Seggos v. Next Millennium Realty, LLC, 06-CV-1133 (SJF)(AYS)

CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
Writing for the CourtFEUERSTEIN, J.
PartiesSTATE OF NEW YORK and BASIL SEGGOS, as ACTING COMMISSIONER OF NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Plaintiffs, v. NEXT MILLENNIUM REALTY, LLC, et al., Defendants.
Decision Date09 February 2016
Docket Number06-CV-1133 (SJF)(AYS)

STATE OF NEW YORK and BASIL SEGGOS1,
as ACTING COMMISSIONER OF NEW YORK STATE DEPARTMENT
OF ENVIRONMENTAL CONSERVATION, Plaintiffs,
v.
NEXT MILLENNIUM REALTY, LLC, et al., Defendants.

06-CV-1133 (SJF)(AYS)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

February 9, 2016


OPINION & ORDER

FEUERSTEIN, J.

Pending before the Court are, inter alia, (1) the motion of plaintiffs State of New York and Basil Seggos, as Acting Commissioner of the NYDEC (collectively, "the State"), pursuant to Rule 56 of the Federal Rules of Civil Procedure for partial summary judgment on their claims against defendants Next Millennium Realty LLC ("Next Millennium"); 101 Frost Street Associates, L.P. ("101 FSA"); and Alan Eidler, Lise Spiegel Wilks and Pamela Spiegel Sanders, as co-executors of the Last Will and Testament of Jerry Spiegel and duly authorized administrators of the Estate of Jerry Spiegel (collectively, "the Spiegel Defendants") seeking judgment declaring (a) that Next Millennium, 101 FSA and the Spiegel Defendants (collectively, "the Frost Street Defendants") are jointly and severally liable under Section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42

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U.S.C. § 9607(a), for all response costs incurred and to be incurred by the State in responding to contamination at and emanating from the New Cassel Industrial Area ("NCIA") Site, and specifically into the off-site area designated as Operable Unit No. 3 by the NYDEC2; (b) that the State's response actions with respect to the NCIA are not inconsistent with the national contingency plan under Section 107 of CERCLA, 42 U.S.C. § 9607(a); (c) that the Frost Street Defendants are jointly and severally liable for further response costs incurred by the State in responding to contamination at and emanating from the NCIA Site under Section 113(g)(2) of CERCLA, 42 U.S.C. § 9613(g)(2); and (d) that the Frost Street Defendants are liable for damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such damages, pursuant to Sections 107(a) and 113(g) of CERCLA, 42 U.S.C. §§ 9607(a) and 9613(g)(2), respectively ("the Natural Resource Damage Claim" or "the NRD Claim")3; and (2) the Frost Street Defendants' (a) cross motion pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment on their fifth affirmative defense for divisibility of harm, and (b) motion pursuant to Rule 56 of the Federal Rules of Civil Procedure for partial

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summary judgment dismissing the State's NRD Claim. For the reasons set forth below, the State's motion is granted in part and denied in part and the Frost Street Defendants' cross motion and motion are denied.

I. Factual Background4

The NCIA encompasses approximately one hundred seventy (170) acres of land in the Town of North Hempstead in the County of Nassau; is comprised of numerous industrial facilities; and is bounded by the Long Island Railroad to the north, Frost Street to the east, Old Country Road to the south and Grand Boulevard to the southwest. (State's Statement of Material Facts Pursuant to Local Rule 56.1 ["State 56.1"], ¶ 1; Frost Street Defendants' Counter-Statement of Material Facts Pursuant to Local Rule 56.1 and Statement of Additional Undisputed Facts ["FSD Counter."], ¶ 1). The NCIA was first recognized as an area with widespread groundwater contamination during a county-wide groundwater investigation conducted by the Nassau County Department of Health ("NCDH") in 1986. (FSD Counter., ¶ 3). Past industrial activities conducted within the NCIA resulted in extensive volatile organic compound ("VOC") contamination of groundwater in the vicinity of the NCIA Site. (Id., ¶ 2). Specifically, disposal activities at industrial facilities within the NCIA resulted in the disposal of hazardous wastes, including the VOCs tretrachloroethylene ("PCE"), trichloroethylene ("TCE") and 1,1,1-trichloroethane ("1,1,1-TCA"), which are hazardous substances under CERCLA. (Id., ¶¶ 5, 8).

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It is undisputed that releases of hazardous waste from facilities within the NCIA Site migrated from the facilities to surrounding areas, including State OU-3/EPA OU-1. (FSD Counter., ¶ 6). Although the State contends that the surrounding area also includes the Bowling Green Water District well field, (State 56.1, ¶ 6), the Frost Street Defendants "dispute[] that any hazardous waste originating from the Frost Street Sites or the eastern Plume have migrated into the Bowling Green Water District Well." (FSD Counter., ¶ 6).

