footnote omitted).
Many of the cases upon which Detrex relies analyzed
contribution claims under § 9613, e.g., Amoco Oil v.
Borden, 889 F.2d at 672; Shapiro v. Alexanderson, 741
F.Supp. at 479, n. 5. In Jn re Dant & Russell, Inc., 951
F.2d 246 (9th Cir.1991), the court applied § 9613 to
apportion liability in a § 9607 action, but relied in part
on the fact that the party seeking response costs had ad-
mitted CERCLA liability. Amcast has made no such
64a
admission. Further, the Dant & Russell court appor-
tioned liability within the context of a proof of claim
in a bankruptcy case.
Detrex cites FMC Corp. v. Northern Pump Co., 668
F.Supp. 1285 (D.Minn.1987), in which the plaintiff
brought a § 9607 claim and there was'no § 9613 counter-
claim. In that case, the district court determined that
one of the potentially responsible persons was not liable.
The court noted that two factors were necessary to im-
pose liability for response costs: CERCLA liability and
accountability for disposal of hazardous wastes. The
court found that one party was potentially liable under
CERCLA, but it was not accountable for disposal of
hazardous wastes. The court’s decision was based in
part on the fact that the party had been released from
liability by agreement, and that the party had not dis-
posed of hazardous wastes at the site. FMC Corp. v.
Northern Pump Co., 668 F.Supp. at 1290-91. In this
case, Detrex has not been released from liability, and
Detrex was found to have released TCE at the EPC site.
The court finds the reasoning of United States v.
Kramer, 757 F.Supp. 397, persuasive. CERCLA’s intent
is better realized when the apportionment of liability
takes place in a claim under § 9613. Section 9607 does
not provide for apportionment of liability, and has only a
limited number of defenses that do not apply to this
action. Therefore, the court concludes that it should not
engage in equitable apportionment of the parties’ liability
in this case. Apportionment will have to await Detrex’s
filing of an action under § 9613.
Detrex argues that Amcast’s earlier settlement with
former shareholder defendants should be considered in
this court’s apportionment. The plaintiffs in this action
received $1 million from the former shareholder defend-
ants. In Comerica Bank-Detroit v. Allen Industries, Inc.,
769 F.Supp. 1408 (E.D.Mich.1991), the court applied
65a
comparative fault to a CERCLA action settlement. Un-
der § 6 of the Uniform Comparative Fault Act, the plain-
tiffs’ recovery against the non-settling defendants is re-
duced by the settling defendants’ equitable share of fault.
Therefore, Detrex claims, before assigning a percentage
of fault against Detrex, the court should determine the
fault of Detrex, the plaintiffs, and the former sharehold-
ers. Detrex has submitted a considerable amount of evi-
dence in this motion and in its previous motion for sum-
mary judgment, indicating that the Elkhart Products Cor-
poration employees were responsible for some of the
TCE contamination. Many of the areas where contami-
nation occurred were separate from the delivery area,
where Detrex’s spills occurred.
For the reasons stated above, the court will not appor-
tion liability in this case. Even if apportionment were
applied against Amcast, the court would not apportion
the liability of the former shareholder defendants, as the
order of November 14, 1990 determined that the former
shareholders were not liable. The plaintiffs are entitled
to recover their response costs from Detrex.
2. Additional Costs
Amcast claims that it is entitled to recover all of its
response costs, including its attorney fees, against Detrex
in light of the court’s finding of liability on Count I.
As of November 22, 1991, Amcast had _ incurred
$1,197,082.42 in costs which it now seeks to recover.
CERCLA provides that private parties may recover “any
. . « Necessary costs of response incurred . . . consistent
with the national contingency plan.” 42 U.S.C. § 9607
(a)(4)(B). Amceast claims that its response costs in-
clude expenses incurred in storage, confinement, treat-
ment, transport, and disposal of hazardous waste, and
monitoring the effectiveness of the response. Ascon Prop-
erties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1154 (9th
Cir.1989), discusses the scope of the term “response
cost”.
66a
CERCLA does not define the term “response cost.”
However, in its definitional section, CERCLA does
define “response” as “remove, removal, remedy, and
remedial action.” 42 U.S.C. § 9601(25). These
four terms are defined in the two immediately pre-
ceding subsections, §§ 9601(23) & (24). Section
9601(23) makes clear that “removal” includes “the
cleanup . . . of released hazardous substances from
the environment.”
(citation omitted). Amcast’s response costs include the
cost of investigating the release of a hazardous substance,
as well as evaluating and producing methods to address
the release. 42 U.S.C. §§ 9601(23), (24); Tanglewood
East Homeowners v. Charles-Thomas, Inc., 849 F.2d
1568, 1575 (Sth Cir.1988); Cadillac Fairview/Califor-
nia, Inc. v. Dow Chemical Co., 840 F.2d 691, 695 (9th
Cir.1988).
a.. Indirect Costs
Amcast also contends that in addition to recovering
the costs directly related to addressing the TCE con-
tamination, it is entitled to recover such indirect costs as
labor expenses and office supplies attributable to its re-
sponse action. Of the $1,197,082.42 of costs incurred
as of November 22, 1991, $55,992.28 constituted in-
direct employee labor costs.
In T & E Industries, Inc. v. Safety Light Corp., 680
F.Supp. 696, 706-07 (D.N.J.1988), the court found that
recoverable costs under 42 U.S.C. § 9601(23) encom-
passed the value of the time the company president spent
in evaluating and mitigating the contamination problem.
See also United States v. R.W. Meyer, Inc., 889 F.2d
1497 (6th Cir.1989), cert. denied, 494 U.S. 1057, 110
S.Ct. 1527, 108 L.Ed.2d 767 (1990); and United States
v. Hardage, 733 F.Supp. 1424, 1437 (W.D.Okla.1989)
(the government was entitled to recover its indirect re-
sponse costs).
