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United States v. Timmons Corp.

February 8, 2006


The opinion of the court was delivered by: Randolph F. Treece United States Magistrate Judge


Plaintiff, the United States of America ("USA"), brings suit alleging violations of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601 et seq., in particular §§ 9604 & 9607. Dkt. No. 1, Compl. at ¶ 1. Pursuant to the CERCLA claim, Plaintiff seeks a response to the Environmental Protection Agency's ("EPA") Request for Information ("Request"), a civil penalty for failure to previously respond to the EPA's Request for Information, cost recovery against Timmons Corporation ("Timmons"), judgment in rem against real property located at 191 Watervliet Shaker Road, Colonie, Albany County, New York ("Real Property") for costs expended by the United States in connection with the Adirondack Steel Superfund Site, and to strike affirmative defenses asserted by the Defendants. Plaintiff brings this Motion for Summary Judgment pursuant to FED. R. CIV. P. 56(b). Dkt. No. 20.


The following facts present no genuine issues of material fact.*fn2 Timmons' principle place of business is the current residence of Defendant Donald W. Stone, Sr. ("Stone"). Dkt. No. 20, Pl.'s 7.1 Statement at ¶ 1. Stone is the current President and owner of Timmons.*fn3 Id. at ¶ 6.

On March 15, 1989, Timmons purchased the Real Property from the bankruptcy estate of the Adirondack Steel Casting Company, Inc., along with a larger parcel of land consisting of approximately one hundred and sixty-three (163) acres. Id. at ¶¶ 3 & 4; Dkt. No. 20, Deed, App. 4; Dkt. No. 20, Discharge of Mortgage, App. 5; Dkt. No. 20, Tracy A. Silk Lt., dated Oct. 6, 1999, App. 6; Dkt. No. 20, Donald Stone, Sr. Aff. ("Stone Aff. I"), dated Apr. 12, 2005, App. 24. In 1998, Timmons sold one hundred and twenty-four (124) adjoining acres to two different corporations.*fn4 Pl.'s 7.1 Statement at ¶ 4. In 1999, one (1) acre was sold to a third company.*fn5 Id. The Real Property owned by Timmons is located on the remaining thirty-eight and a half (38.5) acres. Id. at ¶ 10. The Real Property contains a vacant building, formerly used as a steel foundry, consisting of electrical transformers used to "power electric arc furnaces," as well as several other buildings leased to commercial tenants. Id. at ¶ 11; Dkt. No. 20, 1993 EPA Action Mem., dated Feb. 5, 1993, App. 14 at pp. 2-3; Dkt. No. 20, Site-Specific Plan by Wehran, dated May 1995, App. 41.

When the Real Property was purchased by Timmons, the electrical transformers were already on the property.*fn6 Pl.'s 7.1 Statement at ¶ 12. In September 1988, the Real Property was assessed by civil engineers with a recommendation that the transformers be removed and disposed. Id. at ¶ 22; Dkt. No. 20, Scalise-Knysh Report, App. 13 at p. 10. In March 1989, prior to Timmons' purchase of the Real Property, an environmental assessment report was given to Timmons stating that fluid in the transformers contained polychlorinated biphenyls ("PCBs"). Pl.'s 7.1 Statement at ¶ 15; Dkt. No. 20, Goldberg-Zoino Report, App. 12 at p. 41. Timmons, consistent with good practice, examined both reports prior to purchase. Pl.'s 7.1 Statement at ¶ 23; Dkt. No. 20, Interrogatory Response, App. 10 at ¶ 5.