In 1988, the NYDEC listed the NCIA as a Class 2 site in the Registry of Inactive Hazardous Waste Disposal Sites in New York, thereby indicating that hazardous waste was disposed at the site and constituted a significant threat to public health or the environment. (FSD Counter., ¶ 4). The NYDEC divided the NCIA Site into three (3) "operable units," (a) Operable Unit 1 ("OU-1"), which is the sources of contaminants at individual industrial facilities located within the NCIA, including the on-site soils at each of the Frost Street Sites; (b) Operable Unit 2 ("OU-2"), which is groundwater contamination at each such facility, including groundwater contamination between the Frost Street Sites; and (c) Operable Unit 3 ("State OU-3/EPA OU-1"), which is groundwater contamination downgradient from the NCIA Site, i.e., south of Old Country Road and Grand Boulevard. (Id., ¶ 7). The NCIA and State OU-3/EPA OU-1 are directly above an EPA-designated sole source aquifer, which is the principal source of drinking water on Long Island. (Id., ¶ 10). Groundwater sampling in the NCIA and State OU-3/EPA OU-1 found concentrations of VOCs, including PCE, TCE and 1,1,1-TCA, in excess of state drinking water standards. (Id., ¶ 11).

In order to identify the sources of contamination within the NCIA, the NYDEC conducted Preliminary Site Assessments ("PSAs") within the NCIA. (FSD Counter., ¶ 12). As a result of

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the PSAs, the NYDEC listed seventeen (17) facilities within the NCIA as Class 2 sites in the New York Registry of Inactive Hazardous Waste Disposal Sites ("the Registry") between May 1995 and September 1999. (Id., ¶ 13). Of the seventeen (17) Class 2 sites, three (3) were investigated and de-listed from the Registry; two (2) were investigated, remediated and de-listed from the Registry; and one (1) was investigated, remediated and re-classified as a Class 4 site. (Id., ¶ 14). The NYDEC designated the 89 Frost Street Site, 101 Frost Street Site and 770 Main Street Site (collectively, "the Frost Street Sites") as Class 2 sites in 1996. (Id., ¶ 15).

As a result of the release of hazardous substances at the NCIA Site, the NYDEC, using funds from the State's Inactive Hazardous Waste Remedial Fund, undertook investigation, remediation, and other actions to respond to the contamination in State OU-3/EPA OU-1. (FSD Counter., ¶ 16).

New York State regulations incorporate by reference the federal National Oil and Hazardous Substances Pollution Contingency Plan ("NCP"), 40 C.F.R. Part 300, at N.Y. Comp. Codes R. & Regs. tit. 6, § 375-1.1(g)(2). (FSD Counter., ¶ 17).

As of February 11, 2015, the NYDEC and the Department of Health ("DOH") have incurred four million nine hundred eighty-six thousand four hundred thirteen dollars and fifty-five cents ($4,986,413.55) in unreimbursed response costs related to State OU-3/EPA OU-1 and attributed to the thirteen (13) facilities at issue in this case.5 (FSD Counter., ¶ 18).

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A. The 89 Frost Street Site

The 89 Frost Street Site is comprised of approximately three and a half (3.5) acres of land located at 89 Frost Street in North Hempstead. (FSD Counter., ¶ 20). Tenants and subtenants utilized a fifty-five thousand (55,000) square foot facility on the property for commercial manufacturing from approximately 1964, when it was built, through 1998, when the structures on the site were demolished.6 (Id., ¶ 21).

The environmental investigations carried out by the NYDEC and its consultants identified numerous hazardous substances present in the shallow soil, deep soil and groundwater at the 89 Frost Street Site. (FSD Counter., ¶ 23). Specifically, concentrations of PCE in on-site groundwater were as high as thirty-seven thousand micrograms per liter (37,000 µg/L), at a location downgradient of two (2) drywell/cesspools at the western part of the 89 Frost Street Site. (Id., ¶ 32). Later, during the NYDEC's Remedial Investigation, (1) PCE was detected in on-site groundwater at a concentration of one hundred twenty thousand micrograms per liter (120,000 µg/L), (id., ¶ 33); and (2) "PCE and TCE were detected at concentrations above guidance levels in soils at the 89 Frost Street Site," including PCE at forty-seven thousand micrograms per kilogram (47,000 µg/kg) in soil in a drywell, (id., ¶ 30). During a subsequent investigation at the 89 Frost Street Site, PCE and TCE were detected in numerous soil samples, including PCE concentrations of forty-five million micrograms per kilogram (45,000,000 µg/kg) and TCE

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concentrations of four hundred thousand micrograms per kilogram (400,000 µg/kg). (Id., ¶ 31). Contamination in the on-site soil and groundwater indicates past disposal on the 89 Frost Street Site. (Id., ¶ 29).

The 89 Frost Street Site utilized an on-site sanitary system and numerous drywells until February 1983, when it was connected to the municipal sewer system. (FSD Counter., ¶ 22). It is undisputed that solvents were located in the old septic system utilized at the 89 Frost Street Site. (Id., ¶ 26). The State contends that the old septic system "was taken out of service following a fire that destroyed the building in or about 1976[;]" that a new septic system was installed at the property when the building was reconstructed on the site; and that "[t]he source area investigation performed at the 89 Frost Street Site identified significant levels of contamination in and downgradient from the...

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