Town of Halfmoon & Cnty. of Saratoga v. Gen. Elec. Co.

• Decision Date: 12 May 2015
• Docket Number: Nos. 1:09–CV–228,1:11–CV–6.,s. 1:09–CV–228
• Citation: 105 F.Supp.3d 202
• Parties: TOWN OF HALFMOON and County of Saratoga, Plaintiffs, v. GENERAL ELECTRIC COMPANY, Defendant. Saratoga County Water Authority, Plaintiff, v. General Electric Company, Defendant.
• Court: U.S. District Court — Northern District of New York

105 F.Supp.3d 202

TOWN OF HALFMOON and County of Saratoga, Plaintiffs,

v.GENERAL ELECTRIC COMPANY, Defendant.

Saratoga County Water Authority, Plaintiff,

v.General Electric Company, Defendant.

Nos. 1:09–CV–228

1:11–CV–6.

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

Signed May 12, 2015.

Nolan & Heller, LLP, David A. Engel, Esq., Shannan Collier, Krasnokutski, Esq., of Counsel, Albany, NY, for Plaintiff Town of Halfmoon.

Dreyer Boyajian LLP, Craig M. Crist, Esq., Donald W. Boyajian, Esq., James R. Peluso, Jr., Esq., Benjamin W. Hill, Esq., William J. Dreyer, Esq., of Counsel, Albany, NY, for Plaintiffs Saratoga County and Saratoga County Water Authority.

Mackenzie Hughes LLP, Samantha L. Millier, Esq., of Counsel, Syracuse, NY, for Defendant General Electric Co.

Williams & Connolly LLP, Neelum J. Wadhwani, Esq., Robert J. Shaughnessy, Esq., Steven R. Kuney, Esq., Constance T. Forkner, Esq., Joseph G. Petrosinelli, Esq., Washington, DC, for Defendant General Electric Co.

MEMORANDUM—DECISION and ORDER

DAVID N. HURD, District Judge.

TABLE OF CONTENTS

TABLE OF ABBREVIATIONS 206

I.	INTRODUCTION	206
II.	FACTUAL BACKGROUND	206
III.	DISCUSSION	209

A.	Summary Judgment Standard	210
B.	Plaintiffs' Motions for Partial Summary Judgment	210

1. CERCLA 210

a.	Costs Related to Remedial Measures	211
b.	Necessary Costs of Response	212
c.	Compliance with the NCP	214

2.	State Claims–Doctrine of Conflict Preemption	217
3.	New York Navigation Law	219

C. GE's Motions for Summary Judgment 220

1.	CERCLA	220
2.	New York Navigation Law	221

D. Future Course of the Litigation 221

1.	Liability Issues	221
2.	Damages Issues	222

IV. CONCLUSION 222

TABLE OF ABBREVIATIONS

CERCLA:	Comprehensive Environmental Response, Compensation, and Liability Act
EPA:	United States Environmental Protection Agency
GE:	General Electric Company
NCP:	National Contingency Plan
NYDEC:	New York State Department of Environmental Conservation
PCBs:	Polychlorinated Biphenyls
ppt:	parts per trillion
ROD:	Record of Decision
SCWA:	Saratoga County Water Authority

I. INTRODUCTION

The Town of Halfmoon (“Halfmoon”) and the County of Saratoga (“the County”) initiated this action against defendant General Electric Company (“GE”) on February 25, 2009.¹On February 15, 2011, this case was consolidated with a related case filed by the Saratoga County Water Authority (“SCWA”) against GE on January 4, 2011. This consolidated action arises from the release of Polychlorinated Biphenyls (“PCBs”) into the Hudson River from two GE facilities in upstate New York.

In their respective complaints, plaintiffs assert the following causes of action against GE: (1) A claim seeking injunctive relief staying the dredging project, which began in 2009 and is in progress (“First Cause of Action”); (2) a cost recovery claim pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601–9675(“CERCLA”) (“Second Cause of Action”); (3) a strict liability claim (“Third Cause of Action”); (4) a claim pursuant to New York Navigation Law (“Fourth Cause of Action”); as well as claims for (5) negligence/gross negligence (“Fifth Cause of Action”); (6) public nuisance (“Sixth Cause of Action”); (7) private nuisance (“Seventh Cause of Action”); (8) trespass (“Eighth Cause of Action”); equitable indemnity/restitution (“Ninth Cause of Action”); and for declaratory judgment (“Tenth Cause of Action”). During the course of the litigation, plaintiffs have stipulated to the dismissal of the First and Tenth Causes of Action.

The parties have completed extensive discovery and have filed numerous motions. Currently pending are the County and SCWA's motion for partial summary judgment on the liability of GE; Halfmoon's motion for partial summary judgment on the liability of GE; GE's motion for summary judgment against the County and SCWA; and GE's motion for summary judgment against Halfmoon.²These motions have been fully briefed, and oral argument was heard on December 16, 2014, in Utica, New York. Decision was reserved.

