World Trade Farmers Market, In v. Burns International Services C

Filing

OPINION, affirming judgment of the district court, by DJ, JAC, DAL, FILED.[1215136] [10-4197]

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10-4197-cv
In re September 11 Litigation

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UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2012
(Submitted: July 12, 2013

Decided: May 2, 2014)

Docket No. 10-4197
- - - - - - - - - - - - - - - - - - - -x
IN RE SEPTEMBER 11 LITIGATION:
Cedar & Washington Associates, LLC,
Plaintiff-Appellant,
- v.The Port Authority of New York and New
Jersey, Silverstein Properties, Inc.,
World Trade Center Properties LLC,
Silverstein WTC Management Co. LLC, 1
World Trade Center LLC, 2 World Trade
Center LLC, 3 World Trade Center LLC, 4
World Trade Center LLC, 7 World Trade
Company, L.P., HMH WTC, Inc., Host
Hotels and Resorts, Inc., Westfield WTC
LLC, Westfield Corporation, Inc.,
Consolidated Edison Company of New
York, AMR Corporation, American
Airlines, Inc., UAL Corporation, and
United Airlines, Inc.
Defendants-Appellees.
- - - - - - - - - - - - - - - - - - - -x
Before:

JACOBS, CABRANES, and LIVINGSTON, Circuit
Judges.

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Cedar & Washington Associates, LLC, appeals from a

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judgment of the United States District Court for the

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Southern District of New York (Hellerstein, J.), dismissing

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its CERCLA indemnity claim for remediation costs it incurred

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as owner of a building contaminated by toxic dust from the

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September 11, 2001 attack on the World Trade Center.

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Because the attack constituted an “act of war” for which

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CERCLA provides an affirmative defense, we affirm.

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SARI E. KOLATCH (Jay B. Spievack,
Kara Gorycki, Cohen Tauber
Spievack & Wagner P.C., New
York, N.Y., Robert D. Fox, Neil
Witkes, Manko, Gold, Katcher &
Fox LLP, Bala Cynwyd, PA, on the
brief), Cohen Tauber Spievack &
Wagner, P.C., New York, N.Y.,
for Appellant.
LEAH W. SEARS (Beth D. Jacob,
Judith S. Roth, on the brief),
Schiff Hardin LLP, New York,
N.Y., for Appellee The Port
Authority of New York and New
Jersey.
Richard Williamson, Thomas A.
Egan, Flemming Zulack Williamson
Zauderer LLP, New York, N.Y.,
for Appellees Silverstein
Properties, Inc., et al.
Christopher Walsh, Paul M.
Hauge, Gibbons P.C., Newark,
N.J., for Appellees Host Hotels
and Resorts, Inc. & HMH WTC,
LLC.
2

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PETER L. WINIK, Latham & Watkins
LLP, Washington, D.C., for
Appellees Westfield WTC LLC &
Westfield Corp., Inc.
Charles F. Rysavy, Dawn M.
Monsen, K&L Gates LLP, Newark,
N.J., for Appellee Consolidated
Edison Co. of New York, Inc.
MAURA K. MONAGHAN (Roger E.
Podesta, Debevoise & Plimpton,
New York, N.Y., Desmond T.
Barry, Jr., Condon & Forsyth
LLP, New York, N.Y.), Debevoise
& Plimpton, New York, N.Y., for
Appellees American Airlines,
Inc. & AMR Corp.
Jeffrey J. Ellis, Quirk and
Bakalor, P.C., New York, N.Y.,
Michael R. Feagley, Mayer Brown,
LLP, Chicago, Ill., for
Appellees United Air Lines, Inc.
& United Continental Holdings,
Inc.
DENNIS JACOBS, Circuit Judge:
Real estate developer Cedar & Washington Associates,

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LLC, sues the owners and lessees of the World Trade Center

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(and the owners of the airplanes that crashed into it) under

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the Comprehensive Environmental Response, Compensation, and

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Liability Act (“CERCLA”), 42 U.S.C. §§ 9601-9675, seeking

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recovery of costs incurred in remediating a nearby building

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contaminated by the September 11, 2001 attack on the World

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Trade Center.

