OPINION AND ORDER DENYING UNITED STATES’ MOTION TO DISMISS MICHCON’S THIRD PARTY COMPLAINT AGAINST THE UNITED STATES (Dkt. No. 120)
I. INTRODUCTION AND PROCEDURAL HISTORY
Now before the Court is the United States’ Motion to Dismiss the Third-party Complaint pursuant to Rule 12(b)(6) filed by Michigan Consolidated Gas Company (“MiehCon”). (Dkt. No. 120). MichCon filed its Response to the United States’ Motion to Dismiss on February 11, 2013. (Dkt. No. 123). The United States filed its Reply on February 21, 2013. (Dkt. No. 124). Plaintiffs Ford Motor Company and Severstal North America, LLC. (collectively “Plaintiffs”) also filed a Reply entitled “Joinder in the United States’ Request for Certification under Fed.R.Civ.P. 54(b).” (Dkt. No. 125). A hearing on this matter
The underlying CERCLA action was originally filed by Plaintiffs Ford and Sev-erstal against MichCon on August 13, 2008. (Dkt. No. 1). MichCon then filed a Counterclaim against both Plaintiffs. (Dkt. No. 40). Thereafter, United States District Judge Robert H. Cleland granted Plaintiffs’ Motion to Partially Dismiss MichCon’s Counterclaim. (Dkt. No. 55). MichCon then filed a Motion for Reconsideration (Dkt. No. 58) seeking leave to Amend the Counterclaim, and sought leave to file a Third-Party Complaint. Judge Cleland granted this Motion for Reconsideration on May 5, 2011,
In an earlier, separate case before Judge Bernard A. Friedman, Ford Motor Co. v. United States, No. 04-72018 {“Ford I”), Ford and the United States were engaged in settlement negotiations regarding the Rouge Manufacturing Complex (“RMC”). Eventually, Severstal was also included in the negotiations. {See Dkt. No. 115, Opinion and Order Granting Consent Decree, at 6). These negotiations in Ford I also revealed issues related to MichCon’s potential liability regarding the Schaefer Road Area (“SRA”). {Id.). Thereafter, Plaintiffs filed the underlying action against MichCon {“Ford II”). {Id.).
Plaintiffs contend that MichCon was involved in the mediation and given the same “factual SRA Settlement Area information that Ford, Severstal and the United States had exchanged in earlier mediations.” {Id. at 6-7). Thus, two proposed consent decrees were agreed upon by Ford, Severstal and the United States. {Id. at 7). While the first consent decree regarding the RMC was approved and entered by Judge Friedman in Ford I, he declined to enter the second consent decree regarding the SRA (“SRA CD”) because it is the subject of this litigation and directed the parties to file the SRA CD in this action. (Id.).
Thereafter, Plaintiffs filed a Second Amended Complaint (Dkt. No. 100) and then on December 21, 2011, Plaintiffs filed a Third Amended Complaint in this matter (both pursuant to stipulations). (Dkt. No. 105). Both the Second and the Third Amended Complaints asserted claims by Plaintiffs against the United States, in addition to MichCon. Plaintiffs then filed a Motion for Entry of a Consent Decree (the SRA CD). (Dkt. No. 106). MichCon opposed the entry of the SRA consent decree in a Response and Sur-Reply. (Dkt. Nos. 110 & 113).
On September 28, 2012, Judge Cleland issued an Opinion and Order granting Plaintiffs’ Motion for Entry of a Consent Decree. (Dkt. No. 115). The Consent Decree was entered on October 9, 2012. (Dkt. No. 116).
The United States filed the present motion seeking to dismiss MichCon’s Third-party Complaint on January 17, 2013. (Dkt. No. 120). On March 20, 2013, Judge Cleland entered an Order of Disqualification in this matter and the case was transferred to this Court. (Dkt. No. 128).
