Revitalizing Auto Cmtys. Envtl. Response Trust v. Nat'l Grid USA
| Decision Date | 18 August 2021 |
| Docket Number | August Term, 2020,Docket No. 20-1931-cv |
| Citation | 10 F.4th 87 |
| Parties | REVITALIZING AUTO COMMUNITIES ENVIRONMENTAL RESPONSE TRUST, and Racer Properties LLC, Plaintiffs-Appellants, v. NATIONAL GRID USA, Niagara Mohawk Power Corporation, Carrier Corporation, Raytheon Technologies Corporation, fka United Technologies Corporation, General Electric Company, fka General Electric Corporation, Bristol-Meyers Squibb Company, New Process Gear, Inc., Magna Powertrain USA, Inc., Thompson Corners, LLC, Metalico Syracuse Realty, Inc., Metalico New York, Inc., Gardner Denver, Inc., ONX1 LLC, Onondaga Pottery Company, Syracuse China LLC, Libbey Glass LLC, Amparit Industries, LLC, 6181 Thompson Road, LLC, Carrier Circle Business Complex LLC, Telesector Resources Group, Inc., Western Electric Company, Incorporated, Syracuse LePage LLC, Lennox Industries Inc., Syracuse Deere Road Associates, LLC, Jagar Enterprises, Inc., Calocerinos and Spina, C & S Engineers, Inc., John Does, B&B Family Limited Partnership, Hauler's Facility LLC, 6223 Thompson Road Suite 1000 Syracuse, NY 13206, Honeywell International Inc., 80 State Street Albany, NY 122072543, Lockheed Martin Corporation, 6801 Rockledge Drive Bethesda, MD 20817, New Process Gear, Inc., 6600 New Venture Gear Drive East Syracuse, NY 13507, Nokia of American Corporation, 600 Mountain Avenue Murray Hill, NJ 07974, North Midler Properties LLC, 6041 Sewickley Drive Jamesville, NY 13078, Northeast Management Services, Inc., c/o Florine Basile, Jr., President P.O. Box 1238 Cicero, NY 13039, Northern Industrial Holdings, LLC, 1675 South State Street Suite B Dover, De 19901, Thompson Lawn, LCC, 7050 Cedarbay Road Fayetteville, NY 13066, Thompson NW, LLC, 7050 Cedarbay Road Fayetteville, NY 13066, Carlyle Air Conditioning Company, Inc., Defendants-Appellees, Chrysler Group LLC, Cooper Crouse-Hinds, LLC, Prestolite Electric Incorporated, Deere & Company, Center Circles LLC, Solvents and Petroleum Service, Inc., Aleris Partners LLC, Fulton Iron & Steel Co. Inc., Burko Corporation, Empire Pipeline Corporation, Old Carco Liquidation Trust, By Its Trustee RJM I, LLC 251 Little Falls Drive Wilmington, DE 19808, Old Carco LLC, 555 Chrysler Drive Auburn Hills, MI 48236, United States Hoffman Machinery Corporation, 105 Fourth Avenue New York, NY 10003, Old Electric, Inc., aka Old Prestolite, fka Prestolite Electric Incorporated, Defendants. |
| Court | U.S. Court of Appeals — Second Circuit |
Matthew Littleton, Donahue, Goldberg & Littleton, Washington, DC (Alan J. Knauf, Linda R. Shaw, Amy K. Kendall, Knauf Shaw LLP, Rochester, NY, on the brief), for Plaintiffs-Appellants.
Robert A. Wiygul (Steven T. Miano, Peter V. Keays, on the brief), Hangley Aronchick Segal Pudlin & Schiller, Philadelphia, PA, Kristin Carter Rowe (Dean S. Sommer, on the brief), Young/Sommer LLC, Albany, NY, for Defendants-Appellees 6181 Thompson Road, LLC; Amparit Industries, LLC; B&B Family Limited Partnership; Bristol-Myers Squibb Company; C & S Engineers, Inc.; Calocerinos and Spina; Carlyle Air Conditioning Company, Inc.; Carrier Circle Business Complex LLC; Carrier Corporation; Gardner Denver, Inc.; General Electric Company; Haulers Facility LLC; Honeywell International Inc.; Jagar Enterprises, Inc.; Libbey Glass LLC; Lockheed Martin Corporation; Magna Powertrain USA, Inc.; Metalico New York, Inc.; Metalico Syracuse Realty, Inc.; National Grid USA; New Process Gear, Inc.; Niagara Mohawk Power Corporation; Nokia of America Corporation; North Midler Properties; Northeast Management Services, Inc.; Northern Industrial Holdings, LLC; Onondaga Pottery Company; ONX1 LLC; Raytheon Technologies Corporation (f/k/a United Technologies Corporation); Syracuse China LLC; Syracuse Deere Road Associates, LLC; Syracuse LePage LLC; Telesector Resources Group, Inc.; Thompson Corners, LLC; Thompson Lawn, LLC; Thompson NW, LLC; Western Electric Company, Incorporated.
