Revitalizing Auto Cmtys. Env't Response Tr. v. Nat'l Grid USA ( 2021 )

20-1931-cv
Revitalizing Auto Cmtys. Env’t Response Tr. v. Nat’l Grid USA
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2020
Argued: May 28, 2021 Decided: August 18, 2021
Docket No. 20-1931-cv
REVITALIZING AUTO COMMUNITIES ENVIRONMENTAL RESPONSE TRUST, AND RACER
PROPERTIES LLC,
Plaintiffs-Appellants,
— v. —
NATIONAL GRID USA, NIAGARA MOHAWK POWER CORPORATION, CARRIER
CORPORATION, RAYTHEON TECHNOLOGIES CORPORATION, FKA UNITED
TECHNOLOGIES CORPORATION, GENERAL ELECTRIC COMPANY, FKA GENERAL
ELECTRIC CORPORATION, BRISTOL-MEYERS SQUIBB COMPANY, NEW PROCESS GEAR,
INC., MAGNA POWERTRAIN USA, INC., THOMPSON CORNERS, LLC, METALICO
SYRACUSE REALTY, INC., METALICO NEW YORK, INC., GARDNER DENVER, INC.,
ONX1 LLC, ONONDAGA POTTERY COMPANY, SYRACUSE CHINA LLC, LIBBEY GLASS
LLC, AMPARIT INDUSTRIES, LLC, 6181 THOMPSON ROAD, LLC, CARRIER CIRCLE
BUSINESS COMPLEX LLC, TELESECTOR RESOURCES GROUP, INC., WESTERN ELECTRIC
COMPANY, INCORPORATED, SYRACUSE LEPAGE LLC, LENNOX INDUSTRIES INC.,
SYRACUSE DEERE ROAD ASSOCIATES, LLC, JAGAR ENTERPRISES, INC., CALOCERINOS
AND SPINA , C & S ENGINEERS, INC ., JOHN DOES, B&B FAMILY LIMITED PARTNERSHIP,
HAULER’S FACILITY LLC, 6223 THOMPSON ROAD SUITE 1000 SYRACUSE, NY 13206,
HONEYWELL INTERNATIONAL INC., 80 STATE STREET ALBANY, NY 122072543,
LOCKHEED MARTIN CORPORATION, 6801 ROCKLEDGE DRIVE BETHESDA, MD 20817,
NEW PROCESS GEAR, INC., 6600 NEW VENTURE GEAR DRIVE EAST SYRACUSE, NY
13507, NOKIA OF AMERICAN CORPORATION, 600 MOUNTAIN AVENUE MURRAY HILL,
NJ 07974, NORTH MIDLER PROPERTIES LLC, 6041 SEWICKLEY DRIVE JAMESVILLE, NY
13078, NORTHEAST MANAGEMENT SERVICES, INC., C/O FLORINE BASILE, JR.,
PRESIDENT P.O. BOX 1238 CICERO, NY 13039, NORTHERN INDUSTRIAL HOLDINGS,
LLC, 1675 SOUTH STATE STREET SUITE B DOVER, DE 19901, THOMPSON LAWN, LCC,
7050 CEDARBAY ROAD FAYETTEVILLE, NY 13066, THOMPSON NW, LLC, 7050
CEDARBAY ROAD FAYETTEVILLE, NY 13066, UNITED STATES, CARLYLE AIR
CONDITIONING COMPANY, INC.,
Defendants-Appellees,
CHRYSLER GROUP LLC, COOPER CROUSE-HINDS, LLC, PRESTOLITE ELECTRIC
INCORPORATED, DEERE & COMPANY, CENTER CIRCLES LLC, SOLVENTS AND
PETROLEUM SERVICE, INC., ALERIS PARTNERS LLC, FULTON IRON & STEEL CO. INC.,
BURKO CORPORATION, EMPIRE PIPELINE CORPORATION, OLD CARCO LIQUIDATION
TRUST, BY ITS TRUSTEE RJM I, LLC 251 LITTLE FALLS DRIVE WILMINGTON, DE 19808,
OLD CARCO LLC, 555 CHRYSLER DRIVE AUBURN HILLS, MI 48236, HOFFMAN
MACHINERY CORPORATION, 105 FOURTH AVENUE NEW YORK, NY 10003, OLD
ELECTRIC, INC., AKA OLD PRESTOLITE, FKA PRESTOLITE ELECTRIC INCORPORATED,
Defendants.*
B e f o r e:
SACK, LYNCH, AND MENASHI, Circuit Judges.
Plaintiffs-Appellants Revitalizing Auto Communities Environmental
Response Trust (“RACER Trust”) and RACER Properties LLC (together,
*
The Clerk of the Court is respectfully directed to amend the caption as set forth
above.
2
“RACER”) appeal an order of the District Court for the Northern District of New
York (David N. Hurd, J.) dismissing their federal claims for violations of the
Comprehensive Environmental Response, Compensation, and Liability Act
(“CERCLA”), 42 U.S.C. § 9601 et seq., and related state law claims. RACER, which
was created and funded to clean up polluted locations connected to the former
General Motors Corporation during that company’s bankruptcy, alleges cost
recovery and contribution claims under CERCLA §§ 107 and 113, 42 U.S.C.
§§ 9607 and 9613, against dozens of defendants, which RACER alleges
contributed to pollution at one of the New York sites it has been tasked with
cleaning up. The district court held that RACER’s § 107 claim was prudentially
unripe against all defendants, and that its § 113 claim either failed to state a claim
or was time barred against the moving defendants, and was prudentially unripe
against the non-moving defendants. We VACATE and REMAND both holdings,
concluding that RACER’s CERCLA claims are prudentially ripe, and that all
other issues raised by the parties must be addressed by the district court on
remand. We also agree with the district court’s conclusion that on remand,
EPLET, LLC, RACER Trust’s trustee, must be substituted as plaintiff.
MATTHEW LITTLETON, Donahue, Goldberg & Littleton,
Washington, DC (Alan J. Knauf, Linda R. Shaw, Amy K.
Kendall, Knauf Shaw LLP, Rochester, NY, on the brief),
for Plaintiffs-Appellants.
