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United States District Court, Southern District of New York

July 11, 1990


The opinion of the court was delivered by: Lasker, District Judge.

Carlyle Piermont Corporation ("Carlyle") instituted this action under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. (Supp. 1987) ("CERCLA" or "Superfund"), and under New York common law for consequential damages, punitive damages and response costs incurred during the discovery, investigation and ultimate clean-up by excavation and physical removal of hazardous solvents from the soil on land which Carlyle now owns and seeks to develop and which defendants Federal Paper Board Co., Inc. ("Federal") and Continental Can Co., Inc. ("Continental") formerly owned and operated. Federal has asserted cross-claims against Continental, and has filed a third-party complaint against other third-party defendants for contribution and indemnification.

Federal and Continental move for partial summary judgment on the ground that Carlyle's response costs were not consistent with the requirements of the National Oil and Hazardous Substances Pollution Contingency Plan ("NCP"), 40 C.F.R. § 300 (1989). Federal also moves to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction, because the only claim against it is based on CERCLA. Carlyle cross-moves for partial summary judgment on liability, for initial investigative and monitoring costs, for attorneys' fees and for sanctions pursuant to Fed. R.Civ.P. 11.


Carlyle purchased approximately thirty acres of waterfront property in October 1986 from defendant Clevepak Corporation and Federal's and Continental's successors in interest. The property is located on the Piermont Pier, in Piermont, New York, and is bordered on the north by the Hudson River, to the south by the Piermont Marsh, a National Estuarine Sanctuary containing 944 acres of wetlands, and to the east by village parkland. Between 1964 and 1984 Continental and then Federal owned and operated a paper mill and folding carton plant on the property. One of the buildings on the property, building 41b, located in a 1.5 acre area ("the site"), was a printing facility which used various solvents, including the hazardous substances toluene, ethylbenzene and xylene, which were stored in tanks on the site.

Between November 1986 and April 1988 the Village Board of Piermont conducted and completed an environmental analysis of Carlyle's proposed development of the property and request for a zoning change, pursuant to the State Environmental Quality Review Act ("SEQRA"), N.Y.Envtl.Conserv.L., Art. 8 (McKinney 1984). Although testing and investigation during the SEQRA process had not revealed significant concentrations of hazardous substances on the site, persistent allegations of the presence of such substances there led the New York Department of Environmental Conservation ("DEC") to inspect the property in April and May 1988 and to request additional information from Carlyle. Following several weeks of soil sampling and testing by Carlyle's engineers, in conjunction with representatives of the DEC, concentrations of toluene, ethylbenzene and xylene were detected in the soil surrounding building 41b, which had been recently demolished by Carlyle.

Carlyle's project manager, Gary Koehnken, cordoned off the area and arranged for additional testing. Carlyle notified the Village Board of its discovery and decided to reopen the SEQRA process to file a draft supplemental environmental impact statement (the "DSEIS"), and, following public hearings and comment, a final supplemental environmental impact statement (the "FSEIS").

In July 1988 Carlyle's environmental consultants proposed a "Remedial Action Plan" to clean up the site. The consultants had determined, following further investigation, that unacceptably high levels of solvents were present in the soil and groundwater near an abandoned dry well on the site. The Remedial Action Plan proposed excavating approximately 100 cubic yards of soil in and around the site to determine whether the actual level of contamination was so high that the soil should be transported off-site, or whether the level was sufficiently low that the soil could be used as backfill. The Remedial Action Plan was included in the DSEIS, and later in the FSEIS, which was accepted by the Village Board at the conclusion of supplemental SEQRA proceedings.

Koehnken states in his affidavit that he and the various consulting scientists hired by Carlyle, as well as representatives of the DEC, considered various alternative remedial actions including the following: on-site encapsulation, on-site biological treatment, hog and haul removal, on-site aeration, off-site incineration, injection well steam recovery, and no action.*fn1

In a letter to Federal and Continental dated July 14, 1988, Carlyle's attorney, Ronald J. Offenkrantz, informed them of the discovery of the hazardous solvents and stated:

    We have reason to believe that your firm was the
  actual polluter of the material found on the site
  and therefore has a liability to Carlyle as the
  owner for all costs of remediation as well as for
  such consequential damages as may have been
  incurred as a result of your use of the property.

