The opinion of the court was delivered by: Hon. Robert Holmes Bell
This is an action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., and Part 201 of the Michigan Natural Resources and Environmental Protection Act (NREPA), Mich. Comp. Laws §§ 324.20101-324.20142, for recovery of response costs at the EPA-regulated North Bronson Industrial Area Superfund site in Bronson, Michigan.
This action was tried to the Court from August 26, 2009, through September 3, 2009. Having carefully considered the testimony, exhibits, deposition excepts, trial briefs, written closing arguments, and proposed findings of fact and conclusions of law, the Court enters this opinion incorporating its findings of fact and conclusions of law in accordance with Rule 52(a) of the Federal Rules of Civil Procedure.
ITT filed this action for cost recovery and contribution in 2005. The parties and claims that remained for trial were the following:*fn1
1. Plaintiff ITT Industries Inc.'s ("ITT")*fn2 claims for cost recovery under CERCLA § 107(a), 42 U.S.C. § 9607(a) and Part 201 of NREPA, Mich. Comp. Laws § 324.20126a, against Royal Oak Industries ("Royal Oak"), The Scott Fetzer Company ("Scott Fetzer") and L.A. Darling Company ("L.A. Darling"), for costs relating to response actions ITT performed at the former Bronson Reel facility, also known as Operable Unit 1 of the North Bronson Former Facilities Site ("NBFF OU1"). (Dkt. Nos. 88, 114.)
2. Royal Oak's counterclaim against ITT, cross-claim against Scott Fetzer and third- party claim against L.A. Darling for contribution under CERCLA § 113, 42 U.S.C. § 9613 and Part 201 of NREPA, should Royal Oak be found liable for more than its fair and equitable share of ITT's costs relating to NBFF OU1. (Dkt. No. 96.)
3. Scott Fetzer's counterclaim against ITT, cross-claim against Royal Oak, and third-party claim against L.A. Darling for contribution under CERCLA § 113, and Part 201 of NREPA, should Scott Fetzer be found liable for more than its fair and equitable share of ITT's costs relating to NBFF OU1. (Dkt. No. 112.)
4. L.A. Darling's counterclaim against ITT for contribution under CERCLA § 113, and Part 201 of NREPA, should L.A. Darling be found liable for more than its fair and equitable share of ITT's costs relating to NBFF OU1. (Dkt. No. 151.)
Resolution of these claims requires an understanding of the historical efforts to address industrial wastes and environmental contamination in the City of Bronson, in Branch County, Michigan.
Beginning in the early 1900s, as manufacturing operations began to develop in the North Bronson Industrial Area ("NBIA"), companies discharged wastewater to County Drain 30 ("CD-30"). (FPT F-8.) In response to concerns about the water quality in CD-30, the City of Bronson built an industrial sewer system with lagoons. (FPT-F9.)*fn3 Between 1939 and 1949, the Bronson Reel Company ("Bronson Reel"), H.A. Douglas Manufacturing Company, ("H.A. Douglas") (the former Scott Fetzer facility) and L.A. Darling all discharged wastewater to these western lagoons via the western industrial sewer. (FPT F-10.)
By 1948, the western lagoons were reaching capacity, and the City of Bronson constructed new lagoons located in the northeast corner of the NBIA, which were commonly referred to as the eastern lagoons. (FPT F-11.) In 1949, the western industrial sewer overflowed in several areas along Railroad Street, causing storm sewer infiltration of wastewater. (Stephens Test.; Exs. 6052, 6053). Beginning in 1949, wastewater from the former Scott Fetzer and L.A. Darling sites was re-directed to the new eastern lagoons via the eastern industrial sewer which ran north along Matteson Street. The Bronson Reel facility continued to discharge wastewater to the western lagoons via the western industrial sewer. (FPT F-12, F-68, F-58, F-59.)
In 1979, the Michigan Department of Natural Resources ("MDNR" n/k/a Michigan Department of Environmental Quality "MDEQ") detected trichloroethylene*fn4 ("TCE") in groundwater samples from six monitoring wells in the vicinity of the western disposal lagoons in northwest Bronson. (FPT F-1.) TCE is commonly used as an industrial solvent for cleaning and degreasing and was likely in the waste streams of facilities which discharged to the eastern and western-lagoons. (Ex. 5004, Warzyn RI, iii.)
