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TOWN OF NEW WINDSOR v. TESA TUCK

March 14, 1996

THE TOWN OF NEW WINDSOR, Plaintiff, against TESA TUCK, INC., FRYE COPYSYSTEMS, INC., GAF CORPORATION, LIGHTRON CORPORATION, INC., EUGENE LITTMAN, and HARRY BASCH, Defendants. TESA TUCK, INC., FRYE COPYSYSTEMS, INC., GAF CORPORATION, LIGHTRON CORPORATION, INC., Third-Party Plaintiffs, -against- KOLLMORGEN INSTRUMENTS CORPORATION, THE NEW YORK STATE DEPARTMENT OF TRANSPORTATION, THE STATE OF NEW YORK, THE NEW YORK STATE THRUWAY AUTHORITY, THE UNITED STATES OF AMERICA, JAMES S. PATSALOS, JAMES S. O'NEILL, CHARLES T. KAVANAGH, CORNELL GROUP SERVICE CORP., MEARL CORPORATION, COCA-COLA BOTTLING COMPANY OF NEW YORK and CITY OF NEWBURGH, Third-Party Defendants.


The opinion of the court was delivered by: PARKER

 BARRINGTON D. PARKER, JR., U.S.D.J.

 Plaintiff Town of New Windsor ("the Town") brought this action under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), P.L. 99-499 (October 17, 1986), specifically 42 U.S.C. § 9607 ("§ 107") and 42 U.S.C. § 9613 ("§ 113"), and state nuisance law against defendants tesa tuck, inc., Frye Copysystems, Inc., CAP Corporation, Lightron Corporation, Inc., Eugene Littman and Harry Basch, seeking recovery of its costs in cleaning up the New Windsor landfill.

 In 1994, four of the defendants commenced third-party actions against Kollmorgen Instruments Corporation, the New York State Department of Transportation, the State of New York ("the State"), the New York State Thruway Authority, the United States of America, James S. Patsalos, James S. O'Neill, Charles T. Kavanagh, Cornell Group Service Corp., Mearl Corporation, Coca-Cola Bottling Company of New York *fn1" and City of Newburgh.

 BACKGROUND

 The Town was the owner and operator of the New Windsor landfill ("the landfill"), which operated from 1962 until 1976. In the 1980s, the New York State Department of Environmental Conservation ("DEC") deemed the landfill a significant threat to public health or to the environment, and listed it on its registry as an Inactive Hazardous Waste Site. In 1986, the United States Environmental Protection Agency ("EPA") rejected the DEC's nomination of the landfill for listing on CERCLA's National Priorities List ("NPL").

 In 1989, the Town and DEC executed an Administrative Order on Consent ("Consent Order") requiring the Town to conduct a detailed investigation of the landfill and to develop and implement a remedial plan, and declaring it eligible for 75% reimbursement by the State of part of its clean up costs, pursuant to the New York Environmental Quality Bond Act of 1986 ("EQBA"). *fn2" Reimbursement was conditioned on the Town's pursuit of this cost recovery action against those who contributed to the landfill, 75% of the recovery from which would be shared with the State. In February 1990, the DEC entered a State Assistance Contract (# C300069) with the Town to reimburse the Town for 75% of the eligible clean-up costs incurred in remediating the landfill. In exchange, the Town agreed to take all reasonable steps to recover its response costs from other responsible parties and to pay the State 75% of the proceeds from the recovery. This lawsuit, filed in 1992, seeks such recovery.

 In 1990-91, the Town's consultant, EA Engineering Science and Technology, performed a Remedial Investigation Feasibility Study ("RI/FS"). Following its review of the final RI/FS, in October, 1991, the State issued its Record of Decision ("ROD"), which outlined the State's chosen remedy for the landfill. The remedial action was implemented in 1992-93. The Town has spent approximately $ 5 million, and under existing 30-year monitoring requirements, will spend an additional $ 3 million in response costs. The Town has received funds of approximately $ 3.5 million in EQBA aid from the State. The Town seeks these costs as necessary costs of response from the defendants.

 In Motion # 1, the movants seek summary judgment dismissing the complaint in its entirety on the grounds that (1) the costs incurred by the Town in complying with its obligations under state law are not CERCLA response costs, (2) the Town's closure of the landfill was neither "necessary" nor "consistent with the national contingency plan" as required by CERCLA, and (3) the Town's common law claim for public nuisance is time barred.

 In Motion # 2, the Town moves to amend the complaint to add Kollmorgen, Mearl and Coke-NY as defendants, arguing that joinder at this stage in the litigations is proper because these third-party defendants cannot demonstrate bad faith on the part of the Town or undue prejudice from the amendment.

 In Motion # 4, the United States moves to dismiss the Town's § 107 claim. It argues that because the Town is a responsible party or a potentially responsible party, its claims are for contribution under § 113(f), not claims on which joint and several liability may be imposed pursuant to § 107(a)(4). The United States argues that because defendants/third-party plaintiffs face liability on the Town's claims only for their allocable share of the CERCLA response costs incurred by the Town and do not risk incurring liability for any amount in excess of their allocable shares they do not themselves have contribution claims against the third-party defendants, and thus third-party claims and cross-claims for contribution are unavailable as a matter of law in this action.