ROBERT A. WIYGUL (Steven T. Miano, Peter V. Keays, on the
brief), Hangley Aronchick Segal Pudlin & Schiller,
Philadelphia, PA,
KRISTIN CARTER ROWE (Dean S. Sommer, on the brief),
Young/Sommer LLC, Albany, NY,
for Defendants-Appellees 6181 Thompson Road, LLC;
Amparit Industries, LLC; B&B Family Limited Partnership;
Bristol-Myers Squibb Company; C & S Engineers, Inc.;
Calocerinos and Spina; Carlyle Air Conditioning Company,
3
Inc.; Carrier Circle Business Complex LLC; Carrier
Corporation; Gardner Denver, Inc.; General Electric
Company; Haulers Facility LLC; Honeywell International
Inc.; Jagar Enterprises, Inc.; Libbey Glass LLC; Lockheed
Martin Corporation; Magna Powertrain USA, Inc.; Metalico
New York, Inc.; Metalico Syracuse Realty, Inc.; National
Grid USA; New Process Gear, Inc.; Niagara Mohawk Power
Corporation; Nokia of America Corporation; North Midler
Properties; Northeast Management Services, Inc.; Northern
Industrial Holdings, LLC; Onondaga Pottery Company;
ONX1 LLC; Raytheon Technologies Corporation (f/k/a
United Technologies Corporation); Syracuse China LLC;
Syracuse Deere Road Associates, LLC; Syracuse LePage LLC;
Telesector Resources Group, Inc.; Thompson Corners, LLC;
Thompson Lawn, LLC; Thompson NW, LLC; Western
Electric Company, Incorporated.
DOUGLAS H. ZAMELIS, Law Offices of Douglas H. Zamelis,
Cooperstown, NY, for Defendant-Appellee Northeast
Management Services, Inc.
CHARLES T. WEHLAND, Jones Day, Chicago, IL, James M.
Gross, Jones Day, New York, NY, for Defendant-Appellee
Lennox Industries, Inc.
GERARD E. LYNCH, Circuit Judge:
This case, though only in its infancy, has already mired the parties and the
court in a procedural morass. Perhaps that is unsurprising, as it deals with the
Comprehensive Environmental Response, Compensation, and Liability Act
4
(“CERCLA”), a statute that, as we have previously observed, “is known neither
for its concinnity nor its brevity.” W.R. Grace & Co.-Conn. v. Zotos Int’l, Inc., 559
F.3d 85, 88 (2d Cir. 2009).
Plaintiffs-Appellants Revitalizing Auto Communities Environmental
Response Trust (“RACER Trust”) and RACER Properties LLC (together,
“RACER”) were created during the General Motors Corporation (“GM”)
bankruptcy pursuant to a Trust Consent Decree and Settlement Agreement,
which was approved and entered by the United States Bankruptcy Court for the
Southern District of New York, effective March 29, 2011 (the “2011 Agreement”
or “Trust Consent Agreement”). GM, the Environmental Protection Agency
(“EPA”), a number of states, and the Saint Regis Mohawk Tribe were also parties
to the agreement. RACER was established and funded to clean up pollution in
and around a number of former GM properties, including the former GM plant
site at issue here, located in the Onondaga Lake region of New York.
RACER alleges that after the cleanup of the New York plant site began, the
New York State Department of Environmental Conservation (“NYSDEC”) – and
eventually the EPA – asked RACER to extend its cleanup efforts to an area not
5
encompassed by the 2011 Agreement. RACER sued several dozen Defendants,1
which it alleges contributed to the pollution in the expanded territory it is now
being asked to address, in an effort to force them to contribute to the costs of
cleanup.
RACER brought claims for cost recovery and contribution in the
alternative under §§ 107(a) and 113(f) of CERCLA, 42 U.S.C. §§ 9607(a) and
1
Defendants-Appellees 6181 Thompson Road, LLC; Amparit Industries, LLC;
B&B Family Limited Partnership; Bristol-Myers Squibb Company; C&S
Engineers, Inc.; Calocerinos and Spina; Carlyle Air Conditioning Company, Inc.;
Carrier Circle Business Complex LLC; Carrier Corporation; Gardner Denver, Inc.;
General Electric Company; Haulers Facility LLC; Honeywell International Inc.;
Jagar Enterprises, Inc.; Lennox Industries, Inc.; Libbey Glass Inc. (now known as
Libbey Glass LLC); Lockheed Martin Corporation; Magna Powertrain USA, Inc.;
Metalico New York, Inc.; Metalico Syracuse Realty, Inc.; National Grid USA; New
Process Gear, Inc.; Niagara Mohawk Power Corporation; Nokia of America
Corporation; North Midler Properties; Northeast Management Services, Inc.;
Northern Industrial Holdings, LLC; Onondaga Pottery Company; ONX1 LLC;
Raytheon Technologies Corporation f/k/a United Technologies Corporation;
Syracuse China Company (now known as Syracuse China LLC); Syracuse Deere
Road Associates, LLC; Syracuse LePage LLC; Telesector Resources Group, Inc.;
Thompson Corners, LLC; Thompson Lawn, LLC; Thompson NW, LLC; and
Western Electric Company, Incorporated filed a joint brief (referred to hereafter
as the “Joint Appellees’ Br.”). Defendant-Appellee Lennox Industries Inc. filed a
separate brief, joined by Northeast Management Services (referred to hereafter as
the “Lennox Appellees’ Br.”), and also joins the arguments of the joint brief.
There were additional defendants in the district court who are not represented
and/or did not appeal, as explained further below and as reflected in the caption.
Arguments attributed to “Defendants” appear in the joint brief unless otherwise
stated.
6
9613(f).2 As discussed more fully below, CERCLA “creates several distinct
provisions that authorize parties in different procedural positions to recover costs
incurred in cleaning up contamination [including, as relevant here]: (1) section
107(a), which permits the general recovery of cleanup and prevention costs . . .
and ([2]) section 113(f)(3)(B), which creates a contribution right for parties that
have resolved their liability by settlement.” W.R. Grace & Co.-Conn., 559 F.3d at 89(internal quotation marks omitted). RACER argued that because it has not
resolved its liability as to the expanded territory in a judicially approved
settlement, its claim should proceed under § 107. However, RACER pleaded a
§ 113 claim in the alternative, so that it could pursue that avenue of relief if the
court found that its liability to clean up the expanded territory was resolved,
which would bar it from proceeding under § 107. Finally, RACER also alleged
several related state law claims, and sought a declaratory judgment as to
Defendants’ liability.
The district court (David N. Hurd, J.) dismissed RACER’s complaint. As a
threshold matter, the court concluded that, if the suit proceeded, RACER Trust’s
2
For ease of reading, we refer to these provisions throughout the Opinion as they
are numbered in CERCLA, i.e. §§ 107 and 113.
7
trustee must be substituted as a plaintiff because the trust lacks capacity to sue.
On the merits, the district court held that RACER’s § 107 claim was prudentially
unripe because the EPA is investigating other potentially responsible polluters.
The court reasoned that it would be best to allow the EPA to identify other
responsible parties and decide on a proper course of action before allowing
RACER to pursue other polluters in court. The district court also concluded that
RACER would not suffer hardship from delay because it could assert defenses in
the bankruptcy proceeding if the NYSDEC or EPA required it to clean up
territory not encompassed by the 2011 Agreement. As to RACER’s § 113 claim,
the district court held that it too should be dismissed, because either it was also
unripe, it was time-barred (if the 2011 Agreement established RACER’s liability
to clean up the expanded territory), or it failed to state a claim (if RACER’s
liability to clean up the expanded territory had not yet been resolved).
