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Phoenix Beverages, Inc. v. Exxon Mobil Corporation

United States District Court, E.D. New York

February 11, 2015

PHOENIX BEVERAGES, INC., RODB LLC, WINDMILL DISTRIBUTING COMPANY, L.P., UP FROM THE ASHES, INC., and other affiliated companies of PHOENIX BEVERAGES, INC., Plaintiffs,
v.
EXXON MOBIL CORPORATION, EXXONMOBIL RESEARCH ENGINEERING COMPANY and QUANTA RESOURCES CORPORATION, Defendants. QUANTA RESOURCES CORPORATION, Third-Party Plaintiff,
v.
ACE WASTE OIL, INC., et al., Third-Party Defendants.

MEMORANDUM & ORDER

PAMELA K. CHEN, District Judge.

Plaintiffs Phoenix Beverages, Inc. and its affiliated companies (collectively, "Plaintiffs") instituted this action on July 31, 2012 against Defendants Exxon Mobil Corporation, ExxonMobil Research and Engineering Company (together, "Exxon"), and Quanta Resources Corporation ("Quanta") (collectively, "Defendants") based on Defendants' alleged contamination of real property (the "Property") owned and operated by Plaintiffs. (Dkt. 1 ("Compl.") ¶ 1.) Plaintiffs seek relief under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., and the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq., as well as State law, including New York Navigation Law, N.Y. Nav. Law § 181(5). (Id. ) Discovery is currently proceeding in this matter. ( See Dkt. 443.)

On October 27, 2014, Plaintiffs moved for a preliminary injunction pursuant to RCRA § 7002(a)(1)(B) on the ground that Plaintiffs face a threat of imminent irreparable harm from a risk of explosion due to underground methane gas accumulating beneath the Property. (Dkts. 431 & 432.) Specifically, Plaintiffs sought to enjoin "Defendants to design and install (1) an explosive gas monitoring and alarm system to warn of the presence of methane gas within the buildings on the [] Property; (2) a sub-slab depressurization system to prevent the migration of explosive gas into the buildings on the [] Property, and (3) a system to extract and neutralize the methane gas underlying the [] Property and begin abatement of the underground plume of waste oil that is the source of the explosive gas." (Dkt. 432-1 ("Pl. Mem.") at 6).[1] Exxon and Quanta each opposed Plaintiffs' motion. (Dkt. 448 ("Exxon Mem.") & 458 ("Quanta Mem.").)

The Court heard oral argument on Plaintiffs' motion on November 19, 2014. (Dkt. 466 (Transcript of Nov. 19, 2014 Conference ("Tr.").) At the close of argument, the Court denied Plaintiffs' request for an evidentiary hearing and motion for preliminary injunctive relief. (Id. at 82, 86.) This Memorandum & Order sets forth the reasons for the denial of Plaintiffs' requested relief.

BACKGROUND

The Property is located at 37-88 Review Avenue, Long Island City, New York. (Compl. ¶ 1.) Plaintiffs are currently leasing a warehouse and office building located on the Property (the "Building") to a number of commercial enterprises engaged in various activities, such as food and beverage distribution, construction, and storage for video production operations. (Pl. Mem. at 11; Dkt. 434-2 (Declaration of Rodney Brayman dated Oct. 27, 2014 ("Brayman Decl.")) ¶ 3.) Over one hundred individuals occupy the Building in connection with these enterprises, with occupants physically present twenty-four hours a day, seven days a week. (Brayman Decl. ¶ 3.)

There is no dispute that a substantial plume of Light Non-Aqueous Phase Liquid ("LNAPL"), consisting of waste oils and other contaminants, is floating on the water table beneath the Property and the Building. ( See Dkt. 433 (Declaration of Tomlinson Fort dated Oct. 27, 2014 ("Fort Decl.")) ¶¶ 8, 13 & Ex. C; Dkt. 447 (Declaration of John A. Simon dated Nov. 9, 2014 ("Simon Decl.")) ¶ 3.) It is further undisputed that this subsurface LNAPL is generating methane gas through biodegration and volatization, and that methane consequently is accumulating in the "sub-slab" between the concrete foundation of the Building and the LNAPL plume. (Fort Decl. ¶¶ 14, 17; Dkt. 445 (Declaration of Stuart Mitchell dated Nov. 10, 2014 ("Mitchell Decl.")) ¶¶ 7, 10, 21.)

