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Dixon Lumber Co., Inc. v. Austinville Limestone Co., Inc.

United States District Court, W.D. Virginia, Roanoke Division

October 31, 2017

DIXON LUMBER CO., INC., Plaintiff,


          Elizabeth K. Dillon United States District Judge

         Plaintiff Dixon Lumber Company (Dixon) and defendant Austinville Limestone Company (ALC) own adjacent plots of land in Wythe County, Virginia. Both companies bought their property from Gulf & Western Industries (G&W), which operated a zinc and lead mine on ALC's site through a division called New Jersey Zinc Company (NJZ). Years before ALC and Dixon purchased their properties, NJZ dumped limestone tailings, a byproduct of its mining operations, on the plot now owned by Dixon. Dixon seeks to hold ALC responsible for environmental liabilities arising from those limestone tailings under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 1906-9675.

         This opinion addresses two pending motions. The first is a motion for partial dismissal filed by ALC. (Dkt. No. 104.) The second is Dixon's motion to strike ALC's affirmative defenses. (Dkt. No. 112.) The motions have been fully briefed and were argued before the court on October 6, 2017. For the reasons set forth below, ALC's motion for partial dismissal will be granted, and Dixon's motion to strike ALC's affirmative defenses will be denied.

         I. BACKGROUND

         In November 1984, Dixon purchased land from G&W. Dixon represents that it was unaware of the tailings pile on part of the land called Austin Meadows; Dixon did not learn about the pile until 1992 when it received a letter from the State Water Control Board informing it that high amounts of zinc and lead were emanating from the tailings. The same year it received the letter, Dixon entered a consent agreement with the Department of Environmental Quality (DEQ) to remove the tailings pile from Austin Meadows and reclaim the limestone tailings.

         That consent order authorized Dixon to contract with ALC to remove the limestone tailings. A series of amended consent orders extended the term of the order until 2015. Pursuant to the consent orders, Dixon and ALC entered into a series of agreements regarding the removal of the limestone tailings. The original agreement, executed in 1993, authorized ALC to remove the tailings pile and provided that its operations would be considered remedial actions on behalf of Dixon. Subsequent agreements in 2003 and 2008 extended the timeline for ALC's tailings removal activities and provided that Dixon would receive a royalty for tailings removed, processed, and sold by ALC. Dixon alleges that ALC failed to conduct these removal activities in a timely manner and to comply with the removal standards acceptable to DEQ and that, as a result, ALC caused releases or threatened releases of hazardous substances from the site.

         Following a heavy rainfall and discharge of pollutants in June 2013, DEQ and the Department of Mines, Minerals, and Energy (DMME) entered into a letter of agreement with Dixon and ALC. Among other things, the agreement required Dixon and ALC to develop a final plan for reclamation of Austin Meadows and submit it to DEQ and DMME. While developing that plan, Dixon and ALC hit an impasse on which party would be responsible for final reclamation costs on Dixon's site. Dixon subsequently filed this suit, claiming that ALC is liable for at least some of the costs.

         Dixon's original complaint alleged that ALC was liable for response costs as an "owner" (as successor to NJZ) under 42 U.S.C. § 9607(a)(1) and as an "operator" under 42 U.S.C. § 9607(a)(2), as well as for contribution under 42 U.S.C. § 9613. By order dated June 9, 2017, the court held that ALC was not a corporate successor to G&W for purposes of CERCLA liability. (Dkt. No. 70.) Thereafter, Dixon filed a first amended complaint adding the claim that ALC is liable as an "arranger" pursuant to 42 U.S.C. § 9607(a)(3).


         A. ALC's Motion to Dismiss Dixon's Arranger Liability Claim

         ALC first moves to dismiss Dixon's arranger liability claim under Rule 12(b)(6) for failure to state a claim for which relief can be granted. It contends that Dixon failed to state an arranger liability claim because it did not allege that ALC arranged for the disposal of hazardous substances by any other party, as is required under 42 U.S.C. § 9607(a)(3). In response, Dixon argues that 42 U.S.C. § 9607(a)(3) does not require a party to have arranged for disposal with another party in order for arranger liability to attach. The court rejects Dixon's argument and holds that Dixon has failed to state an arranger liability claim.

         1. Standard of review under Rule 12(b)(6)

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiffs allegations must "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This standard "requires the plaintiff to articulate facts, when accepted as true, that 'show' that the plaintiff has stated a claim entitling him to relief, i.e., the 'plausibility of entitlement to relief" Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). The plausibility standard requires more than "a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678.

         In determining whether the plaintiff has met this plausibility standard, the court must accept as true all well-pleaded facts in the complaint and in any documents incorporated into or attached to the complaint. Sec 'y of State for Defence v. Trimble Navigation Ltd.,484 F.3d 700, 705 (4th Cir. 2007). Further, it must "draw[] all reasonable factual inferences from those facts in the plaintiffs favor, " Edwards v. City of Goldsboro,178 F.3d 231, 244 (4th Cir. 1999), but it need not "accept legal conclusions couched as facts or 'unwarranted inferences, unreasonable conclusions, or arguments, ...

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