On appeal, RACER contests all of those points and raises a number of other
issues. We conclude that the district court was correct to require RACER Trust to
substitute its trustee as plaintiff, because the trust lacks capacity to sue. On the
merits, we hold that the district court erred in dismissing RACER’s complaint at
this early stage. RACER’s § 107 claim is ripe because it is based on costs RACER
8
has already incurred for which it may not receive repayment through the EPA
investigation, and because further delay in adjudicating the claim would cause
RACER hardship. We also conclude that the district court erred in dismissing
RACER’s § 113 claim. To the extent that the district court concluded that it too
was prudentially unripe, we disagree for the same reasons that apply to the § 107
claim. To the extent the district court’s dismissal rested on other grounds, the
court failed to adequately explain its reasoning and we remand for further
analysis. Finally, we decline to address the other issues raised by the parties,
which should be addressed by the district court in the first instance, as we
explain further below.
Accordingly, we VACATE and REMAND the district court’s dismissal of
RACER’s CERCLA claims. We also VACATE and REMAND the district court’s
dismissal of RACER’s state law claims so that the court may reconsider its ruling
in light of this Opinion.
BACKGROUND
I. Factual Background
For many years, GM operated the Syracuse Inland Fisher Guide Plant
(“IFG Plant”) in the Onondaga Lake region of New York. The Onondaga Lake
9
region, which suffered from heavy pollution, was added to the National
Priorities List of sites eligible for cleanup under CERCLA in 1993. GM ceased
operations at the IFG Plant that same year, and the former IFG Plant site is now a
subsite of the Onondaga Lake site.
The IFG Plant subsite was further subdivided into two operable units
(“OUs”) for purposes of the cleanup: OU-1 and OU-2. OU-1 is the site of the
former IFG Plant. OU-2 consists of a 9,000 foot stretch of Ley Creek, a waterway
adjacent to the former IFG Plant that flows into Onondaga Lake.
When the Onondaga Lake site was added to the National Priorities List in
1993, the EPA entered an agreement with New York’s Department of
Environmental Conservation (“NYSDEC”), designating it the lead agency for the
site. In 1997, the NYSDEC and GM signed a consent order, in which GM agreed
to conduct a remedial investigation/feasibility study to investigate and develop a
plan to address pollution at the IFG Plant subsite.3 The 1997 consent order also
3
We use the terms “remedial” and “remediate” throughout this Opinion in the
ordinary, non-technical sense, to describe GM’s, and later RACER’s, efforts to
clean up the area. In so doing, we express no opinion as to whether those actions
were “remedial” or “removal” actions as defined by CERCLA. See 42 U.S.C. §
9601(23)-(24); MPM Silicones, LLC v. Union Carbide Corp., 966 F.3d 200, 218 (2d Cir.
2020).
10
authorized GM to undertake interim remedial measures in furtherance of the
cleanup efforts, and between 2002 and 2004, GM implemented three such
measures to avoid further migration of pollution from OU-1 to Ley Creek.
On June 1, 2009, GM declared bankruptcy. The bankruptcy proceedings
addressed, among other issues, GM’s environmental liabilities. On March 29,
2011, the United States Bankruptcy Court for the Southern District of New York
(the “Bankruptcy Court”) approved a Trust Consent Agreement among GM, the
EPA, various states pursuing GM, and the Saint Regis Mohawk Tribe. The
agreement created RACER Trust, which was charged with cleaning up 89
polluted sites – across 14 states – that were connected with GM, including OU-1
and OU-2 of the IFG Plant subsite. The trust set aside specific dollar amounts for
the cleanup of each location, including approximately $22.57 million for OU-1
and $8.55 million for OU-2. The trust was designed to own and operate polluted
properties formerly owned by GM, including OU-1, with the goal of eventually
selling them for a productive or beneficial use.4 EPLET, LLC, (“EPLET”) was
4
RACER Properties LLC was established on behalf of the trust to hold title to
properties formerly owned by GM and now owns OU-1. OU-2, which consists of
land beyond the original GM plant site, is not owned by RACER Properties.
RACER Properties did, however, acquire a small portion of land along the south
side of Ley Creek (the “Ley Creek Subsite”), which has some overlap with OU-2.
11
named as the trustee of RACER Trust, and signed the Trust Consent Agreement
on RACER’s behalf.
By virtue of the Trust Consent Agreement, RACER Trust took over GM’s
remediation efforts and became responsible for rehabilitating OU-1 and OU-2. In
2013, RACER completed the remedial investigation/feasibility study for OU-2
that GM had agreed to undertake in 1997. In response, in March 2015, the EPA
and the NYSDEC issued a Record of Decision describing the remediation
activities they wished RACER to undertake with respect to OU-2. On October 27,
2015, RACER and the NYSDEC stipulated to a consent order in which RACER
agreed to undertake the remediation activities outlined in the Record of Decision.
As RACER began the work outlined in the 2015 consent order, the
NYSDEC directed RACER to sample the soil from an expanded area, outside the
bounds of the original OU-2 site (the “expanded territory”). The sampling
revealed that the expanded territory was also polluted. As a result, according to
RACER, “[the NYSDEC] requested that RACER Trust remediate this additional
area of approximately 22 acres.” Appellants’ Br. 7; see also J.A. 54 ¶ 27 (“[the
NYSDEC] now seeks remediation of lands outside of the original geographic
scope of the OU-2 remedial work”). RACER contends that remediating the
12
expanded territory would cost $60 to $93.5 million, significantly more than the
$8.5 million allocated by the Trust Consent Agreement to clean up OU-2. RACER
alleges that it has already spent about $12.4 million on the investigation and
cleanup of OU-2 and the expanded territory. RACER alleges that numerous
entities other than GM contributed to the pollution in the expanded territory, but
that the NYSDEC has to date been unwilling to consider pursuing other
potentially responsible polluters to recover the funding needed to remediate the
area. Accordingly, RACER contends that it “ha[s] been and will continue to be
damaged by incurring response costs for Environmental Response to the
Contamination” of the expanded territory, “well in excess of [RACER’s] own
equitable share of liability for such remediation resulting from the GM Debtors’
historic ownership and operation” of the IFG Plant. J.A. 116 ¶ 404.
In December 2019, after RACER filed its complaint in this case, the EPA
assumed lead agency status for the cleanup of OU-2. In September 2020, the EPA
requested that RACER complete a feasibility study to assess alternatives for
remediating OU-2 and the expanded territory, remediation which it believed
RACER was responsible for under the 2011 Agreement. That communication
enclosed a draft consent order. Finally, in April 2021, the EPA acknowledged that
13
it “is investigating several parties that it believes may potentially be legally
responsible for performing or funding the remediation of [the site], in addition to
RACER,” but noted that even if other polluters were identified, EPA “is not
typically involved in th[e] allocation process” among different polluters and
“does not anticipate that it will need to be involved in the allocation of remedial
costs” here. App. Ct. Dkt. 244 at Ex. A.
