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Business Litigation - CERCLA Action Seeking $44 million for Clean Up Costs to be Dismissed

Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 1 of 29
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------------------------------X
STATE OF NEW YORK and ALEXANDER B. GRANNIS,
as Commissioner of the New York State Department of
Environmental Conservation,
Plaintiffs REPORT AND
RECOMMENDATION
CV 06-1133 (SJF) (MLO)
-against-
NEXT MILLENIUM REALTY, LLC, et al.,
Defendants,
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NEXT MILLENIUM REALTY, LLC, 101 FROST STREET
CORPORATION, EMILY SPIEGEL, individually and as trustee
under an agreement of trust for the benefit of Pamela Spiegel and
Lisa Spiegel, JERRY SPIEGEL,
Third-Party Plaintiffs,
-against-
ADCHEM CORP., et al.,
Third-Party Defendants.
-------------------------------------------------------------------------------X
ORENSTEIN, Magistrate Judge:
Plaintiffs State of New York and Alexander B. Grannis, as Commissioner of the New
York State Department of Environmental Conservation (collectively “Plaintiffs”) brought this
action under the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.,
(“CERCLA”) and New York’s common law of public nuisance, indemnification and restitution
seeking to recover past and future response costs incurred by the State in responding to theCase 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 2 of 29
alleged release and threatened release of hazardous substances at or from thirteen facilities that
form the New Cassel Industrial Area Superfund Site, located in North Hempstead, New York
(the “NCIA Site”) and to redress harm to the public health and environment of the State resulting
from defendants’ alleged acts and omissions at the NCIA Site. (Second Amended Compl. ¶¶ 1,
139-168.)
Pursuant to the Orders of District Judge Sandra J. Feuerstein dated October 5, 2009,
December 15, 2009, June 17, 2010 and July 2, 2010, defendants’ (1) Next Millennium Realty,
LLC (“Next Millennium”), 101 Frost Street Associates, L.P., 101 Frost Street Corporation, Alan
Eidler, as Co-Executor of the Estate of Emily Spiegel, Pamela Spiegel Sanders, as Co-Executor
of the Estate of Emily Spiegel, Lise Spiegel Wilks, as Co-Executor of the Estate of Emily
Spiegel, and Jerry Spiegel (collectively the “Frost Street Defendants”); (2) Grand Machinery
1
Exchange, Inc., Paul Merandi and 2632 Realty Development Corporation (collectively the
2 3
“Grand Machinery Defendants”) ; (3) Barouh Eaton Allen Corporation (“BEAC”) ; (4) Sulzer
1
In their Memorandum of Law in Opposition to the Grand Machinery Defendants’ Motion
for Summary Judgment, Plaintiffs state that they submitted their opposition only as to defendants
Grand Machinery Exchange Inc. and 2632 Realty Development Corporation, and that they intend to
withdraw the claims against defendant Paul Merandi. (Pls.’ Mem. of Law in Opp. to Grand
Machinery’s Motion for Summary Judgment, dated Jan. 15, 2010, at 2 n.1.) Accordingly, the Court
respectfully reports and recommends that defendant Paul Merandi’s motion for summary judgment
be granted.
2
By Notice of Motion dated December 14, 2009, the Grand Machinery Defendants joined in
the Frost Street Defendants’ motion for summary judgment. Notice of Motion, dated December 14,
2009.
3
By letter dated June 11, 2010, defendant BEAC joined in the Frost Street Defendants’
and Grand Machinery Defendants’ motions for summary judgment. Smith Letter, dated June 11,
2010.
2Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 3 of 29
4
Metco (“Sulzer”) ; (5) Utility Manufacturing Corporation, Nest Equities, Inc., Audie Kranz and
5
Wilbur Kranz (collectively the “Utility Manufacturing Defendants”) ; and Tishcon Corporation,
6
Kamal Chopra and Joe Elbaz (collectively the “Tishcon Defendants”) motions for summary
judgment pursuant to Fed. R. Civ. P. 56 have been referred to the undersigned. In addition,
defendants NMB (USA) Inc. and IMC Eastern Corporation (collectively the “IMC
7 8
Defendants”) ; Island Transportation Inc. ; William Gross and C&O Realty (collectively the
9
“C&O Defendants”) ; and Atlas Graphics, Inc., Richard Degenhart and H.D.P. Printing
10
Industries, Inc. (collectively the “Atlas Graphics Defendants”) (hereinafter all moving parties
4
By letter dated June 10, 2010 (and filed June 14, 2010), defendant Sulzer joined in the
Frost Street Defendants’ and Grand Machinery Defendants’ motions for summary judgment.
O’leary Letter, dated June 10, 2010.
5
By Notice of Motion dated June 15, 2010, the Utility Manufacturing Defendants joined
in the Frost Street Defendants’ and Grand Machinery Defendants’ motions for summary
judgment. Notice of Motion, dated June 15, 2010.
6
By letter dated June 29, 2010, the Tishcon Defendants joined in the Frost Street
Defendants’ and Grand Machinery Defendants’ motions for summary judgment. Landrigan
Letter, dated June 29, 2010.
7
By letter dated June 9, 2010, the IMC Defendants joined in the Frost Street Defendants’
and Grand Machinery Defendants’ motions for summary judgment. Lucic Letter, dated July 9,
2010.
8
By letter dated June 10, 2010, defendant Island Transportation, Inc. joined in the Frost
Street Defendants’ and Grand Machinery Defendants’ motions for summary judgment. Woolson
Letter, dated June 10, 2010.
9
By letter dated June 15, 2010, the C&O Defendants joined in the Frost Street
Defendants’ and Grand Machinery Defendants’ motions for summary judgment. Schulz Letter,
dated June 15, 2010.
10
By letter dated June 28, 2010, the Atlas Graphics Defendants joined in the Frost Street
Defendants’ and Grand Machinery Defendants’ motions for summary judgment. Robinson
Letter, dated June 28, 2010 (filed June 29, 2010).
3Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 4 of 29
11
referred to collectively as “Defendants”).
For the reasons that follow, this Court respectfully reports and recommends that
Defendants’ motions for summary judgment be granted.
BACKGROUND
The factual background underlying this action is set forth in this Court’s prior Reports
and Recommendations, dated February 17, 2007 and May 2, 2008, familiarity with which is
presumed. See Report and Recommendations, dated February 17, 2007 and May 2, 2008,
12
Orenstein, M., M.J. The Court provides only those facts deemed pertinent to this motion.
