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DMJ ASSOCIATES, L.L.C. v. CAPASSO

June 11, 2002

DMJ ASSOCIATES, L.L.C., PLAINTIFF
V.
CARL A. CAPASSO, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Robert M. Levy, United States Magistrate Judge

MEMORANDUM AND ORDER

By Notice of Motion dated January 23, 2002, the Generator defendants*fn1 moved for a stay of this action pending completion of a remedial investigation and feasibility study ("RI/FS") to be undertaken at the Quanta Resources site in Long Island City, New York (the "Quanta site") by the New York State Department of Environmental Conservation ("DEC") pursuant to a consent order soon to be finalized with approximately twenty-four companies, including but not limited to many of the defendants in this case. Defendant Quanta Resources Corporation ("Quanta") subsequently joined in the Generator defendants' motion. Collectively, these defendants ("movants") seek a stay of this action on grounds of primary jurisdiction, Burford abstention, and the court's inherent ability to manage its docket. Plaintiff DMJ Associates ("plaintiff" or "DMJ") opposes the motion as contrary to congressional intent and improperly delaying the ultimate resolution of its long-pending claims. DMJ further complains that, because it is not a party to the proposed DEC consent order, it would have no meaningful role in developing a work plan that protects its interests.

Defendant Darling International, Inc. ("Darling") objects that its interests would also not be safeguarded in the RI/FS process, as it too is not a party to the proposed consent order with DEC. Unlike the claims against the movants, which stem from their activities at the Quanta site, plaintiff's claims against Darling involve the release of contaminants on the Capasso Property*fn2 itself. Darling also opposes any stay that would prevent the completion of Phase 1 discovery as to the claims against Darling and delay Darling's anticipated motion for summary judgment.

Plaintiff additionally moves to modify the Case Management Order to allow the beginning of Phase 2 document discovery while the parties are completing Phase 1 discovery. Movants and Darling object, arguing that Phase 2 discovery as to the sources of contamination should be delayed until "the extent and nature of the contamination . . . and any endangerment there from" has been established through the completion of Phase 1 discovery and the RI/FS process. (See Case Management Order No. 1 ("Case Management Order" or "the Order") ¶ IA(1).)

BACKGROUND

On December 10, 1997 plaintiff filed this imminent and substantial endangerment citizen's suit under the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6972 (a) to require defendants to conduct an investigation to establish, inter alia, the nature and extent of potential endangerment on the Capasso Property and implement an appropriate abatement plan. The complaint also includes claims under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq.,*fn3 and state common law nuisance.*fn4 On August 14, 2000, plaintiff filed an amended complaint with somewhat different parties; the causes of action remain the same.

Plaintiff alleges that the Capasso Property has been contaminated through the release of hazardous materials directly on the Capasso Property as well as through the migration of hazardous materials from the Quanta site to the Capasso Property. Specifically, plaintiff claims that Darling released harmful chemical solvents on the Capasso Property and that the Generator defendants and Quanta are responsible for a plume of oil and hazardous substances emanating from the Quanta site that is now endangering the Capasso Property. On June 14, 2000, the court entered a Case Management Order which provides for phased discovery. Phase 1 focuses on the nature and extent of contamination at the Capasso Property, while Phase 2 examines the sources of the alleged contamination, including historical operations by Quanta and Darling, and the Generator defendants' arrangements for disposal and Phase 3 focuses on possible remedies. Discovery to date has been limited to Phase 1.

THE DEC PROCESS

At the court's invitation, DEC representatives appeared at oral argument on March 13, 2002 to explain the nature of DEC's proposed involvement at the Quanta site, the anticipated length of the RI/FS process, the impact of the RI/FS on the Capasso Property, and the agency's views of any potential conflict caused by the continuation of this litigation while the RI/FS is underway.

According to DEC, the RI/FS consists of a remedial investigation and a feasibility study conducted pursuant to a consent order between potentially responsible parties at the Quanta site and DEC. The projected remedial investigation, also known as a site characterization, would determine the nature and extent of contamination at the Quanta site, as well as any off-site ramifications, including whether there is a plume of hazardous material that has migrated to the Capasso Property. (Transcript of Oral Argument held March 13, 2002 ("Tr.") at 70.)

At the time of argument, DEC was evaluating a proposed consent order signed by a number of potentially responsible parties, including the Generator defendants and Quanta (collectively, "respondents"). Under the consent order, respondents would submit a draft RI/FS work plan for the Quanta site for DEC approval within 120 days of the effective date of the order. (Tr. at 69; proposed Order on Consent, ¶ IIB1(a), submitted at the March 13, 2002 hearing.) As DEC explained, there will be "one comprehensive investigation work plan that's approved by DEC in conjunction with the Department of Health." (Tr. at 62.) DEC will make the final decision as to what is included in the work plan and which data will be considered. Respondents will bear the costs of the testing. (Tr. at 69.) Because they are not parties to the order, plaintiff and Darling will have no role in the formulation or approval of the work plan, but will receive notice and an opportunity to comment as part of a citizen participation plan. (Tr. at 63, 66.) Although DEC has no obligation to meet with non-parties or to respond to their comments in writing (Tr. at 63), it agreed to consider plaintiffs and Darling's concerns and, if appropriate, include them in the work plan, but took pains to explain that DEC would have the ultimate say over every aspect of the plan. (Tr. at 66.) Once a work plan has been approved, respondents will be required to submit a monthly report of their activities to DEC. (Tr. at 67.) The agency estimated the remedial investigation would be completed approximately seven months after final approval of the work plan. (Tr. at 70.)

The feasibility study, which considers possible remedies where contamination is found, would take another five months. (Id..) Respondents are free to opt out of the remedial program after the completion of the feasibility study. (Tr. at 64.) All told, DEC estimated that the RI/FS process would take between fourteen and fifteen months from the March 13, 2002 argument date to complete.*fn5 (Tr. at 70.)

At issue in the pending motions is a request to stay Phase 1 discovery until the completion of the RI/FS. In relevant part, Phase 1 discovery examines "the extent and nature of any contamination . . . on and around the Capasso Property and any endangerment there from, as well as the extent and nature of the contamination alleged . . . on the nearby Quanta LIC property." (Case Management Order No. 1, dated June 14, 2000 ("Case Management Order")). In addition to written discovery requests and depositions, Phase 1 discovery includes sampling and data collection from ground wells placed in various locations on or near the Capasso Property. Plaintiff has already installed a number of monitoring wells and has obtained court approval for the installation of three more, which plaintiff desires to install without further delay. (See Order dated July 2, 2001.)

During oral argument, DEC emphasized that it took no position on the request for a stay or on the underlying legal arguments. (Tr. at 62.) However, DEC expressly stated that neither the continuation of the existing monitoring wells nor the installation of plaintiff's three additional wells would interfere with its investigation.*fn6 (Tr. at 68, 78.) Although DEC would "rather do its investigation and feasibility study unfettered by other investigations occurring on the site," (Tr. at 62), the DEC project manager on the Quanta site confirmed that this litigation ...


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