author: MISHLER, District Judge.

text:
    The STATE OF NEW YORK, Plaintiff, v. The UNITED STATES of America; Caspar W. Weinberger as Secretary of Defense; and Verne Orr, as Secretary of the Air Force, Defendants.
    No. CV 82-2228.
    United States District Court, E.D. New York.
    Oct. 8, 1985.

      Robert Abrams, Atty. Gen. of the State of N.Y., Norman Spiegel, Nancy Stearns, Asst. Attys. Gen., New York City, for plaintiff.
    Raymond J. Dearie, U.S. Atty., E.D. of N.Y., Thomas Battistoni, Asst. U.S. Atty., Brooklyn, N.Y., for defendants; John L. Wittenborn, George B. Henderson, Attys., U.S. Dept, of Justice, of counsel.
   Memorandum of Decision and Order

MISHLER, District Judge.

I. FACTS

Plaintiff, the State of New York, has brought this suit against the United States of America, Caspar Weinberger (Secretary of Defense) and Verne Orr (Secretary of the Air Force) to redress wrongs allegedly committed by defendants against New York State, its citizens and its residents. Defendants allegedly committed these wrongs through “chemical contamination of the groundwaters underlying former Suffolk County Air Force Base and the surrounding area and [through] the threat of further contamination posed to the groundwaters and surface waters of New York State.” (Amended Comp. 111).

From approximately March 27, 1951 to March 31, 1971, defendants operated and controlled the Suffolk County Air Force Base at what is now known as the Suffolk County Airport. After March 31, 1971, defendants transferred ownership of the airbase to Suffolk County, although they still retained possession and control of seventy acres of the airbase for use by New York Air National Guard, 106th Airspace Rescue and Recovery Group. (Id. 119, 11-12).

South and downgradient of the airport are residential areas, which are bordered by Quantuck Creek on the east; Aspatuck Creek on the west; and Quantuck Bay on the south. Plaintiff alleges that all three of these bodies of water are navigable waters rich in marine life. (Id. ¶ 18).

Plaintiff claims that over a period exceeding ten years, defendants spilled, leaked or discharged large quantities of military jet fuel known as JP4 as well as other chemicals into the ground at Suffolk County Airport. Specifically, plaintiff makes the following allegations:

(1) “[B]eginning in the late 1950’s or early 1960’s, a leak in the hydrant system that channeled JP4 jet fuel from the storage tanks to the aircraft at the Suffolk County Airport resulted in discharge of military jet fuel into the soil” until repaired in the fall of 1962 (Id. at Í! 20-21);

(2) In 1967, during a cleaning of the storage tanks, tens of thousands of gallons of jet fuel entered the soil (Id. ÍI23-26);

(3) In February, 1974, while fuel was being transferred from one storage tank to another, more than 10,000 gallons of JP4 was discharged into the soil (Id. ¶ 28-29);

(4) From 1957 to the present, during military firefighting exercises, jet fuel, hydraulic fluid, drain oil and other chemicals, which were “not consumed [by] fire were left in [a] pit and soaked into the soil” (Id. ¶ 31-33);

(5) Until April 1, 1971, defendants operated a Nondestructive Inspection Laboratory “where hazardous chemicals, including dye penetrants, degreasers and acids were used for examining aircraft structures and components for flaws”; when no longer useable, these chemicals were stored temporarily in a lime filled pit from which the chemicals leaked into the soil (Id. ¶ 34-36); and

(6) Defendants disposed of “significant quantities” of contaminated jet fuel, carbon tetrachloride, and other “hazardous chemicals” into a landfill near the airport (Id. ¶ 37-41).

In 1977, hydrocarbon and fuel contaminants were found in residential water wells on Peters Lane located south and downgra-dient from the airport. Due to potential health hazards, Suffolk County installed a water main in this area to provide the residents with a safe source of drinking water. (Id. ÍÍ 43-45).

In 1982, “significant concentrations” of JP4 jet fuel were discovered in groundwater monitoring wells located south and downgradient from the airport. In addition, hydrocarbon contaminants were found in a well on Fairview Avenue, located south of Peters Lane. Suffolk County Health Department advised residents in this area to cease using their private wells. (Id. 1146-49).

II. Legal Claims and Requested Relief

It is this contamination and pollution allegedly caused by the foregoing events and emanating from Suffolk County Airport that forms the factual basis for plaintiff’s complaint. As for the legal underpinnings of plaintiffs complaint, it sets forth nine causes of action, the first and ninth of which are expressly premised upon federal statutes. Under the first cause of action, defendants’ “handling, storage, disposal and discharge of JP4 jet fuel and other hazardous chemicals and failure] to remove them from the soil” purportedly violates § 13 of the Rivers and Harbors Act, 33 U.S.C. § 407 and § 301(a) of the Clean Water Act, 33 U.S.C. § 1311(a). (Id. 11 55-56). Under the ninth cause of action (or what is in actuality the second denominated eighth cause of action in the amended complaint), defendants are allegedly strictly liable to plaintiff for resultant damages to the “land, wildlife, biota, groundwater and other natural resources” and for “all costs and expenses incurred or to be incurred by the State of New York for the removal, remediation and response to the contamination” at and around the airport under § 107(a) of the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9607(a). (Id. II82-83). The other seven causes of action are explicitly grounded on state law as follows: strict liability in tort (second cause of action — ¶[ 57-62); negligent creation of a continuing public nuisance (third cause of action — If 63-67); negligent maintenance of a continuing public nuisance (third cause of action — 1168-71); intentional maintenance of a continuing public nuisance (fifth cause of action — 1172-75); violation of general prohibition against water pollution under New York’s Environment Conservation Law (ECL) § 17-0501 (sixth cause of action —1176-77); violation of ECL § 17-1743 by failing to notify the Department of Environmental Conservation of the 1974 spill of JP4 fuel (seventh cause of action — 1178-79); and violation of ECL § 17-0503 by permitting hazardous substances to “enter the soil and thereby leak into the waters of a Marine District” (eighth cause of action — ¶ 80-81).

Jurisdiction is asserted under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671 et seq., the Clean Water Act, 33 U.S.C. § 1365; CERCLA, 42 U.S.C. § 9601 et seq. and 28 U.S.C. § 1331(a).

As for relief, plaintiff seeks the following:

(1) That defendants be required to remove the jet fuel and other contaminants referred to in this Complaint from the soil and groundwater beneath and down gradient from the Suffolk County Airport and return the site to its ecological condition prior to the spills and discharges of JP4 jet fuel and other hazardous chemicals.
(2) That defendants provide safe drinking water to any person whose well has been or becomes contaminated from jet fuel or other hazardous chemicals referred to in this complaint; or
(3) That defendants be liable to the State of New York for the actual costs of removing or neutralizing the jet fuel and other hazardous chemicals in this complaint referred to; and
(4) That defendants be fined in the amount as provided by law for each day of violation of New York Environmental Conservation Law and the Clean Water Act; and
(5) That defendants reimburse the State of New York for all damages sustained and to be sustained to the natural resources of the State and for all the costs and expenses incurred or to be incurred by the State of New York for remediation and response to the contamination at and in the environs of the Suffolk County Airport as allowed by Section 107(a)(2)(A)(B) of CERCLA, 42 U.S.C. § 9607(a) [; and]
(6) For such other and further relief that this Court deems just and proper.

(Amended Comp. p. 20-21).

Defendants now move to dismiss the amended complaint pursuant to Fed.R. Civ.P. 12(b) for lack of subject matter jurisdiction and/or failure to state a claim upon which relief can be granted. Alternatively they seek judgment on the pleadings under Fed.R.Civ.P. 12(c) or summary judgment under Fed.R.Civ.P. 56. Defendants have submitted affidavits and exhibits in support of their motion, which was submitted without oral argument. Since matters outside the pleadings have been presented and are presently considered by the court, this motion is treated as one for summary judgment. Fed.R.Civ.P. 12(b).

