Niagara Mohawk v. Consolidated Rail ( 2010 )

08-3843-cv(L); 08-4007-cv(XAP)
Niagara Mohawk v. Consolidated Rail
1 UNITED STATES COURT OF APPEALS
2
3 F OR THE S ECOND C IRCUIT
4
5
6
7 August Term, 2008
8
9 (Argued: June 9, 2009 Decided: February 24, 2010)
10
11 Docket Nos. 08-3843-cv (L); 08-4007-cv (XAP)
12
13
14 Niagara Mohawk Power Corporation,
15
16 Plaintiff-Appellant-Cross-Appellee,
17
18 –v.–
19
20 Chevron U.S.A., Inc.,
21
22 Defendant-Appellee-Cross-Appellant,
23
24 United States Steel Company, Richard B. Slote, in his
25 capacity as personal representative of the estate of Edwin
26 D. King, and Portec, Inc.,
27
28 Defendants-Appellees-Cross-Appellees,
29
30 King Services, Inc., Richard B. Slote, and Lawrence King,
31
32 Defendant-Cross-Appellees,
33
34 County of Rensselaer and The County of Rensselaer Sewer
35 District No. 1,
36
37 Third-Party-Defendants-Cross-Appellees,
38
39 Consolidated Rail Corporation, American Premier
40 Underwriters, Inc., The Foundation Company and Pittsburgh
Page 1 of 67
1 Business,
2
3 Defendants.
4
5
6
7
8 Before:
9 C ALABRESI, W ESLEY, Circuit Judges, and V ITALIANO, * District
10 Judge.
11
12 Niagara Mohawk Power Corporation (“NiMo”) commenced
13 this action to recover costs pursuant to the Comprehensive
14 Environmental Response, Compensation, and Liability Act of
15 1980 (“CERCLA”), Pub. L. No. 96-510, 94 Stat. 2767, and the
16 Superfund Amendments and Reauthorization Act of 1986, Pub.
17 L. No. 99-499, 100 Stat. 1613, codified together at 42
18 U.S.C. §§ 9601-75, from the defendants for cleanup of
19 properties previously owned by NiMo and once either owned,
20 leased, or used by the defendants. In this appeal, NiMo
21 challenges orders of the United States District Court for
22 the Northern District of New York (Hurd, J.) denying NiMo’s
23 motion for summary judgment, granting summary judgment in
24 favor of the defendants, and denying NiMo’s motion for
25 reconsideration.
26 We are called upon to determine whether NiMo, as a
27 potentially responsible party under CERCLA, can seek
28 response and cleanup costs under either § 107(a)(4)(B) or
29 § 113(f)(3)(B), after having settled its CERCLA liability
30 with the New York State Department of Environmental
31 Conservation (“DEC”) but not with the Environmental
32 Protection Agency (“EPA”), where the EPA has not expressly
33 authorized the DEC to settle CERCLA liability relating to
34 the property at issue. We hold that NiMo may seek
35 contribution costs under § 113(f)(3)(B) because NiMo has
36 settled with the DEC, but consequently NiMo may not seek
37 reimbursement for response costs under § 107(a). We hold
38 that the district court erred in granting summary judgment
39 for the defendants because there are genuine issues of
*
The Honorable Eric N. Vitaliano, of the United States District Court
for the Eastern District of New York, sitting by designation.
Page 2 of 67
1 material fact with regards to their respective liabilities.
2 We hold that the district court erred by holding that NiMo
3 did not comply with the National Continency Plan. We hold
4 that the district court erred in part by dismissing NiMo’s
5 New York Navigation Law claims. Finally, we hold that the
6 district court erred in dismissing Chevron’s third party
7 action against the County of Rensselaer and others.
8 We affirm, however, the district court’s dismissal of
9 NiMo’s state contribution, indemnity, and unjust enrichment
10 claims because they are preempted by CERCLA.
11
12 A FFIRMED in part and R EVERSED in part.
13
14 J OHN T. P ARKINSON, Syracuse, NY (Thomas R. Lotterman,
15 Robert V. Zener, Milissa A. Murray, Sandra P.
16 Franco, Bingham McCutchen LLP, Washington, DC,
17 on the brief), for Plaintiff-Appellant-Cross-
18 Appellee Niagara Mohawk Power Corporation.
19
20 P ATRICK J. H IGGINS, Powers & Santola, LLP, Albany,
21 NY, for Defendant-Appellee-Cross-Appellant
22 Chevron U.S.A., Inc.
23
24 K EVIN C. M URPHY, The Wladis Law Firm, Syracuse, NY
25 (David L. Smiga, on the brief, Pittsburgh,
26 PA), for Defendant-Appellee-Cross-Appellee
27 United States Steel Corporation.
28
29 K IMBERLEE S. P ARKER, Bond, Schoeneck & King, PLLC,
30 Albany, NY, for Defendant-Appellee-Cross-
31 Appellee Portec, Inc.
32
33
34
35
36
37 W ESLEY, Circuit Judge:
38 This case is yet another in a series of cases that
39 attempt to chart the contours of liability of a potentially
40 responsible party (“PRP”) under §§ 107(a)(4)(B) and
Page 3 of 67
1 113(f)(3)(B) for contribution towards, and payment of, costs
2 resulting from the identification and cleanup of hazardous
3 substances under the Comprehensive Environmental Response,
4 Compensation, and Liability Act of 1980 (“CERCLA”), Pub. L.
5 No. 96-510, 94 Stat. 2767, and the Superfund Amendments and
6 Reauthorization Act of 1986 (“SARA”), Pub. L. No. 99-499,
7 100 Stat. 1613, codified together at 42 U.S.C. §§ 9601-75.
8 We hold that the PRP seeking contribution in this case,
9 Niagara Mohawk Power Corporation (“NiMo”), may seek
10 contribution under § 113(f)(3)(B) from certain of the PRPs —
11 Chevron U.S.A., Inc. (“Chevron”), United States Steel
12 Corporation (“U.S. Steel”), Portec, Inc. (“Portec”), and
13 Edwin D. King (“King”) — because New York’s Department of
14 Environmental Conservation (“DEC”) could agree to settle
15 NiMo’s CERCLA liability without express authorization by the
16 Environmental Protection Agency (“EPA”). However, because
17 NiMo incurred response costs as a result of a resolution of
18 its CERCLA liability with the DEC, NiMo cannot seek recovery
19 costs under § 107(a)(4)(B).
20 We also hold that the district court erred in granting
21 summary judgment to U.S. Steel, Chevron, Portec, and King
22 because there are genuine issues of material fact as to
Page 4 of 67
1 their liability. The district court erred in finding that
2 NiMo did not comply with the National Contingency Plan. We
3 reverse in part the district court’s dismissal of NiMo’s
4 Navigation Law contribution claim. We affirm the district
5 court’s dismissal of NiMo’s state contribution,
6 indemnification, and unjust enrichment claims as preempted
7 under CERCLA. Finally, we reverse the district court’s
8 dismissal of Chevron’s third-party action against the County
9 of Rensselaer and others.
10 I. BACKGROUND
11 At the center of this dispute is a contaminated site in
12 Troy, New York — known as the Water Street Site — that over
13 the last 100 years has played host to various industrial
14 activities including a coke 1 plant, a steel manufacturing
15 facility, a manufactured gas plant, and a petroleum
16 distribution facility. Each use led to the release or
17 disposal of toxic substances, many subject to liability
18 under CERCLA.
19 NiMo owned portions of the Water Street Site either
20 directly or through a predecessor from 1922 until 1951.
21 During this period, NiMo continued to operate a pre-existing
1
Coke is a residue of coal left after distillation.
Page 5 of 67
1 manufactured gas plant on the Site. Coal tar, which
2 contains hazardous substances covered by CERCLA, is a
3 typical waste that results from the production of
4 manufactured gas and has been found on the Site. By 1951,
5 NiMo had conveyed most of its interest at the Site to
6 Republic Steel, and today owns only a small parcel used as a
7 natural gas regulator station.
8 In December of 1992, NiMo entered into an Order on
9 Consent with the DEC that required NiMo to investigate
10 twenty-one sites in New York that once had hosted
11 manufactured gas plants to determine the nature and extent
12 of the hazardous materials present. The purpose of the
13 Order was to “control and/or remove residual [manufactured
14 gas plant] waste sources.” NiMo agreed to develop and
15 implement plans for remediation of the pollution under the
16 direction of the DEC. For each site, NiMo developed and
17 implemented a Preliminary Site Assessment that provided data
18 necessary for the DEC to determine whether the hazardous
19 substances present on the site posed a threat to the public
20 or the environment, and thus required remediation. Any site
21 identified by the Preliminary Site Assessment as requiring
22 comprehensive evaluation was then subject to a Remedial
Page 6 of 67
1 Investigation conducted by NiMo, which consequently prepared
2 a Feasibility Study. NiMo agreed to remediate sites the DEC
3 deemed in need. In 2003, NiMo and the DEC executed an
4 amended Order on Consent under which NiMo incurred
5 additional costs while obtaining a specific release of
6 CERCLA liability upon meeting certain conditions.
7 Both Orders included the Water Street Site. As NiMo
8 learned, the hazardous byproducts of the commercial
9 activities conducted on the Site lasted far longer than the
10 industries themselves. For purposes of the assessments,
11 reports, and remediation, the DEC divided the property into
12 four parts, corresponding to historical ownership and
13 property lines. 2
14 In its Preliminary Site Assessment for Area 1, NiMo
15 concluded that no remedial investigation or feasibility
16 study need be done based on the few hazardous materials
17 found. NiMo did take some action in Area 1, however; it
18 removed some tar and continued to monitor Area 1 for any new
19 tar leaks.
20 Investigation of Area 2 revealed significant
2
A map of the Water Street Site is provided at
Appendix A.
Page 7 of 67
1 contamination. In addition to hazardous materials in the
2 soil and groundwater, NiMo discovered evidence of hazardous
3 materials in the sediment of the Wynantskill Creek, which
4 runs through Area 2. NiMo prepared a Final Feasibility
5 Study Report evaluating remedial options for the area; the
6 Report and its recommendations await a final DEC decision.
7 After its review of Area 3, NiMo requested that Area 3
8 be deleted from the remediation plan because the only
9 manufactured gas plant activity on Area 3 would not have
10 produced hazardous materials. The DEC agreed only to
11 postpone any investigation of Area 3, fearing that Area 3
12 may have some contamination from nearby Hudson River
13 deposits.
14 Area 4 had substantial contamination in its soil and
15 sediments. The DEC approved a remediation plan that
16 included excavation, placement of an impermeable cap over
17 the area, certain use restrictions for the property, and
18 future monitoring.