In 1986, the U.S. Environmental Protection Agency ("EPA") included the NBIA on the National Priorities List for investigation and potential remediation of hazardous wastes under CERCLA. (Ex. 5004, Warzyn RI 2-1). The NBIA site covers approximately 220 acres, and is currently comprised of two operable units ("OUs"):
* NBIA OU1 includes the western and eastern industrial wastewater lagoons, sediments, and portions of CD-30, groundwater impacted by the lagoons discharging to CD-30, and exposure to groundwater throughout the NBIA site.
* NBIA OU2 includes the western and eastern industrial sewers and groundwater impacted by releases from the industrial sewers. (FPT F-2.)
The MDNR retained Warzyn Inc. to conduct a Remedial Investigation ("RI"_ of the NBIA. (Ex. 5004, Warzyn RI 1-1.) Warzyn conducted its field activities in 1988-1989, and filed its Remedial Investigation in 1993. The predominant contaminants found by Warzyn at the NBIA site were chlorinated ethene compounds, including TCE, and metals, including cadmium, chromium, copper, nickel, and zinc. (Id. at ii-iii.) The Warzyn RI found high concentrations of TCE in soil and groundwater at the L.A. Darling site and the Scott Fetzer site. (Id. at 5-38). TCE concentrations of 2,700 ug/L were found at MW21 on the L.A. Darling Site (id. at 5-21), and TCE concentrations of 30,000 ug/L were found at MW20 on the Scott Fetzer site (id. at 5-29). The Warzyn RI identified a regional groundwater plume of volatile organic compounds ("VOCs"), including TCE, and identified the L.A. Darling Sub-Area and the Scott Fetzer Sub-Area as potential sources of the TCE. (Id. at ii-iii.)
In 1996 and 1998 the MDEQ conducted field investigations regarding NBIA OU2, the industrial sewers. (Dkt. No. 6008, MDEQ NBIA OU2 Tech. Memo at 3.) Both VOCs and metals were found to be migrating in the groundwater. However, the contaminant of greatest concern to the EPA and the MDEQ was TCE. "Because of the relatively low mobility of metals in groundwater, the risk associated with metals is believed to be minimal when compared to the mobility and risk associated with the VOCs." (Id. at9.) TCE, which was the most frequently reported VOC, was detected in fifty-eight of sixty-nine groundwater samples. (Id. at5-6.) At L.A. Darling, TCE was detected in all seven groundwater samples, with the highest level at 28,000 ppb. (Id. at10.) At Scott Fetzer TCE was detected in numerous groundwater samples, with the highest level at 21,000 ppb. (Id. at 11.) TCE was also detected in groundwater samples from three locations north and down gradient of Bronson Reel, in close proximity to the industrial sewer line (GPW4, GPW5, and GPW6), with the highest concentration of 3,900 ug/kg detected at GPW4. (Ex. 6008 at 7; Ex. 1423, Map of Sample Locations Prior to SRI.) According to the MDEQ, the source of the TCE in the samples down gradient of Bronson Reel "may have been handling or disposal practices at the [Bronson Reel] facility, or releases from the industrial sewer." (Ex. 6008 at 11.) The MDEQ concluded that the industrial sewer, portions of the storm sewer, L.A. Darling, Scott Fetzer and Bronson Reel, appeared to be source areas of environmental contamination at the NBIA. (Id. at10-11.)
In March of 1999, ITT, Scott Fetzer, L.A. Darling, Bronson Plating and the City of Bronson, all of which were associated with facilities that had historically discharged industrial waste water into the NBIA sewers and lagoons, entered into a Consent Decree with EPA regarding response activities and costs incurred with respect to the NBIA. (FPT F-3.) On September 27, 2000, the EPA issued a Special Notice Letter to ITT, Scott Fetzer and L.A. Darling with respect to the industrial sewers, NBIA OU2. (FPT-F38.) The primary goal of the NBIA OU2 Special Notice was to investigate regional groundwater impacted by VOCs (primarily TCE) originating from the industrial sewer. (Olmsted Test.) The EPA entered into negotiations with the three Special Notice recipients. Teresa Olmsted, Director of Environmental Programs at ITT, personally attended the meetings with the EPA regarding the NBIA OU2 Special Notice. Olmsted explained that the parties' discussions with the EPA centered on the difficulty of determining what VOCs were originating from the industrial sewer rather than from the facilities because the L.A. Darling and Scott Fetzer former facilities had not yet been investigated. (Olmsted Test.) During these discussions it was suggested that addressing the facility sources could identify the most significant sources to the regional plume, could limit the investigation of the industrial sewer, or could make the sewer investigation moot if the facilities were the primary sources. (Olmsted Test.) By letter dated March 8, 2001, the EPA agreed that it was critical to develop a strategy for dealing not only with the industrial sewers but with the upstream sources as well. It accordingly allowed the three Special Notice recipients to choose between investigating the industrial sewer, or ending negotiations for the industrial sewer and entering into separate agreements for the investigation of each individual former facility. (Ex. 6124, EPA 03/08/2001 letter.) The three Special Notice recipients elected to terminate negotiations as to OU-2 and to proceed with the individual investigations of the former facilities. (Id.)
