Facts

Plaintiff Pentair Thermal Management, formerly known as Tyco Thermal Controls LLC, is the present owner of property in Redwood City. Defendant Rowe Industries LLC is the successor-in-interest to former operators at the site, Hill Magnetics and several successor entities. After polychlorinated biphenyls (PCB) contamination was found at the site, Tyco sued Rowe under CERCLA to recover the costs for the investigation and clean up of the site.

Rowe denied liability, cross-complained for contribution, and claimed that Tyco failed to comply with the National Contingency Plan (NCP) in performing the remediation.

In approximately late 1966 or early 1967, Hill Magnetics began operating a division that manufactured electrical transformers at the site. During the late 1960s, transformer fluid typically contained PCBs, which made the fluid fire-resistant. Specifically, transformers used a product called Askarels, which contain a high concentration of PCBs. Hill manufactured approximately one to two Askarel-immersed transformers each month.

The records of Monsanto, the primary manufacturer of the PCB-containing Askarels, show that Hill ordered at least 427,361 pounds (approximately 33,287 gallons) of PCB-containing transformer fluids (of the types known as Aroclor 1254 and Aroclor 1260) between 1965 and 1970.

Tyco claims it's predecessor-in-interest Raychem purchased the site in 1973. After the sale, no further transformer manufacturing operations occurred at the site, and no PCB-containing liquids were ever used. PCBs were subsequently detected in the soil at the site. The highest concentration of these PCBs was found at the exact location where Hill had assembled the transformers.

PLAINTIFF'S CONTENTIONS:
Tyco's experts opined that the pattern of this contamination is consistent with spills and leaks from the PCB operations conducted by Rowe.

Rowe's experts claimed that the PCBs were most likely the result of wire operations by Tyco (though no liquid PCBs were used), rail operations (though no evidence exists that the rails utilized PCBs) and/or surface paint (though PCBs were no longer a component of paints after 1971).

Tyco contends it spent approximately $4 million of NCP compliant costs for investigation and cleanup at the site. To date, Rowe has not contributed to these efforts.

Tyco contended that the operations of Rowe's predecessors, Hill, directly caused the PCB contamination at the site, and that no other credible sources for contamination could be identified. It further claimed that its actions taken in response to the contamination were reasonable, necessary, and consistent with the NCP. They asked for 100 percent liability to be assessed against Rowe.

Plaintiff also contended that no special precautions were used in handling the Askarels. Rather, a Hill employee testified that employees often used to immerse their arms up to their elbows in the Askarels while assembling the transformers.

DEFENDANT'S CONTENTIONS:
Rowe Industries Inc. contended that it could not be linked to the contamination, and that other sources (paint, railroad operations, wire manufacture) contributed to the contamination. It further argued that Rowe's response actions were not NCP compliant. They asked for a defense judgment, or, alternatively, that only 10 percent liability is assessed against it.

Settlement Discussions

Tyco demanded $2.3 million, according to plaintiff. Tyco demanded $7.2 million, according to defendant. Rowe offered $600,000.

Result

Bench decision for $3,599,999. The court found in favor of Tyco on the majority of issues submitted. Ultimately, the court issued a judgment in favor of Tyco and against Rowe for $3,599,999. Additionally, the court issued an order finding that Rowe is liable for 100 percent of all necessary future costs of remediating PCB contamination at the site that are consistent with the NCP.

Other Information

Parties attended several mediations and settlement conferences but were unable to settle. Rowe has appealed the judgment. Rowe filed a Rule 52 motion claiming that Tyco failed to meet its burden to show NCP compliance. The court denied this motion. Rowe filed a brief requesting apportionment and contribution, and asking that it be allocated only 10 percent of total liability. The court declined to either apportion the loss or award contribution and found that Rowe was 100 percent liable. However, the court allowed a $425,000 offset due to prior settlements. EXPERT TESTIMONY: Tyco expert, Thomas Delfino opined that the presence of PCBs in soil at transformer manufacturing facilities is common and that, prior to 1972, PCBs were treated as ordinary industrial materials. He testified that the chemical signature of the PCBs were the same as the products that were used by Rowe's predecessors. Delfino concluded that the handling, storage and use of PCB liquids during Rowe's predecessors operations at the site likely resulted in the release of PCBs. Tyco expert, Eric Butler, Ph.D., opined that the source of the PCB contamination at the site and along the rail spur derives from the activities associated with manufacturing PCB-containing electric transformers. Dr. Butler testified that the finding of PCBs demonstrated that di-electric fluids, such as the type known to be used by Rowe's predecessors, were the cause of the contamination. He also testified that he had performed a survey of electrical transformer manufacturing operations (such as those known to be conducted by Rowe's predecessors) and every facility to which information was available was known to have PCB contamination). Tyco expert, Peggy Peischl opined that the response actions taken by Tyco were reasonable and necessary to address PCB contamination above threshold levels. Tyco expert, Steven A. Johnson, opined that Tyco incurred costs for numerous actions that were necessary to respond to the release or threatened release of hazardous materials, in particular PCBs. Johnson testified that Tyco incurred $3,970,126 in costs that were necessary response costs and consistent with the NCP. He also opined that Tyco incurred $55,906 in prejudgment interest calculated from the date of the filing of the initial complaint in this matter. FILING DATE: Nov. 17, 2006.