Opinion
94-CV-0400E(F).
December 28, 2004
MEMORANDUM and ORDER
This decision may be cited in whole or in any part.
This CERCLA action was commenced by New York State ("NYS") in 1994. NYS seeks response costs related to the release of hazardous materials from the Wellsville/Andover Landfill in Wellsville, N.Y. ("the Site") — which was used by defendants to dispose of various hazardous wastes. The remaining defendants in this action are Panex Industries, Inc., Successor Panex Industries, Inc. Stockholders' Liquidating Trust (the "Trust") and Michael D. Debaecke, Esq. as Trustee of the Trust (collectively "Panex Defendants"). NYS filed a summary judgment motion on April 20, 2004 seeking, inter alia, to hold the Panex Defendants jointly and severally liable for $4,558,034.83 in un-reimbursed response costs pursuant to CERCLA section 107, 42 U.S.C. § 9607, as well as future response costs pursuant to CERCLA section 113(g)(2), 42 U.S.C. § 9613(g)(2), (collectively "the Response Costs"). This motion was argued and submitted on December 10, 2004. For the reasons set forth below, NYS's motion will be granted.
Comprehensive Environmental Response and Liability Act, 42 U.S.C. §§ 9601- 9675.
The opposition to NYS's motion for summary judgment was filed by the Trust. Nonetheless, for purposes of simplicity, this Court will refer to the Panex Defendants as such collectively or individually unless otherwise noted because the Trust ostensibly represents the interests of the other Panex Defendants.
Rule 56(c) of the Federal Rules of Civil Procedure ("FRCvP") states that summary judgment may be granted only if the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In other words, after discovery and upon a motion, summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment is thus appropriate where there is "no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The moving party bears the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (citing Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970)). If the moving party makes such a showing, the non-moving party must then come forward with evidence of specific facts sufficient to support a jury verdict in order to survive the summary judgment motion. Ibid.; FRCvP 56(e).
With respect to the first prong of Anderson, a genuine issue of material fact exists if the evidence in the record "is such that a reasonable jury could return a verdict for the nonmoving party." Stated another way, there is "no genuine issue as to any material fact" where there is a "complete failure of proof concerning an essential element of the nonmoving party's case." Celotex, at 323. Under the second prong of Anderson, the disputed fact must be material, which is to say that it "might affect the outcome of the suit under the governing law." Anderson, at 248.
Anderson, at 248; see also id. at 252 ("The mere existence of a scintilla of evidence in support of the [movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [movant].").
Furthermore, "[i]n assessing the record to determine whether there is a genuine issue as to any material fact, the district court is required to resolve all ambiguities and draw all factual inferences in favor of the party against whom summary judgment is sought." Nonetheless, mere conclusions, conjecture, unsubstantiated allegations or surmise on the part of the non-moving party are insufficient to defeat a well-grounded motion for summary judgment. In CERCLA cases, if the governmental plaintiff establishes a prima facie case of liability, "and the defendant is unable to demonstrate by a preponderance of the evidence the existence of one of the three affirmative defenses set forth in § 9607(b), then plaintiff is entitled to summary judgment on the issue of liability, even when genuine issues of material fact remain as to appropriate damages." United States v. Alcan Aluminum Corp., 990 F.2d 711, 720 (2d Cir. 1993) (hereinafter " Alcan I").
St. Pierre v. Dyer, 208 F.3d 394, 404 (2d Cir. 2000) (citing Anderson, at 255).
Goenaga, supra note 4, at 18.
There is also a fourth, non-statutory, affirmative defense as discussed below.
Familiarity with the underlying facts in this case is presumed. Moreover, other courts have presented an overview of CERCLA that needs no reiteration here. This Court finds that NYS has established a prima facie case of liability under CERCLA section 107(a) for the reasons set forth by NYS in its motion papers. Although "CERCLA § 9607 is a strict liability statute", the Court of Appeals has "added a `common law gloss' to the statutory framework of CERCLA" that modifies CERCLA's scheme of joint and several liability in certain circumstances. United States v. Alcan Aluminum Corp., 315 F.3d 179, 184-185 (2d Cir. 2003) (" Alcan II") (discussing Alcan I), cert. denied, 540 U.S. 1103 (2004). The Court of Appeals (in Alcan I as construed by Alcan II) has created a "special exception" that permits CERCLA defendants to avoid liability altogether. Alcan II, at 185-186. Such exception, however, is not applicable here and the Panex Defendants do not argue otherwise.
