91 F.3d 353 (2nd Cir. 1996), 926, State of N.Y. v. Lashins Arcade Co.
| Citation | 91 F.3d 353 |
| Party Name | STATE OF NEW YORK and Thomas C. Jorling, as Trustee of the Natural Resources, Plaintiffs-Appellants-Cross-Appellees, v. LASHINS ARCADE CO. and Lashins Arcade Corp., Defendants-Appellees-Cross-Appellants, Rocco Tripodi, Bedford Village Cleaners, Inc., and Rocco Astrologo, Defendants-Appellees. |
| Case Date | August 05, 1996 |
| Court | United States Courts of Appeals, U.S. Court of Appeals — Second Circuit |
Page 353
Argued Feb. 14, 1996.
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Robert Emmet Hernan, Assistant Attorney General of the State of New York, New York City (Dennis C. Vacco, Attorney General, Victoria A. Graffeo, Solicitor General, Peter H. Schiff, Deputy Solicitor General, J. Jared Snyder, Assistant Attorney General, New York City, of counsel), for Plaintiffs-Appellants-Cross-Appellees.
Daniel Riesel, New York City (Steven Russo, Sive, Paget & Riesel, P.C., New York City, Joel Sachs, Keane & Beane, P.C., New York City, of counsel), for Defendants-Appellees-Cross-Appellants.
Before: MAHONEY, WALKER, and CALABRESI, Circuit Judges.
MAHONEY, Circuit Judge:
Plaintiffs-appellants-cross-appellees the State of New York and Thomas C. Jorling, as trustee of the State of New York's natural resources 1 (collectively "New York"), appeal from a final judgment entered June 20, 1995
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in the United States District Court for the Southern District of New York, Charles L. Brieant, Judge, that granted summary judgment to defendants-appellees-cross-appellants Lashins Arcade Company and Lashins Arcade Corporation (collectively "Lashins") and denied New York's motion for summary judgment in this action brought under § 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. § 9607(a), 2 the common law of public nuisance, and § 841 of the New York Real Property Actions and Proceedings Law (which provides for a statutory action for nuisance), and for unjust enrichment and restitution. The complaint sought, inter alia, damages for costs New York incurred investigating and cleaning up the release of tetrachloroethene, or perchloroethylene ("PCE"), and its breakdown compounds, trichloroethene ("TCE"), 1,2-dichloroethene ("DCE"), and vinyl chloride, into the groundwater in the vicinity of the Bedford Village Shopping Arcade (the "Arcade") in Westchester County, New York. PCE is a chemical used as a solvent in dry cleaning operations.
The district court awarded Lashins summary judgment based upon the third-party defense provided by § 107(b)(3) of CERCLA, 42 U.S.C. § 9607(b)(3), 3 and dismissed the action "as against the Lashins defendants." New York v. Lashins Arcade Co., 856 F.Supp. 153, 158 (S.D.N.Y.1994). The court subsequently denied New York's motion to strike a jury demand made by defendant Rocco Astrologo, New York v. Lashins Arcade Co., 881 F.Supp. 101 (S.D.N.Y.1995), and denied New York's motion for reargument on the jury trial issue, New York v. Lashins Arcade Co., 888 F.Supp. 27 (S.D.N.Y.1995).
On this appeal, New York contests not only the dismissal of its claims against Lashins, but also the interlocutory decisions of the district court with respect to the jury trial issue. Lashins cross-appealed from the district court's approval of consent decrees entered between New York and the other defendants, which settled New York's claims against those defendants, but has since withdrawn its cross-appeal. 4
We affirm the judgment of the district court.
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Background
This appeal involves the release of hazardous substances at the Arcade, which resulted in groundwater contamination in the area. The Arcade, a 6,800 square foot one-story building housing six retail stores, was built in 1955, and was owned by Holbrook B. Cushman until his death in 1966. Lashins Arcade Co., 856 F.Supp. at 155. The property was then held in trust by Cushman's widow, Beatrice Cushman, and the Bank of New York until 1972. Id. Cushman leased a store in the Arcade to Astrologo from about 1958 to 1963, where Astrologo operated a dry cleaning business. Id. The store was next leased to defendant Rocco Tripodi (with whom defendant Bedford Village Cleaners, Inc. is affiliated) in 1963, who maintained the dry cleaning business at the Arcade until 1971. Id. During this period, Tripodi dumped powdered wastes from his dry cleaning machines, which contained the volatile organic compound ("VOC") PCE, on the ground outside the Arcade behind his store. In December 1971, Tripodi moved his dry cleaning business out of the Arcade, and no other dry cleaning establishment has operated there since that time. In November 1972, the trust sold the Arcade to Miriam Baygell, who owned the property until her death in 1977, when it was inherited by her husband, Milton Baygell. Id.