The case returns to us after a remand to the
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district court to determine in the first instance whether

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the defendants are insulated by CERCLA’s “act of war”

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defense.

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the Southern District of New York (Hellerstein, J.)

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concluded that the attack constituted an “act of war” for

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purposes of CERCLA’s affirmative defense, and that the

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defendants therefore were entitled to judgment on the

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pleadings.

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On remand, the United States District Court for

We agree.

Although CERCLA’s strict liability scheme

10

casts a wide net, an “act of war” defense avoids ensnarement

11

of persons who bear no responsibility for the release of

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harmful substances.

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As the “act of war” defense shows, CERCLA was not intended

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to create liability for the dispersal of debris and wreckage

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from a catastrophe that was indistinguishable from military

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attack in purpose, scale, means, and effect.

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President and Congress responded to the September 11 attacks

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by labeling them acts of war, and this classification

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warrants notice, and perhaps some deference, in the CERCLA

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context.

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and immediately caused the release, and were the “sole

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cause” of the release because the attacks “overwhelm[ed] and

The attacks come within this defense.

Both the

The decisive point is that the attacks directly

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swamp[ed] the contributions of the defendant[s].”

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September 11 Litigation, 931 F. Supp. 2d 496, 512 (S.D.N.Y.

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2013) (quoting William H. Rodgers, Jr., Environmental Law:

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Hazardous Wastes and Substances § 8.13 (1992)).

In re

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6
7

BACKGROUND
After the September 11, 2001 attacks that leveled the

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World Trade Center (“September 11 attacks”), real estate

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developer Cedar & Washington began renovating its leased 12-

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story downtown office building into a 19-story business

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hotel.

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Environmental Conservation and the United States

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Environmental Protection Agency notified Cedar & Washington

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that the interstitial spaces of the building might contain

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finely-ground substances from the World Trade Center,

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including concrete, asbestos, silicon, fiberglass, benzene,

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lead, and mercury:

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renovation to continue, the government agencies required

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Cedar & Washington to perform costly remediation.

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suit, Cedar & Washington seeks to recover those costs from:

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the owner of the World Trade Center site, lessees of World

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Trade Center buildings, and the companies that owned the two

In late 2004, the New York State Department of

so-called “WTC Dust.”

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To permit

In this

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aircraft that were crashed into the towers.
The claims are premised on CERCLA and common-law

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indemnification.

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complaint on statute of limitations grounds and

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(alternatively) on the ground that Cedar & Washington failed

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to allege a necessary element of a CERCLA cost recovery

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claim: either a “release” or a “disposal” of hazardous

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substances.

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(AKH), 2010 WL 9474432 (S.D.N.Y. Sept. 22, 2010) (citing 42

The district court initially dismissed the

In re September 11 Litigation, No. 08-9146

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U.S.C. § 9607(a)(1)-(2)).

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these “thorny questions of statutory interpretation”;

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instead, we remanded under United States v. Jacobson, 15

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F.3d 19, 22 (2d Cir. 1994), for the district court to

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determine, in the first instance, whether the defendants

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could invoke CERCLA’s “act of war” defense.

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11 Litigation, 485 F. App’x 443 (2d Cir. 2012).

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affirmative defense requires the alleged polluter to prove

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by a preponderance of evidence that the release of a

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hazardous substance was caused “solely by . . . an act of

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war.”

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On appeal, we declined to resolve

In re September
This

42 U.S.C. § 9607(b).

Pursuant to our mandate, the district court ordered
briefing and heard argument, and then held, in a March 20,

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2013 opinion, that Cedar & Washington’s claim could be

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dismissed on this alternative ground (in addition to those

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identified in its earlier opinion).

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Litigation, 931 F. Supp. 2d 496 (S.D.N.Y. 2013).