III. DISCUSSION

A. Summary Judgment Standard of Review

We set out the general principles governing summary judgment motions. The moving party has the burden of establishing the absence of a genuine issue of fact. Fed.R.Civ.P. 56(c). Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 244 (2d Cir.1984); United States v. One Tintoretto Painting, 691 F.2d 603, 606 (2d Cir.1982). That burden includes the presentation by the moving party of such “ ‘evidence on which, taken by itself, it would be entitled to a directed verdict.’ ” Donnelly v. Guion, 467 F.2d 290, 293 (2d Cir.1972) (quoting Radio City Music Hall Corp. v. United States, 135 F.2d 715, 718 (2d Cir.1943)). Furthermore, the movant’s burden can only be established “on the basis of admissible evidence adduced from persons with personal knowledge of the facts.” Katz v. Goodyear Tire & Rubber Co., supra, 737 F.2d at 244 (quoting Burtnieks v. New York, 716 F.2d 982, 985 (2d Cir.1983)). The opposing party “must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e); United States v. One Tintoretto Painting, supra, 691 F.2d at 606. Conclusory allegations or denials will not defeat a motion for summary judgment. S.E.C. v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978). “To defeat a summary judgment motion the opposing party must set forth ‘supporting arguments or facts in opposition to the motion.’ S.E.C. v. Research Corp., supra, 585 F.2d at 31. If the opponent fails to substantiate the existence of a genuine dispute, a proper concern for judicial efficiency and the mandate of Rule 56(c) require summary disposition of the issue. Id.” Schering v. Home Ins. Co., 712 F.2d 4, 9 (2d Cir.1983). Summary judgment should not be denied on “the mere possibility that a factual dispute may exist,” Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980) (emphasis in original) or a “mere hope that evidence to support his claim would develop at trial.” Taylor v. Rederi A/S Volo, 374 F.2d 545, 549 (3d Cir.1967). Of course, “the court must resolve all ambiguities and draw all reasonable inferences against the moving party.” Katz v. Goodyear Tire & Rubber Co., supra, 737 F.2d at 244. Lastly, it should be noted that in resolving whether a case is ripe for summary disposition, “the court cannot try issues of fact but can only determine whether there are issues of fact to be tried.” Id. (quoting Empire Eletronics Co. v. United States, 311 F.2d 175, 179 (2d Cir.1962)) (emphasis in original).

B. Subject Matter Jurisdiction

Before we can address the merits of plaintiff’s claims to determine whether they can withstand the instant summary judgment motion, we must initially consider defendants’ challenge to this court’s subject matter jurisdiction of this case. Plaintiff seeks to invoke this court’s jurisdiction under FTCA, 28 U.S.C. §§ 1346(b), 2671 et seq.; the Clean Water Act, 33 U.S.C. § 1365; CERCLA, 42 U.S.C. § 9601 et seq. and 28 U.S.C. § 1331(a). We first address the assertion of jurisdiction under the Federal Tort Claims Act.

1. Federal Tort Claims Act

“The basic rule of federal sovereign immunity is that the United States cannot be sued at all without the consent of Congress.” Block v. North Dakota, 461 U.S. 273, 287, 103 S.Ct. 1811, 1819-20, 75 L.Ed.2d 840 (1983). The FTCA is a congressional waiver of sovereign immunity for “civil actions on claims against the United States, for money damages, ... for injury or loss of property ... caused by the negligent or wrongful act or omission of any employee of the government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.” 28 U.S.C. § 1346(b).

Plaintiff seeks under the FTCA what is described as “monetary” relief from defendants. Since monetary damages is the only form of relief provided for under the FTCA, Birnbaum v. United States, 588 F.2d 319, 335 (2d Cir.1978), plaintiff admits that its request for injunctive relief, which also appears in the complaint, must be premised, if at all, on another jurisdictional basis. (See Plaintiff’s Memorandum of Law at p. 5 n. 2).

Defendants argue that plaintiff’s request for monetary damages is really a claim in nature of equitable restitution to compensate New York for the alleged actual (although unspecified) costs incurred in cleaning up the polluted areas. Defendants’ argument is based on the notion that plaintiff is not seeking the value of natural resources that have been damaged, but rather the cost of removing the pollutants. Plaintiff retorts, however, that the cost of removing the contaminants is simply the suggested measure of damages to its property. The mere fact that this cost is used in calculating requested damages, they conclude, should not transform a claim for monetary damages into one for equitable relief.

We agree with plaintiff. The Supreme Court in Rayonier Inc. v. United States, 352 U.S. 315, 77 S.Ct. 374, 1 L.Ed.2d 354 (1957), held that negligence by the Forest Service permitting a fire to destroy timber, buildings, and other property of the plaintiff’s was actionable under the FTCA. In Rayonier, as in the instant case, plaintiff sought recovery for damage to its property. Decisions which have disallowed recovery under the FTCA when plaintiffs seek merely to recover firefighting expenses and not property damage in connection with the government’s alleged negligence in extinguishing fires, see, e.g., State of Idaho v. United States Department of Army, 666 F.2d 444 (9th Cir.), cert. denied sub nom. 459 U.S. 823, 103 S.Ct. 53, 74 L.Ed.2d 58 (1982); California v. United States, 307 F.2d 941 (9th Cir.1962), are therefore inapposite.

The above conclusion, however, does not end our inquiry as to our jurisdiction over this suit pursuant to the FTCA since the defendants argue that the applicable statute of limitations has expired. 28 U.S.C. § 2675(a) requires plaintiff to present its federal tort claim to the appropriate federal agency prior to filing suit in this court under the FTCA. 28 U.S.C. § 2401 provides the applicable statute of limitations as follows:

A tort claim against the United States shall be forever barred unless it is presented in writing to the appropriate Federal agency within two years after such claim accrues or unless action is begun within six months after the date of mailing, by certified or registered mail, of notice of final denial of claim by the agency to which it was presented.

Although defendants do not concede that plaintiff made its administrative claim within the two year limitation, they provide little argument to dispute that point. Defendants do, however, contest whether plaintiff filed its suit in this court within the six month limitation following the administrative denial of its claim on July 24, 1981. Plaintiff, in fact, filed its complaint on July 29, 1982, more than one year later than the issuance of the administrative final denial letter.

Since it is well established that the six month period to file suit after a denial of an administrative claim is jurisdictional, see, e.g., Childers v. United States, 442 F.2d 1299, 1301 (5th Cir.), cert. denied, 404 U.S. 857, 92 S.Ct. 104, 30 L.Ed.2d 99 (1971); Claremont Aircraft, Inc. v. United States, 420 F.2d 896, 897 (9th Cir.1970); Solomon v. United States, 566 F.Supp. 1033, 1035 (E.D.N.Y.1982); Heimila v. United States, 548 F.Supp. 350, 351 (E.D.N.Y.1982), plaintiffs failure to comply with this requirement precludes this court from invoking subject matter jurisdiction of this case through the FTCA.

2. Rivers & Harbors Act of 1899

Plaintiffs first cause of action is premised on § 13 of the Rivers & Harbors Act of 1899 (“RHA”), 33 U.S.C. § 407 as well as § 301(a) of the Clean Water Act, 33 U.S.C. § 1311(a). (Amended Comp. II 55-56). To the extent, plaintiffs action is grounded upon the RHA, this court has no jurisdiction over it.

It is clear that the RHA makes no explicit provision for any party other than the United States Government to enforce § 13 of the Act. To the degree plaintiff seeks to bring this action “on behalf of all residents and citizens of the State of New York” (Id. 11 5) as a qui tam action, the Second Circuit has held that there is no authority to maintain such action under § 13 of the RHA. E.g., Connecticut Action Now, Inc. v. Roberts Plating Co., 457 F.2d 81 (2d Cir.1972).

Similarly, we find no authority for plaintiff to bring this action under § 13 of the RHA as an implied private right of action. Town of North Hempstead v. Village of North Hills, 482 F.Supp. 900 (E.D.N.Y.1979); Parsell v. Shell Oil Co., 421 F.Supp. 1275 (D.Conn.1976) (Newman, J.), aff'd without published opinion sub nom. East End Yacht Club Inc. v. Shell Oil Co., 573 F.2d 1289 (2d Cir.1977); see California v. Sierra Club, 451 U.S. 287, 292-98, 101 S.Ct. 1775, 1778-81, 68 L.Ed.2d 101 (1981) (where Court held that there is no implied private right of action under § 10 of the RHA).

3. Clean Water Act

Defendants also challenge the court’s jurisdiction over plaintiff’s first cause of action insofar as it is premised on § 301 of the Clean Water Act (“CWA”), 33 U.S.C. § 1311. “The [C.W.A.] makes it unlawful for any person to discharge pollutants into navigable waters except in compliance with the limits and conditions of a discharge permit.” Friends of the Earth v. Consolidated Rail Corp., 768 F.2d 57, 59 (2d Cir. July 19, 1985); see Chemical Manufacturers Assoc. v. Natural Resources Defenses Council, Inc., — U.S. —,—, 105 S.Ct. 1102, 1104, 84 L.Ed.2d 90 (1985).

