The opinion of the court was delivered by: McMAHON, District Judge.
Plaintiffs, thirty-two homeowners and residents of the Town of
Carmel in Putnam County, New York, bring this action seeking
relief under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et
seq. (1995) ("CERCLA"), the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. § 6901 et seq. (1995) ("RCRA"), and the
common law against various municipalities, corporations and
whose activities over the last forty-five years have touched on
or concerned the land on which their homes stand. After expedited
discovery and dismissal or discontinuance of the action against
six individual defendants,*fn2 all ten remaining defendants and
all three third-party defendants have moved for summary judgment
or dismissal of various claims, counterclaims, cross claims, and
third-party claims asserted against them. The motions are
disposed of as follows:
I. Disposition of the Various Motions for Summary Judgment
A. Plaintiffs' Claims
B. Defendants' Cross Claims
The various cross claims for indemnity, contribution, and/or
response costs under CERCLA and/or RCRA asserted by the following
1. Town of Carmel ("Carmel" or the "Town")
2. Putnam County ("Putnam" or the "County")
3. Lynlil Land Development Corp. ("Lynlil")
4. Howard Stockfield ("Stockfield")
5. Thomas Boniello ("Boniello")
7. Joseph Mantovi ("Mantovi")
C. Defendants' Counterclaims
Lynlil, MSSI, and Mantovi assert counterclaims against the
Plaintiffs for indemnification and contribution under CERCLA.
These counterclaims are dismissed with prejudice. The remaining
counterclaims have not been addressed in any of the parties'
briefings and are unaffected by the Court's various rulings. They
consist of the following counterclaims against Plaintiffs: (1)
frivolous prosecution of a RCRA claim, asserted by Lynlil,
Stockfield, MSSI, Mantovi, and Putnam County; (2) frivolous
prosecution of a CERCLA claim, asserted by Putnam County; and (3)
cost recovery under CERCLA for Lynlil's expenses in investigating
possible contamination at the DeLuca Farm and from constructing
an alternate public water supply.
D. Third-Party Action
The third-party contribution claims asserted by Lynlil and the
Lynlil Defendants against Olga DeLuca, Elizabeth DeLuca, and
Thomasina Christianson (the "Third-Party Defendants"), under
CERCLA, 42 U.S.C. § 9607 & 9613(F)(1), are dismissed with
E. Third-Party Defendants' Cross Claims
The Third-Party Defendants brought cross claims for
contribution and indemnity against Carmel, Putnam, Lynlil, the
Lynlil Defendants, Mantovi, MSSI, Anthony DeLuca, and Theresa
Miller. To the extent they seek contribution under CERCLA, these
cross claims are moot and are dismissed with prejudice. To the
extent they seek common law indemnity and/or contribution, these
claims are dismissed, but may be reasserted in the State Supreme
II. Statement of Facts
On these dispositive motions, I construe all facts in favor of
the Plaintiffs, who are the non-movants. See United States v.
Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176
(1962); Donahue v. Windsor Locks Bd. of Fire Commn'rs,
834 F.2d 54, 57 (2d Cir. 1987). What follows, then, is a recitation of the
case taken largely from the Plaintiffs' papers opposing the
various motions that seek dismissal of their claims, supplemented
as needed by uncontested facts from other presentations that are
relevant to the issues before me.
A. Septic Waste Dumping at the DeLuca Farm
The property that is the subject of this litigation consists of
around 246 acres of land located within the Hamlet of Mahopac,
Town of Carmel, County of Putnam, in the State of New York. (Aff.
of Joel Sachs in Opposition to Defendants' Motion for Summary
Judgment ("Sachs aff."), ¶ 3) Agor Lane, a public road in the
Town of Carmel, bisects the property. Id. Philip and Mary
DeLuca came to own this property, hereinafter referred to as the
"DeLuca Farm," in 1944, and following Philip's death in 1966,
Mary conveyed various portions to her children and grandchildren,
including defendants Anthony DeLuca and Theresa DeLuca Miller
(the "DeLuca Defendants"). (Id., ¶¶ 4, 6, 8) In 1986 and 1990,
the DeLuca family members subsequently conveyed portions of the
property to two corporate entities controlled by the Lynlil
Defendants. (Id., ¶ 9)
B. Lynlil and the Lynlil Defendants
1. Lynlil Is Not Liable Under CERCLA.
Lynlil was indisputably an owner of the DeLuca Farm. It
purchased the property containing the Site in 1986 from various
DeLuca family members, including the DeLuca Defendants, and
proceeded to develop it. It lost title to the property for at
least a few weeks when Putnam bought the land in tax foreclosure,
and it may thereby have lost legal ownership of the site
altogether (see § III(A)(1)(a) -(b), supra). Regardless,
Lynlil cannot be deemed a "responsible party" under CERCLA.
Lynlil cannot be held liable under section 9607(a)(2) because
it neither owned nor operated the DeLuca Site at the time
hazardous substances were dumped there. It purchased the property
in 1985, some 15 years after the dumping ceased.
There is no contention that Lynlil or the Lynlil Defendants
either arranged for the dumping of hazardous substances or
accepted same, and there is no evidence in this record that would
support any such contention if it had been made. Thus, sections
9607(a)(3) and (4) are inapplicable as well.
