State of NY v. Solvent Chemical Co., Inc.

• Decision Date: 31 January 1995
• Docket Number: No. 83-CV-1401C.,83-CV-1401C.
• Citation: State of NY v. Solvent Chemical Co., Inc., 875 F. Supp. 1015 (W.D. N.Y. 1995)
• Parties: The STATE OF NEW YORK, Plaintiff, v. SOLVENT CHEMICAL COMPANY, INC., ICC Industries, Inc., Mader Capital Corporation, 3163 Buffalo Avenue Corporation, and Corigan Sanoian, Individually and d/b/a Quad Technologies, Inc., Defendants. SOLVENT CHEMICAL COMPANY, INC., ICC Industries, Inc., and Mader Capital Corporation, Defendants and Third-Party Plaintiffs, v. The UNITED STATES of America, E.I. DuPont de Nemours and Company, Occidental Chemical Corporation, the City of Niagara Falls, New York, Frontenac Environmental Services, Inc., Laidlaw Transportation Company, Ltd., Consolidated Rail Corporation, Bema Company, Ltd., Eastman Kodak Company, and General Motors Corporation, Third-Party Defendants.
• Court: U.S. District Court — Western District of New York

875 F. Supp. 1015

The STATE OF NEW YORK, Plaintiff, v. SOLVENT CHEMICAL COMPANY, INC., ICC Industries, Inc., Mader Capital Corporation, 3163 Buffalo Avenue Corporation, and Corigan Sanoian, Individually and d/b/a Quad Technologies, Inc., Defendants.

SOLVENT CHEMICAL COMPANY, INC., ICC Industries, Inc., and Mader Capital Corporation, Defendants and Third-Party Plaintiffs, v. The UNITED STATES of America, E.I. DuPont de Nemours and Company, Occidental Chemical Corporation, the City of Niagara Falls, New York, Frontenac Environmental Services, Inc., Laidlaw Transportation Company, Ltd., Consolidated Rail Corporation, Bema Company, Ltd., Eastman Kodak Company, and General Motors Corporation, Third-Party Defendants.

No. 83-CV-1401C.

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

January 31, 1995.

COPYRIGHT MATERIAL OMITTED

Damon & Morey (Paul M. Samson, of counsel), Buffalo, NY, for Solvent Chemical Co., Inc.

David Calverly, Buffalo, NY, for ICC Industries, Inc.

Duke, Holtzman, Yaeger & Photiadis (Peter G. Ruppar, and James L. Duke, of counsel), Buffalo, NY, for Mader Capital Corp.

Harris Beach & Wilcox (Henry W. Killeen, III, of counsel), Hamburg, NY, for Laidlaw Transp. Co., Ltd.

CURTIN, District Judge.

On July 19, 1994, third-party defendant Laidlaw Inc. ("Laidlaw") filed a motion to dismiss, with prejudice, the amended third-party complaints of Solvent Chemical Co., Inc. ("Solvent"), Item 179, Mader Capital, Inc. ("Mader"), Item 181, and ICC Industries, Inc. ("ICC"), Item 183. Item 240. Oral argument was held on December 16, 1994. For the reasons given below, Laidlaw's motion is denied.

BACKGROUND

Plaintiff, the State of New York, filed suit on December 9, 1983, against Solvent, Mader, ICC, and three other defendants, under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., and related state law for the costs of investigation and clean-up of a site located at 3163 Buffalo Avenue, Niagara Falls, New York. Item 1. In June, 1986, Solvent, Mader, and ICC filed third-party complaints asserting CERCLA contribution and related claims against various third-party defendants. Items 42-44. No claims were asserted against Laidlaw at that time.

A remedial investigation of the site by certain of the defendants and third-party defendants resulted in a report to the State of New York in 1991. The State subsequently hired a contractor to conduct further investigative work, analysis, and a feasibility study. Meanwhile, only limited progress has been made in this litigation. Over the years some discovery has been carried out; however, even now it appears to be far from complete.

On December 28, 1993, Solvent filed a motion for leave to file an amended third-party complaint in order to assert claims against six new third-party defendants including Frontenac Environmental Services, Inc. ("Frontenac") and Laidlaw. Item 171. ICC and Mader then filed similar motions. Items 173, 174. The stated grounds for adding Frontenac and Laidlaw as third-party defendants were (1) that Frontenac was a tenant at the site from about 1980 to about 1984, and during that time conducted various operations that may have contributed to the contamination of the site with hazardous materials, and (2) that during some or all of that time, Frontenac was owned, controlled, and dominated by Laidlaw. The motions were unopposed by the parties to the action at that time, and were granted. Items 176-178. Amended third-party complaints were duly filed, in April 1994. Items 179, 181, 183.