    We suggest that you place this matter in the
  hands of your attorneys and instruct them to
  contact this firm on receipt so that the matter
  and its resolution may be further discussed.*fn2

Counsel for the defendants replied in separate letters requesting additional information and stating that they were investigating whether they had indeed owned the property.*fn3 Offenkrantz responded to both letters on July 27, stating in his letter to Federal:

  What we seek is your cooperation in remediating
  the problem with DEC. We wrote to you because we
  intend to commence a plan of remediation and to do
  it promptly since to delay would result in
  increased damages to our client as the developer
  and ultimately to your client as the polluter.

    We would hope that Federal Paper Board will see
  that it is to its advantage to cooperate in the
  remediation and minimize everyone's costs and

On the following day Offenkrantz wrote again to Federal and Continental to advise them that after a conference with the DEC, remediation of the site was scheduled to begin on August 15. Federal thereafter arranged for its chief engineer to visit the site on August 19 to discuss the situation with Carlyle's engineers.

On September 15, 1988, Federal's counsel, John T. Flynn, wrote to Koehnken to express Federal's concern that the speed at which a clean-up program was being planned by Carlyle, "obviously affords us no participation whatever in the remediation program. Further, implementing same in such a hasty fashion could well result in a scientifically unsound or unnecessarily costly program."*fn5 Flynn also explained that Federal was still reviewing the extent of its responsibility for the Piermont site. On September 20, 1988, Margaret Murphy, outside counsel for Federal, wrote to Offenkrantz to confirm that Federal was a prior owner of the site and to state that upon receipt of additional information regarding the DEC's involvement in the situation, Federal would "cooperate in remediation of the property to the extent such remediation is required by the DEC."*fn6

From September until October, when Carlyle completed excavating the contaminated soil and shipped it to a Wayne, Michigan hazardous substances landfill, Carlyle continued to attempt to involve Federal and Continental in the clean-up planning. The defendants continued to seek additional information which they asserted was necessary for them to evaluate the cost effectiveness of, and alternatives to, the proposed action. The record indicates that Carlyle became increasingly concerned with implementing its plan before November 8, 1988, the effective date for new federal prohibitions on land disposal of solvent-contaminated soil. See 40 C.F.R. § 268.30 (1989). The excavation and shipment of approximately 2600 tons of solvent-contaminated soil from the site to a hazardous waste disposal facility/landfill in Wayne, Michigan was completed before the November 8 deadline. Carlyle alleges that its total response costs exceed $1 million, of which $278,000 were spent for initial monitoring and investigation.


One of the major objectives of the private recovery provisions of CERCLA is to "assure an incentive for private parties, including those who may themselves be subject to liability under the statute, to take a leading role in cleaning up hazardous waste facilities as rapidly and completely as possible." City of New York v. Exxon Corp., 633 F. Supp. 609, 617 (S.D.N.Y. 1986). CERCLA section 107(a), 42 U.S.C. § 9607(a) (Supp. 1987), provides in relevant part that:

  (2) any person who at the time of disposal of any
  hazardous substance owned or operated any facility
  at which such hazardous substances were disposed
  of . . .

  (4) . . . from which there is a release, or a
  threatened release which causes the incurrence of
  response costs, of a hazardous substance, shall be
  liable for —

    (A) all costs of removal or remedial action
    incurred by the United States Government or a
    State or an Indian tribe not inconsistent with
    the national contingency plan;

    (B) any other necessary costs of response
    incurred by any other person consistent with the
    national contingency plan.

Response costs are defined, in part, as costs incurred "to reduce or eliminate the release or threat of release of hazardous substances, or pollutants or contaminants." 40 C.F.R. § 300.71(a)(1) (1989). The NCP, 40 C.F.R. § 300, contains specific requirements which parties must meet to recover response costs from other parties. These requirements differ significantly depending on whether the response for which costs are sought is deemed a "removal" or "remedial" action.

Removal actions are defined under CERCLA as:

  the cleanup or removal of released hazardous
  substances from the environment, such actions as
  may be necessary taken in the event of the threat
  of release of hazardous substances into the
  environment, such actions as may be necessary to
  monitor, assess, and evaluate the release or
  threat of release of hazardous substances, the
  disposal of removed material, or the taking of
  such other actions as may be necessary to prevent,
  minimize, or mitigate damage to the public

  health or welfare or to the environment, which may
  otherwise result from a release or threat of
  release. The term includes, in addition, without
  being limited to, security fencing or other
  measures to limit access, provision of alternative
  water supplies, temporary evacuation and housing
  of threatened individuals not otherwise provided
  for, action taken under 9604(b) of this title, and
  any emergency assistance which may be provided
  under the Disaster Relief Act of 1974 [42 U.S.C. § 5121
  et seq.].