The separate but coordinated investigations became the North Bronson Former Facilities ("NBFF") site. The NBFF site lies within the 220-acre NBIA Superfund Site, but is not part of the NBIA from an administrative standpoint. The NBFF is comprised of three former manufacturing plants, each of which used metal plating operations at one time or another, as well as other metal working operations. There are currently three Operable Units ("OUs") within the NBFF:
* NBFF OU1 (also referred to as the "Bronson Reel site") is the Bronson Reel Former Facility located at 505 North Douglas Street.
* NBFF OU2 (also referred to as the "L.A. Darling site") is the L.A. Darling Former Facility located east of North Matteson Street at West Railroad Avenue.
* NBFF OU3 (also referred to as the "Scott Fetzer site") is the Scott Fetzer Company Former Facility located at 141 West Railroad Street, including Scott Fetzer's Plant No. 1, its Annex/Cyanide Destruction Facility ("Annex"), and portions of the western industrial sewer adjacent to the Site, along portions of State Street and North Walker Street. (FPT F-14.)
The EPA issued a Special Notice Letter to ITT with respect to NBFF OU1 on July 5, 2001. Similar Special Notice Letters with respect to NBFF OU2 and NBFF OU3 were issued to L.A. Darling and Scott Fetzer respectively that same day (collectively "NBFF Special Notice Letters"). (FPT F40.) The NBFF Special Notice Letters called for investigation rather than remediation.
On or about September 30, 2002, ITT entered into an Administrative Order by Consent ("ITT AOC") with the EPA regarding the Bronson Reel Former Facility. (FPT F-41.) The stated purpose of the ITT AOC was as follows: In entering into this Consent Order, the objectives of U.S. EPA and the Respondent are: (a) to determine the nature and extent of TCE contamination in groundwater caused by the release or threatened release, if any, of TCE from OU1 (excluding the industrial sewer) by conducting a remedial investigation; (b) to determine and evaluate alternatives for remedial action (if any) to prevent, mitigate or otherwise respond to or remedy identified risks from OU1 related contamination other than that determined to be caused by the industrial sewer or other off-site sources; and (c) to provide for the recovery of response and oversight costs incurred by U.S. EPA with respect to this Consent Order.
(FPT F-42; Ex. 6013, ITT AOC at 3.) Under the heading "Jurisdiction and General Provisions," the AOC provides that "the remaining work should focus on determining if a source for trichloroethene (TCE) in groundwater exists at OU1." (Ex. 6013, ITT AOC at 2.) "[T]his Consent Order requires the Respondent, as part of the RI/FS, to develop and evaluate potential remedial alternatives to address TCE contamination in groundwater originating from OU1 that presents an unacceptable risk to human health or the environment . . . ." (Id.)
Because the L. A. Darling and Scott Fetzer sites had already been identified as sources of TCE to the regional plume, the investigations required by their AOCs was not to determine whether they were a source of TCE, but to characterize the nature and extent of contamination caused by the release of all hazardous substances. The purpose of the Scott Fetzer and L.A. Darling AOCs was described as follows:
In entering into this Consent Order, the objectives of the U.S. EPA and the Respondent are: (a) to determine the nature and extent of contamination caused by the release or threatened release of hazardous substances, pollutants or contaminants at or from [OU2/OU3], by conducting a remedial investigation;
(b) to determine and evaluate alternatives for remedial action (if any) to prevent, mitigate or otherwise respond to or remedy any release or threatened release of hazardous substances, pollutants, or contaminants at or from [OU2/OU3], by conducting a feasibility study; and (c) to provide for the recovery of response and oversight costs incurred by U.S. EPA with respect to this Consent Order. (FPT-F47; Ex. 6010, NBFF OU3 AOC; Ex. 5012, NBFF OU2 AOC.)
