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WADEMAN v. CONCRA

July 6, 1998

KAREN WADEMAN and JOSEPH WADEMAN, Plaintiffs, against ANTHONY R. CONCRA; CITY OF HUDSON INDUSTRIAL DEVELOPMENT AGENCY; HUDSON DEVELOPMENT CORPORATION; HUDSON COMMUNITY DEVELOPMENT AND PLANNING AGENCY; PETERSON PETROLEUM, INC.; CAPITOL VALLEY CONTRACTORS, INC.; VERNON HOFFMAN SOIL AND FOUNDATION ENGINEERING; VERNON C. HOFFMAN, JR., P.E; DANIEL G. LOUCKS, P.E.; CRAWFORD ASSOCIATES; DAVID J. CRAWFORD, P.E.; ENVIRONMENTAL OIL, INC.; FRONTIER CHEMICAL CORP., Defendants. CRAWFORD & ASSOCIATES and DAVID J. CRAWFORD, P.E., Cross-claimants, -against- ANTHONY R. CONCRA; CITY OF HUDSON INDUSTRIAL DEVELOPMENT AGENCY; HUDSON DEVELOPMENT CORPORATION; HUDSON COMMUNITY DEVELOPMENT AND PLANNING AGENCY; PETERSON PETROLEUM, INC.; CAPITOL VALLEY CONTRACTORS, INC.; VERNON HOFFMAN SOIL AND FOUNDATION ENGINEERING; VERNON C. HOFFMAN, JR., P.E; DANIEL G. LOUCKS, P.E.; ENVIRONMENTAL OIL, INC.; and FRONTIER CHEMICAL CORP., Cross-defendants.


The opinion of the court was delivered by: KAHN

MEMORANDUM-DECISION AND ORDER

 Presently before the Court are several motions by both the plaintiffs and defendants. First, defendant Environmental Oil has moved to dismiss the complaint. Second, defendant Anthony R. Concra ("Concra") has also moved to dismiss the action. Third, defendants Crawford & Associates and David J. Crawford, P.E. ("Crawford") have moved for summary judgment. Fourth, defendants City of Hudson Industrial Development Agency ("CHIDA") and the Hudson Community Development and Planning Agency ("HCDPA") have moved to dismiss the complaint. Fifth, defendant Vernon Hoffman Soil ("Hoffman Soil"), Vernon C. Hoffman ("Hoffman") and Daniel G. Loucks, P.E. ("Loucks") have moved to dismiss the complaint. *fn1" Sixth, the defendant Hudson Development Corporation ("HDC") has also moved to dismiss. Finally, the seventh motion before the Court is the plaintiffs' cross-motion to amend the complaint. Oral arguments on these motions were heard on September 19, 1997 in Albany, New York and the Court reserved decision. As of the date of this Order, defendants Peterson Petroleum, Inc., Capitol Valley Contractors, Inc. ("Capitol Valley"), and Frontier Chemical Corp. ("Frontier") have failed to appear.

 I. MOTION TO DISMISS

 In reviewing the sufficiency of a complaint at the pleading stages, "the issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). Where a motion to dismiss is made prior to any discovery or the filing of an answer, the court is averse to dismiss the complaint, regardless of whether the plaintiff is unlikely to prevail, unless the defendant can demonstrate that plaintiff is unable to prove facts which would entitle him to relief. Wade v. Johnson Controls, Inc., 693 F.2d 19, 22 (2d Cir. 1982); see Egelston v. State Univ. College, 535 F.2d 752, 754 (2d Cir. 1976). The Supreme Court has defined the scope of dismissals for failure to state a claim:

 
Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). This procedure, operating on the assumption that the factual allegations in the complaint are true, streamlines litigation by dispensing with needless discovery and fact finding. Nothing in Rule 12(b)(6) confines its sweep to claims of law which are obviously insupportable. On the contrary, if as a matter of law "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations," Hishon, supra, at 73, a claim must be dismissed, without regard to whether it is based on an outlandish legal theory or on a close but ultimately unavailing one.

 Neitzke v. Williams, 490 U.S. 319, 326-27, 104 L. Ed. 2d 338, 109 S. Ct. 1827 (1989).

 On a motion brought pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted, the allegations in the plaintiff's complaint are deemed to be true and will be liberally construed in the light most favorable to the plaintiff. Patton v. Dole, 806 F.2d 24, 30 (2d Cir. 1986). In determining the sufficiency of plaintiff's claim for Rule 12(b) (6) purposes, the Court is limited to considering the factual allegations in the complaint, the documents annexed to the complaint as exhibits or relied upon by the plaintiff, and any matters to which judicial notice may be taken. Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir. 1993). A complaint should not be dismissed unless it appears that no construction of the facts would permit the plaintiff to prevail. Hughes v. Rowe, 449 U.S. 5, 10, 66 L. Ed. 2d 163, 101 S. Ct. 173 (1980); Bass v. Jackson, 790 F.2d 260, 262 (2d Cir. 1986).