The following facts are undisputed unless otherwise noted:
The NCIA is comprised of approximately 170 acres of industrial and commercial
property, which is bounded by the Long Island Railroad, Frost Street, Old Country Road and
Grand Boulevard in North Hempstead, Nassau County, New York. (Second Am. Compl.¶¶ 2,
52-53, 140-42; Pl. 56.1 Statement at ¶¶ 2, 79.) The thirteen manufacturing and commercial
facilities that are the subject of this action are a portion of the NCIA complex. (Id.) The NCIA
is located over a sole-source aquifer identified by the United States Environmental Protection
11
The Court notes that defendants Arkwin Industries, Inc., Thomas Molloy, William
Maglio, as co-executor of the Estate of Daniel Berlin, and Frank Jacobson, as co-executor of the
Estate of Daniel Berlin (collectively the “Arkwin Defendants”) have filed a motion for summary
judgment and have agreed to a separate briefing schedule with Plaintiffs. See Ommen Letter,
dated September 9, 2010 (informing the Court that the Arkwin Defendants agreed to the following
briefing schedule: State’s opposition papers shall be served by October 8, 2010 and the Arkwin
Defendants’ reply papers shall be served by October 25, 2010). Accordingly, the Arkwin
Defendants’ motion for summary judgment will not be considered.
12
By Orders, dated August 14, 2007 and May 2, 2008, respectively, the district court adopted
the Reports and Recommendations in their entirety as Orders of the Court. State of New York v.
Next Millennium Realty, LLC, 2007 WL 23621444 (E.D.N.Y. Aug. 14, 2007; State of New York v.
Next Millennium Realty, LLC, 2008 WL 1958002 (E.D.N.Y. May 2, 2008.
4Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 5 of 29
Agency (the “EPA”). (Id.) Groundwater underlies the Sites at a depth of approximately 60 feet,
and two public water supply wells are located approximately 1,500 feet downgradient of the
NCIA. (Id.)
According to the Second Amended Complaint, the disposal of hazardous substances at
each of the thirteen facilities have contaminated the soil and groundwater at and in the vicinity of
each facility, including in and around the Bowling Green Water District (“Bowling Green”)
public water supply wells. (Id.) As the contaminants from each of the facilities commingled,
13
Plaintiffs allege that they formed a plume of pollutants that has migrated from the NCIA sites
and has contaminated the nearby Bowling Green public water supply wells, thus threatening the
environment and public health. (Id.) Defendants are alleged to be the current owners and/or
operators of the facilities and/or the successors to the entities that owned or operated the thirteen
NCIA Sites at the time of the disposal of hazardous substances. (Id.)
Development of the NCIA dates back to early 1950, and past industrial activities
conducted within the NCIA have resulted in extensive contamination of groundwater at the
NCIA by volatile organic compounds (“VOC”s). (Second Am. Compl.¶¶ 54-56; Pl. 56.1
Statement at ¶¶ 79-81.) Based upon an investigation by the Nassau County Health Department
in connection with the NCIA site which revealed the presence of VOCs in the groundwater, the
New York State Department of Environmental Conservation (the “NYSDEC”) placed the entire
NCIA properties on the New York State Registry of Inactive Hazardous Waste Disposal Sites
(the “Registry”) in August 1988. (Id.) The NYSDEC retained Lawler, Matusky & Skelly
13
A plume is a volume of contaminated groundwater in an aquifier that extends downward
and outward from a specific source of contamination. (Pls.’ Mem. of Law in Opp. to Defs. Grand
Machinery’s Mot. for Summary Judgement, dated Jan. 15., 2010 at 3.)
5Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 6 of 29
(“LMS”) to conduct Preliminary Site Assessments (“PSA”s) to locate sources of groundwater
contamination and to identify potentially responsible parties. (Id.) In March 1995, the NYSDEC
14
delisted the NCIA Site as a whole and listed seven properties within the NCIA as Class 2 sites.
In 1996, 1997 and 1998 additional PSAs resulted in the NYSDEC listing additional properties
within the NCIA as Class 2 sites. (Id.)
In remediating Class 2 sites in the NCIA, the NYSDEC employed a three-prong strategy.
(Second Am. Compl.¶¶ 57; Pl. 56.1 Statement at ¶¶ 82, 137-38.) First, the NYSDEC identified
on-site source areas of contamination and chose appropriate remedial actions to address these
areas. (Id.) Second, the NYSDEC investigated the on-site groundwater contamination at each
site and chose appropriate remedial actions to address these areas. (Id.) Finally, the NYSDEC
investigated off-site groundwater contamination migrating from Class 2 sites in the NCIA toward
the Bowling Green public water supply. (Id.)
The NYSDEC conducted an area wide Remedial Investigation/Feasibility Study
(“RI/FS”) relating to off-site groundwater contamination that was migrating from the Class 2
sites in the NCIA. (Id.) The NYSDEC in 2003 issued its Record of Decision (“ROD”) for the
NCIA Site’s off-site groundwater remediating south of the NCIA Site, called Operable Unit No.
3 (“OU-3"). (Id.) In its decision, the NYSDEC required the full plume remediating of the
Western, Central and Eastern plumes, in the upper and lower portions of the aquifier with in-well
stripping treatment systems. (Id.) In November 2005, the NYSDEC issued an Explanation of
Significant Differences that separated the sites involved into two distinct groups: those located in
the areas of the origin of the Eastern and Central plumes, and those located in the area of the
14
Class 2 sites listed on the Registry are those properties that contain hazardous wastes and
pose a significant threat to the environment. (Id.); see NYCRR § 375-1.8(a)(2)(ii).
6Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 7 of 29
origin of the Western plum. (Id.)
15
On March 13, 2006, Plaintiffs commenced the instant action in the United States
District Court for the Eastern District of New York (Feuerstein, D.J.) against Defendants (1)
seeking recovery costs under § 107 of CERCLA for the completion of the remediating of the off-
site groundwater plumes including the costs of investigating and remediating the off-site
groundwater contamination in and around the Bowling Green public water supply wells and of
responding to releases of hazardous substances at the respective facilities; (2) injunctive relief to
abate the contamination in the NCIA and for reimbursement of the State’s costs in abating a
public nuisance under New York common law; (3) restitution; and (4) indemnification. (Compl.,
dated Mar. 13, 2006.) Plaintiffs amended the Complaint to add certain NCIA parties to this
action on May 12, 2006. (Am. Compl., dated May 20, 2006.) On May 20, 2008, Plaintiffs filed
a Second Amended Complaint to add certain NCIA parties to this action. (Second Am. Compl.,
dated May 20, 2008.)
Defendants now move for summary judgment pursuant to Fed. R. Civ. P. 56 on the
grounds that Plaintiffs’ claims are time-barred.