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district court emphasized that:

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•

the attacks were “unique in our history,” id. at 509;

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•

al-Qaeda’s leadership “declared war on the United

In re September 11
The

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States, and organized a sophisticated, coordinated, and

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well-financed set of attacks intended to bring down the

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leading commercial and political institutions of the

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United States,” id.;

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•

“Congress and the President responded by recognizing

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al-Qaeda’s attacks as an act of war” and sent U.S.

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troops “to wage war against those who perpetrated the

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attacks and the collaborating Taliban government,” id.;

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and

17

•

the Supreme Court clarified in Hamdi v. Rumsfeld, 542

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U.S. 507 (2004), and Hamdan v. Rumsfeld, 548 U.S. 557

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(2006), that the attacks “were acts of war against the

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United States.”

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Supp. 2d at 512.1

In re September 11 Litigation, 931 F.

1

These facts are subject to judicial notice under
Federal Rule of Evidence 201(b) because they are “not
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Further, the district court held that this “act of war” was

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the sole cause of any release of hazardous substances from

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the World Trade Center’s collapse because the September 11

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attacks “overwhelm[ed] and swamp[ed] the contributions of

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the defendant[s].”

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Id. (quoting Rodgers, supra, at § 8.13).

The district court cautioned that its “holding as to

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the act-of-war defense should be read narrowly, fitting the

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facts of this case only.”

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necessarily applicable in contexts presenting different

Id. at 514.

Its decision was not

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considerations, such as “cognate laws of insurance” or the

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Anti-Terrorism Act of 1992.

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Id.

Once the district court issued its opinion, Cedar &

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Washington promptly notified this Court to restore

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jurisdiction, and the appeal was reinstated.

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DISCUSSION

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The district court’s decision that the September 11

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attacks constitute an “act of war” under CERCLA, and that

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those attacks were the sole cause of the release of WTC

subject to reasonable dispute,” are “generally known within
the trial court’s territorial jurisdiction,” and “can be
accurately and readily determined from sources whose
accuracy cannot reasonably be questioned [here, the 9/11
Commission Report].”
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dust, is reviewed de novo.

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150, 160 (2d Cir. 2010) (grant of a motion for judgment on

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the pleading accorded de novo review).

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all well-pled allegations and draw all reasonable inferences

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in Cedar & Washington’s favor.

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F.3d 52, 56 (2d Cir. 1999) (“In deciding a Rule 12(c)

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motion, we apply the same standard as . . . under Rule

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12(b)(6), accepting the allegations contained in the

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complaint as true and drawing all reasonable inferences in

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Hayden v. Paterson, 594 F.3d

We accept as true

Burnette v. Carothers, 192

favor of the nonmoving party.”).

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12

I

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CERCLA imposes strict liability for hazardous waste

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cleanup on owners and facility operators, on certain persons

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who arrange for the disposal or treatment of hazardous

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waste, and on certain persons who transport hazardous waste.

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42 U.S.C. § 9607(a)(1)-(4).

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made available when CERCLA liability would not be linked to

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responsibility for contamination.

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in Section 107(b):

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Three affirmative defenses are

These defenses are listed

There shall be no liability under [CERCLA] for a person
otherwise liable who can establish by a preponderance
of the evidence that the release or threat of release
of a hazardous substance and the damages resulting
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therefrom were caused solely by-(1) an act of God;
(2) an act of war;
(3) an act or omission of a[n unrelated] third party
. . . ; or
(4) any combination of the foregoing paragraphs.
42 U.S.C. § 9607(b) (emphasis added).
“Act of war” is undefined in the statutory text, and

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the legislative history is silent on the intended meaning of

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the term.

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1061 (9th Cir. 2002).

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the bare meaning of the . . . phrase but also its placement

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and purpose in the statutory scheme.”

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Robinson, 702 F.3d 22, 31 (2d Cir. 2012) (quoting Holloway

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v. United States, 526 U.S. 1, 6 (1999) (internal quotation

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marks omitted)).

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United States v. Shell Oil, Co., 294 F.3d 1045,
To construe it, we “consider not only

United States v.