19 NiMo began this action on July 1, 1998, 3 seeking to
20 recoup its CERCLA costs and seeking to recover under a
3
NiMo filed an amended complaint on May 26, 1999,
adding defendants.
Page 8 of 67
1 number of state law claims. Defendants counterclaimed and
2 cross-claimed for contribution; the parties ultimately moved
3 for summary judgment. In its first opinion in November of
4 2003, the district court thoroughly recounted the
5 complicated facts of the case and disposed of a number of
6 matters. Niagara Mohawk Power Corp. v. Consol. Rail Corp.
7 (“Niagara I”), 291 F. Supp. 2d 105 (N.D.N.Y. 2003). On
8 November 7, 2003, the day after the district court’s opinion
9 in Niagara I, the 2003 Order of Consent was executed. That
10 Order was “intended to supercede and replace” the 1992
11 Consent Order. NiMo agreed to continue the remediation of
12 the sites. Under the terms of the agreement, NiMo “resolved
13 its liability to the State for purposes of contribution
14 protection provided by CERCLA Section 113(f)(2).”
15 Over the next five years, the case came to our Court
16 twice. Prior to our decisions in each appeal, the United
17 States Supreme Court issued a major decision involving
18 CERCLA issues that directly affected the appeal then before
19 us and required us to remand the matter to the district
20 court for reconsideration. This decision is the culmination
Page 9 of 67
1 of the case’s third visit to 500 Pearl Street. 4
2 II. CERCLA
3 Enacted in response to New York’s Love Canal disaster, 5
4 CERCLA was designed, in part, to “assur[e] that those
5 responsible for any damage, environmental harm, or injury
6 from chemical poisons bear the costs of their actions.” S.
7 Rep. No. 96-848, at 13 (1980). CERCLA, remedial in nature,
8 is designed to encourage prompt and effective cleanup of
9 hazardous waste sites. See B.F. Goodrich Co. v. Murtha, 958
10 F.2d 1192, 1197-98 (2d Cir. 1992). CERCLA empowers the
11 federal government and the states to initiate comprehensive
4
The Court is currently housed at the Moynihan Federal
Courthouse at 500 Pearl Street, a “temporary” location of
now some five years.
5
In the late 1930s or early 1940s, the Hooker Chemical
Company began dumping toxic waste in an abandoned canal near
Niagara Falls. Michael H. Brown, Love Canal and the
Poisoning of America, The Atlantic Monthly, Dec. 1979, at
33. In 1953, the canal was filled and sold to the city to
provide land for a new elementary school and playground.
Id. Families moved into the area, unaware that the large
field behind their homes was teeming with toxic waste. Id.Despite evidence of contamination, it took until 1978 for
New York State and the federal government to investigate the
pervasive health problems affecting the residents and the
deterioration of buildings around the Love Canal. S. Rep.
No. 96-848, at 8-10 (1980). Ultimately, it was determined
that thousands of tons of toxic waste contaminated the area
around Niagara Falls, creating an “environmental ghetto[]”
that then-President Carter declared a federal emergency.
Id.Page 10 of 67
1 cleanups and to seek recovery of expenses associated with
2 those cleanups. Somewhat like the common law of ultra-
3 hazardous activities, property owners are strictly liable
4 for the hazardous materials on their property, regardless of
5 whether or not they deposited them there. See New York v.
6 Lashins Arcade Co., 91 F.3d 353, 359 (2d Cir. 1996); see
7 also Integrated Waste Servs., Inc. v. Akzo Nobel Salt, Inc.,
8 113 F.3d 296, 301-02 (2d Cir. 1996). Owners can escape
9 liability only if the pollution results from an act of God
10 or an act of war, or if the owners establish they are
11 “innocent owners” under the statute. 42 U.S.C. § 9607(b);
12 see also Michael B. Gerrard & Joel M. Gross, Amending
13 CERCLA: The Post-SARA Amendments to the Comprehensive
14 Environmental Response, Compensation, and Liability Act 54
15 (2006).
16 CERCLA does provide property owners an avenue of
17 reprieve; it allows them to seek reimbursement of their
18 cleanup costs from others in the chain of title or from
19 certain polluters — the so-called potentially responsible
20 parties (“PRP”s). 6 42 U.S.C. § 9607(a). This reprieve is
6
Under CERCLA, a potentially responsible party (PRP)
is defined as:
Page 11 of 67
1 available through three separate provisions, namely §§ 107,
2 113(f)(1), and 113(f)(3)(B). Section 107 authorizes the
3 United States, a state, or “any other person” to seek
4 reimbursement for all removal or remedial costs 7 associated
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any
hazardous substance owned or operated any facility at
which such hazardous substances were disposed of, (3)
any person who by contract, agreement, or otherwise
arranged for disposal or treatment, or arranged with a
transporter for transport for disposal or treatment, of
hazardous substances owned or possessed by such person,
by any other party or entity, at any facility or
incineration vessel owned or operated by another party
or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous
substances for transport to disposal or treatment
facilities, incineration vessels or sites selected by
such person, from which there is a release, or a
threatened release which causes the incurrence of
response costs, of a hazardous substance.
42 U.S.C. § 9607(a).
7
“Removal” under CERCLA means:
[T]he cleanup or removal of released hazardous
substances from the environment, such actions as may be
necessary taken in the event of the threat of release
of hazardous substances into the environment, such
actions as may be necessary to monitor, assess, and
evaluated the release or threat of release of hazardous
substances, the disposal of removed material, or the
taking of such other actions as may be necessary to
prevent, minimize, or mitigate damages to the public
health or welfare or to the environment, which may
otherwise result from a release or threat of release.
42 U.S.C. § 9601(23).
Page 12 of 67
1 with the hazardous materials on the property, provided that
2 those actions are consistent with the National Contingency
3 Plan — the federal government’s roadmap for responding to
4 the release of hazardous substances. Id. § 9607(a)(4). The
5 language “any other person” includes a PRP that voluntarily
6 cleans the site. See United States v. Atl. Research Corp.,
7 551 U.S. 128, 135-36 (2007). Section 113(f)(1) provides
8 PRPs who have been sued under § 107 a right of contribution
9 from other PRPs, including the plaintiff. Id. at 139.
10 Section 113(f)(3)(B) also provides a right of contribution
11 to PRPs that have settled their CERCLA liability with a
12 state or the United States through either an administrative
13 or judicially approved settlement. 42 U.S.C. §
14 9613(f)(3)(B). In allocating the response costs among the
15 parties, the statute instructs the court to use “such
16 equitable factors as the court determines are appropriate.”
“Remedial action[s]” mean:
[T]hose actions consistent with permanent remedy taken
instead of or in addition to removal actions in the
event of a release or threatened release of a hazardous
substance into the environment, to prevent or minimize
the release of hazardous substances so that they do not
migrate to cause substantial danger to present or
future public health or welfare or the environment.
42 U.S.C. § 9601(24).
Page 13 of 67
1 Id. § 9613(f)(1).
2 Section 107 allows for complete cost recovery under a
3 joint and several liability scheme; one PRP can potentially
4 be accountable for the entire amount expended to remove or
5 remediate hazardous materials. 8 See Schaefer v. Town of
6 Victor, 457 F.3d 188, 195 (2d Cir. 2006). When CERCLA was
7 first enacted, this was the only remedy available. Courts
8 struggled with whether PRPs (themselves liable for some of
9 the cleanup) could invoke § 107 for contribution from other
10 PRPs for their proportionate share of the costs as opposed
11 to full cost recovery. See Key Tronic Corp. v. United
12 States, 511 U.S. 809, 816 (1994). In the absence of express
13 language, some courts filled in the obvious gap and
14 recognized a common law right to contribution between PRPs.
15 Id. Congress finally provided the express language
16 necessary to authorize a contribution right under CERCLA
8
A number of courts, including ours, have noted that
while § 107(a) permits recovery of all remedial costs, it
does not preclude a defendant PRPs from asserting
counterclaims (or cross-claims) for contribution under §
113(f)(1), effectively converting the § 107(a) action into
an apportionment of liability among jointly and severally
liable parties. See Consol. Edison Co. of N.Y. v. UGI
Util., Inc., 423 F.3d 90, 100 n.9 (2d Cir. 2005); see also
Atl. Research, 551 U.S. at 140.
Page 14 of 67
1 with the Superfund Amendments and Reauthorization Act of
2 1986, adding § 113 to the statutory scheme. Pub. L. No. 99-
3 499, 100 Stat. 1613, 1647-48.
4 Supreme Court jurisprudence exploring the nature of the
5 relationship between these statutory provisions developed
6 simultaneously with the district court’s decisions in the
7 case before us. After the district court’s first decision,
8 the Court issued the first of two opinions attempting to
9 clarify the interaction between §§ 107 and 113. First, in
10 2004, the Court determined that a private party who had not
11 been sued under § 106 or § 107(a) could not assert a claim
12 for contribution under § 113(f)(1) from other PRPs. Cooper
13 Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 160-61
14 (2004). Looking to the text of § 113(f)(1), the Court
15 concluded that contribution was only available “during or
16 following” an action under § 106 or § 107. Id. at 165-66.
17 The plaintiff had remediated the hazardous material
18 voluntarily, without the judicial spur of § 106 or § 107,
19 and thus was not eligible to sue other PRPs for
20 contribution. Id. at 168. Because the parties had not
21 briefed the issue, the Court expressly refused to decide
22 whether the plaintiff could have sued under § 107. Id. at
Page 15 of 67
1 169-70.
2 After Cooper Industries, we remanded Niagara I back to
3 the district court for reconsideration in light of that
4 decision. Niagara Mohawk Power Corp. v. Consol. Rail Corp.
5 (“Niagara II”), 436 F. Supp. 2d 398, 399-400 (N.D.N.Y.
6 2006). In Niagara II, NiMo correctly conceded that it could
7 not proceed with a contribution claim under § 113(f)(1) — it
8 had not been sued under § 106 or § 107(a). Id. at 400-01.
9 NiMo argued, however, that it could seek contribution under
10 § 113(f)(3)(B) because it had resolved its CERCLA liability
11 in the 2003 Consent Order. Id. at 401. The district court
12 disagreed. It concluded that because the DEC had not been
13 granted authority to settle CERCLA claims by the EPA, the
14 settlement did not qualify under § 113. Id. at 402. The
15 district court viewed the consent orders as reaching only
16 state law-based liability. 9
9
The district court also ruled that NiMo could not
invoke § 107(a) as a basis for its claims. Niagara II, 436
F. Supp. 2d at 403. The court relied on pre-Cooper
Industries Circuit precedent, Bedford Affiliates v. Sills,
156 F.3d 416 (2d Cir. 1998), that had required settling PRPs
to employ § 113(f). Id. That holding was abandoned — at
least as to the inability of a settling PRP to use § 107(a)
— by our decision in W.R. Grace & Co. — Conn. v. Zotos
Int’l, Inc., 559 F.3d 85, 90 (2d Cir. 2009). W.R. Grace was
decided after the district court’s decision in Niagara II.