Section 313 of the CWA, 33 U.S.C. § 1323, waives the sovereign immunity of federal facilities engaging in acts of water pollution and provides in pertinent part as follows:

(a) Each department, agency, or instrumentality of the executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge or runoff of pollutants, and each officer, agent, or employee thereof in the performance of his official duties, shall be subject to, and comply with, all Federal, State, interstate, and local requirements, administrative authority, and process and sanctions respecting the control and abatement of water pollution in the same manner, and to the same extent as any nongovernmental entity including the payment of reasonable service charges. The preceding sentence shall apply (A) to any requirement whether substantive or procedural (including any recordkeeping or reporting requirement, any requirement respecting permits and any other requirement, whatsoever), (B) to the exercise of any Federal, State, or local administrative authority, and (C) to any process and sanction, whether enforced in Federal, State, or local courts or in any other manner. This subsection shall apply notwithstanding any immunity of such agencies, officers, agents, or employees under any law or rule of law.... No officer, agent, or employee of the United States shall be personally liable for any civil penalty arising from the performance of his official duties for which he is not otherwise liable, and the United States ahll be liable only for those civil penalties arising under Federal law or imposed by a State or local court to enforce an order or the process of such court.

Section 505, 33 U.S.C. § 1365, which allows “citizens” a private right of action, provides in pertinent part:

[Any] citizen may commence a civil action on his own behalf — (1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of (A) an effluent standard or limitation under this Act or (B) an order issued by the Administrator or a State with respect to such a standard or limitation, ... The district courts shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to enforce such an effluent standard or limitation, or such an order, or to order the Administrator to perform such act or duty, as the case may be, and to apply any appropriate civil penalties under section 309(d) of this Act [33 USCS § 1319],

Defendants make several arguments that plaintiffs CWA cause of action should be dismissed. First, defendants argue, based upon legislative history, that § 301 of the CWA, 33 U.S.C. § 1311, does not apply to pollutant discharges in groundwater. Rather, they suggest that the section only applies to pollution in navigable waters, which they claim plaintiff has not placed in issue. We decline to reach defendants’ argument as to the scope of § 301 as applied to groundwaters, since it is clear that plaintiff has alleged that the pollutants threaten to contaminate Quantuck Creek, Aspatuck Creek and Quantuck Bay, all of which are undisputably navigable waters. (Amended Comp. ¶¶ 1 & 52). See United States v. GAF Corp., 389 F.Supp. 1379, 1383 (S.D. Texas 1975).

Second, defendants argue that § 313(a) of the CWA, 33 U.S.C. § 1323, only waives their sovereign immunity from liability under state laws which contain objective and administrative pre-established water pollution control standards. They claim that since plaintiff seeks to enforce state laws which require the ad hoc establishment of standards of conduct by the judiciary, their CWA cause of actions should be dismissed.

To examine this argument, we must analyze both § 313 and § 505 of the CWA, 33 U.S.C. §§ 1323, 1365, separately as well as their interrelationship.

Section 313 subjects federal facilities to “all Federal, State, interstate and local requirements ... for the control and abatement of water pollution.” 33 U.S.C. § 1323(a) (emphasis added). Plaintiff claims that the various state laws cited in its complaint are “requirements” within the meaning of § 313.

In Environmental Protection Agency v. California, 426 U.S. 200, 96 S.Ct. 2022, 48 L.Ed.2d 578 (1976) (“EPA v. California), the Supreme Court seems to equate “requirements” in § 313 with effluent limitations and standards. See id. at 215 & n. 28, 96 S.Ct. at 2029-30 & n. 28. The Second Circuit has described effluent standards and limitations as:

administratively established regulations of particular types of dischargers on the amounts of pollutants that may be discharged. See 33 U.S.C. § 1362(11) (defining an “effluent limitation” as “any restriction established by a State or the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources.... ”); Zener, The Federal Law of Water Pollution Control, in Federal Environmental Law 682, 684 (Envtl.L.Inst.1974). The Environmental Protection Agency (“EPA”) is required to establish effluent standards and limitations that all point source dischargers are required to meet. E.g., 33 U.S.C. §§ 1311, 1312, 1316, 1317.

United States v. Hooker Chemicals & Plastics, 749 F.2d 968, 979 (2d Cir.1984).

The Supreme Court ruled in EPA v. California, supra, 426 U.S. at 228, 96 S.Ct. at 2035, that § 313 did not obligate federal facilities to comply with federally approved State permit requirements. Since the ability of the states to enforce their effluent limitations and standards through the National Pollutant Discharge Elimination System “NPDES” was significantly undercut by the Supreme Court’s ruling, Congress amended § 313 in 1977 to explicitly include “procedural” requirements, such as the permit system at issue in EPA v. California. See Romero-Barcelo v. Brown, 643 F.2d 835, 854 n. 36 (1st Cir.1981), rev’d on other grounds sub nom. Weinberger v. Romero-Barcelo, 456 U.S. 305, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982); S.Rep. No. 370, 95th Cong., 1st Sess. 67, reprinted in 1977 U.S.Code Cong. & Ad.News 4326, 4392. This amendment, however, did not “expand the category of applicable substantive requirements” with which federal facilities must comply under § 313. Romero-Barcelo v. Brown, supra, 643 F.2d at 854 n. 35 (emphasis added). Therefore, to the degree the Supreme Court’s ruling in EPA v. California, construed the substantive “requirements” of § 313 to mean effluent limitations, such ruling was unaffected by the 1977 amendments enacted by Congress.

Despite the foregoing case law and legislative history, plaintiff argues “requirements” under § 313 not only include effluent limitations but water quality standards as well. Based on this argument, plaintiff tries to show that although the defendants have not violated any effluent limitations, their alleged violation of water quality standards is actionable under the CWA.

In Bethlehem Steel v. Environmental Protection Agency, 538 F.2d 513, 515 (2d Cir.1976), the Second Circuit discussed at length the distinctions between effluent limitations and water quality standards as employed in the CWA:

Before the 1972 Amendments [to the CWA], water quality standards, as the Eighth Circuit has noted, were the “keystone” of the federal pollution control program. “Under that program, if wastes discharged into receiving waters reduced the quality below permissible standards, legal action could be commenced against the discharger.” CPC International Inc. v. Train, 515 F.2d 1032, 1034-35 (8th Cir.1975). See former 33 U.S.C. § 1160(c)(5), repealed by the 1972 Act. This system was subject to criticism for several reasons. Many critics argued that the water quality standards simply were not set high enough. More important for our purposes, it was argued that enforcement was inadequate, both because the procedure was peculiarly cumbersome, and because the burden of proving that a particular polluter had caused the water quality to dip below the standards was all but impossible to satisfy.
It was this dissatisfaction with water quality standards as a method of pollution control that led to the proposal that they be replaced or supplemented with “effluent limitations”:
The concept of effluent limitation has been offered as a logical alternative to the water quality standards. Instead of indirectly measuring discharges by their effect on water quality, monitoring equipment would directly measure discharges at their source.
Boston College Note, supra note 5, at 752. See also statement of Hon. William D. Ruckelshaus, then Administrator of the Environmental Protection Agency, in Hearings on H.R. 1186, House Committee on Public Works (Dec. 7, 1972), reported in 2 Legislative History, supra note 2, at 1182-83. The 1972 Amendments to the [CWA] adopted this proposal, and changed the emphasis in the statutory scheme of water pollution control from that of regulating the quality standard of the body of water involved to regulating not only the quality standard of the body of water but also the quality of the effluent discharged into the body of water....
Thus, although water quality standards and effluent limitations are related, ... the two are entirely different concepts and the difference is at the heart of the 1972 Amendments.

Id. at 515 (citations omitted) (footnotes omitted) (emphasis in original).

Plaintiff argues that because water quality standards were directly enforceable against dischargers under the Act prior to the 1972 amendments, they are currently directly enforceable against the defendants. Therefore, plaintiff concludes, there was no need for the substantive requirements of § 313 to be broadened by the 1977 amendment to include water quality standards, since such standards were already encompassed within the section. What plaintiff fails to realize, however, is that prior to the 1972 Amendments, the CWA did not provide for any waiver of sovereign immunity by federal facilities. See 84 Stat. 107, 38 U.S.C. § 1171(a) (1970). Moreover, as will be discussed subsequently in our analysis, prior to the 1972 amendments, there existed no private right of action for citizens to bring suit. It was only when Congress established the NPDES permit system, regulating the discharge of pollutants by specific individuals or entities, as well as changed the emphasis in enforcement under the CWA from water quality standards to effluent limitations, that Congress provided for the right of citizens to bring suit against the federal government under § 505, 33 U.S.C. § 1365. Therefore, we conclude that it is unlikely that Congress intended to waive sovereign immunity and provide for citizen suits under a method of enforcement — water quality standards — which it found to be so inadequate when the CWA was amended in 1972. See Bethlehem Steel v. Environmental Protection Agency, supra, 538 F.2d at 515. Eather, sovereign immunity was waived only with respect to violations of effluent limitations. This conclusion is strengthened when one considers § 505, 33 U.S.C. § 1365, in depth.

