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SOLVENT CHEMICAL COMPANY v. E.I. DUPONT DE NEMOURS & CO.

June 27, 2005.

SOLVENT CHEMICAL COMPANY, ICC INDUSTRIES, INC., Plaintiffs,
v.
E.I. DUPONT DE NEMOURS & COMPANY, Defendant.



The opinion of the court was delivered by: JOHN CURTIN, Senior District Judge

In this action, plaintiffs Solvent Chemical Company, Inc. ("Solvent") and Solvent's parent company, ICC Industries, Inc. ("ICC") (collectively, "Solvent") seek contribution against defendant E.I. DuPont de Nemours & Company ("DuPont") pursuant to Section 113 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9613, in connection with costs incurred in remediating contamination at property located at 3163 Buffalo Avenue, Niagara Falls, New York, and adjacent property owned by the Olin Corporation (referred to by the parties herein as the "Olin Hot Spot"). Currently pending is DuPont's renewed motion for summary judgment (Item 67) seeking rulings from the court with respect to the scope of contribution protection contained in the Consent Decree which DuPont entered with the State of New York in April 1997, approved by this court on October 8, 1997. Oral argument on DuPont's motion was heard by the court on September 13, 2004.

BACKGROUND

The pertinent factual background has been set forth at length in several prior motions, decisions, and orders in this case and in State of New York v. Solvent Chemical Co., Inc., No. 83-CV-1401(C), and is for the most part undisputed. Briefly stated, the 3163 Buffalo Avenue Site functioned for many years as a chemical manufacturing and storage facility, starting in 1940 when DuPont built and operated a plant at the Site under a contract with the United States Chemical Warfare Service ("CWS") to manufacture a chemical known as impregnite. The plant was shut down in late 1943. It was reactivated in 1951 for impregnite production by the Occidental Chemical Corp. (formerly Hooker Electrochemical Company) during the Korean conflict, and was shut down again in 1953. In 1972, the City of Niagara Falls purchased the Site and sold it to Solvent. From 1973 to 1977, Solvent manufactured chlorinated benzenes and other chemicals at the Site. Solvent eventually sold the property in 1978, and a number of companies have owned or operated the Site until the present day.

  The 3163 Buffalo Avenue Site is adjacent to several other industrial facilities, bordered on the west by the Olin Corporation, and to the south and east by DuPont's manufacturing facility located at Buffalo Avenue and 26th Street in Niagara Falls ("the DuPont Facility"). In 1985, the State determined that the 3163 Buffalo Avenue Site was an inactive hazardous waste disposal site, and placed it on the Inactive Waste Disposal Site Registry as Site Number 932096. At about the same time, the State also determined that the DuPont Facility was an inactive hazardous waste disposal site, and separately listed it on the Inactive Waste Disposal Site Registry as Site Number 932013.

  Meanwhile, in December 1983, the State commenced civil action No. 83-CV1-401(C) against Solvent and others (including DuPont and Olin), seeking recovery of response costs incurred in connection with the 3163 Buffalo Avenue Site pursuant to CERCLA Section 107(a) and the common law of public nuisance. In June 1986, Solvent commenced a third-party action in No. 83-CV-1401(C) against DuPont, Occidental, the United States, and the City of Niagara Falls, claiming that the chemical manufacturing operations conducted by the third-party defendants on the 3163 Buffalo Avenue Site had contributed to the Site's environmental condition. Solvent later impleaded additional third-party defendants in a series of amended third-party complaints (see Items 179, 390, 539, 746, 861 and 1148 in No. 83-CV-1401(C)).

  In 1989, plaintiffs, the United States, DuPont, Occidental, and Mader Capital Corp., as potentially responsible parties, conducted a remedial investigation to define the nature and extent of contamination resulting from previous activities at the Site. An investigation report was submitted to the State in 1990, indicating significant contamination of groundwater and soils. The New York State Department of Environmental Conservation ("DEC") then conducted a Supplemental Remedial Investigation and Feasibility Study ("RI/FS") to evaluate various remedial alternatives, and on December 31, 1996 the DEC issued a Record of Decision ("ROD") containing a plan for the remedial action to be taken at the Site. Principal organic contaminants identified in the RI/FS and the ROD included benzene, chlorobenzene, three different dichlorobenzene isomers, and trichlorobenzene, all directly related to Solvent's chlorinated benzene manufacturing operations at the Site. Inorganic contaminants included chromium, lead, manganese, mercury, and zinc (Item 69, Ex. E, pp. 10-13). While the ROD indicated that "[n]umerous other organic contaminants were detected in site groundwater in lower concentrations . . ." (id. at pp. 10-11), the benzene and chlorinated benzene materials were clearly identified as the primary "contaminants of concern" in the overburden soils and groundwater, as well as in the various zones (zones "A" through "F") of bedrock groundwater (see id. at pp. 40-46, Tables 1-7).