The underlying facts and applicable law surrounding Defendants’ motion will be
15
State of New York et al. v. Next Millenium Realty, LLC et al., CV 06-1133 (SJF)(MLO)
was consolidated into lead case, Next Millenium Realty, LLC et al. v. Adchem Corp. et al., CV 03-
5985 on May 4, 2006 as related actions. See Order, dated May 4, 2006 (Feuerstein, D.J.). Case
number CV 06-1133 was administratively closed by Order, dated May 4, 2006. Id. Thereafter, in
an Order dated September 8, 2010, the two actions were severed for all purposes, and the Clerk of
the Court was directed to reopen the case entitled State of New York et al. v. Next Millenium Realty,
LLC et al., under docket number CV 06-1133. See Order, dated September 8, 2010 (Feuerstein,
D.J.). By notice of motion dated September 17, 2010, defendants Adchem Corp., Northern State
Realty Co., Pufahl Realty Corp. and Lincoln Processing moved for reconsideration of the Order,
dated September 8, 2010 which severed the two actions for all purposes. (Notice of Motion, dated
September 17, 2010.)
7Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 8 of 29
presented in the relevant discussion section below.
DISCUSSION
I. Summary Judgment Standard
Summary judgment is appropriate “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show 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.” Fed. R. Civ. P. 56( c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986)); Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 309 (2d Cir. 2008);
Globecom Group, LLC v. Hartford Fire Ins. Co., 434 F.3d 165, 170 (2d Cir. 2006). A dispute
regarding a material fact is genuine “if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986);
see also SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009); Coppola v.
Bear Stearns & Co., 499 F.3d 144, 148 (2d Cir. 2007). The nonmoving party “must do more
than simply show that there is some metaphysical doubt as to the material facts.” Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Murphy, 2008 WL
2433615, at *6. Rule 56(e) “requires the nonmoving party to go beyond the pleadings and by
[its] own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’
designate specific facts showing there is a genuine issue for trial.’” Celotex Corp., 477 U.S. at
324, 106 S. Ct. 2548 (citing Fed. R. Civ. P. 56); see Gilles v. Repicky, 511 F.3d 239, 242 (2d Cir.
2007). In doing so, “[e]vidence submitted in support of a summary judgment motion must be
admissible [at trial], and the proponent of the evidence bears the burden of showing that the
evidence is admissible.” Vahos v. General Motors Corp., 2008 WL 2439643, at *4 (E.D.N.Y.
June 16, 2008); see Patterson v. County of Oneida, 375 F.3d 206, 219-20, 222 (2d Cir. 2004).
8Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 9 of 29
In considering a motion for summary judgment, “the judge’s function is not himself to
weigh the evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial.” Celotex, 477 U.S. at 249, 106 S. Ct. at 2511; see Caldarola v.
Calabrese, 298 F.3d 156, 160 (2d Cir. 2006). In doing so, “[t]he district court must draw all
reasonable inferences and resolve all ambiguities in favor of the nonmoving party and grant
summary judgment only if no reasonable trier of fact could find in favor of the nonmoving
party.” Sutera v. Schering Corp.,73 F.3d 13, 15 (2d Cir. 1995) (citation omitted); see Augustin v.
Yale Club of New York City, 2008 WL 1813229, at *1 (2d Cir. 2008).
II. CERCLA Claims
CERCLA is a broad remedial statute that Congress enacted to encourage the timely
cleanup of sites contaminated with hazardous wastes and other pollutants. W.R. Grace & Co. v.
Zotos Int’l, Inc., 559 F.3d 85 (2d Cir. 2009); see Niagara Mohawk Power Corp. v. Chevron
U.S.A., Inc., 596 F.3d 112,120 (2d Cir. 2010) (“CERCLA, remedial in nature, is designed to
encourage prompt and effective cleanup of hazardous waste sites”). CERCLA “grants the
President . . . power to command government agencies and private parties to clean up hazardous
waste sites,” Key Tronic Corp. v. Untied States, 511 U.S. 809, 814 (1994), and provides that
“everyone who is responsible for hazardous-waste contamination may be forced to contribute to
the costs of cleanup,” United States v. Bestfoods, 524 U.S. 51, 56 & n.1 (1998) (internal quotation
marks and citations omitted). See Niagara Mohawk Power Corp., 596 F.3d at 120 (“CERCLA
empowers the federal government and the states to initiate comprehensive cleanups, and to seek
recovery of expenses associated with those cleanups”); Commander Oil Corp. v. Barlo Equip.
Corp., 215 F.3d 321, 326 (2d Cir. 2000) (CERCLA sets forth “a regime of broad-ranging liability,
permitting the government to recover its remediating expenses directly from parties responsible
9Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 10 of 29
for pollution and authorizing private parties to pursue contribution or indemnification from
potentially responsible parties for expenses incurred responding to environmental threats”)
th
(citations omitted); see also S. Rep. No. 848, 96 Cong., 2d Sess. 13 (1980) (CERCLA’s
expansive liability scheme is intended “to assure that the costs of injuries resulting from defective
or hazardous substances are borne by the persons who create such risks rather than by the injured
parties who are powerless to protect themselves”).
CERCLA’s goals include “encouraging the timely cleanup on those responsible for
creating or maintaining the hazardous conditions.” Consol. Edison Co. of N.Y. v. UGI Utilities,
Inc., 423 F.3d 90, 94 (2d Cir. 2005) (internal quotation marks and citation omitted); accord
Burlington N. & Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870, 1874 (2009). In support of
these goals, CERCLA provides two distinct legal remedies for the recoupment or reimbursement
for hazardous waste cleanup and prevention costs at contaminated sites: (1) cost recovery actions
by the government and private parties against potentially responsible parties under § 107(a) and
(2) contribution actions under § 113(f). 42 U.S.C. §§ 9607(a) and 9613(f); see Cooper Indus. Inc.
v. Aviall Servs., Inc., 543 U.S. 157, 163 & n. 3 (2004); Schaefer v. Town of Victor, 457 F.3d 188,
194 (2d Cir. 2006). Only § 107(a) is at issue in the instant matter.
