City of New York v. Exxon Corp.

• Decision Date: 24 April 1986
• Docket Number: No. 85 Civ. 1939 (EW).,85 Civ. 1939 (EW).
• Citation: 633 F. Supp. 609
• Parties: The CITY OF NEW YORK, Plaintiff, v. EXXON CORP.; Exxon Research & Engineering Co., Inc.; Ingersoll-Rand Co.; Alcan Aluminum Corp.; Ford Motor Co.; Koppers Co., Inc.; BASF Wyandotte Corp.; Borg-Warner Corp.; Chrysler Corp.; United Technologies Corp.; Carrier Corp.; National Can Corp.; Public Service Electric & Gas Co.; Dana Corp.; and Refinement International, Inc., formerly known as Ag-Met, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

633 F. Supp. 609

The CITY OF NEW YORK, Plaintiff, v. EXXON CORP.; Exxon Research & Engineering Co., Inc.; Ingersoll-Rand Co.; Alcan Aluminum Corp.; Ford Motor Co.; Koppers Co., Inc.; BASF Wyandotte Corp.; Borg-Warner Corp.; Chrysler Corp.; United Technologies Corp.; Carrier Corp.; National Can Corp.; Public Service Electric & Gas Co.; Dana Corp.; and Refinement International, Inc., formerly known as Ag-Met, Inc., Defendants.

No. 85 Civ. 1939 (EW).

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

April 24, 1986.

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Lawrence A. Salibra, Alcan Aluminum Corp., Cleveland, Ohio, for defendant Alcan Aluminum Corp.

Leonard Marks, Gold, Farrell & Marks, New York City (Thomas L. Sivak, Koppers Co. Pittsburgh, Pa., of counsel), for defendant Koppers Co.

Johnnine Brown Hazard, Edward J. Kennedy, Bell, Boyd & Lloyd, Chicago, Ill., for defendant Borg-Warner Corp.

Leonard Marks, Gold, Farrell & Marks, New York City, Timothy A. Vanderver, Russell V. Randle, Patton, Boggs & Blow, Washington, D.C., for defendants United Technologies Corp., Carrier Corp.

C. MacNeil Mitchell, Breed, Abbott & Morgan, New York City, Norman W. Bernstein, Associate Counsel, Ford Motor Co., Dearborn, Mich., for defendant Ford Motor Co.

Joseph DiBenedetto, Margot Schonholtz, Cole & Deitz, New York City, for defendant Refinement Intern., Inc.

Frederick A.O. Schwarz, Jr., Corp. Counsel, City of New York, New York City (Walter A. Kretz, Jr., James F. Simon, Christopher A. Amato, June Rose, of counsel), for plaintiff.

James W. Moorman, Cadwalader, Wickersham & Taft, New York City, David J. Mahoney, Mark L. Manewitz, Exxon Corp., Linden, N.J., for defendants Exxon Corp. and Exxon Research and Engineering Co.

Norman Sade, Dennis M. Resnick, Budd, Larner, Kent, Gross, Picillo, Rosenbaum, Greenberg & Sade, New York City, for defendant Ingersoll-Rand Co.

Arthur P. Schmauder, New York City, David P. Schneider, BASF Wyandotte Corp., Parsippany, N.J., for defendant BASF Wyandotte Corp.

Melvin Katz, Michael Phillips, Lester, Schwab, Katz & Dwyer, New York City, for defendant Chrysler Corp.

Alan H. McLean, Hughes, Hubbard & Reed, New York City, for defendant National Can Corp.

E. Dennis Sisk, Hunton & Williams, New York City, for defendants Public Service Elec. & Gas Co. and Dana Corp.

OPINION

EDWARD WEINFELD, District Judge.

The City of New York brings this action under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA),¹ together with various pendent state claims, against major corporations which generated and transported hazardous wastes dumped at five landfills owned and operated by the City. All defendants move to dismiss the complaint under Fed.R.Civ.P. 12(b)(6); in addition, defendant Refinement International, Inc. ("Refinement") moves to dismiss for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2).

The City's complaint alleges that, beginning in 1972, the predecessor corporation of defendant Refinement International, Ag-MET Inc., ("Ag-MET"), along with other affiliated corporations in the business of rerefining oil, contracted with the remaining defendants ("the generator defendants") to transport and dispose of industrial and chemical waste generated by the latter defendants' activities in the metropolitan area. Ag-MET and the ten other transporting companies ("the Mahler companies") were owned or operated, in whole or in part, by one Russell Mahler. Mahler subsequently pled guilty in this district to an information charging that from 1972 to 1980 he conspired to bribe John Cassiliano, an employee of the City's Department of Sanitation, in order to gain access to five City landfill sites for the purpose of illegally disposing of industrial and chemical waste. Cassiliano was convicted after trial in New York State Supreme Court of the charge of official misconduct in allowing one or more of the Mahler companies to dispose of waste in City landfills in violation of law.