67a
Detrex contends that employee labor is not a response
cost recoverable in a CERCLA action, citing Artesian
Water Co. v. Government of New Castle County, 659
F.Supp. 1269, 1285-96 (D.Del.1987), aff'd, 851 F.2d
643 (3rd Cir.1988), which noted that Congress chose
not to provide recovery for income loss. Detrex also
cites In re Hemingway Transport, Inc., 126 B.R. 656,
663 (D.Mass.1991), aff'd, 954 F.2d 1 (1st Cir.1992),
which stated that CERCLA does not provide recovery
for employee time spent in cleanup efforts. The court
agrees with Amcast that the indirect costs of employee
labor and overhead expenses are recoverable, as such
costs are “part and parcel of all costs of the removal
action, which are recoverable under CERCLA.” United
States v. R.W. Meyer, Inc., 889 F.2d at 1503.
b.. Attorney Fees
Amcast seeks its attorney fees incurred in connection
with its response actions and this cost recovery suit, cit-
ing 42 U.S.C. § 9601(25), which states that “(t]he terms
‘respond’ or ‘response’ means [sic] remove, removal, rem-
edy, and remedial action, all such terms (including the
terms ‘removal’ and ‘remedial action’) include enforce-
ment activities related thereto.” In Pease & Curren Re-
fining, Inc. v. Spectrolab, Inc., 744 F.Supp. 945, 951
(C.D.Cal.1990), and in General Electric Co. v. Litton
Business Systems, Inc., 715 F.Supp. 949, 959 (W.D.
Mo.1989), aff'd, 920 F.2d 1415 (8th Cir.1990), cert.
denied, US. , 111 S.Ct. 1390, 113 L.Ed.2d
446 (1991), the courts determined that attorney fees
were recoverable response costs.
Detrex claims that attorney fees are not recoverable
response costs. Case law is inconsistent. Several cases
have denied attorney fees in private CERCLA actions.
State of New York v. SCA Services, Inc., 754 F.Supp.
995, 1000 (S.D.N.Y.1991), stated that the pervailing
rule is that attorneys fees are not recoverable in private
CERCLA actions and that if Congress had intended to
68a
allow recovery of attorney fees it would have so pro-
vided. See also Mesiti v. Microdot, Inc., 739 F.Supp.
57, 62 (D.N.H.1990); Regan v. Cherry Corp., 706 F.
Supp. 145, 149 (D.R.1.1989).
In Pease & Curren Refining, Inc. v. Spectrolab, Inc.,
744 F.Supp. at 950-51, the court coricluded that allowing
attorney fees as recoverable response costs would further
CERCLA’s intent to provide prompt and effective cleanup
of waste disposal sites and insure that those responsible
for the release of hazardous substances bore the cost of
response, citing Mardaz Corp. v. C.G.C. Music, Ltd.,
804 F.2d 1454, 1455 (9th Cir.1986). See also General
Electric Co. v. Litton Industrial Automation Systems, 920
F.2d at 1422. In allowing recovery of attorney fees and
litigation expenses in a cost recovery action, the court in
Bolin v. Cessna Aircraft Co., 759 F.Supp. 692, 710
(D.Kan.1991), stated:
By providing private remedies with a federal cause
of action for the recovery of necessary expenses in
the cleanup of hazardous wastes, Congress intended
§ 107 as a powerful incentive for these parties to
expend their own funds initially without waiting for
the responsible persons to take action. . . . The
court can conceive of no surer method to defeat
this purpose than to require private parties to
shoulder the financial burden of the very litigation
that is necessary to recover these costs. Thus, to the
extent that any litigation costs incurred by the plain-
tiffs fall within the meaning of the “necessary costs”
authorized under § 9607(a)(4)(B), plaintiffs are
entitled to recover such costs.
See also Key Tronic Corp. v. United States, 766 F.Supp.
865, 871-72 (E.D.Wash.1991). This court finds the
Bolin court’s position persuasive and well-taken. It would
defeat the express purpose of CERCLA to require plain-
tiffs seeking to recovery response costs to incur attorney
fees in connection with their actions to recover response
69a
costs. Enforceemnt activities recoverable under § 9607
necessarily include attorney fees, and, therefore, Amcast
may recover its attorney fees in this action.
c. Declaratory Relief
Amcast requests a declaratory judgment pursuant to
42 U.S.C. § 9613(g)(Z) that Detrex is liable for any
future costs it incurs in cleaning up the TCE contamina-
tion, claiming that such a judgment is appropriate as to
future costs because the court cannot award costs until
they are incurred. United States v. Hardage, 733 F.
Supp. at 1439; Williams v. Allied Automotive Autolite
Division, 704 F.Supp. 782, 784 (N.D.Ohio 1988); Rock-
well International Corp. v. I U International Corp., 702
F.Supp. 1384, 1388 (N.D.II1.1988).
Detrex claims that Amcast is not entitled to declara-
tory relief as to the plaintiffs’ future response costs be-
cause a trial is necessary to determine each party’s lia-
bility. CERCLA provides for a declaratory judgment on
liability for response costs in § 9607 actions. 42 U.S.C.
§ 9613(g)(2). In In re Dant & Russell, Inc., 951 F.2d
at 249-50, the court explained the propriety of declara-
tory relief as to future response costs in a CERCLA
action:
[Sections 9607 and 9613(g)‘Z)’ envision that,
before suing, CERCLA plaintiffs \i!! spend money
responding to an environmental ko’: ji. They can
then go to court and obtain reimburseinent for their
initial outlays, as well as a declaration that the re-
sponsible party will have continuing liability for the
cost of finishing the job.
This system strikes a balance between a number
of consideration. By requiring a plaintiff to take
some positive action before coming to court,
CERCLA insures that the dispute will be ripe for
judicial review. On the other hand, by not requiring
plaintiffs to perform full cleanup before coming to
70a
court, and by expressly providing for declaratory
judgments, CERCLA substantially reduces the risk
involved in performing the cleanup. This encourages
private response.
(citation omitted). See also United States v. Kramer,
757 F.Supp. at 412. ,
The court agrees, and concludes that the plaintiffs are
entitled to a declaratory judgment as to their future re-
sponse costs.