Page 16 of 67
1 After Niagara II, in 2007, the Supreme Court addressed
2 the unanswered question from Cooper Industries. See Atl.
3 Research, 551 U.S. at 131 (2007). The Court read “any other
4 necessary costs of response incurred by any other person” in
5 § 107(a)(4)(B) as authorizing claims against other PRPs by
6 private parties that incurred response costs. Id. at 135-
7 37. The Court differentiated joint and several liability
8 claims under § 107 from contribution claims under § 113,
9 identifying each as distinct “causes of action [available]
10 to persons in different procedural circumstances.” Id. at
11 139 (internal quotation marks omitted). Section 107, the
12 Court explained, is available for parties that have incurred
13 actual response costs, while § 113(f) is available for
14 parties that have reimbursed those response costs to
15 others. 10 Id.
See Niagara II, 436 F. Supp. 2d at 398. As a result of the
district court’s two rulings, NiMo was left with no federal
right of contribution at all.
10
The Court looked to the common law understanding of
contribution in defining that term as used in § 113(f): “the
tortfeasor’s right to collect from others responsible for
the same tort after the tortfeasor has paid more than his or
her proportionate share, the shares being determined as a
percentage of fault.” Atl. Research, 551 U.S. at 138(quoting Black’s Law Dictionary 353 (8th ed. 2004))
(internal quotation marks omitted).
Page 17 of 67
1 We remanded Niagara II in light of Atlantic Research.
2 Niagara Mohawk Power Corp. v. Consol. Rail Corp. (“Niagara
3 III”), 565 F. Supp. 2d 399, 400 (N.D.N.Y. 2008). The
4 district court in Niagara III concluded that Atlantic
5 Research necessitated no change in the court’s previous
6 determinations and reaffirmed its prior rulings. Id. at
7 403. Once again the case is before us.
8 A. Niagara’s Recovery Costs
9 Pursuant to its agreement with the DEC, NiMo incurred
10 costs to investigate and remediate the Water Street Site.
11 NiMo sought repayment of those costs from the defendants
12 under a theory that the defendants were PRPs as a result of
13 their status as owners of portions of the site and also as a
14 result of certain actions each took on their respective
15 properties — storing leaking drums, demolition of industrial
16 facilities, disposal of hazardous substances on site — all
17 of which allegedly resulted in the presence of hazardous
18 substances on the Water Street property.
19 1. 2003 Consent Order
20 Before the district court, NiMo sought to recover the
21 costs of its remediation efforts under § 107 or,
22 alternatively, under § 113(f)(1). Following the first
Page 18 of 67
1 remand, NiMo conceded that it was not entitled to seek
2 contribution under § 113(f)(1) because it had not been
3 subject to a civil action under § 106 or § 107. Niagara II,
4 436 F. Supp. 2d at 401. However, NiMo argued it was
5 entitled to contribution under § 113(f)(3)(B) because the
6 2003 Consent Order qualified as an administrative
7 settlement. Id. The court refused to consider the 2003
8 Consent Order. 11 Id.
9 The parties argue quite vigorously over whether the
10 2003 Consent Order is before us. Chevron and Portec stress
11 that the district court’s decision to not consider the 2003
12 Consent Order was not an abuse of discretion and that our
13 earlier refusal to add the Order to the record on appeal of
14 Niagara I supports that view.
15 Chevron and Portec are right about the standard of
16 review, but wrong about the result. We review a district
17 court’s decision whether to reopen the record to admit new
18 evidence for abuse of discretion. Matthew Bender & Co. v.
19 W. Pub. Co., 158 F.3d 674, 679 (2d Cir. 1998). A district
11
Having dismissed NiMo’s federal claims, the district
court then declined to exercise supplemental jurisdiction
over NiMo’s unjust enrichment claims. Niagara II, 436 F.
Supp. 2d at 403.
Page 19 of 67
1 court has abused its discretion if its ruling is “based . .
2 . on an erroneous view of the law or on a clearly erroneous
3 assessment of the evidence, or [if the district court]
4 rendered a decision that cannot be located within the range
5 of permissible decisions.” In re Sims, 534 F.3d 117, 132
6 (2d Cir. 2008) (internal quotation marks and citations
7 omitted). In our view the district court abused its
8 discretion by failing to admit the 2003 Consent Order.
9 Upon our remand of Niagara I to the district court to
10 reconsider its decision in light of Cooper Industries, NiMo
11 attempted to admit the 2003 Consent Order by attaching the
12 Order to an attorney’s affidavit submitted to the district
13 court with NiMo’s brief on the effect of Cooper Industries
14 on the case. The district court rejected the 2003 Consent
15 Order as not part of the record and noted that no motion to
16 supplement the record had been made. Niagara II, 436 F.
17 Supp. 2d at 401. The district court added the following
18 comments in a footnote: “The Amended Consent Order is an
19 attachment to an attorney affidavit submitted in support of
20 Niagara Mohawk’s brief on remand, but was not included (or
21 for that matter mentioned) in any prior proceedings, which
22 have been ongoing since 1998. It is also noted that Niagara
Page 20 of 67
1 Mohawk sought permission in the Second Circuit to supplement
2 the record on appeal with the Amended Consent Order.
3 Permission was denied.” Id. at 401 n.3 (emphasis added).
4 Our initial denial of NiMo’s request to include the
5 2003 Consent Order in the record of the first appeal makes
6 sense to us; the Consent Order was not before the district
7 court in Niagara I. See Int’l Bus. Mach. Corp. v.
8 Edelstein, 526 F.2d 37, 44 (2d Cir. 1975) (“[A]bsent
9 extraordinary circumstances, federal appellate courts will
10 not consider rulings or evidence which are not part of the
11 trial record.”). That ruling was not premised on NiMo’s
12 mistake but on impossibility; the 2003 Consent Order could
13 not have been before the district court as it had not been
14 fully executed until after the district court’s first
15 decision. See Niagara I, 291 F. Supp. 2d at 105; see also
16 Niagara II, 436 F. Supp. 2d at 401. But, in these
17 circumstances, our conclusion with regard to what was before
18 our court should not have been dispositive or, frankly, even
19 considered by the district court when faced with the
20 decision to admit the document on remand. As soon as the
21 district court regained jurisdiction following the remand,
22 NiMo attempted to admit the document with its first
Page 21 of 67
1 submission. The district court’s notation that the Order
2 had not previously been included in the record is
3 technically correct but overlooks the obvious — it could not
4 have been a part of the record as it did not exist.
5 Moreover, the district court’s comment that the case had
6 been on-going since 1998 was of no moment; NiMo presented
7 the 2003 Consent Order at the first opportunity it had to do
8 so. And, although NiMo did not make a formal motion to
9 supplement the record, there is no evidence that any of the
10 defendants made a formal motion to strike the document or
11 even disputed its authenticity. 12 The district court
12 penalized only NiMo for a trivial procedural shortcoming;
13 this was error.
14 2. Section 113(f)(3)(B) Claims
15 In our view, only § 113(f)(3)(B) provides the proper
16 procedural mechanism for NiMo’s claims. Under §
17 113(f)(3)(B), a “person who has resolved its liability to
12
Even if the district court had not abused its
discretion in failing to admit the 2003 Consent Order, we
are empowered to take judicial notice of the 2003 Consent
Order, as it is a public record. See, e.g., Roth v.
Jennings, 489 F.3d 499, 509 (2d Cir. 2007). Thus, on
multiple grounds, we conclude that the 2003 Consent Order is
a part of the appellate record and may be considered in our
analysis.
Page 22 of 67
1 the United States or a state for some or all of a response
2 action or for some or all of the costs of such action in an
3 administrative or judicially approved settlement may seek
4 contribution from any person who is not party to a
5 settlement.” 42 U.S.C. § 113(f)(3)(B). As noted, the
6 district court determined that this provision did not apply
7 to NiMo because NiMo settled with the DEC, and the EPA had
8 not formally delegated power to settle CERCLA claims to the
9 DEC. Niagara II, 436 F. Supp. 2d at 402. In the district
10 court’s view, the settlement did not resolve NiMo’s
11 liability under CERCLA and thus, NiMo was not entitled to
12 contribution. Id. at 404.
13 Some of our earlier cases could be mistaken for
14 supporting the district court’s view. In Consolidated
15 Edison, we held that a utility (“ConEd”) that entered into a
16 “Voluntary Cleanup Agreement” with the DEC could not seek
17 contribution from another PRP under § 113(f)(3)(B) because
18 the Voluntary Cleanup Agreement by its terms only absolved
19 ConEd of state liability and did not reference CERCLA. 13
13
Under the Voluntary Cleanup Agreement, the DEC
“release[d], covenant[ed] not to sue, and . . . fore[went]
from bringing any action, proceeding, or suit pursuant to
the [New York] Environmental Conservation Law, the
Navigation Law or the State Finance Law, and from referring
Page 23 of 67
1 Consol. Edison Co. v. U.G.I. Util., Inc., 423 F.3d 90, 97
2 (2d Cir. 2005). The Voluntary Cleanup Agreement indicated
3 that DEC would “not take any enforcement action under . . .
4 CERCLA,” but DEC promised to refrain from doing so only “to
5 the extent that [the existing] contamination [at issue] is
6 being addressed under the Agreement.” Id. at 97. The state
7 agency also reserved the “right to take any investigatory or
8 remedial action deemed necessary as a result of a
9 significant threat resulting from the Existing Contamination
10 or to exercise summary abatement powers.” Id. at 96-97. We
11 held that the rights reserved by the DEC “[left] open the
12 possibility that the [DEC] might still seek to hold ConEd
13 liable under CERCLA” and therefore, because ConEd could
14 still be sued under CERCLA, it was not entitled to bring an
15 action under § 113(f)(3)(B). 14 Id. at 97.
to the Attorney General any claim for recovery of costs
incurred by the [DEC] . . . for the further investigation
and remediation of the Site, based upon the release or
threatened release of Covered Contamination.” Consol.
Edison, 423 F.3d at 96.
14
This Court noted but did not resolve the issue again
in Schaefer v. Town of Victor, 457 F.3d 188, 202 n.19 (2d
Cir. 2006) (“[W]e need not decide whether the . . . Consent
Judgment [at issue] constitutes a judicially approved
settlement . . . .”).
