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TOWN OF NEW WINDSOR v. TESA TUCK INC.

July 22, 1996

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


The opinion of the court was delivered by: PARKER

 FACTS

 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), and state law is before this Court on certain defendants' motions for summary judgment dismissing the plaintiff State of New York's claims. *fn1"

 The plaintiff Town of New Windsor ("the Town") is the owner of the New Windsor landfill ("the landfill"), which it operated from 1962 until 1976. In the 1980s, the New York State Department of Environmental Conservation ("the State") deemed the landfill a significant environmental threat, and listed it on its registry as an Inactive Hazardous Waste Site. The landfill is not a federal Superfund site and the United States Environmental Protection Agency ("EPA") has declined to list the landfill on CERCLA's National Priorities List ("NPL").

 In 1989, the Town and the State 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. The Town agreed to indemnify the State for any claims arising from the Town's remedial actions at the landfill. After executing the Consent Order, the Town became 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"). Under the EQBA, the State may assist financially strapped towns to meet their obligations under the New York State Environmental Conservation Law ("ECL") in responding to the threats posed by inactive hazardous waste sites owned and/or operated by towns.

 In February 1990, the State entered a State Assistance Contract with the Town to reimburse the Town for 75% of the eligible clean-up costs incurred in remediating the landfill. Pursuant to the State Assistance Contract, 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.

 Following a Remedial Investigation Feasibility Study ("RI/FS") by the Town's consultant and the issuance of a Record of Decision ("ROD") by the State, remedial action was undertaken in 1992-93. The Town has spent approximately $ 5 million, $ 3.5 million of which has been reimbursed by the State pursuant to the EQBA grant. The plaintiffs seek these costs, plus approximately $ 3 million in future monitoring costs, and oversight costs, as costs of response under CERCLA. Specifically, the State seeks the approximately $ 3.5 million that it spent reimbursing the Town for the cleanup, future monitoring costs, and costs in overseeing the Town's remediation.

 Defendants tesa tuck, inc., Lightron Corporation, Inc. and Kollmorgen Instruments Corporation now move for summary judgment dismissing the State's CERCLA claims on the grounds that (1) the State has not "incurred" response costs within the meaning of CERCLA; (2) as a potentially responsible party ("PRP"), the State is limited to a claim for contribution under § 113(f); (3) reimbursement by the State under the EQBA was improper and unlawful; and (4) CERCLA does not authorize the State to recover its costs in overseeing the Town's remediation. *fn2" This Court holds that, by reimbursing the Town with EQBA funds, the State has "incurred" CERCLA response costs and denies the motion for summary judgment.

 DISCUSSION

 1. Legal Standard

 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 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, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)); 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, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962)(per curiam)(other citations omitted)). See also Coach Leatherware Co., Inc. v. AnnTaylor, Inc. 933 F.2d 162, 167 (2d Cir. 1991)(citations omitted).

 2. Whether, by reimbursing the Town pursuant to the EQBA, the State "incurred" response costs within the meaning of CERCLA

 To recover under § 107(a)(4)(A), the State must have "incurred" costs of removal or remedial action at the landfill. See, e.g., United States v. Alcan Aluminum Corp., 990 F.2d 711, 719-20 (2d Cir. 1993)(citing B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1198 (2d Cir. 1992)). CERCLA does not define the term "incurred," but defendants argue that its meaning is plain, and inconsistent with the State's claim here. An obligation imposed by law, they argue, is a predicate to "incurred" costs, *fn3" and here, the Town, and only the Town, was legally obligated to take action at the landfill. Because the State itself took no remedial action at the landfill and was not obligated to provide assistance under the EQBA, defendants argue, it did not "incur" any costs. *fn4"


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