Westwood Pharmaceuticals v. Nat. Fuel Gas Dist.

• Decision Date: 21 May 1990
• Docket Number: No. Civ-88-1122C.,Civ-88-1122C.
• Citation: 737 F. Supp. 1272
• Parties: WESTWOOD PHARMACEUTICALS, INC., Plaintiff, v. NATIONAL FUEL GAS DISTRIBUTION CORPORATION, as Successor in Interest to Iroquois Gas Corporation, Defendant.
• Court: U.S. District Court — Western District of New York

737 F. Supp. 1272

WESTWOOD PHARMACEUTICALS, INC., Plaintiff, v. NATIONAL FUEL GAS DISTRIBUTION CORPORATION, as Successor in Interest to Iroquois Gas Corporation, Defendant.

No. Civ-88-1122C.

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

May 21, 1990.

COPYRIGHT MATERIAL OMITTED

Saperston & Day, P.C. (Daniel M. Darragh, of Counsel), Buffalo, N.Y., for plaintiff.

Phillips, Lytle, Hitchcock, Blaine & Huber (Robert E. Glanville, of Counsel), Buffalo, N.Y., for defendant.

CURTIN, District Judge.

BACKGROUND

Plaintiff Westwood Pharmaceuticals, Inc. ("Westwood"), claims that defendant National Fuel Gas Distribution Corporation ("National Fuel") is liable for Westwood's past and future response costs associated with the release of hazardous substances on a parcel of land in Buffalo, New York, purchased by Westwood from National Fuel's predecessor in interest, Iroquois Gas Corporation ("Iroquois"). Westwood has asserted four causes of action alleging that National Fuel is liable under either the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub.L. No. 99-499, 100 Stat. 1613 (1986), or the New York State common law of nuisance and unjust enrichment. National Fuel has moved for summary judgment dismissing Westwood's complaint and holding Westwood liable on National Fuel's counterclaims for its past response costs and for any future response costs it may incur. Westwood has moved for partial summary judgment under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), for Westwood's past response costs; for declaratory judgment pursuant to CERCLA Sections 107(a) and 113(g)(2), 42 U.S.C. §§ 9607(a), 9613(g)(2), and the Declaratory Judgment Act, 28 U.S.C. § 2201(a), on National Fuel's liability for any future response costs that Westwood may incur; and for summary judgment as to most of the affirmative defenses asserted by National Fuel.¹

FACTS

The site at issue encompasses approximately 8.8 acres bounded on the west by DeWitt Street, on the south by Bradley Street, on the east by Dart Street, and on the north by land owned by the Buffalo Structural Steel Corporation. The northwest corner of the site is bounded by Scajaquada Creek. It appears that the site has been put to industrial use since 1866. Before the land was purchased by People's Gas Company ("People's"), it was used for operations such as a sawmill, an iron-products manufacturing plant, a carriage and sleigh works, and a carriage-top manufacturing company. When People's bought the land in 1897, it constructed a gas-manufacturing plant. In 1925, Iroquois purchased the site for $375,000, gaining title by a referee's deed, and People's was subsequently dissolved in 1932.

Iroquois conducted gas-manufacturing and storage operations on the site through 1951. According to National Fuel,

tars and waste oils produced by the Iroquois operations were extracted in concrete tar separator pits and stored in tanks pending sale or off-site disposal.... Spent oxides generated in the gas purification process were taken off-site for disposal.... Ash and cinders were stored on site temporarily and then removed for use or disposal elsewhere.

Item 14 at 4. Iroquois halted gas-manufacturing operations at the site in 1951, but continued to use the location for gas compression and storage for several years thereafter. In 1968, it had certain structures on the premises demolished, primarily, it appears, on the northern portion of the site. The structures that were demolished included a 1.75-million-cubic-foot gas holder, a one-million-gallon oil tank, a relief holder, a gas-purifying house, and at least two tar-separator pits. Other structures on the southern portion of the premises were left standing. National Fuel states that

in connection with the demolition, oils, tars, coal, coke, spent oxides, and various wastes from the gas manufacturing process were removed from the site for sale or disposal.... Underground pipelines were purged with an inert gas and plugged.... The tar separator pits were pumped out, the above-ground portions were collapsed into the sub-surface sections ... and were covered with a clay cap.

Item 14 at 5.

