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March 26, 2001


The opinion of the court was delivered by: Curtin, District Judge.


Plaintiff Buffalo Color Corporation ("Buffalo Color") brings this action pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607(a), 9613(f)(1), 9613(g)(2), the Declaratory Judgment Act, 28 U.S.C. § 2201-02, and the laws of New York State. Plaintiff seeks to recover from defendant AlliedSignal Inc. ("AlliedSignal") the necessary costs it has incurred and will incur in connection with the investigation and remediation of the hazardous wastes found at the Buffalo Dye Plant.

Currently before the court is Buffalo Color's motion for partial summary judgment on its second and third causes of action*fn1, and on AlliedSignal's first through eleventh and thirteenth through nineteenth affirmative defenses (Items 11 — 17, 22, 25, 28 — 30). AlliedSignal cross — moves for summary judgment (Items 19-21, 23, 24, 26, 27, 31, 33). The parties also filed a Joint Appendix (Item 18).


I. Facts

Buffalo Color is the current owner and operator of the chemical manufacturing plant ("Dye Plant") located at 100 Lee Street in Buffalo, New York. The Dye Plant is situated on approximately 42 acres of property previously divided into five geographic regions known as Areas A, B, C, D, and E. Only Areas A, B, C, and E of the Dye Plant are the subject of this litigation.

Operations at the Dye Plant date back to 1879 and were limited to the area of the plant now known as Area A, which fronts on the Buffalo River. From 1879 to 1899, the Dye Plant was operated as a coal tar dye manufacturing facility by Schoellkopf Aniline and Chemical Company of Buffalo, owned by two brothers, Jacob F. Schoellkopf, Jr. and C.P. Hugo Schoellkopf. On or about December 18, 1899, the Schoellkopf, Hartford and Hanna company was incorporated, whereupon it consolidated with three other companies to form one large company. In 1915, Schoellkopf, Hartford and Hanna changed its name to Schoellkopf Aniline and Chemical Works, Inc.

In 1917, Schoellkopf Aniline and Chemical Works, Inc., and five other companies contracted to form a new company, National Aniline and Chemical Company ("National Aniline"), to manufacture various coaltar products. A short time later, Schoellkopf Aniline and Chemical Works, Inc., was dissolved. In 1920, Allied Chemical and Dye Corporation began to acquire capital stock in National Aniline. In 1941, Allied Chemical liquidated National Aniline (by then its wholly owned subsidiary) and began operating National Aniline as a division of the corporation. In 1958, Allied Chemical and Dye changed its name to Allied Chemical Corporation. After acquiring the Signal companies in 1985, Allied Corporation adopted its current name, AlliedSignal, Inc. ("AlliedSignal").

By Purchase Agreement dated June 16, 1977, Buffalo Color purchased Areas A, B, C, and E of the Dye Plant from AlliedSignal. Manufacturing activities in Area D had ceased prior to the sale and were not restarted by Buffalo Color. According to the Purchase Agreement, Buffalo Color purchased the real property and equipment comprising the Dye Plant, as well as the right to manufacture and sell certain products and intermediates. Section 3 of the Purchase Agreement, entitled "Assumption of Certain Liabilities by Purchaser," addressed the liability that each party would assume following the sale. Buffalo Color and AlliedSignal now point to this section of the Agreement as indicating that the other party has liability for cleanup of hazardous materials discovered on plant property.

A. Discovery of Hazardous Waste*fn2

Sometime before 1977, three impoundments were built on land located in Area E. In 1980, Buffalo Color submitted an application to operate the impoundments, as required by the Resource Conservation and Recovery Act (RCRA), thus bringing the Dye Plant within RCRA's regulatory jurisdiction.*fn3 In 1986, the Department of Environmental Conservation ("DEC"), which has the authority to administer RCRA in New York State, closed two of the impoundments and ordered the third closed in 1989.

Closure of the impoundments involved dewatering, excavation of contaminated sludges, and backfilling with clean soil. Contaminated soils beneath the impoundments remained after closure. At the time the impoundments were closed, hazardous substances were detected in the groundwater in monitoring wells in Area E.

During this same time period (from 1986 to 1991), the DEC and U.S. Environmental Protection Agency (EPA) conducted a RCRA Facility Assessment ("RFA") of the Dye Plant to determine whether any hazardous waste or its constituents had been released from those areas of the facility where the solid waste activities had been conducted. By letter dated September 10, 1991, Buffalo Color tendered a demand to AlliedSignal for reimbursement of past and future costs regarding investigation and remediation of areas A, B, C, and E. Item 24, Exh. 42. In 1992, the DEC was delegated the authority to administer the Hazardous and Solid Waste Amendment ("HSWA") to RCRA. The HSWA required any permit issued under RCRA after November 1984 to address corrective action for releases from solid waste management units at a facility. Item 12, p. 3.