Il. CONCLUSION
For the foregoing reasons, the court hereby DENIES
the defendants’ motion to amend, and GRANTS the
plaintiffs’ motion for partial summary judgment. In light
of the plaintiffs’ representation that they will dismiss their
common law negligence claim in Count VI and their
claim for punitive damages, it appears that no issues
remain in this case, and the clerk is directed to enter
judgment in accordance with this order and the order of
November 18, 1991.
Judgment shall be entered for the plaintiffs on Counts
I, Il, IV, V, VU, VII, [X, and XIII of the plaintiffs’
complaint in the amount of $1,197,082.42 as response
costs incurred as of November 22, 1991, thus attorneys
fees, litigation expenses and prejudgment interest in sums
to be determined hereafter pursuant to District Rule 43.
Interest shall accrue on the amount of the judgment as
allowed by law. Declaratory judgment shall be entered
for the plaintiffs as to defendant Detrex’s liability for all
future response costs incurred by plaintiffs in responding
to the TCE contamination at plaintiff Elkhart Products’
plant in Elkhart, Indiana. The future response costs for
which defendant Detrex and its successors or assigns are
liable include attorneys fees, litigation and expenses and
prejudgment interest.
SO ORDERED.
Tla
UNITED STATES DISTRICT COURT
N.D. INDIANA
SOUTH BEND DIVISION
No. $88-620 (RLM)
AMCAST INDUSTRIAL CORPORATION, et al.,
Plaintiffs,
Vv.
DETREX CORPORATION, et al.,
Defendants.
Nov. 18, 1991
MEMORANDUM AND ORDER
MILLER, District Judge.
This is a CERCLA case in which the plaintiff seeks
to recover response costs against a supplier of a hazard-
ous substance, whose drivers are claimed to have spilled
the substance during deliveries. The cause comes before
the court on the motion by defendant Detrex Corpora-
tion’s for summary judgment, the plaintiffs’ motion for
partial summary judgment, and Detrex’s first and second
motions to strike portions of the documentary evidence
submitted in support of the plajatiffs’ partial summary
judgment motion. The parties’ briefing, arguments as
positive arguments of their own, began on August 19 and
appears to have come to a close on November 8.
The court acknowledges the plaintiffs’ request for oral
argument on their motion for partial summary judgment
and on the first motion to strike. However, the parties’
72a
thorough memoranda sufficiently aid the court that oral
argument will not be necessary, particularly in recognition
of the proximity of the December 2 trial date.
I. FACTS
Plaintiff Elkhart Products Corporation (“EPC”) op-
erates a manufacturing plant in Elkhart, Indiana. EPC
is a wholly owned subsidiary of plaintiff Amcast Indus-
trial Corporation (“Amcast”). Detrex manufactures
chemicals for industrial uses, including a solvent known
as trichloroethylene (“TCE”), a hazardous substance as
defined in 42 U.S.C. § 9601(14). TCE is a mutagen
and a suspected carcinogen, and human exposure to this
substance may cause eye and skin irritation, headaches,
heart disease, and liver damage.
Detrex marketed its chemicals to Indiana customers
through its Gold Shield Solvents Division in Indianapolis.
Detrex sold TCE to EPC between 1978 and 1986, mak-
ing approximately thirty-four deliveries to the Elkhart
site. Detrex was EPC’s sole supplier of TCE during those
years. Detrex employed five drivers to deliver the sol-
vent. However, for fifteen of the thirty-four deliveries,
Detrex used the services of an independent common car-
rier, Transport Services Company (“Transport”).
The plaintiffs contend that TCE was spilled when it
was delivered by Detrex or Transport drivers, contaminat-
ing the soil and groundwater. The plaintiffs assert that
the drivers spilled two to five gallons of TCE with each
delivery, and twice spilled greater quantities. One oc-
casion involved an overfilling of EPC’s tank, resulting
in a 200 to 300 gallon spill that destroyed the asphalt
pavement surrounding the tank. The other incident in-
volved the driver’s failure to close the valve of his truck,
causing a two inch stream of TCE to be discharged from
the truck as it left the EPC site.
EPC learned of the TCE groundwater contamination
in the 1980's, following an investigation of a complaint
73a
that TCE was travelling from the groundwater beneath
EPC’s plant and polluting the groundwater beneath Miles
Laboratories, a pharmaceutical manufacturer located across
the street.
The plaintiffs further allege that they expended more
than $1 million to monitor the release of TCE into the
environment, take short term action to eliminate risks,
and design and install a permanent remedy. EPC claimed
that its remedial action will cost nearly $1.5 million and
that it sustained $1 million in property damage.
In a letter dated August 27, 1986, EPC’s president
demanded that Detrex reimburse EPC for the cost of the
remedial measures. Detrex did not reimburse EPC. Am-
cast and EPC brought this action pursuant to the Com-
prehensive Environmental Response, Compensation, and
Liability Act (“CERCLA”), as amended, 42 U.S.C.
§§ 9601 et seq., and the Declaratory Judgment Act, 28
U.S.C. § 2201. The plaintiffs also sought common law
tort and contractual remedies.
Il. SUMMARY JUDGMENT STANDARD
A party seeking summary judgment must demonstrate
that no genuine issue of fact exists for trial and that the
movant is entitled to judgment as a matter of law. Fed.
R.Civ.P. 56(c); Certain Underwriters of Lloyd's v. Gen-
eral Accident Ins. Co. of America, 909 F.2d 228. 231
(7th Cir.1990). If that showing is made and the mo-
tion’s opponent would bear the burden at trial on the
matter that forms the basis of the evidence to show what
facts are in actual dispute. Lujan v. National Wildlife
Federation, US. , 110 S.Ct. 3177, 3186. 111
L.Ed.2d 695 (1990); Celotex Corp. v. Catrett, 477 US.
317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986): Sims v.