ITT completed its Streamlined Remedial Investigation/Streamlined Remedial Assessment ("SRI/SRA") Report and submitted its Focused Feasibility Study ("FFS") in May of 2006. (Ex. 6015, ITT NBFF OU1 SRI/SRA; Ex. 6066, ITT NBFF OU1 FFS.) The primary contaminants found during ITT's SRI were metals and total petroleum hydrocarbons ("TPH"). ITT recommended that no active remedial requirements be imposed for the Bronson Reel site because the site was not a source of VOCs to the regional groundwater plume and evaluation of other site-related contaminants showed no unacceptable risks requiring active remediation. (Ex. 6066, ITT NBFF OU1 FFSat 2-6, 2-10.) The remedy recommended by ITT was a restrictive covenant on the site that prohibited groundwater use because of TCE that migrated onto the site from upgradient sources. (Id. at 5-4; Olmsted Test.) ITT's FFS was approved by the EPA and the MDEQ in 2006.
Following a public meeting, the EPA issued a Record of Decision ("ROD") for the Bronson Reel site. (Ex. 6017, ITT NBFF OU1 ROD.) The ROD did not require any active remediation of TCE in the groundwater, regardless of the source. (Id.) The remedy chosen for the Bronson Reel site was the implementation of a restrictive covenant which in part requires an investigation of soil under the facility only if the foundations are removed and soil is exposed and restricts potable use of groundwater until it meets federal and state drinking water standards. (FPT F-44.) The ROD is not being implemented by ITT, but rather by (New) BSI in accordance with the terms of a settlement agreement dated August 25, 2009. (Ex. 1530, Settlement Agreement.)
ITT has filed a CERCLA § 107(a) cost recovery claim against Royal Oak, Scott Fetzer, and L.A. Darling. Liability under § 107(a) attaches where "a release, or a threatened release . . . causes the incurrence of response costs." 42 U.S.C. § 9607(a)(4). ITTs prima facie case for cost recovery requires ITT to prove the following elements:
(1) the property 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, 460 F.3d 697, 703 (6th Cir. 2006) (citing Franklin County Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534, 541 (6th Cir. 2001)). The four categories of potentially responsible parties ("PRPs") are: (1) the current owner or operator of a facility; (2) any person who, at the time of disposal of a hazardous substance, owned or operated any facility at which such hazardous substances were disposed of; (3) any person who arranged for disposal or treatment of hazardous substances at the facility; and (4) any person who transported hazardous substances to a waste facility. 42 U.S.C. § 9607(a)(1)-(4); Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 347 n.8 (6th Cir. 1998). Liability under § 107(a) is generally joint and several on any defendant regardless of fault. Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648, 653 (6th Cir. 2000) (citing Centerior Serv., 153 F.3d at 347-48).
There is no dispute that the Bronson Reel site is a facility, that there has been a release or threatened release of a hazardous substance at the Bronson Reel site, and that releases have caused ITT to incur at least some necessary costs of response that are consistent with the NCP. The issues for resolution at trial concerning ITT's cost recovery claim were whether Defendants were PRPs, whether Defendants' releases of hazardous substances caused ITT to incur response costs, whether all of ITT's claimed costs were "necessary" and "consistent" with the NCP, and whether some of the costs were divisible. Resolution of ITT's cost recovery claim (as well as the various contribution claims) require an understanding of the historical operations and remedial activities at the three North Bronson Former Facility Operable Units ("NBFF OUs").
A. BRONSON REEL SITE (NBFF OU1)
The Bronson Reel site, NBFF OU1, consists of approximately 1.85 acres located at 505 North Douglas Street in Bronson, Michigan. The site has been used for manufacturing operations from 1929 to 1994.
The Bronson Reel site was first occupied in 1929 by the Bronson Reel Company. In 1947, McAleer Manufacturing Company ("McAleer") purchased all of the stock of the Bronson Reel Company and the Bronson Reel Company became a division of McAleer. In 1950, McAleer changed its name to Higbie Manufacturing Company ("Higbie") which continued the operations at the Bronson Reel site. (FPT-F16 -- FPT-F19.)