Douglas H. Zamelis, Law Offices of Douglas H. Zamelis, Cooperstown, NY, for Defendant-Appellee Northeast Management Services, Inc.
Charles T. Wehland, Jones Day, Chicago, IL, James M. Gross, Jones Day, New York, NY, for Defendant-Appellee Lennox Industries, Inc.
Before: Sack, Lynch, and Menashi, Circuit Judges.
This case, though only in its infancy, has already mired the parties and the court in a procedural morass. Perhaps that is unsurprising, as it deals with the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), a statute that, as we have previously observed, "is known neither for its concinnity nor its brevity." W.R. Grace & Co.-Conn. v. Zotos Int'l, Inc. , 559 F.3d 85, 88 (2d Cir. 2009).
Plaintiffs-Appellants Revitalizing Auto Communities Environmental Response Trust ("RACER Trust") and RACER Properties LLC (together, "RACER") were created during the General Motors Corporation ("GM") bankruptcy pursuant to a Trust Consent Decree and Settlement Agreement, which was approved and entered by the United States Bankruptcy Court for the Southern District of New York, effective March 29, 2011 (the "2011 Agreement" or "Trust Consent Agreement"). GM, the Environmental Protection Agency ("EPA"), a number of states, and the Saint Regis Mohawk Tribe were also parties to the agreement. RACER was established and funded to clean up pollution in and around a number of former GM properties, including the former GM plant site at issue here, located in the Onondaga Lake region of New York.
RACER alleges that after the cleanup of the New York plant site began, the New York State Department of Environmental Conservation ("NYSDEC") – and eventually the EPA – asked RACER to extend its cleanup efforts to an area not encompassed by the 2011 Agreement. RACER sued several dozen Defendants,1 which it alleges contributed to the pollution in the expanded territory it is now being asked to address, in an effort to force them to contribute to the costs of cleanup.
RACER brought claims for cost recovery and contribution in the alternative under §§ 107(a) and 113(f) of CERCLA, 42 U.S.C. §§ 9607(a) and 9613(f).2 As discussed more fully below, CERCLA "creates several distinct provisions that authorize parties in different procedural positions to recover costs incurred in cleaning up contamination [including, as relevant here]: (1) section 107(a), which permits the general recovery of cleanup and prevention costs ... and ([2]) section 113(f)(3)(B), which creates a contribution right for parties that have resolved their liability by settlement."
W.R. Grace & Co.-Conn. , 559 F.3d at 89 (internal quotation marks omitted). RACER argued that because it has not resolved its liability as to the expanded territory in a judicially approved settlement, its claim should proceed under § 107. However, RACER pleaded a § 113 claim in the alternative, so that it could pursue that avenue of relief if the court found that its liability to clean up the expanded territory was resolved, which would bar it from proceeding under § 107. Finally, RACER also alleged several related state law claims, and sought a declaratory judgment as to Defendants’ liability.
The district court (David N. Hurd, J. ) dismissed RACER's complaint. As a threshold matter, the court concluded that, if the suit proceeded, RACER Trust's trustee must be substituted as a plaintiff because the trust lacks capacity to sue. On the merits, the district court held that RACER's § 107 claim was prudentially unripe because the EPA is investigating other potentially responsible polluters. The court reasoned that it would be best to allow the EPA to identify other responsible parties and decide on a proper course of action before allowing RACER to pursue other polluters in court. The district court also concluded that RACER would not suffer hardship from delay because it could assert defenses in the bankruptcy proceeding if the NYSDEC or EPA required it to clean up territory not encompassed by the 2011 Agreement. As to RACER's § 113 claim, the district court held that it too should be dismissed, because either it was also unripe, it was time-barred (if the 2011 Agreement established RACER's liability to clean up the expanded territory), or it failed to state a claim (if RACER's liability to clean up the expanded territory had not yet been resolved).
On appeal, RACER contests all of those points and raises a number of other issues. We conclude that the district court was correct to require RACER Trust to substitute its trustee as plaintiff, because the trust lacks capacity to sue. On the merits, we hold that the district court erred in dismissing RACER's complaint at this early stage. RACER's § 107 claim is ripe because it is based on costs RACER has already incurred for which it may not receive repayment through the EPA investigation, and because further delay in adjudicating the claim would cause RACER hardship. We also conclude that the district court erred in dismissing RACER's § 113 claim. To the extent that the district court concluded that it too was prudentially unripe, we disagree for the same reasons that apply to the § 107 claim. To the extent the district court's dismissal rested on other grounds, the court failed to adequately explain its reasoning and we remand for further analysis. Finally, we decline to address the other issues raised by the parties, which should be addressed by the district court in the first instance, as we explain further below.
Accordingly, we VACATE and REMAND the district court's dismissal of RACER's CERCLA claims. We also VACATE and REMAND the district court's dismissal of RACER's state law claims so that the court may reconsider its ruling in light of this Opinion.
For many years, GM operated the Syracuse Inland Fisher Guide Plant ("IFG Plant") in the Onondaga Lake region of New York. The Onondaga Lake region, which suffered from heavy pollution, was added to the National Priorities List of sites eligible for cleanup under...
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