In Hancock v. Train, 426 U.S. 167, 96 S.Ct. 2006, 48 L.Ed.2d 555 (1976), the Supreme Court examined the interrelationship of the parallel provisions of the Clean Air Act regarding the waiver of sovereign immunity as to federal facilities and the citizens’ statutory right of action. The Court concluded in Hancock that “it seems most unlikely that in providing that a State might bring suit in district court to enforce the duties of federal installations under § 118 [42 U.S.C. § 1857], the Congress would not make all of those duties enforceable in district court.” Id. at 197, 96 S.Ct. at 2021. Thus, the Court concluded that the citizens’ suit provision and the waiver of sovereign immunity under the Clean Air Act are coextensive and are defined with reference to each other. Id.; see also EPA v. California, supra, 426 U.S. at 222-23, 96 S.Ct. at 2033.

Similarly, we conclude that § 313, 33 U.S.C. § 1323, and § 505, 33 U.S.C. § 1365 should also be construed as coextensive. Thus, the requirements for which § 313 waives federal sovereign immunity should be equal to the right of citizens to sue the United States under § 505 for violations of “effluent standards or limitations.”

As previously mentioned, § 505 provides for suits “against any person (including ... the United States ...) who is alleged to be in violation of ... an effluent standard or limitation.” 33 U.S.C. § 1365. Effluent standards or limitations are further defined in that section as follows:

For purposes of this section, the term “effluent standard or limitation under this act” means (1) effective July 1, 1973, an unlawful act under subsection (a) of section 301 of this Act [33 U.S.C. § 1311]; (2) an effluent limitation or other limitation under section 301 or 302 of this Act [33 U.S.C. § 1311 or 1312]; (3) standard of performance under section 306 of this Act [33 U.S.C. § 1316]; (4) prohibition, effluent standard or pretreatment standards under section 307 of this Act [33 U.S.C. § 1317]; (5) certification under section 401 of this Act [33 U.S.C. § 1341]; or (6) a permit or condition thereof issued under section 402 of this Act [33 U.S.C. § 1342], which is in effect under this Act (including a requirement applicable by reason of section 313 of this Act [33 U.S.C. § 1323].

§ 505(f), 33 U.S.C. § 1365(f).

Subsections (f)(1) through (f)(4) refer to control requirements of federal law and (f)(5) pertains to requirements of state law which are specified in federally issued NPDES permits. Subsection 505(f)(6) refers to a “requirement” applicable under § 313, 33 U.S.C. § 1323, which is “in effect” as being issued under a permit or condition under the NPDES permit authority of § 402, 33 U.S.C. § 1342. Thus, on the face of the statute, the only state law “requirements” which are enforceable under § 505 are those established administratively through the issuance of NPDES permit. See EPA v. California, supra, 426 U.S. at 222-24, 96 S.Ct. at 2033.

This interpretation of § 505 is supported by examining its legislative history. The Senate Report accompanying the amendments to the CWA which added the private right of action of citizens in § 505 states the following:

Section 505 would not substitute a “common law” or court-developed definition of water quality. An alleged violation of an effluent control limitation or standard, would not require reanalysis of technological in other considerations at the enforcement stage. These matters will have been settled in the administrative procedure leading to the establishment of such effluent control provision. Therefore, an objective evidentiary standard will hve to be met by any citizen who brings an action under this section.
... Whether abatement is sought by an agency or by a citizen, there should be a considerable record available to the courts in any enforcement proceeding resulting from the Federal and State administrative standard-setting procedures. Consequently, the factual basis for enforcement of requirements would be available at the time enforcement is sought, and the issue before the courts would be a factual one of whether there had been compliance.

S.Rep. No. 414, 92d Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad. News 3668, 3745, 3746. Therefore, it is clear that Congress intended that § 505 would create a private right of action only to enforce effluent limitations and standards that are administratively predetermined through NPDES permits issued under §§ 301, 302, 304, 306, and 307. As a necessary implication of this explicit legislative intent, we conclude that Congress did not wish to authorize suits under § 505 against federal facilities under state water quality standards since that would require the courts to develop their own definition of what are prohibitive levels of water pollution.

This conclusion that water quality standards are not enforceable under § 505 is also supported by the relevant case law. See, e.g., United States v. Hooker Chemicals & Plastics, supra, 749 F.2d at 978 (“[ajuthority granted to citizens to bring enforcement actions under [§ 505] is limited to effluent standards or limitations established administratively under the Act” and do not pertain to the “creation of an imminent and substantial endangerment”) (quoting S.Rep. No. 414, reprinted in 1972 U.S.Code Cong. & Ad.News at 3747 (emphasis in original)); Stream Pollution Control Board of Indiana v. U.S. Steel, 512 F.2d 1036, 1041 (7th Cir.1975) (action to abate a nuisance is not actionable under § 505 since it is not an action commenced to require compliance with an effluent limitation, standard or administrative order); Town of North Hempstead v. Village of North Hills, supra, 482 F.Supp. at 904 (action under § 505 “may only be maintained to enforce a previously promulgated effluent standard or order of the Administrator of the EPA with respect to such a standard”); cf. Romero-Barcelo v. Brown, supra, 643 F.2d at 855-56 (interpreting the analogous citizens’ suit provision, 42 U.S.C. 4711, and the analogous federal sovereign immunity waiver provision, 42 U.S.C. 4903, of the Noise Control Act, the Court concluded that “requirements” respecting noise control and abatement do not include the Commonwealth of Puerto Rico’s nuisance statute since it does not provide the type of “relatively precise standards capable of uniform application to similar sources of sound”).

After a thorough consideration of plaintiff's second through eighth causes of action-all of which are based on state law-in light of the foregoing analysis, we conclude that all of these theories of suit fail to provide the types of substantive "requirements" that are enforceable under § 505 and § 313. This failure is predicated on a common defect-the lack of an objective, administratively predetermined effluent standard or limitation or administrative order upon which to measure the prohibitive levels of water pollution. Extensive discussion of each of the state causes of action is unnecessary since it is clear that utilization of any of them as a basis of suit under the CWA would result in the type of ad hoc judicial enforcement Congress clearly did not envision.

4. Comprehensive Environmental Response Compensation and Liability Act (CERCLA)

Plaintiffs ninth cause of action seeks relief under CERCLA, 42 U.S.C. § 9601 et seq. for costs and expenses in the "removal, remediation and response to the contamination” which allegedly occurred. (Amended Comp. H 83).

As analyzed by the Second Circuit in State of New York v. Shore Realty Corp., 759 F.2d 1032 (2d Cir.1985):

CERCLA was designed to “bring order to the array of partly redundant, partly inadequate federal hazardous substances cleanup and compensation laws.” It applies “primarily to the cleanup of leaking inactive or abandoned sites and to emergency responses to spills.... ” And it distinguishes between two kinds of response: remedial actions — generally long-term or permanent containment or disposal programs — and removal efforts — typically short-term cleanup arrangements.

Id. at 1040 (footnotes omitted) (quoting F. Anderson, D. Mandelker & A. Tarlock, Environmental Protection: Law and Policy 568 (1984)). CERCLA authorizes the federal government, through the auspices of the Environmental Protection Agency (“EPA”) to respond to toxic pollution in several ways: (1) “EPA can use Superfund resources to clean up hazardous waste sites and spills,” 42 U.S.C. § 9611, in accordance with the National Contingency Plan’s (“NCP”) standards and procedures, established by the EPA, 42 U.S.C. § 9605; (2) “EPA can sue for reimbursement of cleanup costs from any responsible parties it can locate,” 42 U.S.C. § 9607; (3) EPA can “seek an injunction in federal district court to force a responsible party to clean up any site or spill that presents an imminent and substantial danger to public health or the environment,” 42 U.S.C. § 9606(a). Id. at 1041. In addition to congressional authorization of cleanup responsibility .to the EPA under CERCLA, the Act also provides that states “can sue responsible parties for remedial and removal costs if such efforts are ‘not inconsistent with’ the NCP.” Id. (quoting 42 U.S.C. § 9607(a)(4)(A)). Moreover, although CERCLA does not preempt state law, 42 U.S.C. § 9614(a), it does prohibit “states from requiring contributions to any fund ‘the purpose of which is to pay compensation for claims ... which may be compensated under CERCLA’ ”. Id. (quoting 42 U.S.C. § 9614(c)). Finally, it should be noted that under CERCLA responsible parties are “liable for ... damages for injury to destruction of, or loss of natural resources, including or loss resulting from such a release,” 42 U.S.C. § 9607(a)(4)(c), under the doctrine of strict liability. Id. at 1042.