In April of 1963, Higbie sold its Bronson Reel division, including the site property, to Bronson Specialties, Inc. (hereinafter referred to as "(Old) BSI"), which operated the Bronson Reel Company as a subsidiary. In 1964, (Old) BSI changed the name Bronson Reel Company to Action Sales, Inc. In late 1967, (Old) BSI sold certain assets of the fishing reel business to True Temper, Inc., but retained the Bronson Reel Company and much of the equipment. (FPT-F20.)
In 1968, (Old) BSI changed the name of the company that was previously Bronson Reel Company to Bronson Products Company, and continued to conduct metal working operations at the NBFF OU1 site. Bronson Products Company manufactured precision machine parts and custom machine tools and dies, as well as various metal parts for the automotive, and other industries. In January 1979, Kuhl, Inc., a wholly owned subsidiary of Kuhlman Corporation, created expressly to purchase (Old) BSI, acquired the assets and business of (Old) BSI, including Bronson Products Company, along with the former Bronson Reel site property. As part of the acquisition plan, (Old) BSI changed its name to BSI, Inc., and subsequently dissolved and distributed all assets of the corporation. Immediately thereafter, as part of the acquisition plan, Kuhl, Inc. changed its name to Bronson Specialties, Inc. (hereinafter referred to as "(New) BSI"), and continued the operations of (Old) BSI, including the operations of Bronson Products Company (custom and precision machining and production of metal parts), as a division of (New) BSI. (FPT-F21.)
After the 1979 acquisition, (New) BSI continued the operation of Bronson Products Company on the site though December 1984, and at that time sold the equipment and non-real property assets of its operations on the site to Bronson Precision Products ("BPP"), an assumed name of Defendant Royal Oak Industries, Inc. ("Royal Oak"). (New) BSI leased the Bronson Reel site to BPP and Royal Oak pursuant to a written lease agreement. BPP continued the business of Bronson Products, including all metal working operations, as well as the addition of various new metal working equipment on the site, from 1985 until the end of 1994. At that time, BPP moved its operations to the building across the street, at 404 Union Street, but continued to use the Bronson Reel site through 2002 to store equipment and materials for its operations at 404 Union Street. (FPT-F15; FPT-F22.)
In 1971, ITT, Higbie and ITT Higbie Manufacturing Company, a wholly owned subsidiary of ITT, agreed to a plan of merger whereby the shareholders of Higbie would receive shares of ITT in exchange for their shares of Higbie and Higbie would be merged into ITT Higbie. This merger was completed in 1972, nine years after Higbie had sold the Bronson Reel Company and the Site property to (Old) BSI. ITT has never conducted operations on the Bronson Reel site and has never owned a subsidiary that conducted operations on the Bronson Reel site during ITT's ownership of the subsidiary. ITT is a party to the NBIA OU1 consent decree, and the 2002 AOC regarding the NBFF OU1 Site. (FPTF23.) ITT denies being a successor to the Bronson Reel Company, but counsel for ITT stipulated on the record that it is a proper party to this action, and that it agrees to answer for ITT Higbie Manufacturing Company. (Stipulation 08/28/2009.)
1. Operations at the Bronson Reel site from 1929 to 1984
In 1929, the original building at 505 North Douglas Street covered approximately 15,000 square feet. The primary operations of the former Bronson Reel site from 1929 through 1967 were related to the production of fishing reels, including machining, grinding, stamping, trimming and plating of metal parts. Prior to 1948, the plating department was located on the eastern side of the original building, and the plating room's discharges to the industrial sewer had a connection on the east side of the facility on North Douglas Street. In approximately 1948, the facility building was expanded, which tripled the size of the manufacturing facility. After the 1948 building expansion, the plating department was moved to the western side of the building, with connections to the industrial sewer on the west side of the building via a north-south connector line. From 1963 through 1967, (Old) BSI continued metal working and plating operations, including discharges of plating wastes to the industrial sewer at the western lagoons. The production of fishing reels at this Site ceased in early 1968. (FPT F-24.)
From the late 1940s to the 1960s Bronson Reel purchased seven to eight 55-gallon drums of cutting oil per month. Much of the oil went out with the shavings. (Haynes Dep. 34, 35, 37.) Naphtha (oleum spirits) used at the plant for cleaning parts was tossed in with the shavings and thrown out into the backyard. (Haynes Dep. 33.) James Gerchow, who was the general manager of Bronson Products and BPP from 1971 to 1994, estimated based upon his conversations with the older employees about prior practices, that from 1922 to 1969, before the introduction of the centrifuge, for every 40,000 pounds of chips, approximately 8000 pounds of oil were released into the yard.
