Schaefer v. Town of Victor

Decision Date13 July 2006
Docket NumberDocket No. 05-1949-CV.
Citation457 F.3d 188
PartiesBetty J. SCHAEFER, Executrix of the Estate of William Schaefer, Plaintiff-Appellant, v. TOWN OF VICTOR, Village of Victor, Hartman Material Handling Systems, Inc., R. Phillip Hartman, Mendon Disposal Co., Inc. and Waste Management of New Jersey, Inc., Defendants-Appellees.
CourtU.S. Court of Appeals — Second Circuit

Michael R. Wolford, Wolford & Leclair LLP, Rochester, N.Y. (Leslie E. Swift, Wolford & Leclair LLP, Rochester, NY, and Michael A. Jones, Jr., Town of Victor, NY, on the brief), for Defendants-Appellees Town of Victor and Village of Victor.

Before: OAKES, SOTOMAYOR and WESLEY, Circuit Judges.

WESLEY, Circuit Judge:

A perceptive governor once noted: "Benjamin Franklin said there were only two things certain in life: death and taxes. But I'd like to add a third certainty: trash."1 The instant case arises out of the federal government's efforts to deal with this "third certainty" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), §§ 101-175, 42 U.S.C. §§ 9601-9675 (2000). Congress enacted CERCLA to address the risks associated with the improper storage and disposal of hazardous and toxic substances. To minimize these risks, "Congress established a fund to finance cleanup of some sites and required certain responsible parties to reimburse either the fund or the parties who paid for the cleanup." Midlantic Nat'l Bank v. N.J. Dep't of Envtl. Prot., 474 U.S. 494, 506, 106 S.Ct. 755, 88 L.Ed.2d 859 (1986).

CERCLA's passage ignited controversy over whether responsible persons could seek contribution for cleanup costs from other responsible parties. To address this uncertainty, Congress added an explicit right of contribution, CERCLA § 113(f)(1), in the Superfund Amendments and Reauthorization Act of 1986, Pub.L. No. 99-499, 100 Stat. 1613, 1647-48 (1986). The Supreme Court recently clarified, however, that a potentially responsible party may seek contribution under § 113(f)(1) only if the party has already been sued under CERCLA. See Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 165-66, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004).

The threshold issue in the instant case is whether a potentially responsible party that may not seek contribution under § 113(f)(1) may nevertheless recover in indemnity under another section of CERCLA — § 107(a) — and, if so, whether plaintiff William Schaefer initiated this action within the applicable statute of limitations. We hold that, while this Circuit's most recent view of the statute allows Schaefer to bring this claim as a cost recovery action under § 107(a), Schaefer failed to initiate this action for remedial costs within the applicable limitations period. In so holding, we reject Schaefer's recommendation that we adopt a "bright-line" rule based either on the ultimate approval of a remedial action plan or on the closure of the landfill. We conclude that the limitations period for remedial actions begins, as the plain language of the statute instructs, from the "initiation of physical on-site construction of the remedial action." CERCLA § 113(g)(2)(B).


Over four decades ago, William Schaefer opened the Genesee Sand & Gravel Landfill (the "landfill") in Ontario County in western New York. In 1965, Schaefer contracted with the Town of Victor (the "Town") to operate the landfill. The landfill operated continuously between 1965 and April 1993, during which time Schaefer accepted waste from several of the defendants. For example, Schaefer contracted with the Town of Victor to provide landfill services for the Town between July 1, 1968 and November 9, 1981. The Town, in turn, gave permission to defendant Hartman Material Handling Systems, Inc. ("Hartman Material"), a now dissolved New York corporation then managed by defendant Philip Hartman ("Hartman"), to dispose of waste at the landfill. Schaefer also entered into multiple agreements with the Village of Victor (the "Village") to dispose of solid waste between 1968 and 1993. Additionally, defendant Mendon Disposal Co., Inc. ("Mendon Disposal"), another dissolved New York corporation, which was the predecessor of defendant Waste Management of New Jersey, Inc. ("Waste Management"), allegedly deposited solid waste at the landfill.

Schaefer's environmental troubles began in the early 1980s when he attempted to renew his landfill operating permit with the New York State Department of Environmental Conservation ("DEC"). The DEC had issued Schaefer a permit in 1978 allowing him to operate the landfill until October 1, 1981. In September of 1981, Schaefer submitted an application for renewal of this permit and, over the next several years, Schaefer and the DEC negotiated the terms of the pending permit renewal.