II. BACKGROUND
A. History of The Rouge Manufacturing Complex and The Schaefer Road Area
In the late 1910s, Ford Motor Company (“Ford”) built the Rouge Manufacturing
Among other things, the RMC engaged in coke oven production (utilizing up to 183 coke ovens) involving the destructive distillation of coal from 1919 through 1987. (TP Compl. ¶ 10). The operation of these coke ovens resulted in the production of gas and by-products. (T-P Compl. ¶ 10). Currently, the RMC is being regulated as an “active and ongoing corrective action facility under the Resource Conservation and Recovery Act (“RCRA”) and the Natural Resources and Environmental Protection Act (“NREPA”). (T-P Compl. ¶ 11).
MichCon, or its predecessor, once owned a parcel of land located immediately west of the RMC and the original River channel. (T-P Compl. ¶ 12). From 1968 until 1973, the Army Corps of Engineers (“Army Corps”) rechanneled the River in response to a 1947 flood. (T-P Compl. ¶ 14). In 1968, prior to the River being rechanneled, MichCon sold 22 acres of its land parcel to Ford. (T-P Compl. ¶ 13). Prior to the rechanneling project, these 22 acres were located on the west side (the “MichCon” side) of the original River channel, however, the rechanneling caused those acres to be relocated on the east side (the “Ford” side) of the new River channel. (T-P Compl. ¶ 14). The 22 acres are now part of a larger area known in this litigation as the Schaefer Road Area (“SRA”).
MichCon alleges that during the rechan-neling of the River, the Army Corps “excavated through an open dump operated by the City of Melvindale, a portion of Mich-Con’s former waste water ponds, sediments in the former River channel, and one of Ford’s SRA sludge ponds that Ford had operated since 1954.” (T-P Compl. ¶ 16). MichCon contends that the Army Corps’ activities “disrupted, displaced, and relocated substantial volumes of contaminated material” and that contaminated material was then used as “fill” in other areas of the SRA. (T-P Compl. ¶ 16). MichCon further alleges that the Army Corps installed a concrete channel, pea gravel bed, dewatering pipe and pressure relief vents that created a “preferential pathway” which allowed contamination to more easily migrate. (T-P Compl. ¶ 17). MichCon asserts that due to the detection of hazardous substances and metals being detected on the SRA in excess of applicable cleanup criteria, the SRA is a “facility” under CERCLA, § 101(9).
MichCon alleges that it has incurred and will continue to incur “necessary response costs” including the retention of environmental consultants who have: (1) analyzed the SRA property; (2) analyzed nearby properties; (3) analyzed the extent of the contamination at or emanating from the
B. Ford and Severstal’s Claims against MichCon and the United States
Currently Ford and Severstal North America, Inc. (“Severstal”) are involved in designing a permanent remedy for the contamination of the SRA and are under the oversight of the Michigan Department of Environmental Quality (“MDEQ”). (T-P Compl. ¶¶ 39, 40). Ford and Severstal are incurring and will continue to incur costs as a result these activities. (T-P Compl. ¶ 23; see also Ex. A, Pl.’s' First Amend. Compl.). As a result, Ford and Severstal filed the underlying action against MichCon seeking cost recovery and contribution from MichCon under CERCLA §§ 107(a) and 113(f) and NRE-PA for these costs. (Id.). In response to Ford and Severstal’s suit, MichCon filed a Counterclaim against them and also this Third-party Complaint against the United States seeking “contribution” under CERCLA, § 113(f) towards MichCon’s potential liability to Ford and Severstal and “cost recovery” under CERCLA, § 107(a). (T-P Compl. ¶¶ 25-30).
In 2Q04, Ford also sought to recover response costs from the United States in the separate but related case mentioned supra, Ford I, No. 04-72018. A consent decree between Ford, Severstal and the United States was entered in Ford I on October 19, 2011. (United States’ Br., Ex. 2). The Ford I consent decree resolved the United States’ liability as to all liability regarding contamination at or emanating from the RMC except for the liability attributable to the Army Corps’ rechannel-ing project. (United States’ Br., Ex. 2).
On October 9, 2012 the SRA CD was entered in this action between the United States, Ford and Severstal. (Dkt. No. 116; see also United States’ Br., Ex. 3). The SRA CD resolved all claims (whether asserted or not) by the Plaintiffs against the United States regarding the SRA in Ford II.
