MPM Silicones, LLC v. Union Carbide Corp., Docket No. 17-3468(L), 17-3669(XAP)

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: JACOBS and LEVAL, Circuit Judges
• Citation: 966 F.3d 200
• Parties: MPM SILICONES, LLC, Plaintiff-Counter-Defendant-Appellant-Cross-Appellee, v. UNION CARBIDE CORPORATION, Defendant-Counter-Claimant-Appellee-Cross-Appellant.
• Docket Number: Docket No. 17-3468(L), 17-3669(XAP),August Term, 2019
• Decision Date: 23 July 2020

966 F.3d 200

MPM SILICONES, LLC, Plaintiff-Counter-Defendant-Appellant-Cross-Appellee,
v.
UNION CARBIDE CORPORATION, Defendant-Counter-Claimant-Appellee-Cross-Appellant.

Docket No. 17-3468(L), 17-3669(XAP)
August Term, 2019

United States Court of Appeals, Second Circuit.

Argued: May 8, 2019
Decided: July 23, 2020
Amended: August 13, 2020

Jonathan M. Ettinger, Foley Hoag LLP, Boston, MA, (Jeremy W. Meisinger, Foley Hoag LLP, Boston, MA, Peter A. Sullivan, Foley Hoag LLP, New York, NY, on the brief) for Plaintiff-Counter-Defendant-Appellant-Cross-Appellee MPM Silicones, LLC.

Harold L. Segall, Beveridge & Diamond, P.C., Washington, DC, (Karl S. Bourdeau, Benjamin E. Apple, Beveridge & Diamond, P.C., Washington, DC, Megan R. Brillault, Beveridge & Diamond, P.C., New York, NY, Edward M. Grauman, Beveridge & Diamond, P.C., Austin, TX, on the brief) for Defendant-Counter-Claimant-Appellee-Cross-Appellant Union Carbide Corporation.

Before: Dennis Jacobs, Pierre N. Leval, Circuit Judges.¹

JACOBS and LEVAL, Circuit Judges:

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TABLE OF CONTENTS

A. BACKGROUND...––––206

I. UCC's USE OF PCBS AT THE SITE ...––––206

II. SUBSEQUENT OWNERSHIP OF THE SITE ...––––211

III. MPM DISCOVERS BURIED PCBs...––––213

IV. PROCEDURAL HISTORY ...––––213

V. THE DISTRICT COURT'S JULY 2016 ORDER ...––––215

VI. THE DISTRICT COURT'S SEPTEMBER 2017 ORDER ...––––216

B. DISCUSSION...––––217

I. STATUTE OF LIMITATIONS ...––––217

a. UCC's construction of the earthen cap and the diversion ditch in 1992 were remedial ...––––222

b. NYSEG's single-remediation principle was not intended to govern all circumstances ...––––223

II. FUTURE REMOVAL COSTS ...––––231

a. Constitutional ripeness ...––––232

b. Prudential ripeness ...––––233

c. Future removal cost allocation ...––––236

C. CONCLUSION...––––237

These are cross-appeals by Plaintiff MPM Silicones, LLC ("MPM") and Defendant Union Carbide Corporation ("UCC") from different aspects of the judgment of the United States District Court for the Northern District of New York (Brenda J. Sannes, J. ). Plaintiff MPM owns and operates the Sistersville site ("Sistersville" or the "Site"), a manufacturing facility in Friendly, West Virginia. The Site was previously owned and operated by Defendant UCC for many decades.

In the course of UCC's manufacturing operations at the Site in the 1960s and 1970s, UCC generated substantial amounts of toxic polychlorinated biphenyl ("PCB") waste and buried that waste in various areas of the site. After MPM acquired the Site, it discovered some of this buried PCB waste and undertook a program of clean-up activity in response. MPM brought this suit against UCC under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") to recover from UCC the costs it had incurred (and would incur) in cleaning up UCC's PCB contamination.

As explained below, with respect to the timeliness of CERCLA suits to recover such response costs, the governing statute distinguishes between what it identifies as "removal" action, 42 U.S.C. § 9601(23), which is generally urgent action taken to deal, at least temporarily, with an immediate health hazard, and "remedial action," id. § 9601(24), which is less urgent action whose objective is to eventually achieve a comprehensive, permanent remedy. See New York State Elec. and Gas Corp. v. FirstEnergy Corp. , 766 F.3d 212, 230–31 (2d Cir. 2014). The timeliness of cost recovery suits is governed by very different standards, depending on whether the costs were incurred in "remedial action" or in "removal action." 42 U.S.C. § 9613(g)(2). In this opinion, we use the terms "removal" and "remediation" (or "remedial") not in their colloquial senses, but to refer respectively to the statutory terms "removal action" and "remedial action."