In 1978, the Westchester County Department of Health (the "WCDOH") conducted a countywide survey regarding possible groundwater contamination by VOCs. Id. The survey found elevated VOC levels in the hamlets of Katonah, Armonk, and Bedford Village. Id. Further sampling of private wells in Bedford Village conducted by the WCDOH in 1979 revealed groundwater contamination in an area southeast of the Arcade. These samples contained high concentrations of PCE and its breakdown compounds, TCE and DCE. The WCDOH issued "boil water" notices to affected homeowners. Id.
In 1982, the New York State Department of Environmental Conservation (the "NYSDEC") authorized state funds for an investigation and remediation of the groundwater problem at the Arcade and the nearby Hunting Ridge Shopping Mall pursuant to § 27-1301 et seq. of the New York Environmental Conservation Law. Lashins Arcade Co., 856 F.Supp. at 155. The investigations conducted from 1982 to 1986 revealed fluctuating levels of VOC contamination in the wells adjacent to the Arcade. Id. at 155-56. A "Phase I" investigation, completed in June 1983 by the Wehran Engineering Company ("Wehran"), reported that the highest level of contamination in the Arcade was found in the area formerly occupied by the dry cleaning establishment.
Following the Phase I investigation, the "Bedford Village Wells" site was listed on the New York State Registry of Inactive Hazardous Waste Disposal Sites (the "Registry"). The Registry is published annually by the NYSDEC pursuant to § 27-1305(1) of the New York Environmental Conservation Law, which requires the NYSDEC annually to "transmit a report to the legislature and the governor identifying every inactive hazardous waste disposal site in the state known to the [NYSDEC]." Id. (McKinney 1996 Supp.). The registered sites are prioritized based upon "the relative need for action at each site to remedy environmental and health problems resulting from the presence of hazardous wastes at such sites." N.Y.Envtl.Conserv.Law § 27-1305(4)(b) (McKinney 1996 Supp.). In the 1983 Registry, the Bedford Village Wells site was designated as a Class "2a" site, based in part upon information that disposition of dry cleaning solvents had probably occurred at the Arcade. Class "2a" sites are those that are suspected to be hazardous waste disposal sites, but which require further investigation to confirm the presence of hazardous wastes. This site was described as including the Arcade, the Hunting Ridge Shopping Mall, an Exxon gasoline station, the Bedford Theater Building, and an apartment building adjacent to the theater. In December 1987, the Arcade was separated from the Hunting Ridge Shopping Mall, and each was thereafter designated as a separate site in the Registry.
By letter dated October 12, 1983 and addressed to Miriam Baygell (who by that time was deceased), the NYSDEC advised that it intended to conduct a Phase II investigation
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of the Bedford Village Wells, and also stated that Ms. Baygell had the right to conduct such an investigation herself. Milton Baygell did not respond to this letter, which he may never have received. In any event, Wehran conducted the Phase II fieldwork for the NYSDEC commencing in 1984, and reported its final conclusions in June 1985. During this period, the WCDOH requested in a letter to Milton Baygell dated March 6, 1984 that he install a granular activated carbon ("GAC") filter in the well supplying the Arcade with water to remedy the VOC problem; Baygell installed the GAC filter in May 1985.
The final Phase II Report concluded that VOC contamination persisted at the Arcade site. It also stated that although the Hunting Ridge Shopping Mall was located just 4,000 feet southwest of the Arcade, the groundwater contamination at the two sites was probably not related. As a result of these findings, the Bedford Village Wells Site was reclassified from Class "2a" to Class "2" in the 1986 Registry. A Class "2" site is defined as a "[s]ignificant threat to the public health or environment--action required." N.Y.Envtl.Conserv.Law § 27-1305(4)(b)(2) (McKinney 1984); see also id. 1995 supplementary practice commentary (McKinney 1996 Supp.). Milton Baygell was informed about the reclassification in a certified letter for which he signed a receipt on June 20, 1986.
In 1986, the United States Environmental Protection Agency (the "EPA") joined with the WCDOH to investigate the Arcade. Their joint surveys confirmed that VOCs persisted in three private wells at the Bedford Village Wells site, and low VOC concentrations also appeared east and southeast of the Arcade in water supplies that had previously been uncontaminated. In view of this problem, the NYSDEC requested and obtained approval from the EPA for a Remedial Investigation/Feasibility Study ("RI/FS") of the entire Bedford Village Wells site. The NYSDEC retained Dvirka and Bartilucci Consulting Engineers ("Dvirka and Bartilucci") to perform the RI/FS in December 1986, and the firm began its field work the following summer.
Meanwhile, in January 1987, Milton Baygell entered into negotiations with Lashins for the sale of the...
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