State v. West Side Corp..

• Decision Date: 03 June 2011
• Docket Number: No. 07–CV–4231 ENV ALC.,07–CV–4231 ENV ALC.
• Citation: 790 F.Supp.2d 13
• Parties: The State of NEW YORK and Alexander B. Grannis, as Commissioner of New York State Department of Environmental Conservation, Plaintiffs,v.WEST SIDE CORP., Sheldon F. Schiff, Dow Chemical Company, Ethyl Corporation and PPG Industries, Inc., Defendants.
• Court: U.S. District Court — Eastern District of New York

790 F.Supp.2d 13

The State of NEW YORK and Alexander B. Grannis, as Commissioner of New York State Department of Environmental Conservation, Plaintiffs,

v.WEST SIDE CORP., Sheldon F. Schiff, Dow Chemical Company, Ethyl Corporation and PPG Industries, Inc., Defendants.

No. 07–CV–4231 ENV ALC.

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

June 3, 2011.

Jeanna E. Hussey, N.Y. State Office of the Attorney General, Pedro Medina, New York State Department of Law Environmental Protection, New York, NY, for Plaintiff.David J. Kanfer, John–Patrick Stiles Curran, Tannenbaum Helpern Syracuse & Hirschtrirr LLP, Andrew Weissmann, Steven M. Siros, Matthew William Alsdorf, Jenner & Block, Paula J. Schauwecker, Beveridge & Diamond, P.C., New York, NY, Alan E. Kraus, Gerhard P. Gengel, Kegan Andrew Brown, Latham & Watkins LLP, Newark, NJ, Gary J. Smith, Beveridge & Diamond PC, San Francisco, CA, Robert S. Brager, Beveridge & Diamond, P.C., Baltimore, MD, for Defendants.

MEMORANDUM & ORDER

VITALIANO, District Judge.

Plaintiffs, the State of New York and Alexander B. Grannis, in his then capacity as the Commissioner of the New York State Department of Environmental Conservation (“DEC”), filed this action against defendants, West Side Corp. (“West Side”), Sheldon F. Schiff, Dow Chemical Company (“Dow”), Ethyl Corporation (“Ethyl”) and PPG Industries, Inc. (“PPG”), alleging liability under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “the Act”), 42 U.S.C. §§ 9601 et seq., and New York's common law doctrines of public nuisance, restitution, and indemnification. This litigation involves costs incurred by the state in responding to hazardous substances released at or from a facility known as the West Side Corporation site, a storage distribution center for perchlorethylene (“PCE”). Dow, Ethyl, and PPG (collectively the “manufacturer defendants”) are all manufacturers and distributors of PCE and contracted with West Side to supply it with PCE. The manufacturer defendants now move to dismiss counts two, three, four and six of the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, defendants' motion is granted in part and denied in part.

I. BACKGROUND

The following factual allegations are drawn from the complaint and are considered true for purposes of the current motion.

West Side is a New York corporation with its principal place of business at the West Side Corporation site, 107–10 180th Street, Jamaica, New York (“the site”). (Compl. ¶ 10.) West Side currently owns the site and operated a storage distribution center there from 1969 to 1990 for PCE, a chemical commonly used in the dry cleaning industry. ( Id. ¶ 10.) Dow, Ethyl, and PPG contracted with West Side to supply it with PCE for redistribution or repackaging. ( Id. ¶¶ 14, 26, 38.)

The process of delivering PCE to West Side was allegedly the same for each of the manufacturer defendants. PCE arrived on railroad tankers and was then directly transferred by the manufacturers to West Side's aboveground storage tanks (“AST”) located on the southeast portion of the site. ( Id. ¶¶ 16, 27–28, 39–40.) Since the ASTs had no spill prevention restraints, spills and leaks would “necessarily,” and did, occur during these transfers. ( Id. ¶¶ 17–18, 29–30, 41–42.) Spills and leaks also occurred during the transfer of PCE from the ASTs to the site building via underground pipes. ( Id. ¶¶ 20, 32, 44.) Plaintiffs allege that the manufacturer defendants had control over and knowledge of the spills and leaks for the duration of their working relationship with West Side. ( Id. ¶¶ 21–24, 33–36, 45–48.)

