Syms v. Olin Corp.

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: Leval
• Citation: Syms v. Olin Corp., 408 F.3d 95 (2nd Cir. 2005)
• Decision Date: 18 May 2005
• Docket Number: Docket No. 03-6234.
• Parties: Eileen SYMS, individually and as Administrator of the Estate of John Syms; the Somerset Group, Inc.; Unitool Corporation; Lew-Port Construction Corporation; C & S Machinery Corporation; Syms Equipment Rental Corporation; Lew-Port Electric Corporation, Plaintiff-Appellants, v. OLIN CORPORATION; United States Department of Defense; Donald Rumsfeld, in his official capacity as Secretary of Defense; United States Department of the Army; Thomas E. White, in his capacity as Secretary of the Army; United States Department of Air Force; Dr. James G. Roche, in his official capacity as Secretary of the Air Force; United States Nuclear Regulatory Commission; Richard Meserve, in his official capacity as chairman of the United States Nuclear Regulatory Commission; United States of America, Defendant-Appellees.

408 F.3d 95

Eileen SYMS, individually and as Administrator of the Estate of John Syms; the Somerset Group, Inc.; Unitool Corporation; Lew-Port Construction Corporation; C & S Machinery Corporation; Syms Equipment Rental Corporation; Lew-Port Electric Corporation, Plaintiff-Appellants, v. OLIN CORPORATION; United States Department of Defense; Donald Rumsfeld, in his official capacity as Secretary of Defense; United States Department of the Army; Thomas E. White, in his capacity as Secretary of the Army; United States Department of Air Force; Dr. James G. Roche, in his official capacity as Secretary of the Air Force; United States Nuclear Regulatory Commission; Richard Meserve, in his official capacity as chairman of the United States Nuclear Regulatory Commission; United States of America, Defendant-Appellees.

Docket No. 03-6234.

United States Court of Appeals, Second Circuit.

Argued: November 16, 2004.

Decided: May 18, 2005.

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Alan J. Knauf and Linda R. Shaw, Knauf Shaw LLP, Rochester, N.Y. (Ronald L. Kuis, Pittsburgh, PA, on the brief), for Plaintiff-Appellants.

JoAnn T. Sandifer, Husch & Eppenberger, LLC, (David R. Dyroff, Jr., Michael D. Montgomery, on the brief), St. Louis, MO, for Defendant-Appellee Olin Corporation.

David S. Fishback, Assistant Director, Environmental Torts Section, Civil Division, and Todd S. Aagaard, Environment & Natural Resources Division, Department of Justice (Peter D. Keisler, Assistant Attorney General, Civil Division; J. Patrick Glynn, Director, and Timothy B. Walthall, Attorney, Environmental Torts Section, Civil Division; Thomas L. Sansonetti, Assistant Attorney General, and Michele Walter, Attorney, Environment & Natural Resources Division, on the brief), Washington, D.C., for Federal Appellees.

Before: FEINBERG, LEVAL, STRAUB, Circuit Judges.

LEVAL, Circuit Judge.

Plaintiff-appellants, all persons and entities related to John Syms and the Somerset Group (collectively "Somerset"), appeal from the grant of summary judgment by the United States District Court for the Western District of New York (Richard J. Arcara, J.) in favor of the defendant-appellees (collectively "defendants"). The suit sought primarily to recover necessary response costs Somerset had allegedly incurred in the cleanup of hazardous substances, as well as alleged injury to the value of Somerset's property. The judgment dismissed the claims brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and the Federal Tort Claims Act (FTCA); the court declined to exercise supplemental jurisdiction over the state law claims against defendant-appellee Olin Corporation. We affirm in part because (1) Somerset is not eligible to seek contribution under CERCLA § 113(f); (2) its radioactive contamination claims under CERCLA are time-barred; (3) other costs it incurred are not recoverable under CERCLA; and (4) its claims under FTCA are time-barred. We vacate in part and remand because a genuine issue of material fact exists as to whether Somerset incurred recoverable necessary response costs in admitting government officials and contractors onto its property.

BACKGROUND

In 1942, the United States Department of War purchased 7500 acres in Niagara County, New York to establish the Lake Ontario Ordnance Works (LOOW). The Department of War used approximately 2500 acres for a TNT plant and related military activities, leaving the remaining 5000 acres as a buffer zone. TNT production at LOOW ceased in 1943, and the site was thereafter used for the disposal of radioactive waste from uranium processing operations associated with the Manhattan Project and various contaminants from the Army's chemical warfare service. Waste was left in drums that sat along the roadside for months, in a cooling tower not designed to hold hazardous materials, and in outdoor piles. The government also dug a series of trenches to drain radioactive waste into the Central Drainage Ditch, which flowed into several nearby creeks.