 II. FACTS

 The following facts are presented in the light most favorable to the plaintiffs for purposes of the motions to dismiss. Patton, 806 F.2d at 30. Plaintiffs Karen and Joseph Wademan were husband and wife and lived in the Town of Philmont, New York. Starting in July of 1992, Karen Wademan was employed by the Columbia County Department of Social Services ("DSS") as a social welfare examiner. As a result, Mrs. Wademan reported to work at the DSS building located at 25 Railroad Avenue in Hudson, New York between July 1992 and March 1996.

 In April of 1998, Mrs. Wademan died from complications from acute myeloid leukemia ("AML"). The presence of AML has been linked to exposure to benzene, which is a derivative of petroleum and a known carcinogen. The plaintiffs contend that Mrs. Wademan was exposed to benzene at the DSS Building in Hudson (the "DSS Building"). Plaintiffs have brought suit against former and current owners of the premises including HDC, CHIDA, Concra, and Peterson Petroleum, Inc. ("Peterson"). The plaintiffs also name parties that were involved in the design, construction, improvement and operation of the DSS Building including the HCDPA, Capitol Valley, Hoffman, Hoffman Soil, Loucks, Crawford, Environmental Oil and Frontier.

 From 1973 to 1985, the property on which the DSS building is located was operated and owned by Peterson. The property housed several above ground storage tanks which were used to store petroleum and other chemicals. In December of 1985, Peterson sold the land to the HDC which had plans for the construction of the DSS Building. In February of 1990, HDC sold the land to Concra who then sold the premises to CHIDA. Concra and CHIDA then entered into an agreement in which Concra, acting as CHIDA's agent, agreed to construct the DSS building. CHIDA then leased the DSS building to Concra. The land had been used for the storage of chemicals, a fact which was known to CHIDA as is evidenced in the agreement between CHIDA and Concra to indemnify CHIDA against claims involving hazardous waste. See Culnan Aff., Ex. I, P 2.3(c).

 In 1988, Hoffman was retained to evaluate the condition of the property. Hoffman's report indicated that the premises suffered from chemical contamination including petroleum. The report stated that visible petroleum contamination was present as was the odor of fuel on the property. Defendant Loucks purportedly admitted that the contamination was "the worst he had ever seen." Defendants Hoffman and Loucks informed the property owner of the contamination, but no report was made to either state or federal environmental authorities. Hoffman recommended to the property owner that a protective barrier be installed to prevent the migration of petroleum fumes and that a ventilation system be installed to address the problem. The DSS Building was constructed on the contaminated soil and the recommendation of the protective barrier was not followed.

 In the Spring of 1996, several DSS employees, including Mrs. Wademan, reported illnesses. Because these people believed that their illnesses were attributable to their work environment, their union, Local 424 of the United Public Service Employees Union, requested an environmental assessment of the premises. Mr. Dale E. Rowe ("Rowe"), the director of Environmental Health of the County's Department of Health ("DOH") performed an environmental assessment of the premises and the DSS Building and determined that the soil and possibly the groundwater were contaminated by petroleum.

 In June of 1996, Analytical Laboratories of Albany, Inc. ("Analytical") was retained to draft an assessment plan for the site. It was determined that petroleum contamination was present and that a "significant portion of the contamination is estimated to be located beneath the building foundation and slab." Culnan Aff., Ex. B at 6.0. According to this report, the area of contamination covers approximately 3/4 of an acre and varies in depth from "just below the surface to 24'." Culnan Aff., Ex. B at 6.0. Analytical recommended that a remediation plan be developed that would meet with the approval of New York State's Department of Environmental Conservation ("DEC").

 On September 4, 1996, the DOH released a report detailing the air quality of the DSS Building. The DOH noted that the building had ventilation problems and that volatile organic compounds ("VOCs") were detected in the basement area. The report indicated that the presence of VOCs were probably due to the presence of gasoline powered equipment stored in the basement but "subsurface petroleum contamination cannot be ruled out as a contributing source." Culnan Aff., Ex. C at 7.

 In the Fall of 1996, Fluor Daniel GTI, Inc. ("Fluor Daniel") was retained by the HCDA to perform additional testing of the site and to provide further recommendations concerning remediation. In the report dated February 5, 1997, Fluor Daniel noted the "presence of significant hydrocarbon impacts to the soil and/or groundwater beneath the building." Culnan Aff., Ex. E at 6. Fluor Daniel also noted that the "amount of petroleum impacts to the soil and/or groundwater, although not quantified, do warrant the need for remedial action to safeguard human health and/or to be protective of the environment." Culnan Aff., Ex. E at 6. The HCDPA has not followed the recommendations in the reports and the soil remains contaminated while the DSS continues its daily operations at the site.