The only possible source of liability for Lynlil, then, is as
an "owner and operator of a . . . facility" under section
9607(a)(1). This, of course, brings us back to the infamous
Putnam County Correction Deed. If the Correction Deed did not
divest Putnam of the title it acquired in the tax foreclosure
sale, then Lynlil cannot qualify as the "owner and operator of a
. . . facility" under section 9607(a)(1), because Putnam, in
fact, legally owns the place.
Assuming that the Correction Deed was effective, Lynlil would
be the current owner of the Site and potentially a responsible
person under CERCLA. See 42 U.S.C. § 9607(a)(1) ("the owner and
operator of a . . . facility"). Notwithstanding subsection
(a)(1)'s conjunctive phrasing — "owner and operator" — many
courts have construed its requirement in the disjunctive, finding
persons responsible for CERCLA clean-up costs if they owned or
operated the facility at the time the plaintiff filed the
complaint. See, e.g., United States v. Fleet Factors Corp.,
901 F.2d 1550, 1554 n. 3 (11th Cir. 1990) (ascribing the semantic
confusion to "careless statutory drafting") (citing cases).
If Lynlil is the current owner, it would be strictly liable
despite the fact that it did not own the Site at the time of
disposal of hazardous substance; as this Circuit has recently
observed, CERCLA "imposes strict liability without regard to
causation on parties who fall within at least one of the four
categories of potentially responsible persons." Bedford
Affiliates v. Sills, 156 F.3d 416, 425 (2d Cir. 1998). However,
Lynlil can escape liability if it can satisfy
one of CERCLA's affirmative defenses, as set forth in § 9607(b).
See New York v. Lashins Arcade Co., 91 F.3d 353, 359 (2d Cir.
1996); United States v. Alcan Aluminum Corp., 990 F.2d 711, 721
(2d Cir. 1993). As it happens, CERCLA protects Lynlil from
liability, just as it did Putnam. In Lynlil's case, the
applicable provision is the so-called "third-party defense."
See 42 U.S.C. § 9607(b)(3).
Recognizing that persons could become entangled in CERCLA's
liability net through no fault of their own, Congress carved out
several defenses to the CERCLA liability, one of which protects
innocent third-party purchasers who had nothing to do with the
release of hazardous substances onto the property. This defense
reads as follows:
42 U.S.C. § 9607(b)(3).
The third-party defense is available to a party who, like
Lynlil, acquired a piece of contaminated property years after
disposal of substances ceased. See, e.g., Lashins Arcade, 91
F.3d at 359. While Plaintiffs try valiantly to convince me that
there are disputed issues of material fact touching on Lynlil's
invocation of the third-party defense, a fair reading of the
record compels the conclusion that no reasonable juror could do
anything other than give Lynlil the benefit of that defense.
Accordingly, Lynlil's motion for summary judgment dismissing
Plaintiffs' CERCLA claim must be granted.
First, there is no dispute that the Site was contaminated by
parties other than the Lynlil Defendants. Plaintiffs do not
contend that Lynlil was responsible for the presence of any
hazardous substance on the DeLuca Farm. Indeed, they concede in
their own papers that Lynlil could do nothing about the dumping,
since the dumping concluded many years before the developers
purchased the Site. See Cplt., ¶¶ 37-38; Plaintiffs' Memorandum
of Law in Opposition to Defendants' Motions for Summary Judgment
("Pls.' Br.") at 97. Their attempts to hold Lynlil liable as the
current owner, relying on the authority of New York v. Shore
Realty Corp., 759 F.2d 1032 (2d Cir. 1985), are unpersuasive and
unavailing in light of the controlling ruling of the Court of
Appeals in Lashins Arcade, supra.
Second, it is well settled that the acts or omission that
caused the release of hazardous substances — here, the dumping of
septic waste — did not occur in connection with any contractual
relationship between Lynlil and those who were responsible for
the dumping. Under controlling Second Circuit case law, Lynlil's
contract to purchase the DeLuca Farm from the DeLuca family
members does not create the kind of "contractual relationship"
that would deprive Lynlil of its third-party defense, as the
purchase agreement does not "relate to the hazardous substances
or allow the landowner to exert some element of control over the
third party's [here, the DeLucas]'s activities." Lashins
Arcade, 91 F.3d at 360. See also Westwood Pharmaceuticals, Inc.
v. Nat'l Fuel Gas Distrib. Corp., 964 F.2d 85, 91-92 (2d Cir.
v. Alexanderson, 743 F. Supp. 268, 271 (S.D.N.Y. 1990) ("[t]he
act or omission must occur in a context so that there is a
connection between the acts and the contractual relationship").
Contrary to Plaintiffs' argument, Lashins Arcade is factually
indistinguishable from the instant case; in both matters, the
innocent purchaser who sought to rely on the third-party defense
bought the land from someone who was actually connected to the
release of the allegedly hazardous substances. If the Lashins
Arcade purchaser was entitled to the defense, then Lynlil is as
well. By contrast, in United States v. A & N Cleaners &
Launderers, Inc., 854 F. Supp. 229 (S.D.N.Y. 1994), the case
relied on by Plaintiffs, the party who sought to avail himself of
the third-party defense was the record owner of the property
during the entire period of offending conduct, and the actual
dumper was his sublessee. See also Lashins Arcade, 91 F.3d at
362 (distinguishing A & N Cleaners based on defendant's
ownership during the period of violation). There are no similar
facts before me.
