United States District Court, E.D. New York
April 29, 2004.
UNITED STATES OF AMERICA, Plaintiff,
CITY OF GLEN COVE, WAH CHANG SMELTING AND REFINING COMPANY OF AMERICA, INC., Defendant(s).
The opinion of the court was delivered by: THOMAS PLATT, JR., Senior District Judge
MEMORANDUM AND ORDER
Before this Court is a motion brought by TDY Holdings LLC and
TDY Industries ("TDY" or "Intervenor") to intervene pursuant to
Section 113(i) of the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9613(i)
(2004), and Fed.R.Civ.P. 24, in the instant action between the
United States of America ("Plaintiff" or "U.S.") and the City of
Glen Cove ("Glen Cove"), Wah Chang Smelting and certain federal
agencies, (collectively "Defendants" or "Settling PRP's").
For the following reasons, TDY's motion to intervene should be GRANTED.
This case revolves around the Li Tungsten Superfund Site (the
"Site"), which consists of a former industrial facility (the
"Facility") where tungsten ore processing and other metal
processing operations were conducted from 1942-1985. Pursuant to
CERCLA, the Environmental Protection Agency ("EPA") issued a
Record of Decision ("ROD") for the Site in September 1999. The
EPA identified several PRPs, including TDY, Wah Chang Smelting
and Glen Cove. In addition, the EPA identified several federal
PRPS, including the U.S. Department of Commerce, U.S. Treasury
and U.S. General Services Administration (collectively, "Federal
PRPs"). After finalizing the ROD, the EPA sought to implement
Site cleanup through a series of orders, requiring TDY and
several other PRPs to (i) perform a remedial design for a portion
of the site, (ii) perform certain portions of the remedial action
described in the ROD, and (iii) remove contaminated dredge spoils
placed by the Army Corps of Engineers. TDY complied with these
orders, and allegedly "incurred millions of dollars in response
costs." (TDY Mem. of Law at 4).
In an effort to recover their costs, TDY brought a contribution action against the Federal PRPs. See TDY Holdings LLC, et al
v. United States of America, et al, CV-00-6545 (TCP).
Subsequently, the U.S. began negotiations with Wah Chang
Smelting, Glen Cove and the Federal PRPs, to the alleged
exclusion of TDY, which eventually culminated in the filing of
the instant action. Simultaneous with the filing of the complaint
in the instant action, the U.S. lodged a Consent Judgment to
resolve its claims against Glen Cove, Wah Chang Smelting and the
potential contribution liability of the Federal PRPs.*fn1
After the Consent Judgment was lodged with this Court, the U.S.
provided for an opportunity for public comment in accordance with
28 C.F.R. § 50.7. At the close of this comment period, the U.S.
will then "evaluate any comments received, determine whether any
comments disclose facts or considerations which indicate that the
proposed settlement is inappropriate, inadequate or improper, and
advise the Court whether the United States requests that the
Consent Judgment be entered." (Notice of Lodging of Proposed
Consent Judgment at 2).*fn2 If the U.S. requests that the
Consent Judgment be entered, this Court will be required to determine whether the settlement is
"fair, reasonable and in keeping with the goals of CERCLA." (U.S.
Mem. Of Law at 4). In the eventuality that this Court does accept
the Consent Judgment, TDY's contribution claims in their related
lawsuit against the U.S. will be extinguished. See CERCLA §
TDY argues that it should be permitted to intervene in the
instant action as of right under both CERCLA § 113(i) and
Fed.R.Civ.P. 24(a)(2). Intervention is granted under either provision
when an intervenor "1) files a timely motion; 2) asserts an
interest relating to the property or transaction that is the
subject of the action; 3) is so situated that without
intervention the disposition of the action may, as a practical
matter, impair or impede its ability to protect its interest; and
4) has an interest not adequately represented by the other
parties." United States of America v. Pitney Bowes, Inc.,
25 F.3d 66, 70 (2d Cir. 1994). The conditions for intervention under
§ 113(i) and Rule 24(a)(2) are "virtually identical," and the
only difference is with respect to the burden of proof on the
fourth prong. Pitney Bowes, 25 F.3d at 70 (citing Travelers
Indem. Co. v. Dingwell, 884 F.2d 629, 641 (1st Cir. 1989)
(internal citations omitted)). Under Rule 24(a)(2), "the
purported intervenor must show that its interest is not adequately represented," whereas under § 113(i), "the government
bears that burden." Pitney Bowes, 25 F.3d at 70.
