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Cooper Indus., Inc. v. Agway, Inc.

ELR Citation: 28 ELR 21026
Nos. 92-CV-0748, 987 F. Supp. 92/(N.D.N.Y., 11/17/1997) Cert. granted, liability established for second defendant

The court holds that a manufacturer is liable for response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for dumping scrap steel and aluminum at a Superfund site. The court also grants another company's motion to certify for interlocutory appeal whether a potentially responsible party (PRP) may bring a cost recovery action under CERCLA §107. Plaintiffs paying for response costs at the site pursuant to administrative orders brought suit seeking to recover response costs from various defendants, including the manufacturer and the company, for disposing of hazardous waste or for arranging for such disposal at the site. The court first holds that the issue of whether a district judge must give a party the opportunity to demonstrate good cause before rejecting untimely papers is not suitable for immediate appeal. The company seeking certification of this issue failed to identify any issue for which there exists a substantial difference of opinion. The court next holds that the issue of whether a district judge has authority to issue a directive that only certain supporting affidavits will be considered is also improper to certify for interlocutory appeal. Courts have discretion to grant parties permission to file untimely papers on a showing of good cause. Further, no case supports the position that a court cannot issue a directive accepting some papers and rejecting others. Thus, there is not substantial grounds for differing opinion with respect to this issue. However, the court then holds that the third issue raised—whether PRPs may bring cost recovery actions under CERCLA §107—satisfies the three requirements for immediate appeal. A determination that PRPs cannot assert §107 claims may materially affect the outcome of this litigation. Further, there is substantial ground for difference of opinion on this issue. And if this issue is later resolved differently, continued proceedings under §107 claims against the company may be wasteful, as §113 claims are not interchangeable with §107 claims.

Next, the court holds that the law of the case precludes it from determining whether PRPs can bring §107 claims, whether CERCLA applies retroactively, and whether CERCLA is unconstitutional under the U.S. Commerce Clause. The court decided these issues previously. Therefore, the court denies the manufacturer's motion to dismiss on these grounds. The court then holds that plaintiffs' claim against the manufacturer for unjust enrichment/restitution is dismissed. A defendant is not enriched simply because the U.S. Environmental Protection Agency (EPA) may order a plaintiff to remediate a site. The court further holds that plaintiffs' negligence claim against the manufacturer is dismissed. Neither the parties nor the court can find any cases where a court, applying New York law, has ruled on the viability of a negligence claim asserted against a generator of hazardous waste by other manufacturers who are PRPs that have been ordered by EPA to clean up the contaminated site. And the court refuses to create or extend New York law to recognize such a novel duty. The court then holds that it will not dismiss plaintiffs' remaining state-law claim against the manufacturer for discharging petroleum. Plaintiffs' complaint and the manufacturer's own expert witness provide enough evidence to defeat the manufacturer's motion to dismiss.

The court next holds that summary judgment is granted in favor of the plaintiffs on the issue of liability with respect to the manufacturer's dumping of scrap steel at the site. The scrap steel was disposed of at the site. The manufacturer cannot avail itself of the storage defense when, as here, the party to whom the scrap was sold temporarily stores it and then simply resells the materials to others. Further, the recycling exemption does not apply to the manufacturer because it did not arrange for the scrap steel to be recycled. In addition, the court finds that the scrap steel is hazardous under CERCLA, and the hazardous substances found in the manufacturer's waste were identified at the site. Likewise, the court holds that summary judgment is granted in favor of the plaintiffs as to the manufacturer's CERCLA liability for dumping scrap aluminum at the site. The manufacturer disposed of aluminum scrap at the site, and the two affidavits relied on by the manufacturer failed to raise a question of fact in this regard. Moreover, all known grades of aluminum used in the manufacturer's manufacturing process contained CERCLA listed hazardous substances, and hazardous substances found in the manufacturer's scrap aluminum were identified at the site. Last, the court reserves decision on the issue of divisibility, and thus the scope of the manufacturer's liability, because the manufacturer did not fully address the issue in its papers.

[A prior decision in this litigation is published at 27 ELR 21018.]

Counsel for Plaintiffs
Thomas F. O'Connor, Alan J. Pope
O'Connor, Gacioch, Pope & Tait
One Marine Midland Plaza
E. Tower, 7th Fl., Binghamton NY 13902
(607) 772-9262

Counsel for Defendants
Reed W. Neuman
Howrey & Simon
1299 Pennsylvania Ave. NW, Washington DC 20004
(202) 783-0800