Beginning sometime during the 1960s, the operations at the Bronson Reel site also included a trichloroethylene ("TCE") degreaser. Use of the TCE degreaser terminated sometime before 1971. (FPT F-25.) During the ten or so years that the TCE degreaser was in operation, it was located in the northwestern portion of the main building in the screw machine room north of the plating facility. (FPT F-26.) The TCE degreaser at the Bronson Reel site utilized approximately one 55 gallon drum of TCE every three months. (FPT F-27.) In contrast to the naphtha, TCE was not thrown out into the yard. The sludge from the TCE degreaser was shoveled into a paper barrel and taken to the dump. (Haynes Dep. 32.)
After the 1968 sale of the fishing reel business, (Old) BSI, under the name Bronson Products Company, continued metal finishing operations at the NBFF OU1 Site. Bronson Products Company primarily made small metal parts for the automotive industry, including speedometer gears for AC (Delco), and General Motors, specialty nut fastener products for Ford (e.g., lug nuts), cam shaft dampeners for Eaton Corporation, and other parts for Dana Corporation and Detroit Diesel. Bronson Products Company also made couplings and fittings for Aeroquip Corporation. Bronson Products Company produced metal parts for the U.S. Department of Defense, Teledyne Continental Motors, Swift & Company, and Ramer Test Tools. Bronson Products Company also made tooling (forms to cut steel) for screw machines. (FPT-F28.)
In April of 1969 the Michigan Water Resources Commission ("MWRC") stated in a letter to Bronson Reel that Bronson Reel's chip storage and soluble oil disposal methods created a "very hazardous and potential oil pollution problem" because open chip barrels were being stored at the rear of the plant on a concrete pad. The ground around the concrete pad is saturated and "[t]he amount of oil draining from the chips and from the barrels is sufficient to migrate away from the property and onto Ruggles Street extended." (Ex. 6025, MWRC letter of 04/21/1969.) The MWRC also raised concerns about the untreated waste from the plating line entering the industrial sewer and the heavily laden rinse from the quenching process entering the storm sewer. (Id.) In 1973 the MWRC noted that operators at the site were spreading oil on the ground for dust control. (Venman Test.; Ex. 1285, 1973 MWRC Facilities Inspection Report.)
The operations at the Bronson Reel site did not change significantly when (New) BSI took over in 1979. (Gerchow Test.) The facility continued to produce metal parts using various screw machines, gear hobbing machines, broaching, thread-rolling, grinding, and roto-finishing (tumbling), and used some of the same equipment that had been used by Bronson Reel for the production of metal parts. The wastewater from the roto-finish department was discharged into a trench in the floor which connected to the industrial sewer or the storm sewer. (Venman Test.; Stephens Test.) The discharge contained metal particles, cutting oils, and solvents including naphtha and 1,1,1 TCA. (Gerchow Test.; VenmanTest.; Stephens Test).
(Old) BSI, the Houghton Defendants, (New) BSI and BPP all maintained metal chip bins in the yard to the west of the plant. Because the chip bins were not sealed, run-off from the bins was released onto the soils and included metal residues, cutting oils, metal chips, 1-1-1 TCA, and naphtha. (Gerchow Test.; Stephens Test.) Additionally, the various metals used by the operations at the Bronson Reel site included brass, aluminum, and alloy steels, some of which contained chromium, lead and selenium. (Gerchow Test.; Ex. 6015, ITT NBFF OU1 SRI/SRA). The operators at the Bronson Reel site, including (Old) BSI, the Houghton Defendants, (New) BSI and BPP also stored fifty-five gallon drums of waste outside of the facility in an area near the maintenance shed in the western yard. (Gerchow Test.; Ex. 6015). There were three underground storage tanks ("USTs") at the Site used for fuel oil and other materials. (Stephens Test.; Ex. 1422, Map of Bronson Reel site.)
2. Operations at the Bronson Reel site from 1984 to 1994
Defendant Royal Oak Industries, through its subsidiary, Bronson Precision Products ("BPP"), operated at the former Bronson Reel site from December 1984 through 1994 pursuant to a lease with (New) BSI, and continued the same types of operations as its predecessors. (Gerchow Test.) Gerchow remained as general manager of BPP. (Gerchow Test.) BPP ran a cleaner operation than did its predecessors. BPP did not use TCE or perchloroethylene (PCE). It did not do any metal plating and it did not use heat treating equipment. (Gerchow Test.) The de-burring or roto finish process used detergent, water and abrasives, all of which were non-hazardous. (Gerchow Test.; Ex. 6027, MWRC Discharge Permit Application, at 10-11.) BPP used a centrifuge for spinning oil from chips and turnings from the screw machines. The centrifuge was a closed, recirculating system that was 90-99% efficient in removing oil. (Gerchow Test.)
