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New York v. General Electric Co.

ELR Citation: 45 ELR 20193
Nos. 1:14-CV-747, (N.D.N.Y., 09/29/2015) (Hummel, M.J.)

A district court granted in part and denied in part New York's motions to dismiss a company's counterclaims against it in the state's underlying CERCLA action for response costs. The state claimed that the Eleventh Amendment barred the company's counterclaims because the state has neither consented nor waived its immunity to suit. But in an action commenced voluntarily by the United States or a state in federal court, sovereign immunity or Eleventh Amendment immunity does not bar a defendant from bringing a counterclaim for common law or CERCLA-based recoupment. But where common law recoupment counterclaims could result in the application of a standard and remedy not provided for by Congress as part of its statutory scheme, and may allow for relief when CERCLA itself would not, such a claim should not be permitted against the state. The court therefore dismissed the company's counterclaim sounding in common-law recoupment. However, the company's counterclaim for contribution under CERCLA is not barred. Unlike with a common-law recoupment counterclaim, where it is feasible that a lesser standard of liability may be used to require payment from a state, a contribution claim pursuant to CERCLA allows the court to apply equitable factors to determine allocation of costs. It does not allow for the possibility of a state-law standard, not contemplated by Congress, being applied to hold a state liable to a private party.