II. Procedural Background
In October 2018, RACER filed a complaint in the United States District
Court for the Northern District of New York against dozens of entities that
allegedly contributed to pollution in the expanded territory. On April 30, 2019,
RACER filed an amended complaint, which added new defendants. RACER
sought cost recovery and contribution under CERCLA §§ 107 and 113, and also
alleged a number of related state law claims. Finally, RACER sought a
declaratory judgment holding Defendants liable for polluting the expanded
territory.
On November 13, 2019, a group of Defendants jointly moved to dismiss the
complaint pursuant to Rule 12(b)(6). On December 3, 2019, a subset of the same
group submitted a supplemental brief offering additional arguments for
14
dismissal. The same day, Honeywell International Inc. independently moved to
dismiss the complaint and joined the two previous motions. Several Defendants
were not represented before the district court and did not join the motions.
On January 22, 2020, RACER opposed the motion. On March 16, 2020, the
district court issued a text order observing that since the complaint was filed, the
EPA had taken over from the NYSDEC as the lead agency for the site, and that
RACER’s claims were premised on the NYSDEC allegedly holding RACER
exclusively responsible for the cleanup of the expanded territory. In light of that
change in circumstances, the district court ordered RACER to file a sur-reply
addressing “why th[e] Court should not grant summary judgment against
plaintiffs because [the] EPA’s assumption of command has rendered this case
moot and/or unripe given that NYSDEC is no longer pursuing a remediation
strategy rooted in compelling plaintiffs alone to conduct the environmental
cleanup.” D. Ct. Dkt. 310. In response, RACER argued that the EPA’s assumption
of lead agency status did not have any “impact on the justiciability of the
lawsuit,” because there had been no substantive change in enforcement policy.
To the contrary, RACER contended that the EPA – like the NYSDEC – intended
to require RACER to investigate the expanded territory as a prelude to
15
remediation. D. Ct. Dkt. 311 at 3. As evidence that its CERCLA cost recovery
claim was ripe, RACER also emphasized that it had already incurred costs
remediating the expanded territory. On May 12, 2020, the district court dismissed
RACER’s complaint without prejudice. Revitalizing Auto Cmtys. Env’t Response Tr.
v. Nat’l Grid USA, No. 18-cv-1267, 2020 WL 2404770 (N.D.N.Y. May 12, 2020). The
court began by explaining that RACER did not have capacity to sue in its own
right, and that its trustee, “EPLET, LLC[,] must be joined and/or ratify any future
action as RACER’s trustee for RACER to remain as a plaintiff.” Id. at *7.
The court then turned to RACER’s CERCLA § 107 claim for cost recovery.
The court concluded that the claim was constitutionally ripe, because RACER
had adequately alleged that it had spent money cleaning up the expanded
territory. Id. at *8. However, the court held that the claim was nonetheless
prudentially unripe because the EPA was investigating other potentially
responsible parties, and the outcome of that investigation would clarify the scope
of RACER’s liability vis-à-vis other potentially responsible parties. Id. Moreover,
the court reasoned that RACER would not suffer hardship from waiting for the
EPA to proceed because, were it to continue pressuring RACER to remediate the
expanded territory, RACER would be able to assert defenses available to it under
16
the 2011 Agreement. Id. at *8-9. Finally, the court rejected RACER’s argument that
it would suffer hardship from the expiration of the statute of limitations because,
regardless of how RACER’s and GM’s previous cleanup efforts were analyzed,
the “limitation period ha[d] either not yet begun, or else ha[d] already run out.”
Id. at *9-10. In either case, the court reasoned, RACER would not be prejudiced by
waiting for the EPA to identify other responsible polluters. Id.
The court further concluded that RACER’s CERCLA § 113 claim for
contribution should also be dismissed without prejudice. The court reasoned that
either, as RACER argued in advancing its § 107 claim, its liability to remediate
the expanded territory was not contemplated by any prior agreement and
therefore RACER failed to state a § 113 claim, or, if the 2011 Agreement did
establish RACER’s liability to remediate the expanded territory, then the § 113
claim was time-barred. Id. at *11-12. The court further held that “as to the
unrepresented defendants and John Does . . . the same prudential ripeness
analysis counsels in favor of dismissing [the] § 113 claims” because, if the EPA
were to identify and pursue other responsible polluters of the expanded territory,
that would clarify the scope of RACER’s liability. Id. at *13. Ultimately, the court
17
suggested that it was dismissing both CERCLA claims as unripe, stating
“plaintiffs’ claims are not ripe and must be dismissed.” Id. at *14.
Having dismissed RACER’s federal claims, the district court declined to
exercise supplemental jurisdiction over RACER’s state-law claims and entered
judgment accordingly. Id. at *13-14. This appeal followed.
DISCUSSION
We begin with the threshold issue of RACER’s capacity to sue. We agree
with the district court’s conclusion that in order to proceed, RACER’s trustee
must be substituted as plaintiff. Turning next to RACER’s CERCLA claims, we
conclude that the district court erred in dismissing the § 107 claim as prudentially
unripe. As to the § 113 claim, we vacate the district court’s judgment. To the
extent that judgment rested on the conclusion that the § 113 claim was
prudentially unripe, we disagree for the same reasons that we conclude the § 107
claim is ripe. To the extent the district court’s judgment rested on other grounds,
the court failed to adequately explain its reasoning. Finally, as explained below,
we decline to address the remaining issues that the parties raised, which should
be decided by the district court in the first instance.
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I. Capacity to Sue
The district court concluded that RACER Trust lacks capacity to sue and
that RACER Trust’s trustee, EPLET, must be joined as a plaintiff. We review de
novo the district court’s interpretation of Federal Rule of Civil Procedure 17, as
well as its application of state law to determine capacity to sue pursuant to that
rule. Reiter v. MTA New York City Transit Auth., 457 F.3d 224, 229 (2d Cir. 2006);
Horowitz v. 148 S. Emerson Assocs. LLC, 888 F.3d 13, 19-20 (2d Cir. 2018).
On appeal, RACER contends that RACER Trust has the capacity to sue
because Federal Rule of Civil Procedure 17(a) – which governs whether a party
qualifies as the real party in interest – allows RACER Trust to sue in its own
name. Rule 17(a) provides that “[a]n action must be prosecuted in the name of
the real party in interest” but that “a trustee of an express trust . . . may sue in [its]
own name without joining the person for whose benefit the action is brought.”
Fed. R. Civ. P. 17(a)(1) (emphasis added). RACER argues that Rule 17’s
“permissive language” indicates that a suit in which an express trust is the real
party in interest may, but need not, be brought by its trustee without joining the
trust as a plaintiff. Appellants’ Br. 47. It follows, RACER argues, that a trust can
also bring suit in its own name.