In the case at bar, plaintiff, the State, of New York, brings suit against the defendants for their alleged violation of 42 U.S.C. § 9607(a)(4)(A) & (B) as a result of their disposal of “hazardous substances.” Defendants neither dispute that the United States Government is amenable to suit under CERCLA, 42 U.S.C. § 9607(g) nor that they are a “person” who can be held strictly liable under the statute. 42 U.S.C. § 9601(21) (“ ‘person’ means ... United States Government”). Rather, defendants premise their motion for summary judgment on the CERCLA cause of action on the theory that JP4 jet fuel which allegedly polluted the area in question is not a “hazardous substance” within the meaning of CERCLA.

42 U.S.C. § 9601(14) defines hazardous substance as follows:

(A) any substance designated pursuant to section 311(b)(2)(A) of the Federal Water Pollution Control Act [33 USCS § 1321(b)(2)(A)], (B) any element, compound, mixture, solution, or substance designated pursuant to section 102 of this Act [42 USCS § 9602], (C) any hazardous waste having the characteristics identified under or listed pursuant to section 3001 of the Solid Waste Disposal Act [42 USCS § 6921] (but not including any waste the regulation of which under the Solid Waste Disposal Act has been suspended by Act of Congress), (D) any toxic pollutant listed under section 307(a) of the Federal Water Pollution Control Act [33 USCS § 1317(a)], (E) any hazardous air pollutant listed under section 112 of the Clean Air Act [42 USCS § 7412], and (F) any imminently hazardous chemical substance or mixture with respect to which the Administrator has taken action pursuant to section 7 of the Toxic Substances Control Act [15 USCS § 2606]. The term does not include petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance under subparagraphs (A) through (F) of this paragraph, and the term does not include natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas).

Plaintiff specifically alleges that the defendants disposed of JP4, carbon tetrachloride, dye penetrants, degreasers, acids, hydraulic fluid, drain oil and other hazardous chemicals. Defendants claim that JP4 “consists of one or more fractions of crude petroleum,” which is “a complex mixture of organic compounds,” containing “some quantities of benzene toluene [and] xylene.” (Churchill Aff. ¶¶4, 7 & 8). Although defendants acknowledge that pursuant to 42 U.S.C. § 9601(14)(A) & (C) that benzene, toluene and xylene have been individually designated to be “hazardous substances,” 40 C.F.R. § 116.4; 40 C.F.R. § 261.33, they argue that JP4 is a “petroleum” product explicitly excluded from the statutory definition of “hazardous substances.”

While it is true that 42 U.S.C. § 9601(14) does exclude petroleum, “crude oil or any fraction thereof” as a hazardous substance, such exclusion is conditioned on the substance in question not being “specifically listed or designated as a hazardous substance under subparagraphs (A) through (F).” 42 U.S.C. § 9601(14). To avoid the fatal impact to their argument by the fact that components of JP4 are specifically designated as hazardous substances, defendants argue that “[i]f the mere presence of small amounts of benzene, toluene and xylene were held to remove a petroleum product from the exemption, many of the most common petroleum products, and crude petroleum itself, would fall outside the ambit of the exemption.” (Defendants’ Memorandum of Law p. 78).

Although defendants’ argument has some surface appeal, based upon the facts as they are presently before us, we need not reach this issue of statutory construction to deny defendants’ summary judgment motion. This decision is based on the following reasons. First, even if the defendants’ statutory interpretation is correct, there exists a genuine factual dispute as to whether these hazardous substances —benzene, toluene and xylene — were originally constituents of other materials besides JP4. This factual dispute is based on plaintiff’s claims that (supported by an affidavit from an environmental scientist) that these substances are constituents of a variety of non-petroleum products, including some of the chemical solvents defendants allegedly disposed of at the sites in question. (Shkuda Aff. ¶ 3).

Second, plaintiff alleges and the defendants have not disputed that “carbon tetrachloride, diethylether, chlorobenzene, acetone, methyethyl ketone, 1, 1, 1-triehloroe-thane, 1, 1, 2-trichloroethane, trichloroethy-lene, bromobenzene and tetrachloroethy-lene” are all hazardous substances within the meaning of 42 U.S.C. § 9601(14) as specified in 40 C.F.R. § 261.33, and have all been found to contaminate the groundwater in question. {Id. 117).

Thus, based upon the foregoing, we conclude that plaintiff has raised a genuine factual dispute as to whether or not defendants disposed of hazardous substances within the meaning of CERCLA. Defendants’ motion for summary judgment with respect to the CERCLA cause of action is therefore denied.

5. Pendent State Law Claims

Plaintiff has set forth seven causes of action based exclusively upon state law. Assuming arguendo that these causes of action and the federally based CERCLA action “derive from a common nucleus of operative fact,” United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966), and that the state law claims are legally cognizable, we are still without jurisdiction to entertain them. Our lack of jurisdiction over these claims is premised on plaintiffs failure to show any waiver of sovereign immunity with respect to these state law actions. See United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976) (“It has long been established, of course, that the United States, as sovereign, ‘is immune from suit save as it consents to be sued ... and the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit.’ ”) (quoting United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769-70, 85 L.Ed. 1058 (1941)). Plaintiff’s attempt at relying upon the Federal Tort Claims Act as a basis for jurisdiction and to provide a waiver of sovereign immunity over these claims was rejected because of plaintiff’s failure to comply with the relevant six month statute of limitations. Similarly, we rejected any reliance upon the CWA as a basis for jurisdiction and waiver of sovereign immunity over these claims since these causes of action do not fall within our construction of the term “requirement.” Lastly, we conclude that CERCLA’s waiver of sovereign immunity cannot apply to these state law claims since it is clear from the relevant statute that the waiver is limited only to compliance with CERCLA. 42 U.S.C. § 9607(g) (“Federal Government shall be subject to and comply with this Act in the same manner and to the same extent ... as any nongovernmental entity_”) (emphasis added). Therefore, finding no basis upon which we conclude that there is a waiver of sovereign immunity as to the state law claims, these claims are dismissed for lack of subject matter jurisdiction.

IY. CONCLUSION

Defendants’ motion for summary judgment is granted in part insofar as the first eight causes of action enumerated in the amended complaint are dismissed and is denied in part with respect to the CERCLA claim, the ninth cause of action enumerated in the amended complaint.

SO ORDERED.

      . Moreover, the slip opinions attached to Defendants’ Reply Memorandum of Law holding— for purposes of a right to a jury trial — that CERCLA suits are in the nature of equitable restitution and therefore do not warrant a jury trial, e.g., United States v. Reilly Tar & Chemical Corp., 20 Env’t Rep Cas (BNA) (D.Minn.1984) are of little relevance on the issue of whether plaintiff may invoke the court’s jurisdiction under the FTCA.

      . Defendants also argue that plaintiffs’ public nuisance claim cannot be maintained under the FTCA because it is based on a strict liability standard of care under New York law and the FTCA abrogates sovereign immunity of the defendants only for their negligent or wrongful acts. See Laird v. Nelms, 406 U.S. 797, 798-99, 92 S.Ct. 1899, 1900-01, 32 L.Ed.2d 499 (1972). Defendants, however, misconstrue New York law on public nuisance. As the New York Court of Appeals ruled:
      A nuisance, either public or private, based on negligence and whether characterized as either negligence or nuisance, is but a single wrong and "whenever a nuisance has its origin in negligenct,” negligence must be proven.

        Copart Industries, Inc. v. Consolidated Edison Co. of New York, 41 N.Y.2d 564, 565, 394 N.Y.S.2d 169, 173, 362 N.E.2d 968 (1977). Since plaintiffs allege a negligent creation and negligent maintenance of a public nuisance, defendants’ negligence must be proven and the claims could be actionable under the FTCA had plaintiff filed this suit within the applicable six month period.