 THE STATUTORY FRAMEWORK

 In 1980, Congress passed CERCLA to provide the tools necessary for a prompt and effective response to problems resulting from hazardous waste disposal, and to force those responsible for creating harmful conditions to bear the costs of remediation. See B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1198 (2d Cir. 1992). Because it is a remedial statute, CERCLA must be construed liberally to effectuate its two primary goals. B.F. Goodrich, 958 F.2d at 1198. Liability under CERCLA is strict, see State of New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2d Cir. 1985), and joint and several, if the environmental harm is indivisible. See B.F. Goodrich Co., 958 F.2d at 1198.

 CERCLA establishes four classes of responsible parties liable for the costs of responding to releases or threatened releases of hazardous substances. These include past and present owners or operators of facilities, transporters of hazardous substances, and those who generate or arrange for the disposal or treatment of hazardous substances. 42 U.S.C. § 9607(a).

 Section 107(a)(4) of CERCLA provides, in pertinent part, that a responsible person 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; . . .

 § 107(a)(4)(A) and (B), 42 U.S.C. § 9607(a)(4)(A) and (B).

 In 1986, Congress passed the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), P.L. 99-499, 100 Stat. 1613, adding §§ 113(f) and (g), 42 U.S.C. §§ 9613(f) and (g). *fn3" Sections 113(f)(1) and (2) provide a private right of action for contribution and contribution protection for parties settling with the United States government or a State.

 Section 113(f) provides, in pertinent part:

 
(1) Contribution
 
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 of this title or section 9607 of this title.
 
(2) Settlement
 
A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. Such settlement does not discharge any of the other potentially liable persons unless its terms so provide, but it reduces the potential liability of the others by the amount of the settlement.

 § 113(f)(1) and (2), 42 U.S.C. § 9613(f)(1) and (2).

 DISCUSSION

 1. Motion # 1

 
a. Whether the Town may recover under CERCLA when its costs would have had to have been incurred simply to bring the Landfill into compliance with ordinary state landfill closure requirements

 Rule 56 of the Federal Rules of Civil Procedure authorizes summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The Court's responsibility is to perform "the threshold inquiry of determining whether there is the need for a trial -- whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." McNeil v. Aguilos, 831 F. Supp. 1079, 1082 (S.D.N.Y. 1993) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1985)); Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990). In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See McNeil, 831 F. Supp. at 1082 (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 8 L. Ed. 2d 176 (1962) (per curiam) (other citations omitted)). See also Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162, 167 (2d Cir. 1991) (citation omitted).

 Liability under CERCLA is imposed where a plaintiff establishes the following five elements: (1) the defendant falls within one of the four categories of "responsible parties" enumerated in § 107(a); (2) the site of the clean-up is a facility under 42 U.S.C. § 9601(9); (3) there is a release or threatened release of hazardous substances at the facility; (4) as a result of which plaintiff has incurred response costs; and (5) the costs incurred conform to the national contingency plan ("NCP") under § 107(a)(4)(A) as administered by the EPA. See U.S. v. Alcan Aluminum Corp., 990 F.2d 711, 719-720 (2d Cir. 1993) (citing B.F. Goodrich Co., 958 F.2d at 1198). The movants argue here that the absence of material issues of fact on the third, fourth and fifth elements entitled them to summary judgment dismissing the Town's CERCLA claims.

 Relying on Barnes Landfill, Inc. v. Town of Highland, 802 F. Supp. 1087 (S.D.N.Y. 1992) and City of Seattle v. Amalgamated Servs., 1994 U.S. Dist. LEXIS 9761, 1994 WL 869839 (W.D.Wash.), the movants argue that the Town has not shown a release or threatened release of a hazardous substance that has "caused" it to incur response costs. They argue that the Town has failed to establish "causation" because the Town would have had to incur these costs simply to comply with ordinary landfill closure and maintenance regulations under Part 360 of the New York Code of Rules and Regulations, 6 ("Part 360"). They assert that four of the six "remedial actions" required by the ROD constitute requirements imposed on the Town by Part 360, and argue, therefore, that even if the landfill contained no hazardous substances, the Town would still have been obliged to undertake these actions and incur these costs to bring the landfill into compliance with Part 360. The movants conclude that the Town's costs were not caused by a release or threatened release of hazardous substances, but by its obligation to comply with state closure and maintenance requirements.

 In Barnes, defendants moved to dismiss plaintiff's CERCLA claim on the grounds that the plaintiff failed to allege a release or threatened release of hazardous substances or to allege that it incurred response costs as a result of the release or threatened release. The court granted the motion on grounds of "vagueness" holding that plaintiff's allegations of a release or threatened release did not provide any defendant with adequate notice of its potential liability, and plaintiff's allegation that it had incurred costs in response to the release of hazardous substances was conclusory. The court explained:

 
It is only costs caused by the hazardous substance response for which defendants can be held liable under federal law. Ordinary closing or clean-up costs not pertaining to hazardous substances, incurred under state law or otherwise, would not be a basis for holding defendants responsible under CERCLA.

 Barnes, 802 F. Supp. at 1088.

 In City of Seattle, defendants moved for summary judgement to exclude the costs of meeting state and local standards for landfill closure from a liability action under CERCLA. The court granted the motion:

 
Any actions [plaintiff] was already obligated to take to meet [state and local regulations] were not caused by the escape of hazardous substances. Only costs incurred to meet additional requirements cause [sic] by the escape of hazardous substances, or ...

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