19
However, RACER’s argument fails to respond to the issue raised by
Defendants and resolved by the district court – namely, whether RACER Trust
has capacity to sue – which is governed by Rule 17(b), not Rule 17(a). “‘[C]apacity
has been defined under Rule 17(b) as a party’s personal right to come into court,
and should not be confused with the question of whether a party has an
enforceable right or interest or is the real party in interest.’” Horowitz, 888 F.3d at
20 (alteration omitted), quoting Wright & Miller, 6A Fed. Prac. & Proc. Civ. §
1559 (3d ed. 2017).
Rule 17(b) provides rules for determining the capacity to sue or be sued of
“an individual,” “a corporation,” and “all other parties.” Fed. R. Civ. P. 17.
Because RACER Trust is not an individual or a corporation, its capacity is
determined by the “the law of the state where the court is located,” i.e. New
York. Fed. R. Civ. P. 17(b)(3).
Under New York law, “an express trust vests in the trustee the legal
estate,” and the trustee is the party with capacity to sue on behalf of the trust.
N.Y. Est. Powers & Trusts Law § 7-2.1(a); Ronald Henry Land Tr. v. Sasmor, 990
N.Y.S.2d 767, 768 (App. Term 2014); see also Americold Realty Tr. v. Conagra Foods,
Inc., 577 U.S. 378, 383 (2016) (“Traditionally, a trust was not considered a distinct
20
legal entity, but a ‘fiduciary relationship’ between multiple people. . . . [L]egal
proceedings involving a trust were brought by or against the trustees in their
own name.”). RACER all but concedes that RACER Trust should be treated as an
express, or “traditional,” trust under New York law. It does not contest the
district court’s determination that RACER Trust is not a business trust. Instead, it
relies on a provision of Rule 17(a) that addresses “express trusts” in support of its
argument that it has the capacity to sue. Although RACER half-heartedly argues
that “an environmental remediation trust created in a federal bankruptcy
proceeding” should be treated differently than a traditional trust under state law,
Appellants’ Reply Br. 18, it offers no rationale, or supporting authority, for that
proposition. Moreover, even assuming arguendo that RACER is correct, that
RACER Trust is sui generis, the agreement creating it vests the power “to
prosecute and defend lawsuits or administrative actions or proceedings on behalf
of the Environmental Response Trust” in its trustee. J.A. 717. Accordingly, we are
persuaded that EPLET, not RACER Trust, has capacity to sue on behalf of the
trust.
That conclusion brings us to the question of the proper remedy.
“[C]apacity to sue . . . is non-jurisdictional in nature,” Fund Liquidation Holdings
21
LLC v. Bank of Am. Corp., 991 F.3d 370, 382 (2d Cir. 2021), and can be waived. See,
e.g., Allan Applestein TTEE FBO D.C.A. v. Province of Buenos Aires, 415 F.3d 242,
245 (2d Cir. 2005). Although Defendants argued below that the case should be
dismissed due to RACER Trust’s lack of capacity, they now concede that “[t]he
District Court correctly held that EPLET, as the trustee, must be joined and/or
ratify this action as RACER’s trustee for RACER to remain as a plaintiff.” Joint
Appellees’ Br. 20 (internal quotation marks omitted).5 RACER has indicated that
if this action is remanded, it will “add or substitute EPLET as a party,” satisfying
the district court’s condition. Appellants’ Br. 48.6 Moreover, we have previously
held that dismissal should be avoided where, as here, it would lead to the trustee
5
Defendants also argue that more than adding or substituting EPLET is required,
citing Federal Treasury Enterprise Sojuzplodoimport v. SPI Spirits Ltd., 726 F.3d 62, 83
(2d Cir. 2013). That argument misapprehends our decision in Federal Treasury
Enterprise, which set out what actions a real party in interest must take to ratify a
suit that it did not join. Id. at 83-84.
6
The district court, and RACER on appeal, rely on Rule 17(a)(3)’s admonition
that “[t]he court may not dismiss an action for failure to prosecute in the name of
the real party in interest until, after an objection, a reasonable time has been
allowed for the real party in interest to ratify, join, or be substituted into the
action.” It is not clear that Rule 17(a)(3) applies here, since RACER Trust’s
problem is lack of capacity to sue, not a failure to prosecute in the name of a real
party in interest. But to the extent that it does apply, it also supports allowing
RACER Trust to substitute its trustee as a plaintiff.
22
“simply refiling the complaint . . . and a completely wasteful repetition of
proceedings that have already occurred.” Allan Applestein, 415 F.3d at 246.7
Accordingly, we conclude that Racer Trust’s incapacity does not require
dismissal of this case. On remand, the complaint should be amended to
substitute EPLET as plaintiff.
II. CERCLA Claims
CERCLA’s “dual goals [are] cleaning up hazardous waste and holding
polluters responsible for their actions.” New York v. Next Millennium Realty, LLC,
732 F.3d 117, 124 (2d Cir. 2013). Section 107(a) “provides a cause of action for
private parties to seek recovery of costs from a potentially responsible party of
any necessary costs of response to a release of hazardous substances.” MPM
Silicones, LLC v. Union Carbide Corp., 966 F.3d 200, 214 (2d Cir. 2020) (internal
quotation marks and alterations omitted). “[S]ection 113(f)(3)(B) . . . creates a
contribution right for parties that have resolved their liability by settlement.”
Consol. Edison Co. of New York v. UGI Utilities, Inc., 423 F.3d 90, 94 (2d Cir. 2005).
7
There appears to be no question that dismissal here would result in such a
refiling. No party suggests that EPLET disapproves of this suit, or that officials at
RACER filed this action without EPLET’s knowledge or approval.
23
RACER pleaded two CERCLA claims in the alternative: a § 107(a) claim to
recover costs it incurred cleaning up the expanded territory, and a § 113(f)(3)(B)
contribution claim for those same costs, should the court determine that a prior
agreement resolved its liability. The district court concluded that the § 107 claim
was unripe. As to the § 113 claim, the district court concluded either that it was
prudentially unripe as to the non-moving defendants, and that it was either time-
barred (if the 2011 Agreement established RACER’s liability to clean up the
expanded territory) or it failed to state a claim (if RACER’s liability to clean up
the expanded territory had not yet been resolved) as to the moving defendants.
We first address the ripeness of the § 107 claim and then address the district
court’s decision regarding the § 113 claim and the interplay between the two
claims.
A. Section 107 Claim
We review the district court’s ripeness determination de novo. Connecticut v.
Duncan, 612 F.3d 107, 112 (2d Cir. 2010).8 “Ripeness is a term that has been used
8
Defendants argue that we should distinguish between constitutional ripeness,
which they agree should be reviewed de novo, and prudential ripeness, which
they argue should be reviewed for abuse of discretion because it involves an
exercise of the district court’s judgment. Although that argument is not wholly
implausible, our precedents dictate otherwise. Connecticut, 612 F.3d at 112; accord,
24
to describe two overlapping threshold criteria for the exercise of a federal court’s
jurisdiction,” which address “whether a case has been brought prematurely.” In
re Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., 725 F.3d 65, 109-10 (2d Cir.