Page 24 of 67
1 In W.R. Grace & Co.– Conn. v. Zotos Int’l, Inc., we
2 held that a PRP could not bring an action for contribution
3 against another PRP under § 113(f)(3)(B) based on its
4 settlement with the DEC because the DEC settlement “ma[de]
5 no reference to CERCLA, [and] establishe[d] that the DEC
6 settled only its state law claims against [the PRP], leaving
7 open the possibility that the DEC or the EPA could, at some
8 future point, assert CERCLA or other claims.” 559 F.3d 85,
9 91 (2d Cir. 2009). Specifically, the consent order at issue
10 provided that, “[i]f the [DEC] acknowledges that the
11 implementation is complete . . . such acknowledgment shall
12 constitute a full and complete satisfaction and release of
13 each and every claim, demand, remedy or action whatsoever
14 against [the PRP], its officers and directors, which the
15 [DEC] has or may have as of the date of such acknowledgment
16 pursuant to Article 27, Title 13, of the [New York
17 Environmental Conservation Law] relative to or arising from
18 the disposal of hazardous or industrial waste at the Site.”
19 Id.20 In each case, the consent order at issue did not
21 purport to resolve CERCLA liability and hence, in the
22 panel’s view, did not qualify as an administrative
Page 25 of 67
1 settlement under § 113. But neither Consolidated Edison nor
2 W.R. Grace held that the DEC was without authority to settle
3 CERCLA claims nor did either case conclude that CERCLA
4 settlement authority required explicit authorization from
5 the EPA. See W.R. Grace, 559 F.3d at 90-91; Consol. Edison,
6 423 F.3d at 95-97. Moreover, unlike the consent agreements
7 in Consolidated Edison and W.R. Grace, the 2003 Consent
8 Order specifically released NiMo from CERCLA liability. The
9 2003 Consent Order released NiMo from liability under
10 “[f]ederal statutory . . . law involving or relating to
11 investigation or remedial activities relative to or arising
12 from the disposal of hazardous wastes or hazardous
13 substances . . . at the [Water Street Site]” and “resolved
14 [NiMo’s] liability to the State for purposes of contribution
15 protection provided by CERCLA Section 113(f)(2)[, 42 U.S.C.
16 § 9613(f)(2)].” Under the 2003 Consent Order, the remedial
17 activities performed by NiMo were consideration for “a
18 release and covenant not to sue . . . which [DEC] has or may
19 have pursuant to . . . State or Federal statutory or common
20 law involving or relating to investigative or remedial
21 activities relative to or arising from the disposal of
22 hazardous wastes or hazardous substances.” Once NiMo
Page 26 of 67
1 completed the Consent Order responsibilities, NiMo was
2 “deemed to have resolved its liability to the State for
3 purposes of contribution protection provided by CERCLA
4 Section 113(f)(2)” and thus was “entitled to seek
5 contribution.” The 2003 Consent Order qualifies as an
6 administrative settlement of liability for purposes of
7 CERCLA pursuant to the plain text of § 113(f)(3)(B).
8 Our interpretation of the Consent Order fits squarely
9 within the type of contribution claims contemplated by §
10 113. The provisions of the statute come into play once NiMo
11 resolved its liability to the “United States or a State.”
12 42 U.S.C. § 9613(f)(3)(B) (emphasis added). The statute
13 does not require that the United States acquiesce in the
14 administrative settlement — it does not read the “United
15 States and a State.” Nor does § 113(f)(3)(B) require that
16 there be a federal delegation of settlement authority to a
17 state — the statute does not say the “United States or a
18 State with the express authority of the United States.” But
19 the district court’s interpretation of the statute would
20 compel such a result. If Congress wanted to constrict the
21 authority of state environmental agencies in settling CERCLA
22 claims, it could have easily done so. Instead, Congress
Page 27 of 67
1 chose the disjunctive and established a dual track for the
2 resolution of CERCLA liability.
3 As the EPA’s amicus brief points out, “[b]ecause of the
4 number and variety of contaminated sites across the country,
5 states play a critical role in effectuating the purposes of
6 CERCLA.” 15 Brief for United States as Amicus Curiae
7 Supporting Appellant at 4, Niagara Mohawk v. Consol. Rail,
8 Nos. 08-3843-cv; 08-4007-cv (2d Cir. 2009) That role is
9 not only critical, it is autonomous. For instance, the EPA
15
The EPA brief understandably takes issue with our
holding in Consolidated Edison.
The United States was not a party to Consolidated
Edison and believes it was not correctly decided.
Section 113(f)(3)(B) applies where a PRP ‘has resolved
its liability to . . . a State for some or all of a
response action or for some or all of the costs of such
action.’ 42 U.S.C. § 9613(f)(3)(B). The settlement of
federal and state law claims other than those provided
by CERCLA fits within § 113(f)(3)(B) as long as the
settlement involves a cleanup activity that qualifies
as a ‘response action’ within the meaning of CERCLA §
101(25), 42 U.S.C. § 9601(25).
Brief for United States as Amicus Curiae Supporting
Appellant at 15, Niagara Mohawk v. Consol. Rail, Nos. 08-
3843-cv; 08-4007-cv (2d Cir. 2009) (emphasis added). While
there is a great deal of force to this argument given the
language of the statute, we need not resolve the
Consolidated Edison / W. R. Grace problem as the language of
the 2003 Order clearly encompasses CERCLA liability and our
cases have never precluded the state agency from resolving
CERCLA claims.
Page 28 of 67
1 must coordinate with an affected state before deciding on an
2 appropriate remedial action, and, under § 128, the EPA may
3 award a grant to a state that has a response program that
4 conforms to the requirements of CERCLA. 42 U.S.C. §§
5 9604(c), 9628(a). The EPA is expressly authorized to enter
6 into contracts or agreements with states to carry out CERCLA
7 response actions. 40 C.F.R. § 300.515(a)(1).
8 Under CERCLA, states have causes of action independent
9 from the federal government. For example, under § 107, a
10 PRP is liable for clean up costs “incurred by the United
11 States Government or a state.” 42 U.S.C. § 9607(a)(4)(A).
12 We have previously held that a state does not need the
13 approval of the United States before it can remediate
14 hazardous substances and sue PRPs under § 107. See N.Y. v.
15 Shore Realty Corp., 759 F.2d 1035, 1047-48 (2d Cir. 1985).
16 CERCLA views the states as independent entities that do not
17 require the EPA’s express authorization before they can act.
18 New York is empowered to settle a PRP’s CERCLA liability.
19 The 2003 Consent Order between NiMo and the DEC qualifies as
20 “an administrative or judicially approved settlement” under
21 § 113(f)(3)(B); NiMo is entitled to seek contribution under
22 CERCLA.
Page 29 of 67
1 3. Section 107(a) Claim
2 NiMo contends that it may also have a claim under §
3 107(a). 16 Section 107(a) claims are brought by federal or
4 state agencies that have incurred response costs or PRPs who
5 incur CERCLA clean up costs without judicial or
6 administrative intervention. 17 See Atl. Research, 551 U.S.
7 at 135. Section 113(f)(3)(B) claims seek proportionate
8 reimbursement from other PRPs of cleanup costs for a PRP
9 that has resolved its CERCLA liability for some or all of
10 the costs of a response action through a judicial or agency-
11 approved settlement. See 42 U.S.C. § 9613(f)(3)(B).
12 Clearly, the two sections have differing restrictions and
16
While we normally would not consider an alternative
basis for recovery once we have decided another section of a
statute provides one, this is far from a normal case. Given
the twists and turns the litigants and the law has
experienced over the past eleven years, we think it time to
address all of the parties’ arguments.
17
In Atlantic Research, the Supreme Court left open the
question of when an action for cost recovery under § 107(a)
may be available to a PRP that directly incurs clean up
costs under some judicial or administrative compulsion. See
Atl. Research, 551 U.S. at 139 n.6. We similarly do not
decide whether a § 107(a) action could be pursued by a PRP
that incurs clean up costs after engaging with the federal
or a state government, but is not released from any CERCLA
liability.
Page 30 of 67
1 different purposes. 18 Moreover, § 113(f) was enacted by
2 Congress as part of SARA to amend CERCLA for the purpose of
3 codifying the contribution remedy that most courts had
4 already read into the statute. It was designed to
5 “clarif[y] and confirm . . . the right of a person held
6 jointly and severally liable under CERCLA to seek
7 contribution from other potentially liable parties, when the
8 [PRP] believes that it has assumed a share of the cleanup or
9 cost that may be greater than its equitable share under the
10 circumstances.” H.R. Rep. No. 99-253(I), at 79 (1985).
11 NiMo’s claim fits squarely within the more specific
12 requirements of § 113(f)(3)(B). NiMo acknowledged
18
To the extent that NiMo seeks recovery of its actual
response costs and does not seek reimbursement from others
for response costs it disproportionately paid to a third
party, NiMo’s claims do not seem to fit the common law
definition of contribution that the Supreme Court employed
in defining the statutory term in Atl. Research. The Atl.
Research Court, however, recognized that there could be an
overlap of the concepts of cost recovery and contribution.
Atl. Research, 551 U.S. at 139 n.6. NiMo was partially
responsible for the contamination at the Water Street Site.
It avoided a state or federal cleanup of the Site and a
subsequent suit by New York or the United States under §
107(a) for reimbursement of those costs by entering into the
Consent Orders. NiMo in essence financed the cleanup.
While NiMo’s claims might fall within “the overlap”of the
concepts of cost recovery and contribution recognized by
Atl. Research, “concepts” do not alter the plain language of
the statute in play here. NiMo’s claims clearly meet the
more specific parameters of the terms of § 113(f)(3)(B).
Page 31 of 67
1 responsibility and paid for response costs under the
2 statute. NiMo settled its CERCLA liability with DEC by
3 agreeing to identify and to remediate some of the hazardous
4 substances present at the Water Street Site. NiMo presses a
5 claim for a sharing of those costs with other PRPs
6 consistent with § 113(f)(3)(B). The EPA in its amicus brief
7 strongly argues that § 113(f)(3)(B) is the proper vessel for
8 NiMo’s contribution claims in light of its more specific
9 requirements, the nature of NiMo’s claims, and the amendment
10 of the statute to provide the right of contribution. We
11 agree. Congress recognized the need to add a contribution
12 remedy for PRPs similarly situated to NiMo. To allow NiMo
13 to proceed under § 107(a) would in effect nullify the SARA
14 amendment and abrogate the requirements Congress placed on
15 contribution claims under § 113. 19 “When Congress acts to
16 amend a statute, [courts] presume it intends its amendment
17 to have real and substantial effect.” Stone v. INS, 514
18 U.S. 386, 397 (1995).
19 III. SUMMARY JUDGMENT
20 In Niagara I, the district court denied NiMo’s motion
19
Claims under § 107 do enjoy a six-year statute of
limitations while claims under § 113 have a three-year
statute of limitations. 42 U.S.C. § 9613(g).
