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W.R. GRACE & CO. v. ZOTOS INTERNATIONAL

May 3, 2005.

W.R. GRACE & CO. — CONN., Plaintiff,
v.
ZOTOS INTERNATIONAL, INC., Defendant.



The opinion of the court was delivered by: WILLIAM SKRETNY, District Judge

DECISION AND ORDER

I. INTRODUCTION

Plaintiff W.R. Grace & Co.-Conn. ("Grace") is the current owner of a parcel of property on Brewer Road in Waterloo, New York ("Brewer Road Site" or "Site") where hazardous waste was deposited some fifty years ago. Grace commenced this action on December 30, 1998, pursuant to section 113 of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9613(f), the Declaratory Judgment Act, 28 U.S.C. § 2201, and New York law, seeking contribution from Defendant Zotos International, Inc. ("Zotos") for costs incurred in connection with Grace's investigation and remediation of contamination at the Site.

  A non-jury trial on the issue of liability was held before this Court on May 17, 19, 20, 21, 24, 25 and 26, 2004. The parties introduced almost four hundred exhibits and each offered lay and expert witness testimony. Following the trial, each party submitted a post-hearing brief, a responding brief, and a brief on the evidentiary issues raised at trial. Each party also prepared proposed findings of fact and conclusions of law for the Court's consideration. On December 15, 2004, Zotos filed a Notice of Recent Decision of the United States Supreme Court in Cooper Industries, Inc. v. Aviall Services, Inc., ___ U.S. ___, 125 S. Ct. 577, 160 L. Ed. 2d 548 (Dec. 13, 2004), and requested that the parties be given the opportunity to brief the significance of Cooper to the liability issues in this case. Grace joined in Defendant's request by filing a Motion for Supplemental Briefing on Liability Issues. The requests were granted and each party has submitted a supplemental brief and reply brief.

  Rule 52 of the Federal Rules of Civil Procedure provides, in pertinent part, that "in all actions tried upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law thereon." FED. R. CIV. P. 52(a). Because the parties' post-trial briefing raises fundamental questions of law regarding Grace's ability to maintain a claim against Zotos, the outcome of which may be determinative here, this Court will first address those questions.

  II. BACKGROUND

  Grace acquired the Brewer Road Site on or about December 28, 1978, when it purchased the assets of Evans Chemetics, Inc. ("ECI"), a chemical manufacturer. (Docket No. 108, p. 3;*fn1 No. 136, ¶¶ 20-21; J. Ex. 163).*fn2 ECI had used the Brewer Road Site as a dumping ground for waste from a manufacturing facility in Waterloo, New York (the "Waterloo Plant") during the period 1950 through 1959 (the "Disposal Period"). (Docket No. 108, p. 2; No. 136, ¶¶ 13, 19; J. Exs. 122; 123; 124, p. 4; 152, p. 4).

  During the Disposal Period, ECI manufactured a variety of organic compounds at the Waterloo Plant, some of which were used in the formulation of hair care products. (J. Ex. 152, p. 4; P. Ex. 383, p. 1). ECI also formulated and packaged hair care products for sale to Zotos, as well as to other distributors and customers. (Docket No. 136, ¶ 33; P. Ex. 385, p. 3).

  In 1983, the New York State Department of Environmental Conservation ("DEC") retained an environmental consultant to conduct a Phase I preliminary investigation of the Site. (Docket No. 136, ¶¶ 51-52; P. Ex. 383). Among the materials observed at the Site were bottles and plastic tubes for hair care products, some of which bore Zotos' product labels. (P. Ex. 383, p. 7; P. Ex. 385, pp. 1-2; see also, Williams Dep. at 70:9-71:2; Tr. at 67-70).