Mulcahy, 902 F.2d 524, 549 (7th Cir.), cert. denied
U.S. ——, 111 S.Ct. 249, 112 L.Ed.2d 207
(1990). If he fails to do so, summary judgment is
proper, Fitzpatrick v. Catholic Bishop of Chicago, 916
74a
F.2d 1254, 1256 (7th Cir.1990); Tatalovich v. City of
Superior, 904 F.2d 1135, 1142 (7th Cir.1990). A
genuine factual issue exists only when there is sufficient
evidence for a jury to return a verdict for the motion’s
opponent. Harbor House Condominium Ass'n v. Massa-
chusetts Bay Ins. Co., 915 F.2d 316, 320 (7th Cir.
1990); Hines v. British Steel Corp., 907 F.2d 726, 728
(7th Cir.1990). Summary judgment should be granted
if no reasonable jury could return a verdict for the mo-
tion’s opponent. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986);
Visser v. Packer Engineering Associates, Inc., 924 F.2d
655, 660 (7th Cir.1991).
The parties cannot rest on mere allegations in the
pleadings, Hughes v. Joliet Correctional Center, 931 F.2d
425, 428 (7th Cir.1991); McCarthy v. Kemper Life Ins.
Companies, 924 F.2d 683, 687 (7th Cir.1991), or upon
conclusory allegations in affidavits. Mestayer v. Wiscon-
sin Physicians Service Ins. Corp., 905 F.2d 1077, 1079
(7th Cir.1990). The court must construe the facts as
favorably to the non-moving party as the record will per-
mit, Brennan v. Daley, 929 F.2d 346, 348 (7th Cir.
1991); Soldal v. County of Cook, 923 F.2d 1241, 1245
(7th Cir.1991), and draw any permissible inferences
from the materials before it in favor of the non-moving
party, Matsushita Electric Industrial Co. v. Zenith Radio
Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538
(1986); Illinois Bell Telephone Co. v. Haines and Co.,
Inc., 905 F.2d 1081, 1087 (7th Cir.1990), as long as
the inferences are reasonable. Bank Leumi Le-Israel,
B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991). The
non-moving party must show that the disputed fact is
immaterial, or outcome-determinative, under applicable
law. Johnson v. Pelker, 891 F.2d 136, 138 (7th Cir.
1989).
The court will address the parties’ motions for sum-
mary judgment with these standards in mind.
75a
I. THE MOTIONS TO STRIKE
The plaintiffs and Detrex each seek summary judg-
ment on count I, which alleges that Detrex and its driv-
ers are strictly liable for the plaintiff's response costs un-
der 42 U.S.C. § 9607(a)(1) because Detrex is the owner
or operator of a facility from which there was a release
of hazardous substances. Detrex also moves for summary
judgment in its favor as to Count Il, IV, V, VI, VII,
VIII, IX, and XIII and the request for punitive dam-
ages in the complaint. Count Ii alleges that Detrex is
strictly liable under 42 U.S.C. § 9607(a) (3) for response
costs because Detrex arranged for the disposal of a haz-
ardous substance which caused contamination at the site.
Count IV of the complaint alleges that an implied
term existed in the contract between Detrex and the
plaintiffs that required Detrex to deliver TCE without
spillage and without causing environmental damage; the
plaintiffs claim that Detrex breached this implied term.
Count V asserts that Detrex committed a trespass when
it spilled TCE at the site. Count VI alleges negligence
by the drivers who delivered TCE, and Count VII alleges
that Detrex negligently hired and trained its delivery
drivers. Count VIII asserts Detrex is strictly liable for
damages because its delivery of TCE constituted an “ab-
normally dangerous activity.”* Count IX asserted a
nuisance claim and Count XIII asserted an indemnity
claim, but the plaintiffs have withdrawn those counts of
the complaint.
A. Evidence of the Spilis
The proposition that Detrex caused TCE to be spilled
is common to each of the counts. If there were no spills,
Detrex engaged in no “release” (Count I), engaged in no
“disposal” (Count II), breached no implied “anti-spillage™
1 The plaintiffs claimed in Count VIII that Detrex was engaged
in an “ultrahazardous activity”. However, the parties now agree
that the modern term is “abnormally dangerous activity”.
76a
provision in the contract (Count IV), did not exceed
the scope of its invitation so as to commit a trespass
(Count V), and engaged in no abnormally dangerous ac-
tivity (Count VIII). If there were no spills, the plaintiff
suffered no damages due to the negligence of Detrex’s
drivers (Count VI) or Detrex’s negligence in training or
retraining those drivers (Count VII). Detrex argues that
the plaintiffs have no admissible evidence to prove any
TCE spillage by Detrex, and has moved to strike several
portions of depositions that the plaintiffs seek to use as
proof.
Detrex argues that the court must exclude, on hearsay
grounds, see Fed.R.Ev. 802, the portions of the testimony
of Clifton Cartwright, Henry Copenhaver, Gary Emer-
son, John Graber, Ed Hosea, Richard Mann, Robert
Patterson, Dennis Selner, David Smith, and Robert Todd
in which the deponents relate that they heard about
TCE spills from others. Detrex cites Visser v. Packer
Engineering Associates, Inc., 924 F.2d 655, 659 (7th
Cir.1991), in which the Seventh Circuit noted that affi-
davits offered in opposition to a summary judgment mo-
tion were not based on personal knowledge. The court
Stated that Fed.R.Civ.P. 56(e) incorporates Fed.R.Ev.
602, and that evidence offered on summary judgment
must be based on the affiant’s or deponent’s observation
or other first-hand experience. 924 F.2d at 659. See
also Price v. Rochford, 947 F.2d 829, 833 (7th Cir.
1991) (“The court believed the articles to be inadmis-
sible. ... If so, they fail to meet the requirements of
Rule 56(e)”).
The plaintiffs respond that the court should give some
leeway as to evidence submitted at the summary judg-
ment stage because of the preliminary nature of the
proceeding, citing McFeely v. United States, 700 F.Supp.
