United States District Court, Northern District of New York
January 31, 2002
THE STATE OF NEW YORK AND JOHN P. CAHILL, AS COMMISSIONER OF THE NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, PLAINTIFFS,
MOULDS HOLDING CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Thomas J. McAVOY, U.S. District Judge.
Memorandum-Decision & Order
This action arises out of the environmental remediation of the landfill
of the Town of Van Buren located in Ogandaga County, New York. The Town
of Van Buren ("Town") owned and operated the landfill from 1963 until it
was closed in 1989. At that time, it appeared that the landfill was
responsible for groundwater contamination in the surrounding area. In
1989, the State of New York Environmental Conservation Department
("State") entered into a state assistance contract ("SAC") with the
Town. Pursuant to New York Environmental Conservation Law §
State reimbursed the Town for 75% of its clean-up
costs, or $2,257,393.00.
The State then brought this action pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") and
state common law to recover the money paid to the Town, as well as
additional expenses incurred by the State. Moulds Holding Corporation
("Moulds") now moves for summary judgment on the basis that the State
does not have a viable claim under CERCLA § 107(a), that Moulds is
not a successor in interest to the Syroco Corporation, that there is no
genuine issue of material fact as to disposal of hazardous substances at
the site, and that the state law claims are either pre-empted by CERCLA
or barred by the statute of limitations.
I. Standard for Summary Judgment
It is well settled that on a motion for summary judgment, the Court
must construe the evidence in the light most favorable to the non-moving
party, see Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir. 1999), cert.
denied, 529 U.S. 1098 (2000), and may grant summary judgment only where
"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). With this standard in mind, the Court will consider Mould's
II. Moulds' Motion for Summary Judgment
A. The State's Claim Under § 107*fn1
Moulds first contends that the State does not have a viable claim under
§ 107 of CERCLA because it is not the real party in interest.
Alternately, Moulds contends that the State should be limited to a §
113(f) contribution claim because it is essentially suing in place of the
In 1989, the Town entered into an administrative consent order with the
State requiring it to perform remedial actions. Subsequently, the State
also entered into the SAC with the Town and reimbursed the town 75% of
the costs the Town incurred while remediating the site. The SAC required
the Town to seek recovery of the costs incurred from other responsible
parties, and provided that the Town could lose its funding and might be
required to repay the State should it fail to attempt recovery of the
funds expended. Finally, the SAC provided that when the Town recovered
funding from other parties, the Town would return funds to the State,
such that the State contribution would always remain no higher than 75%
of the Town's unrecovered costs.
Based on the SAC, Moulds claims that it is the Town who incurred
response costs within the meaning of CERCLA and the State merely acted as
a funding agency. Thus, Moulds contends that it is the Town that must
bring the action, and further that the Town, or the State acting on its
behalf, would be limited to a contribution action under § 113(f)
because it is a potentially responsible party ("PRP"). Finally, Moulds
argues that the result of allowing the State to sue instead of the Town
is either double recovery against Moulds or increased liability for the
Town.*fn2 The State responds, relying on Town of New Windsor v. Tesa
Tuck, Inc., 935 F. Supp. 317 (S.D.N.Y. 1996), that the State did incur
response costs when it reimbursed the
Town, and thus, the State should be
allowed to sue under § 107 asserting joint and several liability
1. 107(a) and 113(f)
Section 107(a) allows an innocent party to bring an action to recover
its response costs incurred in remediating a facility as defined by
§ 9601(9), as long as those response costs are consistent with the
National Contingency Plan (NCP). See 42 U.S.C. § 9607(a)(4)(B); B.F.
Goodrich v. Betkoski, 99 F.3d 505, 514 (2d Cir. 1996) cert. denied,
524 U.S. 926 (1998). Liability under § 107(a) is joint and several.
B.F. Goodrich, 99 F.3d at 514. Thus, should the State be allowed to
recover under § 107(a), it would be entitled to recover from Moulds
all of its response costs incurred. Section 113(f) by contrast provides
for contribution between PRPs. 42 U.S.C. § 9613; See Bedford
Affiliates v. Sills, 156 F.3d 416, 423-25 (2d Cir. 1998). Liability
under § 113(f) is several. Each party must pay only for the amount of
waste it contributed to the site. Beford Affiliates, 156 F.3d at 423.