Page 32 of 67
1 for summary judgment with respect to King Service and
2 granted summary judgment for U.S. Steel and Portec, and
3 partial summary judgment for Chevron. Niagara I, 291 F.
4 Supp. 2d at 140-41. The district court found that although
5 King was the current owner of Area 2 — and failed to provide
6 evidence that it engaged in the appropriate inquiry when it
7 purchased the property in 1968 to qualify for the innocent
8 owner defense under 42 U.S.C. § 9601(35)(B) — there was a
9 genuine issue of material fact as to whether response costs
10 incurred by NiMo were consistent with the National
11 Contingency Plan. Niagara I, 291 F. Supp. 2d at 128.
12 With respect to U.S. Steel, the district court found
13 that NiMo’s expert testimony that U.S. Steel had released
14 hazardous substances onto the Water Street Site during the
15 time U.S. Steel owned the property prior to 1922 was
16 speculative. Id. at 129. The district court concluded that
17 NiMo had failed to raise a genuine issue of material fact as
18 to whether hazardous substances were released when U.S.
19 Steel owned the property. Id. at 130.
20 With respect to Chevron, the district court first
21 determined that although the DEC had suspended its
22 investigation of Area 3, which Chevron currently owns,
Page 33 of 67
1 Chevron was a PRP because the entire Water Street Site,
2 including Area 4 that Chevron had also owned, remained at
3 issue in the case. Id. at 131. However, the district court
4 found that NiMo had not provided any evidence to support its
5 claim that Republic, Chevron’s tenant on Area 4 when Chevron
6 owned that portion of the property, had dispersed hazardous
7 materials. Id. at 134. Therefore, the district court held
8 Chevron was not liable for the cleanup of Area 4. Id. 20
9 The district court reserved decision for the damages phase
10 on the degree to which Chevron would be liable for response
11 costs. Id. at 133.
12 Portec never owned or occupied any part of the Water
13 Street Site, but was Area 2’s neighbor to the northeast.
14 NiMo pursued costs from Portec because NiMo believed Portec
15 deposited waste in the Wynantskill Creek that then traveled
16 into Area 2. The district court first held that NiMo was
17 required to show that it had, or would, incur cleanup costs
18 as a result of the hazardous substances found on Portec’s
19 property. Id. at 135. In other words, the district court
20 held that NiMo must prove a nexus between Portec’s release
20
The district court dismissed Chevron’s claims against
the Rensselaer defendants as moot. Niagara I, 291 F. Supp.
2d at 135.
Page 34 of 67
1 of hazardous substances and NiMo’s cleanup costs. Id. at
2 136. The district court found that NiMo had not provided
3 evidence of causation. Id. at 137.
4 The district court dismissed NiMo’s New York Navigation
5 Law claim because NiMo, as a petroleum discharger, could not
6 bring a claim under New York Navigation Law § 172(3). Id.
7 The district court also held that NiMo could not bring a
8 claim under New York Navigation Law § 176(8) because it had
9 remediated only manufactured gas hazardous wastes and not
10 petroleum. Id.
11 The district court ruled that NiMo’s state law
12 contribution and indemnification claims were preempted by
13 CERCLA as to King and Chevron, and dismissed those claims as
14 to the other defendants because the defendants were not
15 subject to liability for damages for the same injury to
16 property. Id. The district court then denied NiMo’s motion
17 for summary judgment on its unjust enrichment claim against
18 King and Chevron because NiMo failed to prove that there was
19 no genuine issue of material fact. Id. at 140. Finally,
20 the district court held that NiMo’s public nuisance claim
21 was time barred by a three-year statute of limitations and
22 that Oliver Chevrolet, Inc. v. Mobil Oil Corp., 249 A.D.2d
Page 35 of 67
1 793, 794-95 (3d Dep’t 1998), did not counsel extending it.
2 Niagara I, 291 F. Supp. 2d at 138.
3 NiMo, U.S. Steel, Portec, and the King defendants, 21
4 along with defendants not party to this appeal, moved under
5 Federal Rule of Civil Procedure 54(b) for entry of final
6 judgment. The district court granted summary judgment in
7 favor of Portec, U.S. Steel, and Chevron — only with respect
8 to Area 4 — on NiMo’s CERCLA claims, and dismissed NiMo’s
9 state law claims. NiMo appealed. As noted above, in the
10 ensuing years the case came to this Court on two occasions
11 and on each visit we remanded the matter to the district
12 court for reconsideration of an intervening ruling from the
13 Supreme Court that gave greater definition to the statutory
14 scheme for potentially responsible parties seeking recovery
15 of response costs from other PRPs.
16 Following the second remand, the district court decided
17 that NiMo’s cleanup costs with regard to Chevron were not
18 recoverable under CERCLA “because of the type of substances
19 involved (asphalt, kerosene, naphtha, and naphthalene).”
20 Niagara III, 565 F. Supp. 2d at 402. The district court
21
This includes King Service, Edwin King, Lawrence
King, and Slote.
Page 36 of 67
1 noted that pursuant to the 1992 and 2003 Consent Orders,
2 NiMo was “responsible for removal and remediation of
3 manufactured gas plant-related hazardous waste contamination
4 only, that is, hazardous contamination caused by [NiMo]
5 itself.” Id. at 402-03. Thus all of NiMo’s claims were
6 dismissed by the district court. Again NiMo appealed. 22
7 The standard is well known: summary judgment is
8 appropriate when there exists no dispute of material fact.
9 See, e.g., Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d
10 292, 300 (2d Cir. 2003). But the standard’s utility
11 functions only in the context of the statute that imposes or
12 absolves a litigant from liability. All of the parties
13 asked the district court to resolve the liability question
14 as a matter of law. NiMo lost for a number of reasons
15 expressed by the district court in its rulings that began in
16 November of 2003 and culminated with the second remand
17 decision now before us. We have already concluded that the
18 district court erred in its conclusion that NiMo could not
19 employ § 113(f)(3)(B), but that is not the end of the
20 liability calculation.
22
We review the district court’s summary judgment
conclusions de novo. See Commander Oil Corp. v. Barlo
Equip. Corp., 215 F.3d 321, 326 (2d Cir. 2000).
Page 37 of 67
1 CERCLA is a remedial statute; it reaches as far back
2 into the past as necessary to identify both the hazardous
3 wastes present at a site and those responsible for them
4 under the statute. The logic is straightforward and simple
5 — Congress wanted owners and polluters to identify and clean
6 up all the hazardous waste they discover. To further this
7 goal, Congress made past and present owners, and others,
8 liable for the hazardous materials they contributed.
9 Recognizing, however, the practical difficulties of this
10 statutory scheme, Congress also empowered the court through
11 § 113 to use “such equitable factors as the court determines
12 are appropriate” to reach a just result. 42 U.S.C. §
13 9613(f)(1) (emphasis added).
14 Congress 23 noted examples of the factors that it thought
15 courts should consider in apportioning costs:
23
CERCLA was hastily enacted and was a combination of
three other toxic waste and oil spill cleanup bills that had
not passed. Frank P. Grad, A Legislative History of the
Comprehensive Environmental Response, Compensation and
Liability (“Superfund”) Act of 1980, 9 Colum. J. Envtl. L.
1, 1-2 (1982). CERCLA in its final form has scant
legislative history. Id. at 1. Those interested in
reviewing the history of CERCLA, then, often look to the
history of the three other bills that informed the final
product. Id. at 2; see also Committee on Environment and
Public Works, A Legislative History of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (Superfund) at V-VII (1983).
Page 38 of 67
1 (1) The ability of the party to demonstrate that his
2 contribution to the release can be distinguished; (2)
3 The amount of hazardous substance involved. Of course,
4 a small quantity of highly toxic material, or above
5 which releases or makes more dangerous another
6 hazardous substance, would be a significant factor; (3)
7 The degree of toxicity of the hazardous substance
8 involved; (4) The degree of involvement of the person
9 in the manufacture, treatment, transport, or disposal
10 of the hazardous substance; and (5) The degree of
11 cooperation between the person and the Federal, State,
12 or local government in preventing harm to public health
13 or the environment from occurring from a release. This
14 includes efforts to mitigate damage after a release
15 occurs.
16
17 S. Rep. No. 96-848, at 345-46 (1980).
18 While these factors may seem relevant to a liability
19 determination, CERCLA purposefully lowered the liability bar
20 required to be a PRP. As we have observed previously:
21 The plain meaning of th[e statutory] language dictates
22 that [a party seeking costs] need only prove: [ ] there
23 was a release or threatened release, which [ ] caused
24 incurrence of response costs, and [ ] that the
25 defendant generated hazardous waste at the cleanup
26 site. What is not required is that the government [or
27 another authorized party] show that a specific
28 defendant’s waste caused incurrence of cleanup costs.
29
30 United States v. Alcan Aluminum Corp., 990 F.2d 711, 721 (2d
31 Cir. 1993) (emphasis in original).
32 This relaxed liability standard is appropriate when
33 viewed in the context of the language of CERCLA. The
34 statute focuses on two important goals: remediation of sites
35 that present a clear and present danger to the health and
Page 39 of 67
1 well-being of the communities in which they are located and
2 identification of the source, or sources, of hazardous
3 materials at sites that may have experienced commercial
4 activity long ago (the record in this case alone dates back
5 to the 1800s). Both goals suggest that caution is
6 appropriate when evaluating a motion for summary judgment to
7 dismiss a claim against a PRP in a CERCLA case. As we have
8 noted, “Congress faced the unenviable choice of enacting a
9 legislative scheme that would be somewhat unfair to
10 generators of hazardous substances or one that would
11 unfairly burden the taxpaying public . . . . [W]e think
12 Congress imposed responsibility on generators of hazardous
13 substances advisedly.” Alcan Aluminum, 990 F.2d at 716-17.
14 Each hazardous waste site is unique in its combination
15 of commercial activities, substances present, and history.
16 In situations like the present case, the type of evidence,
17 be it direct or circumstantial, and its quality, is to some
18 degree impeded by the passage of time and the lack of
19 business records reflecting the day-to-day operations of the
20 industries then present at the Water Street Site. The
21 available evidence of who did what at the relevant site is
22 often dependent on inference. When determining CERCLA
Page 40 of 67
1 liability, “there is nothing objectionable in basing
2 findings solely on circumstantial evidence, especially where
3 the passage of time has made direct evidence difficult or
4 impossible to obtain.” Franklin County Convention
5 Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d
6 534, 547 (6th Cir. 2001).