ITT contends that based on Royal Oak's admissions in its answers to interrogatories, BPP released small amounts of oil and fine metal particles from the roto finish process into the industrial sewer. (Ex. 1004, Ans. to Interrog. No. 7.) Royal Oak subsequently amended this answer to indicate that the wastes from the roto finish process were released to the storm sewer or the sanitary sewer. (Ex. 1005, Ans. to Interrog. No. 7.) Mr. Gerchow had no specific recollection of where the roto finish wastes were released. He testified that the interrogatory answer was amended based upon the MDNR's May 11, 1988, letter regarding its site visit. (Ex. 1083, MDNR 05/11/1988 letter). The Court concludes that the MDNR's contemporaneous observation that the process waters emptied to a cement pit outside the building that went to the storm sewer is the best evidence of what occurred. The Court accordingly finds that Royal Oak released its roto finshi process waters to the storm sewer.
BPP used hazardous materials in its operations, including oils, solvents and metals. The facility used oleum spirits (naptha) to clean parts and some of the cutting oils used by BPP included 1,1,1 trichloroethane ("TCA") as an additive. The metals used in BPP's operations included 1,000,000 pounds of alloyed steel and 10,000 pounds of aluminum alloys and brass per year. (Gerchow Test.) These alloys contained hazardous metals including chromium, nickel, lead, manganese and molybdenum. (Ex. 1471, Table re: Composition of Metals; Ex. 1472, Table re: Composition of Metals.) The steel and aluminum alloy particles themselves are listed hazardous substances because the alloys contain elemental chromium, nickel, lead and other substances. (Stephens Test.)
No process at the facility used dissolved metals after 1981. (Stephens Test.) However, no additional physical or chemical process was required to cause a release of hazardous substances. Steel alloy chips and turnings were placed in bins (dumpsters) that were unconvered and open to precipitation. An oil-water mixture composed of 90% water and 10% oil seeped from the chip bins (Stephens Test.; Gerchow Test.) Metal chips or shavings were also released directly onto the soil during transport to the bins. The metal alloy chips or shavings are themselves hazardous substances because they contain listed hazardous substances in the form of chromium, nickel and lead and/or other hazardous substances. (Stephens Test.; Ex. 1471; Ex. 1472.) Accordingly, a release occurred when the metal shavings and particles were discharged to the soil. The metal chips were also subject to to later physical processes, including precipitation and snow melt over a period of years, causing low concentrations of metals to enter into solution to further contaminate soil and groundwater.
Notwithstanding BPP's use of a centrifuge, BPP still released oil to the ground. Metal chips still had oil on them, and the grinding swarf from the grinding operations did not go to the centrifuge. In May 1988, after inspecting the BPP facility, the MDNR sent BPP a letter noting its concerns about oil discharges to the ground and the discharge of untreated wastewater directly to the storm sewer:
Quite a few barrels of waste oil stored outside. Some on a concrete pad with no containment and some on pallets in the yard. Evidence of oil runoff to the ground in several areas.
Open metal chip storage bin is located outside on the ground. No pad or oil containment. Pooled oil present on ground at one end of bin and evidence of long-time runoff of oils unto the soil (facility in operation since about 1920's). (Ex. 1083, MDNR 05/11/1988 Letter re Site Visit.)
In June 1988, the Branch-Hillsdale - St. Joseph District Health Department ("District Health Department") conducted an on-site investigation the Bronson Reel Site. (FPT-F31, FPT F-33.) Based upon its observations of waste storage and labeling violations and illegal discharges, the District Health Department issued a report concerning BPP's waste storage and handling practices and required BPP to take corrective actions. (Id.;Ex. 6036, 06/22/1988 District Health Dep't letter; Laurent Dep., 13, 17-20).
Subsequent to the inspection by the District Health Department, (New) BSI conducted an investigation and excavation of contaminated soils as well as the removal of an underground oil storage tank, an oil-water separator and a portion of the industrial sewer along the northern edge of the Bronson Reel Site. (FPT F-34.) ITT and Royal Oak shared in the costs, along with (New) BSI, of remediating and investigating metals and petroleum contamination at the former Bronson Reel Site in the 1988-1990 response activities together with other site owners and operators. (Olmsted Test.; Gerchow Test.)