The Court is also permitted to consider equitable factors in apportioning
liability under § 113. Further, PRPs are limited to bringing an
action under § 113(f) and may not bring an action under §
107(a). Bedford Affiliates, 156 F.3d at 424. Thus, the Town would be
limited to a contribution action in any suit it brought against Moulds.
Moulds argues that this provision should apply with equal force to the
State in this case because it stands in place of the Town in its recovery
2. General CERCLA Law
This Court starts with the general proposition that "CERCLA is a `broad
remedial statute.'" B.F. Goodrich, 99 F.3d at 514 (quoting B.F. Goodrich
Co v. Murtha, 958 F.2d 1192, 1197 (2d Cir. 1992)). The dual purposes of
CERCLA are to facilitate clean up of hazardous waste sites and to ensure
that those responsible for creating the hazardous waste sites pay for the
clean-up. B.F. Goodrich, 99 F.3d at 514 (quoting Senate Report, S.Rep.
848, 96th Cong., 2d Sess. 13 (1980)). Further, "[a]s a remedial
statute, CERCLA should be construed liberally to give effect to its
purposes." Id. (citing Schiavone v. Pearce, 79 F.3d 248, 253 (2d Cir.
The Court also notes that CERCLA encourages a variety of settlement
arrangements. See In Re Cuyahoga Equip. Corp., 980 F.2d 110, 119 (2d
Cir. 1992) (one purpose of CERCLA is to encourage settlements); see also
Town of New Windsor v. Tesa Tuck, Inc., 935 F. Supp. 317, 321 (S.D.N.Y.
1996) (discussing some of the settlement arrangements allowed or
encouraged in the context of CERCLA litigation). In particular, Section
122 of CERCLA expressly provides for agreements between the federal
government and PRPs, to have the settling PRPs clean up the hazardous
waste sites. 42 U.S.C. § 9622. Under this section, the federal
government is expressly authorized to recover money it pays to the PRPs
conducting the clean-up by a joint and several liability action under
§ 107(a), rather than by a contribution action under § 113(f).
Id.; see also Town of New Windsor, 935 F. Supp. at 321 (discussing some
of these arrangements). In circumstances where some parties have settled
and others have not, the courts are forced to deal with the complicated
issues of allocation following partial settlements. See, e.g., Daniel
Risel, et al., Private-Party Hazardous Material Litigation, SF97 ALI-ABA
COURSE OF STUDY 483, 501 (June 25-29, 2001) (discussing some of the
complicated allocation issues dealt with by federal courts handling
CERCLA claims with several parties, including partial settlements).
Another basic purpose of CERCLA is to provide a continued source of
funding to the state and federal governments for their clean-up actions.
Thus, the federal government has been allowed to bring a § 107(a)
claim asserting joint and several liability against private PRPs even if
the federal government is, itself, a PRP. See United States v. Wallace,
961 F. Supp. 969, 974 (N.D.TX 1996) (citing United States v. Kramer,
757 F. Supp. 397, 414 (D.N.J. 1991); United States v. Hunter,
70 F. Supp.2d 1100, 1106 (C.D.CA 1999); City of New York v. Exxon Corp.,
776 F. Supp. 177, 198 (S.D.N.Y 1991) (suggesting same logic would apply
to state or some municipal actions). This purpose is equally clear in
the context of a state fund, such as that used by the State of New York
to help pay the remediation costs incurred by the Town of Van Buren. A
continued source of funding is the only way to ensure continued clean-up
Keeping in mind this history and the policy reasons that have formed
other CERCLA decisions, the Court finds that the State may bring a
section 107(a) claim against Moulds.
