Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

U.S. v. GURLEY

March 1, 2004.

UNITED STATES OF AMERICA, PLAINTIFF,
v.
WILLIAM M. GURLEY, DEFENDANT, and THE STATE OF ARKANSAS, INTERVENER.



The opinion of the court was delivered by: STEPHEN REASONER, District Judge

MEMORANDUM OPINION

This Court conducted a hearing on Plaintiff's right to reimbursement of response costs incurred or to be incurred at the Gurley Pit Site and South 8th Street Superfund Sites located in northeast Arkansas. The Court finds the United States is entitled to response cost at the Gurley Pit Site in the amount of $13,986,191.94,*fn1 plus interest from July 24, 2002 until the date of judgment, plus post judgment interest at the rate of 1.23% until paid. The Court also finds the United States is entitled to response costs at the South 8th Street Site in the amount of $6,979,055.18*fn2 plus interest from July 24, 2002 until the date of judgment, plus post judgment interest at the rate of 1.23% until paid, plus a declaratory judgment for all future response costs at the South 8th Street Site. The State of Arkansas is entitled to a declaratory judgment for all future response costs incurred by the State at the South 8th Street Site.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY:

  This case has a long and tumultuous history, a brief review of which is required for a thorough understanding of these proceedings. In November, 1987, the United States brought an action under Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9607, against Defendant, William M. Gurley, and others to recover all of its response costs in cleaning up the Gurley Pit Site located in northeast Arkansas. That action was assigned to the Honorable George Howard, Jr. Section 107(a) of CERCLA authorizes the United States or a state to recover from liable parties "all costs of removal or remedial action incurred by the United States . . . not inconsistent with the national contingency plan ("NCP")." 42 U.S.C. § 9607(a). On July 14, 1990, Judge Howard issued a Memorandum and Opinion granting the Motion for Summary Judgment filed by the United States as to liability against Mr. Gurley at the Gurley Pit Site (also referred to occasionally in the record as the "Edmondson Pit Site"). United States v. Gurley Ref. Co., et al., No. 3:86CV291, slip op. (E.D. Ark. June 14, 1990). Two years later, Judge Howard issued an Order holding Mr. Gurley and related entitles liable for $1,786,502.00 representing the costs incurred by the United States through February 28, 1990, as well as a declaratory judgment for future response costs at the Gurley Pit Site. United States v. Gurley Ref. Co., 788 F. Supp. 1473 (E.D. Ark. 1992). In 1994, the Eighth Circuit affirmed the judgment as to Mr. Gurley. United States v. Gurley, 43 F.3d 1188 (8th Cir. 1994), cert. denied, 116 S.Ct. 73 (1995).

  In July, 1995, Mr. Gurley filed for bankruptcy in the Middle District of Florida. On April 24, 1996, the United States filed a Proof of Claim in the bankruptcy court against Mr. Gurley for the response costs at the Gurley Pit Site and at another site, the South 8th Street Superfund Site ("South 8th Street Site"). After a trial in September, 1997, the bankruptcy court denied Mr. Gurley's discharge, held that Mr. Gurley had concealed substantial assets in an effort to avoid the CERCLA judgment against him, and entered a judgment against Mrs. Gurley determining that the concealed assets were property of the bankruptcy estate.*fn3 United States v. William M. Gurley, No. 95-0293, Bankr. M.D. Fla. (J. and Mem. Op., Aug. 15, 1997); United States v. William M. Gurley, No. 95-0293, Bankr. M.D. Fla. (Am. J., Sept.16, 1997). That judgment was affirmed by the Eleventh Circuit Court of Appeals. Betty Jean Gurley v. George E. Mills, Jr., Trustee, No. 98-01169-CIV-ORL-18 slip op. (11th Cir. Sept. 20, 2000) (per curium).

  On March 23, 1998, the United States filed an Amended Proof of Claim in the bankruptcy action. Mr. Gurley then filed a Motion to Withdraw the Reference which was granted by the United States District Court for the Middle District of Florida. On February 25, 2000, the Florida District Court transferred the claims of the United States to this Court. The State of Arkansas intervened filing a claim for Declaratory Judgment alleging that Mr. Gurley is liable for any response costs incurred by the Arkansas Department of Environmental Quality ("ADEQ").

  II. CURRENT LITIGATION: The United States filed Motions for Summary Judgment in this action as to the Gurley Pit Site based on the Declaratory Judgment in the former Gurley action before Judge Howard. The United States also filed a Motion for Summary Judgment as to the South 8th Street Site for all response costs incurred and to be incurred in the future. This Court conducted a hearing on the motions and issued an Order dated September 27, 2001, granting the Motions for Summary Judgment in all respects, except as to the factual issue of whether the response costs were inconsistent with the NCP.*fn4 This Court then conducted a court trial on the amount of the response costs in the action. At the conclusion of the trial, the Court directed the parties to file post-trial briefs. The only issues before the Court at this time are 1) the admissibility of payroll cost exhibits; 2) whether the response cost incurred in this action are inconsistent with the NCP; and 3) joint and several liability at the South 8th Street Site.

