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NEW YORK v. MOULDS HOLDING CORP.

January 31, 2002

THE STATE OF NEW YORK AND JOHN P. CAHILL, AS COMMISSIONER OF THE NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, PLAINTIFFS,
V.
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 § 27-1313(5)(g), the 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 claims.
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 Town.

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 against Moulds.
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 action.
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. 1996)).
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 actions.

Keeping in mind this history and the policy reasons that have formed other CERCLA decisions, the Court finds that the State may bring ...


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