Most transformers located in the northern substation contained PCB labels. Pl.'s 7.1 Statement at ¶ 19; Goldberg-Zoino Report at pp. 7-8. PCBs are classified as a hazardous substance under CERCLA. Pl.'s 7.1 Statement at ¶ 36. In March 1989 and August 1992, there was noticeable staining on the lower portions of the transformers as well as on the ground; the March 1989 assessment described the area around the transformers as a "hot spot;" and prior to July 6, 1992, large quantities of fluid from the transformers were released into the environment. Pl.'s 7.1 Statement at ¶¶ 20 & 25; Goldberg-Zoino Report at p. 21; Dkt. No. 20, Dilshad Perera Decl., dated June 29, 2005, App. 31 at ¶ 11; Dkt. No. 20, 1992 EPA Action Mem., dated Aug. 14, 1992, App. 15 at p. 1; Site-Specific Plan by Wehran; Dkt. No. 20, EPA Initial Pollution Report, dated Aug. 17, 1992, App. 44. On July 6, 1992, the New York State Department of Environmental Conservation ("NYSDEC") identified areas on the Real Property that were contaminated with the PCB laden fluid. Pl.'s 7.1 Statement at ¶ 33; 1992 EPA Action Mem. at ¶ II.B; 1993 EPA Action Mem. at p. 2; Perera Decl. at ¶¶ 7 & 11. Concrete pads supporting the transformers had been soaked with the fluid that ultimately spilled into the nearby soil. Pl.'s 7.1 Statement at ¶ 33; 1992 EPA Action Mem. at ¶ II.B; 1993 EPA Action Mem. at p. 2; Perera Decl. at ¶¶ 7 & 11. NYSDEC, in 1992, measured soil samples for PCBs*fn7 and the EPA did the same in 1993.*fn8 Pl.'s 7.1 Statement at ¶¶ 34 & 35; 1993 EPA Action Mem. at p. 5; Dkt. No. 20, NYSDEC Lt. to Stone, dated Aug. 4, 1992, App. 22.

On July 6, 1992, NYSDEC requested that the EPA begin a removal action pursuant to CERCLA on the Real Property. Pl.'s 7.1 Statement at ¶ 37; 1992 EPA Action Mem.; 1993 EPA Action Mem.; Dkt. No. 20, EPA Progress Pollution Report I, dated Mar. 15, 1993, App. 45; Dkt. No. 20, EPA Progress Pollution Report II, dated Oct. 29, 1993, App. 46; Dkt. No. 20, NYSDEC Lt. to EPA, dated Aug. 23, 1996, App. 50. The removal process commenced in 1992 and concluded, seven years later, in December 1999. Pl.'s 7.1 Statement at ¶ 37. During the removal process, particularly in 1993, it was confirmed that the soil surrounding the northern transformers was stained with PCBs. Id. at ¶ 24.

In February 1993, the EPA contacted Timmons to negotiate the removal action. Id. at ¶ 38; Dkt. No. 20, EPA Lt. to Timmons I, dated Feb. 1, 1993, App. 48; Dkt. No. 20, EPA Lt. to Timmons II, dated Sept. 29, 1994, App. 18. Negotiations failed and on September 30, 1994, the EPA effectuated an Administrative Order obligating Timmons to remove the PCBs from the Real Property. Pl.'s 7.1 Statement at ¶¶ 38 & 39; Dkt. No. 20, Administrative Order, App. 39. Although Timmons performed some of the removal, the Defendant failed to fully comply with the Administrative Order. Pl.'s 7.1 Statement at ¶ 39; Dkt. No. 20, EMCON/Wehran-NY Lt. to EPA and NYSDEC I, dated Aug. 9, 1995, App. 42; Dkt. No. 20, EPA Lt. to Stone and Timmons, dated Mar. 2, 1995, App. 49; Dkt. No. 20, NYSDEC Lt. to EPA, dated Mar. 8, 1995, App. 51; EMCON/Wehran-NY Lt. to EPA and NYSDEC II, dated June 22, 1995, App. 43. The EPA, therefore, conducted the remainder of the removal activities, consistent with the National Contingency Plan ("NCP"),*fn9 and completed the action on December 4, 1999. Pl.'s 7.1 Statement at ¶ 41; Dkt. No. 20, Notice Lt., dated Oct. 31, 2001, App. 16 at p. 1; Perera Decl. at ¶¶ 8 & 14.

These removal measures were required because of the risk to the public. Pl.'s 7.1 Statement at ¶ 40; 1993 EPA Action Mem. at pp. 6-7. A chain linked fence surrounded only a portion of the property lending the Real Property to be trespassed upon, trucks being burned on the Real Property, windows being broken on certain buildings, and the property otherwise being vandalized. Pl.'s 7.1 Statement at ¶¶ 26, 27, 28, & 32; Interrogatory Response at ¶¶ 3, 11, & 12; Dkt. No. 20, Environmental Services Report, dated Mar. 28, 1995, App. 19 at p. 1. Additionally, the Real Property is surrounded by residential areas, a school, and nearly 9,500 people live within a mile of the Real Property. Pl.'s 7.1 Statement at ¶ 29; 1993 EPA Action Mem. at p. 6. Many people, including children and dirt-bike riders, were exposed to the contaminated property. Pl.'s 7.1 Statement at ¶¶ 30, 31, & 32; 1993 EPA Action Mem. at p. 6; Environmental Services Report at p. 1. Costs were incurred by the EPA for the removal including labor, travel, work performed by contractors, and indirect costs. Pl.'s 7.1 Statement at ¶¶ 63 & 64-172; Perera Decl. at ¶¶ 14 & 15; Dkt. No. 20, Jo-Ann Velez Decl., dated June 28, 2005, App. 28 at Ex. 1.*fn10