  In 1984, Grace entered into an Administrative Order on Consent with the DEC for a Phase II investigation at the Site (the "1984 Consent Order"). (Tr. at 76-77; P. Ex. 386, p. 2). On or about September 28, 1988, Grace entered into another Order on Consent with the DEC, pursuant to which Grace was to develop and implement a remedial investigation, feasibility study, and, if necessary, a remedial program for the Site (the "1988 Consent Order"). (Docket No. 108, p. 3; No. 136, ¶ 53; P. Ex. 384). In 1993, Grace constructed the remedy set forth by the DEC. (Tr. at 84-87). According to Grace, through April 2004, it expended approximately 1.7 million dollars on investigation and remediation activities at the Site. (Tr. at 86-87).

  In its Amended Complaint in this action, filed in November 2000, Grace seeks contribution from Zotos, pursuant to 42 U.S.C. § 9613(f),*fn3 on the ground that Zotos arranged to have various hazardous substances that it owned or possessed disposed of at the Brewer Road Site, and is therefore a responsible party liable under CERCLA. (Docket No. 38, ¶ 28). Alternatively, Grace seeks contribution pursuant to N.Y.C.P.L.R. § 1401 and state common law. (Id., ¶¶ 35-36).

  III. DISCUSSION AND ANALYSIS

  A. Grace's Contribution Claim under CERCLA section 113(f)(1)

  CERCLA section 113(f)(1) provides, in relevant part, that:
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title.
42 U.S.C. § 9613(f)(1) [emphasis supplied].*fn4

  In Cooper Industries, Inc. v. Aviall Services, Inc., ___ U.S. ___, 125 S. Ct. 577, 160 L. Ed. 2d 548 (Dec. 13, 2004), the Supreme Court held that a private party who has not itself been sued under CERCLA section 106 (an abatement action) or section 107(a) (a cost recovery action) may not obtain contribution from other liable parties under section 113(f)(1). Id., pp. 583-586.

  The Amended Complaint does not allege, nor has Grace ever argued, that it was subject to either of the civil actions specified in section 113(f)(1). Thus, Cooper is dispositive on the issue of section 113(f)(1) liability here, and Grace does not argue otherwise. As Zotos correctly contends, section 113(f)(1) does not authorize Grace's suit against it.

  B. Grace's Purported Contribution Claim under CERCLA section 113(f)(3)(B)

  The Supreme Court noted in Cooper that CERCLA section 113 provides two distinct avenues by which a plaintiff may seek contribution, the first being section 113(f)(1). The second avenue, section 113(f)(3)(B), provides that: "[a] person who has resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement may seek contribution from any person who is not party to a settlement referred to in [CERCLA 113(f)(2)]."*fn5 Section 113(f)(2) states, in relevant part, that: "[a] person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement." In other words, a party that has settled its liability under CERCLA may bring a CERCLA contribution action against a non-settling party and is also protected from any contribution claims made by others relative to the site that is the subject of the settlement.

  In its supplemental brief, Grace asserts that its right to seek contribution from Zotos is not adversely affected by the decision in Cooper regarding section 113(f)(1). Specifically, Grace urges that "in the instant case, Grace seeks contribution pursuant to CERCLA § 113(f)(3)(B) because Grace has resolved its liability to the State of New York in two administratively approved settlements for response costs and the response actions at the Brewer Road landfill." (Docket No. 200, p. 3).

  At no time prior to this most recent round of post-trial briefing has Grace sought to premise recovery on section 113(f)(3)(B).*fn6 However, the Second Circuit has held that the failure "to cite a statute, or to cite the correct one, in no way affects the merits of the claim." Albert v. Carovano, 851 F.2d 561, 571 n. 3 (2d Cir. 1988) (motion to dismiss); see also, Newman v. Silver, 713 F.2d 14, 16 n. 1(2d Cir. 1983) (federal pleading is by statement of claim, not by legal theories) (citing Gins v. Mauser Plumbing Supply Co., 148 F.2d 974, 976 (2d Cir. 1945) ("particular legal theories of counsel yield to the court's duty to grant the relief to which the prevailing party is entitled [after trial], whether demanded or not")). Thus, irregardless ...


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