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BUFFALO COLOR CORP. v. ALLIEDSIGNAL
March 26, 2001
BUFFALO COLOR CORP., PLAINTIFF,
ALLIEDSIGNAL, INC., DEFENDANT.
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).
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
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
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
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
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
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
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,
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.
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
incidents from 1965 — 1997, wherein hazardous materials were
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 ...