United States District Court, E.D. Missouri, Southeastern Division
E. JACKSON DISTRICT JUDGE
Wilson Road Development Corporation (WRDC), Brenda Dumey,
Daniel Dumey, and the Brenda Kay Dumey and Daniel E. Dumey
Revocable Living Trusts initiated this action on May 11,
2011, seeking monetary and declaratory relief under the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), as amended, 42 U.S.C. §§
9601 et seq. The defendants, Union Electric Company
d/b/a Ameren Missouri and Citizens Electric Corporation
(collectively, “the utility defendants”), have
filed counterclaims. The lawsuit stems from the discovery of
polychlorinated biphenyls (PCBs) on the Dumeys' 43.5 acre
tract of land (hereinafter, “the Dumey property”)
located downhill from and downgradient to property owned by
Missouri Electric Works, Inc., in Cape Girardeau, Missouri
(hereinafter, “the MEW site”).
assert the following CERCLA claims against the utility
defendants: First, the utility defendants are strictly,
jointly, and severally liable as “arrangers” for
the PCB contamination on the Dumey property, pursuant to 42
U.S.C. § 9607(a)(3). Second, because they are such
arrangers, the utility defendants are jointly and severally
liable to plaintiffs for $100, 796.04 in necessary response
costs plaintiffs have thus far incurred, consistent with the
National Contingency Plan (NCP), to address the
contamination, pursuant to § 9607(a)(3)(B). Third,
because the utility defendants are liable for plaintiffs'
incurred response costs, plaintiffs are automatically
entitled to a declaration that the utility defendants are
strictly, jointly, and severally liable for all future
necessary response costs plaintiffs incur consistent with the
NCP, pursuant to 42 U.S.C. § 9613(g)(2).
utility defendants bring identical, interrelated
counterclaims against plaintiffs: First, that plaintiffs are
also liable as arrangers under § 9607(a)(3), which
entitles the utility defendants to recover jointly and
severally from plaintiffs in contribution, pursuant to §
9613(f)(1). Second, because plaintiffs are liable as
arrangers under § 9607(a)(3), the utility defendants
alternatively are entitled to contribution from plaintiffs
under Missouri law. See Mo. Rev. Stat. §
August 17 and 18, 2015, the case was tried to the Court,
sitting without a jury. Having reviewed the testimony and
documentary evidence, the relevant pleadings, and the
parties' arguments, the Court now makes findings of fact
and conclusions of law as required by Rule 52(a)(1) of the
Federal Rules of Civil Procedure.
FINDINGS OF FACT
March 17, 1989, Brenda Dumey acquired the Dumey property from
Six- Thirty Corporation in satisfaction of a debt. On March
24, 2009, she placed the property into the Brenda Kay Dumey
Revocable Living Trust and the Daniel E. Dumey Revocable
Living Trust, and she and her husband, Daniel Dumey, took
title as trustees. In February 2011, the Dumeys formed WRDC.
[Doc. #348 at ¶ 16] Mrs. Dumey is the secretary,
treasurer, and sole board member of WRDC, while Mr. Dumey
serves as its president.
1952 to 1982, near what would become the Dumey property, MEW
operated a business “performing repairs and scrapping
of transformers, capacitors[, ] and other electrical
equipment containing” PCBs “in oils.” [Doc.
#269-2 at 6] MEW “repaired or scrapped more than 16,
000 transformers at the MEW [s]ite.” United States
v. Union Elec. Co., 132 F.3d 422, 429 (8th Cir. 1997);
see [Doc. #269-2 at 16] (same). Many operations MEW
performed involved draining and changing the oil inside of
those transformers, some of which contained PCBs. The
manufacture and use of PCBs was banned in the late 1970s
under the Toxic Substances Control Act, 15 U.S.C.
§§ 2601 et seq., and PCBs are identified
as a hazardous substance under CERCLA. 42 U.S.C. §
9601(14); 40 C.F.R. § 302.4.
March 27, 2008, the Morrill defendants acquired the MEW site
through a foreclosure sale. On November 12, 2009, Fronabarger
became the owner of the MEW site and later constructed a
self-storage facility there.
