Opinion
Civil Action No. 86-1094.
August 30, 2004
MEMORANDUM
Presently before this Court is the Third-Party Plaintiff's, Consolidated Rail Corporation ("Conrail"), Motion to Dismiss the Third-Party Defendant's, American Premier Underwriters, Inc. ("APU"), Counterclaims. For the following reasons, Conrail's Motion to Dismiss APU's Counterclaims will be granted.
I. FACTUAL AND PROCEDURAL BACKGROUND
This case arises from PCB contamination at the Paoli Rail Yard and an accompanying 400-acre watershed (hereinafter referred to as "the Site"). On June 15, 2004, this Court issued three separate Memorandum Opinions in this case. One of these Opinions examined the Third Party Plaintiffs', National Railroad Passenger Corporation ("Amtrak"), Conrail and Southeastern Pennsylvania Transportation Authority ("SEPTA") (collectively the "Rail Companies"), Motion to Amend the Complaint. See Nat'l R.R. Passenger Corp., 2004 WL 1335723. As this Court noted in that Memorandum Opinion, APU contested the proposed amendment which sought to add four counts by SEPTA against APU to recover costs incurred by SEPTA "from the retrofilling of railcars that occurred at the Site in the 1980's pursuant to regulations issued under the TSCA [Toxic Substances Control Act], 15 U.S.C. §§ 2601-29 and regulations promulgated at 40 C.F.R. § 761." Id. at *2. SEPTA attempted to bring both direct cost recovery and contribution claims against APU in its proposed Amended Complaint under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and Pennsylvania's Hazardous Sites Cleanup Act ("HSCA"). The direct claims against APU were brought pursuant to Section 107, 42 U.S.C. § 9607(a), of CERCLA and Section 702, 35 PA. CONS. STAT. ANN. § 6020.702(a), of the HSCA. The contribution claims against APU were brought pursuant to Section 113, 42 U.S.C. § 9613, of CERCLA and Section 705, 35 PA. CONS. STAT. ANN. § 6020.705(a), of the HSCA. Many courts have discussed the differences between a direct cost recovery claim as opposed to one for contribution. For example, as one court has noted, "[a]lthough direct liability under § 9607 of CERCLA is generally joint and several on any defendant regardless of fault, liability for contribution under § 9613(f) is several only, granting the district court discretion to allocate response costs among liable parties." Am. Special Risk Ins. Co. v. Citizens Ins. Co. of Am., No. 97-72874, 2001 WL 1218551, at *3 (E.D. Mich. 2001) (citations omitted); see also, United States v. Union Corp., 277 F. Supp.2d 478, 485-86 (E.D. Pa. 2004) ("While a defendant in a § 107 cost-recovery action may be jointly and severally liable for the total response cost incurred by the Government, third party defendants . . . are by judicial precedent, only severally liable for contribution under § 113(f)(1). . . . In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate.") (internal quotation marks and citations omitted).
The entire factual and procedural history of this case has been well documented by this Court in other Memorandum Opinions.See e.g., United States v. Nat'l R.R. Passenger Corp., No. 86-1094, 2004 WL 1335723 (E.D. Pa. June 15, 2004). Thus, this Court will only recite the factual and procedural background relevant to the instant Motion.
In the relevant June 15, 2004 Memorandum Opinion, this Court granted in part and denied in part the Rail Companies' Motion to Amend the Complaint. Most relevant to the instant Motion, this Court affirmatively stated that "since SEPTA is a PRP [potential responsible party] under both CERCLA and the HSCA, its claims against APU for retrofilling costs under Section 107 of CERCLA and Section 702 of the HSCA will not be allowed to be added to the Third-Party Complaint." Nat'l R.R. Passenger Corp., 2004 WL 1335723, at *7. Thus, the only remaining claims arising out of the retrofilling expenditures were claims for contribution under CERCLA and the HSCA being brought by SEPTA against APU.
Pursuant to this Court's June 15, 2004 Order, the Rail Companies were required to file a new Amended Complaint pursuant to the dictates of this Court's Memorandum Opinion which allowed SEPTA to add its two contribution claims against APU under CERCLA and the HSCA, but not its direct cost recovery claims against APU. The Rail Companies filed their Amended Complaint on June 23, 2004. On July 9, 2004, APU answered the Amended Third-Party Complaint. Additionally, APU's Answer asserted Counterclaims against Conrail under CERCLA and the HSCA. APU's Counterclaims assert that Conrail should be liable to APU for contribution for any amount of monetary or other relief that might be imposed on APU arising out of SEPTA's retrofilling contribution claims. Conrail is now before this Court seeking to dismiss APU's contribution Counterclaims.
