ROCKWELL INTERNATIONAL CORPORATION v. JIMMY D. HELTON, IN HIS OFFICIAL CAPACITY COMMONWEALTH OF KENTUCKY; JAMES E. BICKFORD, IN HIS OFFICIAL CAPACITY AS SECRETARY, NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET, COMMONWEALTH OF KENTUCKY; ANN R. LATTA, IN HER OFFICIAL CAPACITY AS SECRETARY, TOURISM DEVELOPMENT CABINET, COMMONWEALTH OF KENTUCKY; AND C. THOMAS BENNETT, IN HIS OFFICIAL CAPACITY AS COMMISSIONER, DEPARTMENT OF FISH AND WILDLIFE RESOURCES, COMMONWEALTH OF KENTUCKY
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RENDERED:
MARCH 22, 2002; 2:00 p.m.
ORDERED NOT PUBLISHED BY THE KENTUCKY SUPREME COURT:
NOVEMBER 13, 2002 (2002-SC-0333-D)
C o m m o n w e a l t h O f K e n t uc k y
C o urt O f A ppe a l s
NO.
2001-CA-000467-MR
ROCKWELL INTERNATIONAL CORPORATION
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE WILLIAM L. GRAHAM, JUDGE
ACTION NO. 00-CI-00332
v.
JIMMY D. HELTON, IN HIS OFFICIAL CAPACITY
AS SECRETARY, CABINET FOR HEALTH SERVICES,
COMMONWEALTH OF KENTUCKY; JAMES E. BICKFORD,
IN HIS OFFICIAL CAPACITY AS SECRETARY,
NATURAL RESOURCES AND ENVIRONMENTAL
PROTECTION CABINET, COMMONWEALTH OF KENTUCKY;
ANN R. LATTA, IN HER OFFICIAL CAPACITY AS
SECRETARY, TOURISM DEVELOPMENT CABINET,
COMMONWEALTH OF KENTUCKY; AND C. THOMAS BENNETT,
IN HIS OFFICIAL CAPACITY AS COMMISSIONER,
DEPARTMENT OF FISH AND WILDLIFE RESOURCES,
COMMONWEALTH OF KENTUCKY
APPELLEES
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
DYCHE, JOHNSON AND KNOPF, JUDGES.
JOHNSON, JUDGE:
Rockwell International Corporation has appealed
from an order of the Franklin Circuit Court entered on October
11, 2000, which dismissed Rockwell’s complaint seeking a
declaratory judgment against Jimmy D. Helton, in his official
capacity as Secretary of the Cabinet for Health Services; James
E. Bickford, in his official capacity as Secretary of the Natural
Resources and Environmental Protection Cabinet; Ann R. Latta, in
her official capacity as Secretary of the Tourism Development
Cabinet; and C. Thomas Bennett, in his official capacity as
Commissioner of the Department of Fish and Wildlife Resources
(collectively the Appellees).
Having concluded that Rockwell
pleaded a justiciable controversy, we reverse and remand.
From 1957 to 1989, Rockwell owned and operated a plant
in Russelville, Logan County, Kentucky, which manufactured gas
meter components and typewriter housings.
In its manufacturing
process, Rockwell used a hydraulic fluid that contained
polychlorinated biphenyls (PCBs).
Although Rockwell underwent a
conversion to non-PCB based hydraulic fluid in 1975, the Natural
Resources and Environmental Protection Cabinet (NREPC) discovered
PCBs still present at the facility as late as 1985.
Further testing and investigation revealed PCBs in the
sediments of the Town Branch Creek and the Mud River and in
adjacent flood plain surface soils.
The NREPC concluded that the
PCB contamination was due to waste runoff from the Rockwell
plant.
Runoff flows into the Town Branch Creek through three
drainage tributaries called North Ditch, South Ditch, and East
Ditch.
The Town Branch Creek flows into the Mud River, and the
Mud River extends 64 miles from its confluence with the Town
Branch Creek to the Green River.
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In 1986, the NREPC filed a complaint against Rockwell
in the Franklin Circuit Court.
The complaint sought enforcement
of Kentucky’s environmental laws through injunctive relief.
For
the next nine years, the trial court entered a series of agreed
interim orders between Rockwell and the NREPC.
In 1995, Rockwell
submitted a final remediation plan to the NREPC, which was
rejected.
The NREPC then sought a trial date.
Following the submission of evidence, the Franklin
Circuit Court on March 24, 1997, entered a judgment holding
Rockwell in violation of several environmental statutes and
regulations.
The trial court enjoined Rockwell to correct the
violations and ordered Rockwell to pay the NREPC its actual and
necessary costs.
The trial court expressly reserved the right to
impose civil penalties if the ordered remediation and cleanup
were not completed within a reasonable time.
On August 13, 1999,
1
this Court affirmed the decision of the Franklin Circuit Court.
Independent of its suit against Rockwell, in September
1985, the former Cabinet for Human Resources (now the Cabinet for
Health Services (CHS)), the NREPC, and the Department for Fish
and Wildlife Resources (DFWR) issued a fish consumption advisory,
recommending that pregnant women and small children not eat fish
from either the Town Branch Creek or the Mud River.