      . "Under the NPDES, it is unlawful for any person to discharge a pollutant without obtaining a permit and complying with its terms.” EPA v. California, supra, 426 U.S. at 205, 96 S.Ct. at 2025.


source: Caselaw Access Project

license: Public Domain

text:
    MAGNUS ELECTRONICS, INC., Plaintiff, v. ROYAL BANK OF CANADA, et al., Defendants.
    No. 84 C 7630.
    United States District Court, N.D. Illinois, E.D.
    Oct. 8, 1985.

      Scott A. Brainerd, Brainerd & Bridges, Chicago, Ill., for plaintiff.
    Gordon B. Nash, Jr., Gardner, Carton & Douglas, Chicago, Ill., Bruno A. Ristau, Kaplan, Russin & Vecchi, Washington, D.C., for defendant.
   MEMORANDUM OPINION AND ORDER

Magnus Electronics, Inc. (“Magnus”) originally sued Aerolineas Argentinas (“Aerolíneas”) and Royal Bank of Canada (“Bank”) because of the nondelivery of Magnus’ goods sold to Argentine purchaser Alfredo DiLullo (“DiLullo”). When Mag-nus struck out against Aerolineas (see this Court’s three opinions reported beginning at 611 F.Supp. 436), it shifted to an attack on the Argentine Republic (“Argentina”) via its Second Amended Complaint (the “Complaint”). Argentina promptly moved for dismissal for lack of jurisdiction (both over it, Fed.R.Civ.P. (“Rule”) 12(b)(2), and over the subject matter, Rule 12(b)(1)). It is right on both grounds, and this action is dismissed.

Facts

In October 1981 Magnus entered into a written contract to sell goods to DiLullo (Complaint U 3). Under the contract Mag-nus was to cause the goods to be delivered to DiLullo in Buenos Aires through Bank, which was to assure that the goods were delivered only against payment of the purchase price (Complaint If 4). Magnus’ freight forwarder caused the goods to be shipped to Miami, where Aerolineas took possession under an airway bill designating Bank as sole consignee (id.).

On November 11, 1981 (shortly after the goods had arrived in Buenos Aires) “agents of the Argentine Air Force, acting in their capacity on behalf of the Argentina [sic] military, unlawfully seized and took possession of [Magnus’] goods in Argentine customs” (Complaint It 7). That conversion was implemented by use of at least one forged document (id.), information of the seizure and conversion was suppressed and the goods were classified as “War Secret” material (Complaint II 8). Magnus believes DiLullo “also participated in the aforesaid fraud and withheld information of the unauthorized release” (id.).

“In so acting to cause [Magnus’] goods to be fraudulently converted for Argentine military purposes, the Country of Argentina has acted in violation of international law” (Complaint II9). Those acts of fraud and conversion are alleged to be “without the scope of sovereign judicial immunity” (Complaint ¶ 10).

Lack of Personal Jurisdiction

Argentina is a sovereign state. As with any sovereign, it is amenable to suit only by strict and literal compliance with the Foreign Sovereign Immunities Act of 1976 (the “Act”), 28 U.S.C. §§ 1330 and 1602-1611, for “the comprehensive scheme established by the [Act] is the exclusive means by which foreign countries may be sued in American courts.” Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 372 (7th Cir.1985) (per curiam).

Section 1608(a)(3) mandates service on Argentina’s Ministry of Foreign Affairs “by any form of mail requiring a signed receipt.” In this case it appears Magnus arranged for delivery to the Argentine Ministry by an Argentine notary, instead of service by mail.

That noncompliance with the Act’s literal requirements (though it certainly did provide notice) deprives this Court of personal jurisdiction. But because such a procedural defect is obviously curable, this opinion goes on to deal with the noncurable subject matter deficiency in Magnus’ claim.

Lack of Subject Matter Jurisdiction

Again the sovereign status of Argentina forces Magnus to invoke the Act, without whose provisions Argentina is invulnerable to suit here. Magnus seeks to call into play Section 1605(a)(2):

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
******
(2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.

First it is clear the action, predicated on an alleged fraudulent seizure and conversion of Magnus’ goods in Argentina, is not within the statute’s first clause, referring to “commercial activity carried on in the United States by the foreign state.” Though Magnus, playing fast and loose with the rules, goes outside the record to ascribe Aerolíneas’ United States activities to Argentina, even it does not say that provision applies. And of course the second clause of the statute is plainly inapplicable. Magnus claims instead under the last clause of Section 1605(a)(2).

But on that score Magnus has double difficulty: It fails to satisfy both the “commercial activity” requirement and the “direct effect” test. This opinion will deal with each in turn.

As for the “commercial activity” ingredient, Magnus attempts to gloss over the consequence of the fact that, by its own description of the transaction, it “was of a commercial nature, [Magnus] sending goods to an Argentine buyer [DiLullo] in a regular, for-profit commercial transaction” (Magnus Mem. 7). Argentina was not in that conceded “commercial activity” — indeed Magnus’ grievance is that Argentina wrongfully sidetracked that commercial transaction by intercepting the goods before they reached their rightful destination. Magnus simply cannot force its lawsuit based on that allegedly tortious conduct (an act of international piracy, as Magnus would have it) into the mold of “commercial activity of a foreign state.”

That common sense meaning of “commercial activity” comports with the gravamen of the Section 1605(a)(2) exception. As Harris v. VAO Intourist, Moscow, 481 F.Supp. 1056, 1064 (E.D.N.Y.1979) put it:

As it is used in section 1605(a)(2), “commercial activity” is meant to distinguish activity which results from what in our society would be termed governmental, public or sovereign enterprises — e.g., running police departments or parks— from those resulting from the acts of foreign state agencies or instrumentalities acting in what we would deem a commercial capacity — e.g., operating hotels or cruise ships. See Yessenin-Volpin v. Novosti Press Agency, Tass, 443 F.Supp. 849 (S.D.N.Y.1978).

For better or worse, governmental expropriation of private property is the paradigmatic instance of activity coming under the first rubric and not the second. Whatever else Argentina's alleged conduct may be termed, it is not “commercial activity.”

As for “direct effect,” Magnus seeks to read that requirement as though mere economic impact on a United States party, caused by a foreign government’s actions on its own soil, were enough to subject the foreign sovereign to suit here. That construction of course would prove too much: It would eliminate sovereign immunity altogether, for all the United States plaintiff would have to show would be damages caused by the alleged wrongful conduct of the foreign government in its own territory. Due process constraints preclude such a broad sweep against private litigants (see e.g., State Security Insurance Co. v. Frank B. Hall & Co., 530 F.Supp. 94, 98-100 (N.D.Ill.1981) ), and it would be anomalous indeed if a foreign nation could be haled into court here on so slender a connection when a non-sovereign could not.

Not surprisingly, that has been the courts’ approach to tort litigation sought to be carried on in the United States against foreign governments. Harris, 481 F.Supp. at 1064-65; Upton v. Empire of Iran, 459 F.Supp. 264 (D.D.C.1978), aff'd mem., 607 F.2d 494 (D.C.Cir.1979); Verlinden B.V. v. Central Bank of Nigeria, 488 F.Supp. 1284, 1298 (S.D.N.Y.1980), aff'd on other grounds, 647 F.2d 320 (2d Cir.1981), rev’d on other grounds, 461 U.S. 480, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). Among the other inapplicable opinions Magnus seeks to reshape into authority purportedly supporting its position is Carey v. National Oil Corp., 592 F.2d 673 (2d Cir.1979) (per curiam), a case that in fact supports Argentina and the conclusion reached in this opinion.

Accordingly Magnus has not established the predicate for suing Argentina under the Act. This action is dismissed.

      . This account is drawn from the Complaint. Magnus’ responsive Memorandum has imper-missibly amplified its own allegations with assertions contained in a letter its lawyer wrote this Court April 30, 1985. That letter was written after this Court had dismissed Magnus’ claim against Aerolíneas, when Magnus sought to show Aerolineas has fraudulently concealed the existence of Magnus' cause of action. This Court simply assumed those assertions were true arguendo in its First Supplemental Opinion, 611 F.Supp. at 444-45. Contrary to Mag-nus' present assertion, that did not make the letter part of the official record. Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir.1984). And certainly Magnus' May 20, 1985 filing of the Complaint after having written that letter, without embodying those assertions in the Complaint, must be viewed as its choice to go with the Complaint's allegations rather than the earlier statement. In much the same way Magnus’ lawyer has just (after this opinion was already dictated and on the word processor) sent an unbidden October 7 letter "by way of response to defendant’s reply brief in support" of Argentina's current motion. That letter, filed without leave of court and stating a desire to amend the Complaint further to "plead[ ] a conspiracy between Argentina, its 100% owned airline, and DiLullo,” has not been taken directly into account in this opinion. It is not clear, however, how any amendment based on either of counsel’s letters would change the result reached here (and counsel must be mindful of the Rule 11 implications of wrenching the facts to get around that result).