2013) (internal quotation marks omitted). Constitutional ripeness, the first
threshold criterion, is “drawn from Article III limitations on judicial power . . .
[and] overlaps with the standing doctrine, most notably in the shared
requirement that the plaintiff’s injury be imminent rather than conjectural or
hypothetical.” Id. (internal quotation marks omitted).
Here, the district court concluded that RACER’s claim was constitutionally
ripe because RACER adequately alleged that it had already spent funds cleaning
up the expanded territory. Showing such expenditures is, moreover, a necessary
element of a claim for cost recovery: The claimant must allege that costs have
been incurred. Price Trucking Corp. v. Norampac Indus., Inc., 748 F.3d 75, 80 (2d Cir.
Lacewell v. Off. of Comptroller of Currency, 999 F.3d 130, 140 (2d Cir. 2021). In any
event, reviewing the district court’s decision for abuse of discretion would not
alter the outcome in this case.
25
2014). We focus our attention on the second threshold criterion in dispute –
whether RACER’s § 107 claim is prudentially ripe.9
Prudential ripeness, in contrast to constitutional ripeness, “constitutes an
important exception to the usual rule that where jurisdiction exists a federal court
must exercise it, and allows a court to determine that the case will be better
decided later.” MTBE, 725 F.3d at 110 (internal quotation marks omitted). “In
determining whether a claim is prudentially ripe, we ask whether the claim is fit
for judicial resolution and whether and to what extent the parties will endure
hardship if decision is withheld.” Id. (internal quotation marks and alterations
omitted).
We begin by noting that many of Defendants’ arguments appear to be
focused on whether RACER’s claim for future costs is prudentially ripe. They
argue, for example, that RACER’s claim is “premature” because any costs
RACER might incur are “contingent on future events,” namely, the Bankruptcy
9
The Defendants argue in summary fashion, in a footnote, that the district court
erred in concluding that the case was constitutionally ripe. “We ordinarily deem
an argument to be forfeited where it has not been ‘sufficiently argued in the
briefs,’ such as when it is only addressed in a footnote.” City of New York v.
Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011). We therefore do not
consider this argument on appeal.
26
Court’s authorizing RACER to clean up the entire expanded territory. Joint
Appellees’ Br. 33. The district court concluded, however, that RACER had
adequately alleged that it had already incurred costs cleaning up the expanded
territory, and Defendants do not argue otherwise. Therefore, although the district
court may ultimately enter a declaratory judgment on liability that will be
binding as to liability for future necessary costs, as RACER requests in its
complaint, the question before us is whether RACER’s existing claim, premised
on the costs it has already incurred, is ripe.10 We conclude that it is.
First, the claim is fit for judicial decision. There is, as the district court
properly acknowledged, “no future contingent event that is strictly necessary to
resolv[e]” the claim. Revitalizing Auto Cmtys., 2020 WL 2404770 at *8; see also Nat’l
Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 691 (2d Cir. 2013). Unlike claims that
10
Under § 113(g)(2), once a party’s liability has been established, “the court shall
enter a declaratory judgment on liability for response costs or damages that will
be binding on any subsequent action” for response costs. Moreover, “[t]he fact
that future costs are somewhat speculative is no bar to a present declaration of
liability.” New York v. Green, 420 F.3d 99, 111 (2d Cir. 2005). Of course, the district
court need not consider liability for any future costs until it determines whether
there is liability for the costs RACER has already incurred; we merely observe
that Defendants’ arguments about the speculative nature of future costs RACER
may incur are not relevant to the ripeness of its current claim for costs already
incurred.
27
we have held prudentially unripe, it does not appear “possible that a resolution
of [RACER’s] current claims will not be necessary in the future,” Simmonds v.
I.N.S., 326 F.3d 351, 360 (2d Cir. 2003). Whether or not the EPA or the NYSDEC
requires RACER to continue to remediate the expanded territory, RACER has
already spent money that it is entitled to attempt to recover. Similarly, any
decision the Bankruptcy Court makes as to whether RACER is permitted to
expend its funds cleaning up the expanded territory, and any defenses that
RACER might assert there, will not affect the money that RACER has already
spent. “What future contingencies remain are not determinative of the questions
before us.” Nat’l Org. for Marriage, 714 F.3d at 691 (internal citation omitted).
The district court concluded that because the EPA had “stated its intention
to pursue other [polluters],” Revitalizing Auto Cmtys., 2020 WL 2404770 at *8, it
would be better for all parties to wait for the EPA to proceed. But that conclusion
fails to take account of several salient facts. First, it is not clear that the EPA’s
pursuit of other polluters would give RACER the opportunity to recover costs
already spent. Moreover, the EPA has indicated that although it is “investigating
several parties that it believes may potentially be legally responsible for
performing or funding the remediation of [the expanded territory], in addition to
28
RACER . . . [it] does not anticipate that it will need to be involved in the
allocation of remedial costs” among different responsible parties, once those
parties have been identified. App. Ct. Dkt. 244 at Ex. A. Therefore, even if the
EPA does identify and pursue other responsible parties, RACER’s claims for cost
recovery could remain unresolved.
We are also persuaded that RACER would suffer hardship if required to
wait for the EPA’s investigation to proceed. The EPA is in “the early stages of
[its] enforcement efforts” with regard to the expanded territory. Id. at 4.
Defendants want RACER to wait for however long the EPA process takes before
seeking cost recovery. But even setting aside the question of whether RACER’s
claims would become time-barred during that process, RACER would still be
required to wait, possibly for years, before a court conclusively determines
whether RACER could seek repayment for costs it has already incurred. That is a
“present detriment” sufficient to constitute hardship, not “[t]he mere possibility
of future injury.” Simmonds, 326 F.3d at 360.
Defendants’ arguments that the district court’s conclusion should be
affirmed are similarly unpersuasive. Defendants assert that RACER has not been
ordered to remediate the expanded territory. But regardless of whether that is
29
correct, “[a] private party may recover under § 107(a) without any establishment
of liability to a third party.” United States v. Atl. Rsch. Corp., 551 U.S. 128, 139
(2007). Thus, § 107(a) “permits a party . . . to recover necessary response costs
incurred voluntarily, not under a court or administrative order or judgment.”
Consol. Edison Co. of New York v. UGI Utils., Inc., 423 F.3d 90, 100 (2d Cir. 2005). To
the extent that RACER incurred costs cleaning up the expanded territory
voluntarily, and not because it was legally required to do so by the NYSDEC or
the EPA, the fact that its action was voluntary does not bar RACER from recovery
under § 107, or demonstrate that its claim is not fit for judicial resolution.