In support of its motion to dismiss with prejudice, Laidlaw makes three closely related arguments. First, it maintains that the amended third-party complaints do not satisfy the pleading requirements of Fed.R.Civ.P. 8 and 9(b), because they do not address each element of the claims asserted or allege specific facts in support of those claims. Item 241, pp. 5-14; Item 308, pp. 5-7. Second, it contends that the third-party plaintiffs have failed to demonstrate a good faith factual basis for their claims, as required by Fed. R.Civ.P. 11. Item 241, p. 16; Item 308, pp. 2-5. And finally, it argues that the third-party plaintiffs have neither made the threshold showing of merit required to support the belated impleading of a party under Fed.R.Civ.P. 14(a) and 15(a), nor provided the court with a satisfactory explanation for the delay in asserting their claims against Laidlaw. Item 241, p. 14-16; Item 308, pp. 7-9. In this context, Laidlaw contends that joinder at this time is unfairly prejudicial. Item 308, pp. 8-9.

In response, Mader and Solvent argue that the allegations contained in their amended third-party complaints are sufficient to satisfy the notice pleading requirements of Fed. R.Civ.P. 8, and that Fed.R.Civ.P. 9(b) is inapplicable. Item 273, pp. 2-13; Item 283, pp. 3-13. Solvent contends that regardless of which rule applies, it is entitled to proceed with discovery to obtain specific information in support of its claim that is currently in the sole possession of Laidlaw. Item 283, pp. 7-8, 13. Mader asserts that in the event that the court dismisses its complaint against Laidlaw, it should be granted leave to replead with an opportunity for discovery prior to repleading. Item 273, pp. 14-21. In this context, it contends that it has a simple, acceptable explanation for the delay in filing its complaint against Laidlaw, and that Laidlaw has not demonstrated that the delay has resulted in any prejudice that might warrant the denial of leave to replead. Id., p. 19. ICC joins in Solvent's submissions. Item 286.

At oral argument, ICC's counsel pointed out that Laidlaw makes no statute of limitations argument. He claimed that even if liability had already been established against ICC in this case, ICC could still bring an action against Laidlaw for contribution. Therefore, he maintained, there is no force to Laidlaw's claim of prejudice resulting from the delayed filing. Counsel for Laidlaw did not attempt to rebut this argument.

DISCUSSION

1. Sufficiency of the Pleadings — Fed. R.Civ.P. 8(a), 9(b)

Fed.R.Civ.P. 8(a)(2) provides that a pleading shall contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The objective of this rule is "to give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The Supreme Court has stated that:

The Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim.... Such simplified "notice pleading" is made possible by the liberal opportunity for discovery and the other pretrial procedures established by the Rules to disclose more precisely the basis of both claim and defense and to define more narrowly the disputed facts and issues.

Id. at 47-48, 78 S.Ct. at 102-03. See also, Wade v. Johnson Controls, Inc., 693 F.2d 19, 21 (2d Cir.1982) ("under the liberal theory of notice pleading in the federal rules, a complaint need not state `facts' or `ultimate facts' or `facts sufficient to constitute a cause of action'"). Similarly, "federal pleading is by statement of claim, not by legal theory." Flickinger v. Harold C. Brown & Co., Inc., 947 F.2d 595, 600 (2d Cir.1991); see also, Sidney S. Arst Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d 417, 421 (7th Cir.1994) ("the district court has a duty to consider whether a plaintiff's allegations could provide relief under any available legal theory"). Generally, therefore, a complaint should not be dismissed under Fed.R.Civ.P. 12(b)(6) for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. at 45-46, 78 S.Ct. at 101-02.

A review of the amended third-party complaints at issue in this case reveals that the third party plaintiffs have alleged that (1) from about 1980 to about 1984, Frontenac conducted various operations involving hazardous wastes at 3163 Buffalo Avenue, Niagara Falls, (2) during the course of those operations, Frontenac released hazardous wastes at the site, (3) during the time Frontenac owned and operated the site, hazardous wastes were released from and migrated off the site, (4) Frontenac failed to prevent the migration of the wastes from the site, and (5) during all or part of the time that Frontenac operated at and occupied the site, it was owned, operated, dominated, and controlled by Laidlaw. Item 179, ¶¶ 40-44; Item 181, 58-69; Item 183, ¶¶ 39-43.

Laidlaw does not argue that the allegations concerning Frontenac's operation of the site are insufficient to support a claim for contribution under CERCLA. Neither does it contend that Laidlaw was not the corporate parent of Frontenac during the period in question. Rather, it maintains that the allegation that Frontenac was owned, operated, dominated, and controlled by Laidlaw is simply "conclusory," and unsupported by facts sufficient to sustain a claim of parental liability under CERCLA, either under an ownership theory based on "piercing the corporate veil," or under a theory of operator liability. See Item 241, pp. 3-14.

Under CERCLA § 107(a), "any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of" may be held liable for response costs under the Act. 42 U.S.C. § 9607(a). It is generally agreed that "owner" liability and "operator" liability are two distinct concepts. See, e.g., Long Beach Unified School District v. Dorothy B. Godwin California Living Trust, 32 F.3d 1364, 1367 (9th Cir.1994); Sidney S. Arst Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d at 420-21; Lansford-Coaldale Joint Water Authority v. Tonolli Corp., 4 F.3d 1209, 1220 (3d Cir. 1993); John S. Boyd Co., Inc. v. Boston Gas Co., 992 F.2d 401, 408 (1st...