See, e.g., State of New York v. Panex Indus., Inc., 1996 WL 378172 (W.D.N.Y. 1996).
See, e.g., Pfohl Bros. Landfill Site Steering Comm. v. Browning-Ferris Indus. of N.Y., Inc., 2004 WL 941816, at *7 (W.D.N.Y. 2004).
See, e.g., Alcan I, at 719-720 (setting forth five elements for prima facie case of CERCLA liability).
In other words, the "government is not required to show that a specific defendant's waste caused the incurrence of cleanup costs in order for strict liability to attach to that defendant." Alcan II, infra at 184. Indeed, "in addition to imposing a strict liability scheme, CERCLA does away with a causation requirement." Alcan I, at 721.
The "special exception" to CERCLA liability is not available where a subject pollutant is man-made. Alcan II, at 186; Seneca Meadows, Inc. v. ECI Liquidating, Inc., 121 F. Supp. 2d 248, 255 (W.D.N.Y. 2000) ("TCE [Trichloroethylene] and its related compounds are man-made chemicals that are not naturally occurring and hence have no natural `background' level in the environment; therefore, it would seem that any presence of TCE could not fall within [ Alcan I's] limited exception to the absence of a causation requirement * * *."). Consequently, because Rochester Button dumped, inter alia, TCE at the Site, the Panex defendants do not qualify for Alcan I's "special exception."
Although the Panex Defendants do not qualify for the "special exception," they may "nonetheless `present evidence relevant to establishing divisibility of harm.'" Ibid. (quoting Alcan I). Consequently, in order to avoid joint and several liability, a CERCLA defendant must:
"(1) demonstrate that the harm caused by its emulsion was `distinct' from the harm caused by other contributors at [the Site] or (2) proffer a reasonable basis for determining the proportional contribution of its emulsion to what may be conceived of as a single harm * * *." Alcan II, at 186 (applying Restatement (Second) of Torts § 433A).
The Court of Appeals "identified several types of proof that would be relevant to such a showing of divisibility, including `relative toxicity, migratory potential, and synergistic capacities of the hazardous substances at the site.'" Id. at 185-186 (quoting Alcan I). The defendant "bears the ultimate burden of establishing a reasonable basis for apportioning liability and * * * the government has no burden of proof with respect to what caused the release of hazardous waste and triggered response costs." Id. at 185. This burden has been described as "substantial." Divisibility, therefore, is a limited common law defense to joint and several liability under CERCLA.
United States v. Agway, Inc., 193 F. Supp. 2d 545, 548 (N.D.N.Y. 2002).
Agway, supra note 14, at 547. Moreover, none of CERCLA's statutory defenses is applicable here. Alcan I, at 721 ("[T]here are `only' three defenses to imposition of liability on a generator: an act of God, an act of war, and an act or omission of a third party.").
The Panex Defendants argue that, assuming arguendo that they are liable for the Response Costs, such liability should be apportioned according to their volumetric contribution of pollution to the Site. The Panex Defendants cite, inter alia, statements made by NYS in settlement negotiations as evidence of the Panex Defendants' "fair share" of liability. This Court, however, will not consider any statement made by NYS in an attempt to settle its claims against the Panex Defendants because such statements are inadmissible under Rule 408 of the Federal Rules of Evidence.
The Rochester Button Company, a division of Panex Industries, Inc., dumped the hazardous wastes at issue.