414, 418, n. 1 (S.D.Ind.1988); and Reed v. Ford Motor
Co., 679 F.Supp. 873 (S.D.ind.1988). Although each
of those cases contain the broad language on which the
77a
plaintiffs rely, 700 F.Supp. at 418 n. 1 (“Some leeway
is given at summary judgment because of the preliminary
nature of the proceedings”); 679 F.Supp. at 875 (“the
court will not exceed evidence at this stage on grounds
of hearsay, irrelevance, or undue prejudice”), the cases’
holdings do not support an overly broad reading of Fed.
R.Civ.P. 56(e).
The McFeely court, which appears to have raised the
issue sua sponte, considered deposition testimony under
Fed.R.Ev. 804(b)(1) despite the absence of a showing
of the deponent’s unavailability, but described its deci-
sion as “generous”, and noted that, “Hearsay evidence
that does not qualify under any of the hearsay exceptions
may not be considered by the courts in ruling on a mo-
tion for summary judgment.” 700 F.Supp. at 417-18.
The Reed court considered unauthenticated documents
attached to an attorney’s affidavit, with the understanding
that the documents would be the subjects of trial stipula-
tions. These cases deal with unique circumstances. To-
gether, they support the proposition that doubts as to
admissibility should be resolved in favor of admissibility
at the summary judgment stage, but they do not support
a proposition that a summary judgment court may en-
tirely disregard evidentiary rules governing admissibility
at trial.
Accordingly, the court turns to the deposition portions
that Detrex challenges. By way of introduction, the
plaintiffs contend that the spills fall into three categories:
—the delivery spills: small quantities of a gallon or
more routinely spilled during all or most deliveries
of TCE;
—the overfill spill: an incident in which a storage
tank was overfilled, causing 200 to 300 gallons of
TCE to spill and destroy asphalt; and
—the open-value spill: an incident in which a truck
left the storage tank with the truck’s valve open,
spilling twenty-five to fifty gallons of TCE.
78a
1. Clifton Cartwright
Mr. Cartwright is EPC’s plant engineer. In his depo-
sition, he testified that Gary Emerson and Bobb Todd
told him of each of the spillage incidents, although Bob
Todd had learned of the overflow spill from another per-
son. Mr. Cartwright investigated. the spills, talking to
everybody he could think of. Detrex argues that since
Mr. Cartwright knows no more than what he was told,
his deposition tesitmony is inadmissible. Fed.R.Ev. 602,
802.
The plaintiffs respond with several arguments. First,
they argue that the Cartwright testimony is not hearsay
because it is not offered to prove the truth of the matter
asserted. Mr. Cartwright’s testimony as to the purpose
of his investigation following a spill that damaged the
asphalt, the plaintiffs contend, is offered to prove that the
plaintiffs conducted an investigation pursuant to 40 C.F.R.
§ 300.71(a)(2) (ii) (A) (1988), an essential element of
the plaintiffs’ claim in Count I. They also seem to argue
that Mr. Cartwright’s testimony is admissible under Fed.
R.Ev. 803(24). They argue that his testimony is ma-
terial and probative, and that its trustworthiness is not
seriously contested.
The court agrees that Mr. Cartwright’s testimony, if
limited to showing the conduct of the investigation, is noi
hearsay. See Fed.R.Ev. 801(c); United States v. Blan-
dina, 895 F.2d 293, 300-301 (7th Cir.1989). If so lim-
ited, his deposition testimony is not proof of any spill.
Spills may be proven only if the residual exception estab-
lished by Rule 803(24) applies.’
2 Fed.R.Ev. 803(24) provides:
A statement not specifically covered by any of the [other] ex-
ceptions [to the hearsay rule] but having equivalent circum-
stantial guarantees of trustworthiness, if the court determines
that (A) the statement is offered as evidence of a material
fact; (B) the statement is more probative on the point for
Tea es ee oe
at F
79a.
Admissibility under the residual exception established
by Rule 803(24) requires that “the statement must be
sufficiently trustworthy, material, probative, in the inter-
ests of justice, and given to opposing parties with the
proper notice.” F.T.C. v. Amy Travel Service, Inc., 875
F.2d 564, 576 (7th Cir.), cert. denied, 493 U.S. 954,
110 S.Ct. 366, 107 L.Ed.2d 352 (1989). At this point,
the court affords the plaintiffs the leeway discussed in
McFeely and Reed: the record contains no suggestion
that Detrex was given notice that the plaintiffs intended
reliance on Rule 803(24), see United States v. Wilkus,
875 F.2d 649, 655 (7th Cir.), cert. denied, 493 US.
865, 110 S.Ct. 184, 107 L.Ed.2d 139 (1989), but at
the summary judgment stage, the court will consider the
statements’ admissibility under the remaining tests.
District courts have considerable discretion in applying
the residual exception. United States v. Mokol, 939 F.2d
436, 438 (7th Cir.1991); United States v. Doerr, 886
F.2d 944, 954 (7th Cir.1989); United States v. York,
852 F.2d 221, 224 (7th Cir.1988); United States v.
Howard, 774 F.2d 838, 845 (7th Cir.1985). The re-
sidual exception is “intended to be used rarely, and only
in exceptional circumstances.” United States v. Moore,
791 F.2d 566, 573 (7th Cir.1986); Huff v. White Motor
Corp., 609 F.2d 286, 291 (7th Cir.1979).
Among the factors considered in determining whether
to apply the residual exception are the declarant’s dis-
interest, United States v. Jackson, 780 F.2d 1305, 1316
(7th Cir.1986); United States v. Howard, 774 F.2d at
845, the declarant’s motivation to lie, United States v.
York, 852 F.2d at 225, whether the statement was made
under oath, United States v. Hooks, 848 F.2d 785, 797
(7th Cir.1988); United States v. Guinan, 836 F.2d 350,
which it is offered than any other evidence which the pro-
ponent can procure through reasonable efforts; and (C) the
general purposes of these rules and the interests of justice will
best be served by admission of the statement into evidence.