7 In practice, courts generally bifurcate a CERCLA
8 proceeding, determining liability in Phase I, and then
9 apportioning recovery in Phase II. During Phase I, courts
10 have engaged in a very limited liability inquiry. See Alcan
11 Aluminum, 990 F.2d at 720. We have previously commented on
12 the “breadth” of CERCLA, and have held even a minimal amount
13 of hazardous waste brings a party under the purview of the
14 statute as a PRP. Id. The traditional tort concept of
15 causation plays little or no role in the liability scheme.
16 A party seeking to establish liability under CERCLA need not
17 even show a specific PRP’s waste caused cleanup costs. Id.18 at 721. The First Circuit defines liability similarly: “To
19 satisfy the causal element, it is usually enough to show
20 that a defendant was a responsible party within the meaning
21 of 9607(a); that cleanup efforts were undertaken because of
22 the presence of one or more hazardous substances identified
Page 41 of 67
1 in CERCLA; and that reasonable costs were expended during
2 the operation.” Acushnet Co. v. Mohasco Corp., 191 F.3d 69,
3 77 (1st Cir. 1999). The Ninth Circuit quite dramatically
4 agrees, labeling CERCLA as a statute that allows “broad
5 discretion” to impose liability on “anyone who disposes of
6 just about anything.” A&W Smelter & Refiners, Inc. v.
7 Clinton, 146 F.3d 1107, 1110 (9th Cir. 1998).
8 It is in Phase II, when damages are apportioned, that
9 the relative strength of the evidence of liability becomes a
10 relevant factor. See, e.g., PMC, Inc. v. Sherwin-Williams
11 Co., 151 F.3d 610, 616 (7th Cir. 1998) (Posner, J.) (a PRP’s
12 “spills may have been too inconsequential to affect the cost
13 of cleaning up significantly, and in that event a zero
14 allocation . . . would be appropriate”). In pushing such
15 concerns to Phase II, we admit, as we have in the past,
16 that, in the context of CERCLA, “causation is being brought
17 back into the case — through the backdoor, after being
18 denied entry at the frontdoor — at the apportionment stage.”
19 Alcan Aluminum, 990 F.2d at 722. District courts are
20 authorized to use their broad discretion under CERCLA to
21 employ the equitable factors, including consideration of the
22 quality of the evidence that lead to liability. See
Page 42 of 67
1 Goodrich Corp. v. Town of Middlebury, 311 F.3d 154, 170 (2d
2 Cir. 2002).
3 At the summary judgment stage, then, the analysis of a
4 “genuine dispute of material fact” in the context of a § 113
5 claim under CERCLA might seem limited and constrained. The
6 party seeking contribution must, of course, establish that
7 the defendants qualify as PRPs under the statute and must
8 demonstrate that it is probable that the defendants
9 discharged hazardous material. But the party seeking
10 contribution need not establish the precise amount of
11 hazardous material discharged or prove with certainty that a
12 PRP defendant discharged the hazardous material to get their
13 CERCLA claims past the summary judgment stage. By
14 referencing “equitable factors,” the statute requires
15 district courts to consider the practical difficulties in
16 these cases. Summary judgment is only proper when a
17 defendant establishes it is not liable at all under CERCLA —
18 namely, it is not a PRP under the statute, there is no
19 plausible evidence that it discharged hazardous materials,
20 or it is eligible for one of the three affirmative defenses
21 available under § 107. See 42 U.S.C. § 9607(b).
22 Defenses of minimal involvement or limited proof of
Page 43 of 67
1 responsibility do have a role in the CERCLA scheme; they
2 come in to play during the damages phase when the court is
3 charged with equitably apportioning the costs of the cleanup
4 among the PRPs. That a party seeking contribution can only
5 demonstrate a minimal amount of hazardous discharge from a
6 particular PRP, or that the exact origin proportions are
7 unknown, are the types of equitable factors a court should
8 consider in the apportionment process.
9 Congress sought to further incentivize PRPs to pay for
10 their role in the creation of a hazardous waste site
11 regardless of when they polluted. See Toxic Substances
12 Control Act Amendments: Hearings Before the Subcommittee on
13 Consumer Protection and Finance of the Committee on
14 Interstate and Foreign Commerce, 95th Cong. 356 (1978). To
15 that end, parties seeking contribution — by definition PRPs
16 who have already been charged with liability and resolved
17 their exposure or PRPs confronted with reimbursement claims
18 in a § 107(a) action — must be granted sufficient
19 opportunity to pursue other PRPs and have the costs of
20 cleanup borne equitably with others liable under the
21 statute.
22 This summary judgment standard is in keeping with our
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1 previous directive to liberally construe CERCLA in order to
2 accomplish the congressional objectives. W.R. Grace, 559
3 F.3d at 89. See generally Blake A. Watson, Liberal
4 Construction of CERCLA Under the Remedial Purpose Canon:
5 Have the Lower Courts Taken a Good Thing Too Far?, 20 Harv.
6 Envtl. L. Rev. 199 (1996), reprinted in Sutherland Statutes
7 and Statutory Construction § 65A:13 (Norman J. Singer & J.D.
8 Shambie Singer, eds., 2009).
9 A. Chevron
10 In 1955, Chevron purchased Areas 3 and 4 of the Water
11 Street Site from the Republic Steel Company, and leased an
12 easement over Area 2 for above-ground pipelines originating
13 from Area 3. Chevron used Area 3 for an asphalt terminal
14 from approximately 1953 to 1998. Chevron is the current
15 owner of Area 3 and the easement; it sold Area 4 to
16 Rensselaer County in 1974. During the time when Chevron
17 owned Area 4, Chevron leased the land back to Republic
18 Steel.
19 Chevron argues that NiMo is only obligated to cleanup
20 waste from manufactured gas production and, since Chevron
21 was not in the business of manufacturing gas, Chevron cannot
22 be liable for any of NiMo’s costs. Chevron is correct that,
Page 45 of 67
1 under the Consent Order, NiMo was responsible for
2 remediating the waste specifically related to manufactured
3 gas. But NiMo first had to investigate the site to identify
4 all hazardous waste present. Investigation costs are
5 recoverable as response costs under CERCLA. See 42 U.S.C. §
6 9601(23). Thus, even if a PRP disposed of hazardous waste
7 that was not related to manufactured gas, NiMo may pursue
8 contribution for the PRP’s share of the investigation costs.
9 The District Court originally held, in Niagara I, that
10 “the CERCLA facility at issue here is the MGP facility,” and
11 that Chevron, as “a current owner of a portion of the former
12 MGP facility . . . [was] a ‘covered person’ liable for
13 response costs.” Niagara I, 291 F. Supp. 2d at 131. We
14 have no problem with that holding. But even if one treated
15 the various areas as severable parts, we would reach the
16 same conclusion.
17 For the easement over Area 2 and the entirety of Area
18 3, Chevron qualifies as a PRP under the statute because
19 Chevron is “the owner or operator” of Area 3 and the
20 easement over Area 2. 42 U.S.C. § 9607(a)(1). With regard
21 to the easement over Area 2, there is evidence that
22 hazardous substances may have leaked from Chevron’s pipes
Page 46 of 67
1 and may have been released when Chevron moved asphalt and
2 other substances from barges onto its dock and through the
3 pipes. Chevron does not deny the evidence that there were
4 spills at the dock and pipe leaks in the soil, but argues
5 that its asphalt and petroleum products are not hazardous
6 substances under CERCLA, and thus Chevron cannot be held
7 liable for their discharge. Chevron is correct that
8 petroleum products are expressly excluded from the
9 definition of hazardous substances. 42 U.S.C. § 9601(14).
10 But though asphalt is not a hazardous material per se, NiMo
11 introduced evidence that this asphalt facility produced or
12 used hazardous materials that may have been released with
13 the asphalt. In response, Chevron produced evidence that
14 the waste products from manufactured gas contain “different
15 and greater amounts” of hazardous materials than asphalt.
16 Whether the amount of hazardous materials deposited is
17 minimal is an equitable consideration the court may note
18 during the apportionment of costs. The evidence presented
19 is sufficient to present a genuine issue of material fact to
20 defeat Chevron’s motion for summary judgment.
21 As for Area 3, there was evidence that, in the early
22 1980s one of Chevron’s railroad hoses ruptured and
Page 47 of 67
1 discharged coal tar product into the ground. In 1987,
2 Chevron discovered a pinhole leak of coal tar from a tank on
3 its property. Chevron claims these are “microscopic
4 incidents” and that it is entitled to summary judgment.
5 Regardless of the characterization of these spills, NiMo has
6 taken no remedial action and incurred no cost to investigate
7 or cleanup Area 3. In fact, NiMo reported to the DEC that
8 its preliminary research found no hazardous substances at
9 Area 3 and that no further investigation was necessary. It
10 would seem that in order for NiMo to recover costs, NiMo
11 must prove first that it incurred them. See United States
12 v. Alcan Aluminum Corp., 315 F.3d 179, 184 (2d Cir. 2003).
13 The district court correctly concluded that, at this stage
14 of the cleanup process, NiMo cannot maintain a contribution
15 claim against Chevron for Area 3.
16 Area 4 is more complicated. While Chevron owned Area
17 4, it leased the property to Republic Steel. Though Chevron
18 argues otherwise, Chevron may be liable as a PRP if Republic
19 Steel disposed of any hazardous substances at the Site
20 because Chevron owned the facility. 42 U.S.C. § 9607(a)(2).
Page 48 of 67
1 In 1960, after animals 24 and people got stuck in the open
2 tar pits and one pit caught fire, Republic Steel attempted
3 to remediate the pits on Area 4 by covering them with
4 “earthen material.” Relative to the standards at the time,
5 capping the tar pits was supposedly a state-of-the-art
6 technique. NiMo, however, presented evidence that capping
7 could spread contamination by creating pressure that forced
8 the hazardous materials to surface at the sides of the site
9 and mix with surface water.
10 Under CERCLA, “disposal” means “the discharge, deposit,
11 injection, dumping, spilling, leaking, or placing of any . .
12 . hazardous waste.” 42 U.S.C. § 6903(3). NiMo argues that,
13 by placing the caps, Republic Steel caused the tar from the
14 pits to leak out into the surrounding area. NiMo claims
15 leaking qualifies as disposal, and thus Chevron is liable
16 because it owned Area 4 at the time of disposal of a
17 hazardous substance. We agree. NiMo presented sufficient
18 evidence to create a genuine issue of material fact as to
19 whether the placement of the caps played a role in
24
There is particularly evocative testimony in the
record about “the cow incident,” when Chevron employees
heard “something[] down south of the property bellowing” and
discovered a cow “in the tar pit and she was almost up to
the belly . . . all feet in.”