III. LEGAL STANDARD
Fed. R. Civ. P. 12(b)(6) allows for the dismissal of a case where the complaint fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss under Rule 12(b)(6), a court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh,
The Supreme Court explained that “a plaintiffs obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level....” Bell Atlantic Corp. v. Twombly,
Defendant has brought its motion pursuant to Rule 12(b)(6) but both parties refer to documents attached to the parties’ briefs and the Third-party Complaint. All of these attached documents: Plaintiffs’ First Amended Complaint, SRA CD, and the RMC Consent Decree are documents that are available on the public docket. “[DJocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in a plaintiffs complaint and are central to her claim.” Weiner v. Klais and Co., Inc.,
IV. ANALYSIS
MichCon’s Third-party Complaint sets forth two claims under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq. The first claim is a claim for contribution under § 113(f), and the second is a claim for recovery of costs under § 107(a).
A. CERCLA History and Framework
The Sixth Circuit has explained that CERCLA, “facilitates cleanup and remediation of contaminated lands, and shifts the financial burden of such environmental response actions to the parties responsible for releasing hazardous sub
(1) the owner and operator of a vessel or a facility; (2) any previous owner or operator during any time in which hazardous substances were disposed at a waste facility; (3) any person who arranged for disposal or treatment of hazardous substances at the waste facility; and (4) any person who transported hazardous substances to a waste facility.
Id., (citing Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp.,
As CERCLA was originally enacted, there was no provision which explicitly provided for a right of action for contribution. However, a number of courts held that although “CERCLA did not mention the word ‘contribution’ such a right arose either impliedly from provisions of the statute, or as a matter of federal common law.” Cooper Industries, Inc. v. Aviall Serv., Inc.,
However, courts interpreting CERCLA after the passage of SARA began to expand the reach of § 113(f) by providing an exclusive remedy to PRPs and shrink the parameters of § 107(a) by providing cost recovery only to those ‘innocent parties’. United States v. Atlantic Research Corp.,
In more recent case law, the Supreme Court attempted to flesh out the interplay between CERCLA provisions § 107(a) and § 113(f) which are so often at loggerheads. In Cooper Industries, the Supreme Court held that pursuant to the plain language of the statute, a private party may only pursue contribution under § 113(f)(1) from other PRPs subject to certain conditions, namely “during or following” a civil action under § 106 or § 107. Cooper Industries,
Three years later, in Atlantic Research, the Supreme Court addressed the issue and held that “ § 107(a) provides so-called potentially responsible parties (PRPs) [] with a cause of action to recover costs from other PRPs.” Id. at 131,
The Atlantic Research decision did not, however, resolve the tension between § 107(a) and § 113(f) but rather created a new playing field for these issues to unfold. Indeed, the Supreme Court left at least three critical questions unanswered in Atlantic Research: (1) the Supreme Court “assume[d] without deciding that § 107(a) provides for joint and several liability” (Id. at 140 n. 7,
B. Claim for Cost Recovery
The Court now turns to the instant case and the novel issue presented: whether MichCon’s claim for cost recovery under § 107(a) is barred by the SRA CD, which does not bar cost recovery claims by its plain terms. The SRA CD, states in relevant part:
The Parties agree, and by entering this Consent Decree this Court finds, that the United States is entitled, as of the Effective Date, to protection from Contribution actions or claims as provided by Section 113(f)(1) of CERCLA, U.S.C. 9613(f)(1), or as may be otherwise provided by law, for “matters addressed” in this Consent Decree. The “matters addressed” in this Consent Decree are Covered Matters as defined in Paragraph 4(b) hereof. Any rights the United States may have to obtain contribution or otherwise recover costs or damages from persons not party to this Decree are preserved.
(Dkt. No. 116, SRA CD, ¶7, emphasis added). “Covered Matters” are then defined in the SRA CD as:
any and all past or future claims, including any contractual or Tort Claims, that were, could now be or hereafter could be asserted against the United States, to the extent that they arise from or are directly related to BOTH:
(A) Activities conducted by the Army Corps of Engineers in the Schae-fer Road Settlement Area on or before the Effective Date; AND
(B) Pollutants, contaminants, solid wastes, Hazardous Wastes, and Hazardous Substances: (1) at or on the Schaefer Road Settlement Area on or before the Effective Date; (2) at or on the SchaeferRoad Settlement Area on or before the Effective Date, but which have come to be, or will after the Effective Date ... come to be, located in any [other] place; or (3) that arise out of any conditions at the Schaefer Road Settlement Area, on or before the Effective Date.