42 U.S.C. § 9601(23) (Supp. 1987). Various courts have concluded that "Removal actions are to be taken in response to an immediate threat to the public welfare or to the environment . . . and are `primarily . . . intended for the short-term abatement of toxic waste hazards.'" Amland Properties Corp. v. Aluminum Co. of America, 711 F. Supp. 784, 795 (D.N.J. 1989) (quoting Piccolini v. Simon's Wrecking, 686 F. Supp. 1063, 1068 (M.D.Pa. 1988)). See New York State v. Shore Realty Corp., 759 F.2d 1032, 1040 (2d Cir. 1985).

Remedial actions are statutorily defined as:

  those actions consistent with permanent remedy
  taken instead of or in addition to removal actions
  in the event of a release or threatened release of
  a hazardous substance so that they do not migrate
  to cause substantial danger to present or future
  public health or welfare or the environment. The
  term includes, but is not limited to, such actions
  at the location of the release as storage,
  confinement, perimeter protection using dikes,
  trenches, or ditches, clay cover, neutralization,
  cleanup of released hazardous substances or
  contaminated materials, recycling or reuse,
  diversion, destruction, segregation of reactive
  wastes, dredging or excavations . . . and any
  monitoring reasonably required to assure that such
  actions protect the public health and welfare and
  the environment.

42 U.S.C. § 9601(24) (Supp. 1987). In sum, the line between removal and remedial actions is not precisely defined but removal actions are typically short-term measures taken to prevent immediate harm whereas remedial actions are generally long-term projects designed to effect permanent solutions. City of New York v. Exxon Corp., 633 F. Supp. at 614.

The NCP requirements for remedial actions are greater than those for removal actions. To be consistent with the NCP, a party taking a remedial action must:

  (A) Provide[] for appropriate site investigation
  and analysis of remedial alternatives as required
  under § 300.68;

  (B) Compl[y] with the provisions of (e) through
  (i) of § 300.68;

(C) Select[] a cost-effective response; and

  (D) Provide an opportunity for appropriate public
  comment concerning the selection of a remedial
  action consistent with paragraph (d) of § 300.67
  unless compliance with the legally applicable or
  relevant and appropriate State and local
  requirements identified under paragraph (a)(4) of
  this section provides a substantially equivalent
  opportunity for public involvement in the choice of

40 C.F.R. § 300.71(a)(2)(ii). The NCP requirements for a removal action, by contrast, do not include provisions for "appropriate public comment" or detailed investigation and evaluation of alternative actions.*fn7

Federal argues that: 1) the factual record in this case is sufficient to grant summary judgment; 2) the undisputed facts clearly establish that Carlyle's action was remedial in nature because it was not taken in response to an immediate threat to public health or the environment but rather was intended as a permanent clean up; 3) Carlyle's remedial action was not consistent with the NCP principally because it was not a cost-effective response, there was an inadequate opportunity for public participation in its selection, and other alternatives were not sufficiently explored; 4) consistency with the NCP is a prima facie element of Carlyle's case on liability; and, accordingly, 5) Federal is not liable to Carlyle for any costs of response, including initial investigatory and monitoring costs, because it has not established liability.

Carlyle replies that: 1) the record in the case is not sufficiently developed to grant summary judgment to Federal on the question of consistency with the NCP; 2) its action was a removal action; 3) its costs of response substantially complied with the NCP and substantial, not literal, compliance is all that is required; 4) consistency with the NCP goes to damages and is not a prima facie element of liability and, accordingly, Carlyle is entitled to declaratory relief on liability; and 5) the undisputed facts establish Federal's liability for initial investigatory and monitoring response costs incurred by Carlyle because such costs need not be consistent with the NCP.


The first issue is whether the record is sufficient to grant summary judgment on the question of whether Carlyle's response costs were consistent with the NCP. To evaluate consistency with the NCP, it must first be determined whether Carlyle's physical excavation and disposal of the contaminated soil was a removal or remedial action and, consequently, what NCP requirements attach.

Federal asserts that all of the facts necessary to resolve the issue of consistency with the NCP are to be found in the record created by the plaintiff during the SEQRA review process, e.g. the DSEIS, FSEIS and other public documents. Carlyle emphasizes that Federal's motion was brought at the inception of this case, before any substantial discovery could take place, and that genuine issues of material fact exist as to consistency with the NCP.