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1 redistributing the hazardous materials at Area 4.
2 In addition, the DEC noted that some of the hazardous
3 materials found at Area 4 did not originate from NiMo’s
4 activity. This raises a question of fact as to whether
5 Chevron or Republic Steel contributed other deposits, in
6 addition to causing the leak in the pits.
7 B. Portec
8 Portec has never owned any of the land at the Water
9 Street Site. However, between 1968 and 1997, Portec owned
10 land to the northeast of Area 2, and used the land to house
11 a rail-splitting plant that Portec operated from 1900 to
12 1989. During the time in question, the Wynantskill Creek
13 ran along the northern part of Portec’s property, crossed
14 Area 2, and emptied into the Hudson River.
15 From 1908 on, Portec was a member of the Wynantskill
16 Improvement Association. At various points, Portec also
17 served as the chair and, eventually, the sole member of the
18 Association. The Wynantskill Improvement Association was a
19 nonprofit organization designed to improve the Wynantskill
20 Creek for milling purposes through a variety of methods,
21 including regulating the flow of the water, connecting lakes
22 and ponds to the Creek, and constructing dams. Portec is
Page 50 of 67
1 the sole remaining member of the Association, and
2 consequently, may hold title to a portion of the Wynantskill
3 Creek.
4 NiMo argues that Portec is liable as a PRP because its
5 membership in the Association renders Portec responsible for
6 the activities of the Association as a whole. To NiMo, the
7 Association’s control of the Wynantskill Creek makes it
8 liable for waste in the Creek. NiMo alternatively claims
9 that Portec is liable for contribution because it permitted
10 the disposal of hazardous materials on its property, those
11 hazardous materials entered the Wynantskill Creek and,
12 eventually, they contaminated Area 2. Portec counters that
13 it is not liable under CERCLA because it never owned or
14 operated any of the property at the Water Street Site, and
15 that there is no legal basis for assigning CERCLA liability
16 based on membership in a non-profit corporation. We need
17 not reach the thorny issue of whether membership in such an
18 association could result in CERCLA liability because we find
19 that Portec is liable under a much simpler theory.
20 Under § 107(a)(2), a PRP may be liable under CERCLA if
21 it “at the time of disposal of any hazardous substance . . .
22 operated any facility at which such hazardous substances
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1 were disposed of.” 42 U.S.C. § 9607(a)(2). The definition
2 of operator is very broad in the CERCLA context. See United
3 States v. Bestfoods, 524 U.S. 51, 65-66 (1998). To be an
4 operator under the statute, a person “must manage, direct,
5 or conduct operations specifically related to pollution,
6 that is, operations having to do with the leakage or
7 disposal of hazardous waste.” Id. at 66-67. Under this
8 definition, Portec is a PRP under CERCLA because Portec
9 “conducted operations specifically related to pollution” at
10 the Wynantskill Creek. There is evidence that Portec’s
11 activities on its property resulted in hazardous waste
12 deposits. Spent solvents and quench oils 25 were not
13 properly removed from the plant. Underground pipes leaked
14 fuel oil. Neighboring properties suffered spills. Soil
15 sampling from the Portec property revealed a number of
16 hazardous substances in the ground. More importantly for
17 NiMo’s purposes, there is evidence that these hazardous
18 deposits made their way into the Wynantskill Creek and into
19 the Hudson River. Portec used the Wynantskill Creek to
20 discharge waste from its plant. Surface and ground water
21 traveled across Portec’s property into the Creek. The
25
Quench oil is oil used to cool heat-treated metal.
Page 52 of 67
1 Creek, in turn, passed through Area 2 on its way to the
2 Hudson.
3 During its travels across Area 2, the water in the
4 Creek appears to have left behind hazardous materials.
5 These hazardous materials, according to one of NiMo’s
6 experts, originated at the Portec Plant. In the planned
7 remediation of Area 2, NiMo may have to cleanup this waste,
8 along with the waste that NiMo itself deposited there.
9 Thus, Portec operated a facility where hazardous waste was
10 deposited and NiMo may have to clean that waste as part of
11 its remediation plan for Area 2. This meets the necessary
12 statutory elements to attach liability to Portec. Because
13 Portec qualifies as a PRP under CERCLA, and because there is
14 evidence in the record that Portec may have deposited
15 hazardous materials that settled in Area 2, the district
16 court erred in its grant of summary judgment to Portec.
17 C. King
18 In 1957, King Service, Inc. leased Area 2 from the
19 then-owner and began operating a petroleum distribution
20 facility. In a series of transactions between 1968 and
21 1973, King purchased Area 2, save a bit of land where the
22 Wynantskill Creek enters the Hudson River. King is the
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1 current owner of Area 2.
2 NiMo presented undisputed evidence that there are
3 hazardous wastes located on Area 2. King, as the current
4 owner of the contaminated property, is indisputably liable
5 as a PRP. See 42 U.S.C. § 9607(a)(1). The district court
6 concluded the same, but ultimately dismissed the complaint
7 as to King because the court incorrectly determined that
8 NiMo did not qualify for contribution under § 113(f)(B)(3).
9 The grant of summary judgment to King was improper.
10 D. U.S. Steel
11 U.S. Steel, or its predecessors, owned the Water Street
12 Site from 1902 to 1922. U.S. Steel operated iron and steel
13 manufacturing facilities at Areas 1 and 2. From 1907 to
14 1922, U.S. Steel dismantled structures and equipment at an
15 idle steel plant on Area 1. U.S. Steel also demolished the
16 old Bessemer Steel Works that had been in use since the late
17 1860s to convert iron to steel on Area 2. The demolition
18 generated materials that U.S. Steel dumped, along with
19 byproducts from its own iron and steel manufacturing, at a
20 landfill it owned and operated at Area 4. As a result of
21 U.S. Steel’s dumping at Area 4, this area allegedly grew in
22 acreage. NiMo seeks contribution from U.S. Steel as the
Page 54 of 67
1 owner or operator of property who disposed of hazardous
2 waste on its property, and as an arranger. 42 U.S.C. §
3 9607(a)(2)-(3). 26 NiMo contends that U.S. Steel deposited
4 hazardous waste from its demolition and industrial
5 activities. U.S. Steel contends that NiMo’s allegations are
6 based on speculation and are without evidentiary basis.
7 CERCLA liability may be inferred from the totality of
8 the circumstances as opposed to direct evidence. Tosco
9 Corp. v. Koch Indus., Inc., 216 F.3d 886, 892 (10th Cir.
10 2000). Because the relevant time period was from 1902 until
11 1922, both NiMo and U.S. Steel were forced to rely primarily
12 on circumstantial evidence resulting in a battle of experts.
13 NiMo’s experts concluded that U.S. Steel’s activities
14 resulted in the deposit of hazardous materials while U.S.
15 Steel’s experts concluded that its activities did not. The
16 battle bespeaks of a dispute of material fact for purposes
17 of CERCLA liability.
26
Under CERCLA, “arranger” is shorthand for “any person
who by contract, agreement, or otherwise arranged for
disposal or treatment, or arranged with a transporter for
transport for disposal or treatment, of hazardous substances
owned or possessed by such person, by any other party or
entity, at any facility or incineration vessel owned or
operated by another party or entity and containing such
hazardous substances.” 42 U.S.C. § 9607(a)(3).
Page 55 of 67
1 U.S. Steel was an owner of the property in question;
2 there is evidence in the form of expert testimony, albeit
3 disputed, that U.S. Steel caused hazardous deposits on the
4 property. CERCLA does not require a smoking gun. The
5 credibility of the experts, the type of evidence presented,
6 the amount of hazardous waste involved, and the degree of
7 U.S. Steel’s involvement in the identified hazardous
8 deposits are all relevant as equitable factors for the
9 district court to use in apportioning response costs. At
10 this stage, however, NiMo’s claims against U.S. Steel
11 survive summary judgment; U.S. Steel qualifies as an owner
12 under § 107 and NiMo has presented evidence that hazardous
13 deposits may have been generated and deposited at the site
14 on U.S. Steel’s watch.
15 E. National Contingency Plan
16 The district court determined that there was a genuine
17 issue of material fact as to whether NiMo’s cleanup efforts
18 were consistent with the National Contingency Plan. We have
19 never squarely addressed whether compliance with a state
20 consent decree is sufficient to prove adherence to the
21 National Contingency Plan.
22 Under § 107, a PRP is liable for cleanup costs
Page 56 of 67
1 consistent with the national contingency plan. 42 U.S.C. §
2 9607(a)(4)(A)-(B). The National Contingency Plan is
3 essentially the federal government’s toxic waste playbook,
4 detailing the steps the government must take to identify,
5 evaluate, and respond to hazardous substances in the
6 environment. See 40 C.F.R. part 300; see also Travis
7 Wagner, The Complete Guide to the Hazardous Waste
8 Regulations: RCRA, TSCA, HMTA, EPCRA, and Superfund, 3d,
9 326-27 (1999). Adherence to the plan is the gatekeeper to
10 seeking reimbursement of response costs. Ultimately, the
11 goal is “consistency and cohesiveness to response planning
12 and actions.” H. Rep. 96-1016, at 30 (1980).
13 Courts presume that actions undertaken by the federal,
14 or a state, government are consistent with the National
15 Contingency Plan. See, e.g., City of Bangor v. Citizens
16 Commc’ns Co., 532 F.3d 70, 91 (1st Cir. 2008). However,
17 private parties that have responded to hazardous substances
18 must establish compliance. Id. One way of establishing
19 compliance with the national plan is to conduct a response
20 under the monitoring, and with the ultimate approval, of the
21 state’s environmental agency. Id.; see also NutraSweet Co.
22 v. X-L Eng’g Co., 227 F.3d 776, 791 (7th Cir. 2000). This
Page 57 of 67
1 is consistent with the state’s power to settle CERCLA
2 liability without the express approval of the EPA. It would
3 be bizarre indeed if a PRP’s settlement with a state
4 entitled it to seek contribution under § 113(f)(B)(3), but
5 its actions taken in executing that settlement disqualified
6 the settlor from employing the statute to recoup a portion
7 of its expenses.
8 NiMo’s adherence to the DEC Consent Decree established
9 its compliance with the National Contingency Plan. The
10 district court’s conclusion in this regard was error.