Applying Alcan I/Alcan II here, this Court finds that the Panex Defendants have proffered no evidence that the pollution for which the Panex Defendants are liable caused a "distinct" harm within the meaning of Alcan I/Alcan II. Although the Panex Defendants argue that Rochester Button waste was dumped into a "cell" or area that was exclusively used for Rochester Button waste, they fail to proffer any evidence that the waste in the Rochester Button cell remained in that cell ( i.e., that it did not migrate into groundwater). Moreover, NYS has produced evidence that some Rochester Button waste was sent to areas outside of Rochester Button's cell. Accordingly, the Panex Defendants have failed to carry their burden of demonstrating that the harm caused by Rochester Button waste was "distinct" from the harm caused by other parties who contributed hazardous wastes to the Site.
The Panex Defendants attempt to satisfy the second prong of the Alcan I/Alcan II divisibility defense to joint and several liability by contending that their volumetric contribution of waste to the Site provides a "reasonable basis" for determining their proportional contribution of harm caused at the Site. Although Alcan I noted that "commingling [of wastes in a dump] is not synonymous with indivisible harm", Alcan II held that summary judgment in favor of the government is appropriate where, as here, a defendant
Alcan I, at 722.
"did not comprehensively and persuasively address the effects of its waste emulsion at [the Site], it cannot be said that the company either established that the harm caused by its emulsion was distinct or proffered a reasonable basis for dividing the harm and apportioning liability. Stated another way, [defendant] did not satisfy its substantial burden with respect to divisibility because it failed to address the totality of the impact of its waste at [the Site]; it ignored the likelihood that the cumulative impact of its waste emulsion exceeded the impact of the emulsion's constituents considered individually, and neglected to account for the emulsion's chemical and physical interaction with other hazardous substances already at the site." Alcan II, at 187.
Indeed, Rochester Button's volumetric contributions of waste to the Site do not necessarily approximate its contribution to the harm caused at the Site because small amounts of some wastes can cause more harm than large amounts of other types of hazardous wastes. The Panex Defendants, however, have proffered no evidence of the "relative toxicity, migratory potential, degree of migration, and synergistic capacit[y]" of the wastes dumped at the Site by Rochester Button. The Panex Defendants have failed to carry their burden of proffering a reasonable basis for determining the divisibility of harm at the Site. Accordingly, NYS's motion for summary judgment will be granted because the Panex Defendants did not satisfy their burden under either prong of the Alcan I/Alcan II divisibility defense to joint and several liability.
United States v. Monsanto, 858 F.2d 160, 168 (4th Cir. 1988) (applying section 433A of the Restatement (Second) of Torts and rejecting defendant's volumetric argument concerning divisibility of harm at a Superfund site). Monsanto held that defendants failed to satisfy their burden of proof with respect to a divisibility defense where it stated:
"To meet this burden, the generator defendants had to establish that the environmental harm at [the site] was divisible among responsible parties. They presented no evidence, however, showing a relationship between waste volume, the release of hazardous substances, and harm at the site. Further, in light of the commingling of hazardous substances, the district court could not have reasonably apportioned liability without some evidence disclosing the individual and interactive qualities of the substances deposited there. Common sense counsels that a million gallons of certain substances could be mixed together without significant consequences, whereas a few pints of others improperly mixed could result in disastrous consequences. Under other circumstances proportionate volumes of hazardous substances may well be probative of contributory harm. In this case, however, volume could not establish the effective contribution of each waste generator to the harm at the * * * site." Monsanto, at 172-173.
The facts of this case, therefore, are more akin to those of Monsanto than they are to a case where only one type of waste was deposited at a Superfund site, which makes it possible to apportion harm according to a defendant's volumetric contribution of waste. See, e.g., U.S. Envtl. Protection Agency v. Sequa Corp. (In re Bell Petro. Servs., Inc.), 3 F.3d 889, 903 (5th Cir. 1993); United States v. Atlas Lederer Co., 282 F. Supp. 2d 687, 704-705 (S.D. Ohio 2001).
Alcan II, at 186.