Here, the U.S. is arguing that TDY cannot satisfy the second
and third prongs for intervention, namely, an interest in the
subject matter of the action and an inability to protect that
interest without intervention. Each argument is now taken in
1. Does TDY Have a Protectable Interest in this Action?
The U.S. argues that the only interest TDY asserts is "that TDY
will lost its right to contribution," and this is insufficient to
support intervention in the instant action. (U.S. Mem. of Law at
10). There appear to be two divergent view points on whether
contribution is an adequate interest to sustain intervention
under CERCLA or Fed.R.Civ.P. 24(a)(2), and as yet, the Second
Circuit Court of Appeals has not confronted this specific issue.
On the one hand, a number of district courts have held that a
contribution interest is too speculative and contingent to
sustain a claim for intervention. See, e.g., State of
Arizona v. Motorola, 139 F.R.D. 141, 144-6 (D. Az. 1991);
United States of America v. Wheeling Disposal Svc. Inc., 1992
U.S. Dist. LEXIS 22425, *4-*6 (W.D. Mo. Oct. 1, 1992); United
States of America v. Vasi, 22 Chem. Waste Lit. Rep. 218, 219 (N.D. Ohio 1991). The third circuit, in United States of
America v. Alcan Aluminum, Inc., 25 F.3d 1174
, 1184 (3rd
Cir. 1994), echoed this viewpoint in dicta when it explained:
Where the proposed intervenor has not yet settled
with the government, it is unclear what, if any,
liability it will have. Thus, any contribution right
it might have depends on the outcome of some future
dispute in which the applicant may, or may not, be
assigned a portion of the liability. In that
situation, courts have properly found the interest of
non-settler applicants to be merely contingent.
The Eighth Circuit and District of New Jersey, however, in
United States of America v. Union Electric Co., 64 F.3d 1152
(8th Cir. 1995) and United States of America v. Acton
Corp., 131 F.R.D. 431 (D.N.J. 1990), respectively, have held
that a non-settling PRP's interest in contribution is sufficient
to sustain intervention under both CERCLA and the federal rule.
The reasoning in Union Electric is particularly instructive. In
Union Electric, the Eighth Circuit found a non-settling PRP's
contribution interest sufficient to warrant intervention because
"settlement under § 113(f)(2) purports to cut off the rights of
persons not necessarily present in the litigation." Id. at
1166. Thus, the "threat of cutting off contribution rights of
non-settling PRPs creates a direct and immediate interest on the part of the non-settling PRPs in the subject matter of the
present litigation." Id.
After careful consideration, this Court chooses to follow the
Eighth Circuit's sound analysis in Union Electric, and finds
that TDY's contribution interest is adequate to sustain
intervention in this case. This result is particularly
appropriate under the instant set of facts, where as here, the
federal government was on both sides of the negotiation table and
essentially reached a settlement agreement with itself. Further,
TDY alleges that it was shut out of later negotiations between
the EPA and Settling PRPs. Accordingly, TDY has satisfied the
third prong for intervention.
2. Is TDY's Interest Unable to be Protected without
The U.S. also argues that even if TDY's interest in
contribution is legitimate, that interest is capable of being
adequately safeguarded without intervention because it is
"protected by CERCLA's process for public review and comment, and
review by this Court of any such comments submitted prior to
entry of a settlement." (U.S. Mem. of Law at 16). The U.S.
asserts that TDY has taken full advantage of this comment process
and submitted a thirty-nine page objection to the proposed
Consent Judgment. However, by the U.S.'s own admission, it does not appear that
TDY's contribution interest would be adequately protected through
CERCLA's public review and comment process. Indeed, in their
opposition papers, the U.S. points out that if this Court is
called upon to decide whether the proposed Consent Judgement
should be entered, "the proper inquiry for the Court at that time
would not be whether non-settler TDY's interests are fully
protected . . . but rather whether the Consent Judgment with the
Settling Defendants and Settling Federal Agencies is fair,
reasonable, and consistent with the goals of CERCLA." (U.S. Mem.
of Law at 4, n. 1) (emphasis supplied). Further, as explained
supra, if this Court decides to accept the Consent Judgment,
then TDY's claims for contribution in its lawsuit against the
settling federal agencies will be extinguished. Clearly, TDY's
contribution claims are unable to be protected in this case
without intervention and accordingly, TDY is entitled to
intervene under both CERCLA 113(i) and Fed.R.Civ.P. 24(a)(2).
It is hereby ordered that TDY's motion to intervene in the
instant action is GRANTED. SO ORDERED.