Brooklyn Union Gas Co. v. Exxon Mobil Corp.

• Decision Date: 19 August 2020
• Docket Number: 17-CV-45 (MKB)
• Citation: 480 F.Supp.3d 430
• Parties: The BROOKLYN UNION GAS COMPANY d/b/a National Grid NY, Plaintiff, v. EXXON MOBIL CORPORATION, United States of America, Paragon Oil Inc./Texaco, Inc., Bayside Fuel Oil Depot Co., Iron Mountain, Inc., City of New York, Motiva Enterprises LLC, Buckeye Partners, L.P., Sunoco, Inc. (R&M), Chevron U.S.A. Inc., 19 Kent Acquisition LLC, North 12th Associates LLC, 35 Kent Ave LLC, New 10th Street LLC, and Patti 3 LLC, Defendants.
• Court: U.S. District Court — Eastern District of New York

480 F.Supp.3d 430

The BROOKLYN UNION GAS COMPANY d/b/a National Grid NY, Plaintiff,

v.EXXON MOBIL CORPORATION, United States of America, Paragon Oil Inc./Texaco, Inc., Bayside Fuel Oil Depot Co., Iron Mountain, Inc., City of New York, Motiva Enterprises LLC, Buckeye Partners, L.P., Sunoco, Inc. (R&M), Chevron U.S.A. Inc., 19 Kent Acquisition LLC, North 12th Associates LLC, 35 Kent Ave LLC, New 10th Street LLC, and Patti 3 LLC, Defendants.

17-CV-45 (MKB)

United States District Court, E.D. New York.

Signed August 19, 2020

Bradley Scott Rochlen, Pro Hac Vice, Robert Middleton, Pro Hac Vice, Russell Bertram Selman, Pro Hac Vice, James M. Showalter, Schiff Hardin LLP, Chicago, IL, Mir Y. Ali, Pro Hac Vice, Schiff Hardin LLP, for Plaintiff The Brooklyn Union Gas Company.

Lanny S. Kurzweil, McCarter & English, LLP, New York, NY, for Plaintiff Sunoco, Inc. (R&M).

Daniel Farino, Pro Hac Vice, David Edelstein, Pro Hac Vice, Archer & Greiner, P.C., Haddonfield, NJ, John B. McCusker, McCusker, Anselmi, Rosen, Carvelli, New York, NY, Michael Lauricella, Archer & Greiner P.C., Hackensack, NJ, Rosemarie DaSilva, McCusker Anselmi Rosen & Carvelli, Florham Park, NJ, for Defendant ExxonMobil Corporation.

Matthew Mailloux, United States Attorney's Office, Eastern District of Ne, Brooklyn, NY, for Defendant United States of America.

Matthew W. Morrison, Pro Hac Vice, Pillsbury Winthrop Shaw Pittman LLP, Washington, DC, for Defendants Paragon Oil Inc./Texaco, Inc., Chevron U.S.A. Inc.

David John Freeman, Gibbons P.C., New York, NY, Shawn Michael Latourette, Gibbons PC, Newark, NJ, for Defendant Bayside Fuel Oil Depot Corporation.

Duke K. McCall, III, Pro Hac Vice, Morgan Lewis & Bokius LLP, Washington, DC, John A. Vassallo, III, Morgan Lewis & Bockius LLP, Nicole Ann Sullivan, White and Williams, LLP, New York, NY, for Defendant Iron Mountain, Inc.

Christopher Gene King, The City of New York Law Department Office of Corporation Counsel, Devon Rae Goodrich, Susan Elizabeth Amron, New York City Law Department, New York, NY, for Defendant City of New York.

Diana Amaral Silva, Pro Hac Vice, Nicole Rosanne Moshang, Pro Hac Vice, Robert David Fox, Pro Hac Vice, Manko, Gold, Katcher & Fox, LLP, Bala Cynwyd, PA, for Defendant Motiva Enterprises LLC.