  The remedy selected for the Site includes the following components:
a. Containment of contaminated soils by placement of a clean soil cover system.
b. Control and collection of contaminated overburden groundwater through construction and operation of an overburden ("A-zone") collection system.
c. Installation of a phased bedrock hydraulic control system, including pumping wells installed and operated within the bedrock "B-zone" and at the Olin Hot Spot to achieve hydraulic control over the highly contaminated groundwater in the overburden and upper fractured bedrock.
d. Treatment of pumped groundwater either onsite or offsite.
e. Implementation of a long-term monitoring program to evaluate the effectiveness of the implemented remedy.
f. Deed restrictions limiting future use of the Site. (Id. at pp. 22-23, 35-38; Item 69, ¶ 18).
  On October 8, 1997, this court approved five separate Consent Decrees entered between the State and several of the parties identified as potentially responsible for response costs at the Site.*fn1 Of particular concern to this litigation are the Consent Decrees which the State entered with DuPont (the "DuPont Decree")*fn2 and Solvent (the "Solvent Decree") with respect to the 3163 Buffalo Avenue Site. The terms of the DuPont Decree provided that DuPont would pay the State $216,250.00 and the State would settle all of its claims against DuPont, as follows:
 
[T]he State is settling all claims against [DuPont, Occidental, and the United States] for the Matters Addressed by this Consent Decree including all Response Costs, past and future, which have been incurred or will be incurred by the State, any local governmental entity, or any private entity, including any and all Response Costs incurred by any party to this action or by any other responsible party, for investigation and remediation as a result of the release or threatened release of Hazardous Substances at or from the Site. The payments being made by the Settling Defendants represent the fair and reasonable contribution by the Settling Defendants of the total past Response Costs which have been incurred by the State and by any other party and the total anticipated future Response Costs which will be incurred by the State, any local governmental entity, or any private entity for the implementation of the remedial program set forth in the State's ROD for the Site, including but not limited to all post-construction, operation and maintenance, and monitoring Response Costs, and all Response Costs arising in any way in connection with any subsequent groundwater remediation phases that may be required under the ROD.
(Id., Ex. A, ¶ 17). Paragraph 19(b) of the DuPont Decree provides as follows:
Only with respect to DuPont, the "Matters Addressed" do not include, and DuPont reserves all of its rights and defenses against any party other than a Settling Defendant or the State with regard to: . . .
(b) any claim by a person not a party to this Consent Decree for any Response Costs or other relief for the release of Hazardous Substances emanating or arising from the adjacent or nearby DuPont Facility and migrating onto or about the Site and/or Olin property. . . .
(Id., ¶ 19(b)). The DuPont Decree also contains the following provision for "Contribution Protection:"
 
The Parties agree and by entering into this Consent Decree the Court finds that [DuPont, Occidental, and the United States] are entitled to the full extent of protection from contribution actions or claims provided by CERCLA Section 113(f)(2), 42 U.S.C. § 9613(f)(2), and/or any other applicable federal or state law, for the Matters Addressed by this Consent Decree.
(Id., ¶ 21). As mentioned, this Consent Decree was approved by the court on October 8, 1997, and entered as an order (Item 657) in No. 83-CV-1401.
  Under the Solvent Decree, Solvent agreed to remediate the contamination discovered at the 3163 Buffalo Avenue Site, as well as the contamination located on the adjacent Olin Hot Spot, while reserving its right to seek recovery of any response costs incurred for the release of hazardous substances or other contamination emanating or arising from adjacent facilities (including the DuPont Facility) and migrating onto the 3163 Buffalo Avenue Site or the Olin Hot Spot (Item 69, Ex. B). Paragraph 46(b) of the Solvent Decree provided that the "Matters Addressed" by the Decree did not include, and Solvent reserved all of its rights against any party other than the State with regard to:
. . . any response costs or other relief for the release of hazardous substances or other contamination emanating or arising from adjacent or nearby facilities, including the DuPont facility, and migrating onto or about the Site and/or Olin property. . . .
(Id., ¶ 46(b)). The Solvent Decree was approved by this court on October 8, 1997, and entered as an order (Item 655) in No. 83-CV-1401. At about the same time, Solvent and DuPont entered a separate "side agreement" under which DuPont agreed not to pursue any third-party contribution claims related to the release of hazardous substances at and from the Site.*fn3 Specifically, Paragraph 1 of the agreement provides as follows:
. . . DuPont . . . will not assert any demands for contribution, indemnification or reimbursement, or claims, counter claims or cross claims, nor bring any action or file any litigation against the third parties for reimbursement, contribution or indemnification related to any of the "Matters Addressed" in the Consent Decrees to be separately executed by the parties with New York State in the Action (the "Consent Decrees").
(Item 69, Ex. F, ¶ 1). Paragraph 4 of the side agreement provides:
Except for those claims which comprise matters not addressed in the Consent Decrees or matters for which the parties have reserved their rights in the Consent Decrees Solvent . . . agree[s] to release any and all claims against DuPont related to the Site.
(Id., ¶ 4). This side agreement was required by Solvent as a condition to entering the Solvent Decree in order to allow it to pursue its remaining contribution claims against non-settling third parties without the threat of contribution claims by DuPont against those same parties (id.; see Item 69, Ex. R (Falick Dep.), at 45).