Defendants also argue that the extent of RACER’s legal authority to
perform work in the expanded territory should be resolved before RACER is
permitted to recover costs incurred in performing that work. That too is
unpersuasive. As explained above, it may be the case that RACER acted
improperly in undertaking the cleanup of the expanded territory without seeking
authorization from the Bankruptcy Court. But that has little to do with RACER’s
claim against Defendants, which turns only on whether RACER incurred
“necessary costs of response . . . consistent with the national contingency plan,”
§ 107(a)(4)(B). And future Bankruptcy Court adjudication of the issue of RACER’s
30
authority to undertake remediation of the expanded territory, however the court
decides that issue, will not repay RACER for the costs it has already incurred.
Similarly, Defendants’ argument that RACER would have compelling
defenses under the 2011 Agreement as to any liability to clean up the expanded
territory does not affect the court’s ability to resolve RACER’s § 107 claim.
Defendants argue that whether (and to what extent) the Bankruptcy Court will
authorize RACER to clean up the expanded territory is “necessarily antecedent,”
Joint Appellees’ Br. 32, to whether RACER is permitted to recover from
Defendants. Not so. Defendants are neither parties to nor intended beneficiaries
of the 2011 Agreement and cannot press the provisions of that agreement as a
defense. And RACER may recover from Defendants regardless of whether the
Bankruptcy Court approves the expenditures it has made.11
11
Moreover, even if RACER could avoid liability by contesting the EPA’s orders
or litigating before the Bankruptcy Court its authority to clean up the expanded
territory, it is for RACER and its trustee, not the district court, to weigh the
potential costs and chances of success of such litigation. Depriving RACER of the
right to choose its best strategy for avoiding unjustified costs itself poses
hardship on RACER. Neither we nor the district court are in a position to
determine that the proposed alternative strategies would better minimize the
hardship to RACER.
31
Finally, we observe that the Supreme Court has recently cast doubt on the
reach of the prudential ripeness doctrine. In Lexmark International, Inc. v. Static
Control Components, Inc., the Court explained that a federal court’s ability to
decline jurisdiction on prudential ripeness grounds must be reconciled with the
“virtually unflagging” obligation of a court “to hear and decide cases within its
jurisdiction.” 572 U.S. 118, 125-26 (2014) (internal quotation marks omitted). In
Susan B. Anthony List v. Driehaus, the Court went further, calling into question
“the continuing vitality” of the prudential ripeness doctrine (though concluding
that it need not resolve that issue because the “fitness” and “hardship” factors
were “easily satisfied” in that case). 573 U.S. 149, 167 (2014). Since Lexmark and
Susan B. Anthony, we have not directly addressed whether the prudential
ripeness doctrine remains good law. But see, e.g., MPM Silicones, 966 F.3d at 233
(applying the doctrine). Assuming that it does, however, the Supreme Court’s
cautious approach to prudential ripeness is a reminder that the doctrine
constitutes a narrow exception to the strong principle of mandatory exercise of
jurisdiction. That caution reinforces our conclusion that the district court erred in
finding RACER’s § 107 claim prudentially unripe.
32
For all of those reasons, we conclude that RACER’s § 107 claim is ripe for
adjudication. In doing so, we express no opinion on any other threshold matter
raised by the parties, or on the merits of the claim, none of which the district
court has yet addressed. In particular, although the district court discussed in
dicta several reasons why RACER’s claim may be time-barred, that issue was not
decided by the district court, and we therefore decline to address it on appeal.
B. Section 113 Claim
We turn now to RACER’s § 113 claim as to the expanded territory, which
the district court dismissed without prejudice, because it was prudentially unripe
as to the non-moving defendants, and it was either time-barred (if the 2011
Agreement established RACER’s liability to clean up the expanded territory) or it
failed to state a claim (if RACER’s liability to clean up the expanded territory had
not yet been resolved) as to the moving defendants. We review a district court’s
order on a motion to dismiss for any of those reasons de novo. Duncan, 612 F.3d at
112; Hernandez v. United States, 939 F.3d 191, 198 (2d Cir. 2019); Deutsche Bank Nat.
Tr. Co. v. Quicken Loans Inc., 810 F.3d 861, 865 (2d Cir. 2015). We conclude that the
district court erred in dismissing the claim.
33
“[T]he remedies available in §§ 107(a) and 113(f) complement each other by
providing causes of action to persons in different procedural circumstances.” Atl.
Rsch. Corp., 551 U.S. at 139 (internal quotation marks omitted). In particular, the
Supreme Court has explained that,
a [polluter] that pays money to satisfy a settlement
agreement or a court judgment may pursue § 113(f)
contribution. But by reimbursing response costs paid by
other parties, the [polluter] has not incurred its own
costs of response and therefore cannot recover under
§ 107(a). As a result, though eligible to seek contribution
under § 113(f)(1), the [polluter] cannot simultaneously
seek to recover the same expenses under § 107(a).
Id. The United States Supreme Court and this court have further concluded that
where a plaintiff’s claim “fits squarely within the more specific requirements of
§ 113[],” the plaintiff cannot choose instead to proceed under § 107. Niagara
Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 127-28 (2d Cir. 2010)
(holding that the plaintiff could not proceed under § 107 where a Consent Order
between the NYSDEC and the plaintiff had given rise to a contribution claim
under § 113); see also Territory of Guam v. United States, 141 S.Ct. 1608, 1611 (2021)
34
(holding that a settlement must resolve a CIRCLA-specific liability to trigger a
contribution action under § 113(f)(3)(B)).12
Here, RACER pleaded claims as to the expanded territory under §§ 107
and 113 in the alternative. On appeal, RACER explains that it believes it has not
“resolved its liability to the United States or a State” as to the expanded territory,
the prerequisite for § 113 claim, see § 113(f)(3)(B), and therefore, that it must
proceed under § 107. Appellant’s Brief at 38. However, RACER contends that it
pleaded both claims because, if the district court concludes that RACER cannot
proceed under § 107 because it has a viable § 113 claim to the expanded territory,
then RACER wishes to pursue that claim in the alternative.
12
But see Atl. Rsch. Corp., 551 U.S. at 139 n.6 (explaining that it is not the case that
“§§ 107(a)(4)(B) and 113(f) have no overlap at all” and that, in particular, “a
[polluter] may sustain expenses pursuant to a consent decree following a suit
under § 106 or § 107(a)” and declining to decide “whether th[o]se compelled
costs of response are recoverable under § 113(f), § 107(a), or both”); Niagara
Mohawk Power Corp., 596 F.3d at 127 n.17 (noting that “[i]n Atlantic Research, the
Supreme Court left open the question of when an action for cost recovery under
§ 107(a) may be available to a [potentially responsible party] that directly incurs
clean up costs under some judicial or administrative compulsion” and declining
to decide “whether a § 107(a) action could be pursued by a PRP [potentially
responsible party] that incurs clean up costs after engaging with the federal or a
state government, but is not released from any CERCLA liability”).