(a) Statute of Limitations Under CERCLA § 107
“Section 107 authorizes the United States, a state, or any other person to seek
reimbursement for all removal or remedial costs associated with the hazardous materials on the
property, provided that those actions are consistent with the National Contingency Plan – the
federal government’s roadmap for responding to the release of hazardous substances.” Niagara
Mohawk Power Corp., 596 F.3d at 120-21 (internal quotation marks and citation omitted). Under
§107 of CERCLA, there are two applicable limitations periods governing cost recovery actions
10Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 11 of 29
depending on whether the response costs were incurred in connection with a removal action or a
remedial action. 42 U.S.C. § 9613(g)(2); see Schaefer, 457 F.3d at 195 (“For cost recovery
actions under § 107, CERCLA distinguishes between two kinds of response: remedial actions –
generally long-term or permanent containment or disposal programs – and removal efforts –
typically short-term cleanup arrangements”) (internal quotation marks and citation omitted); see
also State of New York v. Shore Realty Corp., 759 F.2d 1032,1040 (2d Cir. 1985). Section
113(g)(2) of CERCLA provides in pertinent part:
An initial action for recovery of the costs referred to in [§ 107] of
this title must be commenced;
(A) for a removal action, within 3 years after completion of the
removal action, except that such cost recovery action must be
brought within 6 years after a determination to grant a waiver under
[§ 104(c)(1)(C)] of this title for continued response action; and
(B) for a remedial action, within 6 years after initiation of physical
on-site construction of the remedial action, except that, if the
remedial action is initiated within 3 years after the completion of the
removal action, costs incurred in the removal action may be
recovered in the cost recovery action brought under this
subparagraph.
42 U.S.C. § 9613(G)(2). “Because of this difference in limitations periods, whether an activity is
a “removal action” or a “remedial action” under § 107(a) can be determinative of the timeliness of
a claim.” Schaefer, 457 F.3d at 195-96.
The statute defines removal actions as those responses that include
the 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 evaluate
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 damage to the public
11Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 12 of 29
health or welfare or to the environment, which may otherwise result
from a release or threat of release.
42 U.S.C. § 9601(23). Remedial actions are defined as those
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. The term includes, but is not limited
to, such actions at the location of the release as storage,
confinement, perimeter protection using dikes, trenches, or ditches,
clay cover, neutralization, cleanup of released hazardous substances
and associated contaminated materials, recycling or reuse,
diversion, destruction, segregation of reactive wastes, dredging or
excavations, repair or replacement of leaking containers, collection
of leachate and runoff, onsite treatment or incineration, provision of
alternative water supplies, and any monitoring reasonably required
to assure that such actions protect the public health and welfare and
the environment.
42 U.S.C. § 9601(24). “Distilled to its core, the key distinction between a remedial and a removal
action is the purpose for which the action is undertaken. As a rule of thumb, though not an
invariable guide, remedial actions are long-term or permanent containment or disposal programs,
while removal actions are typically short-term cleanup arrangements.” Yankee Gas Servs. Co. v.
UGI Utilities, Inc., 616 F. Supp. 2d 228, 270 (D. Conn. 2009) (internal quotation marks and
citations omitted).
(b) Response Activities at the NCIA Site
Defendants contend that (i) the physical on-site construction of the granulated activated
carbon treatment system (the “GAC System”) to address contamination found in the Bowling
Green aquifier which commenced on or before December 10, 1990; and/or alternatively (ii) the
supplemental construction of a Packed Tower Aeration System (the “supplemental air stripping
tower”) which was connected to the GAC System which commenced on June 12-13, 1995,
12Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 13 of 29
triggered the running of the time in which the State must have commenced its initial action for the
recovery of costs associated with a remedial action under CERCLA. According to Defendants
because Plaintiffs failed to commence the within action within six years of construction of (i) the
GAC System in December 1990 and/or (ii) the supplemental air stripping tower on June 12-13,
1995, Plaintiffs’ cost recovery claims under § 107 of CERCLA are barred by the applicable statute
of limitations.
Plaintiffs disagree and argue that the instant action was timely commenced because the
construction of the GAC System and the supplemental air stripping tower constituted removal
actions, not remedial actions. In the alternative, Plaintiffs argue that the applicable statute of
limitations was tolled by the execution of tolling agreements by Defendants.
(i) Construction of GAC System
A review of the record reveals the following. The “NCIA was first recognized as an area
with widespread groundwater contamination during a county-wide groundwater investigation
conducted by the NCDH in 1986.” (ROD, dated October 2003, at 4.) The primary concern to
human health and/or the environment was the threat of contamination to the sole source aquifier
that is the source of the water supply at the Bowling Green water supply wells. (Id. at 1) As a
result of the investigation, the NYSDEC listed the NCIA as a Class 2 site in the Registry in 1988.
(Id.) In 1989, Bowling Green hired Dvirka & Bartilucci Consulting Engineers (“D&B”) to
recommend a “long-term treatment option” for remediating the VOC groundwater contamination
migrating from the NCIA Site into the Bowling Green water supply wells. (Davis Aff., dated Mar.
27, 2009, ¶¶ 2-4; Ex. 1.) Following its evaluation, D&B recommended the GAC System at an
estimated project cost of $1.25 million. (Id. at ¶ 6.) On July 28, 1990, the NCDH approved the
GAC System and the construction of the treatment system was put out to bid. (Id. at ¶¶ 7-10.)
13Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 14 of 29
Although Plaintiffs argue that the State had no involvement with the design, construction
or approval of the plans for the GAC System (or the supplemental air stripping tower), and
therefore the recovery activity cannot be imputed to the State for purposes of calculating the
CERCLA statute of limitations, Plaintiffs’ argument is belied by the record and applicable law.
Section 5-1.22 of Part 5, Chapter 1 of the New York State Sanitary Code (“SSC”),
provides that no supplier of water may construct or install an addition to or modification of an
existing public water system until the plans and specifications have been submitted to and
approved by the State. 10 N.Y.C.R.R.§ 5-1.22; see Dunn Decl., dated Nov. 18, 2009, ¶ 2. Plans
for the modification of an existing public water system may be approved by the State when the
modification is deemed necessary to protect public health or safety. (Id.) A supplier of water
16
must receive approval of the State before placing into service any public system constructed
under the requirements of the SSC. The New York State Department of Health (“NYSDOH”)
delegates to local health departments the responsibility for reviewing, commenting, and ultimately
approving plans by the local water supplier for modifying the existing water supply system.
(Dunn Decl., dated Nov. 18, 2009, ¶¶ 3-4.)
Here, NYSDOH delegated direct supervision of the review, approval and construction of
the GAC System (and supplemental air stripping tower) at Bowling Green to its designated
representative NCDH. (Id.) Notwithstanding, in March 1990, D&B advised both NYSDOH and
NCDH that the Bowling Green water supply wells had detected levels of contamination. (Alarcon
Decl., dated Mar. 17, 2009, ¶ 5.) NYSDOH received the initial application for the approval of the
plans and was copied on all necessary correspondence concerning the GAC System and
16
“State” is defined to mean the State Commissioner of Health or his designated
representative. SSC § 5-1.1(bk).
14Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 15 of 29
supplemental air stripping tower. (Id.; see Doyle Letter, dated March 12, 1990 (attached as Ex. A
to Frost Street Defs. Reply Mem., dated April 5, 2010)); Davis Aff., dated Mar. 27, 2009, ¶ 6; Exs.