  III. ADMISSIBILITY OF PAYROLL COST EXHIBITS:

  During the trial on costs, the Court admitted the summary exhibits*fn5 offered by the government but excluded admission of payroll costs in the summary where the payroll information did not reveal the underlying salary and wage rate. The United States filed a Brief in Support of Motion for Admission (Doc. No. 93) of the payroll costs during the last days of the hearing. Mr. Gurley filed his response (Doc. No. 95) and the United States replied (Doc. No. 96). From the pleadings, the Court finds the payroll costs listed in the summaries are admissible. The payroll reports generated from the Environmental Protection Agency ("EPA") Integrated Financial Management System ("IFMS") show the amounts paid and the hours worked per pay period for each EPA regional and headquarters employee who worked on the Gurley Pit Site and South 8th Street Sites.*fn6 The computer printouts detailing payroll costs incurred are admissible pursuant to FRE 1006 since there is sufficient supporting underlying data and the government established that the printouts accurately reflected the data stored in the IFMS computerized central accounting system. EPA Region 6 accountant Dennis McBride, EPA headquarters accountant Charles Young, and the Plaintiff's expert certified public accountant, Wiley Wright, all testified at length as to the integrity, accuracy, and reliability of the EPA computer systems and printouts. In addition, Mr. Wright testified that he tested whether the payroll computer printouts contained in Government's Exhibits 2 and 3 accurately reflected the data stored in the IFMS computer system by comparing the information contained in those printouts to the payroll data stored in the IFMS system. For each of the instances checked, the payroll information was identical to that separately generated and printed from the data stored in the IFMS system. For these reasons, the Court finds those portions of Plaintiff's Exhibit 2 and 3 dealing with payroll costs admissible.

  IV. RESPONSE COSTS:

  At the conclusion of the hearing, the Court directed the parties to file briefs addressing each item of cost and detailing the evidence, or lack thereof, with respect to each item. However, in Mr. Gurley's Post-trial Brief (Doc. No. 105) and Proposed Findings and Conclusions (Doc. No. 106), he devotes well over half of his brief to a re-argument of the defenses of statute of limitations and lack of subject matter jurisdiction. Mr. Gurley concedes, on the second page of his fifty page brief, that he "recognizes full well that this court has previously rejected his defenses of limitations and failure to properly commence a civil action." (Def.'s Post-trial Br. at 2.) This Court has found these arguments to be without merit on more than one occasion*fn7 and will not address them again.

  With respect to the Gurley Pit Site, the government seeks the following response costs:
1) EPA Region 6 and Headquarter payroll expenses;
2) EPA Region 6 and Headquarter travel expenses;
3) EPA indirect costs,*fn8 4) expenditures for contracts;
5) expenditures under EPA's interagency agreement with the Army Corps of Engineers;
6) funds provided by EPA to the State of Arkansas;
7) funds provided to the Agency for Toxic Substances and Disease Registry ("ATSDR");*fn9
8) prejudgement interest; and
9) Department of Justice (DOJ) enforcement costs.
Specifically, the Cost Summary*fn10 reveals: GURLEY SITE 06-39
 
EPA Principal from 3-1-90 $9,392,225.67 to 6-30-01 (no ATSDR)
INTEREST (from 9-10-90 4,945,957.85 to 7-24-02 (no ATSDR)
DOJ 737,268.86
PAYMENTS (1,089,260.44)
TOTAL Gurley Pit Site $13,986,191.94*fn11 (after withdrawal of ATSDR costs) SOUTH 8TH STREET 06-H8
EPA Principal from inception $5,596,093.34 to 6-30-01 (no ATSDR)
INTEREST from 4-24-96 1,822,693.33 to 7-24-02 (no ATSDR)
DOJ 868,062.81
PAYMENTS (1,306,000.00)
TOTAL South 8TH Street Site $6,980,849.48
COMBINED TOTAL FOR GURLEY PIT SITE AND SOUTH 8TH STREET SITE $20,967,041.42 (unreimbursed and past costs)

  V. OBJECTIONS TO RESPONSE COSTS:

  With respect to his objections to the government's claim, the only costs Mr. Gurley challenged in his post-trial brief are:

 
(1) enforcement costs related to both the Gurley Pit Site and South 8th Street Site incurred after the bankruptcy petition date, July 26, 1995.
(2) prejudgment interest with regard to both Sites accruing or incurred after the date that Mr. Gurley filed for bankruptcy, July 26, 1995.
(3) costs rejected by Philip Marino, Mr. Gurley's accountant.
(4) payroll costs questioned by the Court.
(5) contract costs sought by the government at the South 8th Street Site.
Based on Mr. Marino's opinion as to the total billings verified, Mr. Gurley concludes that he "can only be liable for $5,591,824.60 for the Gurley Pit Site and $3,514,077.88 for the South 8th Street Site. (Plf.'s Post-trial Br., Exhibit 2 at 577-78). Mr. Gurley also argues that the damage is divisible and that the amounts he should pay must be reduced by twenty-five percent.