Third, since Lynlil purchased the DeLuca Farm property some 15
years after the dumping ended, there was nothing it could have
done to prevent the action — dumping — that led to the release of
allegedly hazardous substances. Thus, it cannot have violated any
statutory duty to take "adequate precautions" to prevent the
prior owners and those with whom they contracted from dumping
septic waste on the Site. See Lashins Arcade, 91 F.3d at 360.
Finally, there is no disputed issue of fact as to Lynlil's
exercise of due care with respect to the hazardous substances in
light of all relevant facts and circumstances. Lynlil first
became aware of the possibility of contaminants at the Site in
1989, when it was advised of same by the PCDOH. Plaintiffs assert
that Lynlil learned of the Site's location on or about December
4, 1985, when Town of Carmel Planning Board member Leo Saluto
advised Lynlil engineer, Gary Tretsch, that the old septic dump
was on the parcel Lynlil wished to develop. A Gannett newspaper
article appearing the following day allegedly confirmed that
Lynlil's construction plans were designed to avoid disturbing the
old dumping area. (Sachs aff., ¶¶ 81-84) But Lynlil maintains
that it had no reason to know this long-dormant septic waste dump
posed any sort of environmental threat until August 1989, when
the PCDOH required testing of the well on lot 42 in response to a
third-party complaint. These tests revealed volatile organic
compounds, including TCE and vinyl chloride, that are not
ordinarily found in septic waste. (Riesel decl., ¶ 13)
Therefore, even if Lynlil knew, prior to August 1989, that the
DeLuca Farm contained an old septic waste dump, that would not be
enough to take the CERCLA claims against Lynlil to a jury.
Plaintiffs point to nothing in the record which demonstrates that
Lynlil (or the Lynlil Defendants) knew that the septic waste
contained hazardous, non-septic substances.
Plaintiffs' RCRA claims against Lynlil and the Lynlil
Defendants must also be dismissed because there is no evidence in
this record from which a trier of fact could conclude that they
"contributed [to or is] contributing to the past or present
handling, storage, treatment, transportation, or disposal of any
solid or hazardous waste which may present an imminent and
substantial endangerment to health or the
environment." 42 U.S.C. § 6972(a)(1)(B). The term "contributed
to" is not defined under RCRA, so courts have looked to its
ordinary meaning. See, e.g., Zands, 779 F. Supp. at 1264. The
term has been universally held to infer something more than mere
ownership of a site; some level of causation between the
contamination and the party to be held liable must be
established. See United States v. Hardage, 116 F.R.D. 460, 466
(W.D.Okla. 1987). As noted above, it is undisputed that the
disposal about which Plaintiffs complain ceased some 15 years
before Lynlil had anything to do with the property. The fact that
Lynlil came into ownership of the property years after the
allegedly offending activity means it cannot be held liable under
Plaintiffs contend that Lynlil contributed to the disposal of
hazardous wastes "by virtue of their studied indifference"*fn22
to the alleged passive migration of hazardous waste, through the
groundwater or otherwise. Lynlil counters that this sort of
passive migration does not constitute "disposal" of hazardous
waste as defined in RCRA.
I conclude that Lynlil is correct, particularly in light of the
Second Circuit's ruling in ABB Indus., 120 F.3d at 357-59, a
case decided after the instant motions were fully submitted. In
ABB Indus., the Second Circuit rejected a similar "passive
migration" argument as a basis for "disposal" liability under
CERCLA or RCRA. Id. (citing U.S. v. CDMG Realty, 96 F.3d 706,
714-15 (3d Cir. 1996)).
ABB Indus. and CDMG Realty, whose analysis the ABB Indus.
Court explicitly adopted, are cases closely on point with this
one. In those cases, as here, the defendants became the owner of
property after the dumping of allegedly hazardous substances
occurred. The plaintiff in CDMG Realty argued that the
defendant should be held liable for the costs of clean-up under
CERCLA as an owner at the time of disposal because contaminants
that had been placed on the property under yet another prior
owner spread further during the defendant's tenure as owner of
the property. The Third Circuit rejected this theory "based on
the plain meaning of the words used" in CERCLA's definition of
disposal,*fn23 and held that words like "leaking" and
"spilling," on which some courts had relied to hold an owner
liable for passive migration under CERCLA, "should be read to
require affirmative human action." CDMG Realty, 96 F.3d at
713-14. The ABB Indus. Court agreed, concluding that to read
the statute otherwise would render useless CERCLA's "innocent
owner" defense because defendants could never demonstrate that
they acquired land "after the disposal" of hazardous materials.
ABB Indus., 120 F.3d at 358. As the panel observed, "[o]nce
hazardous chemicals are in the ground, they usually spread, and
therefore, there would almost never be an identifiable period
`after the disposal.'" Id. The ABB Indus. Court also upheld,
based on its CERCLA discussion, dismissal of the plaintiff's RCRA
claims "[b]ecause ABB cannot show that [defendants] spilled
hazardous chemicals or otherwise contaminated the site. . . ."
Id. at 359.
Plaintiffs here correctly point out that CDMG Realty was a
CERCLA case, not a RCRA case, but the outcome in ABB Indus.,
which was a CERCLA and RCRA case, illustrates that the
distinction is of no moment. Moreover, as noted above, CERCLA
defines "disposal" by reference to RCRA. Compare
42 U.S.C. § 9601(29) with 42 U.S.C. § 6903(3). There is, therefore,
no reason not to apply the same principle in this case —
especially in that a finding precluding liability for the passive
migration of substances that are already on a piece of property
is consistent with the plain meaning of both the words "disposal"
and "contributed to" as they are used in RCRA.