Compare United States v. 175 Inwood Assocs. LLP, 330 F. Supp. 2d 213, 232 (E.D.N.Y. 2004) ("Merely asserting that liability should be apportioned, without providing any meaningful input as to how or why that apportionment should be accomplished, does not meet the relevant `substantial' threshold.") with Aff. of R. Karl Hill ¶ 5 ("A reasonable basis for allocation certainly exists and the Successor Trust should be given the opportunity to demonstrate, at trial, that the Successor Trust should be assessed, at most, a percentage `share' of the total recovery sought by the State * * *.") (emphasis added). Opposing NYS's motion was the Panex Defendants' opportunity to demonstrate the alleged divisibility of harm. Moreover, a similar volumetric argument was rejected by Judge Scullin in the Northern District of New York in Agway where he noted that defendants "face an uphill battle in attempting to demonstrate that volumetric contribution is a reasonable basis for apportioning liability of a single harm." Agway, supra note 14, at 549. The court in Agway granted the government's summary judgment motion based on the defendant's "total failure to produce any evidence regarding any of the factors relevant to the issue of divisibility as well as any proof to support its argument that volume alone is a reasonable basis for apportionment." Id. at 552.
This Court rejects the Panex Defendants' laches argument because such equitable defenses are not available in CERCLA enforcement actions. As noted by NYS, the cases cited by the Panex Defendants are distinguishable. Moreover, even if a laches defense were available to the Panex Defendants, this Court finds such to be inapplicable to this case because NYS was diligent in prosecuting this action, despite the extensive amount of time involved — which is not uncommon in CERCLA actions such as this one.
See, e.g., United States v. Occidental Chem. Corp., 965 F. Supp. 408, 416 (W.D.N.Y. 1997) (holding that equitable defenses such as "unclean hands" are not available in CERCLA enforcement actions); cf. Degussa Constr. Chem. Operations, Inc. v. Berwind Corp., 280 F. Supp. 2d 393, 411 (E.D. Pa. 2003) ("With respect to CERCLA section 107(a) cost recovery actions, the majority of courts have rejected equitable defenses as inconsistent with the explicit language of CERCLA and congressional intent.").
Degussa, supra note 21, at 411 (noting that the elements for a laches defense are: "(1) lack of diligence by the party against whom the defense is asserted; and (2) prejudice to the party asserting the defense").
The Love Canal litigation lasted for nearly two decades. See Occidental Chem, supra note 21.
The Panex Defendants contend that Panex Corp. should be dismissed because it is a defunct entity — although they filed no motion in support of this contention. This Court previously rejected this argument and it sees no reason to revisit the same.
This Court finds that NYS is entitled to recover future response costs from the Panex Defendants. The Court of Appeals has held that the "proper remedy for future response costs is * * * a declaratory judgment award dividing future response costs among responsible parties." Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 92 (2d Cir. 2000). To the extent, however, that the harm at the Site cannot be divided on the facts presented, this Court will hold the Panex Defendants jointly and severally liable for NYS's future response costs as well.
See also Goodrich Corp. v. Town of Middlebury, 311 F.3d 154, 175 (2d Cir. 2002) (discussing Gussack); Durham Mfg. Co. v. Merriam Mfg. Co., 294 F. Supp. 2d 251, 268 (D. Conn. 2003) (applying Gussack and holding that CERCLA section 113(g)(2) "permits a declaratory judgment allocating future response costs between [potentially responsible parties]").
See, e.g., Northwestern Mut. Life Ins. Co. v. Atlantic Research Corp., 847 F. Supp. 389, 402 (E.D. Va. 1994) ("Because the defendants are jointly and severally liable under CERCLA for the contamination of the facility, declaratory judgment against all defendants for future remediation costs is proper.").
Accordingly, it is hereby ORDERED that plaintiff's motion for summary judgment is granted, that the Panex Defendants are jointly and severally liable under CERCLA section 107, 42 U.S.C. § 9607, for all un-reimbursed response costs incurred by the State of New York in cleaning up the Site, that the Panex Defendants are jointly and severally liable under CERCLA section 113(g)(2), 42 U.S.C. § 9613(g)(2), for all future response costs incurred by the State of New York in cleaning up the Site and that the Clerk of this Court shall close this case.