II. FACTUAL BACKGROUND

Unless otherwise noted, the following pertinent facts are undisputed. GE owned and operated two capacitor manufacturing plants located along the Hudson River in Hudson Falls and Fort Edward, New York. GE used, stored, and disposed of PCBs at these two facilities between 1947 and 1977.³The United States Environmental Protection Agency (“EPA”) issued permits to GE allowing it to discharge PCBs from the two plants in the mid–1970s. GE exceeded the maximum amount of PCB discharge permitted by state law at least once, in 1976. In 1977, the Toxic Substances Control Act, 15 U.S.C. §§ 2601–2697, generally prohibited the manufacture and sale of PCBs.

The EPA has established a maximum containment level for PCBs in drinking water of 500 parts per trillion (“ppt”). The New York State Department of Health has similarly established 500 ppt as the standard for protecting human health with regard to PCBs in drinking water. The New York State Department of Environmental Conservation (“NYDEC”) established a water quality standard PCB level of 90 ppt for drinking water sources.

The use, storage, and disposal of PCBs at the two GE plants ultimately resulted in the release of PCBs into the Hudson River and the groundwater, surface water, air, and soil adjacent to the plants.⁴The EPA designated a 200–mile section of the Hudson River as a Superfund Site. This site is divided into: (1) The Upper Hudson River, stretching from Hudson Falls to Troy, New York; and (2) the Lower Hudson River, stretching from Troy to the Battery in New York City. Contaminated sediment from GE's discharge is a predominate source of PCBs in the water column in the Upper Hudson River.

A 1984 EPA study of the affected area yielded an interim “no action” recommendation due to then-existing technology's uncertain ability to remediate the contaminates. The EPA continued to reassess the matter. In 1990, the County commissioned Clough Harbor & Associates to complete an intermunicipal water study, which analyzed population trends, water demands, and potential plans for the provision of water to municipalities within the County. The study was updated in 1995 to incorporate changes in municipal water systems throughout the County. These studies formed a tentative “master plan” that identified the Upper Hudson River as the primary source for the County's drinking water. The studies identified a site in the Town of Moreau as a potential area to establish a water source intake.

In 2000, the EPA proposed a plan to remediate the river sediments in the affected area through dredging. GE initially opposed the dredging, warning it would “resuspend” the PCBs in the water and cause increased contamination. Nonetheless, the EPA issued a Record of Decision in 2002 calling for the dredging and removal of contaminated sediment from the Upper Hudson River (“the 2002 ROD”). The 2002 ROD contemplated a two-phase project, estimated to take over six years to complete—one year for Phase 1 and five years for Phase 2.

In 2002 Clough Harbor & Associates performed another review—updating the 1990 and 1995 water studies—regarding the provision of drinking water to municipalities in the County. According to plaintiffs, this study accounted for potential environmental impacts of the planned dredging project and recommended using the Moreau site to access the Upper Hudson River in order to avoid downstream contaminates in the proposed dredging site. The parties dispute the amount of consideration actually given to alternative sources—aside from the Moreau site—and the reasoning behind SCWA's choice of that site (i.e. whether the threat of resuspended PCBs from the dredging process was a factor in the decision to utilize the Moreau site).

In October 2005 the United States filed a complaint in the Northern District of New York seeking injunctive relief and recovery and response costs from GE. The EPA and GE negotiated and signed a Consent Decree, which this Court approved in November 2006. See United States v. Gen. Electric Co.,460 F.Supp.2d 395 (N.D.N.Y.2006), aff'd, Town of Fort Edward v. United States,No. 06–5535–CV, 2008 WL 45416 (2d Cir.2008). In the Consent Decree GE agreed to perform Phase 1 of the dredging project, but could opt out of Phase 2 under certain conditions. Pursuant to CERCLA, the Consent Decree exempted GE from obtaining federal, state, or local permits to build and operate the “on-site” processing facility.

Beginning in 2006, plaintiffs and GE initiated discussions and studies regarding possible alternative sources of drinking water to be used by Halfmoon and the County, as well as other municipalities no longer involved in this action, during Phase 1 of the dredging project. A November 2006 ruling by EPA found, over GE's objections, that the provision of such alternative water sources was consistent with the 2002 ROD and was needed “to protect the community from the potential hazard of consuming water that contains elevated levels of PCB as a result of the dredging.” Boyajian Decl., Ex. 28, ECF No. 201–30, at 4.

The County retained Malcolm Pirnie, Inc. as a consultant and eventually applied for permission to develop a raw water source at the Moreau site. In December 2006 the NYDEC issued a water supply permit to the County for a water intake on the Hudson River in Moreau. The County subsequently transferred its interest in the Moreau water system project to the SCWA. In 2008 the SCWA issued $44,900,000 million in revenue bonds and received several grants to fund this project.

In February 2009, GE issued a Phase 1 Remedial Action Community Health and Safety Plan, which identified potential hazards that the dredging project would present to the local community. It also noted that an alternative water supply would be provided to the residents of Halfmoon by constructing a water line to the City of Troy's water supply. Pursuant to a March 2009 modification to the Consent Decree, GE agreed to pay the EPA seven million dollars toward the design and construction of said...