New York v. PVS Chemicals, Inc. ( 2019 )

18-2537
New York v. PVS Chemicals, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
10th day of September, two thousand nineteen.
Present: ROSEMARY S. POOLER,
BARRINGTON D. PARKER,
REENA RAGGI,
Circuit Judges.
_____________________________________________________
STATE OF NEW YORK,
Plaintiff-Counter-Defendant-Appellant,
v. 18-2537-cv
PVS CHEMICALS, INC. (NEW YORK),
Defendant-Counter-Claimant-Appellee.
_____________________________________________________
Appearing for Appellant: Frederick A. Brodie, Assistant Solicitor General (Timothy
Hoffman, Assistant Attorney General, Victor Paladino, Assistant
Solicitor General, on the brief), for Letitia A. James, Attorney
General of the State of New York, Albany, N.Y.
Appearing for Appellee: David L. Roach, Roach, Lennon & Brown, PLLC (J. Michael
Lennon, on the brief), Buffalo, N.Y.
Appeal from the United States District Court for the Western District of New York (Schroeder,
M.J.).
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is REVERSED and
the case REMANDED to the district court with instructions to enter judgment for the State of
New York.
Appellant the State of New York appeals from the July 30, 2018, judgment of the United
States District Court for the Western District of New York (Schroeder, M.J.) granting PVS
Chemicals, Inc. (New York)’s (“PVS’s”) motion for dispute resolution and precluding New York
from requiring PVS to remediate environmental conditions which existed when the parties
entered a 2002 Consent Decree with PVS (the “Consent Decree”). New York v. PVS Chems.,
Inc., 324 F. Supp. 3d 352, 365 (W.D.N.Y. 2018). We assume the parties’ familiarity with the
underlying facts, procedural history, and specification of issues for review.
A panel of this court previously held that the Consent Decree at issue in this case is
ambiguous regarding whether New York may require PVS to implement a groundwater and soil
remediation program based on evidence of contamination that existed in 2002. New York v. PVS
Chems., Inc. (New York), 589 F. App’x 10, 11 (2d Cir. 2014) (summary order). We remanded the
case for the sole purpose of allowing the district court to consider extrinsic evidence in
determining the parties’ intent with respect to the ambiguous provision. Id. Thus, the only issue
before us is whether the extrinsic evidence permits New York to require PVS to implement
corrective measures to remediate pollution that New York was aware of before agreeing to the
Consent Decree. New York now appeals the district court’s decision after reviewing the extrinsic
evidence that New York may not require PVS to remediate environmental conditions of which it
was aware when it entered the Consent Decree.
“We review the district court’s interpretation of a consent decree de novo, and its factual
findings for clear error.” United States v. Broad. Music, Inc., 275 F.3d 168, 175 (2d Cir. 2001).
The proper interpretation of an ambiguous contract based on extrinsic evidence as to the parties’
intent “is a question of fact for the factfinder.” JA Apparel Corp. v. Abboud, 568 F.3d 390, 397
(2d Cir. 2009).
The record belies the district court’s factual findings regarding the parties’ intent in
entering the Consent Decree. The record reveals that from the beginning of settlement
negotiations, New York and PVS were committed to reaching a settlement that comprehensively
addressed the alleged environmental contamination at the PVS site. App’x at 813 (letter from
New York informing PVS that “it is essential that PVS make a firm commitment from the outset
to undertake and complete this sequential process for addressing the State’s concerns regarding
groundwater and related environmental resources”); App’x at 825 (meeting notes from a PVS
representative stating, “NYS [New York State] is not willing to negotiate pieces of this, is
looking at the whole parcel. We are following this same path”). In accord with this stated goal,
New York’s first draft of the Consent Decree required PVS to “implement selected corrective
measures at the facility” to alleviate groundwater and soil contamination. App’x at 838.
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PVS then objected to the Consent Decree’s requirement that it implement the corrective
measures, stating that it would negotiate remedial measures only “[i]f there [was] a basis for
[Resource Conservation and Recovery Act] claims or remedies as indicated by the data
generated by the proposed Investigation.” App’x at 1104 (emphasis added). New York
responded that it would permit PVS to make a “proposed change that limits defendant’s
commitment to performance of a site investigation in accordance with an approved site
investigation work plan,” only if the change were “accompanied by a corresponding limited
release.” App’x at 1127. Specifically, “[t]he State would reserve its rights to proceed against
defendant for any liability that may result from the State’s determination that further measures
are required, and defendant would reserve its rights to defend.” App’x at 1127. The final Consent
Decree reflects this agreement.
This drafting history demonstrates that New York was unwilling to settle with PVS
unless it could retain its right to pursue PVS for groundwater and soil remediation at the PVS
site, including such remediation as was warranted by the agreed-to investigation. Nothing in the
drafting history or in the Consent Decree itself reveals New York’s agreement to limit the
contamination on which it could pursue PVS for remediation to contamination discovered
through the required investigative studies. Despite PVS’s arguments to the contrary, New York
agreed only that it would decide whether to seek further remediation efforts “after review of the
reports,” JA 33—it did not agree to relinquish its rights to pursue remediation efforts on the basis
of pre-existing information. This reservation provided no time limitation during which New
York needed to assess the investigative report and decide whether to pursue further action;
neither did the reservation require that the study find a threshold amount of contamination before
New York could pursue such further action.
On the entire evidence, we are “left with the definite and firm conviction that a mistake
has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985) (internal
quotation marks omitted). We therefore reverse the judgment of the district court and direct the
district court to enter judgment in favor of New York.
The judgment of the district court hereby is REVERSED and the case is REMANDED to
the district court with instructions to enter judgment for the State of New York.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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