The site is located adjacent to four drinking water supply wells that are, and for some time have been, decommissioned by the New York City Department of Environmental Protection (“DEP”) due to groundwater contamination. ( Id. ¶ 50.) In August 1997, after a subsurface investigation conducted by a private environmental consultant, EEA Inc., DEC designated the site an “inactive hazardous waste disposal Site,” as defined under New York law. ( Id. ¶¶ 52–53.) DEC attempted to, but could not, obtain West Side's or Schiff's agreement to investigate the contamination and clean up the site. ( Id. ¶ 54.) Disagreement was not the final word. Instead, the state pursued “response actions at the Site, within the meaning of § 101(25) of CERCLA, 42 U.S.C. § 9601(25), in accordance with the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. Part 300” (“NCP”). ( Id. ¶ 55.) The state claims that it incurred response costs of over $6 million as of the date of the complaint, October 10, 2007. ( Id. ¶ 71.)

That complaint alleges six causes of action. First, plaintiffs claim that defendants are jointly and severally liable for all response costs incurred by the state to date, and all costs to be incurred in the future, pursuant to 42 U.S.C § 9607 (“CERCLA § 107”). ( Id. ¶ 84.) The second cause of action asserts that defendants are jointly and severally liable for all costs incurred by the state to abate the public nuisance caused by the hazardous substances released into the environment. ( Id. ¶¶ 87–92.) Third, plaintiffs charge that defendants have been unjustly enriched by the state and are liable for the value of the benefit conferred. ( Id. ¶¶ 93–98.) The fourth cause of action sounds in indemnification; plaintiffs seek all the expenses and costs incurred while performing defendants' duties. ( Id. ¶ ¶ 99–103.) Fifth, plaintiffs allege that defendants are jointly and severally liable to the state for “all damages or injury to, destruction, or loss of the natural resources of the State at and near the Site, and for all reasonable costs of assessing such injury,” under CERCLA § 107. ( Id. ¶¶ 86, 104–109.) In the sixth cause of action, plaintiffs contend that defendants are jointly and severally liable for all damages to the natural resources of the state pursuant to the common law doctrine of public nuisance and statutorily under New York Real Property and Proceedings Law § 841. ( Id. ¶ 110.) The manufacturer defendants now move to dismiss only the state law claims—counts two, three, four and six of the complaint.

II. DISCUSSION

A. Analytical Framework for Threshold Dismissal

Federal Rule of Civil Procedure 8(a)(2) requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” This rule does not compel a litigant to supply “detailed factual allegations” in support of his claims, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007), “but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “A pleading that offers ‘labels and conclusions' ... will not do.” Id. (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955); see also In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir.2007). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

To survive a Rule 12(b) motion, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. This “plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotations omitted); see Iqbal v. Hasty, 490 F.3d 143, 157–58 (2d Cir.2007) (interpreting Twombly to require a “plausibility standard” that “obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible”), rev'd on other grounds, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A court must presume the truth of all factual allegations in the complaint for purposes of Rule 12(b)(6), but the court is not bound to accept the truth of legal conclusions couched as factual allegations. Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 2944, 92 L.Ed.2d 209 (1986). Indeed, it is the factual allegations that are paramount, as “a complaint need not pin plaintiff's claim for relief to a precise legal theory,” nor does it need to provide “an exposition of his legal argument.” Skinner v. Switzer, 562 U.S. ––––, 131 S.Ct. 1289, 1296, 179 L.Ed.2d 233 (2011).

In analyzing well-pled facts at this stage, a court will draw all reasonable inferences in favor of the nonmoving party. See Gorman v. Consol. Edison Corp., 488 F.3d 586, 591–92 (2d Cir.2007). Additionally, on a motion to dismiss unrelated to subject matter jurisdiction, the court may only consider the pleading itself, documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, and matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002); Int'l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir.1995).

B. Federal Preemption

Defendants argue that plaintiffs' state law claims for public nuisance, restitution, and indemnification are all preempted by federal law as they “impermissibly conflict” with the CERCLA causes of action. Plaintiffs, of course, retort sharply, arguing that Congress, in enacting CERCLA, expressly preserved state law remedies regarding hazardous waste sites.

As is now well-engrained, the Supremacy Clause of Article VI of the Constitution grants Congress the authority to preempt state law. La. Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 368, 106 S.Ct. 1890, 1898, 90 L.Ed.2d 369 (1986). As a result, “state laws that conflict with federal law are ‘without effect.’ ” Altria Group, Inc. v. Good, 555 U.S. 70, 70, 129 S.Ct. 538, 543, 172 L.Ed.2d 398 (2008) ...