 Plaintiffs have brought a total of twelve causes of action. Three causes of action arise under federal environmental statutes, the first under Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 ("RCRA"), the second under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 ("CERCLA"), and the third under the Clean Water Act, 33 U.S.C. § 1251 ("CWA"). The essence of these three claims is that the defendants released hazardous waste in the form of petroleum into the ground and groundwater and should be responsible to rectify the problem through injunctive relief and to compensate Mrs. Wademan for the medical expenses she incurred as a result of her exposure to these chemicals.

 The remaining claims are based in state law. The fourth claim is based in negligence for the release of hazardous substances, the subsequent failure to remediate the site, and the resulting injuries suffered by Mrs. Wademan. The fifth cause of action is based in nuisance and damages in strict liability. The sixth claim is against defendants Hoffman and Crawford for breach of duty to exercise reasonable care in the design of the building knowing of the contamination of the site. The seventh and eighth causes of action against defendants Hoffman, Capitol, Crawford, Concra, HDC and CHIDA are based on breach of warranty and breach of warranty for fitness for the particular purpose respectively. The ninth claim against all defendants raises a claim for false and fraudulent misrepresentation. The tenth claim against defendants Peterson and HDC is based on the theory of ultrahazardous activity. The eleventh cause of action against defendants Peterson, HDC, Environmental, and Frontier, plaintiffs negligence in the act removing the petroleum storage tanks from the facility. Finally, the twelfth claim against all defendants is made on behalf of Mr. Wademan for damages in the form of loss of consortium. Because the first three claims are federal and are the only basis for this Court's jurisdiction, they will be addressed first.

 III. DISCUSSION

 As discussed, the plaintiffs' first three claims are based on federal environmental statutes and are the only claims that give rise to this Court's jurisdiction. CERCLA, RCRA, and the CWA each have a "Citizen Suit" provision. The moving defendants contend that these provisions do not give the plaintiffs standing or are otherwise deficient for the plaintiffs' purposes.

 A. Comprehensive Environmental Response, Compensation and Liability Act

 The moving defendants raise a litany of arguments against the plaintiffs' CERCLA claim. All of the defendants assert that the plaintiffs lack standing under CERCLA and raise the argument that CERCLA specifically excludes petroleum waste from its umbrella of coverage. The defendants also contend that damages other than clean-up costs, for example private medical monitoring costs, are not available under this statute.

 1. Standing Under CERCLA

 This Court is required to address standing even if the issue had not been raised by the parties. See FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231, 107 L. Ed. 2d 603, 110 S. Ct. 596 (1990). "As an element of subject matter jurisdiction, the issue of standing should be raised by a motion to dismiss for lack of jurisdiction over the subject matter." 15 Moores Federal Practice, § 101.30[1] (Matthew Bender 3d ed.) "Article III of the Constitution limits the authority of the federal courts to decide only actual cases and controversies." Lee v. Board of Governors of the Federal Reserve System, 118 F.3d 905, 910 (2d Cir. 1997) (citing Allen v. Wright, 468 U.S. 737, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984)). "The Supreme Court has recognized that a litigant's stake in the controversy must extend beyond mere interest in a dispute, and the doctrine of standing has developed to ensure the presence of 'that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends.'" Id. (quoting Baker v. Carr, 369 U.S. 186, 204, 7 L. Ed. 2d 663, 82 S. Ct. 691 (1962)). "As with questions of jurisdiction generally, the party invoking the authority of the court bears the burden of proof on the issue of standing." Id. (citing Warth v. Seldin, 422 U.S. 490, 498, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975)). In order to establish standing, a movant must show:

 
(1) that the plaintiff[s] have suffered an 'injury in fact' -- an invasion of a judicially cognizable interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) that there be a causal connection between the injury and the conduct complained of -- the injury must be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court; and (3) that it be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

 Id. (quoting Bennett v. Spear, 520 U.S. 154, , 117 S. Ct. 1154, 1163, 137 L. Ed. 2d 281 (1997) (citing in turn Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 119 L. Ed. 2d 351, 112 S. Ct. 2130 (1992)). In short, "the standing question is whether the plaintiff has 'alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify the exercise of the court's remedial powers on his behalf." Warth, 422 U.S. at 498-99 (citing Baker, 369 U.S. at 204)(emphasis in original). "The Art. III judicial power exists only to ...


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