I therefore conclude that Lynlil did not "contribute to" the
"disposal" of any substance on the Site, and dismiss Plaintiffs'
claims against the company and the individual Lynlil Defendants
(b) Septic Waste Does Not Constitute a Hazardous Substance
Even if Lynlil and the Lynlil defendants were found passively
to have contributed to the disposal of septic waste at the Site,
they would still not be liable under RCRA. RCRA imposes liability
only for contributing to the disposal of "hazardous wastes" as
that term is defined in the statute. If a substance is not on the
"hazardous waste" list, there can be no finding of imminent and
substantial danger under RCRA. See, e.g., Price v. U.S. Navy,
818 F. Supp. 1323, 1325 (S.D.Cal. 1992), aff'd, 39 F.3d 1011
(9th Cir. 1994). Septic waste is not listed as a hazardous
substance under RCRA. In fact, it is specifically excluded from
the list of hazardous substances. See 40 C.F.R. § 261.4(b)(1).
Since it is the dumping of septic waste, an excluded substance,
that is the gravamen of the complaint in this action, Plaintiffs'
complaint fails as a matter of law.
Plaintiffs contend that, under the "mixture rule," septic waste
— a solid waste — becomes hazardous waste once it is commingled
with a hazardous waste. Plaintiffs speculate that hazardous
substances detected at the Site are the chemical remains of
degreasers, including septic tank cleaners and other household
cleaners, that were either discarded by consumers down their
drains or poured down drains and septic pipes to clear blockages.
See Pls.' Br. at 34-35. Thus, Plaintiffs conclude, the septic
waste that was subsequently dumped at the DeLuca Farm Site
constituted hazardous waste because it combined solid and
hazardous wastes. See Id.
However, Plaintiffs point to no evidence that anyone involved
in this case did, in fact, use such solvents to clean the tanks.
Instead, they offer their experts' hypothesis about how such
substances could have gotten to the Site. They must do more,
however, than speculate in order to establish a genuine, disputed
fact issue. See Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12
(2d Cir. 1986).
Moreover, Plaintiffs are barred from invoking the mixture rule
in light of its retroactive invalidation in 1991. See Shell Oil
Co. v. EPA, 950 F.2d 741, 752 (D.C.Cir. 1991) (vacating the rule
for EPA's failure to follow requisite notice and comment
procedures); United States v. Goodner Bros. Aircraft, Inc.,
966 F.2d 380, 384-85 (8th Cir. 1992) (finding Shell Oil's
invalidation of mixture rule to apply retroactively). While the
EPA subsequently promulgated a new mixture rule in 1992, the new
rule cannot be applied retroactively to the alleged disposals at
the DeLuca Farm Site. See Goodner Bros., 966 F.2d at 385.
Consequently, the mixture rule cannot apply here to render the
septic waste, that was disposed at the Site, a hazardous
Plaintiffs cannot establish that the septic waste at the Site
presents an imminent and substantial endangerment under RCRA, so
their claim must be dismissed.
4. The State Common Law Claims Against Lynlil and the Lynlil
Defendants are Dismissed Without Prejudice.
Just as I concluded with respect to Putnam County, having
dismissed Plaintiffs' federal claims against Lynlil and the
Lynlil Defendants, I decline to exercise pendent jurisdiction
over the remaining state common law claims. See
28 U.S.C. § 1367(c). These claims are dismissed without prejudice
to Plaintiffs' right to file them in State Supreme Court. All the
Lynlil Defendants' defenses to these claims are, of course,
5. The Cross Claims for Indemnity Asserted by Putnam County,
Lynlil, and the Lynlil Defendants Against Each Other Are
As the claims against Putnam County, Lynlil, and the Lynlil
Defendants have all been dismissed, their cross claims against
each other are dismissed with prejudice as well. To the extent
that they seek indemnification, contribution and reimbursement
from the DeLuca Defendants, pursuant to state law, these claims
may be reasserted in State Supreme Court.
6. The Third-Party Contribution Claims Asserted by Lynlil and
the Lynlil Defendants Against Olga DeLuca, Elizabeth DeLuca,
Thomasina Christianson are Dismissed.
As the claims against Lynlil and the Lynlil Defendants have all
been dismissed, their third-party contribution claims against
Olga DeLuca, Elizabeth DeLuca, and Thomasina Christianson, under
CERCLA, are dismissed with prejudice.
7. Lynlil's and Stockfield's Counterclaims
Lynlil and Stockfield asserted counterclaims against the
Plaintiffs for frivolous prosecution of a RCRA claim. Lynlil also
asserted a counterclaim against the Plaintiffs for contribution
and indemnification of any CERCLA liability found against Lynlil,
and a third counterclaim seeking recovery of response costs from
Plaintiffs under CERCLA for Lynlil's expenses in investigating
the Site and building an alternate public water supply. Lynlil's
counterclaim for contribution and indemnification is dismissed as
moot. As to the remaining counterclaims, since no party has moved
for summary judgment on them, and since they are not mooted by
the Court's dismissal of the Plaintiffs' federal claims, they
C. Town of Carmel
1. Town of Carmel's Motion to Dismiss Plaintiffs' CERCLA Claim
(a) Town of Carmel Lacked Sufficient Site Control to be Liable
as a CERCLA Site "Owner."
