New York v. Moulds Holding Corp.

No. 00-CV-1034 (UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK January 31, 2002)

ELR Digest

The court holds that the state of New York could bring a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) § 107(a) claim against a manufacturer that allegedly disposed of hazardous waste at a town's landfill even though the state and the town had entered a state assistance contract (SAC), under which the state reimbursed the town for cleanup costs at the landfill. New York Environmental Conservation Law (NYECL) § 27-1313(5)(g) authorizes the state's use of the SAC, which provided the town with 75% of its cleanup costs at the landfill. After entering the SAC, the state brought CERCLA § 107(a) and state-law claims against the manufacturer seeking recovery of the money paid to the town. The manufacturer claimed that the state was limited to a CERCLA § 113(f) contribution claim because, under the SAC, it was not a real party at interest.

The court first holds, however, that the state is not limited to a § 113(f) contribution claim because it is an innocent party that incurred response costs at the site. Although the funds disbursed to the town under the SAC went to remediate the landfill, the state could have remediated the landfill on its own and then brought a claim against the manufacturer. Instead of relying on this system, the state enacted NYECL § 27-1313(b)(9) in order to encourage towns to clean up their own problems, and this system furthers the CERCLA purpose of facilitating timely cleanup. The court next holds that allowing the state § 107(a) action will not result in double recovery against the corporation. Although the SAC requires the town to attempt to recover its response costs, liability between the manufacturer and the state and the manufacturer and the town can be apportioned. The court further holds that under the substantial continuity test, the manufacturer is a successor to the corporation that caused the contamination and, thus, the manufacturer cannot escape potential liability by arguing it is not such. The court additionally holds that despite the failure of the state to offer evidence that the manufacturer or its successors deposited hazardous waste at the landfill, the state did offer evidence that the manufacturer disposed of waste at the landfill and the state retains the burden of establishing that these items were hazardous. The court finally holds that of the state's state-law claims, all but the public nuisance claim are preempted by CERCLA because they are seeking damages also recoverable under CERCLA. The public nuisance claim for damages is barred by the statute of limitations, but the state can seek a public nuisance claim for injunctive relief.

The full text of this decision is available from ELR (20 pp., ELR Order No. L-458).

[Counsel not available at this printing.]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]