Wendy A. Marsh, Christina Verone Juliano, Pro Hac Vice, Holly K. Austin, Pro Hac Vice, James Joseph O'Shea, Hancock Estabrook LLP, Syracuse, NY, for Defendant Buckeye Partners, L.P.

John J. McAleese, III, Pro Hac Vice, Lanny S. Kurzweil, McCarter & English, LLP, New York, NY, Amanda G. Dumville, Pro Hac Vice, McCarter & English, Newark, NJ, for Defendant Sunoco, Inc. (R&M).

Elizabeth Read Knauer, Mark A. Chertok, Joyce E. Kung, Victoria Shiah Treanor, Sive Paget & Riesel, P.C., New York, NY, for Defendants 19 Kent Acquisition LLC, North 12th Associates LLC, 35 Kent Ave LLC, New 10th Street LLC.

Ryan O. Miller, Kishner & Miller, New York, NY, for Defendant Patti 3 LLC.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

Plaintiff The Brooklyn Union Gas Company, doing business as National Grid NY, commenced the above-captioned action on January 4, 2017, against Defendants Exxon Mobil Corporation ("Exxon"); the United States of America ("United States"); Texaco, Inc. ("Texaco"); Bayside Fuel Oil Depot Co. ("Bayside"); Iron Mountain, Inc. ("Iron Mountain"); the City of New York; Motiva Enterprises LLC ("Motiva"); Buckeye Partners, L.P. ("Buckeye"); Sunoco, Inc. (R&M) ("Sunoco"); Chevron U.S.A. Inc. ("Chevron"); 19 Kent Acquisition LLC ("19 Kent"); North 12th Associates LLC ("North 12"); 35 Kent Ave LLC ("35 Kent"); New 10th Street LLC ("New 10"); and Patti 3 LLC ("Patti 3"). (Compl., Docket Entry No. 1.) On May 23, 2019, Plaintiff filed a Second Amended Complaint (the "SAC"), asserting claims for recovery of response costs, under section 107(a), and contribution, under section 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq. (the "CERCLA"), the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, and the New York Navigation Law, N.Y. Nav. Law. §§ 170 –97. (SAC, Docket Entry No. 136.)

Defendants now move to dismiss the SAC for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Defs. Mot. to Dismiss ("Defs. Mot."), Docket Entry No. 145; Defs. Mem. in Supp. of Defs. Mot. ("Defs. Mem."), Docket Entry No. 146.) On November 1, 2019, the United States filed a reply in support of Defendants’ motion. (United States Reply in Supp. of Defs. Mot. ("U.S. Reply"), Docket Entry No. 149.) Plaintiff opposes the motion. (Pl. Opp'n to Defs. Mot. ("Pl. Opp'n"), Docket Entry No. 147.)

For the reasons set forth below, the Court grants Defendants’ motion and: (1) dismisses the section 113 claim with prejudice; (2) dismisses the section 107 claims and the Declaratory Judgment Act claim for failure to state a claim; (3) declines to exercise supplemental jurisdiction over the New York Navigation Law claim and dismisses this claim without prejudice; and (4) grants Plaintiff leave to amend the section 107 claims, the Declaratory Judgment Act claim, and to replead the New York Navigation Law claim.

I. Background

a. Factual background

Plaintiff seeks to recover for costs "arising out of the disposal, release, and /or threatened release of hazardous substances into the environment at current and historical facilities owned and/or operated by [Defendants]" at the area "adjacent to the Bushwick Inlet and the East River in Brooklyn, New York" (the "Bushwick Site").¹ (SAC ¶ 1.) The Bushwick Site consists of areas where Plaintiff previously owned and operated property located on Blocks 2287, 2288, and part of Block 2283 (the "MGP Site"), (id. ¶ 49; see also Property Historical Ownership Map, annexed to SAC as Ex. A, Docket Entry No. 136-1), and neighboring areas where Defendants engaged in various industrial activities, including the former Pratt Works Refinery (the "Refinery Site"), (SAC ¶ 3).