Investigation and Action by the Environmental Protection
to the Environmental Protection Agency (EPA), “[t]he
salvaged transformer oil was filtered through Fuller's
earth, ” which is also called “diatomaceous
earth, ” “for reuse, ” and an
“estimated 90% of the transformer oil was
recycled.” [Doc. #269-2 at 6] Though the process of
filtering used transformer oil through Fuller's earth
allowed much of the oil to be recycled, the filtering process
itself generated waste. A portion of the oil was absorbed
into the diatomaceous earth during the filtering process.
Each batch of Fuller's earth thus became contaminated
with oil (and therefore with PCBs); it was eventually so
impregnated with oil that it was no longer suitable as a
filtering mechanism. MEW disposed of PCB-contaminated
diatomaceous earth on the MEW site.
oil cannot be filtered and recycled ad infinitum.
Recycled transformer oil can be used to lubricate and
insulate a transformer, as with new oil. However, though
filtering used transformer oil rids it of impurities, the
filtering process does not alter the inevitable chemical
progression whereby the combination of wear and time renders
all such oil unrecyclable. That is so because all transformer
oil eventually loses its dielectric properties-among the
vital qualities of such oil-leaving it unfit for use in
transformers. MEW's operation is estimated to have
generated “28, 000 gallons of oil” “that
was not recycled, ” “the majority” of which
MEW disposed of onsite. Id.; see Union
Elec., 934 F.Supp. at 326-27.
began investigating MEW in the mid-1980s. On October 25,
1984, the EPA discovered over 100 55-gallon drums of
transformer oil at the MEW site, all of which contained PCBs.
Some of those drums were leaking oil. In 1986, an EPA
investigation found soil on the MEW site was contaminated
with PCBs. The EPA's “action level” or
“remediation standard” for PCB contamination in
soils such as those on the MEW site is 10 parts per million
(ppm). The surface soil on the MEW site was contaminated with
PCBs in concentrations of up to 58, 000 ppm.
investigation also raised concerns regarding the possible
spread of PCB contamination beyond the MEW site. By 1987, the
EPA's Field Investigation Team discovered PCB
contamination in the ravine that drains onto the Dumey
property. In 1988, the EPA forbid MEW from accepting any
electrical equipment containing PCBs at concentration levels
higher than 1 ppm. In 1989, the EPA discovered groundwater
contamination, and it found surface soil contamination on
over 70% of the MEW site, including over four acres of highly
contaminated surface soil. B & D Elec., 2007 WL
1395468, at *1. All transfers of transformers to MEW ceased
the same year. The MEW site was designated a
“Superfund” site and placed on the National
Priorities List (NPL) on February 21, 1990, shortly after Mrs.
Dumey acquired the Dumey property.
delineated the Superfund site into three operable units
(OUs), which, in short, include the soils on MEW site (OU-1),
groundwater (OU-2), and a wetlands south of and downgradient
to the MEW site (OU-3) that encompasses, in part, portions of
the Dumey property. Though over the years they have often
been referred to interchangeably, the Dumey property and OU-3
are not precisely coextensive. Eastern sections of the Dumey
property are not wetland areas covered by OU-3, and the OU-3
wetlands also extend in several directions beyond the borders
of the Dumey property. In any event, the contaminated areas
of the Dumey property at issue here are part of OU-3.
1988 to 1991, the EPA sent notices to potentially responsible
parties (PRPs), inviting them to participate in settlement
negotiations regarding the Superfund site. The negotiations
resulted in the entry of a consent decree between the United
States, the State of Missouri, and a group of forty-two PRPs.
The PRPs who signed the consent decree were and are legally
obligated to perform the work under the consent decree
regardless of the cost.
by signing the consent decree the PRPs did not admit
liability under CERCLA, the PRPs acknowledged that they had
sent particular transformers to MEW during its operation.
Those transformers and the responsibility units derived
therefrom in turn determined each PRP's share of response
costs for the removal and remediation efforts at the
Superfund site. See Union Elec., 132 F.3d at 429.