Around the
same time, Rockwell undertook a program to determine the extent
1
Rockwell International Corp. v. Natural Resources &
Environmental Protection Cabinet Ky.App., 16 S.W.3d 316 (1999).
,
-3-
of PCB contamination near its plant, to prevent further PCB
releases, and to clean up existing contamination.
In August 1986, the DFWR upgraded the existing fish
consumption advisory to a warning thatno one eat fish caught in
the Town Branch Creek or the Mud River.
The DFWR posted warning
signs at intervals along the two bodies of water.
The signs
stated: ADo not eat fish caught in Town Branch or the Mud River
from the Hancock Lake Dam to Green River.
These fish are a
potential health risk as they are contaminated with PCBs
(polychlorinated biphenyls).
For further information please
contact the Barren River Health Department . . . @. Rockwell has
repeatedly requested that the warning be terminated, arguing that
the warning is unnecessary because fish in both bodies of water
test below the federal Food and Drug Administration (FDA)
accepted level of 2.0 parts per million of PCB content.
Despite Rockwell’s pleas, the original warning remained
in effect until January 28, 1999.
On that date, CHS and NREPC
issued an updated warning that declared:
Following are consumption precautions for
various tested species in Mud River and Town
Branch. The advise is based on a meal of ½
pound of fish (before cooking) eaten by a
150-pound individual.
Town BranchCFish should not be consumed from
any portion of Town Branch. This includes
all species and all sizes.
Mud RiverCFish which feed on the bottom,
such as catfish, carp, suckers and drum
should not be eaten. Game fish such as bass,
sunfish and crappie may be eaten, but not
more than six meals per year. Women of
childbearing age and children should not eat
any fish from Mud River [emphasis original].
-4-
The reissued warning claimed to be based on test data gathered
between 1996 and 1998.
The new warning also changed the PCB
contamination standard from the former FDA guidelines to a new
federal clean water mandate developed for the Great Lakes region,
2
known as the Great Lakes Protocol (GLP).
Since 1985, Rockwell has spent a considerable amount of
money remediating and testing the Mud River/Town Branch Creek
area.
While the Franklin Circuit Court retains jurisdiction over
the cleanup efforts, Rockwell asserts that no court supervision
exists in regard to the appellees’ issuance of fish consumption
warnings based on ever-changing PCB-contamination standards.
Rockwell claims that the fish consumption warning has harmed and
continues to harm it in a variety of ways.
It is with this in
mind that Rockwell brought the present action.
On March 9, 2000, Rockwell filed a complaint against
3
the appellees in the Franklin Circuit Court. The complaint
sought injunctive and declaratory relief.
Specifically, the
complaint alleged that the reissued fish consumption warning
violated Kentucky law because it was based on an improper
2
The NREPC claims that the Great Lakes Protocol is used by
the member states of the Ohio River Valley Water Sanitation
Commission, of which Kentucky is a member state. See KRS
224.018-760.
3
Rockwell had previously filed an action (#4:99CV-15-M) in
the United States District Court for the Western District of
Kentucky. The lawsuit was dismissed on August 26, 1999, on the
grounds that Rockwell failed to meetAthe minimal constitutional
requirement for standing. On appeal, the Court of Appeals for
@
the Sixth Circuit affirmed.
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standard (the GLP).
Rockwell also alleged a violation of its due
process and equal protection rights under the United States and
Kentucky Constitutions, arguing that the new warnings are
arbitrary and capricious.
In response, the appellees filed a
joint motion to dismiss, claiming that Rockwell had failed to
plead a justiciable controversy.
The appellees also argued that
Rockwell’s claims were precluded by the doctrine of collateral
estoppel.
The Franklin Circuit Court granted the appellees’
motion on October 11, 2000, on the basis that Rockwell had failed
to plead a justiciable controversy.
Rockwell then filed a motion
to alter, amend or vacate the order.
That motion was denied by
the trial court on February 8, 2001.
This appeal followed.
KRS4 418.040 enables a plaintiff to seek a declaration
of rights when an Aactual controversy exists.
@
When a motion to
dismiss a declaratory action is filed, the question presented to
the circuit court is not whether the plaintiff will ultimately
prevail, but whether the complaint states a cause of action for
5
declaratory relief.
As Rockwell noted in its brief on appeal,
the complaint must be construed in the light most favorable to
6
the plaintiff and all allegations must be taken as true.
Therefore, the issue on appeal is whether the Franklin Circuit
4
Kentucky Revised Statutes.
5
Curry v. Coyne Ky.App., 992 S.W.2d 858, 859 (1998)(citing
,
City of Louisville v. Stock Yards Bank & Trust Co. Ky., 843
,
S.W.2d 327, 328 (1992)).
6
Id. (citing Whittington v. Whittington Ky.App., 766 S.W.2d
,
73, 74 (1989)).
-6-
Court erred when it determined that Rockwell failed to state a
cause of action for declaratory relief.