2-5; Alarcon Decl., dated Mar. 17, 2009, ¶ 5; Exs. A-C, D-E ) Indeed, by letter dated March 12,
1990, D&B’s plans for the construction of the GAC System were sent directly to Gilbert Faustel of
the NYSDOH and sought the NYSDOH’s assistance to expedite approval of the plans and
specifications for the construction project. (Doyle Letter, dated March 12, 1990.) In pertinent part,
the letter set forth the following:
Transmitted herewith are three (3) copies of Contract Nos. 1, 2, 3,
and 4 for the Construction of Bowling Green Estates Water
Treatment Facility and Application for Approval of Plans for Public
Water Supply Improvement Gen. Form 296. The project involves
the construction of a 4.0 MGD Granular Activated Carbon (GAC)
Adsorption System to serve Well No. 1 and Well No. 2 in the
Bowling Green Estates Water District, including the replacement of
deep well turbine pumps and mortors. The project was broken
down into several contracts to expedite fabrication and delivery of
treatment equipment.
At present, the Town of Hempstead Department of Water is
installing a Granular Activated Carbon (GAC) Adsorption System
at the site of Wells No. 1 and 2 in order to maintain water of
acceptable quality. The quality of water discharged from each of
the wells has shown an increase in the levels of organic compounds;
however, the concentration of organic compounds is below the
maximum allowable limit as set forth in the New York State
Sanitary Code Part 5, the Town of Hempstead Department of Water
has initiated the installation of a GAC Adsorption System to ensure
and maintain water of acceptable quantity and quality.
The treatment system is designed to remove, at a minimum, three
times the actual influent concentration produced from any one well.
The combined discharge from the two public water supply wells is
approximately 2,800 gallons per minute (gpm). The granular
activated carbon adsorption system consisting of three (3) carbon
adsorption units will treat the entire influent flow of 2,800 gallons
per minute produced from the wells to reduce the levels of volatile
organic compounds in the effluent . . . .
15Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 16 of 29
The Town of Hempstead is proceeding with the construction phase
of the project with the intent of the system being completed and
approved for use prior to the onset of summer, in order to meet area
peak day demands. . . . We would appreciate any assistance your
office can provide to expedite approval of plans and specification.
(Id.)
On June 28, 1990, NCDH approved the plans for the installation of the GAC System, notably
giving its approval on NYSDOH Form DOH 101 which stated that the approval was “issued for the
State Commissioner of Health.” (Alarcon Decl., dated Mar. 17, 2009, ¶ 12, Ex. E.) Thereafter, the
Town was permitted to operate the system when the NCDH issued an Approval of Completed Works
certificate based upon the satisfactory water analysis results from the GAC System, and notably
NCDH gave its approval on NYSDOH Form GEN219 which stated that the approval was “issued for
the State Commissioner of Health.” (Id., Ex. F.)
The fact that the NYSDOH delegated direct supervision of the installation of the GAC
System to the NCDH does not relieve the State of its statutory responsibility for the approval of
the treatment system. See, e.g., Long Island Head Start Child Dev. Servs. v. Economic Opp.
Comm’n of Nassau Cty., 558 F. Supp. 2d 378, 396 (E.D.N.Y. 2008) (holding “in general, under
the law of agency, an agent’s knowledge is imputed to the principal, when the knowledge is
material to the subject matter of his agency”). Moreover, there is sufficient evidence in the record
that the State had involvement with the approval of the GAC System, including the facts that the
NYSDOH received the initial application for the approval of the plans, was copied on all
correspondence concerning the GAC System, and that the approval of the plans for the GAC
System as well as the approval of a completed works certificate were officially noticed on
NYSDOH letterhead and official forms under the authority of the State Commissioner of Health.
(Alarcon Decl., dated Mar. 17, 2009, ¶ 12, Ex. E.) Based on this evidence, the Court finds that
16Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 17 of 29
Plaintiffs had involvement with and approval of the construction of the GAC System at the NCIA
Site.
On December 10, 1990, the construction of the GAC System was completed and D&B
sought permission from NCDH to operate the GAC System at Bowling Green. (Davis Aff., dated
Mar. 27, 2009, ¶¶ 11-12; Ex. 1, 4, 8.) Between 1990 and the spring of 1995, the GAC System
was the exclusive remedy in place to treat the groundwater contamination adversely affecting the
Bowling Green public waters supply.
Notably, in March 1995, the NYSDEC delisted the NCIA Site as a whole and listed seven
properties within the NCIA as Class 2 sites. Additional PSAs thereafter resulted in the NYSDEC
listing additional properties within the NCIA as Class 2 sites. The GAC System remains in use to
17
this date, nearly nineteen years after its construction. (Davis Aff., dated Mar. 27, 2009, ¶ 14; see
Merklin Aff., dated Mar. 9, 2009, ¶¶ 10-11.)
(ii) Construction of the Supplemental Air Stripping Tower
A review of the record indicates the following. In the spring of 1995, the NCDH issued a
report indicating that higher concentrations of contamination originating from the NCIA were
migrating toward Bowling Green. (Davis Aff., dated Mar. 27, 2009, ¶¶ 15-18; Exs. 9-10.) On
May 16, 1995, the NYSDEC and NYSDOH conducted a public meeting concerning the
groundwater contamination, which was attended by Commissioner of the Town of Hempstead
Water District Daniel Davis and the Town of Hempstead Town Attorney. (Id.) At the meeting,
Commissioner Davis requested that the State reimburse Bowling Green for all costs associated
17
The GAC System is presently utilized in conjunction with the supplemental air stripping
tower which was constructed in 1995, and is to be incorporated into any future remedial systems at
OF-3. (Davis Aff., dated Mar. 27, 2009, ¶ 14; Merklin Aff., dated Mar. 9, 2009, ¶¶ 4-6, 10-11;
and ROD at 1, 19-22.)
17Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 18 of 29
with the construction and operation of the GAC System, and he received assurance that (i)
“recovery of the cost of the construction and operation of the GAC treatment system would be
pursued against the parties responsible for the contamination at [the] NCIA,” and (ii) “that the
NYSDEC would assist in the funding of necessary supplemental remedial systems to protect the
quality of the Bowling Green water.” (Id. at ¶¶ 16-20.) Following the meeting, Commissioner
Davis again hired D&B to identify further remedial options, and on May 23, 1995, D&B
recommended an approximately 34' air stripping tower to supplement the GAC System. (Id. at ¶¶
21-27.)
On June 12 and 13, 1995, construction of the air stripping tower commenced. (Id. at ¶¶
28-32; Ex. 17; Merklin Aff., dated Mar. 9, 2009, at ¶¶ 6-9.) D&B hired Warren George, Inc.