35
The district court dismissed RACER’s § 113 claim without prejudice,
reasoning that:
[I]f plaintiffs are correct in their argument that the
expanded territory is not contemplated by any prior
agreement, then there is no predicate settlement
agreement for their § 113 claims and they have failed to
state a claim. Alternatively, if any agreement did
establish plaintiffs’ liability under CERCLA for the
purposes of their seeking contribution, that agreement
was plainly the 2011 Agreement, and not the 2015
Agreement. Thus plaintiffs’ § 113 claims fall well
outside of the three-year statute of limitations. In either
case, plaintiffs’ § 113 claims against the moving
defendants and Honeywell must be dismissed without
prejudice.
Revitalizing Auto Cmtys., 2020 WL 2404770 at *12. Later, the district court also
concluded that RACER’s § 113 claim was prudentially unripe as to the
unrepresented defendants and John Does for the same reasons that its § 107 claim
was unripe. Id. at *13. Finally, the district court stated in its conclusion that
“plaintiffs’ claims are not ripe,” id. at *14, suggesting that its prudential ripeness
determination served as the basis for dismissal of both of RACER’s CERCLA
claims. In short, the district court’s decision does not make clear why it dismissed
RACER’s § 113 claim.
36
To the extent that the district court’s dismissal rests on a conclusion that
the § 113 claim, like the § 107 claim, is prudentially unripe, we disagree for all of
the reasons previously stated. If the district court concludes that RACER does not
have a viable § 107 claim but can, in the alternative, pursue a § 113 claim for
contribution for the costs already incurred, we disagree that adjudication should
be delayed until the EPA process is complete. As we have already explained, it is
not clear that the EPA process will establish RACER’s right to recover costs
already incurred, and RACER will suffer hardship if it is required to wait,
possibly for years, before recovering money it has already spent.
Alternatively, to the extent that the district court’s dismissal rested on its
conclusion that either RACER failed to state a claim under § 113 or that any such
claim would be time-barred, the district court did not state that those are
separate, individually sufficient reasons for dismissal. Instead, it merely
concluded that one or the other must exist, even though each reason rests on a
contradictory interpretation of the 2011 Agreement.
Moreover, to the extent that the § 113 claim is in fact time-barred, the
proper response would be to dismiss the claim with prejudice, and to the extent
that the current complaint fails to state a claim, the district court would need to
37
consider whether the defects giving rise to that conclusion are remediable, or
whether they could not be cured by any plausible amendment, leading in the
latter case to dismissal again with prejudice. The fact that the district court
decided none of these things suggests that its dismissal without prejudice was not
a definitive resolution of any of these issues but was rather, like its prudential
ripeness decision, a temporizing measure that merely postponed a definitive
reckoning with the issues. Such an approach may have had some appeal if the
§ 107 claim was properly deferred as prudentially unripe. But we see no reason to
approve such a practice with the § 107 claim restored to the district court’s
docket.
Therefore, because the district court did not conclusively address either
issue, we conclude that the appropriate course of action is to vacate that portion
of the district court’s decision. As we have stated before, “[i]f the court fails to
make findings and to give an explanation, and the reason for the court’s ruling is
not clear to us, we will remand for findings and an explanation.” Beckford v.
Portuondo, 234 F.3d 128, 130 (2d Cir. 2000); see also id. (“[I]t is [not] our function to
decide motions . . . in the first instance. . . .We are entitled to the benefit of the
district court’s judgment, which is always helpful and usually persuasive.”);
38
accord Zalaski v. City of Bridgeport Police Dep’t, 613 F.3d 336, 343 (2d Cir. 2010)
(remanding where the district court had not undertaken the required analysis). In
vacating the district court’s conclusions, we express no opinion as to the
underlying issues. Accordingly, we hold that RACER’s § 113 claim as to the
expanded territory is prudentially ripe and vacate the district court’s conclusion
that either RACER failed to state a claim under § 113 or that any such claim is
time barred.
On remand, we leave this case in the able hands of the district court, which
is best positioned to determine how the case should proceed. We note only a few
additional points for the district court to consider. First, RACER has made clear
that it is pursuing relief under §§ 107 and 113 in the alternative, as it has a right to
do, see Fed. R. Civ. P. 8(d)(2)-(3), that it believes it is entitled to relief under § 107,
and that its § 113 claim is contingent on the rejection of its § 107 claim. Because
we hold that the § 107 claim is ripe, it may be logical for the district court to
address the merits of that claim first because, if it is successful, the court need not
address the § 113 claim at all.
Second, if the district court concludes that on the record before it, the § 113
claim fails to state a claim or is time-barred, it may enter judgment dismissing
39
that claim. However, any such judgment should clearly articulate on what
grounds the claim is dismissed. If, on the other hand, the district court concludes
that neither alternative basis for dismissal is sufficiently clear on the record
before it, then it may allow both the §§ 107 and 113 claims to proceed until after
the record is further developed.
Third, as we have previously explained, if a plaintiff has a claim that “fits
squarely within the more specific requirements of § 113[],” the plaintiff cannot
choose instead to proceed under § 107. Niagara Mohawk Power Corp., 596 F.3d at
127-28. Some of the Defendants argue that RACER cannot proceed under § 107
because it had a claim under § 113, albeit one that is now time-barred. See Lennox
Appellees’ Br. 5-8. We leave it to the wise discretion of the district court whether
that argument suggests that some consideration of the § 113 claim is warranted as
a preliminary question in evaluating RACER’s revived § 107 claim.
Finally, both parties urge us to address issues related to whether RACER
has a viable § 113 claim as to OU-2. Some of the district court’s observations in
dicta might bear on whether such a claim would be viable. But that dicta, which,
in any event, are found in the vacated portion of the district court’s opinion
40
discussing RACER’s § 113 claim as to the expanded territory, are not reviewable
on appeal. See In re Bean, 252 F.3d 113, 118 (2d Cir. 2001).
CONCLUSION
We conclude that the district court correctly ruled that the complaint must
be amended to substitute EPLET, the trustee of RACER Trust, as plaintiff.
We VACATE and REMAND the district court’s conclusions regarding
RACER’s §§ 107 and 113 claims. In particular, we conclude that both claims are
prudentially ripe, and that to the extent the district court dismissed the § 113
claim for other reasons, it failed to adequately explain its reasoning. We decline
to address the other threshold and merits issues raised by the parties, which the
district court has not addressed in the first instance.
Finally, we VACATE and REMAND the district court’s decision
dismissing RACER’s state law claims, which was premised on the dismissal of
the federal claims. If the district court concludes that either of RACER’s federal
claims can proceed, it should also reconsider whether to exercise supplemental
jurisdiction over the state law claims. As to RACER’s claim for declaratory relief,
although the district court was correct to observe that a claim for declaratory
41
relief is not an independent cause of action, on remand RACER may continue to
seek declaratory relief as a remedy for its other claims.
42