The opinion of the court was delivered by: John T. Curtin, District Judge
Presently before the court are four motions related to a third-party
action brought pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq.
Third-party defendants Bay State Smelting Company, Inc. ("Bay State") and
Benjamin Sack ("Sack") have filed a motion for summary judgment against
third-party plaintiff Solvent Chemical Company, Inc. ("Solvent") on
Solvent's claims against them. Item 1032. Bay State and Sack
(collectively, the "Bay State defendants") argue that neither is liable
to Solvent under either section 107(a)(3) or section 113(f) of CERCLA.
Solvent then filed a cross-motion for summary judgment against Bay State
and Sack asserting their liability under CERCLA. Item 1052.
Subsequently, the Bay State defendants filed a motion to strike the
affidavit of Solvent attorney Christopher Dow, Item 1093, and a motion to
strike the affidavit of Solvent's expert, Dr. E. Bruce Nauman. Item
An order dated August 20, 2001 proposed that if a demand for oral
argument was filed, the court would decide whether to hear oral argument
or have the matter submitted. Item 1036. There was no demand for oral
argument. Having carefully considered the arguments set forth in the
papers, the court grants the Bay State defendants' motion for summary
judgment and grants their motion to strike the Nauman affidavit, denies
Solvent's cross-motion for summary judgment, and denies the Bay State
defendants' motion to strike the Dow affidavit.
In 1983, the State of New York (the "State") brought an action
against, inter alia, Solvent pursuant to section 107(a) of CERCLA,
42 U.S.C. § 9607(a), "seeking recovery of costs incurred and to be
incurred, and other relief, in responding to the release or threatened
release of hazardous substances at or in connection with the property
located at and near 3163 Buffalo Avenue, Niagara Falls, New York . . . ."
Item 1056, Ex. 3, p. 2. In December 1996, the State issued a Record of
Decision ("ROD") identifying a number of hazardous substances in the soil
and groundwater at the Buffalo Avenue site and calling for specific
remedial activities to be undertaken there. Item 1056, Ex. 1. Zinc was
among the contaminants identified in the ROD. Id., pp. 10-11. Zinc is
listed as a hazardous substance pursuant to section 101(14) of CERCLA,
42 U.S.C. § 9601(14). Item 1056, Ex. 2.
In April 1997, Solvent and the State entered into a Consent Decree, in
which Solvent agreed to implement the remedy set forth in the ROD. Item
1056, Ex. 3. The Consent Decree was approved by this court on October 8,
1997. Item 655. It reserved Solvent's right to seek contribution against
other non-settling parties. Item 1056, Ex. 3, ¶ 47. It also provided
that the remedial actions to be undertaken to clean up the site should be
conducted in compliance with applicable provisions of CERCLA and the
National Contingency Plan, 40 C.F.R. Part 300. Id., ¶ 6. Solvent then
proceeded to file third-party actions seeking, inter alia, statutory
contribution under CERCLA against other alleged owners, operators,
transporters, and those who arranged for disposal at the site. Solvent
asserts that it has incurred over $4.4 million in response costs at the
site, and anticipates that it will incur over $20 million in total
response costs. Item 1056, ¶¶ 6, 7.
On April 3, 1998, in its fifth-amended third-party complaint, Solvent
impleaded Bay State and Benjamin Sack*fn1 as third-party defendants,
seeking contribution from each of them under CERCLA for a share of the
response costs Solvent has and will incur at the site. Item 1056, Ex. 4.
The complaint charged Bay State and Sack, and a number of other parties
collectively referred to as the "Zinc Waste Generators," id., ¶ 85,
with selling zinc wastes to Solvent between approximately 1973 and 1978.
Id., ¶ 141. The complaint asserted that when the Zinc Waste
Generators provided zinc wastes to Solvent, "they arranged for the
disposal of and/or treatment of the Zinc Wastes . . . and any hazardous
substances contained therein." Id., ¶ 143. The complaint further
alleged that the Zinc Waste Generators were unable to use the Zinc Wastes
which they sold to Solvent unless they were further processed. Id.,
¶ 144. In addition, Solvent claimed that if the Zinc Waste Generators
had not provided these wastes to Solvent, "they would have had to
otherwise treat or dispose of them." Id., ¶ 145. The Zinc Waste
Generators, asserted Solvent, were able to arrange for the disposal of
and/or treatment of the zinc wastes and alleged hazardous substances
contained therein by selling them to Solvent for a nominal price or
giving them to Solvent at no cost. Id., ¶ 146.