  VI. FINDINGS AND CONCLUSIONS ON COSTS:

  Section 107(a) of CERCLA authorizes the United States or a state to recover from liable parties "all costs of removal or remedial action incurred by the United States Government or a State . . . not inconsistent with the national contingency plan." 42 U.S.C. § 9607(a). "Because the instant case is one brought by one of the three parties*fn12 listed in § 9607(a)(4)(B), its costs are presumed to be consistent with the NCP." United States v. Findett Corp., 75 F. Supp.2d 982 (E.D. Mo. 1999), aff'd, 220 F.3d 842 (8th Cir. 2000) (citing Minnesota v. Kalman W. Abrams Metals, Inc., 155 F.3d 1019, 1025 (8th Cir. 1998). "In an action brought by any one of those three parties, the burden of proof as to inconsistency is on the defendant. A defendant `must demonstrate that the government's response action giving rise to the particular cost is inconsistent with the NCP.'" United States v. Findett Corp., 75 F. Supp.2d at 990 (citing United States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 747 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987)). CERCLA "contemplates that those responsible for hazardous waste at each site must bear the full cost of cleanup actions and that those costs necessarily include both direct costs and a proportionate share of indirect costs attributable to each site." Findett, 75 F. Supp.2d at 993.

  As previously noted, if the government's response actions are in harmony with the NCP, the costs incurred pursuant to those actions are recoverable from liable parties. Findett, 220 F.3d 842, 849-50 (8th Cir. 2000); United States v. Hardage, 982 F.2d 1436, 1441 (10th Cir. 1992), cert. denied, 510 U.S. 918 (5th Cir. 1993). Response costs that are not inconsistent with the NCP are conclusively presumed to be reasonable and therefore recoverable under CERCLA. See United States v. Dico, 266 F.3d 864, 879 (8th Cir. 2001); United States v. Findett Corp., 220 F.3d at 849; United States v. Hardage, 982 F.2d at 1441-1443; United States v. Northeastern Pharm. and Chem. Co., Inc., 810 F.2d at 747-48 (8th Cir. 1986); United States v. Vertac Chem. Corp., 33 F. Supp.2d 769, 777 (E.D. Ark. 1998); United States v. Gurley, 788 F. Supp. at 1481. The focus of the NCP is on procedures for the selection of response action rather than on "costs", per se:
The NCP regulates choice of response action, not costs. Costs, by themselves, cannot be inconsistent with the NCP. Only response actions — i.e., removal or remedial actions — can be inconsistent with the NCP, which can be demonstrated by a showing that the government's choice of response action was arbitrary and capricious. As long as the government's choice of response action is not inconsistent with the NCP, its costs are presumed to be reasonable and therefore recoverable.
Hardage, 982 F.2d at 1443 (emphasis in the original).
  The defendant's expert in Findett argued the EPA submitted insufficient documentation to substantiate its response costs. The district court, however, concluded that the government had provided sufficient evidentiary support for its motion for partial summary judgment on response costs. As in this case:
[The government] provided itemized cost summary reports of its payroll costs. Those reports include the names of employees who did Site-related work, the year and the pay period in which they did that work, the hours that they worked, and the corresponding payroll amounts. . . . The summaries list the employee who traveled, the travel voucher number, the cost of the travel, and the Treasury schedule confirming payment of that cost. With respect to the EPA contractors who worked on the Site, the government has provided contract summaries listing the contractor, contract number, and total contract costs. The summaries set forth the voucher and Treasury schedule numbers supporting those costs and confirming payment thereof.
Findett, 75 F. Supp.2d at 991. On appeal, the Eighth Circuit affirmed holding that EPA had submitted sufficient evidence to support its claim for recovery of response costs. United States v. Findett, 220 F.3d at 849-50. The Appeals Court reasoned that the alleged missing documentation noted in the defendant's expert report was in fact provided by the EPA to the defendant and the detail sought (for example, progress reports from contractors, audit reports of contacts) was only peripherally related to whether the response costs were actually incurred. Findett, at 849.

  During the course of the trial of the issue of costs, the United States presented testimony from ten witnesses:

  (1) Dennis McBride, an EPA accountant who certified the accuracy and the adequacy of the documentation of the EPA costs;

  (2) Cheryl Young, a Corps of Engineers accountant who certified the accuracy and adequacy of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.