80a
355 (7th Cir.), cert. denied, 487 U.S. 1218, 108 S.Ct.
2871, 101 L.Ed.2d 907 (1988); United States v. Bou-
lahanis, 677 F.2d 586, 588 (7th Cir.), cert. denied,
459 U.S. 1016, 103 S.Ct. 375, 74 L.Ed.2d 509 (1982),
the declarant’s probable motivation in making the state-
ment, United States v. Marshall, 856 F.2d 896, 901-902
(7th Cir.1988); United States v. Guinan, 836 F.2d at
355; Cook v. Hoppin, 783 F.2d 684, 691 (7th Cir.
1986), the extent of the declarant’s personal knowledge
of the events recounted in the statement, United States v.
Doerr, 886 F.2d at 956; F.T.C. v. Amy Travel Service,
Inc., 875 F.2d at 576; United States v. Snyder, 872 F.2d
1351, 1356 (7th Cir.1989), the probable accuracy of
the witness’s recounting of the declarant’s statement,
United States v. Hooks, 848 F.2d at 797, a testifying
witness’s knowledge of the statement’s contents, United
States v. Peters, 791 F.2d 1270, 1293 (7th Cir.), cert.
denied sub nom, Odoner v. United States, 479 U.S. 847,
107 S.Ct. 168, 93 L.Ed.2d 106 (1986), the declarant’s
age, United States v. York, 852 F.2d at 225, the declar-
ant’s character for truthfulness and honesty, United States
v. Snyder, 872 F.2d at 1355, the frequency with which
the declarant made similar statements, United States v.
Vretta, 790 F.2d 651, 659 (7th Cir.), cert. denied, 479
U.S. 851, 107 S.Ct. 179, 93 L.Ed.2d 115 (1986); United
States v. Howard, 774 F.2d at 846, whether the declarant
recanted the statement, United States v. Moore,.936 F.2d
1508, 1517 (7th Cir.1991), the statement’s temporal
proximity to the event related, United States v. Vretta,
790 F.2d at 659, and the existence of sufficient corrobo-
rative evidence, United States v. York, 852 F.2d at 225;
accord, United States v. Mokol, 939 F.2d at 440 (“where
the testimony is critical to the case, the trial court may
require a high degree of corroboration”).
The court also must consider whether more probative,
admissible evidence exists, United States v. Powell, 894
F.2d 895, 901 n. 5 (7th Cir.) cert. denied, US.
——, 110 S.Ct. 2189, 109 L.Ed.2d 517 (1990); United
8la
States v. Wilkus, 875 F.2d 649, 655 (7th Cir.) cert.
denied, 493 U.S. 865, 110 S.Ct. 184, 107 L.Ed.2d 139
(1989); United States v. Vretta, 790 F.2d at 658-659;
Huff v. White Motor Corp., 609 F.2d at 295, although
sheer need alone does not justify admission. United States
v. Snyder, 872 F.2d at 1355.
The court cannot find that Mr. Cartwright’s testimony
is admissible under Rule 803(24) to prove the truth of
what he was told about the spills. The cases discussed
above indicate that with very rare exceptions, the declar-
ants’ identities and the basis of the declarants’ knowledge
must be known. Without such knowledge, the court can-
not evaluate the declarants’ disinterest, motivation, per-
sonal knowledge, general truthfulness, or consistent repe-
tition. For example, in Cook v. Hoppin, 783 F.2d at
691, the court found error in admission of statements
under Rule 803(24) when the declarants’ identities were
unknown, and the declarants themselves may have based
their statements on hearsay. Under such circumstances,
the court held, an analysis cannot even begin as to
whether the statements have the requisite circumstantial
guarantees of trustworthiness.
Mr. Cartwright was asked the names of the persons
with whom he spoke, and he provided six names. He
was unable, however, to recall what he was told by each
of them. Accordingly, the analysis required by Rule
803(24) cannot be satisfied.
Mr. Cartwright’s deposition testimony may be con-
sidered, but only insofar as it is offered to establish that
the plaintiffs engaged in an investigation of the spills.
It is inadmissible, and so may not be considered on
summary judgment, to establish that spills occurred.
2. Gary Emerson
Mr. Emerson testified to having seen TCE end up on
the ground when trucks filled the tanks on ten to fifteen
occasions from the “late seventies up through early
82a
eighties”, although he could not provide exact dates.
The earliest such occasion was about 1978. Detrex
moves to strike Mr. Emerson’s testimony as irrelevant
because he did not identify the delivery company, so the
spills cannot be attributed to Detrex. Detrex argues that
this uncertainty causes the potential for unfair prejudice
to substantially outweigh the testimony’s probative value.
The court disagrees. |
The record indicates that Detrex was the plaintiffs’
sole supplier of TCE from 1978 to 1986, the years en-
compassing Mr. Emerson’s observations. That Detrex
employed Transport drivers on fifteen deliveries does not
render Mr. Emerson’s testimony unduly prejudicial, be-
cause Detrex may be liable under 42 U.S.C. § 9607
(a)(3) for arranging transport for disposal of a hazard-
ous substance.
Detrex’s motion to strike Mr. Emerson’s deposition
testimony must be denied.
3. John Graber
Mr. Graber testified that in the early to mid-1980s, he
“heard about a spill out in the back” “from different peo-
ple around the plant here, talking about it.” He heard
that somebody fell asleep while filling the tank, causing
an overflow. Detrex objects on hearsay grounds.
The plaintiffs first respond that the Graber testimony
is offered only to corroborate other evidence of the over-
flow spill. If the testimony is offered to prove the fact
of the spill, however, it is hearsay. The plaintiffs then
argue that the evidence is admissible to establish the time
of the overflow spill, placing it in the years in which
Detrex was the plaintiffs’ sole supplier of TCE. The
plaintiffs offer no authority for this use of the evidence.
