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Garrett Day LLC v. International Paper Co.

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

November 15, 2017

GARRET DAY LLC, et al., Plaintiffs,
v.
INTERNATIONAL PAPER COMPANY, et al., Defendants.

          District Judge Walter H. Rice

          REPORT AND RECOMMENDATIONS [1]

          Sharon L. Ovington United States Magistrate Judge

         I. Introduction

         The present CERCLA[2] case explores which former owners and operators are responsible for the costs of cleanup efforts undertaken by Plaintiffs Garrett Day LLC and the Ohio Developmental Services Agency at the site of a century-old paper mill in Dayton, Ohio (the Site).[3] Plaintiffs have allegedly spent in the neighborhood of $1.7 million cleaning hazardous substances-trichloroethylene, asbestos, bleaching agents, PCBs (polychlorinated biphenyls), etc.-from the Site. They bring this case against the Site's former owners and operators asserting claims under (1) Section 107 of CERCLA, 42 U.S.C. §§ 9607(a); (2) Ohio's Voluntary Action Program, Ohio Revised Code § 3746.23(A); and (3) common law nuisance.

         Among the many Defendants are Harrison Holdings, L.P.; HPM Investors, Inc.; and HHP, Inc. (the HPP Defendants). They presently seek dismissal of Plaintiffs' First Amended Complaint under Fed. Civ. P. 12(b)(2) for lack of personal jurisdiction. They also seek judgment on the pleadings in their favor under Fed.R.Civ.P. 12(c). The HPP Defendants contend, in the main, that dismissal of Plaintiffs' claims is warranted because the HPP Defendants no longer exist and are, in fact (albeit metaphorically), “dead and buried.” This means to the HPP Defendants that they lack the capacity to sue or be sued and are not “persons” within the meaning of CERCLA.

         Plaintiffs oppose dismissal for reasons to be explored. But first, more needs to be said about the HPP Defendants.

         II. Factual Background

         Accepting Plaintiffs' allegations as true, see E.E.O.C. v. J.H. Routh Packing Co., 246 F.3d 850, 851 (6th Cir. 2001), reveals the following.

         Defendant HPM Investors

          In 1972, St. Regis Paper Company sold the Site and related assets to Howard Paper Mills, Inc. II.[4] This entity-Howard Paper Mills, Inc. II-is also known as Defendant HPM Investors. (Doc. #144, PageID #1232).

         Defendant HPP, Inc.

         In 1989, Howard Paper Group acquired Howard Paper Mills II. Plaintiffs understand, upon information and belief, that Defendant HPP was one of the general partners of Howard Paper Group. Id. at 1233.

         Defendant Harrison Holdings, L.P.

         Defendant Harrison Holdings is formerly known as Howard Paper Group.

         Howard Paper Group

          Plaintiffs allege that in June 1991, the Howard Paper Group sold its business (including its right to its trade name) to several Fox River Paper entities (Fox River Paper) through a purported asset purchase agreement. Id. Plaintiffs assert, “While the Fox River Paper purchase agreement was labeled an asset purchase agreement, Fox River Paper took over Howard Paper Mills, Inc.'s entire business. Put another way, the transaction represented a complete acquisition of Howard Paper Group's operations and business by Fox River Paper.” Id.

         “Following the transaction, Howard Paper Group no longer operated in any capacity….” (with 2 minor exceptions). Id. According to Plaintiffs, “Howard Paper Group signed a noncompetition agreement, effectively preventing Howard Paper from continuing its business.” Id.

         Plaintiffs maintain, upon information and belief, “the most material aspect of the Howard Paper Group that was purportedly not transferred to Fox River Paper was Howard Paper Group's environmental liabilities (which were almost certainly known to the parties at the time). Put simply, Fox River Paper and Howard Paper Group amounted to a de facto merger or consolidation.” Id. at 1234.

         A tiny table attached the HPP Defendants' pending Motion summarizes their description of themselves ...


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