      . All citations to the Act will simply take the form “Section —," with numerical references to Title 28 and not to the Act’s internal numbering.

      . Argentina also claims (Mem. 6 n. 4) the "Notice of Suit,” also required by Section 1608(a)(3), "did not comply with the form prescribed by the Secretary of State in the implementing regulations, 22 C.F.R., Part 93.” It also appears the transmittal may not have included a copy of the summons (another statutory requirement). This opinion however need not deal with those questions, because one flaw under the Act is as fatal as two or three.

      . In an instance typical of Magnus’ misuse of precedent, it cites Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137 (7th Cir.1975) for the proposition that for jurisdictional purposes the concept of "tortious act” embraces injury, and that for long-arm purposes the tort situs is where the injury occurs. That general proposition was applied in Honeywell to subject a foreign patent infringer to suit where it had induced infringement in Illinois. But Illinois itself has since made plain that mere economic impact in this state is insufficient to subject the out-of-state actor to suit here. Green v. Advance Ross Electronics Corp., 86 Ill.2d 431, 438-39, 56 Ill.Dec. 657, 661-62, 427 N.E.2d 1203, 1207-08 (1981) (distinguishing Honeywell on that very ground).

      . Magnus included Aerolíneas in the Complaint even though this Court had previously entered final judgment on its action against the airline. Accordingly the joinder of Aerolíneas is barred by claim preclusion (res judicata). As for Bank, it has been dismissed out with prejudice pursuant to a June 25, 1985 stipulation with Magnus.


author: LITTLE, District Judge.

text:
    Lee J. and Joan R. THEVENOT v. NATIONAL FLOOD INSURANCE PROGRAM.
    Civ. A. 84-0253.
    United States District Court, W.D. Louisiana, Alexandria Division.
    Oct. 10, 1985.
    Peter J. Lemoine, Boatner & Luke, Bunk-ie, La., for plaintiffs.
    Joseph S. Cage, Jr., U.S. Atty., David A. Titman, Asst. U.S. Atty., Shreveport, La., for defendant.
   OPINION

LITTLE, District Judge.

Mr. & Mrs. Lee J. Thevenot, hereinafter referred to as “Thevenot”, filed this suit to recover on a flood insurance policy issued pursuant to the National Flood Insurance Program for flood damage sustained in May of 1983. The defendant is the flood insurer for Thevenot. Thevenot also claims penalties and attorney’s fees for the arbitrary and capricious denial of the claim. The defendant denies any indebtedness and has filed a counterclaim alleging that The-venot has filed a false claim, 31 U.S.C. § 3729, and that legal penalties should apply-

This matter was tried before the Court without a jury on 26 and 27 September 1985. Having considered the pleadings, the evidence adduced at trial, the memoran-da submitted by counsel and the law, the Court now renders its decision.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Thevenot purchased a mobile home on 4 November 1974 for $9,000 from Cenia Bank in Marksville, Louisiana. Cenia Bank was the creditor of a mobile home manufacturer. Cenia foreclosed, acquired whatever title its debtor had to certain assets and then sold the assets. The construction of the mobile home had not been completely finished at the time of the Thevenot sale. A few features were added by Thevenot, including furnishings, prior to transporting the mobile home to an area near Grand Lake in Avoyelles Parish. There is testimony that the act of quitclaim deed from Cenia to Thevenot is in error in that the property sold for $9,000 included not only the mobile home but also a forklift and perhaps some hand tools. The purchase price of the mobile home is not material to the decision in this matter.

A flood occurred in May of 1983 damaging the mobile home and contents. Neither Thevenot nor the mobile home were strangers to the consequence of rising water. The mobile home and contents were damaged by floods in 1975, 1979 and January of 1983 as well as the flood of May of 1983, which is the subject matter of this lawsuit. Thevenot received $18,300 for flood loss to the mobile home and contents in 1975, $16,-621 for loss in 1979 and $2,544.50 for loss in January of 1983. For the May of 1983 flood Thevenot’s petition in this matter claims $27,612 in damages. History supports the conclusion that Thevenot was an experienced flood loss claimant.

Under the basic terms of the policy issued by the defendant, Thevenot is entitled to recover the replacement cost for damages sustained in the May 1983 inundation. The evidence is clear and convincing that Thevenot did not repair and refurbish, the mobile home after the floods of 1975, 1979 or January of 1983. The little repair work performed after each flood was minor in nature and not of such magnitude contemplated by the amount of each previous flood damage payment. The Court is impressed and convinced by the testimony of the expert, Jim Hill. Mr. Hill has many years of experience in mobile home flood damage inspection, repair, purchase and resale. He is also experienced in estimating contents damage and replacement cost. The Court, after observing the demeanor of the plaintiffs’ witnesses and their testimony, is clearly convinced that the testimony of repair as described by Mr. Thevenot and his witnesses is inaccurate, untrue and incredible. The Court believes that Mr. Hill’s appraisal of the fair market value of the mobile home immediately prior to the May flood to be accurate, i.e., $500. The only other witness who had an opinion of value was Mr. Kenneth Gremillion who was a guest in the mobile home sometime before the 1983 floods. He has some experience in the business, but mobile home sales, service and appraisal are not his major concern. He opined that the value would be $7,000, less $2,000 if the insulation was wanting. There is no doubt that the insulation was nonexistent or impotent in May of 1983. The cost of removal was not considered by Mr. Gremillion. Mr. Hill’s inspection included a head-to-toe analysis and it is his opinion which the Court values and adopts.

The conclusion as to the value of the contents in May of 1983 is somewhat more difficult. The list prepared by Thevenot includes items which were not damaged in the flood (table, chairs, TV, pots, etc.). Some items such as food, hunting and fishing equipment are listed but no testimony was given as to the actual description of the items let alone any evidence as to their value at the time of the loss. The stove had been stolen and there is no evidence as to when it was stolen, i.e., before or after the flood. From what he saw during his inspections, expert Hill appraised the damaged material at $500. Thevenot’s witness estimates that used furniture would cost $1,500 and that would replace what he understands the Thevenots to have lost. The proof submitted by the plaintiffs to the value of the contents of the mobile home is lacking and without content or credence. The Court adopts the conclusion of expert Hill that the actual value of the contents of the mobile home immediately prior to the May flood was $500.

Under the terms of the policy, the deductible was $500 for building loss and $500 for content loss. The evidence preponderates that the value of the mobile home was $500 and the value of the contents was $500 immediately prior to the May 1983 flood. Accordingly, Thevenot is not entitled to any recovery under the policy-

Even if this Court had found Mr. & Mrs. Thevenot entitled to more than the policy deductible amounts, which it does not, this Court would invoke the following policy provision and deny any recovery whatsoever.

“Article VIII — General Conditions and Provisions.
B. Concealment, Fraud: We will not cover you under this policy if you have sworn falsely, or willfully concealed or misrepresented any material fact or done any fraudulent acts concerning this insurance (See ‘F’, below).
F. Voidance, Reduction or Reformation of the Coverage By Us:
Voidance: This policy shall be void and of no legal force and effect in the event that any one of the following conditions occurs:
d. In the event you or your agent have (i) sworn falsely or (ii) fraudulently or willfully concealed or misrepresented any material fact (including facts relevant to the rating of this policy) in the application for coverage, or upon any renewal of coverage, or in connection with the submission of any claim brought under the policy, in which case this entire policy shall be void as of the date the wrongful act was committed...” (Emphasis added.)

This Court is convinced that the actions of Mr. Thevenot, as described below, clearly reveal an intention to defraud the insurer.

The defendant claims that Lee J. Thevenot’s May 1983 claim constitutes a “false claim” within the meaning of 31 U.S.C. § 3729. The False Claim Act provides:

“A person not a member of an armed force of the United States is liable to the United States Government for a civil penalty of $2,000, an amount equal to 2 times the amount of damages the Government sustains because of the act of that person, and costs of the civil action, if the person—
(1) knowingly presents, or causes to be presented, to an officer or employee of the Government or a member of an armed force a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved..