There is no doubt that CERLCA commands a broad reading,

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and that, accordingly, its several exceptions (including

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“act of war”) are generally read narrowly.

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Co. v. AAMCO Transmissions, Inc., 962 F.2d 281, 285 (2d Cir.

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1992) (“It was Congress’ intent that CERCLA be construed

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liberally . . . .”); see also Shell Oil, 294 F.3d at 1061-62

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(denying “act of war” defense to oil companies who released
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See Gen. Elec.

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hazardous substances during wartime at the government’s

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direction); Westfarm Assocs. Ltd. P’ship v. Washington

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Suburban Sanitary Comm’n, 66 F.3d 669, 677 (4th Cir. 1995)

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(noting CERCLA’s “narrow defenses for damages caused solely

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by act of God, war, or third parties”).

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However, the reason for that rule of construction is to

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“accomplish [CERCLA’s remedial] goals.”

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F.2d at 285.

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responsible for any damage, environmental harm, or injury

Gen. Elec., 962

CERCLA was passed “to ensure that those

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from chemical poisons bear the costs of their actions.”2

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Id. (internal quotation marks omitted); see also Burlington

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N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602

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(2009) (“The Act was designed to promote the timely cleanup

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of hazardous waste sites and to ensure that the costs of

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such cleanup were borne by those responsible for the

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contamination.” (internal quotation marks omitted)).

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18

That purpose, however broad, is not advanced here by
imposing CERCLA liability on the airlines and the owners

2

“CERCLA’s primary purposes are axiomatic: (1) to
encourage the timely cleanup of hazardous waste sites; and
(2) to place the cost of that cleanup on those responsible
for creating or maintaining the hazardous condition.” Price
Trucking Corp. v. Norampac Indus., Inc., --F.3d--, No. 112917-cv, 2014 WL 1012835, at *3 (2d Cir. Mar. 18, 2014)
(internal quotation marks omitted).
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(and lessors) of the real estate.

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of the defense is served by recognizing the September 11

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attacks as acts of war.

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defendants all control over the planes and the buildings,

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obviated any precautions or prudent measures defendants

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might have taken to prevent contamination, and located sole

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responsibility for the event and the environmental

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consequences on fanatics whose acts the defendants were not

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bound by CERCLA to anticipate or prevent.

And the manifest purpose

The attacks wrested from the

See, e.g., 2 The

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Law of Hazardous Waste: Management, Cleanup, Liability and

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Litigation § 14.01[8][b] (Susan M. Cooke, ed.) (delineating

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CERCLA’s act-of-war defense as covering “man-made

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catastrophes beyond the control of any responsible party”).

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We therefore conclude that, solely for purposes of

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construing CERCLA’s affirmative defenses, the September 11

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attacks were acts of war.3

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This contextual reading comports with the plain meaning
of “act of war” notwithstanding that the September 11

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Cedar & Washington contend that the September 11
attacks are more appropriately covered by the “third-party”
affirmative defense, but that discovery would be required
for defendants to meet their burden on that defense. See
Appellant Br. 15 n.9. Because the claims are barred by the
act-of-war defense, we need not decide whether they would
also be barred by the “third-party” defense.
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attacks were not carried out by a state or a government.

2

War, in the CERCLA context, is not limited to opposing

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states fielding combatants in uniform under formal

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declarations.4

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avoided a broad or categorical holding.

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because the September 11 attacks were different in means,

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scale, and loss from any other terrorist attack.

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coordinate branches of government expressly recognized the

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September 11 attacks as an act of war justifying military

At the same time, the district court wisely
None was needed

Both

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response, and these decisions are worthy of deference.

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Congress, in the immediate aftermath of 9/11, passed the

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Authorization for the Use of Military Force (“AUMF”), Pub.

13

L. No. 107-40, 115 Stat. 224 (2001), which “constitute[d]

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the specific statutory authorization” necessary for the

15

President to enter military hostilities abroad under the War

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Powers Act, 50 U.S.C. §§ 1541-1548, and “to use all

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necessary and proper force” against those responsible for

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the September 11 attacks.

