ELG Utica Alloys, Inc. v. Niagara Mohawk Power Corp. et al
Filing
196
ORDER denying 189 Motion for Judgment on the Pleadings. Signed by Judge Brenda K. Sannes on 5/22/2020. (rjb, )
Case 6:16-cv-01523-BKS-ATB Document 196 Filed 05/22/20 Page 1 of 11
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
ELG UTICA ALLOYS, INC.,
Plaintiff,
6:16-cv-01523 (BKS/ATB)
v.
NIAGARA MOHAWK POWER CORP. d/b/a
NATIONAL GRID, SPECIAL METALS CORP.,
GENERAL ELECTRIC COMPANY, EMPIRE
RECYCLING CORP., and CHICAGO PNEUMATIC
TOOL COMPANY, LLC,
Defendants.
NIAGARA MOHAWK POWER CORP. d/b/a
NATIONAL GRID,
Third-Party Plaintiff,
v.
CBS CORPORATION (Successor-in-Interest to
WESTINGHOUSE ELECTRIC CORPORATION),
Third-Party Defendant.
Appearances:
For Defendant/Third-Party Plaintiff Niagara Mohawk Power Corp. d/b/a National Grid:
Yvonne E. Hennessey
Barclay Damon, LLP
80 State Street
Albany, New York 12207
For Third-Party Defendant CBS Corporation
Alana E. Fortna
Babst, Calland, Clements and Zomnir, P.C.
Two Gateway Center, 6th Floor
603 Stanwix Street
Pittsburgh, Pennsylvania 15222
Case 6:16-cv-01523-BKS-ATB Document 196 Filed 05/22/20 Page 2 of 11
Hon. Brenda K. Sannes, United States District Judge:
MEMORANDUM-DECISION AND ORDER
I.
INTRODUCTION
This action arises from the investigation of the release or threatened release of hazardous
substances at “the Universal Waste Site” (the “Site”), which operated as a metal recycling
operation in Utica, New York from the 1950s until 2012. (Dkt. No. 43, ¶¶ 1–2). Third-Party
Plaintiff Niagara Mohawk Power Corp. d/b/a National Grid (“National Grid”) filed claims
against Third-Party Defendant CBS Corporation (successor-in-interest to Westinghouse Electric
Corporation) (“CBS” or “Westinghouse”) seeking: (1) contribution and a declaratory judgment
under Section 113 of the Comprehensive Environmental Response, Compensation, and Liability
Act (“CERCLA”), as amended, 42 U.S.C. § 9613; (2) indemnity and contribution under Article
12 of the New York Navigation Law, N.Y. Nav. Law sections 170 et seq. (the “Navigation
Law”); and (3) contribution under section 1401 of the New York Civil Practice Law and Rules,
N.Y. C.P.L.R. § 1401, and New York common law (the “contribution claim”). (Dkt. No. 69, ¶¶
126–188).
On October 10, 2019, the Court granted in part CBS’s motion to dismiss for failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6) and dismissed National Grid’s claim
under the Navigation Law. See ELG Utica Alloys, Inc. v. Niagara Mohawk Power Corp., No. 16cv-01523, 2019 WL 5086020, 2019 U.S. Dist. LEXIS 17615 (N.D.N.Y. Oct. 10, 2019). CBS
now moves for partial judgment on the pleadings under Federal Rule of Civil Procedure 12(c) as
to National Grid’s contribution claim under section 1401 and common law.1 (Dkt. No. 189). The
1
In its motion to dismiss, CBS did not argue that National Grid’s contribution claim was preempted by CERCLA, so
the Court did not address the issue. Id., 2019 WL 5086020, at *7 n.7, 2019 U.S. Dist. LEXIS 176152, at *20 n.7.
2
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parties have filed responsive briefing. (Dkt. Nos. 191, 193). For the reasons that follow, the
motion is denied.
II.