Federal cites several cases in which courts have granted summary judgment on the issue of consistency with the NCP after determining that the factual records were complete. Versatile Metals Inc. v. Union Corp., 693 F. Supp. 1563 (E.D.Pa. 1988); Amland, 711 F. Supp. at 794; County Line Investment Co. v. Tinney, No. 88-C-550-E, 1989 U.S. Dist. LEXIS 11358 (D.Okl. 1989); Artesian Water Co. v. Government of New Castle County, 659 F. Supp. 1269, 1292-93 (D.Del. 1987), aff'd, 851 F.2d 643 (3d Cir. 1988). However, Carlyle persuasively replies that in Amland and County Line summary judgment was granted only after extensive discovery was completed and in Versatile Metals, the court ruled after more than two months of trial. 693 F. Supp. at 1567.

Carlyle cites several cases to support its position that consistency with the NCP is a peculiarly fact intensive question that can normally only be determined at trial, or at least after a full pretrial record has been prepared. Cadillac Fairview/California, Inc. v. Dow Chemical Co., 840 F.2d 691, 695 (9th Cir. 1988); City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 1144 (E.D.Pa. 1982); Sunnen Products Co. v. Chemtech Indus., Inc., 658 F. Supp. 276, 278 (E.D.Mo. 1987).

We conclude that genuine issues of material fact exist and the record is insufficient to determine conclusively whether Carlyle's response was a remedial or removal action, what NCP requirements attach, and whether Carlyle complied with those requirements.

For example, Carlyle asserts that its action was a removal, not a remedial, action. The criteria established by the EPA for determining when a removal action is appropriate are:

    (i) Actual or potential exposure to hazardous
  substances or pollutants or contaminants by nearby
  populations, animals, or food chain;

    (ii) Actual or potential contamination of
  drinking water supplies or sensitive ecosystems;

    (iii) Hazardous substances or pollutants or
  contaminants in drums, barrels, tanks, or other
  bulk storage containers that may pose a threat of

    (iv) High levels of hazardous substances or
  pollutants or contaminants in

  soils largely at or near the surface, that may

    (v) Weather conditions that may cause hazardous
  substances or pollutants or contaminants to
  migrate or be released;

(vi) Threat of fire or explosion;

    (vii) The availability of other appropriate
  Federal or State response mechanisms to respond to
  the release;

    (viii) Other situations or factors which may
  pose threats to public health or welfare or the

40 C.F.R. § 300.65(b)(2) (1989). Federal argues vigorously that the situation at the site met none of these criteria. Specifically, Federal asserts that the undisputed facts show that no immediate short-term action was necessary because the presence of solvents on the site did not pose an imminent threat to health or the environment. Federal relies on statements in the DSEIS by Carlyle, for instance, that the solvents detected on the site "are the same compounds that would be present, at comparable levels, if a gasoline spill had occurred in the area,"*fn8 and that, "the groundwater below the site is not and could never be used as a potable drinking water source because of conditions having nothing to do with the solvents."*fn9

Carlyle asserts that its action was removal, not remedial, because the solvents posed a threat of migration and risk of exposure to "nearby populations" and "drinking water supplies or sensitive ecosystems," 40 C.F.R. § 300.65(b)(2). The Koehnken Affidavit states that two DEC representatives, who were purportedly involved at every stage in Carlyle's investigation of toxic solvents in the soil, indicated that the site would probably be listed as a "classification 2" on the New York State Inactive Hazardous Waste Registry.*fn10 A classification 2 site is defined as: "Significant threat to the public health or environment — action required." N.Y.Envtl.Conserv.Law § 27-1305(4)(b)(2) (McKinney 1984). Michael Elder, an attorney representing various environmental groups concerned about the Piermont situation, also states in his affidavit that the solvents discovered at the site presented a health and environmental threat through possible migration to the Hudson River or the Piermont Marsh and that the DEC also informed him that "the concentration of solvents which had been found warranted a listing of the site in classification 2 . . . and that the DEC intended to list the site."*fn11

Federal takes the position that the statements in the Elder and Koehnken Affidavits about what the DEC intended to do are hearsay and that, in fact, the only real evidence shows that the DEC merely proposed that the site be designated a classification 2a site, which is defined as a: "Temporary classification assigned to sites that have inadequate and/or insufficient data for inclusion in any of the other classifications."*fn12 However, the only evidence submitted by Federal that DEC intended to give a 2a classification to the Piermont site consists of statements made at a public hearing held after the cleanup by Carlyle had been completed.*fn13

No clarifying affidavits have been submitted by either party from DEC representatives. Indeed, Carlyle asserts that the DEC, as a policy matter, does not submit affidavits on summary judgment motions. Direct evidence as to how the DEC viewed the situation prior to Carlyle's clean-up action is an important missing factor necessary to determine the extent and immediacy of the environmental threat posed by the solvents, and, accordingly, whether a removal or remedial action was appropriate.