The DEC later advised Schaefer that his renewal application was deficient. Specifically, the DEC discovered that Schaefer's landfill was located over a principal aquifer (an underground bed of earth, gravel, and porous stone that yields groundwater). Concerned over potential groundwater contamination, the DEC notified Schaefer that the landfill would have to be closed unless it could be "conclusively demonstrated" that Schaefer's proposal to continue operating the landfill "minimizes or avoids adverse environmental effects to the maximum extent practicable." Although the DEC recommended closure of the facility in an environmentally sound manner as the "most cost-effective solution," it nevertheless gave Schaefer the option of closing the site or undertaking the "additional work necessary to develop a complete application."

It was later discovered, however, that the landfill's solid waste actually included certain hazardous substances as defined by CERCLA. See CERCLA § 101(14), 42 U.S.C. § 9601(14) (defining hazardous substances). Specifically, hazardous substances were detected in leachate (i.e., liquid that has percolated through the soil) and in groundwater monitoring wells at the landfill. In addition, Hartman Material informed the DEC that it had generated "waste paint, filter (dried) and flammable liquids," which had been disposed at Schaefer's landfill between 1966 and 1981. As a result, the DEC designated the landfill as a "suspected" site on the New York State Registry of Inactive Hazardous Waste Disposal Sites ("Registry"). Later in 1986, the DEC denied Schaefer's pending renewal application and directed Schaefer to close the landfill no later than October 31, 1986. Schaefer did not close the landfill; instead, while seeking a permit renewal, he continued to operate the landfill without a permit.

The DEC informed Schaefer on March 5, 1990, that he was responsible for investigative and/or remedial activities (i.e., permanent containment efforts) at the landfill, pursuant to both CERCLA § 107(a) and the New York Environmental Conservation Law (ECL) § 27-1313. Later that year, Schaefer entered into a Consent Order (the "1990 Consent Order") with the DEC for investigation (but not remediation) of the landfill. To this end, Schaefer hired Dunn Geoscience to conduct several studies in response to the threats posed by the landfill. The studies showed that, while there had been no proven release of hazardous wastes as defined by federal law and the ECL, there had been releases of hazardous substances as defined by CERCLA. See CERCLA § 101(14).

Because Schaefer still had not closed his landfill, the DEC finally brought an administrative complaint against Schaefer on November 1, 1991. The DEC alleged that Schaefer was illegally operating the landfill without a valid permit and in violation of operational requirements. In January of 1992, Schaefer and the DEC resolved the allegations in the administrative complaint through another Consent Order (the "1992 Consent Order"). Pursuant to this Order, Schaefer agreed to close the landfill in an environmentally-sound manner and to provide post-closure care of the landfill. The 1992 Consent Order further provided for the assessment of civil monetary penalties against Schaefer and required Schaefer to submit a closure plan within 60 days. However, the agreement also allowed Schaefer to continue operating the landfill until November 30, 1992.

Schaefer and the DEC later entered into three orders of modification, which altered various aspects of the 1992 Consent Order. On November 25, 1992, Schaefer and the DEC entered into the first "Order of Modification," which allowed Schaefer to continue operating the landfill until December 30, 1992. On December 30, 1992, Schaefer and the DEC entered into a "Second Order of Modification," which permitted Schaefer to operate the landfill until April 30, 1993, gave Schaefer until the end of January 1993 to submit a closure plan, and created a surety agreement to ensure proper closure of the landfill. The surety agreement was subsequently modified on January 13, 1993, when Schaefer and the DEC entered into a "Third Order of Modification," which required Schaefer to submit an acceptable surety to the DEC by March 1, 1993.

On January 10, 1993, Schaefer and the DEC entered into a separate "Closure Implementation Agreement," which established procedures for Schaefer to notify the DEC of work he had completed in closing the landfill and to request reimbursement. On January 11, 1993, Schaefer entered into a trust agreement with Canandaigua National Bank for financing the closing of the landfill. On January 13, 1993, Schaefer and the DEC also entered into a stipulation acknowledging the landfill's removal from New York's Registry of Inactive Hazardous Waste Disposal Sites. The stipulation was based on a DEC letter, dated December 16, 1992, which informed Schaefer that his landfill was being deleted from the Registry because the agency had not identified any hazardous wastes at his site. That stipulation was converted...

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