On October 23, 2000, the Defendants were sent a Request for Information by the EPA, which sought a plethora of information, including information concerning the purchase of the Real Property and financial information about Timmons' and Stone's ability to pay for the removal performed by the EPA, for which a response was due within twenty-one (21) days.*fn11 Pl.'s 7.1 Statement at ¶ 42; Notice Lt. at p. 3; Dkt. No. 20, EPA Request for Information Lt., dated Oct. 23, 2000, App. 17. Timmons and Stone did not comply with the Request until approximately October 2003, three years later. Pl.'s 7.1 Statement at ¶¶ 44 & 45. When they did respond, the only information provided were tax returns for the years 2003-2005 and some other financial statements during that same time period.*fn12 Id. at ¶ 46.

On October 31, 2001, the EPA sent to Timmons and Stone a "Notice Of Potential Liability, A Demand For Reimbursement, A Notice Of EPA's Intent To File A Lien, And A Notice Regarding Timmons' Failure To Respond To The October 23, 2000 Information Request Letter," which were received by Defendants on November 2, 2001. Id. at ¶¶ 48 & 174; Notice Lt. At that time, EPA's counsel had given Timmons and Stone a two-week extension to respond to the Request; however, no response was received. Pl.'s 7.1 Statement at ¶¶ 48 & 174. The Notices allowed Timmons to seek a conference or submit the information, but neither was done and the Notice of Lien on the Real Property, which was to secure payment of response costs, was filed on December 10, 2001. Id. at ¶¶ 49, 50 & 175. On October 21, 2002, the Department of Justice ("DOJ") further requested Timmons and Stone to provide financial information that would comply in part with the Request. Id. at ¶ 51. The DOJ made that same request again on May 19, 2003, June 26, 2003, and July 8 and 25, 2003, to no avail. Id. at ¶¶ 52-55.


A. Summary Judgment Standard

Pursuant to FED. R. CIV. P. 56(c), summary judgment is appropriate only where "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." The moving party bears the burden to demonstrate through "pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any," that there is no genuine issue of material fact. F.D.I.C. v. Giammettei, 34 F.3d 51, 54 (2d Cir. 1994) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). "When a party has moved for summary judgment on the basis of asserted facts supported as required by [Federal Rule of Civil Procedure 56(e)] and has, in accordance with local court rules, served a concise statement of the material facts as to which it contends there exist no genuine issues to be tried, those facts will be deemed admitted unless properly controverted by the nonmoving party." Glazer v. Formica Corp., 964 F.2d 149, 154 (2d Cir. 1992).

To defeat a motion for summary judgment, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on "mere allegations or denials" of the facts submitted by the moving party. FED. R. CIV. P. 56(e); see also Scott v. Coughlin, 344 F.3d 282, 287 (2d Cir. 2003) ("Conclusory allegations or denials are ordinarily not sufficient to defeat a motion for summary judgment when the moving party has set out a documentary case."); Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir. 1994). To that end, sworn statements are "more than mere conclusory allegations subject to disregard . . . they are specific and detailed allegations of fact, made under penalty of perjury, and should be treated as evidence in deciding a summary judgment motion" and the credibility of such statements is better left to a trier of fact. Scott v. Coughlin, 344 F.3d at 289 (citing Colon v. Coughlin, 58 F.3d 865, 872 (2d Cir. 1995) and Flaherty v. Coughlin, 713 F.2d 10, 13 (2d Cir. 1983)).

When considering a motion for summary judgment, the court must resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. Nora Beverages, Inc. v. Perrier Group of Am., Inc., 164 F.3d 736, 742 (2d Cir. 1998). "[T]he trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1224 (2d Cir. 1994). Moreover, mere conclusory allegations, unsupported by the record, are insufficient to defeat a motion for summary judgment. See Carey v. Crescenzi, 923 F.2d 18, 21 (2d Cir. 1991).


