Defendants and Kollmorgen oppose the State's motion to amend on the grounds that the State's claims are futile. They correctly assert that prior to granting leave to amend, a court must examine the proposed claims to ascertain whether they are futile on their face. See Love v. New York State Dept. of Envir. Conserv., 529 F. Supp. 832 845 (S.D.N.Y. 1981); Barrett v. U.S. Banknote Corp., 806 F. Supp. 1094, 1098 (S.D.N.Y. 1992). Although defendants and Kollmorgen appear to have strong defenses to the State's claims, because the State's claims present issues of first impression, this Court cannot conclude that they are futile on their face.
Frye argues that the State has unduly delayed and that the delay will prejudice the other parties. The State, however, has not unduly delayed in seeking to realign as plaintiff. It was joined as a third-party defendant in March 1994 and timely filed its answer in June 1994. Moreover, this case is one of the first involving EQBA funding and has progressed further than any other EQBA case. Whether the Town or State has legal authority to recover that portion of the costs reimbursed by the State pursuant to the EQBA grant is one of first impression. The State asserts that the EQBA issue was raised by defendants only in mid-1994, as factual discovery was closing. Before the close of discovery, the State announced its intention to realign as plaintiff in order to recover its alleged "response" costs.
In the cases cited by Frye in opposition to the State's motion, the application to amend/intervene was made after the close of evidence at trial, see United States v. Pitney Bowes, Inc., 25 F.3d 66 (2d Cir. 1994), or many months after a court-imposed deadline, see New Spectrum Realty Services, Inc. v. Nature Company, 42 F.3d 773 (2d Cir. 1994); State of New York v. Cedar Park Concrete Corp., 741 F. Supp. 494 (S.D.N.Y. 1990); H.L. Hayden Co. v. Siemens Medical Systems, Inc., 112 F.R.D. 417 (S.D.N.Y. 1986). Here, there was no court-ordered deadline for amending the pleadings, and the State complied with the deadline for submitting letters to the Court identifying the grounds for its proposed motion to amend.
In addition, the other parties will not be unduly prejudiced by the State's realignment. First, if prohibited from realigning in this action, the state could file a new, separate action, which in all probability would be assigned to this Court as related to this action, if not consolidated with it. None of the parties have articulated any reason why two actions would be less burdensome than, or somehow preferable to, one action.
Second, the nonmovants argue that if the State is realigned as plaintiff, they will have to defend against claims for joint and several liability, rather than merely contribution. The Town, however, has asserted claims for both contribution and joint and several liability from the start of this case. Although nonmovants may have concluded that the Town's claim for joint and several liability would eventually be dismissed, they did so at their peril. In addition, an increase in defendants' exposure is not grounds for denying leave to amend. See, e.g., Poloron Products, Inc. v. Lybrand Ross Bros. & Montgomery, 72 F.R.D. 556, 561-62 (S.D.N.Y. 1976).
Third, the nonmovants argue that the burden of proof will change if the State is permitted to realign.
However, what burden of proof would apply has been somewhat unclear throughout this litigation, and only put to rest by this decision, because the Town has maintained that it should be considered a "state" for purposes of § 107(a)(4)(A).
Finally, the nonmovants argue that if the State is permitted to realign, discovery would have to be reopened and additional motion practice would delay the resolution of this case. The State concedes that limited fact discovery would be needed on its claim for oversight costs. It has, however, attached all the documents supporting this claim to the Notice of Motion. In addition, although it asserts that the documents will likely suffice (since the parties chose not to depose anyone in connection with the response costs incurred by the Town, but relied exclusively on the documents), it will make available any DEC staff member for deposition so as not to delay trial.
This Court is mindful that in all probability discovery will have to be reopened to some extent in connection with the State's claim for its costs in reimbursing the Town. Only one State employee, a former DEC Project Manager for the remedial investigation phase of the landfill closure, has been deposed. In addition, the Court recognizes that granting the State's motion will probably result in some additional motion practice. Although courts have held that the need for additional motion practice is a factor to consider in evaluating the prejudice to nonmovants, see, e.g., H.L. Hayden Co., 112 F.R.D. 417, the Second Circuit has also held that the "purpose of the federal rules is to provide for a full and fair hearing on the merits. The burden of further discovery and motions is not a satisfactory basis to deny a motion to amend." Middle Atlantic Utilities Co., 392 F.2d at 386.
Accordingly, in an effort to provide a hearing on the merits of this action, the State's motion to amend its pleadings to realign as a party plaintiff is granted.
4. Motion # 4
a. Whether a CERCLA § 107(a)(4)(B) claim for joint and several liability against defendants is available to the Town