Plaintiffs allege that, as a result of multiple agreements
between Carmel and the DeLucas to permit the disposal of septic
waste at the DeLuca Farm Site, Carmel "owned" the Site from 1955
to 1970 for purposes of CERCLA liability. See Cplt., ¶¶ 12, 62;
see also 42 U.S.C. § 9601(20)(A) (defining "owner or
operator") & 9607(a)(2) (extending liability to former owners or
CERCLA provides little guidance to the courts in assigning
liability to owner/operators, defining this term in tautological
fashion as ". . . any person owning or operating such facility."
42 U.S.C. § 9601(20)(A). The Ninth Circuit has characterized this
unhelpful statutory definition as "a bit like defining `green' as
`green.'" Long Beach Unified School Dist. v. Dorothy B. Godwin
Calif. Living Trust, 32 F.3d 1364, 1368 (9th Cir. 1994). The
Long Beach Court and others have interpreted the statutory
definition's circularity as an instruction to employ the words'
ordinary meanings rather than an unusual or technical definition.
See, e.g., Edward Hines Lumber Co. v. Vulcan Materials Co.,
861 F.2d 155, 156 (7th Cir. 1988); Grand Trunk West. R. Co. v. Acme
Belt Recoating, Inc., 859 F. Supp. 1125, 1130-31 (W.D.Mich. 1994)
(quoting Black's Law Dictionary definition of "owner" and
requiring dominion or proprietary interest in property).
This Court has previously recognized that the owner of a
leasehold interest in a CERCLA facility may be liable as an owner
of that facility, as long as the lessee exercised sufficient
"site control" to
"place it in the shoes of `owners.'" United States v. A & N
Cleaners & Launderers, 788 F. Supp. 1317, 1333 (S.D.N.Y. 1992).
Carmel disputes Plaintiffs' contention that its agreements with
the DeLucas gave it a leasehold interest in the property;
however, this Court accepts Plaintiffs' allegation for the
purpose of this summary judgment motion.*fn24 Notwithstanding
this assumption, Plaintiffs have not presented sufficient
allegations of "site control" to render the leaseholder Carmel a
A look at the facts of A & N Cleaners is helpful in resolving
this issue. In that case, the leaseholder exercised a level of
responsibility and a degree of site control far beyond any
attributes of ownership Carmel had over the DeLuca Farm Site. In
that case, the lessee had (i) the right to sublet all or part of
the property without the obligation to notify the fee owner; (ii)
the discretion to determine the use of the property by its
subtenants; (iii) the obligation (which it exercised) to keep the
entire premises in good condition and repair at all times; (iv)
the obligation to comply with all governmental rules and
regulations concerning nuisances; and (v) the authority (which it
exercised) to investigate and repair the interiors of the sublet
premises. See A & N Cleaners, 788 F. Supp. at 1333-34. As the A
& N Cleaners Court observed, "[w]ith the exception of the power
of alienation, therefore, [the leaseholder] enjoyed the rights
and bore the obligations of an `owner' as the term is commonly
understood." Id. at 1334.
The same cannot be said of the Town of Carmel's
responsibilities or privileges with respect to the DeLuca Farm
Site. Carmel allegedly paid the DeLucas from 1955 to 1970 to set
aside land for septic waste disposal and then issued permits to
septic tank haulers. The tank haulers paid the DeLucas for each
truck load of septic waste deposited at the Site. According to
the testimony of defendant Mantovi, Carmel at one time plowed or
otherwise maintained the access road to the DeLuca Farm. See
Supplemental Memorandum of Law on Behalf of Plaintiffs in
Opposition to Defendant Town of Carmel's Motion for Summary
Judgment, at 2-8 (citing documentary evidence). But, in contrast
to the A & N Cleaners leaseholder's active site control, Carmel
had no involvement with the Site's day-to-day management.
Plaintiffs offer the site specifications contained in the 1960
agreement between the Town of Carmel and Philip and Mary DeLuca
(the "1960 Agreement") to support their allegation that the Town
exercised sufficient site control to be liable as an owner, but
that argument is unavailing. See exh. 12 to Sachs aff.*fn25
The 1960 Agreement demonstrates that the DeLucas agreed to
provide septic disposal trenches within specified dimensions, to
cover the deposited waste with clean earth, and to close the
trenches properly when they became filled to capacity. See Id.
These provisions do not establish that Carmel involved itself in
the day-to-day management of the Site, as necessary to treat a
leaseholder as a CERCLA owner. Rather, they show that the Town
exercised its regulatory functions by permitting a septic waste
dump to be constructed, but demanding that certain precautions be
taken to protect the local environment. As mentioned previously
in the discussion of Putnam County's motion, CERCLA excludes from
liability a municipality that exercised its regulatory functions,
but did not directly manage the disposal activities. See §
III(A)(1)(c)(i), supra; see also United States v. Township of
Brighton, 153 F.3d 307, 316 (6th Cir. 1998) (noting that "mere
regulation does not suffice to render a
government entity liable, but actual operation (or
`macromanagement') does"); cf. United States v. Rohm & Haas
Co., 939 F. Supp. 1157, 1160 (D.N.J. 1996) (holding state agency
not liable as CERCLA owner/operator though it approved use of
landfill site, periodically inspected the site, and ultimately
shut the site down).