Defendants have conducted various industrial activities at the Bushwick Site at different times from the mid-1800s until as late as 2014. (Id. ¶¶ 25, 113.) The United States erected a toluol plant which "generated an estimated 407,000 gallons of toluol," (id. ¶¶ 87–88), Exxon owned and operated an oil refinery and "cannery," (id. ¶¶ 68–86), Texaco and Motiva owned and operated "petroleum storage facilities," (id. ¶¶ 91–92, 112–15), Bayside owned and operated "petroleum storage and distribution facilities," (id. ¶¶ 93–105), Iron Mountain operated "a storage facility," (id. ¶¶ 106–08), the City of New York owned and operated "a petroleum bulk storage facility," (id. ¶¶ 109–11), Buckeye owned and operated "an oil pipeline," (id. ¶¶ 116–20), Sunoco owned and operated a "petroleum bulk storage and transportation" terminal, (id. ¶¶ 121–23), Chevron owned and operated "an oil truck repair shop and oil truck parking facility," (id. ¶¶ 124–26), and Exxon operated "a manufactured gas plant (‘MGP’)," (id. ¶¶ 46–67). Exxon operated and controlled Plaintiff's "historical Williamsburg Works Manufactured Gas Plant (‘Williamsburg MGP’)." (Id. ¶ 2.) Defendants’ actions have resulted in the release of solid wastes and hazardous substances at the Bushwick Site. (Id. ¶¶ 3–14.) 19 Kent, North 12, 35 Kent, New 10, and Patti 3 each own parcels of land at the Bushwick Site contaminated with hazardous substances. (Id. ¶¶ 15–19.)

In February of 2007, Plaintiff and the New York State Department of Environmental Conservation (the "NYSDEC") entered into an Order on Consent and Administrative Settlement regarding the investigation and remediation of several former manufactured gas plants that were owned or operated by Plaintiff within the State of New York (the "Consent Order"). (Id. ¶¶ 136–38.) In August of 2007, Plaintiff and the NYSDEC agreed to modify the Consent Order to add certain sites to the agreement, including the Williamsburg MGP (the "Modified Consent Order"). (Id. ¶¶ 136–38.) The Modified Consent Order "directs [Plaintiff], under the supervision of the NYSDEC, to investigate and, if necessary, remediate several MGP sites where coal tar and associated hazardous substances were or may have been disposed at various times in the past." (Id. ¶ 137.) The Modified Consent Order requires Plaintiff to develop Interim Remedial Measure Plans ("IRM Plans"), subject to NYSDEC approval, for all of the investigative and remedial activities at each site. (Id. ¶¶ 139–40.)

Plaintiff worked with the NYSDEC to develop an IRM Plan for part of the Williamsburg MGP located at Block 2287 and undertook investigations at the Williamsburg MGP. (Id. ¶ 139.)

By letter dated "November 7, 2016, prior to NYSDEC's approval of a final Remedial Design/Remedial Action Work Plan, [Plaintiff] exercised its right to terminate the Williamsburg MGP from the [Modified Consent Order]." (Id. ¶ 140; see also Letter to NYSDEC dated Nov. 7, 2017 ("Letter to NYSDEC"), annexed to SAC as Ex. G, Docket Entry No. 136-7.) In the Letter to the NYSDEC, Plaintiff asserted that "[t]ermination of the Williamsburg [MGP] from the [Modified Consent Order] is appropriate because [Plaintiff] appears to be only one among a number of potential sources whose operations on, adjacent to, and surrounding the [Williamsburg MGP] contributed to contamination on and near the [Williamsburg MGP]" and that the existence of multiple potential sources "renders a site-specific approach too narrow to prepare a scientifically reliable study and remediation plan." (Letter to NYSDEC 1.) Plaintiff stated that "[e]ven though [it was] exercising its termination right, [it would] honor its commitment to complete the ongoing interim remedial measure." (Id. ) Pursuant to the Modified Consent Order, termination of the Williamsburg MGP became "effective five days following receipt of written notice, [on] November 14, 2016." (Id. ) Plaintiff continued to investigate and incur costs at the Bushwick Site after the withdrawal from the...