In 1995, the DEC announced the results of the RFA study. Essentially, the agency concluded that releases of hazardous substances had occurred and may continue to occur at the Dye Plant from several areas, including the impoundments mentioned above, as well as closed and active sewer lines. Consequently, the DEC issued Buffalo Color a final post-closure permit pursuant to 6 N.Y.C.R.R., Part 373 ("Part 373 permit"). The permit required Buffalo Color to remediate releases from both the closed and active sewer lines and the contamination arising from a number of potential sources, including the impoundments. In fact, due to the density of the sewer lines and the numerous areas of chemical handling located on the property, the entire active area of the Dye Plant (including Areas A, B, C, and E) was subject to the permit's corrective action requirements.

Buffalo Color has already conducted an RCRA Facility Investigation ("RFI") to determine the nature and extent of the releases and potential releases of hazardous wastes and/or constituents from Areas A, B, C, and E. The RFI Final Report was issued in December, 1998. Item 18, Tab 5. Buffalo Color is currently preparing a Corrective Measure Study ("CMS") to determine potential approaches for remediation of the identified releases. The DEC will review the CMS and select the most appropriate remediation plan. So far, Buffalo Color asserts that it has incurred costs totaling $337,870 in performing the RFI and formulating the CMS. Initial estimates regarding the alternative corrective actions considered in the CMS range from $9.5 to $11.2 million.

AlliedSignal concedes that one or more of its admitted predecessors owned and operated the Dye Plant from December 18, 1899 to June 30, 1977, and has stipulated that it will assume any CERCLA liability attributable to the Dye Plant during that time period. Item 18, Tab 3, pp. 2-3. However, AlliedSignal steadfastly denies that any such liability exists, claiming that there was no disposal of hazardous substances during that time period or, in the alternative, that the Purchase Agreement relieved it of any such liability. Because of AlliedSignal's denial, Buffalo Color commenced this action, asserting three causes of action. The first and second causes of action seek to hold AlliedSignal liable under Sections 107(a)(2) and 113(f)(1) of CERCLA. The third cause of action sets forth a claim against AlliedSignal for indemnity under Section 3(b) of the Purchase Agreement.

On September 9, 1999, Buffalo Color filed a motion for partial summary judgment on its second and third causes of action, and also on AlliedSignal's first through eleventh and thirteenth through nineteenth affirmative defenses. Item 11. In response, AlliedSignal cross-moved for summary judgment dismissing Buffalo Color's complaint in its entirety on the ground that the Purchase Agreement relieves it from any liability. Item 19. In the alternative, AlliedSignal moved for partial summary judgment dismissing Buffalo Color's claim that AlliedSignal was jointly and severally responsible for all response costs pursuant to CERCLA § 107.


I. Standard for Summary Judgment

Both Buffalo Color and AlliedSignal have moved for summary judgment of the action or part of the action in their respective favors. Summary judgment is appropriate where a review of the record reveals that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the responsibility of identifying for the court the portions of the record which demonstrate the absence of any material facts. Federal Deposit Ins. Corp. v. Giammettei, 34 F.3d 51, 54 (2d Cir. 1994) (citing Celotex v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

Once the moving party has provided sufficient evidence to support a motion for summary judgment, the opposing party must "set forth specific facts showing that there is a genuine issue for trial." Endico Potatoes, Inc., v. CIT Group Factoring, 67 F.3d 1063, 1066 (2d Cir. 1995) (quoting Fed.R.Civ.P. 56(e)). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Podell v. Citicorp Diners Club Inc., 112 F.3d 98, 100 (2d Cir. 1997). The litigant opposing summary judgment must therefore bring forward some affirmative indication that his version of relevant events is not "fanciful." Id. at 100.

"Entry of summary judgment indicates that no reasonable jury could return a verdict for the losing party." Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162, 167 (2d Cir. 1991). When deciding a motion for summary judgment, courts "view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." American Casualty Co. v. Nordic Leasing, Inc., 42 F.3d 725, 728 (2d Cir. 1994) (quotation and citation omitted).

II. Arguments for Summary Judgment

The present motions for summary judgment ask this court to make two determinations: first, whether, under CERCLA, AlliedSignal is a responsible party and is therefore liable for its equitable share of costs incurred by Buffalo Color for Dye Plant remediation; and second, the legal effect that Section 3 and other sections of the Purchase Agreement have on the parties' respective liabilities in this action.

A. Summary Judgment on Plaintiff's Second Cause of Action

There are generally two issues in CERCLA cases brought by a company against another company: (1) whether the defendant company is liable for contribution of remediation costs, and (2) if liable, for what amount. Here, Buffalo Color's summary judgment motion is limited to whether AlliedSignal is a responsible party under CERCLA and, as such, is therefore liable for a portion of the costs Buffalo Color has and will incur in performing the hazardous waste clean-up at the Dye Plant. See 42 U.S.C. § 9607(a)(2), 9613(f).

