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In an opinion issued on February 12, 2018 in the case of Cooper Crouse-Hinds LLC et al. v. City of Syracuse et al., Case No. 5:16-cv-01201 (N.D.N.Y. Feb. 12, 2018), Judge Mae D’Agostino of the United States District Court for the Northern District of New York weighed in on the issue of when state court orders for removal and remediation resolve a potentially responsible party's liability to the government under Section 113 of CERCLA, and in this case allowing, for at least the time being, Section 107 claims to proceed where there was no clear guidance from the Second Circuit.
Cooper Crouse-Hinds involves a former landfill in Syracuse that was owned and operated by predecessors of the plaintiffs Cooper Crouse-Hinds (CCH) and Cooper Industries (CI). In the early 1960's the landfill was utilized by the City of Syracuse, and in 1972 a portion of the landfill was transferred to the County of Onodaga. In 1985 the landfill was designated as a hazardous waste disposal site under New York's version of CERCLA.
In 2004, CI entered into a Consent Order with the New York State Department of Environmental Conservation (NYSDEC) for investigation and removal activities, and in 2011, CCH entered into a Consent Order with NYSDEC for remediation of the Site. The 2004 Order did not release CI from liability but, instead, stated that nothing in the Order "shall be construed as barring, diminishing, adjudicating or in any way affecting any of [NYSDEC's] rights." The 2011 Order provided that CCH's liability would be resolved "[u]pon [NYSDEC's] issuance of a Certificate of Completion."
In October of 2016, after investigation, removal and clean-up costs of approximately $12 million had been incurred, CCH filed a complaint against Syracuse and Onodaga to recover at least some of those amounts, which Complaint was later amended to add CI as a Plaintiff. Among other things, the Plaintiffs filed both CERCLA Section 107 and Section 113 claims against the Defendants, who in turn moved to dismiss the 107 claims on the basis that the Consent Orders resolved the Plaintiffs’ liability under CERCLA, leaving them with only contribution claims. Defendants also argued that the CERCLA Section 113 claims for costs incurred under the 2004 Consent Order were time-barred as being brought more than three years after entry of the Consent Orders.[1]
The Court denied the Motion to Dismiss the 107 claims. The Court found that the 2004 Consent Order, which explicitly reserved all of the State’s rights, did not resolve CI’s liability and that the 2011 Consent Order did not necessarily resolve CCH’s liability because the release was contingent upon the issuance of Certificate of Completion by NYSDEC, which had not yet occurred. As to the latter Order, the Court recognized that there was a split in authority on whether such a conditional release triggered a Section 113 claim and if so, when, and thus allowed the claim to go forward only because “[t]he parties did not brief [the] issue,” leaving open the possibility that the claim may later be dismissed.
With respect to CI's 113 claim, the Court held that because CI had not resolved its liability to the government in the 2004 Consent Order, the limitations period for any 113 claim had not yet run. But in coming to that conclusion, the Court also questioned whether CI even had a 113 claim, given the Court's ruling that CI had not resolved its liability to the government in either Consent Order. On that issue, the Court directed the parties to further brief the issue as to why CI’s 113 claim should not be dismissed.
[1] The Parties had entered into a tolling agreement within three years of the issuance of the 2011 Consent Order. The Court also addressed the Defendant's challenges to the viability of the Plaintiffs’ state law claims, which is not the subject of this blog post.