The complaint alleges that the Mahler companies illegally disposed of the generator defendants' industrial and chemical wastes, containing "hazardous substances" within the meaning of CERCLA, in such fashion that the City cannot presently determine at which landfill site the wastes of each of the generator defendants were deposited. The City further alleges that these wastes have contaminated groundwater at each of the landfills, and that this groundwater is leaching into surface waters surrounding each of the landfills, including Jamaica Bay, Eastchester Bay, and Richmond Creek, as well as threatening aquifers which are present or potential sources of drinking water for the City's residents. The City seeks in its federal causes of action recovery of those costs it has already incurred in an effort to remove the hazardous wastes from the five landfills, declaratory relief holding defendants liable for the City's future costs of response, and damages for injury caused to natural resources under the City's management and control which are affected by the releases of toxic waste from the landfills.

The defendants move for dismissal of the City's causes of action under CERCLA pursuant to Fed.R.Civ.P. 12(b)(6), contending on various grounds that the City's allegations do not state a claim for private cost recovery under the statute. In addition, defendant Alcan Aluminum Corporation ("Alcan") moves to dismiss the City's complaint on the ground that the wastes generated by it and transported by the Mahler companies for disposal at the City's landfills do not contain a "hazardous substance." Discussion of these motions requires a preliminary review of the purpose and structure of the statute.

CERCLA

The Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or Superfund, was enacted in the closing months of the 96th Congress as a legislative response to the growing problem of toxic industrial wastes, many of which, having been disposed of before their toxicity was widely known, had contaminated the land and water resources of American towns and cities. CERCLA was a legislative attempt to create a coherent response to the dual problem of emergency response to releases of toxic chemicals into the environment, and short- and long-term response to the presence of toxic wastes in existing dumpsites, many of which had been abandoned by any party who could be held legally or financially responsible for cleanup. The statute as it was finally enacted was the product of a long and tortuous process of legislative compromise,² and is far from being a model of statutory or syntactic clarity. In broad outline, the Act establishes a trust fund, commonly called Superfund, which is financed predominantly through excise tax revenues. The federal government is authorized to use Superfund moneys to finance "governmental response" activities and to pay "claims" arising from the response activities of private parties conducted with the express prior approval of designated federal authorities or claims by federal or state governmental entities for damage caused to natural resources belonging to that government.³ In addition to the Superfund claim structure, the Act provides that federal and state governments and private parties may sue those responsible for the generation, transportation, or disposal of hazardous wastes, who are strictly liable for the response costs incurred.⁴ CERCLA defines "response" actions to be of two types: "removal" actions, and "remedial" actions. Removal actions are defined as

the cleanup and removal of released hazardous substances from the environment, such actions as may be taken in the event of the threat of release of hazardous substances into the environment, such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances, the disposal of removed material, or the taking of such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare....⁵

while remedial actions are defined as

those actions consistent with permanent remedy taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment, to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment....⁶

In short, "removal" actions are primarily those intended for the short-term abatement of toxic waste hazards, while "remedial" actions are typically those intended to restore long-term environmental quality.⁷

Response actions taken by the federal government and other parties are to be conducted within the guidelines established by the National Contingency Plan ("NCP") which, under § 105 of the Act, "shall establish procedures and standards for responding to releases of hazardous substances, pollutants, and contaminants," including criteria for evaluating the appropriateness and effectiveness of response measures, along with methods for investigating and evaluating methods for the cleanup of hazardous substance dumpsites.⁸ CERCLA defines "hazardous substances" as those which are identified in regulations propounded by the Environmental Protection Agency pursuant to § 102 of the Act, or any "element, compound, mixture, solution of substance" designated pursuant to the Federal Water Pollution Control Act, the Solid Waste Disposal Act, or the Toxic Substances Control Act, specifically excluding petroleum and many petroleum products.⁹

The City presents three CERCLA causes of action in this litigation, all founded on the cost recovery provision. In the first two causes of action, the City seeks to recover its present and future costs of response at the five landfill sites, first from the generator defendants and second from Refinement International as a transporter of hazardous wastes;...