In actuality, the Rail Companies initially filed their Amended Complaint on June 21, 2004. However, the Rail Companies improperly labeled APU as American Premium Underwriters, Inc. in the caption. Thus, the Rail Companies filed a Corrected Amended Complaint on June 23, 2004 designating APU by the right title in the caption.
II. STANDARD
At the outset, it should be noted that "[a] motion to dismiss a counterclaim is decided by the same standard as a motion to dismiss a complaint." United States ex. rel. Kirsch v. Armfield, III, M.D., 56 F. Supp.2d 588, 590 (W.D. Pa. 1998) (citing FED. R. CIV. P. 12(b); Johnson v. Res. for Human Dev., Inc., 860 F. Supp. 218, 220 (E.D. Pa. 1994)). Thus, this Court will recite the standard applicable for a motion to dismiss a complaint. A motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), tests the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). A court must determine whether the party making the claim would be entitled to relief under any set of facts that could be established in support of his or her claim. Hishon v. King Spalding, 467 U.S. 69, 73 (1984) (citing Conley, 355 U.S. at 45-46); see also Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273 (3d Cir. 1985). In considering a motion to dismiss, all allegations in the complaint must be accepted as true and viewed in the light most favorable to the non-moving party. Rocks v. City of Phila., 868 F.2d 644, 645 (3d Cir. 1989) (citations omitted). However, if the facts "alleged in the pleading, even if true, fail to support the parties' claim, the court may grant a motion to dismiss."Armfield III, M.D., 56 F. Supp.2d at 560 (citing Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir. 1988)). III. DISCUSSION
Conrail makes one argument in support of its Motion to Dismiss APU's Counterclaims. Specifically, Conrail argues that since SEPTA's claims against APU arising from the retrofilling expenditures are only for contribution, any counterclaim by APU against Conrail is superfluous. This Court agrees with Conrail's position, and, thus, for the following reasons, Conrail's Motion to Dismiss APU's Counterclaims will be granted.
Conrail argues that since SEPTA is only bringing a contribution action against APU for the retrofilling costs incurred, APU's Counterclaims are superfluous. Principally, Conrail relies onNiagra Mohawk Power Corporation v. Consolidated Rail Corporation, 291 F. Supp.2d 105 (N.D.N.Y. 2003). As that court stated, the "defendants brought counterclaims against NiaMo [Niagra Mohawk Power Corporation] and cross-claims against each other defendant for indemnification and/or contribution for any liability incurred above and beyond that defendant's proportionate share." Id. at 117 (citing 42 U.S.C. § 9613(f)). In that case, NiaMo moved to dismiss all of the defendants' counterclaims. Id. at 121. That court granted NiaMo's motion to dismiss the contribution counterclaims. Id. at 121-22. While NiaMo had argued that it was entitled to contribution protection, the court stated that "[i]n this contribution action any counterclaims for contribution are superfluous and thus the issue of contribution protection is moot." Id. at 121. The court noted that NiaMo was a PRP under Section 107 of CERCLA and, thus, was precluded from bringing a direct recovery action against the defendants and could only bring a contribution action pursuant to Section 113 of CERCLA. The court went on to explain that "the action is one for contribution, and each defendant will only be liable for its proportionate share . . . No defendant in this case will be jointly and severally liable for the total damages." Id. Therefore, the court concluded that "by the very nature of a contribution action, counterclaims for contribution are superfluous. All defendants' counterclaims for contribution pursuant to CERCLA must be dismissed." Id. at 122.
As a side note, it should be noted that both Conrail and APU were parties in Niagra Mohawk Power Corporation.
This Court has already concluded that SEPTA is a PRP as it relates to its retrofilling claims. See Nat'l R.R. Passenger Corp., 2004 WL 1335723, at *3-4. Therefore, as in Niagra Mohawk Power Corporation, SEPTA can only pursue a contribution action against APU. Indeed, this Court specifically denied SEPTA's attempt to bring a direct cost recovery action against APU in the June 15, 2004 Memorandum Opinion. Therefore, APU will only be liable to SEPTA for its proportionate share, if any, thereby making any contribution counterclaim by APU against Conrail superfluous. Additionally, for the same reasons, APU's HSCA contribution Counterclaim is also superfluous.