Among the settling PRPs were the utility defendants.
settling PRPs were later known as the Missouri Electric Works
Steering Committee (MEWSC) or the MEW Trust. The consent
decree required the MEWSC to perform soil remediation and a
groundwater study, and to reimburse the EPA for oversight
costs. Union Elec., 934 F.Supp. at 332. The MEW
Trust conducted remediation, including thermal treatment of
contaminated soil on the MEW site at OU-1, and sued MEW and
other PRPs for contribution. Soil remediation was completed
in 2000, and approved of by the EPA in its First and Second
Five-Year Review Reports, in 2004 and 2009 respectively.
issued a certificate of completion for the soil remediation
at OU-1. In March of 2014, “surface soil
sampling” conducted by the EPA “detected PCBs
above the 10 ppm cleanup standard” “near the
former MEW building, ” which “represents a
potential new exposure route” that “requires
further evaluation.” [Doc. #269-2 at 9, 24] The EPA has
determined “[a]dditional sampling is required to
confirm” the “detection” of PCBs above 10
ppm at OU-1 and to “delineate the impacted area.”
Id. at 9. Negotiations between the PRPs and the EPA
over the scope of remediation necessary for the groundwater
at OU-2 and the wetlands at OU-3 are ongoing. To date, OU-3
early as 1991, the Dumeys began efforts to sell portions of
their property. However, their efforts have been
unsuccessful. In July 2003, the MEW Trust began fieldwork on
the Dumey property, during which the PRPs constructed an
access road and installed monitoring wells, pursuant to a
license agreement with Brenda Kay Construction, Inc. (BKC),
another development corporation founded by the Dumeys. At the
behest of the EPA, the Dumeys later constructed a pond on the
Dumey property to facilitate monitoring and remediation of
the wetlands. The MEW Trust erected a fence around the pond
to restrict access in February 2007. Also, Brenda Dumey
testified that, after seeing the high school track team
running on Wilson Road, she asked the City of Cape Girardeau
to spread gravel on the road. The city agreed, and a portion
of the road was closed.
investigations of the Dumey property confirmed the presence
of PCBs by no later than 2003, and the Dumeys were aware of
Remediation Efforts by the EPA and the PRPs
of its Second Five-Year Review Report, published in August
2009, the EPA noted:
A June 2005 Ecological Risk Screening Evaluation and a June
2006 Expanded Ecological Risk Screening Evaluation was
performed at OU[-]3 confirming a presence of PCBs in fish and
other biota associated with the pond and channel in the
wetlands. Elevated concentrations of PCBs were detected in
stormwater drainage ditches adjacent to the [MEW site] along
[Doc. #104-45 at 32] Further, Mrs. Dumey admitted she was
aware the Dumey property was contaminated by July 2003. [Doc.
#104-2 at 4]; see [Doc. #104-81] (licensing the MEW
Trust to perform certain work on the Dumey property to
“address the PCB contamination, ” with Mrs.
Dumey's authorization); [Doc. #93-14 at 2] (informing
Mrs. Dumey in July 2003 that the MEW Trust would be
installing monitoring wells on the Dumey property). Thus, it
was universally understood that the Dumey property was
contaminated with PCBs years before plaintiffs tested it.
Second Five-Year Review Report, the EPA also acknowledged
that the Morrill defendants acquired the MEW site in 2008,
and remarked that those owners planned to
“redevelop” the MEW site “for commercial
uses.” [Doc. #104-45 at 18] That is, before plaintiffs
tested the Dumey property, the EPA knew-and had revealed to
the public-that the Morrill defendants were PRPs, because
they were the owners of the MEW site. See 42 U.S.C.
§ 9607(a)(1). Deed restrictions placed on the MEW site
by the EPA permitted certain “commercial and
industrial” uses of the property. [Doc. #104-45 at 28]
The EPA also put in place erosion controls. Id. In
2009, the EPA intended to annually monitor erosion at the MEW
site and to take “[n]o action” to place
“[i]nstitutional controls” on the soil there.
Id. at 29, 33.
was also aware of Fronabarger's ownership of the MEW
site; the company communicated with the EPA both before and
after it acquired the property. [Doc. #104-21 at 16] On April
28, 2010, before plaintiffs incurred response costs, the EPA
sent Fronabarger a letter explaining, inter alia,
that the “restrictions” placed on the MEW site
forbid it from using the property for certain purposes and
obligated Fronabarger to “provid[e] access to the site
for environmental response and investigation
activities.” [Doc. #104-71 at 2] Consequently, before
plaintiffs incurred any of the response costs they seek to
recover here, the EPA was aware Fronabarger owned the MEW
site, and the EPA thus knew of the company's status as a
PRP. See 42 U.S.C. § 9607(a)(1).
