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State v. Pride Solvents & Chemical Co. Inc.

United States District Court, E.D. New York

December 15, 2017

STATE OF NEW YORK and BASIL SEGGOS, as Acting Commissioner of the New York State Department of Environmental Conservation, Plaintiffs,


          Denis R. Hurley United States District Judge.

         Presently before the Court is the Report and Recommendation (“R&R”), dated October 30, 2017, of Magistrate Judge Arlene R. Lindsay recommending that the motion by Pride Solvents &Chemical Co. Inc. (“Pride Solvents”), Pride Solvents & Chemical Co. of N.Y., Inc., Arthur Dhom, Sr., Arthur Dhom, Jr., Cheryl Dhom, as Executor of the Estate of Robert Dhom, and 78-88 Lamar Street Realty Corp. (collectively the “Pride Defendants”) for leave to file a third-party complaint pursuant to Federal Rule of Civil Procedure (“Rule”) 14, be granted in part as it applies to the ten John Does, and denied in part as it applies to the fifty-eight remaining proposed third-party defendants.

         The Pride Defendants timely filed Objections to Judge Lindsay's R&R to the extent that it denies their motion to implead fifty-eight third-party defendants (the “Babylon Settling Defendants”) who are signatories to a consent decree associated with a landfill adjacent to the Pride Solvents property. (Def.'s Objections to R&R at 1 (Nov. 13, 2017) (DE 41) (hereinafter “D's Objections”).) In response, the State of New York (the “State”) and Basil Seggos, Commissioner of the New York State Department of Environmental Conservation (collectively, “Plaintiffs”), filed a Memorandum of Law in Response to the Pride Defendants' Objections, stating that Judge Lindsay correctly denied the motion as it relates to the fifty-eight Babylon Settling Defendants. (Plaintiffs' Mem. in Opp. at 1 (Nov. 27, 2017) (DE 42).)


         The following relevant facts are taken from the Parties' submissions.

         Pride Solvents operated a chemical solvent reclamation facility at 78-88 Lamar Street in West Babylon, New York (the “Pride Site”) from the late 1960's or early 1970's to the early 2000's. (Murphy Aff. ¶ 4 (Apr. 17, 2017).) Adjacent and hydraulically upgradient[1] from the Pride Site is the Babylon Landfill, a municipal landfill and a State superfund site that operated from approximately 1947 to 1993. (Plaintiffs' Mem. of Law in Opp. at 3-4 (May 8, 2017) (hereinafter “Mem. in Opp.”).) The State and the town of Babylon entered into a State Assistance Contract, whereby the State agreed to reimburse the town for 75% of eligible cleanup costs for the Babylon landfill. (Murphy Aff. ¶ 7.)

         On February 2, 2009, the Pride Defendants entered into a Settlement Agreement with the Babylon Landfill Joint Defense Group based on allegations that some of Pride Solvent's waste was transported to the Babylon Landfill. (Murphy Aff. ¶ 12.) Without admitting liability, the Pride Defendants agreed to cash out for a one-time payment for any past and ongoing response costs at the Babylon Landfill. (Id.) The Settlement Agreement did not extend to “liability for claims of any nature related to any facility other than the [Babylon Landfill] Site[.]” (Id.)

         As anticipated, the State incurred response costs in addressing the “hazardous substances” at the Babylon Site, so in 2011 the State filed a complaint seeking to recover its costs. (Id. at 4.) Simultaneously with the complaint, the State filed the Babylon Consent Decree. This Consent Decree resolved any liability against the Babylon Settling Defendants-a group of entities that either (1) owned or operated the Babylon Landfill, (2) arranged for disposal of hazardous substances at the Babylon Landfill, or (3) transported hazardous substances to the Babylon Landfill for disposal. (Id.) Pride Solvents was one of the Babylon Settling Defendants. (Mem. in Opp. at 1; see also Babylon Consent Decree, Ex. 1 to Mem. in Opp.)

         On November 16, 2015, Plaintiffs brought this action against the Pride Defendants under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) § 107(a), 42 U.S.C. § 9607(a), and state common law to recover costs that have been and will be incurred by the State in responding to hazardous substances released at the Pride Site. According to the Complaint, the Pride Defendants are “potentially responsible parties” (“PRPs”) under CERCLA § 107(a), as owners and operators of the Pride Site, and are therefore jointly and severally liable for response costs at the Pride Side.

         After being served with the complaint in this action, the Pride Defendants retained Dr. James Knauss of Shield Environmental Associates to “analyze all data in connection with both the Babylon Landfill and the Pride Site.” (Murphy Aff. ¶ 18.) Based on his review, Dr. Knauss found:

[T]he conclusions in the State's remedial investigation report were flawed, were not accurate, drew the wrong conclusions, and were based upon significant mathematical and other gross errors in the application of scientific principles in the State's reports. Accordingly, he found that the plume originates not from Pride Solvents, but from the Babylon Landfill.

Id. The State does not concede that releases of hazardous substances migrated to the Pride Site from the Babylon Landfill. (Mem. in Opp. at 1.)

         The Pride Defendants first expressed an intent to join additional parties by letter for a pre-motion conference on October 24, 2016. On April 17, 20176, Pride Defendants brought the instant motion, seeking to implead fifty-eight Babylon Settling Defendants and ten John Does who are alleged to be owners and/or operators of properties located upgradient of the Pride Site. (Proposed Third Party Compl. ¶ 19.) The proposed third-party complaint asserts six causes of action: (1) cost recovery for response costs under CERCLA § 107(a); (2) contribution for response costs under CERCLA § 113(f)(3)(B); (3) a declaratory judgment that the third-party defendants are liable to the Pride Defendants for response costs under CERCLA § 113(g)(2); (4) a state claim for negligence; (5) a state claim for nuisance; and (6) a state claim for trespass. (Id. at ¶¶ 33-70.)

         Plaintiffs do not oppose the Pride Defendants' motion for leave to implead the John Doe defendants. (Mem. in Opp. at 1.) However, Plaintiffs do oppose the motion insomuch as it seeks to implead the fifty-eight Babylon Settling Defendants on the grounds that these parties were granted contribution ...

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