(SRA CD, ¶ 4(b)).
As explained above, MichCon concedes that Count I of its Third-party Complaint which seeks contribution under § 113(f) is barred due to the plain language of the SRA CD. However, MichCon maintains that it has a viable claim against the United States for the voluntary costs it incurred in relation to the SRA property under § 107(a).
As an initial matter, the Court notes that the United States has not asserted that MichCon fails to set forth a prima facie claim for cost recovery.
Not surprisingly, the issue at hand is one regarding the rights of a PRP under § 107(a) and § 113(f)(1). Unlike the other multitude of cases which attempt to reconcile (or skirt) the overlap between § 107(a)(4)(B) and § 113(f)(1), the added wrinkle in this case is whether the United States can bar a cost recovery claim on the basis of a consent decree that prohibits contribution claims by non-settlors.
The United States contends that Mich-Con’s status as a PRP (ergo liable under CERCLA) prevents it from invoking joint and several liability under § 107(a) for the costs it incurred. The United States argues “the [§ 107] claim fundamentally remains one for contribution because MichCon admits its own liability for the contamination being addressed that it shares with other PRPs for the Schaefer Road Area, which is being cleaned up at the behest of, and under the strict oversight of, the MDEQ.”
The reasoning behind United States’ argument is inapposite to the holding in Atlantic Research. The Supreme Court recognized in Atlantic Research that under certain circumstances PRPs can recover under both § 107(a)(4)(B) and § 113(f)(1) but the two sections “provide two clearly distinct remedies.” Id. at 137-38,
the remedies available in §§ 107(a) and 113(f) complement each other by providing causes of action “to persons in different procedural circumstances.” Section 113(f)(1) authorizes a contribution action to PRPs with common liability stemming from an action instituted under § 106 or § 107(a). And § 107(a) permits cost recovery (as distinct from contribution) by a private party that has itself incurred cleanup costs. Hence, a PRP that pays money to satisfy a settlement agreement or a court judgment may pursue a § 113(f) contribution. But by reimbursing response costs paid by other parties, the PRP has not incurred its own costs of response and therefore cannot recover under § 107(a). As a result, though eligible to seek contribution under § 113(f)(1), the PRP cannot simultaneously seek to recover the same expenses under § 107(a).
Id. at 139,
In this action, the United States relies upon a string of cases (all issued prior to Atlantic Research) for the proposition that PRP remedies under § 107(a)(4)(B) sound in “contribution.” (United States Br. at 12 n. 4). The primary case the United States relies on for this proposition is Centerior, a CERCLA case in which the United States Court of Appeals for the Sixth Circuit held a party seeking an apportionment of costs attributable to contamination for which all parties were liable was a “quintessential” claim for contribution. Id.,
contrary to Centerior’s interdependent construction of [CERCLA], Atlantic Research reiterated that the remedies provided under CERCLA are ‘clearly distinct.’ Therefore, the appropriateness of a § 107(a) cost recovery or § 113(f) contribution action varies depending onthe circumstances leading up to the action, not the identity of the parties.
ITT Indus.,
Further, the Supreme Court noted in Atlantic Research that the government “use[d] the word ‘contribution’ as if it were synonymous with any apportionment of expenses among PRPs ... [and] [t]his imprecise usage confuses the complementary yet distinct nature of the rights established in §§ 107(a) and 113(f).” Atlantic Research,
After arguing that the § 107(a) claim must be found to be a contribution claim masquerading in a sheep’s clothing (or as a cost recovery claim as it were), the United States goes on to argue that the Protection Against Claims Provision in the SRA CD bars such a claim and that to allow otherwise would wrongfully deprive it of the primary benefit of settling with Plaintiffs. (United States’ Br. at 16). The United States relies upon federal common law to make this connection contending that the language “or as may be otherwise provided by law, for ‘matters addressed’ in this Consent Decree” recognizes “the common law protection affirmed in the Protection Against Claims Provision”.