In their answer, Bay State and Sack raised thirty-four affirmative
defenses. Item 1056, Ex. 5. They did not raise the
defense,*fn2 although the thirty-first defense incorporated by reference
all applicable defenses set forth in the answers of other third-party
defendants. Id., p. 11. Other defendants have included the "useful
product" defense in their answers. See Item 1000, Ex. 5, p. 19.
The cross-motions for summary judgment primarily concern whether the
sales of zinc oxide and zinc skimmings by Bay State to Solvent
constituted arrangements for treatment or disposal under CERCLA —
which would be an element of CERCLA liability — or sales of a
useful product — which would obviate CERCLA liability.
Most of the facts in this case are undisputed; the parties contest the
legal significance of those facts.
On December 29, 1967, Sack Smelting Co., Inc., was incorporated by
Benjamin Sack and two other incorporators in the State of Massachusetts.
Item 1035, Ex. A. On March 26, 1968, Sack Smelting Co., Inc., was granted
the right to operate under the name Bay State Smelting Co., Inc. ("Bay
State"), while at the same time, under the same Article of Amendment, the
"original" Bay State Smelting Co. changed its name to Benjamin Smelting
Co., Inc. Item 1033, p. 2, n. 1; Item 1035, Ex. B. Bay State operated
from 15A Bleachery Court in Somerville, Massachusetts, from 1968 until
its voluntary dissolution in 1996. Item 1035, Ex. C.
Bay State was in the business of smelting non-ferrous metals and
trading scrap metals. Item 1056, Ex. 6, pp. 9-10. It "recycled previously
manufactured non-ferrous metal products," Item 1032, Sack Aff., ¶
11. Bay State produced brass and bronze ingots by melting scrap metal in
its furnaces, and sold the ingots to various foundries which made brass
and bronze metal goods. Id. Brass contains zinc; and when brass is
melted, a portion of the zinc boils off. Item 1054, ¶ 12. During the
smelting process, "[t]he zinc in the flue dust oxidize[s] . . . to form
zinc oxide." Item 1032, Sack Aff., ¶ 12.
Gerald Sack, son of Benjamin Sack, worked at Bay State from 1964 to
1994 in a number of capacities. Item 1032, ¶ 4. At his deposition, he
described Bay State's operations. He explained that the zinc oxide flue
dust "was collected in the bag houses [filters] and put into fiber
drums. And we had a closed trailer at the doorway of the furnace. And
every night they would take the full barrels of the zinc oxide and double
stack them into a trailer until the trailer was full." Item 1056, Ex. 6,
p. 14. Bay State would then "put a tractor under the trailer and drive it
to wherever we sold the bi-product." Id., p. 15. Gerald Sack knew of two
customers that bought Bay State's zinc oxide flue dust: Solvent and
Madison Industries. Id. He also testified that Bay State's
Superintendent, Irving Bond, was the person who handled the disposition
of the flue dust and the environmental permits. Id., pp. 12, 14.
In his affidavit, Gerald Sack stated that the "zinc oxide material was
not melted prior to sale or otherwise processed," and that "Bay State's
operations did not produce zinc chloride wastes." Item 1032, Sack Aff.,
¶¶ 14, 15. He also stated:
To my knowledge, Solvent and other zinc oxide
customers consistently paid for the zinc oxide, which
Bay State collected and sold as a raw material. The
sale of zinc oxide from the non-ferrous scrap smelting
operations was one of several sources of revenue
generated from that business.
At the time of the zinc oxide sales to Solvent, Bay
State would have assumed that the material was being
used as a raw material by Solvent.
Bay State sold zinc oxide flue dust to Solvent from 1974 to 1978. Item
1035, Ex. E. In May 1978, Solvent also purchased materials called "zinc
skimmings" or "sal skimmings" from Bay State. Id., pp. 40065, 40067,
Solvent's weekly production reports detail the ingredients used and
costs involved in manufacturing zinc chloride. Item 1035, Ex. E. The
production reports consistently list flue dust from Bay State (and other
suppliers) as a raw material. Id. Often the production reports contain a
raw material inventory, and Bay State's (and other suppliers') flue dust
is listed. Id., p. 7323. The cost of purchasing zinc oxide was included
in Solvent's zinc chloride production cost calculations. Id. at p. 4955.