Prior to excavation, four soil borings were selected for VOC analysis, and TCE was not detected in any of the samples. (Ex. 6015, SRI/SRA at ES-1.) The soil excavation took place throughout the fall of 1988 and winter of 1989. Most of the soil from the main yard area was removed to a depth of 8-10 feet. (Id. at 1-7. More than 10,440 tons of soil was removed by the excavation contractor A.P.E.C., Ltd. (FPT F-36.) The soils that were excavated were generally not tested for VOCs, but were found to be impacted with metals and petroleum hydrocarbons. (Ex. 6015 at 1-7.)
David Schafer, President of A.P.E.C., Ltd., found drums containing metal shavings and oil stored outside along the west fenced area. (Schafer Dep. 28, 54.) There was evidence that the drums had leaked because the soil was stained and discolored in the drum storage area. (Id. at 137-38, 140.) There were metal shavings throughout the yard area and within the soil on the west side of the BPP building. (Id. at 38-39.) Schafer confirmed that BPP used large metal dumpsters for storage or metal chips, shavings and turnings, and that the metal bins released a mixture of waste oils directly to the soil at the site during BPP's operations. (Id. at 23, 24, 28, 29, 31-33, 142.)
During the remediation, the contractor ruptured a sewer pipe. (FPT F-35.) More than 500 gallons of wastewater were released, but the materials released from the sewer were never characterized. (Venman Test.)
Following the 1988-90 excavation, soils in the sidewalls were still observed to be oily. In addition, oil was observed in the bottom of the excavation at the water table, indicating that contamination had migrated to groundwater. (Stephens Test.) A sump was installed to collect contaminated groundwater, but no remediation of groundwater was conducted as part of the 1988-90 removal action. (Stephens Test.; Venman Test.) Following the excavation, forty-one soil samples were collected from the excavation sidewalls and from borings outside of the excavation. Of the forty-one samples, TCE was detected in only two samples, in concentrations of 60 ug/kg and 110 ug/kg. Because the acceptable soil criteria for TCE is 100 ug/kg, the TCE concentrations at the Bronson Reel site were relatively low. (FPT F-37; Stephens Test.; Ex. 6015, ITT SRI at ES-1.) The sidewall samples containing TCE were located in the northeastern portion of the western yard at the Site, near the area of the building where the former TCE degreaser was reported to have been located. (Ex. 1478; FPT F-26.) Although the yard was excavated primarily to remove soils impacted with metals and petroleum, that excavation would also have removed TCE contamination. The excavated soils were not fully characterized for volatile organic compounds such as TCE.
In November of 1990, the MDNR outlined some additional work that it wanted BPP to conduct in order to complete the investigation and remediation of the Bronson Reel site, including:
a. sampling around the perimeter of the former excavations including testing for metals, hydrocarbons and volatile organic compounds;
b. installation of wells to determine if the contaminated soil is negatively impacting the groundwater, including testing for metals, hydrocarbons and volatile organic compounds;
c. installation of additional down-gradient wells to determine the extent of the TCE found in the wells; and
d. further work to address metals contamination identified during the drilling of monitoring well four. (Ex. 6003, MDNR Letter of 11/07/1990.) It appears that the MDNR's concerns were triggered by its detection of TCE in monitoring wells northwest of the Bronson Reel site during its NBIA investigation in 1998, rather than by anything found during the remediation at the Bronson Reel site. The MDNR directed BPP to submit a work plan before undertaking any further work. There is no indication that any further work was conducted in response to this letter. (Wells Test.; Sklash Test.) Nor is there any indication that the MDNR followed up with BPP concerning this letter or the status of the remediation of the Bronson Reel site.
B. SCOTT FETZER SITE (NBFF OU3)
The Scott Fetzer site, NBFF OU3, consists of the former manufacturing facility, historically referred to as Plant No. 1, located west of North Matteson Street, and north of State Street, and the annex located south of State Street. The Scott Fetzer site was operated by the H.A. Douglas, which later became Kingston Products-Douglas Division, from 1910 through 1968. The Scott Fetzer Company purchased the Kingston Products-Douglas Division in 1968, and continued operations at the site until January of 1984. ...