In 1972, Westwood, which since at least 1942 had occupied what appears to be an adjacent parcel, purchased the property from Iroquois in order to accommodate its planned expansion; the purchase price was $60,100. The sales contract, which provided that it was to be "governed by and construed in accordance with the laws of the State of New York," Item 13, Affidavit of Robert E. Glanville ("Glanville Affidavit"), Exhibit L at ¶ 14, provided Westwood the right to pre-closing access to the property to

(a) inspect the Premises upon reasonable notice to the Seller; (b) enter the Premises for purposes of inspection and planning for Purchaser's occupancy and for the demolition of buildings and improvements; and (c) commence the demolition of buildings and improvements situated upon the Premises....

Id., Exhibit L at ¶ 5. Westwood subsequently demolished the remaining structures at the site. According to Westwood, although it was told that "all buildings, tanks, pipelines and other improvements situate sic on the premises had been purged of natural gas and other chemicals" used in the business operations on the site, it was never told "of the existence of the partially demolished remains of buildings, process equipment, and waste residues left buried at the premises." Item 16 at 3.²

For its part, National Fuel claims that Iroquois was never told of Westwood's development plans prior to the sale, Item 14 at 6, although it seems unlikely that Iroquois was not aware that construction of some type would be undertaken at the site.

Westwood subsequently constructed a warehouse on the southern portion of the property. Soil borings associated with the construction were taken in 1973, and, according to National Fuel, those borings indicated "widespread petroleum-product contamination of the site." Item 14 at 8. Soil borings were also taken in 1984 and 1985 in connection with the construction of a warehouse on the northern portion of the site,³ and they revealed petroleum-related contaminants and other wastes. During excavation for the second warehouse, Westwood encountered subsurface pipeline and the remains of three separator pits and a filter bed. According to Westwood, the separator pits were filled with "demolition debris, and a mixture of water, tar, and waste oil"; the filter bed contained "oily contaminated water"; and the pipes contained "various process residues and waste materials." Item 16 at 3-4. In February, 1985, Westwood had a consultant dig a series of test pits on the location of the planned warehouse, and soil samplings from the pits apparently also displayed signs of petroleum-related contamination. See Item 14 at 10.

National Fuel alleges that Westwood continued with construction far too prematurely. It claims that "notwithstanding these repeated and detailed reports of widespread petroleum product contamination of the project area, Westwood did not initiate an investigation into the origin or scope of the contamination." Item 14 at 10. National Fuel also claims that Westwood likewise failed to confer with "its environmental consultants, its architects, its general construction contractor, or anyone else, to determine whether the conditions encountered required action to protect against a release of these substances into the environment." Id. at 10-11. National Fuel asserts that "on numerous occasions" in late 1985 and early 1986 it expressed concern to Westwood about the manner and pace of the construction activities, and that its concern over containing the migration of suspected wastes on or from the site led it to ask Westwood at least to modify those activities. National Fuel states that it reiterated these concerns by letter in February, 1986, see Item 13, Glanville Affidavit, Exhibit D at 41-42; Item 3 at ¶ 42, but that Westwood nonetheless proceeded with construction on an "expedited basis." Item 14 at 14.

In any event, it appears that the clay cap was removed from the site in October, 1985, during the early phases of construction of the second warehouse, and that Westwood subsequently continued with construction activities. The initial phase of construction apparently involved stripping topsoil to a depth of eighteen inches, and, according to National Fuel, it was during this process that the clay cap was removed. See Item 14 at 11. It appears that the separator pits were initially discovered by Westwood in approximately November, 1985.

Westwood states that, after submitting the materials it discovered at the site for chemical analysis, it contracted for the removal of the contaminated soil and the waste matter "in a manner which was consistent with the applicable waste management regulations of the New York Environmental Conservation Law." Item 16 at 4. Westwood also states that, subject to review and comment by the New York State Department of Environmental Conservation ("DEC"), it initiated procedures designed to investigate the extent of soil and groundwater contamination at the site that included "the installation, sampling and analysis of groundwater monitoring wells, in a manner which is consistent with the provisions of the National Contingency Plan." Id. It is not clear, however, precisely when these actions were taken.

Westwood asserts that "the investigations conducted to date have established the existence of a release of hazardous substances at the Premises and have confirmed that the hazardous substances found at the site are constituents of the wastes and by-products from the gas manufacturing operations conducted there by Iroquois." Item 16 at 4-5. Westwood states that it has thus far incurred over $650,000 in costs associated with the investigation and cleanup of the site, and...