The USA claims that Timmons is liable under CERCLA for costs associated with the removal action. Compl. at ¶ 40. Plaintiff seeks all costs associated with the removal action plus prejudgement interest. Id. at ¶ 40. The Defendants claim that they were not the owners or operators of a facility when hazardous substances were disposed of and as a counterpoint they assert that the USA is a potentially responsible party as they "sold this [Real Property] after World War II" without testing for contamination of PCBs in the 1940's and therefore cannot recover damages. Dkt. No. 3, Answer; Dkt. No. 26, Donald W. Stone, Sr. Aff. ("Stone Aff. II"), dated Aug. 5, 2005, at ¶¶ 2 & 5. Defendants further allege that the transformers were used by the prior owner, the Adirondack Steel Casting Company, Inc. Stone Aff. II at ¶ 6. Although they were never used by Timmons, the transformers were not abandoned by Timmons and remain available for use by proposed tenants.


CERCLA was created due to environmental and public health concerns as a result of "the release of hazardous substances" and a fund was established to remove hazardous substances at contaminated sites. United States v. Ponderosa Fibres of Am., Inc. 178 F. Supp. 2d 157, 160 (N.D.N.Y. 2001).

In order to establish a prima facie case of liability under CERCLA, the plaintiff must prove: 1) the site is a "facility" as defined in CERCLA, 2) a release or threatened release of a hazardous substance has occurred, 3) the release or threatened release has caused the plaintiff to incur response costs that were necessary and consistent with the National Contingency Plan[*fn13 ] set up by CERCLA, and 4) the defendants fall within one or more of the four classes of responsible persons described in CERCLA § [9607](a).

Freeman v. Glaxo Wellcome, Inc., 189 F.3d 160, 163 (2d Cir. 1999) (citations omitted).

CERCLA authorizes a lawsuit against one who is "the owner and operator of a vessel or a facility[.]" 42 U.S.C. § 9607(a)(1). Furthermore, if a party falls within § 9607(a)(1), strict liability will be imposed. See Commander Oil Corp. v. Barlo Equip. Corp., 215 F.3d 321, 327 (2d Cir. 2000) (citation omitted); Cooper Indus., Inc. et al. v. Agway, Inc. et al., 1997 WL 135925, at *3 (N.D.N.Y. Mar. 13, 1997). When a party falls within the ambit of § 9607(a)(1), liability will be imposed "on current owners of a site even if the disposal of the substances occurred before the commencement of ownership and the owner has not been shown to have caused a release." United States v. Manzo, 182 F. Supp. 2d 385, 397 (D.N.J. 2001) (citing New York v. Shore Corp. Realty; 759 F.2d 1032, 1042-44 (2d Cir. 1985)); see also United States v. R.W. Meyer, Inc., 889 F.2d 1497, 1507 (6th Cir. 1989); United States v. JG-24, Inc., 331 F. Supp. 2d 14, 62 (D.P.R. 2004) (citing Manzo) (further citation omitted) (42 U.S.C. § 9607(a)(1) imposes liability on the current owner of a facility "regardless of when disposal occurred and regardless of causation"); New York v. Westwood-Squibb Pharm. Co., 138 F. Supp. 2d 372, 378 (W.D.N.Y. 2000) (citing United States v. Monsanto Co., 858 F.2d 160, 169 (4th Cir. 1988) which held "site owners liable regardless of degree of participation in disposal of hazardous wastes"); New Jersey Tpk. Auth. v. PPG Indus., 16 F. Supp. 2d 460, 467-68 (D.N.J. 1998).

A "facility" includes a building, structure, or "any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." 42 U.S.C. § 9601(9).*fn14 In order to determine whether the second prong has been fulfilled, the first step is to define what constitutes a hazardous substance.*fn15 Although numerous substances can be defined as hazardous, "PCBs are listed among the 700 substances which the EPA has designated as hazardous for purposes of CERCLA" pursuant to 42 U.S.C. § 9602. Mainline Constructing Corp. v. ChopraLee, Inc. et al., 109 F. Supp. 2d 110, 121 (W.D.N.Y. 2000) (citing Table 302.4, 40 C.F.R. § 302); see generally United States v. Alcan Aluminum Corp. ("Alcan II"), 315 F.3d 179 (2d Cir. 2003). In finding a hazardous substance, liability can be established even when the substances are found below the ground, thus "reaffirming the principle that quantity ...

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