(b) Town of Carmel is Not Liable as a CERCLA "Operator" under
the "Actual Control" Test.
Plaintiffs contend that Carmel is also liable under CERCLA as
an "operator" of the DeLuca Farm Site, but they have failed to
allege facts sufficient to show that Carmel played such a role in
the operation of the Site.
The Supreme Court, in United States v. Bestfoods, recently
provided some guidance to courts in applying CERCLA's statutory
definitions to determine "operator" liability. Bestfoods,
524 U.S. 51, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). The Court defined
"operator" according to its ordinary meaning:
[U]nder CERCLA, an operator is simply one who directs
the workings of, manages, or conducts the affairs of
a facility. To sharpen the definition for purposes of
CERCLA's concern with environmental contamination, an
operator must manage, direct, or conduct operations
specifically related to pollution, that is,
operations having to do with the leakage or disposal
of hazardous waste, or decisions about compliance
with environmental regulations.
Id. at 1887.
The Sixth Circuit has applied the Bestfoods holding to a
government entity in United States v. Township of Brighton,
supra, 153 F.3d at 314 (Bestfoods itself had considered
apportioning CERCLA liability only among related corporate
entities). The Brighton Court held that CERCLA "operator"
liability requires affirmative acts and "actual control" over
disposal activities at the facility. See Id. Faced with a
municipality that, like Carmel, had: (1) entered a waste disposal
agreement for the benefit of township residents; (2) required the
dump to meet certain specifications; and (3) paid rent and
maintenance fees to the dump owner, the Brighton Court found
these facts insufficient to impose CERCLA operator liability.
Moreover, the Brighton panel could not find "operator"
liability even in light of evidence that, unlike Carmel "[t]he
township [of Brighton] was not operating at arm's length with a
contractor." Id. at 315
The Brighton Court elaborated on the township's activities
with respect to the dump: (i) it specified in its agreement that
the dump would "be under the supervision of the Board of
Appeals;" (ii) it made "repeated and substantial ad hoc
appropriations" in excess of any rental or permit fees; (iii) it
"made arrangements (including with the local Junior Fire
Department) for bulldozing and other maintenance;" and (iv) it
"took responsibility for ameliorating the unacceptable condition
of the dump, before and after scrutiny from state government,"
among others. Id. at 315-16. On appeal, the Sixth Circuit could
not determine whether all of these activities, in the aggregate,
rendered the township an actual operator of the dump, instead of
a mere regulator, so it remanded for a determination by the
While the Second Circuit has not yet adopted a test for
"operator" liability under CERCLA, all of the other Courts of
Appeal that have addressed the issue with respect to government
entities have, like the Sixth, required a showing of actual and
substantial control. See, e.g., United States v. Vertac Chem.
Corp., 46 F.3d 803, 809 (8th Cir. 1995) (holding that
regulations and inspections did not constitute substantial
control over the production of Agent Orange for purposes of
CERCLA liability); FMC Corp. v. United States Dept. of
Commerce, 29 F.3d 833, 843 (3d Cir. 1994) (finding that the
United States government had exercised "substantial control" over
the production of high tenacity rayon
where the government determined what product the facility would
produce, the level of production, the price of the product, and
to whom the product would be sold); Dart Indus., Inc., 847 F.2d
at 146 (declining to classify local government as operator merely
for its failure to enforce state regulations adequately). As the
Brighton Court emphasized, the plain meaning view of "operator"
espoused in Bestfoods requires that putative operators must
have "performed some acts — that they `operated' the site by
`direct[ing] the workings,' `manag[ing],' or `conduct[ing] the
affairs' — before they can be held responsible." Brighton, 153
F.3d at 314 (quoting Bestfoods) (modification in original).
Plaintiffs offer no facts to show that Carmel exercised any
ongoing control over the disposal activities at the Site. As
discussed above, the site specifications contained in the 1960
Agreement do not establish that Carmel directed the workings at
the Site or influenced its "macromanagement." Plaintiffs offer no
evidence in the voluminous record to suggest that Carmel carried
out disposal activities at the Site, provided personnel,
equipment, or supplies, had, or exerted, any control over the
activities or management at the Site. Moreover, the 1960
Agreement is specifically limited to septic waste; it confers no
authority whatsoever upon Carmel or any other party concerning
the disposal of hazardous substances. Thus, it cannot be said
that Carmel had the authority to manage the disposition of any
alleged hazardous substances at the Site.
(c) Town of Carmel Did Not "Arrange" for the Disposal or
Treatment of Hazardous Substances at the Site for Purposes of
In addition to "owner and operator" liability, CERCLA also
imposes liability upon "any person who by contract, agreement, or
otherwise arranged for disposal or treatment, or arranged
with a transporter for transport for disposal or treatment, of
hazardous substances. . . ." 42 U.S.C. § 9607(a)(3) (emphasis
added). The Second Circuit has held that, in order for "arranger"
liability to attach to parties not actively involved in the
timing, manner, or location of disposal, there must be a
sufficient nexus between the potentially responsible party and
the disposal of the hazardous substances. See General Electric
Co. v. AAMCO Transmissions, Inc., 962 F.2d 281, 286 (2d Cir.