Plaintiffs' Complaint alleges that an adjacent site located at 37-80 Review Avenue, Long Island City, New York and formerly owned by Quanta (the "Quanta Site") is the source of the LNAPL contamination underneath the Property.[2] (Compl. ¶¶ 19-20, 41, 43, 52, 57.) From around 1970 to 1981, Plaintiffs allege that the Quanta Site operated as a disposal, storage, and transfer facility for "hazardous wastes, solid wastes and hazardous substances." (Id. ¶¶ 33-34.) According to Plaintiffs, Exxon and/or predecessor companies arranged for the disposal of hazardous substances, including oil slop, from Exxon facilities to the Quanta Site at least from 1975 to 1980. (Id. ¶¶ 24, 35-37.) Plaintiffs further allege that the migration of contaminants to the Property is the result of Defendants' inadequate methods for storage and treatment at the Quanta Site. (Id. ¶¶ 43-44, 47.)

With Plaintiffs' knowledge or participation, the Property and Building have been subject to an extensive program of testing for concentrations of potentially explosive vapors, including testing for methane at the lower explosive limit ("LEL").[3] In 2002, the New York Department of Environmental Conservation ("DEC") became involved in investigations of contamination at the Property in connection with remediation of the neighboring Quanta Site. (Mitchell Decl. ¶ 3; Exxon Mem. at 22; Pl. Mem. at 6.) Sampling activities were conducted at the Property as early as June 2004. (Dkt. 450 at Ex. 33 (letter from Plaintiffs' counsel dated June 29, 2004 discussing testing for explosive vapors on the Property).) In August 2004, an indoor air screening was performed at the Building after the Building was closed for a period of thirty-six hours to allow vapors to accumulate. (Simon Decl. ¶ 12.) All LEL readings from this screening were at zero, meaning that no combustible gases were detected inside the Building. (Id. ¶ 13.)

The DEC also has been overseeing the investigation of the Property since 2009 in connection with the preparation of remedial recommendations relating to contaminants on the Property. With the involvement of the DEC, the parties have engaged consultants to perform multiple studies on the Property, including: soil vapor sampling program from December 2009 to February 2010 (Mitchell Decl. ¶¶ 6-7), in May 2014 (Fort Decl. ¶ 22 & Ex. D), and in June 2014 (Fort Decl. Ex. D), indoor air investigations of the Building in January 2010, March 2014, and November 2014 (Mitchell Decl. ¶¶ 9, 20, 27-29; Simon Decl. ¶¶ 11, 14), as well as the installation of, and sampling from, monitoring wells inside the Building in January 2013 and in April 2014 (Mitchell Decl. ¶ 21; Fort Decl. ¶¶ 10, 13, 17, 20-23). Evaluation of methane levels in the subsurface of the Property consistently revealed concentrations below ground that exceeded the LEL for methane. (Mitchell Decl. ¶¶ 7, 21; Fort Decl. ¶¶17, 20-21).

Data generated from air samples taken within the Building, on the other hand, did not disclose levels of methane that approached the LEL. ( See, e.g., Mitchell Decl. ¶¶ 10-11, 28; Simon Decl. ¶¶ 10-11; 14-15.) For instance, indoor air sampling conducted in January 2010 did not measure methane in concentrations above 1 part per million, with the exception of samples from sump and floor drains, which registered methane at 500 parts per million, or 100 times below the LEL. (Mitchell Decl. ¶¶ 10-11; Simon Decl. ¶¶ 14-15.) Indoor air sampling performed more recently in November 2014 at thirty-two locations within the Building similarly did not detect methane, except for in a floor drain at a concentration of 370 parts per million, which is almost 100 times below the LEL. (Simon Decl. ¶ 11; Mitchell Decl. ¶¶ 27-29; Fort. Decl. ¶¶ 25-27.)

In or around November 2014, Defendants and other third parties submitted a remedial investigation report regarding the Property to the DEC for review and approval of a remedial plan. (Tr. 49-50; Mitchell Decl. ¶ 23; Exxon Mem. at 10.) The DEC also received copies of interim reports documenting findings from sampling conducted on the Property. ( See, e.g., Mitchell Decl. ¶¶ 12, 15.) Thus far, the DEC has not required immediate action by any party to address methane at the Property. ( See, e.g., Tr. 49-50; Mitchell Decl. ¶¶ 12, 15-16.)

DISCUSSION

A. Resource Conservation and ...


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