by 2009 the EPA was already negotiating with the utility
defendants and other PRPs a consent decree for “all
remaining work” at the Superfund site, including an
“RI/FS” and subsequent “remedial
design/remedial action (RD/RA) for the wetlands area”
on the Dumey property. [Doc. #104-45 at 8] According to the
EPA, a “protectiveness determination of the remedy at
OU[-]3 [could not] be made until further information [was]
obtained, ” which would require “necessary”
“investigation[s]” and “the collection of
data to determine the ecological risks for the”
Superfund site. Id. at 9, 11. Because gathering such
information was “necessary, ” the EPA explicitly
contemplated sampling and analyzing “the wetland
surface soils, sediments, surface water[, ] and soil”
at OU-3. Id. at 34.
planned to conduct a CERCLA-compliant “focused remedial
investigation and ecological risk assessment, ” which
was to be followed by a record of decision (ROD) for OU-3.
Id. at 11. When the EPA issued the Second Five-Year
Review Report in 2009, the agency “expected that”
the testing would “take approximately three years to
complete, ” and “at that time a protectiveness
determination” for OU-3 would “be made.”
Id. at 9. The EPA anticipated that, with agency
oversight, the PRPs would complete that investigation by
September 30, 2011, and would prepare an ecological risk
assessment for OU-3 to “determine whether there is an
unacceptable risk to the environment” by September 30,
2012. Id. at 37. The agency also issued
“Special Notice Letters” of its intention to
complete an “RI/FS and RD/RA” for OU-3, and took
additional steps to inform the public of its plans.
Id. at 30. Indeed, the investigation was
completed-albeit later than anticipated-before the EPA issued
its Third Five-Year Review Report in July 2014, which
incorporates the test results and analysis. See
the investigation, the EPA drafted and submitted to the PRPs
for negotiation a proposed Statement of Work (SOW) “for
the RI/FS for OU[-]3.” [Doc. #341-2 at 1] Among other
things, the SOW recognizes that “low levels of
PCBs” remain “in the soil and stream
sediment” at OU-3 and that PCBs have been
“detected in all fish sampled” from the pond.
Id. at 4. “The purpose of” the SOW is
“to set forth the requirements for conducting” an
RI/FS “to enable selection of a remedy to eliminate,
reduce, or control risks to human health and the environment,
” by “develop[ing] the data necessary to support
the selection of an approach for remediation of” OU-3.
Id. at 5. The SOW also tracks CERCLA's
regulatory framework vis-à-vis planning, testing, data
quality, data analysis, report generation, ensuring health
and safety during testing, cost effectiveness, “green
remediation principles, ” and community relations.
Id. at 6-11; see, e.g., 40 C.F.R.
§§ 300.420(c)(4), 300.430(a)(1).
Response Costs Claimed by Plaintiffs
seek to recoup $100, 796.04 in response costs they allegedly
incurred for work performed by two companies: S&ME and
Burnside Environmental. The Court addresses each
corporation's work in turn.
“November 15 through November 17, 2010, ” before
this litigation began, S&ME “conducted a limited
soil investigation” on the Dumey property. [Doc.
#104-42 at 1] No S&ME witness testified at trial.
Plaintiffs did not introduce into evidence at trial any
deposition transcripts, affidavits, contracts between
themselves and S&ME, or other records in which S&ME
employees or agents explained the limited soil investigation.
The only evidence plaintiffs submitted of the work S&ME
conducted consists of three invoices and a report S&ME
generated after its investigation.
first invoice, which is #444742 and is dated December 7,
2010, reflects $5, 800.00 in “labor” and $370.00
in “expenses” for: “Activities associated
with Exhibit A: Historical Site Research, ” followed by
a redacted section of text. [Doc. #104-15 at 6] No addition
description of S&ME's work is documented on that
invoice. “Exhibit A” is not attached to the
invoice, and plaintiffs have offered no explanation what that
unidentified exhibit refers to. The second page of that
invoice shows that eight S&ME employees spent a total of
sixty-five hours performing the historical site research and
the redacted work. Id. at 7.
#444742 provides no insights into what “historical site
research” was performed, why it was necessary, the
goals of the research, how those goals are connected to
remediating the Dumey property, or what specifically each
S&ME employee did to facilitate that work. For example,
an S&ME employee spent 17.5 hours working as a
“Staff Professional - Grade I” and an additional
4 hours working as a “Staff Professional - Grade
II” on the project, at different hourly rates.