3. The State Incurred Response Costs
First, the State incurred response costs in the clean-up of the
landfill in question. See Town of New Windsor, 935 F. Supp. at 319-322
(discussing what it means to incur response costs). The funds disbursed
pursuant to the SAC went to assist the Town with remediation of the
landfill in a manner consistent with CERCLA. There is no question that
the State could have remediated the landfill on its own and then brought
a claim against Moulds. Instead of relying on this system of clean-up,
the New York State Legislature saw fit to enact N.Y. ENVIR. CONS. L.
§ 27-1313(b)(9) in order to encourage towns to clean-up their own
problem areas by providing them monetary assistance. This system furthers
the CERCLA purpose of facilitating timely clean-ups of hazardous waste
areas. It would be contrary to the legislative intent of both CERCLA and
the New York State environmental laws to curtail the State's ability to
recover the money expended under the state statutory scheme, as long as
the recovery sought also meets the criteria for bringing a CERCLA
Allowing the State to bring a claim to recover money expended pursuant
to the statute furthers the goals of CERCLA by encouraging timely
clean-up through these state-town arrangements. Consequently, allowing
the State to maintain a § 107(a) action against Moulds for the money
expended pursuant to the SAC is consistent with the purposes and policies
4. There is no Double Recovery
Moulds argues that allowing the State to recover will result in a
double recovery against Moulds. Moulds seems to suggest that because the
SAC imposes an obligation on the Town to attempt recovery of response
costs that the Court will somehow impose liability against Moulds in both
a suit by the State and a subsequent suit by the Town. As previously
mentioned, Courts have been dealing with complicated issues of allocation
of liability for some time. Liability between Moulds and the Town can be
apportioned here, just as it has in other cases involving multiple
In essence, the SAC is irrelevant to Moulds. It governs payment
between the Town and the State, providing that the
State is authorized to
pay 75% of the Town's liability. There is nothing in the SAC that prevents
the Court from entering a final judgment as between Moulds and the State
and between Moulds and the Town. The relationship between the State and
the Town is separate and distinct from the issue presented here. Even
were the Town not present in this litigation, Moulds would have the
ability to assert its payment to the State (assuming one occurs) as an
equitable defense in any subsequent action by the Town. There is no
danger of double recovery in this case.
To the extent that Moulds expresses concerns regarding the Town
bringing an action to recover for its expenses not covered by the SAC,
such concern is irrelevant. In the analogous case where a PRP settles
with the Federal government, both the Federal government and the PRP can
bring actions against non-settling PRPs. See Private-Party Hazardous
Material Litigation, at 504 (discussing the double suit that can result
for a non-settling PRP). The issue again becomes the necessity of
allocating damages in proportion to the liability of the parties. While
such allocations are complicated, they are necessitated by the current
scheme of CERCLA.
The Court is mindful that the burden of proving what portion of harm is
attributable to defendants under § 113 will fall to Moulds in this
case, instead of the State. That is, however, the price paid by
non-settling PRPs in similar situations. It is through this harsh result
that courts have attempted to encourage settlement of environmental
claims. See Bedford Affiliates, 156 F.3d at 427 (citing In re Reading
Co., 115 F.3d 1111, 1119 (3d Cir. 1997) (non-settling PRPs may face
disproportionate liability, a means of encouraging settlement).
The Court finds that the SAC does not affect the ability of the State
to recover for the response costs it incurred, including the money paid
to the Town for remediation of the cite. Consequently, Moulds motion for
summary judgment on this grounds is denied.