1992); accord BF Goodrich Co. v. Murtha, 958 F.2d 1192, 1199
(2d Cir. 1992) (finding that municipality's management of
disposal activities provided sufficient nexus for "arranger"
liability).*fn26 The General Electric Court elaborated that
"arranger" liability flows from "the obligation to exercise
control over hazardous waste disposal, and not the mere ability
or opportunity to control the disposal of hazardous substances. .
. ." General Electric, 962 F.2d at 286 (emphasis added).
Plaintiffs do not allege facts sufficient to prevail under this
standard on an "arranger" liability claim. As previously
discussed, Plaintiffs have neither established that Carmel was
actively involved in the timing, manner, or location of disposal,
nor shown that the Town had an obligation to control the septic
waste haulers to whom it issued permits to use the DeLuca Farm
Site. Absent such an obligation, "arranger" liability cannot be
imposed. See Id. Moreover, evidence that the Town assisted
private waste haulers to secure the right to deposit septic
waste at the DeLuca Farm Site, for a fee, does not demonstrate
that Carmel intentionally involved itself in the
disposal of hazardous substances allegedly contained in that
septic waste. See, e.g., United States v. Cello-Foil Prods.,
Inc., 100 F.3d 1227, 1231-32 (6th Cir. 1996) (putative CERCLA
"arranger" must have actual intent to dispose of dangerous
chemicals to be liable); Amcast Indus. Corp. v. Detrex Corp.,
2 F.3d 746, 751 (7th Cir. 1993) ("arranger" liability requires
intentional action and precludes accidental spillage); cf.
Hassayampa Steering Committee v. Arizona, 768 F. Supp. 697, 701
(D.Ariz. 1991) (holding state not liable as "arranger" when it
selected landfill and authorized haulers to deposit waste there).
2. Town of Carmel's Motion to Dismiss Plaintiffs' RCRA Claim
Plaintiffs' RCRA claim against Carmel must be dismissed, as a
matter of law, because the Town was neither owner nor operator,
as these terms are construed, and because Plaintiffs have not
identified any evidence that the septic waste deposited at the
Site through Carmel's involvement contained hazardous materials.
As discussed above, in order to establish liability under RCRA,
Plaintiffs must demonstrate that the Town of Carmel was an owner
or operator of the Site, or contributed to handling, storage,
treatment, transportation, or disposal of solid or hazardous
waste at the site that may present an imminent and substantial
endangerment to health or the environment. See
42 U.S.C. § 6972(a)(1)(B). This Court has already concluded that Carmel was
neither an owner nor an operator for purposes of CERCLA
liability, and Plaintiffs identify no legal authority indicating
that the result should be different under RCRA. Just as the Court
found with respect to Putnam, there is no evidence that Carmel
created solid waste, disposed of it, transported it, or otherwise
handled it. The Town did not "contribute" as construed under RCRA
and, thus, is not liable. See, e.g., Zands, 779 F. Supp. at
Moreover, having previously concluded that septic waste does
not constitute a hazardous substance under RCRA (see §
III(B)(3)(b), supra), this Court finds that Plaintiffs cannot
establish that Carmel contributed to the disposal of materials or
substances at the Site which present an imminent and substantial
endangerment under RCRA. Plaintiffs' RCRA claim must be dismissed
as against the Town of Carmel.
3. The State Common Law Claims Against Town of Carmel are
Dismissed Without Prejudice.
Having dismissed Plaintiffs' federal claims against Carmel, I
decline to exercise pendent jurisdiction over the remaining state
common law claims. See 28 U.S.C. § 1367(c). These claims are
dismissed without prejudice to Plaintiffs' right to refile them
in State Supreme Court, and remain subject to all defenses.
4. Town of Carmel's Cross Claims are Dismissed as Moot.
As the claims against Carmel have been dismissed, its cross
claims on all of Plaintiffs' causes of action are dismissed as
D. Joseph Mantovi and MSSI
1. Mantovi's and MSSI's Motion to Dismiss Plaintiffs' CERCLA
Claim is Granted.
Plaintiffs allege that Mantovi and MSSI are potentially
responsible parties solely under CERCLA's "transporter liability"
category because they carted septic waste allegedly containing
hazardous substances to the Site between 1955 and the
RCRA (see § III(B)(3)(b), supra). That conclusion is
unchanged by Plaintiffs' rank speculation that the septic waste
deposited by Mantovi and MSSI may have contained hazardous
materials introduced by Carmel residents into their own septic
systems. Accordingly, Plaintiffs cannot link Mantovi and MSSI to
any substances that pose an imminent and substantial endangerment
to health or the environment.
Plaintiffs' RCRA claim is dismissed as against Mantovi and
3. The State Common Law Claims Against Mantovi and MSSI are
Dismissed Without Prejudice.
Having dismissed Plaintiffs' federal claims against Mantovi and
MSSI, I decline to exercise pendent jurisdiction over the
remaining state common law claims. See 28 U.S.C. § 1367(c).
These claims are dismissed without prejudice to Plaintiffs' right
to refile them in State Supreme Court.
4. Mantovi's and MSSI's Cross Claims are Dismissed as Moot.
As the claims against Mantovi and MSSI have been dismissed,
their cross claims on all of Plaintiffs' causes of action are
dismissed as well.