Similarly, the President declared

4

We recognize that in the international law context,
“war” has been traditionally defined “as a ‘use of force or
other action by one state against another’ which ‘[t]he
state acted against recognizes . . . as an act of war,
either by use of retaliatory force or a declaration of
war.’” Shell Oil, 294 F.3d at 1061 (quoting two
international law treatises).
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that the September 11 attacks were acts of war and treated

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them as such.

3

Congress on the United States Response to the Terrorist

4

Attacks of September 11, 37 Weekly Comp. Pres. Doc. 1347,

5

1347 (Sept. 20, 2011) (“On September 11th, enemies of

6

freedom committed an act of war against our country.”).

7
8

See Address Before a Joint Session of the

The Supreme Court has deferred to those acts and
declarations of the other branches:

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10
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17
18
19

Hamdan v. Rumsfeld, 548 U.S. 557, 599 n.31 (2006).

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district court, we need not decide whether other terrorist

21

attacks constitute “act[s] of war” under CERCLA; the

22

September 11 attacks fit the category without question.

23

[N]othing in our analysis turns on the admitted absence
of either a formal declaration of war or a declaration
of martial law. Our focus instead is on the September
11, 2001, attacks that the Government characterizes as
the relevant ‘act[s] of war,’ and on the measure that
authorized the President’s deployment of military
force--the AUMF. . . . [W]e do not question the
Government’s position that the war commenced with the
events of September 11, 2001 . . . .
Like the

This reading is not at odds with precedent that “act of

24

war” is construed narrowly in insurance contracts.

25

e.g., Pan Am. World Airways, Inc. v. Aetna Cas. & Surety

26

Co., 505 F.2d 989 (2d Cir. 1974).

27

risk insurance contract is to protect against any insurable

14

See,

The purpose of an all-

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loss not expressly excluded by the insurer or caused by the

2

insured.

3

should have expected the exclusions drafted by them to be

4

construed narrowly against them, and should have calculated

5

their premiums accordingly.”).

6

contractual “act of war” exclusion thus achieves the

7

parties’ contractual intent, insulating the policyholder

8

from loss.

9

and unrelated.

10

Id. at 1003-04 (“The experienced all risk insurers

A narrow reading of a

The remedial purpose of CERCLA is both different

Nor is our interpretation at odds with the Anti-

11

Terrorism Act (“ATA”), 18 U.S.C. §§ 2331 et seq.

12

purpose of the ATA was “[t]o provide a new civil cause of

13

action in Federal law for international terrorism that

14

provides extraterritorial jurisdiction over terrorist acts

15

abroad against United States nationals.”

16

Cong. (1992).

17

defines it as “any act occurring in the course of--(A)

18

declared war; (B) armed conflict, whether or not war has

19

been declared, between two or more nations; or (C) armed

20

conflict between military forces of any origin.”

21

§ 2331(4).

22

of terrorism.

The

H.R. 2222, 102d

The statutory exception for an act of war

18 U.S.C.

Acts of war, then, are distinguished from acts

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Cedar & Washington argues that we should import that

2

distinction into the CERCLA context.

3

designed precisely to differentiate between acts of

4

terrorism and acts of war, while CERCLA is silent as to

5

terrorism.

6

both an act of war and an act of terrorism; under the ATA

7

regime, it may not.

8

defined in the two statutes differ geographically, because

9

the ATA applies solely abroad, whereas CERCLA only applies

10
11

However, the ATA is

Indeed, in the CERCLA context, an event may be

In addition, the “act[s] of war”

domestically.
Given the manifestly distinct statutory text,

12

structure, and remedial purposes of CERCLA and the ATA, we

13

do not construe “act of war” to have the identical meaning

14

in both statutes.

15

Cline, 540 U.S. 581, 596 (2004) (reading language of ADEA in

16

light of purpose of statute).

See Gen. Dynamics Land Sys., Inc. v.

17
18
19

*

*

*

Because they were an “act of war,” the September 11

20

attacks fall under CERCLA’s exception if they were the

21

“sole[]” cause of the alleged release.