B. Successor Liability
Moulds next contends that it should not be liable as a successor
corporation for any activity prior to 1980. In order to fully address
this argument, the Court must review the corporate history of Moulds.*fn4
1. Mould's Corporate History
The first Syroco Inc. was incorproated in New York in 1946. This entity
owned the plant in Baldwinsville, New York, from which the waste that is
the subject of this lawsuit is alleged to have come. From 1965 until
1980, Syroco, Inc. became affiliated with, or a division of, Rexall Drug
and Chemical Company/Dart Industries Inc. In June of 1980, Services
Industries, Inc. purchased substantially all of the assets of the Syroco
Division of Dart, including the Baldwinsville plant. The assets were
transferred to a Texas corporation known as Syroco, Inc. In 1986, the
Texas corporation merged with a Delaware corporation and retained the
name of Syroco, Inc. In 1995, Marley Plastics Holdings purchased
Syroco, which was transferred to Fiskars, Inc. and at some time in 1999
changed its name to Moulds Holding Corp. Moulds does not dispute that it
was the entity which owned the Baldwinsville plant after 1980. Rather,
Moulds contends that it is not liable for any environmental activities
prior to that time. Thus, the issue is
whether Syroco, Inc., the Texas
corporation was a successor to the Division of Dart Industries
2. Test for Successor Liability
The test used in the Second Circuit to determine successor liability is
the substantial continuity test. See Cooper Industires, Inc. v. Agway,
Inc, 1997 WL 275075, at *1 (N.D.N.Y. May 19, 1997). Under this test, the
Court must consider "whether the successor maintains the same business,
with the same employees doing the same jobs, under the same supervisors,
working conditions, and production processes, and produces the same
products for the same customers." Cooper Industries, 1997 WL 275075, at
*1 (quoting B.F.Goodrich v. Betkoski, 99 F.3d 595, 519 (2d Cir. 1996).
3. Moulds is a Successor
There is substantial evidence in the record that Moulds held itself out
as the successor corporation and that, in fact, Moulds meets the test set
forth above. The State has submitted a newspaper article in which the
Syroco president states that no changes will be made in the company even
though it was being sold by Dart Industries to the Texas corporation
Services Industries, Inc. (Bassinson Decl. Ex. "M"). The article also
indicates that there would be no personnel changes at Syroco. Nor were
any of the officers changed. In particular, the president remained the
same after the transition as before. Id. Also attached is the Purchase
and Sale Agreement (Sales Agreement) between Dart and Services.
(Bassinson Decl. Ex. "N"). The Sales Agreement transfers "substantially
all . . . of the assets, rights, properties and business of the Syroco
Division" to Services Industries Inc. Id. The Sales Agreement further
provides that "[a]t the Closing, Seller shall sell, transfer, assign and
deliver to Buyer or its nominee all of the assets, properties, rights and
business of Syroco, whether tangible, intangible, real, personal or
mixed, wherever located . . ." Id. at ¶ 3.01. Thus, the same business
was to be carried out by the successor corporation as was carried out by
the corporation as it existed when affiliated with Dart Industries. The
same personnel at all levels were in place. The successor corporation
also produced the same products for its customers after the change in
corporate structure. Consequently, Moulds qualifies as a successor
corporation under the test, and Mould's motion for summary judgment is
denied on this basis.
Although this finding renders Mould's claim that there is no evidence
of waste disposal after 1980 moot, the Court will, in the interest of
judicial economy, rule on that claim as well.
C. Hazardous Waste Disposal
Moulds' next contention is that the State cannot meet its burden of
coming forward with evidence that it deposited waste at the site
subsequent to 1980. Because the Court found that Moulds is a successor
to Syroco, the Court will consider all of the evidence that hazardous
waste was deposited at the landfill.
Taking all of the evidence in the light most favorable to the
Plaintiff, the Court must determine whether the waste deposited at the
site contained hazardous substances and whether those same substances
were found at the site. Cooper Industries Inc. v. Agway Inc., 1997 WL
135925, at * 3 (N.D.N.Y. March 13, 1997).
A hazardous substance is defined as
(a) any substance designated pursuant to section
1321(b)(2)(A) of Title 33, (b) any element, compound,
mixture, solution, or substance designated pursuant to
section 9602 of this title, 3) any hazardous waste
having the characteristics identified under or listed
pursuant to section 3001 of the Solid Waste Disposal
Act . . ., (d) any toxic pollutant listed under section
1317(a) of Title 33, (E) any hazardous air pollutant
listed under section 112 of the Clean Air Act . . .,
and (F) any imminently hazardous chemical substance or
mixture with respect to which the [EPA] Administrator
has taken action pursuant to section 2606 of Title 15.
42 U.S.C. § 9601(14). Quantity or concentration is not a factor
for the Court to consider. B.F. Goodrich, 99 F.3d at 514 (citing
United States v. Alcan Aluminim Corp., 990 F.2d 711, 720 (2d Cir.