1. Is AlliedSignal Liable for a Portion of the Costs of The Dye Plant Clean-Up?

The elements of an action under Section 113(f)(1)*fn4 of CERCLA are the same as those under Section 107(a).*fn5 See CERCLA § 113(f)(1) ("Any person may seek contribution from any other person who is liable or potentially liable under [CERCLA § 107(a)]."). Hence, to establish a prima facie cause of action for contribution, a private party must show:

(1) Defendant fits within one of the four classes of responsible parties outlined in § 107(a).

(2) The site is a facility.

(3) There is a release or threatened release of hazardous substances at the facility.
(4) The plaintiff incurred costs responding to the release or threatened release.
(5) The costs and response actions conform to the National Oil and Hazardous Substances Pollution Contingency Plan.*fn6

Bedford Affiliates v. Sills, 156 F.3d 416, 427 (2d Cir. 1998).

It is not disputed that the Dye Plant is a facility within the meaning of CERCLA. Item 18, Tab 2, 1 19. As such, the court's analysis is limited to whether: (1) AlliedSignal is a responsible party; (2) there was a release or threatened release of hazardous substances at the facility; (3) Buffalo Color incurred costs responding to the release or threatened release; and (4) those costs and response actions conform to the National Contingency Plan ("NCP").

a. Were Hazardous Wastes Released at the Dye Plant between 1899 and 1977?

AlliedSignal concedes that it would be a responsible party under Section 107(a)(2) of CERCLA if hazardous waste had been released at any time between 1899 and 1977; however, defendant disputes that such a release occurred during that time period. Item 18, Tab 2, ¶¶ 21, 22. Specifically, AlliedSignal argues that plaintiff fails to prove that the releases which caused the contamination at the Dye Plant occurred from 1899 to 1977, or in the alternative did not occur prior to 1899. These arguments, however, fail.

Both the statute and the case law on this issue clearly indicate that it is the disposal of hazardous substances during a party's ownership or operation, rather than the release, that subjects a party to liability. See 42 U.S.C. § 9607(a)(2); see also Allied Princess Bay Co. v. Atochem North America, 855 F. Supp. 595, 604 (E.D.N.Y. 1993) (citing Westwood Pharm. v. National Fuel Gas Dist. Corp., 737 F. Supp. 1272, 1277-79 (W.D.N.Y. 1990)). Moreover, the fact that plaintiff failed to provide evidence that hazardous materials were not dumped on the land prior to 1899 does not undermine its motion for summary judgment. For liability to be assigned, the law merely requires plaintiff to demonstrate that such materials were disposed of on the property during defendant's ownership. City of New York v. Chemical Waste Disposal Corp., 836 F. Supp. 968, 979 (E.D.N.Y. 1993).

To establish that hazardous substances were disposed at the Dye Plant between 1899 and 1977, plaintiff primarily relies on the report issued by the DEC at the conclusion of the RFA (the "RFA Report"), as well as the sworn statement of former AlliedSignal employee David E. Sauer ("Sauer"). Item 15. Sauer began working for AlliedSignal in the early 1970s and relates his firsthand account of the routine spillage and leakage of hazardous substances that resulted from the manual or semi-manual transfer of raw materials and intermediaries during the various manufacturing processes. Item 15, ¶¶ 5-7. Sauer also confirmed that during the same time period, wastewater containing raw materials and unwanted products, many of which are considered hazardous under CERCLA, were discharged into the facility's sewer system to the on-site treatment plant or the impoundments located in Area E. Id. ¶¶ 7, 12. Attached to Sauer's Affidavit as Exhibit A is a "History of Incidents and Violations" at the Dye Plant which contains tables describing various incidents from 1965 — 1997, wherein hazardous materials were released.

The RFI Report supports Sauer's account. Item 18, Tab 5. The Report confirms that many of the substances contained in the wastewater discharge by AlliedSignal's predecessors, while not detected in the up-gradient groundwater wells, have been detected in the groundwater along their down-gradient edge. Id. p. 10. This finding establishes that contaminants that had been placed in the lined or unlined impoundments have entered the environment. Id. pp. 8, 12, 13. See also Senefelder Aff., Item 13, ¶¶ 4 — 7.

Furthermore, Buffalo Color has submitted evidence that during the 1899 — 1977 time period, hazardous chemicals were spilled both inside the plant as well as discharged into the Buffalo River and through the facility's sewer system to the on-site treatment plant. Item 14, Ex. F; Item 15, ¶ 7; Item 16. See list of hazardous substance disposal, Item 32, pp. 7-8. AlliedSignal attempts to argue that such spillage is not considered a release under CERCLA, but the law on the issue states the opposite. See 42 U.S.C. § 6903(3) (disposal includes "the discharge . . . spilling, leaking . . . of any [hazardous substance] into or ...

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