APU makes several arguments in opposition to Conrail's Motion. First, APU states that it believes SEPTA "may be seeking more from APU than APU's equitable share of retrofill costs." (APU's Mem. in Opp'n to Conrail's Mot. to Dismiss Countercls., at 4). This Court disagrees with APU's position. This Court affirmatively denied SEPTA's attempt to bring a direct cost recovery action against APU under CERCLA and the HSCA in the June 15, 2004 Memorandum Opinion. Indeed, even SEPTA in its Reply Brief states that "SEPTA's retrofill claims against APU simply seek contribution under both CERCLA and HSCA." (Rep. Mem. in Supp. of Conrail's Mot. to Dismiss APU's Countercl., at 3). Thus, it is clear that SEPTA is only asserting contribution claims against APU under CERCLA and the HSCA for the retrofilling expenditures. This makes any contribution counterclaims by APU against Conrail under CERCLA and the HSCA superfluous and unnecessary since APU will only be liable to SEPTA for its proportionate share. See Niagra Mowhawk Power Corp., 291 F. Supp. at 121-22.
In actuality, the first argument APU makes is that the Original Motion filed by Conrail on July 26, 2004 was procedurally improper since it only contained a brief, but had no motion attached to the brief. However, on August 13, 2004, Conrail filed a Corrected Motion to Dismiss which contained a Motion along with the accompanying brief. Therefore, this first argument by APU now lacks merit.
Second, APU argues that its counterclaims must remain in place based on the doctrine of collateral estoppel. APU states that "[u]nless Conrail remains a party, any allocation determined by this Court will not be binding on Conrail." (APU's Mem. in Opp'n to Conrail's Mot. to Dismiss Countercl., at 5). APU specifically states that:
[a]rguably, SEPTA could file a separate action against Conrail, claim it is "the State" and another Court could rule that Conrail is liable for all of SEPTA's cost. Conrail could then file a contribution action against APU under state and federal law, and any allocation decided by this Court would not be binding, placing APU in the position of unfortunately paying more than its fair share.
(Id. at n. 3). This argument is unmoving because it fails to consider this Court's June 15, 2004 Memorandum Opinion. In their Motion to Amend the Third-Party Complaint, SEPTA argued that the determination of whether SEPTA was considered "a state" under CERCLA was the only applicable issue in determining whether SEPTA could move forward with its Section 107 direct cost recovery action against APU for the retrofilling costs. This Court disagreed and found that "the threshold inquiry is whether SEPTA is a PRP as it relates to its retrofilling claims." Nat'l R.R. Passenger Corp., 2004 WL 1335723, at *4. Thus, this Court only allowed SEPTA's contribution claims under CERCLA and the HSCA to move forward. Therefore, SEPTA cannot claim it is "a state" and seek all of its costs from Conrail who can then subsequently sue APU for contribution. Rather, SEPTA can only proceed with a contribution claim against Conrail if it chooses to do so. Thus, as this relates to APU, APU will only be liable for its proportionate share of the retrofilling costs, if any, to SEPTA. As this Court's June 15, 2004 Memorandum Opinion made clear, SEPTA can only pursue a contribution action since it is a PRP, thereby eliminating the possibility of Conrail bringing a contribution action against APU arising from SEPTA's costs incurred for the same reasons that APU cannot bring a contribution claim against Conrail.
IV. CONCLUSION
In conclusion, this Court will dismiss APU's Counterclaims against Conrail. SEPTA's claims against APU are only for contribution. As a result, APU's contribution Counterclaims against Conrail are superfluous and unnecessary. By the very nature of the contribution claims, APU can only be liable for its proportionate share of costs arising out of the retrofilling project. In a previous opinion, this Court held that SEPTA can only bring a contribution claim arising from the retrofilling. Therefore, this eliminates the possibility of SEPTA asserting a direct cost recovery action against Conrail at a later date. Thus, Conrail cannot be held to be jointly and severally liable as to the retrofilling costs since SEPTA can only pursue a contribution claim as a PRP, which thus eliminates the possibility of Conrail subsequently asserting a contribution counterclaim against APU arising from SEPTA's costs incurred. Rather, as stated previously, APU can only be held liable for its proportionate share since SEPTA can only pursue contribution claims arising from the retrofilling costs. Therefore, APU's contribution counterclaims are superfluous and Conrail's Motion to Dismiss APU's Counterclaims is granted.
An appropriate Order follows.