V. CONCLUSION
For all these reasons, the Court DENIES the United States’ Motion to Dismiss the Third-party Complaint (Dkt. No. 120).
IT IS SO ORDERED.
Notes
. Pursuant to the Court’s instructions at the hearing, this Opinion and Order does not address the issue of certification pursuant to Fed.R.Civ.P. 54(b). This issue will be addressed separately.
. Although ''SRA” is used in MichCon's Third-party Complaint, it is not defined. However, MichCon attaches and refers to Plaintiffs’ First Amended Complaint in its Third-party Complaint as Exhibit A. (See T-P Compl. ¶ 23, Ex. A). As the First Amended Complaint defines the SRA, the Court relies upon that definition for purposes of this motion. “The [SRA] Property, which is the principal property at issue in this litigation, is approximately 48 acres, is entirely on the east side of the new River channel, and includes the original river channel and a portion of the former [Manufactured Gas Plant] site. The 48 acres consists of the 26 acres Ford acquired in 1938[] and the 22 acres acquired in 1968[ ]." (Pis.’ First Amend. Compl. ¶ 18).
. The Court notes that "[i]n the SRA CD, the SRA Settlement Area is larger than simply the SRA. It also includes 'other small portions of land not currently or previously owned by Ford or Severstal, and the segment of the Rouge River adjacent to the 48-acre parcel.’ ” (Dkt. No. 116, Opinion and Order Granting Plaintiff's Motion for Entry of a Consent Decree, at 5 (citation omitted)).
. Except otherwise noted, section references are to the provisions of CERCLA.
. To assert a prima facie claim for cost recovery pursuant to § 107(a), a party must set forth four elements: (1) the property at issue is a "facility”; (2) there has been a "release” or “threatened release” of a hazardous substance; (3) the release has caused the plaintiff to incur “necessary costs of response” that are “consistent” with the NCP [National Contingency Plan]; and (4) the defendant is in one of four categories of potentially responsible parties. Reg’l Airport Auth. of Louisville v. LFG, LLC,
. The Court recognizes that MichCon vigorously disputes that it has admitted liability under CERCLA. However, whether Mich-Con's allegations in its Third-party Complaint amount to an admission of liability under CERCLA's strict liability framework is not an issue that need be decided at this time because even assuming MichCon’s liability, the United States' argument fails (discussed infra ). See Burlington N.,
. There is no dispute that MichCon’s claim would fall within the "matters addressed” in the SRA CD.
. The Court notes that McDermott is a maritime case upon which the Sixth Circuit has never relied for any point of federal common law. Further, the Court notes that there is no case law, binding or otherwise, on point for this particular issue (that a CERCLA consent decree may bar a cost recovery claim asserted by a non-settling party). In McDermott, the issue presented was whether "the liability of the nonsettling defendants should be calculated with reference to the jury's allocation of proportionate responsibility, or by giving the nonsettling defendants a credit for the dollar amount of the settlement.” Id. at 204,
While the Court recognizes that there are CERCLA cases which bar contribution claims of parties against private settling defendants based on judicial economy and consistency with CERCLA's objectives to obtain quick cleanups, the United States did not cite and this Court could not find, any case law in any district barring cost recovery claims of private settling defendants for these reasons. See Resp. Envtl. Solutions Alliance v. Waste Mgmt., Inc., No. 04-013,
. MichCon has asserted in its Third-party Complaint that its costs were voluntary such that the costs are not the result of a judgment, settlement or administrative order regarding the SRA. (Compl. 22). The United States argues that MichCon’s costs were not actually voluntarily incurred because they are in response to Ford and Severstal's cleanup which is compelled pursuant to a state administrative order. (United States Br. at 14). This' issue is one that implicates a question left open by the Supreme Court in Atlantic Research; whether costs compelled by an administrative order or judicial settlement are recoverable under §§ 107(a), 113(f) or both. Atl. Research,