Solvent's production reports also reveal that Solvent paid between
$0.03 and $0.08 per pound for Bay State's flue dust. Item 1035, Ex. E.
Solvent paid $0.03 per pound for the sal skimmings. Id.
In a note on the July 8-July 21, 1974 production report, Kabir Khalid,
a Solvent employee, wrote, "Please observe that the unit cost of
production is lower than those of previous weeks due to reduced manpower
usage. It has been possible to maintain the level of production with
reduced manpower because of the excellent quality of flue dust (Bay
State) which has made charging of digesters less manhours consuming."
Item 1035, Ex. E, p. 7237. There are references in other production
reports indicating the good quality of flue dust that Solvent received
from Bay State. In the May 25, 1975 raw material inventory, Ranjit Roy
wrote that, "[o]f this inventory [a total of 124,900 pounds] only 36,000
lbs of Bay State is good, usable flue dust." Item 1035, Ex. E, p. 5016.
On the other hand, Solvent experienced quality problems with the flue
dust it received from other suppliers. A number of production reports
indicated that the flue dust shipped from sources other than Bay State
was unusable, often because it was wet. Item 1035, Ex. E, pp. 5016,
5030. In another case, the July 6, 1975 raw material inventory had a star
next to Purity Zinc's 15,000 pounds of flue dust. The star indicated:
"This flue dust is unusable since it contains sulfur compounds which
generate H2S on reaction with acid. H2S is a toxic gas and inhalation in
large amounts can be fatal" Id., p. 5024.
Solvent did complain, however, about the cleanliness of the material
supplied by Bay State and other flue dust providers. Ranjit Roy authored
an internal memorandum dated February 11, 1975, entitled, "Flue Dust From
Sources Such As Bay State Smelting, New England Smelting, etc." He stated
that while the flue dusts are "very good in quality" and had "very few
other impurities," the dusts from their suppliers were "full of `junk'
— plastic sheets, beer cans, steel plates and other garbage, and
this is a major drawback in terms of equipment failure and downtime."
Item 1054, Ex. D. Apparently referring to this memorandum, Sanford
Schwartzman wrote a memorandum to Solvent President Bertram White, dated
February 28, 1975. The memorandum read in part:
In his affidavit, Gerald Sack explained the corporate structure of Bay
State. From the beginning of his employment until the early 1990s, Sack
stated that his father, Benjamin Sack, served as President of Bay State.
Id., ¶ 7. Gerald Sack served as vice-president but learned on the day
of his deposition in March 2001 that he had been made president in 1992.
Item 1056, Ex. 6, p. 8. He was not aware of any period of time prior to
Bay State's dissolution when his father was the sole officer, director,
and shareholder of Bay State.*fn3 Item 1032, ¶ 9. Gerald Sack
averred that Bay State filed annual reports, issued shares of stock, kept
corporate books and records, and maintained a corporate bank account
during the period of his employment there. Id., ¶ 10. The corporate
books and records were included in the assets sold following dissolution
of the corporation. Id. Bay State's attorney provided copies of Bay
State's annual reports for 1992 to1996, and stated that the Massachusetts
Secretary of State was unable to provide him with Bay State's annual
reports prior to 1992. Item 1035, ¶ 8, Ex. D.
A. Standard for Summary Judgment
Federal Rule of Civil Procedure 56(c) provides that a motion for
summary judgment shall be granted if the pleadings and supplemental
evidentiary materials "show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law." A dispute regarding a material fact is genuine "if the
evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Morales v. Quintel Entertainment, Inc., 249 F.3d 115,
121 (2d Cir. 2001), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247 (1986). Under the rule, the burden is on the moving party to inform
the court of the basis for its motion and to demonstrate the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). After the moving party has carried its burden, the non-moving
party "must do more than simply show that there is some metaphysical doubt
as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). "[T]he non-moving party must come
forward with `specific facts showing that there is a genuine issue for
trial.'" Id. at 587 (quoting Fed.R.Civ.P. 56(e)).
[E]ven when both parties move for summary judgment,
asserting the absence of any genuine issues of
material fact, a court need not enter judgment for
either party. Rather, each party's motion must be
examined on its own merits, and in each case all
reasonable inferences must be drawn against the party
whose motion is under consideration.