1993)). Consequently, even where there is a dispute as to minimal
amounts, summary judgment is inappropriate. Id.
The evidence of Mould's hazardous waste disposal includes an inspection
report from July 9, 1976 including a photograph of ten drums of liquid
and solid waste that were disposed of by Syroco employees. Upon
questioning the employees, the inspector was told the barrels contained
paint thinner. The odor was consistent with paint thinner. Abbot Aff.
The evidence also includes testimony from an employee of the landfill,
Clarence Bort, that during the time he was a gate guard, 1969-1978, he
observed that the refuse coming from Syroco "could be a 5-gallon paint
pail, a full load of wooden pallets, several barrels." Bassinson Decl.,
Ex. "A", Bort Depo. 17. He also recalls that Syroco was there almost
"daily." Id. Mr. Bort did not, however, inspect the pails or barrels
and did not recall any liquid coming out of them. Id. at 17, 66. He did
recall seeing dry paint in them at some point. Id. at 65. Around 1985
or 1986, he observed paint filters in the refuse brought from Syroco.
Id. at 67. These filters were wet. Id. at 68. These filters were not,
however, tested. Id. at 69. Also attached to the State's motion papers
is an undated New York State Department of Environmental Quality
questionnare indicating that Syroco dumped liquid waste paint and waste
paint filters at the Van Buren dump at some time. (Ex. "C" to Bassinson
The evidence supplied by the State, if viewed in the light most
favorable to it, is sufficient to at least raise the inference that
Syroco, now Moulds, disposed of paint droppings, paint filters, and paint
thinner at the landfill. Unfortunately, neither party puts forward much
in the way of admissible evidence to establish that these items did or
did not contain hazardous waste found at the landfill.
The State fails to put forward in any clear fashion exactly what
hazardous substances were found at the site. Having reviewed all of the
documents submitted, the Court finds the following references to
hazardous waste at the site. There was vinyl chloride and benzene in the
ground water. Consent decree ¶ 5. There was an elevated concentration of
iron in the groundwater. Record of Decision, p. iii. It appears that
arsenic, barium, iron, manganese, and mercury were found in the
groundwater, but only the concentrations of iron and manganese exceeded
the standards for groundwater. Record of Decision, p. 4. The arsenic
was not attributable to the landfill. Id. p. 4.
Neither of the parties put forward any evidence from which the Court
can conclude that the hazardous wastes found at the site, namely iron and
manganese, were or were not present in the waste paint, paint filters,
and paint thinners deposited by Syroco at the site. Moulds puts forward
a test report of the various items completed in 1981. Notably, that
study did not test for iron or manganese. The test did find that there
were elevated levels of hexavalent chromium, but no chromium was found at
the site. The State, likewise, offers no evidence from which the Court
can find that the waste deposited by
Moulds at the Van Buren landfill
contained hazardous material of the type found there.
On such a poor factual record, the Court declines to render summary
judgment. The Court is mindful that the State will bear the burden of
establishing that the items disposed of were hazardous wastes. It is
simply not possible on the submissions of the parties to determine that
the paint droppings, filters, or paint thinner contained hazardous wastes
found at the site. The Court is mindful of the often difficult
scientific evidence that must be presented on such an issue.
Consequently, the Court exercises its discretion to deny summary judgment
at this time. See Anderson v. Liberty Lobby, 477 U.S. 242, 255-56
(1986). Moulds is free to raise its argument that the State has failed to
meet its burden of proof again on a Rule 50 motion at the close of
D. State Law Claims
Moulds' last claim is that the state law claims put forward by
the State are either pre-empted by CERCLA or the applicable statute
of limitations has passed. The State asserts claims in restitution
and unjust enrichment (fourth claim), subrogation (fifth claim),
implied indemnity (sixth claim), and public nuisance (third claim).
The Court will address each of these claims.
The Court starts with the proposition that "CERCLA as a whole does not
expressly preempt state law . . ." Bedford Affiliates v. Sills,
156 F.3d 416, 426 (2d Cir. 1998). There are, however, instances where,
because of a conflict with the CERCLA scheme, various state law claims
are pre-empted. See id. This includes claims that would permit a double
recovery. Id.; see also Volunteers of America of Western New York v.