Finally, the plaintiffs argue that Mr. Graber’s testimony
is admissible under Rule 803(24). Mr. Graber’s testi-
mony provides no basis for evaluating the declarant, how-
83a
ever; the sources of his information are completely un-
identified. Accordingly, for the reasons set forth in the
discussion with respect to Mr. Cartwright’s testimony,
Rule 803(24) provides no vehicle for admissibility.
Detrex’s motion to strike the deposition testimony of
Mr. Graber must be granted.
4. Ed Hosea
Mr. Hosea testified to the overflow spill that destroyed
the asphalt. He testified that he was not at the plant on
the day it occurred, but was told when he got back. He
was told by “somebody” to look at the asphalt, and “they
said” a Detrex driver had failed to hook his equipment
up properly. He was unable to recall the date.
Detrex moves to strike on hearsay grounds. The plain-
tiffs respond with the first and third arguments raised
with respect to Mr. Graber’s testimony. For the reasons
discussed above, those arguments must fail.
Detrex’s motion to strike Mr. Hosea’s testimony must
be granted.
5. Richard Mann
Mr. Mann testified to having heard of the overflow
spill and to having seen delivery spills, although he could
not specify the time period in which he observed the de-
livery spills. Detrex moves to strike the testimony con-
cerning the overflow spill as hearsay, and moves to strike
the testimony concerning the delivery spills under Rule
403.
Mr. Mann’s testimony about the delivery spills has
substantial probative value that outweighs any risk of
unfair prejudice. His testimony that the time period
about which he spoke was before the second TCE stor-
age tank was installed, an event that occurred after De-
trex became sole supplier, makes his observations rele-
84a
vant, and the risk of unfair prejudice is negligible at the
summary judgment stage.
With respect to the testimony about the overflow spill,
the plaintiffs again seek refuge in Rule 803(24). Unlike
most of the other declarants at issue in the motion to
strike. Mr. Mann identified the source of his informa-
tion: he said he heard about spill from Mr. Todd and
night watchman Dewel Abner. As is discussed below,
Mr. Todd says his information came in part from Mr.
Mann; testimony that seeks its requisite foundation of
personal knowledge from declarants who each disclaim
personal knowledge cannot be said to bear sufficient cir-
cumstantial guarantees of trustworthiness.
The case for admissibility is stronger to the extent
Mr. Mann was relating what he learned from Dewel
Abner, who has not (in this record) denied personal
knowledge. Mr. Mann’s attribution is, however, the only
mention of Mr. Abner that the court has found in the
record before it. The record contains nothing to suggest
a basis for a determination of Mr. Abner’s character for
truthfulness, the consistency of his statements, or even
the basis of his knowledge. Accordingly, the court must
conclude that Mr. Mann’s testimony about the overfill
spill is inadmissible hearsay.
The motion to strike Mr. Mann’s testimony about the
delivery spills should be denied. The motion to strike
Mr. Mann’s testimony about the overfill spills must be
granted.
6. Robert Todd
Mr. Todd was EPC’s plant engineer. He testified to
having observed the open-valve spill. He also testified
to having been told of the overflow spill by John Graber,
Dick Mann (and perhaps others), having seen the over-
flow spill’s aftermath on the asphalt parking lot, and
having suggested that the repair bill be sent to Detrex.
85a
Detrex objects to Mr. Todd’s testimony about what
caused the damage to the asphalt.
The plaintiffs respond by noting that shortly after the
overflow spill, Mr. Todd wrote a memo, now lost, about
the incident. The memo was based on information he
had received from an EPC employee with first-hand
knowledge of the incident. The memo, the plaintiffs ar-
gue, satisfied all requirements for a record of regularly
conducted activity, and hence would be admissible under
Fed.R.Ev. 803(6); accordingly, they conclude, Mr. Todd
should be able to testify to the memo’s contents in light
of its unavailability. See Fed.R.Ev. 1004.
_ The court’s research has disclosed no case that ad-
dresses the admissibility of verbal recollection of a lost
business record prepared eleven years earlier, and the
parties’ research presumably has been equally fruitless.
The cases cited by the plaintiffs relate to lost written
instruments upon which suit was based, rather than writ-
ten accounts of allegedly negligent acts. Assuming that
Mr. Todd would be allowed to testify to the content of
the lost memorandum, however, he did not do so. The
deposition contains no suggestion that he was recounting,
or was asked to recount the content of the lost memo-
randum; he was testifying to his recollection of what
others told him. That he may have made a contempo-
raneous memorandum does not render his recollection of
what others told him admissible over a hearsay objection.
The plaintiffs also argue that Mr. Todd’s testimony is
admissible under Rule 803(24). They point to the cir-
cumstantial guarantees of trustworthiness present when
one reports to his superiors, citing Litton Systems, Inc.
v. American Telephone and Telegraph Co., 700 F.2d
785, 818 (2nd Cir. 1983), cert. denied, 464 U.S. 1073,
104 S.Ct. 984, 79 L.Ed.2d 220 (1984). Mr. Todd,
however, testified that his information about the overflow
spill came from John Graber and Dick Mann. Mr.
Mann, however, testified that he learned of the overflow
86a
spill from Mr. Todd, and Mr. Graber testified that he
learned of the overflow spill from unidentified persons.
Given that both identified sources of Mr. Todd’s informa-
tion disclaim personal knowledge of the overflow spill
(although Mr. Todd also may have acquired information
from others not identified, whose personal knowledge
cannot be evaluated), the court cannot find that Mr.
Todd’s testimony bears sufficient circumstantial guaran-
tees of trustworthiness for admissibility under Rule
803 (24).
Detrex also moves to strike the portions of Mr. Todd’s
testimony in which he stated that the damage to the
asphalt was caused by TCE. The court is not willing to
hold that Mr. Todd lacks sufficient experience and train-
ing to testify that the damage he personally observed was
consistent with a spillage of TCE. Even accepting the
testimony to that extent, however, Mr. Todd has demon-
strated no basis, other than inadmissible hearsay, for any
opinion that the damage was caused by an overfill spill
or by Detrex’s negligence.