18
(“WGI”) to drill three foundation borings at Bowling Green that measured four inches in
diameter and went down 32 feet below the ground surface. (Id.) These soil borings were drilled
with a large drilling truck (similar to the type of equipment used to drill a household well) and
were drilled below the area onto which the concrete slab for the air stripping tower was to be
poured. (Id.) Construction of the supplemental air stripping tower continued into July 1995, with
the construction of the concrete pad on the which the air stripping tower would be erected as well
as mechanical, electric and site work on the air stripping tower. (Davis Aff., dated Mar. 27, 2009,
¶¶ 33-34, 42-44, Ex. 22.) The supplemental air stripping tower continues to be utilized to this day
in conjunction with the GAC System. (Merklin Aff., dated Mar. 9, 2009, ¶ 11.)
(iii) Costs of Construction
The November 1989 process evaluation by D&B estimated that the project cost for the
18
The foundation borings were necessary and required physical on-site construction in order
to support the air stripping tower (which weighed several tons). (Id.)
18Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 19 of 29
GAC System was $1.25 million. (Davis Aff., dated Mar. 27, 2009, Ex. 1.)
By letter dated June 21, 1995, NYSDEC Director Michael J. O’Toole informed NCDH
that the capital costs of the proposed supplemental water treatment system would be paid out of
the State Superfund Program. (Davis Aff., dated Mar. 27, 2009, ¶¶ 34-36, Ex. 18.) The following
week, the NYSDEC Project Engineer for the Remediating of the NCIA, Jeff Trad, telephoned
NCDH requesting certain information regarding the NCDH’s activities for site remediating at the
NCIA, directed that NCDH keep track of all expenses associated with the installation of the air
stripping tower, informed him that the expenses would be refundable by the State (not the federal
government), and stated “that their approach to a payout for this expense is that this is part of the
remediating to clean up the groundwater which is basically the use of treatment at the well head.”
(Id. at ¶¶ 35-36, Ex. 19.)
By letter dated March 23, 1998, NCDH requested from the NYSDEC reimbursement for
the cost of construction of the supplemental air stripping tower from the New York State
Superfund, for an estimate cost of $1.22 million, which included costs relating to integrating plant
piping, instrumentation and safety controls with the existing granular activated carbon filters at
the site.. (Davis Aff., dated Mar. 27, 2009, ¶¶ 42-44, Ex. 22.) NCDH was subsequently
reimbursed for all its costs, including the cost of the WGI foundation borings from the New York
State Superfund as part of the capital cost of installing the air stripping tower. (Id.)
Significantly, in the instant CERCLA action, Plaintiffs are seeking to recover past and
future response costs incurred in responding to the off-site groundwater contamination in the area
bordering the NCIA south of Old Country Road and Grand Boulevard, including in and around
the Bowling Green public water supply wells. (Second Amended Complaint, dated May 20,
19Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 20 of 29
2008.) In particular, the record indicates that Plaintiffs are seeking the recovery of NYSDOH
oversight costs incurred in 1990 and in 1995-96 in connection with activities at NCIA, including
oversight of the approval of the GAC System and air stripping tower, and all construction costs of
the supplemental air stripping tower system. (Maldonado Aff. dated Aug. 21, 2009, Ex. 7,
Attachment B, Exs.4, 23.)
(iv) Classification of the Response Activities at the NCIA Site
Given the facts surrounding the history of the construction, use and projected use of the
response activities at the NCIA site set forth in the record evidence and the applicable legal
principles, this Court concludes that the GAC System utilized in conjunction with the
supplemental air stripping tower were part of a permanent containment effort that was intended
“to prevent and 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,” CERCLA §
101 (24), particularly with respect to groundwater contamination adversely affecting the Bowling
Green public waters supply, see Second Amended Compl., dated May 20, 2008.
First, the manner in which the project was planned, designed and implemented suggests
that the response was intended to be a remedial action. Based on a groundwater investigation
conducted by NCDH in 1986 that revealed a significant threat to public health and the
environment posed by contamination found at and being released from the NCIA, the NYSDEC
listed the entire NCIA as a Class 2 site in the Registry in 1988. Bowling Green thereafter hired
D&B to recommend a long-term treatment option for remediating groundwater contamination
migrating from the NCIA into the Bowling Green public drinking water supply well, and in 1989
D&B recommended the GAC System. The GAC System was completed in December 1990.
Since the discovery of groundwater contamination in 1986, the only remedial response at OU-3
20Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 21 of 29
has been the installation of the GAC System as supplemented by the air stripping tower, and
notably the GAC System in conjunction with the air stripping tower has been utilized at Bowling
Green for nearly nineteen years.
Moreover, the response action was undertaken as part of a long-term strategy for the
remediating of the groundwater contamination. The construction of the GAC System in 1990 at
the Bowling Green water supply well was approved by both the NCDH and the NYSDEC and was
constructed to permanently address, prevent and/or minimize the release of hazardous substances
and remains in use to date as part of the remedial system for the NCIA. The construction of the
supplemental air stripping tower which commenced on June 12-13, 1995 was added to the GAC
System to address the higher concentrations of groundwater contamination originating from NCIA
that were migrating toward Bowling Green and continues in conjunction with the GAC System to
be in use to date.
Further, in its documents, the State’s reference to the GAC System in combination
with the supplemental air stripping tower as “remedial,” while not dispositive, is significant. The
ROD for OU-3, identifies the primary threat at the NCIA as the site’s contravention of
groundwater standards in the sole source aquifier that is the source of water supply at Bowling
Green. (Maldonado Decl., dated Aug. 21, 2009, Ex. 8, at 1.) Section 5.2 of the ROD refers to the
GAC System and air stripping tower as an interim remedial measure and notes that the
“supplemental water treatment system uses an air stripper to remove the contaminants, followed
by carbon polishing” and was constructed using State Superfund money to ensure the protection
of the public water supply. (Id. at 19.) In addition, Section 7.1 specifically lists the
“supplemental treatment system consisting of air stripping followed by carbon polishing” as a
21Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 22 of 29
required “element of remediating” for “all remedial alternatives” considered in the ROD for OU-3
and notes that the air stripper followed by carbon polishing “was constructed to mitigate the
impact of the groundwater contamination leaving the NCIA sites on the Bowling Green Water
District supply wells.” (Id. at 21-22.) Thus, pursuant to the ROD, the GAC System in
combination with the air stripping tower is expected to be part of the long term remedial response
into the future and will be incorporated into any final remedial system. Moreover, in response to
an interrogatory, the State stated in pertinent part “. . . it is necessary to supplement the existing
air stripper system currently in use at the Town of Hempstead Bowling Green with additional
remedial measures in order to complete the remediating of Hazardous Substances present or
expected to be present in the groundwater at the Bowling Green well field.” (Id., Ex. 7, at 22.)