22

The sole cause standard certainly requires more than just

16

42 U.S.C. § 9607(b).

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proximate and but for causation.

2

because the September 11 attacks overwhelmed all other

3

causes, and because the “release” was unquestionably and

4

immediately caused by the impacts.

5

§ 8.13 (characterizing the sole cause standard as a

6

“formidable obstacle . . . allow[ing] escape from liability

7

only where external events overwhelm and swamp the

8

contributions of the defendant”); cf. Aegis Ins. Servs.,

9

Inc. v. 7 World Trade Co., L.P., 77 F.3d 166, 180 (2d Cir.

But it is satisfied here

See Rodgers, supra, at

10

2013) (dismissing negligent design claim against owners of a

11

building destroyed on 9/11 because given “severity of the

12

cataclysm that engulfed lower Manhattan . . . , [i]t is

13

simply incompatible with common sense and experience to hold

14

that defendants were required to design and construct a

15

building that would survive the events of September 11,

16

2001”).

17

Cedar & Washington argues that the composition of the

18

dust and flying debris would have been less harmful but for

19

actions previously taken by the owners of the airplanes and

20

the real estate.

21

an issue of fact or a subject for discovery.

22

is found in the text of the statute.

This argument does not succeed in raising

17

The refutation

The phrase “act of

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war” is listed in parallel with “act of God,” 42 U.S.C. §

2

9607(b); it is useful and sensible to treat the two kinds of

3

events alike when it comes to showing causation.

4

be absurd to impose CERCLA liability on the owners of

5

property that is demolished and dispersed by a tornado.

6

tornado, which scatters dust and all else, is the “sole

7

cause” of the environmental damage left in its wake

8

notwithstanding that the owners of flying buildings did not

9

abate asbestos, or that farmers may have added chemicals to

10

It would

A

the soil that was picked up and scattered.

11
12

II

13

Cedar & Washington incurred costs removing the dust

14

residues of the planes and the World Trade Center, and seeks

15

common-law indemnification.

16

indemnity is a restitution concept which permits shifting

17

the loss because to fail to do so would result in the unjust

18

enrichment of one party at the expense of the other.”

19

McCarthy v Turner Constr., Inc., 17 N.Y.3d 369, 375 (2011)

20

(internal brackets omitted); see also City of New York v.

21

Lead Indus. Ass’n, Inc., 644 N.Y.S.2d 919, 922-23 (1st Dep’t

22

1996) (“The classic situation giving rise to a claim for

“Implied, or common-law,

18

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1

indemnity is where one, without fault on its own part, is

2

held liable to a third party by operation of law . . . due

3

to the fault of another.”).

4

indemnitor must bear some fault for the damages suffered by

5

the indemnitee, whether on account of negligence, equitable

6

considerations, or statutory requirements.

7

Braun, 90 N.Y.2d 177, 183 (1997) (“The duty that forms the

8

basis for the liability arises from the principle that

9

‘every one is responsible for the consequences of his own

Under New York law, an

See Raquet v.

10

negligence, and if another person has been compelled . . .

11

to pay the damages which ought to have been paid by the

12

wrongdoer, they may be recovered from him.’” (quoting

13

Oceanic Steam Nav. Co. v. Compania Transatlantica Espanola,

14

134 N.Y. 461, 468 (1892)) (omission in original)).

15

polluter who causes (or is obligated by statute to

16

remediate) environmental contamination can be liable to

17

another party who cleans it up.

18

Cream Co., 64 N.Y.2d 83, 86-88 (1984).

Thus a

State v. Stewart’s Ice

19

Here, the act-of-war defense bars the CERCLA claim, and

20

Cedar & Washington does not identify any other basis for its

21

claim of indemnification.

22

equitable consideration obligated the defendants to

Because no legal duty or

19

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remediate WTC Dust from Cedar & Washington’s building, this

2

common law claim fails.

3
4
5

For the foregoing reasons, we affirm the judgment of
the district court.

20