With respect to MPM's claims to recover remediation costs, the district court granted summary judgment to UCC on the grounds that, under 42 U.S.C. § 9613(g)(2), the suit was time-barred. MPM Silicones, LLC v. Union Carbide Corp. , No. 1:11-cv-1542, 2016 WL 3962630, at *14–19 (N.D.N.Y. July 7, 2016) ("

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MPM I "). On the other hand, as for removal costs, the court held by summary judgment that UCC was liable to MPM, id. at *31, but that MPM was obligated to cover a part of those costs, reserving the precise allocation for trial, MPM Silicones, LLC v. Union Carbide Corp. , No. 1:11-cv-01542, Dkt. No. 165 (N.D.N.Y., Dec. 8, 2016) ("MPM II "). After a bench trial, the court allocated 95% of future removal costs to UCC with 5% to be borne by MPM. MPM Silicones, LLC v. Union Carbide Corp. , No. 1:11-cv-1542, 2017 WL 6408611, at *15–21 (N.D.N.Y. Sept. 22, 2017) (" MPM III "). MPM and UCC each challenge aspects of those rulings on this appeal.

We hold that the district court relied on invalid reasoning in concluding that MPM's claim for recovery of the costs of its remediation efforts is time-barred by 42 U.S.C. § 9613(g)(2). We therefore vacate that ruling and remand for further consideration of the timeliness of MPM's suit to recover its remediation costs. As to costs of future removal, we hold that the district court correctly ruled that the issue of cost allocation was ripe for review and did not abuse its discretion in allocating responsibility for 95% to UCC.

A. BACKGROUND

i. UCC's use of PCBs at the Site

The Site consists of 1,300 acres of land in a rural area bordering the Ohio River. The site was undeveloped farmland until UCC acquired it and constructed manufacturing facilities. UCC operated those facilities to manufacture a variety of chemical products from approximately 1955 to April 1993. Today, the site is still used for chemical manufacturing and contains several facilities for the storage, treatment, and disposal of manufacturing waste — known as "Solid Waste Management Units" — including a wastewater treatment unit, an active hazardous waste landfill, and two inactive waste-disposal areas. These are known as the North Inactive Site and the South Inactive Site.

During its operation of the Site, UCC used hundreds of thousands of pounds of polychlorinated biphenyls ("PCBs") in its manufacturing processes. Those processes created substantial PCB-laden chemical wastes. UCC disposed of that waste by burning it, or by depositing it into neutralization tanks or lime pits at the Site. After the lime pits filled with sludge, UCC drained them and dug them out, and used the PCB-laden sludge to backfill other areas of the Site. Some of the PCB-laden waste was deposited in the North Inactive Site, a 5.5 acre landfill located uphill and northwest of the Site's waste water treatment facility and a creek that runs through the Site, known as Sugar Camp Run. See Dist. Ct. Dkt. No. 77-1 at 48 (map of the Site); see also Dist. Ct. Dkt. No. 80-17 at 82–85 (ENVIRON Map of Site). The precise locations of all the backfill areas are unknown.

Figure 1: Partial Map of the Site (Dist. Ct. Dkt. No. 77-1 at 48)

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Figure 2: Partial Map of the Site (Dist. Ct. Dkt. No. 80-17 at 82)

UCC used PCBs at Sistersville until 1972, when environmental concerns regarding PCB toxicity began to emerge.² In 1979, after soil sample analysis reported

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the presence of PCBs in Sugar Camp Run, UCC began to investigate its past waste disposal practices. Clem Schubert, a UCC employee, was tasked with that investigation. Schubert conducted interviews with individuals knowledgeable about UCC's historical waste disposal practices and learned about UCC's practice of disposing of PCB-laden wastes in lime ponds and neutralization tanks, and backfilling areas of the Site with sludge from the lime ponds. Schubert identified several areas in the North Inactive Site and several locations south of the wastewater treatment plant where he believed UCC had dumped PCB wastes and further determined that UCC had shifted around previously buried waste during several construction projects. Schubert summarized his findings in a January 1980 memorandum, in which he stated that "it is reasonable to conclude that in the area of the Sistersville Plant site there are buried ... heavies with up to 250,000 pounds of PCB[s]." Dist. Ct. Dkt. 238 at 71. That memorandum was circulated to UCC employees, including UCC's Plant Manager.

UCC conducted several rounds of testing for various contaminants (including PCBs) at the Site between 1979 and 1981. While some tests showed low levels of PCBs in groundwater, the results overall were inconsistent and revealed only small amounts of PCBs.³ In 1984, a UCC memorandum regarding contamination at the North Inactive Site recognized that "[a]lthough no definitive evidence can be found, it is possible that up to 250,000 pounds of PCB[s] are buried at this site ... However, wells at this site when last monitored in 1981 showed no significant leaching or contamination and no PCB[s] were found." Dist. Ct. Dkt. 78–10 at 1. A 1992 memorandum summarizing all prior UCC investigations into PCBs at the Site — including Schubert's 1980 memorandum —...