During the 1950s, Olin Corp. operated an experimental fuel production facility at LOOW, which manufactured aviation fuel using boron. The government cancelled Olin's contract before the plant became fully productive, but Olin remained at LOOW to perform decommissioning activities that included dumping, burying, and burning various chemicals.

In 1966, the government sold 564 acres of LOOW to Fort Conti Corp., which is not a party to this suit. Fort Conti in turn sold 132 acres to Somerset Group in 1970, which was owned by John Syms. Syms also owned or controlled the other plaintiff corporations.

Somerset renovated the buildings on the site between 1970 and 1972 and eventually opened the Lew-Port Industrial Park. In April 1972, the New York Department of Health issued an order restricting the use of the site, citing concern about exposure to radioactive material. The Department of Health instructed Somerset not to develop the property any further or to allow any existing uses to expand. It further specified that decontamination efforts undertaken by anyone other than the government could proceed only with the express approval of the Department of Health.

Somerset cancelled its tenants' leases, extended fencing around the entire site, and hired guards to secure the property. John Syms then mounted a lobbying campaign in Albany and Washington, D.C. to obtain relief. In 1974, the Department of Health issued a supplementary order authorizing Somerset to resume commercial and industrial activities on most of the site. The order continued to prohibit construction in the areas around the Central Drainage Ditch and Six Mile Creek. After issuance of the order, Somerset began attracting new tenants, but in late 1974 the Town of Lewiston cut off the water supply to the site out of concern that contamination would enter the water while it circulated through the site.

Somerset filed for bankruptcy in 1980. At the prompting of the bankruptcy court, Somerset sold 93 acres of the site to its neighbor, which operated an industrial waste landfill on the adjacent property.

Between 1982 and 1984, the government began to consolidate radioactive contamination across LOOW into a 191-acre area known as the Niagara Falls Storage Site (NFSS). The NFSS is located a half-mile from the site and connected to it by the Central Drainage Ditch. As part of the consolidation, a government contractor removed soil and silt along the Central Drainage Ditch and several other parts of the property. The Department of Energy wrote to Somerset on December 29, 1986 to inform it that "the results of the post-remedial action radiological surveys have been verified and that remedial action on your property has been satisfactorily completed." The letter explained that the property was "in compliance with the standards and guidelines applicable to the remedial actions at the Niagara Falls Storage Site." It indicated that a "formal certification statement on your property will be forwarded to you in the near future." The certificate was not sent until May 7, 1992.

Meanwhile, Somerset continued pushing for cleanup of the nonradioactive contamination on its property. In 1998, the Army Corps of Engineers commenced a Phase I Remedial Investigation/Feasibility Study and performed interim asbestos abatement on Somerset's property. In 1999, the Army Corps released preliminary results from its investigation at a public meeting where Somerset allegedly learned for the first time that the groundwater was contaminated with lithium and an explosive known as RDX.

On August 25, 1999, Somerset submitted a demand and claim letter to the Department of Justice, seeking to recover response costs it allegedly incurred in the cleanup of hazardous substances and damages for injury to the value of its property. The government denied the claim. Having exhausted its administrative remedies, Somerset filed this suit in the Western District of New York on August 23, 2000. It alleged fifteen causes of action under CERCLA, 42 U.S.C. § 1983, various provisions of New York statutory and common law, and the Federal Tort Claims Act (FTCA). Somerset asserted all fifteen causes of action against the government, and all but four against Olin.

All parties filed for summary judgment. The magistrate judge recommended granting defendants summary judgment on the CERCLA claims, because it considered Somerset to be a potentially responsible party ineligible for cost recovery under § 107(a), and because Somerset had failed to demonstrate that the response costs it incurred were necessary and in conformance with the national contingency plan. In the alternative, the magistrate judge concluded that Somerset's CERCLA § 107(a) recovery claim was time-barred with respect to radioactive contamination. The magistrate judge also recommended granting the government summary judgment on the § 1983 claim, because § 1983 provides a cause of action against persons acting under color of state law, not persons acting under color of federal law. As for claims under the FTCA, the magistrate judge recommended granting the government summary judgment under the FTCA's two-year statute of limitations. See 28 U.S.C. § 2401(b). In the alternative, the magistrate judge suggested that the discretionary function exception to the FTCA shielded the government from liability, except on Somerset's claim of failure to warn. The magistrate judge recommended that the district court decline to exercise supplemental jurisdiction over the state law claims against Olin.

The district court partially adopted the reasoning of the magistrate judge's report. It granted defendants summary judgment on the CERCLA claims on the ground that Somerset had failed to demonstrate the necessity of its response costs. It granted the government summary judgment on the FTCA claims by reason of untimeliness. Finally, the district court declined to exercise...