Rockwell argues that a justiciable controversy exists
because the appellees exceeded their legal authority when they
issued the 1999 fish consumption warning for the Town Branch
Creek and the Mud River.
Rockwell contends that the issuance of
fish consumption warnings based on the GLP constitutes an
arbitrary and capricious exercise of governmental authority.
As
damages, Rockwell claims a diminution in property value, the
incurrence of additional environmental testing costs, the
incurrence of legal fees to defend civil suits brought against it
by nearby landowners, and damages to its business reputation.
To sustain an action for declaratory relief there must
be a justiciable controversy involving the rights of the
parties.7
The plaintiff must have a present or substantial
8
interest in the outcome of the litigation. AA justiciable
controversy does not include questions ‘which may never arise or
which are merely advisory, or are academic, hypothetical,
incidental or remote, or which will not be decisive of any
present controversy.’9 AA mere difference of opinion is not an
@
7
Id. at 860 (citing HealthAmerica Corp. of Kentucky v.
Humana Health Plan, Inc. Ky., 697 S.W.2d 946, 948 (1985)).
,
8
Yeoman v. Commonwealth of Kentucky, Health Policy Board
,
Ky., 983 S.W.2d 459, 473 (1998)(citingWinn v. First Bank of
Irvington, Ky.App., 581 S.W.2d 21, 23 (1979)).
9
Curry, supra at 860 (quoting Dravo v. Liberty National Bank
& Trust Co., Ky., 267 S.W.2d 95, 97 (1954)).
-7-
actual controversy. . . .10
@
Courts do not adjudicate differences
of opinion between the parties; courts adjudicate actual
11
controversies involving legal rights.
We hold that Rockwell pleaded a justiciable controversy
and that the Franklin Circuit Court erred when it dismissed
Rockwell’s complaint.
While standards for safe fish consumption
are matters within the sound discretion of the appellees, that
discretion is not beyond review.
The advisory must be reasonable
and free from arbitrariness and capriciousness.
As a landowner
adversely affected by the fish consumption advisory, we believe
Rockwell should have an opportunity to demonstrate that the
advisory does not meet constitutional standards.
Whether
Rockwell will ultimately prevail in its claim is of no import.
At this stage of the litigation, all allegations in Rockwell’s
12
complaint must be taken as true.
Rockwell is entitled to
13
judicial review of this administrative action.
The appellees argue in the alternative that even if
Rockwell has pleaded a justiciable claim, that Rockwell is
precluded from challenging the advisory by the doctrine of
collateral estoppel, or issue preclusion as it is sometimes
10
Jefferson County v. Chilton 236 Ky. 614, 33 S.W.2d 601,
,
605 (1930).
11
Curry, supra.
12
Id. at 859.
13
See HealthAmerica Corp. supra; see also Foster v.
,
Goodpaster, 290 Ky. 410, 161 S.W.2d 626 (1942).
-8-
called.
In order for issue preclusion to be used as a bar to
further litigation, certain elements must be present:
First, the issue in the second case must be
the same as the issue in the first case.
Second, the issue must have been actually
litigated. Third, even if an issue was
actually litigated in a prior action, issue
preclusion will not bar subsequent litigation
unless the issue was actually decided in that
action. Fourth, for issue preclusion to
operate as a bar, the decision on the issue
in the prior action must have been necessary
to the court’s judgment [citations
omitted].14
We hold that Rockwell is not barred by issue preclusion
from challenging the fish advisory.
In the 1997 action initiated
by the NREPC, the issue was whether Rockwell had violated
Kentucky’s environmental laws by releasing PCBs into the area
surrounding its Logan County facility.
In the current action the
issue is whether the appellees’ issuance of the 1999 fish
consumption advisory is reasonable and constitutional.
issue was never actually litigated in the prior action.
This
While
the issues in the federal lawsuit were similar to those before
us, the CHS only argues in its brief thatA[a]s to any allegation
of federal constitutional issues, the federal court order would
be dispositive.
@
We agree, but obviously that still leaves the
state constitutional claims to be decided by the state court.
For the reasons stated above, we reverse the order of
the Franklin Circuit Court and remand this matter for further
proceedings consistent with this Opinion.
14
Yeoman, supra at 465.
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ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE, JIMMY D. HELTON:
M. Stephen Pitt
J. Anthony Goebel
Donald J. Kelly
Louisville, Kentucky
John H. Walker
Frankfort, Kentucky
BRIEF FOR APPELLEE, JAMES E.
BICKFORD:
George L. Seay, Jr.
Frankfort, Kentucky
Kathryn M. Hargraves
Kevin Welch
Frankfort, Kentucky
ORAL ARGUMENT FOR APPELLANT:
M. Stephen Pitt
Louisville, Kentucky
ORAL ARGUMENT FOR APPELLEE,
JAMES E. BICKFORD:
Kathryn M. Hargraves
Frankfort, Kentucky
ORAL ARGUMENT FOR APPELLEE,
C. THOMAS BENNETT:
Douglas Scott Porter
Frankfort, Kentucky
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