5. Mantovi's and MSSI's Counterclaims
Mantovi and MSSI asserted counterclaims against the Plaintiffs
for frivolous prosecution of a RCRA claim and for contribution
and indemnification of any CERCLA liability found against Mantovi
or MSSI. Mantovi's and MSSI's counterclaim for contribution and
indemnification is dismissed as moot. As no party has moved for
summary judgment on the frivolous prosecution counterclaims, they
remain in the case, since they are not mooted by dismissal of
Plaintiffs' federal claims.
E. Olga DeLuca, Elizabeth DeLuca, and Thomasina Christianson
As the third-party contribution claims asserted by Lynlil and
the Lynlil Defendants, under CERCLA, against Olga DeLuca,
Elizabeth DeLuca, and Thomasina Christianson have all been
dismissed with prejudice, the Third-Party Defendants' motion for
summary judgment dismissing these claims is now moot.
The Third-Party Defendants' own cross claims for contribution
and indemnity against Carmel, Putnam, Lynlil, the Lynlil
Defendants, Mantovi, MSSI, and the DeLuca Defendants are also
dismissed with prejudice to the extent they seek relief under
CERCLA. To the extent they seek common law indemnity and/or
contribution, these claims are dismissed without prejudice to
their reassertion in State Supreme Court. All of the various
defendants' defenses to these claims are, of course preserved.
F. Anthony DeLuca and Theresa Miller
This leaves us with the unfortunate Anthony DeLuca and Theresa
Miller. In a simpler and less knowledgeable era, their father and
mother made a little money on the side by letting their neighbors
dump their septic waste on an unused parcel of the family farm.
The two named defendants both came into ownership of a 13.6%
undivided interest in the farm in three separate transfers
between 1964 and 1966. Defendants DeLuca and Miller ultimately
sold their interest in the property to Lynlil in 1985, well after
the cessation of dumping, which was alleged to be in the
mid-1970s. Thus, they would seem to fall squarely within the
definition of CERCLA "covered person" as "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. . .
." 42 U.S.C. § 9607(a)(2); see also A & N Cleaners, 788 F. Supp.
DeLuca and Miller contend that they did not participate in the
or operation of any aspect of the Site, and that they had no
involvement whatsoever in any disposal activities on the DeLuca
Farm. While it is not at all clear that this claim, if true,
would insulate them from liability under CERCLA's strict
liability standard, Plaintiffs have identified sufficient
documentary evidence to create a triable issue of fact concerning
the DeLuca Defendants' involvement in the Site's management.
See Pls.' Br. at 67-69.
Moreover, the DeLuca Defendants' reliance upon CERCLA's
third-party defense is misplaced because, unlike Lynlil, the
DeLuca Defendants acquired their interests in the farm while
septic waste disposal was still ongoing. As discussed above, the
third-party defense is available only to innocent purchasers who
acquired the contaminated property after the release of
hazardous substances. See 42 U.S.C. § 9607(b)(3); see also
Lashins Arcade, 91 F.3d at 360. Although Plaintiffs have not
identified the date or source of the alleged contamination, it is
at least a disputed issue of fact whether the release occurred
after 1964, that is, after the DeLuca Defendants came into
ownership of their interests in the DeLuca Farm.
The DeLuca Defendants' motion for summary judgment is denied.
V. Further Proceedings
What remains of this action after the various grants of summary
judgment, the dismissal of claims, cross claims, counterclaims,
and third-party claims as moot, and the Court's declination of
pendent jurisdiction over the common law claims, cross claims,
and third-party claims, is very little:
1. Plaintiffs' claims against Anthony DeLuca and
Theresa Miller under CERCLA;
2. Counterclaims against Plaintiffs by Putnam County,
Lynlil, Stockfield, MSSI, and Mantovi for frivolous
prosecution of RCRA claims against them;
3. A counterclaim against Plaintiffs by Putnam County
for frivolous prosecution of CERCLA claims; and
4. Counterclaims against Plaintiffs by Lynlil for
recovery of response costs under CERCLA.
The Court is unable to provide certification for an
interlocutory appeal pursuant to 28 U.S.C. § 1292(b) because I
cannot opine that there are substantial grounds for difference of
opinion on any controlling question of law. It seems to me that
the controlling questions under CERCLA and RCRA have been fairly
well settled in recent years. Nonetheless, I am of the view that
the ultimate termination of this litigation would be materially
advanced by a prompt appeal, and, but for the pendency of the
claims for frivolous prosecution and for CERCLA response costs by
Lynlil, Putnam, Stockfield, Mantovi, and MSSI, I would have
severed the claims against those defendants, as well as Carmel
and the remaining Lynlil defendants, dismissed them per this
opinion, and directed the immediate entry of judgment. As long as
the frivolous prosecution and CERCLA response cost claims (as to
which no summary judgment motions have been filed) remain in the
case, I am unable to do that. And I am unwilling to sever Carmel,
Boniello, and Barile so that they can appeal separately, as that
would not advance the ball in any material respect.
Lynlil, Putnam, Mantovi, and MSSI should think long and hard
about whether they want to continue to prosecute these
counterclaims. I appreciate that Mr. Stockfield is in a somewhat
different position than the other defendants asserting
counterclaims, but he, too, needs to consider his position. All
of the counterclaimants should consider whether their frivolous
prosecution claims are any less frivolous than the RCRA and
CERCLA prosecutions they challenge.
All parties who have claims remaining before this Court are
directed to appear at a conference on Monday, June 28 at 4 p.m.
This constitutes the decision and order of the Court.