Morales, 249 F.3d at 121 (citations omitted).
B. Standard for CERCLA Liability
CERCLA is a broad, remedial statute enacted by Congress in 1980
"`designed to enhance the authority of the EPA to respond effectively and
promptly to toxic pollutant spills that threaten the environment and human
health.'" Mainline Contracting Corp. v. Chopra-Lee, Inc.,
109 F. Supp.2d 110, 117 (W.D.N.Y. 20000), quoting B.F. Goodrich Co. v.
Murtha, 958 F.2d 1192, 1197 (2d Cir. 1992). CERCLA ensures "`that those
responsible for any damage, environmental harm, or injury from chemical
poisons bear the costs of their actions.'" General Electric Co. v. AAMCO
Transmissions, Inc., 962 F.2d 281, 285 (2d Cir. 1992), quoting S.Rep.
No. 848, 96th Cong., 2d Sess. 13 (1980), U.S. Code Cong. & Admin.
News 1980, 6119, reprinted in 1 CERCLA Legislative History at 320. As a
remedial statute, CERCLA is to be liberally construed to give effect to
its purposes. Schiavone v. Pearce, 79 F.3d 248, 253 (2d Cir. 1996).
To establish a prima facie cause of action under CERCLA, Solvent must
demonstrate that: (1) the defendants are responsible parties as defined
under § 9607(a); (2) the site is a facility as defined in §
9601(9); (3) the release or threatened release of hazardous substances at
the facility; (4) it incurred response costs in connection with the
release; and (5) the cost incurred and response actions taken conform to
the National Contingency Plan ("NCP") established under the CERCLA and
administered by the EPA.*fn4 See Mainline Contracting Corp., 109 F.
Supp.2d at 117. Upon establishing these elements, the defendant is then
strictly liable for the release or threatened release of hazardous
substances unless it successfully invokes one of the statutory defenses
set forth under 42 U.S.C. § 9607(b).
II. Motion to Strike the Dow Affidavit
The Bay State defendants move to strike paragraphs 3, 6, and 10 through
28 (inclusive) and Exhibit 8 of the affidavit of Solvent attorney
Christopher Dow on the grounds that he improperly asserts legal arguments
and characterizes evidence, testimony, and documents in the case. Item
1092, p. 1. Celotex Corp. v. Catrett, 477 U.S. 317 (1986), allows an
attorney a degree of latitude to characterize the evidence by informing
the court of the basis for the summary judgment motion and identifying
the relevant portions of the record which he or she believes demonstrate
the absence of a genuine issue of material fact. Id. at 323. Although the
court agrees that Mr. Dow has, in a number of instances, characterized
the evidence, that characterization will not prejudice this court, which
will peruse the documentary evidence and draw its own conclusions based
on the evidence, not the attorneys' characterizations of it. See In re
NASDAQ Market-Makers Antitrust Litigation, 164 F.R.D. 346, 350 (S.D.N.Y.
The Bay State defendants also object to the Dow affidavit, arguing that
Rule 56 prohibits an attorney's affidavit from containing legal arguments
or factual assertions not made upon personal knowledge. See DiTullio v.
Village of Massena, 81 F. Supp.2d 397, 403 (N.D.N.Y. 2000). This is not
the case here. The Dow affidavit is made "on the basis of my personal
knowledge of the matters stated, or on the basis of Court papers,
discovery or other documents in this proceeding." Item 1056, ¶ 1.
Mr. Dow has not testified as to facts at issue in this case, but rather
refers to various documents or relevant portions of sworn testimony of
witnesses with personal knowledge, and places them before the court.
There are, as the Bay State defendants point out, similarities between
Solvent's memorandum of law and the Dow affidavit.*fn5 But given the
complexity of this case, and the numerous documents and pages of
testimony that have been generated during the discovery process, Mr.
Dow's affidavit presents the evidence in a cohesive manner. See Moore's
Federal Practice § 56.14[c], pp. 56-160 ("In some instances,
counsel may be in a position to provide an affidavit which presents
admissible evidence, for example, if the attorney evidence relates to
matters in the case, such as items in the record or items produced in
On the basis of the foregoing, the court denies the Bay State
defendants' motion to strike the Dow affidavit and/or certain exhibits
attached to the affidavit. Item 1094.
III. Cross-Motions for Summary Judgment on the Issue of Arranger
Liability and the Motion to ...