Other genuine issues of material fact include the concentration levels of the hazardous solvents in the soil and what significance to attach to them, as well as the extent to which alternative actions were evaluated by Carlyle, the DEC and the public. Because these and other factual questions remain with regard to key factors which are determinative of whether Carlyle's action was a removal or a remedial action, and whether it was consistent with the NCP, Defendants' motions for partial summary judgment are denied.


Carlyle moves to recover its initial investigatory and monitoring costs, contending that it is entitled to such costs irrespective of both the recoverability of its other response costs or compliance with the NCP. Federal asserts that because Carlyle's entire response was remedial and did not comply with the NCP, Federal is not liable for any response costs, including monitoring and investigative costs.

At least two courts have directly held that consistency with the NCP is not a precondition to recovery of preliminary investigatory and monitoring costs. In Artesian the defendants conceded and the court held that "the detailed NCP provisions governing other response actions cannot reasonably be applied to preliminary monitoring and evaluation of a release of hazardous substances." 659 F. Supp. at 1294. And in Amland the court, citing Artesian, granted summary judgment to the plaintiff on liability for preliminary monitoring and evaluation costs irrespective of consistency with the NCP. The Amland court held that such costs fall under the statutory definition of removal actions. 711 F. Supp. at 795.

Several courts have also permitted recovery of costs incurred in the initial monitoring and assessment of a release or threatened release of hazardous substances regardless of the recoverability of other response costs. Amland, 711 F. Supp. at 795; Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 892 (9th Cir. 1986) (held, costs of testing and investigation recoverable even where on-site cleanup costs are not sought); Cadillac Fairview/California v. Dow Chemical Co., 840 F.2d 691, 695 (9th Cir. 1988) (following Wickland in "rejecting the distinction between investigatory costs and on-site clean-up costs"); Artesian, 659 F. Supp. at 1287 (same).

Federal contends that the analysis of Versatile Metals and County Line, that investigatory costs be considered as part of an overall remedial action, is more persuasive. However, those two cases are not relevant to the narrow question at hand. In County Line, unlike the instant case, the plaintiff conceded that its response costs, including its monitoring costs, were all part of a remedial action. Accordingly, the County Line court evaluated the entire response for consistency with the NCP. 1989 U.S. Dist. LEXIS 11358 at 2. There was no separate claim made by the plaintiff for initial monitoring and investigative costs. Similarly, in Versatile Metals, defendants, which were seeking to recover response costs from the plaintiff, admittedly incurred no investigative or testing costs because they assumed that the entire site was contaminated. The court concluded, after trial, that the defendants' entire response could be fairly characterized as remedial, and thus all costs were evaluated for consistency with the NCP. 693 F. Supp. at 1578-79.

In the case at hand, plaintiffs have incurred substantial investigatory and response costs in determining the scope of the contamination of the soil. With respect to initial investigatory and monitoring costs, the holdings of Amland and Artesian that liability for such costs may be granted irrespective of the NCP are persuasive. Carlyle has established all of the elements necessary to merit summary judgment on liability against Federal for such costs: the costs were incurred in response to a release of hazardous substances, and Federal is a responsible person because it owned and operated the facility from which such releases occurred at the time of such releases. 42 U.S.C. § 9607(a) (Supp. 1987). See Amoco Oil v. Borden, Inc., 889 F.2d 664, 668 (5th Cir. 1989).*fn14 Continental, however, denies that any solvents were released into the dry well or the soil during the time that it was an owner or operator of the site.*fn15 Accordingly, Carlyle's motion for summary judgment is granted with respect to Federal's liability for initial investigatory and monitoring costs but denied with respect to Continental.*fn16


In view of the denial of Federal's motion for summary judgment it is unnecessary to resolve the legal question raised by Carlyle's cross motion: whether, with respect to response costs other than investigatory and monitoring costs, consistency with the NCP is an issue of liability or damages. With respect to the remaining issues, Carlyle's application for Rule 11 sanctions is without merit, in view of defendants' reasonable and non-frivolous submissions. In light of the many pending issues in this case, Carlyle's request for attorneys' fees is premature and is denied without prejudice to renewal.

In sum, Carlyle's motion for summary judgment is granted with respect to Federal's liability for investigative and monitoring costs but is denied in all other respects. Defendants' motions are denied.

It is so ordered.

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