Heinrich, 90 F. Supp.2d 252, 257 (W.D.N.Y. 2000).
In order to maintain the state law causes of action, the State must be
seeking to recover damages that are not recoverable under CERCLA. See
Volunteers of America of Western New York, 90 F. Supp.2d at 257. Only
one of the State's state law claims meets this test.
The claim for restitution seeks to recover for the environmental
studies performed, the current costs of remediating the landsite, and the
future monitoring costs. The State has put forward no argument that
these are not recoverable under CERCLA, and indeed these costs are the
type of response costs CERCLA governs. Additionally, in at least two
circumstances, Courts have found that state law restitution and unjust
enrichment claims are pre-empted by CERCLA. See Bedfor Affiliates, 156
F.3d at 426; Volunteers of America of Western New York, 90 F. Supp.2d at
257. Consequently, Moulds is granted summary judgment as to this claim.
Likewise, the State's claims for subrogation and indemnity seek to
recover the costs of the Town of Van Buren in remediating the landfill.
Any money recovered here would either be duplicative of the State's
recovery under § 107 or would be a recovery that circumvented the
carefully created CERCLA scheme for settlements and recoveries. The
Town, as a potentially responsible party, cannot recover more from Moulds
than Mould's share of damages. To allow the State to bring actions under
both § 107 of CERCLA and common law claims on behalf of the Town
could result in a double recovery against Moulds. The SAC will govern
the apportionment of the cost of remediation between the Town and the
State, but cannot be used to allow the State to recover its costs twice.
Consequently, Moulds is granted summary judgment on these claims as
Moulds makes two arguments with regard to the State's public nuisance
claim. The first is that it is pre-empted because it seeks solely to
recover for damages that are recoverable under CERCLA. The second is
that it is barred by the statute of limitations. In the claim for public
nuisance, the State seeks to recover for "the creation of the public
nuisance described herein, and for all costs of the State to abate such
public nuisance." Compl. ¶ 34. Although the State has not put forward any
costs of abating the public nuisance that would be inconsistent with
CERCLA, the Court can fathom that such costs exist. Consequently, the
Court would reserve judgment to allow the State to supply documentation
of such costs. However, because the Court finds that the statute of
limitations has expired, that course of action is unnecessary.
The State relies on State of New York v. General Electric Company,
Index No. 6637-99 (S.C. Albany Co. April 26, 2000), for the proposition
that its action for public nuisance is timely. In that case, the Court
found that the State was attempting to preserve a public right and that
property rights were not at issue. Id. at 3. Consequently, the Court
applied a statute of limitations that accrued daily.
In the present matter, the State argues that it is again seeking to
preserve a public right, and that property rights are not at issue. In
contrast, Moulds argues that the State is not seeking to preserve a
right, but to recover damages for harm to the property. This Court
agrees with Mould's position.
In the General Electric case, the State was seeking an order forcing
General Electric to dredge the canal. The issue was not the damage done
to the property or water, but rather the necessity of providing an avenue
of transportation to facilitate commerce. No similar issue is present
here. In the present matter, the State is seeking to force Moulds to pay
for damages caused to the land and groundwater by the dumping of
hazardous wastes. Consequently, the three year statute of limitations
found in CPLR 214-c applies to bar the nuisance action for damages. See
Jensen v. General Electric Co., 82 N.Y.2d 77, 89 (1993); Town of New
Windsor, 919 F. Supp. at 674. The Court notes that no such bar would
apply to a claim for injunctive relief. Thus, to the extent the State
seeks some form of injunctive relief, that claim may go forward.
Based on the foregoing discussion, Defendant's motion for summary
judgment as to the CERCLA § 107 claims is DENIED, as to the state law
claims of restitution, indemnity, and subrogation is GRANTED, as to the
state law claim of nuisance is GRANTED for a damages claim and DENIED for
any injunctive relief claim with leave to renew in pre-trial
IT IS SO ORDERED.