The penal nature of this statute requires the court to scrutinize carefully the evidence to determine if the alleged misconduct violated the statute. United States v. Equifax, Inc., 557 F.2d 456 (5th Cir.1977).

The requisite intent needed to establish a violation of the False Claims Act is well established in the Fifth Circuit. “To establish a violation of the False Claims Act, the United States must demonstrate, by a preponderance of the evidence, that the defendant possessed guilty knowledge or guilty intent to cheat the government.” United States v. Thomas, 709 F.2d 968 (5th Cir.1983); Peterson v. Weinberger, 508 F.2d 45 (5th Cir.1975); United States v. Aerodex, Inc., 469 F.2d 1003 (5th Cir.1972). (For discussion of the conflict of authority among the federal circuits as to whether specific intent to defraud is required, see Annot., 26 A.L.R.Fed. 307 (1976)).

The Court has no problem applying the Act to claims under the National Flood Insurance Program. Thevenot’s actions to secure payment from the National Flood Insurance Program would clearly be considered a “claim” within the meaning of the Act. “A claim is within the purview of the False Claims Act if it is grounded in fraud which might result in financial loss to the Government.” Peterson, 508 F.2d at 52. “This remedial statute reaches beyond ‘claims’ which might be legally enforced, to all fraudulent attempts to cause the Government to pay out sums of money.” United States v. Neifert-White Company, 390 U.S. 228, 233, 88 S.Ct. 959, 962, 19 L.Ed.2d 1061 (1968). (For discussion as to what constitutes a “claim” within the meaning of the False Claims Act, see, Annot. 19 L.Ed.2d 1558.)

One must determine if the defendant, by a preponderance of the evidence, proved that Mr. Thevenot possessed guilty knowledge or guilty intent to cheat the Government. This Court believes that the defendant has proved its assertion of false claim filing by plaintiff Lee J. Thevenot. The clear and convincing evidence which leads to that conclusion includes the following. The age of the mobile home was a most important factor in adjusting the loss. In May of 1983 a 9-year old mobile home will have a value different than that of a 5-year old mobile home. A mobile home exposed to the ravages of the 1975 and 1979 floods will have a value different than that of a mobile home not so exposed. In July of 1983 Mr. Hill inquired of Mr. The-venot as to the age of the mobile home. Mr. Thevenot replied that it was three or four years old. Not having a title registered with the State of Louisiana to the mobile home, Mr. Thevenot was advised to acquire from his vendor (Cenia Bank) a statement reflecting the sale price and date of sale. Mr. Thevenot obtained a letter from Cenia Bank which stated that the transaction of sale occurred in 1979 and that the sale price was $9,000. M$. The-venot gave the letter to Mr. Hill.

The sale actually occurred in 1974. Mr. Thevenot said he did not recall the exact date, that he had purchased two other trailers and he was merely in error. The evidence from Mr. Thevenot is unblemished in other respects. He said he lost a trailer due to flood in 1973 or early 1974 and the trailer purchased from Cenia replaced the flooded mobile home. He and his family used the trailer from 1974 to 1983 on a weekly basis, it was the only trailer which he had at Grand Lake. He claims to have repaired the trailer after two floods, one in 1975 and one in 1979. Many witnesses called by plaintiff Thevenot recall the social and hunting events conducted frequently at the Thevenot mobile home. Mr. Thevenot had three previous flood loss claims for the trailer at Grand Lake, one of which was in 1975 and the other in 1979. For Mr. The-venot to assert that in 1983 he was confused or merely mistaken as to the year of acquisition of the trailer and the age of the trailer is unbelievable. The evidence shows that Mr. Thevenot is a businessman, farmer and a parish-wide elected official, i.e., the assessor of Avoyelles Parish. He is bright, intelligent and articulate. Mr. The-venot intended to submit inaccurate information concerning the age of the trailer in hopes of securing a greater recovery than he could have secured by submitting the proper date of acquisition.

Mr. Thevenot furnished a list of contents of the mobile home damaged as a result of the flood. Included in that list was a TV set, table and chairs and cooking utensils. Those items also appear in Mr. Thevenot’s demand as described in this lawsuit. Those items were removed from the mobile home by the best friend of Mr. Thevenot prior to any flood loss having been suffered. Mr. Thevenot now claims that he had no knowledge of his friend’s protective action until after the suit was filed. The Court finds that assertion untenable. The claim made by Mr. Thevenot for contents loss is so unworthy of a good faith demand as to cause this Court to conclude that the claim is made with full knowledge of its inaccuracy and with design to defraud the Government.

Mr. Thevenot received for a flood loss experienced in 1979 $16,621. His continuous efforts to recover a substantial amount of money for the May 1983 loss claiming the post-1979 loss repairs had been perfected can best be described as ludicrous and intentionally misleading. Just one example of Thevenot’s efforts to receive double and triple payments for repairs never perfected is the floor insulation. Thevenot was paid to replace the floor insulation after the 1979 and January 1983 floods. The evidence conclusively establishes that Theven-ot never replaced any floor insulation.

Potential liability for violating the False Claims Act can be severe. A violator is liable to the Government for double the amount of damages sustained by the Government. 31 U.S.C. § 3729. Double damages are limited to the amounts paid out by reason of the false claim. Aerodex, 469 F.2d at 1011. The Government did not pay any money for the claim in connection with the May 1983 flood. The double damage penalty is not applicable.

A violator can be charged a $2,000 penalty for each false claim, 31 U.S.C. § 3729, and burdened with the costs of the civil action. The Government need not pay out any money to recover the $2,000 penalty-

“We think the trial court was mistaken in its apparent belief that no cause of action is stated under the False Claims Act if the Government has not paid money on the false claim. The Supreme Court in United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443 (1943), affirmed the opinion of a trial court which had held in part that a forfeiture could be recovered under the False Claims Act even where the Government had discovered the fraud before it paid the false claim.... [P]roof of actual damage is not a prerequisite to the recovery of a forfeiture under the False Claims Act_ [T]he investigation necessary to detect a false claim costs the Government money even if no money is paid on the claim.” United States v. Ridglea State Bank, 357 F.2d 495 (5th Cir.1966).

The Government seeks the imposition of the $2,000 penalty. Having found that Thevenot filed a false claim against the Government, the Court imposes the $2,000 penalty against Thevenot. The Court also holds Thevenot liable for the cost of this litigation.

JUDGMENT

For the foregoing reasons, it is

ORDERED that, as to plaintiffs’ claim against defendant, judgment is in favor of defendant and against plaintiffs. Plaintiffs’ suit is DISMISSED with prejudice and at no cost to the defendant.

FURTHERMORE, judgment is in favor of defendant and against plaintiff on the False Claims Act counterclaim. The $2,000 penalty is imposed against the plaintiff. Plaintiff is to bear all the costs of this civil action.

SIGNED in Alexandria, Louisiana on 4 October 1985.

      . At trial, the defendant dropped Mrs. Thevenot from exposure to the penalty provisions of 31 U.S.C. § 3729.

      . At the end of trial, the defendant moved, pursuant to Fed.R.Civ.P. 15(b), to amend the pleadings to conform to the evidence. Specifically, the defendant requested that the scope of the False Claims Act counterclaim be expanded to cover Thevenot's insurance claims for 1979 and January of 1983. Rule 15(b) requires that:
      "[W]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment...”
      The issue is whether the parties expressedly or impliedly tried the false claims issue as it relates to the 1979 and January 1983 claims. There was no express consent by the parties to try these issues. The Court also finds no implied consent. Generally, implied consent can be found when a party does not object to evidence relating to issues beyond the pleadings. Haught v. Maceluch, 681 F.2d 291 (5th Cir.1982). However, "the introduction of evidence relevant to an issue already in the case may not be used to show consent to trial of a new issue absent a clear indication that the party who introduced the evidence was attempting to raise a new issue”. Haught, Id. at 305, quoting, International Harvester Credit Corp. v. East Coast Truck, 547 F.2d 888 (5th Cir.1977). The evidence introduced relating to the 1979 and January 1983 claims was relevant to Thevenot’s suit to recover under the policy and defendant’s False Claims Act counterclaim relating to the May 1983 flood. The Government gave no clear indication when it introduced the evidence that it planned to use the evidence to support claims beyond the scope of the pleadings.
      The Court also finds that the plaintiff would be prejudiced by allowing the pleadings to be amended. "The possibility of prejudice to the opposing party may of course be reason to find a lack of consent to amendment under Rule 15(b).” Haught, 681 F.2d at 306, quoting, Wallin v. Fuller, 476 F.2d 1204 (5th Cir.1973).