Trinity Industries Inc v. Greenlease Holding Co
903 F.3d 333
| 3rd Cir. | 2018Background
- Greenlease owned and Greenville "North Plant" railcar manufacturing site from 1910–1986; Trinity bought it in 1986, operated until 2000, and sold in 2004. Historical operations and use of "historic fill" led to lead and other contamination.
- Pennsylvania investigated Trinity; Trinity entered a plea agreement and a PADEP consent decree requiring remedial investigation and cleanup under state Act 2; Trinity performed remediation (reacquired the site, hired Golder) costing ~$9 million.
- Trinity sued Greenlease and parent Ampco for contribution and cost recovery under CERCLA and Pennsylvania HSCA; District Court granted that Greenlease was a PRP and proceeded to allocate equitable contribution at bench trial.
- Experts proposed sharply divergent allocations: Trinity’s expert allocated ~99% to Greenlease using cost-based methodology; Greenlease’s expert allocated ~12–13% blaming historic fill and disputing some costs.
- District Court allocated responsibility by impact area and then used a volumetric (square feet/cubic yards) proxy to compute an overall allocation (83% Greenlease), then reduced Greenlease by three equitable deductions (6% for third‑party Buyer demolition effects, 5% for indemnity intent, 10% for post‑remediation property value), yielding 62% Greenlease / 38% Trinity.
- On appeal the Third Circuit affirmed pretrial rulings (no Ampco liability; indemnity did not bar contribution; costs were necessary/reasonable) but vacated the District Court’s cost allocation as procedurally and analytically flawed and remanded for recalculation consistent with the experts’ cost-based methodology.
Issues
| Issue | Plaintiff's Argument (Trinity) | Defendant's Argument (Greenlease/Ampco) | Held |
|---|---|---|---|
| Whether the purchase agreement indemnity bars statutory contribution claims | Indemnity expired after 3 years but statute-based contribution still available; Trinity may seek contribution | Indemnity and nonassumption language show parties intended no further liability between them after indemnity period | Court: Contract’s non-assumption and non-waiver clauses preserve statutory/equitable remedies; indemnity does not bar contribution (affirmed) |
| Whether Trinity’s cleanup costs were necessary and reasonable under CERCLA | Costs required by PA consent decree and Act 2; investigatory and remedial actions had nexus to contamination | Costs excessive due to lack of bidding, cost controls, and cost‑plus billing to Golder | Court: Costs had sufficient nexus and were reasonable given consent decree and record; Trinity met necessity/reasonableness burden (affirmed) |
| Whether District Court’s allocation method (volumetric proxy) was appropriate | Trinity: court should follow expert Gormley’s cost-by-activity methodology | Greenlease: volumetric method is speculative, treated square feet and cubic yards equivalently, and ignored differing per‑unit remediation costs | Court: District Court abused discretion by departing from expert cost‑based methodology and using incompatible volumetric measures; allocation vacated and remanded for correct per‑activity cost allocation (vacated in part; remanded) |
| Whether parent Ampco is directly or derivatively liable for Greenlease’s contamination | Trinity: Ampco exercised sufficient control and siphoned funds, warranting operator or alter‑ego liability | Ampco: actions were typical parent oversight; no evidence of day‑to‑day control or misuse of corporate form | Court: No material fact to support Bestfoods operator liability or veil‑piercing; Ampco not liable (affirmed) |
Key Cases Cited
- Burlington N. & Santa Fe Ry. v. United States, 556 U.S. 599 (discussing CERCLA’s purpose to place cleanup costs on responsible parties)
- United States v. Atl. Research Corp., 551 U.S. 128 (distinguishing §107 cost‑recovery from §113 contribution)
- United States v. Bestfoods, 524 U.S. 51 (standards for parent corporation direct operator liability and veil‑piercing limits)
- Beazer E., Inc. v. Mead Corp., 412 F.3d 429 (courts may consider contracting parties’ intent as an equitable factor in allocation)
- Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204 (endorsing volumetric approach only where volume correlates with cost)
- E.I. DuPont De Nemours & Co. v. United States, 432 F.3d 161 (government costs consistent with NCP are presumptively reasonable)
- Litgo N.J. Inc. v. Comm’r N.J. Dep’t of Envtl. Prot., 725 F.3d 369 (discussing equitable allocation and consideration of orphan shares and increased property value)