Id. But the invoice does not explain those roles, or
the work that employee performed in each capacity. The first
invoice also reflects $370.00 charged for expenses to a
“subcontractor, ” “Environmental Data
Resources.” Id. (capitalization removed). No
witness from that subcontractor testified at trial, nor was
any deposition testimony or other record evidence offered to
explain what the subcontractor did, or why it was necessary.
The invoice also does not differentiate between the
historical site research and the work performed for the
second invoice, which is #444743 and is also dated December
7, 2010, shows charges of $5, 235.75 for “labor”
and $2, 581.19 for “supplies and expenses” for:
“Activities associated with Exhibit B: Site Visit,
Transportation & Lodging and Soil Assessment from
November 10, 2010 to December 1, 2010.” Id. at
4 (some capitalization removed). “Exhibit B” is
not described, nor have plaintiffs offered it into evidence.
Further, as discussed more below, S&ME's own report
reflects that it “conducted a limited soil
investigation” over a three-day period from
“November 15 through November 17, 2010.” [Doc.
#104-42 at 1] But the second invoice reflects charges for a
site visit and soil assessment from November 10, five days
before the investigation began, until December 1, weeks after
the investigation concluded. On its face the invoice does not
explain that discrepancy, nor have plaintiffs introduced
evidence to resolve it. To the extent the hours expended
before and after the investigation might encompass
pre-investigation and post-investigation activities, no facts
have been adduced so stating. Any inference that is the case
also cannot be sustained on the evidence offered because the
other invoices show charges for pre-investigation site
research and post-investigation analysis and report writing.
second invoice reflects block-billed hours without details of
each employee's activities, or why those actions were
necessary. Among other expenses billed were two S&ME
employees' “entertainment” and meal costs,
totaling $148.38. Id. at 5. S&ME also charged
plaintiffs $166.83 for “supplies, ” which
reflects $145.07 in actual expenses with a cost multiplier of
1.15, a multiplier for which no justification has been
offered. Id. S&ME's employees spent 64.25
hours performing the work in question, with the bulk of those
hours expended by two employees. Id. But only the
number of hours worked and the employees' hourly billing
rates are documented, not the actual work performed.
example, one employee worked 2.5 hours as a “CAD II,
” at $58.00 per hour. Id. No evidence before
the Court explains what a “CAD II” is, why that
employee's work was necessary, or that his hourly rate is
necessitated by the complexity of the work. As another
example, an S&ME employee worked 0.25 hours as a
“Staff Professional - Grade I, ” at an hourly
rate of $65.00, and 42 additional hours as a “Staff
Professional - Grade II, ” at $75.00 an hour.
Id. The invoice does not explain what either
professional designation means, or why the employee sometimes
worked in a “Grade I” capacity while the bulk of
his time was billed at the higher, “Grade II”
third invoice, which is #452263 and is dated February 4,
2011, is similarly uninformative. Id. at 2. S&ME
billed plaintiffs $4, 160.00 for “labor” and $8,
301.53 for “regular expenses” for:
“conference calls, project research, report writing,
senior review, analytical costs, drilling expenses, and
sampling equipment rental.” Id. (some
capitalization removed). That bill is “for professional
services rendered from November 30, 2010 through January 20,
2011.” Id. (some capitalization removed). The
first and most obvious problem is that S&ME billed
plaintiffs for “drilling expenses” and
“sampling equipment” fees for work purportedly
beginning on or after November 30, 2010. Id. But all
of S&ME's drilling and sampling occurred from
November 15 through November 17. [Doc. #104-42 at 1] No
evidence of record explains that discrepancy.
third invoice also does not detail what “project
research” was conducted, who conducted it, how many
hours they expended doing so, or why it was necessary. Nor is
there evidence of how many hours were expended on
“conference calls, ” which employees participated
in those calls, and why those calls were necessary. Though a
“senior review” of an environmental report might
be prudent, no evidence submitted shows who conducted that
review, whether such persons were qualified to review an
environmental report, what changes they made, what data
accuracy or quality-assurance plan they applied (if any), or
the hours they expended. The term “analytical
costs” is ...