Finally, in a memorandum memoralizing a conversation between the Commissioner of NCDH
and the NYSDEC project engineer for the remediating of the New Cassel Industrial Waste Site on
June 28, 1995, the Commissioner recorded as follows:
J. Trad indicated that the [Bowling Green Water] Department
should keep track of all of the expenses associated with the
installation of the air stripping tower at the Iris Place Pump Station
[Bowling Green] and at the completion of the project the
Department could then advise his office as to the total cost of the
stripper.
This expense he indicated would be a refundable expense by the
State (not the Federal Government) and that their approach to
payout for this expense is that it is part of the remediating to clean
up the groundwater which is basically the use of treatment at the
well head.
(Davis Aff., dated Mar. 27, 2009, ¶¶ 35-36, Ex. 19.)
Finally, the estimate costs expended for the GAC System ($1.25 million) and for the
supplemental air stripping tower ($1.22 million) suggests that the response activities were
22Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 23 of 29
undertaken as the initial phases of remediation at the NCIA as opposed to a short-term clean-up
arrangement.
(v) Timeliness of this Cost Recovery Action if Dated from the
Construction of the GAC System
Having concluded that the response activities (the GAC System utilized in conjunction
with the supplemental air stripping tower) were remedial because they were part of long-term
permanent containment effort and were intended to “prevent or minimize the release of hazardous
substances,” CERCLA § 101(24), the applicable statute of limitations for this cost recovery action
is “6 years after initiation of physical on-site construction of the remedial action,” CERCLA §
113(g)(2)(B). Thus, the determinative issue concerning the timeliness of Plaintiffs’ action is
whether any of the response activities were initiated prior to (i) Mar. 13, 2000 (six years before
Plaintiffs initiated the recovery action against the Frost Street Defendants when Plaintiffs filed
their Complaint, dated Mar. 13, 2006); (ii) May 12, 2000 (six years before Plaintiffs initiated the
recovery action against defendants Grand Machinery and Paul Merandi, the Utility Manufacturing
Defendants, the Tishcon Defendants, and the C&O Defendants when Plaintiffs filed their
Amended Complaint, dated May 12, 2006); or (iii) May 20, 2002 (six years before Plaintiffs
initiated the recovery against defendants 2632 Realty Development Corporation, BEAC, Island
Transportation Inc., and the Atlas Graphics Defendants when Plaintiffs filed their Second
Amended Complaint, dated May 20, 2006), constitute the “initiation of physical on-site
construction of the remedial action.” 42 U.S.C. §113(g)(2)(B); see Schaefer, 457 F.3d at 203-04
(examining, for purposes of determining when the statute of limitations begins to run on remedial
actions, whether the activity was a [1] “physical activity,” [2] that “occurred on site,” [3] which
“qualifies as construction,” and thus [4] “qualifies as the initiation of remedial action”).
23Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 24 of 29
Here, the initiation of the remedial action began with the physical on-site construction of
the GAC System. The GAC System project involved the construction of a 4.0 MGD Granular
Activated Carbon (GAC) Adsorption System to serve Well No. 1 and Well No. 2 in the Bowling
Green Estates Water District, including the replacement of deep well turbine pumps and mortors,
and the project was broken down into several contracts, including general construction, electrical,
plumbing and ventilation, to facilitate the fabrication and delivery of treatment equipment. The
physical on-site construction of the GAC System at the Bowling Green water supply well
19
commenced in 1990 and was completed by December 10, 1990. Given the initiation of the
physical, on-site construction of the GAC System occurred prior to Mar. 13, 2000, May 12, 2000,
and/or May 20, 2002, Plaintiffs’ recovery action is untimely. Accordingly, this Court respectfully
reports and recommends that Defendants motion for summary judgment be granted on this basis.
(vi) Timeliness of this Cost Recovery Action if Dated from the
Addition of the Air Stripping Tower
In the alternative, should the District Court determine that the physical, on-site
construction of the GAC System did not trigger the statute of limitations under CERCLA, then the
Court respectfully reports and recommends that the supplementation of the GAC System, which
began with the commencement of the construction of the air stripping tower that was connected to
the GAC tower on June 12-13, 1995, started the clock for statute of limitations purposes. In such
an instance, this Court finds that the physical on-site activity of a large drilling rig, drilling 32 foot
deep foundation borings into the ground below the site of the proposed concrete slab for the air
19
Although the parties have not specified the date upon which the on-site construction of the
GAC System at Bowling Green commenced, it is undisputed that it commenced sometime in 1990
and was completed on or before December 10, 1990. In any event, even using use the completion
date, December 10, 1990, for statute of limitations purposes, as discussed infra Plaintiffs’ CERCLA
claims are time-barred.
24Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 25 of 29
stripping tower at the Bowling Green water supply well constitutes the initiation of the physical
on-site activity related to the construction of the supplemental air stripping tower. See, e.g.,
Schaefer, 457 F.3d at 203 (“While the mere purchase of a crane does not constitute the initiation
of physical on-site construction, Schaefer’s subsequent use of the crane to spread cover (a mixture
of topsoil, sand, and gravel) over his landfill satisfies each of the four statutory prerequisites”). In
any event, given the initiation of the physical, on-site construction of the supplemental air
stripping tower that was connected to the GAC System occurred prior to Mar 13, 2000, May 12,
2000 and/or May 20, 2002, Plaintiffs’ recovery action would be untimely. Accordingly, on this
alternative basis, this Court respectfully reports and recommends that Defendants motion for
summary judgment be granted.
(vii) The Tolling Agreements
Although Plaintiffs argue that tolling agreements entered into by certain of the Defendants
tolled the applicable statute of limitations period, as set forth below, Plaintiffs’ CERCLA claims
20
were already time-barred by the effective date of the each of the respective tolling agreements.
The record indicates the following. Prior to commencing the instant action, Plaintiffs and
certain of the Defendants entered into tolling agreements. Significantly, the tolling agreements
preserved these defendants’ rights to raise the statute of limitations defense to claims that were
time-barred prior to the effective dates of the agreements and provided that they shall only apply
prospectively and do not operate to revive any limitations periods. The tolling agreements entered
20
As discussed infra, none of the tolling agreements entered between Plaintiffs and the
respective above-listed defendants became effective prior to the expiration of the applicable statute
of limitations, i.e., either December 1996 (six years after on-site construction of the GAC System
commenced), or in the alternative, June 12-13, 2001 (six years after on-site construction of the
supplemental air stripping tower which connected to the GAC System).
25Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 26 of 29
into by these parties are as follows:
Plaintiffs and defendants Next Millenium and 101 Frost Street Associates entered into
tolling agreements that were fully executed on July 9, 2001. As discussed above, the statute of
limitations began to run (i) when on-site construction of the GAC System commenced (prior to
December 10, 1990), or in the alternative, (ii) from the commencement of the construction of the
supplemental air stripping tower which connected to the GAC System which commenced on June
12-13, 1995. Under either case, the tolling agreements did not become effective prior to the
expiration of the applicable statute of limitations.
Defendant Grand Machinery and Paul Merandi (in his capacity as Treasurer of Grand
Machinery) entered into tolling agreements with Plaintiffs in July 2001 with an effective date of
June 28, 2001. (Biblow Letter, dated June 22, 2010.) As discussed above, the statute of
limitations began to run (i) when on-site construction of the GAC System commenced (prior to
December 10, 1990), or in the alternative, (ii) from the commencement of the construction of the
supplemental air stripping tower which connected to the GAC System which commenced on June
12-13, 1995. Under either case, the tolling agreements did not become effective prior to the
expiration of the applicable statute of limitations.
Defendants Utility Manufacturing Corporation, Nest Equities, Inc., Audie Kranz (in his
capacity as President of Utility Manufacturing Corporation) and Wilbur Kranz (in his capacity as
President of Nest Equities, Inc.) entered into tolling agreements with Plaintiffs on August 23,
2001. As discussed above, the statute of limitations began to run (i) when on-site construction of
the GAC System commenced (prior to December 10, 1990), or in the alternative, (ii) from the
commencement of the construction of the supplemental air stripping tower which connected to the
26Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 27 of 29
GAC System which commenced on June 12-13, 1995. Under either case, the tolling agreements
did not become effective prior to the expiration of the applicable statute of limitations.
Defendants Tishcon Corporation entered into a tolling agreement with Plaintiffs on June
28, 2001. (Landrigan Letter, dated June 29, 2010.) As discussed above, the statute of limitations
began to run (i) when on-site construction of the GAC System commenced (prior to December 10,
1990), or in the alternative, (ii) from the commencement of the construction of the supplemental
air stripping tower which connected to the GAC System which commenced on June 12-13, 1995.
Under either case, the tolling agreements did not become effective prior to the expiration of the
applicable statute of limitations.
Accordingly, this Court respectfully reports and recommends that the Court find that the
tolling agreements did not toll the relevant statute of limitations period.
III. New York State Law Claims
Plaintiffs’ Second Amended Complaint also asserts claims under New York State law for
public nuisance, restitution and indemnification. (Second Amended Compl., ¶¶ 149-68.) Having
found that Plaintiffs’ federal CERCLA claims do not survive Defendants’ summary judgment
motion, this Court concludes that subject to the District Court’s reconsideration of the motion to
sever case Nos. CV-03-5985 and CV-06-1122 (Order, dated September 8, 2010 (Feuerstein, D.J.;
see supra fn. 15), it is unwarranted to exercise supplemental jurisdiction over Plaintiffs’ remaining
state-law claims. See 28 U.S.C. § 1367(c)(3); United Mine Workers of Am. v. Gibbs, 383 U.S
715, 726 (1966). “In the interest of comity, the Second Circuit instructs that absent exceptional
circumstances, where federal claims can be disposed of pursuant to Rule 12(b)(6) or summary
judgment grounds, courts should abstain from exercising pendent jurisdiction.” Maura v.
Countrywide Home Loans, Inc., 2010 WL 2976506, at *10-11 (E.D.N.Y. July 22, 2010) (quoting
27Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 28 of 29
Walker v. Time Life Films, Inc., 784 F.2d 44, 53 (2d Cir. 1986) (internal quotation marks
omitted)); see Brzak v. United Nations, 597 F.3d 107, 113-14 (2d Cir. 2010) (holding that “if a
plaintiff’s federal claims are dismissed before trial, the state claims should be dismissed as well)
(internal quotation marks and citations omitted); Cave v. E. Meadow Union Free Sch. Dist., 514
F.3d 240, 250 (2d Cir. 2008) (“We have already found that the district court lacks subject matter
jurisdiction over appellants’ federal claims. It would thus be clearly inappropriate for the district
court to retain jurisdiction over the state law claims when there is no basis for supplemental
jurisdiction”); see also Seabrook v. Jacobson, 153 F.3d 70, 72 (2d Cir. 1998) (observing that
principles of federalism and comity may counsel in favor of the dismissal of state law claims
where “the federal claim on which the state claim hangs has been dismissed”); see also Karmel v.
Claiborne, Inc., 2002 WL 1561126, at *4 (S.D.N.Y. July 15, 2002) (“Where a court is reluctant to
exercise supplemental jurisdiction because of one of the reasons put forth by § 1367(c), or when
the interests of judicial economy, convenience, comity and fairness to litigants are not violated by
refusing to entertain matters of state law, it should decline supplemental jurisdiction and allow the
plaintiff to decide whether or not to pursue the matter in state court.”).
Accordingly, pursuant to 28 U.S.C. § 1367(c)(3), given the absence of any federal claims
that survive the motion for summary judgment and in the interest of judicial economy,
convenience and comity, this Court respectfully reports and recommends (subject to the District
Court’s reconsideration of the motion to sever) that the District Court decline to exercise
supplemental jurisdiction over Plaintiffs’ state law claims and dismiss these claims without
prejudice.
28Case 2:03-cv-05985-SJF -ARL Document 592 Filed 09/24/10 Page 29 of 29
CONCLUSION
For the foregoing reasons, the Court respectfully reports and recommends that Defendants’
motion for summary judgment be granted in its entirety on the federal claims. In addition, the
Court respectfully reports and recommends that the Court decline to retain jurisdiction over
Plaintiffs’ remaining state law claims and dismiss such claims without prejudice.
OBJECTIONS
Any objections to this Report and Recommendation must be filed with the Clerk of the
Court with a copy to the undersigned within fourteen (14) days of receipt of this Report. Failure
to file objections within this period waives the right to appeal the District Court’s Order. See 28
U.S.C. 636 (b)(1); Fed. R. Civ. P. 72, 6(a), 6(e); Beverly v. Walker, 118 F.3d 900, 902 (2d Cir.
1997); Savoie v. Merchants Bank, 84 F.3d 52, 60 (2d Cir. 1996); IUE AFL-CIO Pension Fund v.
Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Roldan v. Racette, 984 F.2d 85, 89 (2d Cir. 1993);
Frank v. Johnson, 968 F.2d 298, 299 (2d Cir. 1992).
Dated: Central Islip, New York
September 24, 2010
______/s/________________________
MICHAEL L. ORENSTEIN
United States Magistrate Judge