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State v. Solvent Chemical Co.

June 6, 2007

THE STATE OF NEW YORK, PLAINTIFF,
v.
SOLVENT CHEMICAL COMPANY, INC., AND ICC INDUSTRIES, INC., DEFENDANTS/THIRD-PARTY PLAINTIFFS,
OLIN CORPORATION, ET AL., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: John T. Curtin United States District Judge

Defendants/third-party plaintiffs Solvent Chemical Company, Inc. ("Solvent") and its corporate parent ICC Industries Inc. ("ICC") (referred to jointly herein as "Solvent") have filed a joint motion for summary judgment dismissing the counterclaim and fourth-party complaint of third-party defendant Olin Corporation ("Olin"). The court heard oral argument of the motion on August 22, 2006.*fn1 For the reasons that follow, Solvent's motion is denied.

BACKGROUND

The factual background of this action has been set forth at length in several prior decisions and orders and will be discussed here only as necessary to the resolution of the matters raised in the current motion. The action was commenced in December 1983 by the State of New York against Solvent pursuant to section 107 of the Comprehensive Environmental Response and Compensation Act ("CERCLA"), 42 U.S.C. § 9607, seeking to recover costs to be incurred in connection with the remediation of environmental contamination at property located at and adjacent to 3163 Buffalo Avenue, Niagara Falls, New York (the "3163 Buffalo Avenue Site"). The original complaint also contained causes of action under the New York Environmental Conservation Law ("ECL"), the New York Real Property Actions and Proceedings Law ("RPAPL"), and the common law of public nuisance (Item 1, ¶ 3). The State's claims against Solvent were ultimately resolved pursuant to Consent Decrees, signed by the parties in April 1997 and approved by this court in October 1997 (see Items 652 and 655), by which Solvent agreed to pay a portion of the costs and/or undertake performance of the remedial work at the 3163 Buffalo Avenue Site, as outlined in the Record of Decision ("ROD") issued by the State in December 1996.

In the meantime, beginning in 1986 Solvent commenced a series of third-party actions against more than 80 companies and individuals for contribution based upon the third-party defendants' alleged release or disposal of hazardous substances at the 3163 Buffalo Avenue Site (see Items 43 and 44). In its fifth amended third-party complaint, filed in April 1998, Solvent sued Olin for contribution seeking to recover an equitable share of the response costs incurred in the investigation and remediation of a "hot spot" of contamination located on Olin's property "west of the 3163 Buffalo Avenue Site and east of Gill Creek" (Item 746, ¶ 133), as well as any costs incurred in remediating contamination caused by the migration of hazardous substances onto the Site from the Olin property (see id. at ¶¶ 132-36). In the "WHEREFORE" clause of the fifth amended third-party complaint, Solvent seeks the following relief against Olin: an order that should SOLVENT be required to expend funds to address the off-site hot spot or on-site contamination which migrated from the OLIN Property, or should the State of New York recover judgment against SOLVENT relating to the off-site hot spot or on-site contamination originating from the OLIN Property, then SOLVENT be adjudged entitled to (i) statutory indemnification or contribution from third-party defendant OLIN under CERCLA, 42 U.S.C. § 9607(a)(1), CERCLA, 42 U.S.C. § 9607(a)(2), and CERCLA, 42 U.S.C. § 9613(f)(1); (ii) implied equitable indemnity; and (iii) contribution under common law principles proportionate to its acts of conduct in contributing to the incident in question, and to the damages and/or injuries sustained by the State of New York, if any. (Id. at p. 37.)

In May 1998 Olin served its answer (Item 809) to the fifth amended third-party complaint, setting forth counterclaims against Solvent and fourth-party claims against ICC seeking to recover the response costs incurred by Olin in connection with the cleanup of Gill Creek, which is a tributary of the Niagara River that runs through Olin's property located to the west of the 3163 Buffalo Avenue Site. Olin participated in the Gill Creek remediation pursuant to an administrative "Order on Consent" entered in March 1991 between the State, Olin, and E.I. du Pont de Nemours & Company ("DuPont") (referred to herein as the "Olin/DuPont Order on Consent," copy attached as Ex. D to Item 1343). The Gill Creek Site is described in the Olin/DuPont Order on Consent as "the bed and banks of Gill Creek south of Buffalo Avenue, and any contiguous areas necessary or convenient for the required activities hereunder." (Item 1343, Ex. D, p. 2, ¶ 3.)

In its counterclaim against Solvent, Olin alleges that the contamination of Gill Creek was caused by releases of hazardous substances into the groundwater or through a discharge sewer that served the 3163 Buffalo Avenue Site during the time Solvent owned and operated the facility, and that Olin consequently incurred response costs at the Gill Creek Site totaling approximately $9 million. Olin sets forth claims for cost recovery under CERCLA § 9607(a) (see Item 809, pp. 13-16); contribution under CERCLA § 9613(f)(1) (id. at pp. 16-19); and declaratory relief pursuant to CERCLA § 9613(g)(2) and the Declaratory Judgment Act, 28 U.S.C. § 2201, et seq. (id. at pp. 19-21).*fn2

Solvent now moves for summary judgment dismissing Olin's counterclaims/fourth-party claims in their entirety, based on the following grounds:

1. As the result of the holdings in Cooper Indus., Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004), and Consolidated Edison Co. v. UGI Utilities, Inc., 423 F.3d 90 (2d Cir. 2005) ("Con Ed"), Olin may not maintain its CERCLA § 113(f)(1) contribution claim because Olin has neither been sued under CERCLA nor settled its CERCLA liability with respect to the Gill Creek cleanup;

2. Under the Second Circuit's holdings in Con Ed and Bedford Affiliates v. Sills, 156 F.3d 416 (2d Cir. 1998), Olin may not maintain its section 107 claim because it is itself a potentially responsible party ("PRP") with respect to the costs it seeks, and it did not incur those costs voluntarily; and

3. In the absence of a valid claim for relief under either section 107 or 113 of CERCLA, Olin cannot assert a cause of action for declaratory judgment.

Each of these grounds is discussed in turn below.

DISCUSSION

1. Olin's CERCLA § 113(f)(1) Claim

This current motion marks the third time this court has been asked to determine the effect of the Supreme Court's Cooper Industries holding on the CERCLA § 113(f)(1) contribution claims at issue in this case. As discussed in this court's June 5, 2006 decision and order (Item 1330),*fn3 Cooper Industries examined the language of CERCLA § 113(f)(1),*fn4 which authorizes a suit for contribution if brought "during or following" an administrative or judicial cost recovery action under CERCLA § 106 or § 107(a), and held that in order for a private party to bring a section 113(f)(1) claim that party must itself have been subject to suit under section 106 or 107(a). Cooper Industries, 543 U.S. at 165-68, cited in New York v. Solvent Chemical Co., Inc., 2006 WL 1582383, at *3 (W.D.N.Y. June 5, 2006). Solvent argues that, as a result of Cooper Industries, Olin cannot maintain its section 113(f)(1) claim for contribution with respect to the Gill Creek cleanup because Olin has never been sued under CERCLA § 106 or § 107(a) by any party to recover the costs of remediating the contamination at Gill Creek.

It is undisputed that Olin has never been subject to a civil action under CERCLA § 106 or § 107(a) with respect to the remediation of Gill Creek (see Item 1357, ¶ 13). However, Olin contends that it should be allowed to seek contribution from Solvent pursuant to section 113(f)(1) for the cost of the Gill Creek cleanup, notwithstanding Cooper Industries, because the contribution claim was asserted "during" the third-party section 107(a) action ...


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