The motion to strike Mr. Todd’s testimony concerning
the overfill spill must be granted.
7. Henry Copenhaver
Mr. Copenhaver, an EPC employee, testified in his
deposition that Bob Todd had told him “that there was a
spill and that we should contact whoever was involved
in it and make them aware.” He does not recall speak-
ing to any supplier, although he identified the purchase
orders for asphalt repair. Detrex moves to strike Mr.
Copenhaver’s testimony about the conversation with Mr.
Todd.
The plaintiffs argue that Mr. Copenhaver’s testimony is
admissible to show notice to Detrex and is admissible
under Rule 803(24). As discussed with respect to the
Cartwright testimony, if the testimony is offered only to
87a
show notice, it is not hearsay. Mr. Copenhaver’s testi-
mony does not, however, show notice to Detrex; Mr.
Copenhaver denied any recollection of notifying Detrex
or any other supplicr. The plaintiffs point to the testimony
of Stan Miles of Detrex, who testified that Mr. Copen-
haver called him and said there had been a spill and that
Mr. Copenhaver would check into it. The Miles testi-
mony is probative of notice, but the Copenhaver testi-
mony is not.
The Copenhaver testimony is not admissibie under
Rule 803(24). Mr. Copenhaver knows no more about
the overfill spill than Mr. Todd told him, and Mr. Todd’s
knowledge cannot be traced to anyone with personal
knowledge of the overfill spill.
Accordingly, Detrex’s motion to strike the Copenhaver
testimony must be granted.
Robert Peterson
Mr. Peterson described the overflow spill. He dis-
claimed any personal knowledge of the spill; he heard
about it from Mr. Todd. He also testified that when he
was presented with the invoice to replace the asphalt
parking lot, someone (he does not recall who) told him
of the spill, and he relayed the information to Detrex.
Detrex moves to strike on hearsay grounds.
The plaintiffs make several arguments in support of
admissibility. First, they note that evidence introduced
to show why a person acted as he did is not hearsay,
citing United States v. Amahia, 825 F.2d 177, 181 (8th
Cir.1987). This argument is correct, although it would
preclude the court from viewing Mr. Peterson’s testimony
as substantive proof of the overflow spill. See United
States v. Martinez, 939 F.2d 412, 415 (7th Cir.1991).
The plaintiffs also argue that Mr. Peterson’s testimony
falls within Rule 803(24). Everything Mr. Peterson re-
lated about the overflow spill, however, came from Mr.
88a
Todd who, in turn, testified that his information came
entirely from persons who disclaim personal knowledge
of the overflow spill or unidentified persons. Notwith-
standing the presence of some guarantees of trustworthi-
ness inherent in a process of reporting within a business,
the evidence nonetheless amounts to a totem pole of
hearsay of undetermined length: Mr. Peterson relates
what he was told by Mr. Todd, who relates what he was
told by Messrs. Graber and Mann, who related what
they were told by others, whose personal knowledge is
uncertain.
Finally, the plaintiffs argue that Mr. Peterson’s testi-
mony is against his pecuniary interest, Fed.R.Ev. 804
(b)(3), noting that Mr. Peterson was a defeedant in
the plaintiffs’ parallel state court action. While such an
argument might* render Mr. Peterson’s statements ad-
missible, it would not render admissible statements other
persons made to Mr. Peterson; Detrex’s motion to strike
is addressed to the statements of others. See Fed.R.Ev.
805.
9. Dennis Selner
Mr. Selner testified to having seen the damage to the
asphalt after the overfill spill. What he knows about the
spill is what Mr. Todd told him. Detrex moves to strike
his testimony about the cause of the spill on hearsay
grounds. Again, the plaintiffs argue for admissibility
under Rule 803(24). As discussed above, Mr. Todd
(Mr. Selner’s source of information) had no personal
knowledge about the overfill spill, and acquired his in-
formation either from unidentified persons or from per-
sons who also lacked personal knowledge. For the rea-
sons discussed above, the court cannot find Mr. Selner’s
3 The plaintiffs would have to provide a further explanation of
why Mr. Peterson’s challenged testimony was against his pecuniary
interest, a point not immediately apparent from the deposition
excerpt.
YT ee ee
89a
challenged testimony to be admissible under Rule
803 (24).
The motion to strike Mr. Selner’s testimony about the
overfill spill must be granted.
10. David Smith
Mr. Smith testified to what Mr. Todd told him about
the overfill and open-valve spills, to having seen the
asphalt the day following the overfill spill, and to Mr.
Todd having told him about Mr. Copenhaver’s contact
with Detrex about the incident. Detrex moves to strike
these portions of Mr. Smith’s deposition testimony as
hearsay.
The plaintiffs argue that Mr. Smith’s testimony is ad-
missible under Rule 803(24). They stress the consistency
of Mr. Smith’s testimony about the overfill spill with
the accounts of others. Although consistency may be
pertinent to determining admissibility under Rule
803(24), it is not determinative; repetition does not
render hearsay admissible. More persuasive is the ab-
sence of any person shown to have personal knowledge
of the overfill spill. If, as decided above, Mr. Todd can-
not testify to what he was told about the overflow spill,
Mr. Smith cannot testify to what Mr. Todd told him.
Because the summary judgment record already con-
tains Mr. Todd’s deposition testimony (based on personal
knowledge) about the open valve spill and Mr. Miles’s
testimony about the conversation with Mr. Copenhaver,
the motion to strike the remaining challenged portions of
Mr. Smith’s testimony is moot.
The motion to strike Mr. Smith’s testimony must be
granted insofar as it relates to the overfill spill.
11. Conclusion
Following ruling on the pertinent portions of the mo-
tion to sirike, the court agrees with Detrex in part. There
90a
is no evidence in compliance with Federal Rule of Civil
Procedure 56(e) with respect to the overfill spill. To the
extent the plaintiffs’ claims arise from that allegation,
Detrex is entitled to summary judgment. There is, how-
ever, evidence of compliance with Federal Rule of Civil
Procedure 56
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