11 VI. STATE LAW CLAIMS
12 A. New York Navigation Law Claims
13 Under New York Navigation Law, anyone who has
14 “discharged petroleum shall be strictly liable, without
15 regard to fault, for all cleanup and removal costs and all
16 direct and indirect damages.” N.Y. Nav. L. § 181(1). This
17 includes costs incurred from investigation and remediation
18 of petroleum. See, e.g., New York v. LVF Realty Co., 59
19 A.D.3d 519, 521 (2d Dep’t 2009). A party who shoulders the
20 cleanup and removal costs and is not at fault for the
21 petroleum discharge may pursue a claim against the actual
22 polluters. N.Y. Nav. L. §§ 172(3), 181(5). NiMo brought
Page 58 of 67
1 Navigation Law claims against the defendants for their
2 discharge of petroleum. However, NiMo had also discharged
3 petroleum at the Water Street Site. As the district court
4 correctly concluded, under the language of § 181, NiMo
5 cannot pursue claims against the defendants because NiMo is
6 at fault for at least some of the petroleum discharge at the
7 site.
8 However, there is an additional provision of New York
9 Navigation Law that affords NiMo a cause of action. Under §
10 176(8), “every person providing cleanup [or] removal of
11 discharge of petroleum . . . shall be entitled to
12 contribution from any other responsible party.” N.Y. Nav.
13 L. § 176(8). “Every person” is obviously inclusive and the
14 language “other responsible party” indicates that the
15 drafters were aware that “every person” could encompass a
16 responsible party. NiMo is entitled to seek contribution
17 for its response costs related to petroleum discharges.
18 We agree with the district court that NiMo did not
19 incur any cleanup costs with respect to Area 3, however,
20 NiMo — in complying with the Consent Order — incurred costs
21 to cleanup Areas 1, 2, and 4. NiMo cleaned up a variety of
22 materials, some of which contained petroleum and petroleum
Page 59 of 67
1 products. There is a genuine issue of material fact as to
2 the liability of the remaining defendants for contribution
3 with regard to costs incurred by NiMo to cleanup and remove
4 unlawfully discharged petroleum.
5 B. Contribution, Indemnification, and Unjust
6 Enrichment Claims
7
8 The district court dismissed NiMo’s claims against King
9 and Chevron for contribution under New York law, concluding
10 that CERCLA preempted the state claims. Niagara I, 291 F.
11 Supp. 2d at 137. The district court also dismissed NiMo’s
12 state law contribution claims against U.S. Steel and Portec
13 because the district court had already determined that U.S.
14 Steel and Portec were not liable for the remediation of the
15 Water Street Site. Id.16 CERCLA could preempt state law in one of three ways:
17 (1) Congress expressly indicated that CERCLA preempts state
18 law; (2) CERCLA is a comprehensive regulatory scheme such
19 that it creates a reasonable inference that the state cannot
20 supplement it; or (3) state law directly conflicts with
21 CERCLA. See Cal. Fed. Sav. & Loan Ass’n v. Guerra, 479 U.S.
22 272, 280-81 (1987). We have previously held that CERCLA
23 does not expressly preempt applicable state law. Marsh v.
Page 60 of 67
1 Rosenbloom, 499 F.3d 165, 177 (2d Cir. 2007). We have also
2 concluded that CERCLA is not such a comprehensive scheme
3 that it cannot be supplemented by state law. Bedford
4 Affiliates v. Sills, 156 F.3d 416, 427 (2d Cir. 1998),
5 overruled on other grounds by W.R. Grace, 559 F.3d at 90.
6 That leaves only preemption by conflict, which exists when
7 “compliance with both state and federal law is impossible,
8 or when the state law stands as an obstacle to the
9 accomplishment and execution of the full purposes and
10 objectives of Congress.” Pac. Capital Bank, N.A. v.
11 Connecticut, 542 F.3d 341, 351 (2d Cir. 2008) (quoting
12 United States v. Locke, 529 U.S. 89, 109 (2000)) (internal
13 quotation marks omitted).
14 CERCLA depends on a federal and state partnership to
15 assist the national government in identifying and
16 remediating hazardous wastes sites consistent with the
17 National Contingency Plan. But while a state can settle a
18 PRP’s CERCLA liability, that authorization does not compel
19 the conclusion that Congress intended that parties who have
20 settled their CERCLA liability should have both a federal
21 and a state law based claim for recovery of the same
22 response expenditures. CERCLA employs state agencies in
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1 identifying and remediating hazardous waste sites while
2 providing a federally defined settlement enticement.
3 Congress created the statutory right to contribution in §
4 113(f) in part to encourage settlements and further CERCLA’s
5 purpose as an impetus to efficient resolution of
6 environmental hazards. See Atl. Research, 551 U.S. at 141;
7 see also Marsh, 499 F.3d at 180. Section 113 is intended to
8 standardize the statutory right of contribution and, in
9 doing so, avoid the possibility of fifty different state
10 statutory schemes that regulate the duties and obligations
11 of non-settling PRPs who might be viewed as tortfeasors
12 under the law of any particular state. Based on the text, §
13 113 was intended to provide the only contribution avenue for
14 parties with response costs incurred under CERCLA. 27 See 42
15 U.S.C. § 9613(f)(3)(C) (“Any contribution action brought
16 under this paragraph shall be governed by Federal law.”).
17 Thus we conclude that state law contribution claims for
27
Our cases — Consolidated Edison and W.R. Grace — have
recognized that there are situations where a settlement with
the DEC encompasses only state law based liability. We
suspect that the United States, given the views it has
expressed in its amicus brief, might view the matter
differently. If any settlement with a state environmental
agency qualifies as a state administrative settlement under
CERCLA, it would seem that CERCLA has preempted the area of
contribution claims that arise out of the settlement.
Page 62 of 67
1 CERCLA response costs conflict with CERCLA contribution
2 claims and therefore are preempted. 28
3 NiMo makes no claims for cleanup costs outside of those
4 it expended in compliance with the Consent Order and we have
5 already determined that costs incurred pursuant to the
6 Consent Order, as amended, fall within CERCLA. Because NiMo
7 did not incur costs outside of CERCLA, NiMo has no grounds
8 for contribution under New York law and we affirm the
9 district court.
10 We are left then with NiMo’s indemnification and unjust
11 enrichment claims. We have previously concluded that state
28
We are not the first circuit to reach this result.
See PMC, Inc. v. Sherwin-Williams Co., 151 F.3d 610, 618
(7th Cir. 1998) (Posner, J.); see also In re Reading Co.,
115 F.3d 1111, 1117 (3d Cir. 1997) abrogated on other
grounds by E.I. DuPont De Nemours & Co. v. United States,
460 F.3d 515, 522 (3d Cir. 2006). More generally, our
conclusion is in keeping with other courts’ determinations
that CERCLA is intended to be the exclusive scheme governing
hazardous waste claims that fall within its purview. See,
e.g., Barnes ex rel. Estate of Barnes v. Koppers, Inc., 534
F.3d 357, 365 (5th Cir. 2008) (when the “conditions for
CERCLA cleanup are satisfied,” CERCLA’s tolling provision
preempts the state law tolling provision); Fireman’s Fund
Ins. Co. v. City of Lodi, Cal., 302 F.3d 928, 946 (9th Cir.
2002) (if the defendant is found to be a PRP, CERCLA
preempts the defendant’s contribution protection provided by
the local environmental and liability ordinance); Town of
Munster, Ind. v. Sherwin-Williams Co., 27 F.3d 1268, 1273
(7th Cir. 1994) (limiting “the defenses to liability under
CERCLA to those enumerated in the statute” and barring
equitable defenses).
Page 63 of 67
1 law indemnification claims were preempted by CERCLA, a
2 conclusion that we reiterate today. Bedford Affiliates, 156
3 F.3d at 427. 29 We also hold that the state law claims for
4 unjust enrichment are preempted for substantially the same
5 reasons as detailed above — allowing unjust enrichment
6 claims for CERCLA expenses would again circumvent the
7 settlement scheme, as PRPs could seek recompense for a
8 legally unjustifiable benefit outside the limitations and
9 conditions of CERCLA.
10 C. Public Nuisance
11 The district court dismissed NiMo’s claim for public
12 nuisance as time barred. Niagara I, 291 F. Supp. 2d at 140.
13 NiMo offers no argument to contest this ruling. Therefore,
14 we affirm the district court.
15 V. CHEVRON’S CROSS-APPEAL
16 Chevron cross-appeals on several grounds. First,
17 Chevron challenges the district court ’s sua sponte
18 dismissal of Chevron’s third-party action against Rensselaer
19 County, which purchased Area 4 from Chevron in 1974. The
20 district court reasoned that the third-party action was moot
29
Though Bedford Affiliates was overruled by W.R.
Grace, the panel’s decision that CERCLA preempts state
indemnification claims remains undisturbed.
Page 64 of 67
1 because the district court had absolved Chevron of liability
2 for Area 4. Id. at 135. Chevron argues that, should we
3 decide to reinstate NiMo’s CERCLA contribution claims
4 against Chevron for Area 4, then we should also reinstate
5 Chevron’s claim against Rensselaer County. We agree.
6 Because we have reinstated NiMo’s CERCLA contribution claims
7 as to Area 4, we reinstate Chevron’s claim against
8 Rensselaer County.
9 Chevron also appeals the district court’s dismissal of
10 Portec and U.S. Steel from the case. As we have reversed
11 the district court and reinstated NiMo’s claims against both
12 Portec and U.S. Steel, Chevron’s cross-claims for
13 contribution against Portec and U.S. Steel are also
14 reinstated.
15 VI. CONCLUSION
16 We reverse the orders of the district court dismissing
17 U.S. Steel, Chevron, Portec, and King Service from the
18 litigation. There are genuine issues of material fact with
19 respect to the defendants contribution liability to NiMo.
20 NiMo is entitled to bring a claim for contribution
21 under § 113(f)(3)(B). A potentially responsible party’s
22 CERCLA liability settlement with a state qualifies the PRP
Page 65 of 67
1 for contribution under § 113(f)(3)(B) and the state agency
2 does not need express authorization for the settlement from
3 the EPA. NiMo satisfied the requirements of the National
4 Contingency Plan by settling its CERCLA liability with New
5 York. Because NiMo resolved its CERCLA liability through an
6 administrative settlement, it is not entitled to bring a
7 claim under § 107(a)(4)(B).
8 We reverse the district court’s dismissal of NiMo’s
9 claim for contribution under New York Navigation Law, and
10 affirm the district court with respect to its dismissal of
11 NiMo's remaining state law claims. We reinstate Chevron’s
12 third-party claims against Rensselaer County for
13 consideration by the district court in light of our
14 reinstating NiMo’s claims against Chevron and we further
15 reinstate Chevron’s cross-claims for contribution against
16 Portec and U.S. Steel.
17 The district court's orders of November 6, 2003, March
18 11, 2004, June 28, 2006, and July 16, 2008 are hereby
19 AFFIRMED in part and REVERSED in part.
20
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1 APPENDIX A
2
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