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State ex rel. DeWine v. Muncy

United States District Court, S.D. Ohio, Western Division

March 30, 2017

State of Ohio, ex rel. Michael DeWine, Ohio Attorney General, Plaintiff,
John D. Muncy, et al., Defendants.



         This matter is before the Court for decision on Defendant's Motion to Dismiss for Failure to State a Claim. (Doc. 16). The case arises from alleged actions of an owner and a predecessor-in-interest to the owner that are alleged to have resulted in damage to the environment. Count I, which asserts a claim for cost recovery under CERCLA pursuant to 42 U.S.C. § 9607(a), does not name Movant as a defendant. But the even-numbered claims of Counts II through VII charge the predecessor in interest, Defendant John D. Muncy, alone, while the odd-numbered ones charge Muncy and the owner, Defendant James O. Miller, jointly. Muncy seeks to have counts two through seven dismissed against him.

         I. Background

         Plaintiff, the State of Ohio, seeks an injunction and damages against Defendants James O. Miller and John D. Muncy arising out of soil and ground water contamination at a former manufacturing plant in Enon. The site is approximately 400 feet north of the Village of Enon's public drinking water well field. Complaint ¶ 23. Enon's well field is down gradient from the site. Complaint ¶ 24. In 1985, Enon detected vinyl chloride, a microbial degradation product of trichloroethylene, above the maximum contaminant level in a Village water production well. Complaint ¶ 25.

         A corporation named REM Investments, Inc. owned and operated the plant from 1969 to 1996. Compl., PageID 4, ¶¶ 12, 20.

         In April 1987, Ohio EPA inspected the site and found five gallons of waste trichloroethylene stored at the site. Complaint ¶ 27. During 1991-92, the Ohio EPA conducted ground water sampling at the site. Complaint ¶ 28. The results revealed volatile organic compounds Cis-1, 2-dichloroethylene at 490 micrograms per liter (“μg/l”) and trichloroethylene at 180 ppb and vinyl chloride at 300 μg/l. Complaint ¶ 28. During 1991-92, Ohio EPA also conducted ground water sampling from Enon's northern area of the well field. Complaint ¶ 29. The sampling results showed Cis-1, 2-dichloroethylene, trichloroethylene, and vinyl chloride in the ground water that supplies the well field. Complaint ¶ 29. In 1992, based upon the sampling results Ohio EPA determined that the source of ground water contamination at Enon well field were volatile organic compounds migrating from the site's manufacturing area. Complaint ¶ 30.

         In 1994, REM Investments and Ohio EPA entered into a consensual administrative order requiring REM Investments to remediate the site. Id., PageID 5-6, ¶¶ 31, 32. Pursuant to the 1994 Order, REM Investments removed 150 tons of soil and injected reagent into the aquifer to cleanse the ground water. Id., PageID 6-7, ¶¶ 33, 34, 38, 39.

         Starting in 2000, REM Investments used an ozone sparging system[1] to cleanse the aquifer. Id., PageID 7, ¶ 41. The Ohio EPA agreed that REM Investments could shut off the system in 2006. Id., ¶ 42.

         On December 29, 2006, the Director of Ohio EPA issued with REM Investments' consent “Director's Final Findings and Order to REM Investments” that amended the 1994 Order and required maintenance of the ozone sparging system and continued ground water monitoring. Complaint ¶ 43. Defendant John D. Muncy signed the Order as President of REM Investments. Defendant's Motion, at 9. The 2006 Order states that if there are exceedances of any maximum contaminant level for a volatile organic compound during two consecutive monitoring events, REM Investments shall restart the ozone sparging system within fourteen days of providing Ohio EPA notification of the second consecutive exceedance. Complaint ¶ 45.

         REM Investments' ground water samples, taken in 2007-12, revealed maximum contaminant level exceedances for volatile organic compounds during at least two consecutive monitoring events. Complaint ¶ 46. On June 14, 2011, Ohio EPA informed REM Investments that, as required by the 2006 Order, it was required to restart the ozone sparging treatment system and resume ground water monitoring activities. Complaint ¶ 47. Again, on September 30, 2011, Ohio EPA informed REM Investments of its obligations under the 2006 Order to restart the ozone sparging system and resume ground water monitoring activities. Complaint ¶ 48. On November 4, 2011, Ohio EPA issued a Notice of Violation letter to REM Investments that its failure to restart the ozone sparging system and to resume ground water monitoring was a violation of the 2006 Order. Complaint ¶ 49. Based upon ground water sampling conducted by Ohio EPA from 2001 through 2007 in Enon's well field and Enon's sampling of ground water from its production wells since at least the late 1980s, volatile organic compounds have migrated from the site to Enon's well field. Complaint ¶ 59.

         On or about May 15, 2012, REM Investments sold the site property to Defendant James Miller for approximately $290, 000.00. Complaint ¶ 21. Following its dissolution, REM Investments failed to notify Ohio EPA, a creditor of REM Investments, as required by Ohio Rev. Code § 1701.86(I). Complaint ¶ 22. Muncy as the President-executive officer and a shareholder of REM Investments allegedly knew about the violations of the 2006 Order and failed to exercise his authority to prevent and stop the violations. Complaint ¶ 22, 64-67, and 77-81.

         In 2006, Ohio EPA and REM Investments agreed to another set of Director's Final Findings and Order providing that the sparging system would be restarted if the pollutants in the ground water exceeded cleanup standards for two consecutive months. Id., ¶¶ 43 - 45. The Complaint alleges that such an event occurred between 2007 and 2012. Id., PageID 8, ¶ 46. The Complaint contends that Ohio EPA instructed REM Investments to restart the sparging system, but that REM Investments did not do so. Id., ¶¶ 47, 48, 49, 80. The Complaint does not disclose how often the pollutant levels have exceeded the cleanup standard since 2007, nor does it reveal the divergence between these levels and the cleanup standard.

         According to the Complaint, contaminants have migrated to the Enon well field, prompting the State to request the reactivation of the sparging system. Id., PageID 9, 18, ¶ 59, Prayer for Relief, ¶ F. The State portrays the site as a “substantial threat to public health or safety.” Id., PageID 9, 17, ¶¶ 60, 104.

         On October 13, 2015, Plaintiff the State of Ohio filed this suit in federal court. As REM Investments has dissolved itself, id., PageID 4, ¶ 22, the State has sued John Muncy, an REM Investments President and shareholder, and James O. Miller, who purchased the land from REM Investments, for seven counts. Id., ¶ 12.

         While Count I asserts a CERCLA violation against Defendant James O. Miller, Count II asserts violation of the 2006 Director's Final Findings and Order in violation of Ohio Revised Code § 6111.07(A) alleging REM Investments failed to maintain the ozone sparging system as required by the 2006 Order, for which Plaintiff alleges Muncy is subject to injunctive relief.

         Count III alleges REM Investments discharged industrial wastes into Ohio waters on three occasions without a permit in violation of Ohio Revised Code § 6111.04. In count three, Plaintiff seeks joint and several injunctive relief against Muncy and Miller.

         Count IV alleges Muncy alone is subject to an injunctive order from the Director of the Ohio EPA due to conditions constituting a substantial threat to public health or threatening to cause or contribute to air or water pollution or soil contamination. Plaintiff alleges it therefore is entitled to an order requiring Muncy to comply with the 2006 Order and reimburse Ohio EPA for costs that are necessary to abate water pollution and soil contamination at the site.

         Count V alleges statutory nuisance against both Muncy and Miller in violation of Ohio Revised Code § 3767.13(B), as contamination in the ground water has allegedly migrated to and ...

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