  Solvent commenced this action (referred to by the parties as "Action II") in June 2001 alleging that DuPont is liable for a portion of the response costs incurred at the Site as a result of the migration of hazardous substances — particularly, chlorinated aliphatic compounds*fn4 — from the DuPont Facility to the Site. In both its second affirmative defense and its first counterclaim in this action, DuPont asserts that the contribution protection contained in the DuPont Decree bars Solvent from seeking contribution from DuPont for any response costs incurred in performing the remedial action required by the ROD to address the release of hazardous substances at the 3163 Buffalo Avenue Site or the Olin Hot Spot (Item 43, pp. 6-8, 11-13). In its third affirmative defense, DuPont asserts that the response costs at the Site are being incurred as the result of the release of benzenes and chlorinated benzenes associated with Solvent's operation of the Site, not as the result of release or migration of any unrelated organic compounds (i.e., chlorinated aliphatics) from the adjacent DuPont Facility (id. at pp. 8-9). DuPont acknowledges that Solvent's contribution claims would not be barred to the extent Solvent can demonstrate that the release of hazardous substances at and from the DuPont Facility has caused Solvent to incur necessary response costs.

  In July 2001, Solvent moved to strike DuPont's second affirmative defense and first counterclaim, and DuPont cross-moved for summary judgment dismissing the contribution claim. In a decision and order dated December 24, 2002, this court denied these motions, finding disputed questions of both fact and law with respect to the scope of contribution protection afforded by the DuPont Decree, as well as "some ambiguity about the scope of contribution that plaintiffs are seeking . . .," to be clarified by further litigation. Solvent Chemical Company, ICC Industries, Inc. v. E.I. DuPont de Nemours & Company, 242 F.Supp.2d 196, 213 (W.D.N.Y. 2002). The court also found genuine issues of fact with respect to the respective rights of the parties pursuant to paragraphs 17, 19(b), and 21 of the DuPont Decree. Id. at 216. DuPont once again moves for partial summary judgment on its first counterclaim and/or second affirmative defense seeking the following determinations by the court as a matter of law:
A. Because no hazardous substances generated at or related to the DuPont Facility have been disposed of at the 3163 Buffalo Avenue Site or the Olin Hot Spot, DuPont is not a CERCLA liable party with regard to the Site.
B. If DuPont is a CERCLA responsible party with regard to the DuPont Facility, it would be liable for all necessary response costs caused by the offsite migration of hazardous substances released at or from the DuPont Facility.
C. Solvent has no basis for a CERCLA Section 113(f)(1) contribution claim against DuPont with regard to the Site, but Solvent is entitled to assert a CERCLA Section 107(a) cost recovery claim against DuPont with regard to any necessary costs of response that Solvent has been caused to incur because of the release of hazardous substances at the DuPont Facility and the groundwater migration of those substances onto the Site.
D. Solvent is a CERCLA Section 107(a)(2) liable party with regard to the Site by virtue of its status as a former owner and operator at the time hazardous substances were disposed of at the Site, and necessary response costs have been caused by a release of hazardous substances at and from the Site.
DuPont contends that following these determinations, the litigation will be more narrowly focused on Solvent's attempt to prove that it was caused to incur necessary response costs as a result of the release of hazardous substances at and from the DuPont Facility and the migration of those substances onto the Site and, if so, the nature and amount of such costs.

  In response, Solvent contends that the law of the case, as determined by this court in its December 24, 2002 decision and order, holds that neither CERCLA nor the DuPont Decree requires Solvent to demonstrate that hazardous substances migrating from the DuPont Facility have specifically caused Solvent to incur response costs distinct and separate from those incurred in implementing the remedy selected in the ROD. To the contrary, according to Solvent, the law requires that in the event hazardous substances like those disposed of at the DuPont Facility have come to be located at the Site, DuPont is liable for its full equitable share (to be determined in ...


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