BACKGROUND
The Court assumes familiarity with the relevant facts and procedural history of this case,
which the Court detailed in its October 10, 2019 Memorandum-Decision and Order. See ELG
Utica Alloys, 2019 WL 5086020, 2019 U.S. Dist. LEXIS 17615. However, the Court
supplements that factual summary with the following allegations drawn from ELG’s amended
complaint, (Dkt. No. 43), National Grid’s answer to ELG’s amended complaint, and National
Grid’s Third-Party Complaint against CBS. (Dkt. No. 69).2
Plaintiff ELG Utica Alloys, Inc. (“ELG”) initiated this action under CERCLA; New York
Navigation Law sections 170 et seq.; and contribution under Section 1401 of the New York Civil
Practice Law and Rules, N.Y. C.P.L.R. § 1401, and New York common law against defendants
National Grid, Special Metals Corp., General Electric, Empire Recycling Corp., and Chicago
Pneumatic Tool Company, LLC. (Id. ¶ 15–20). ELG seeks to hold Defendants liable for “Site
related costs and damages,” including costs and damages due to petroleum contamination at or
from the Site. (Dkt. No. 43, ¶ 9, p. 14). ELG also seeks a judgment against Defendants for
reimbursement of Site-related costs it has incurred to date, (id.), and a declaratory judgment for
any future costs. (Id.).
ELG alleges, as part of its Navigation Law claim, that the defendants, including National
Grid, “arranged for the disposal and discharge of petroleum products at the Site, including but
not limited to transformer oils and lubricants” and that the defendants are “responsible for and/or
2
The Court assumes the truth of, and draws reasonable inferences from, the well-pleaded factual allegations. L-7
Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011).
3
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caused the petroleum discharges on the Site.” (Dkt. No. 43, ¶ 65). Further, ELG alleges that it
has incurred past response costs and other damages from 2012 to date “and will continue to
incur” unknown future response costs and damages, including costs resulting from “petroleum
discharges at or from the Site.” (Dkt. No. 43 ¶¶ 1, 66).
In its answer to ELG’s amended complaint, National Grid denies the allegations related
to petroleum discharge at the Site and “admit[s] upon information and belief,” that “one or more”
of its co-defendants “or Westinghouse are responsible for and/or caused the petroleum
discharges on the Site.” (Dkt. No. 69, ¶¶ 65–66). In its third-party allegations against CBS,
National Grid alleges that “numerous types of oil from the Westinghouse . . . transformer repair
shop w[ere] reportedly dumped into the Mohawk River, buried onsite, or buried at local dumps.”
(Id. ¶ 161). Further, “Westinghouse transported or arranged for the transport and disposal of
scrap materials and other equipment containing oils and lubricants at the Site where such scrap
materials and equipment were broken open, shredded, or otherwise processed” and that this
“resulted in discharges of petroleum at the Site from Westinghouse’s scrap material and other
equipment.” (Id. ¶ 181–82). These allegations were all incorporated by reference in National
Grid’s contribution claim. (Id. ¶ 185).
III.
LEGAL STANDARD
“After the pleadings are closed—but early enough not to delay trial—a party may move
for judgment on the pleadings.” Fed. R. Civ. P. 12(c). The same standard applicable to Fed. R.
Civ. P. 12(b)(6) motions to dismiss applies to Fed. R. Civ. P. 12(c) motions for judgment on the
pleadings.” Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 922 (2d Cir. 2010). Thus, “[t]o
survive a Rule 12(c) motion, the complaint ‘must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.’” Id. (quoting Hayden v. Paterson, 594
F.3d 150, 160 (2d Cir. 2010)). “Although a complaint need not contain detailed factual
4
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allegations, it may not rest on mere labels, conclusions, or a formulaic recitation of the elements
of the cause of action, and the factual allegations ‘must be enough to raise a right to relief above
the speculative level.’” Lawtone-Bowles v. City of New York, No. 16-cv-4240, 2017 WL
4250513, at *2, 2017 U.S. Dist. LEXIS 155140, at *5 (S.D.N.Y. Sept. 22, 2017) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Court will grant a motion for judgment
on the pleadings “if, from the pleadings, the moving party is entitled to judgment as a matter of
law.” VCG Special Opportunities Master Fund Ltd. v. Citibank, N.A., 594 F. Supp. 2d 334, 340
(S.D.N.Y. 2008).
IV.
DISCUSSION
A.
Principles of Preemption as Applied to CERCLA
Under the Supremacy Clause of the United States Constitution, “state and local laws that
conflict with federal law are ‘without effect.’” N.Y. SMSA Ltd. P’ship v. Town of Clarkstown,
612 F.3d 97, 103–04 (2d Cir. 2010) (quoting Altria Group, Inc. v. Good, 555 U.S. 70, 76
(2008)). In general, three types of preemption exist:
(1) express preemption, where Congress has expressly preempted
local law; (2) field preemption, where Congress has legislated so
comprehensively that federal law occupies an entire field of
regulation and leaves no room for state law; and (3) conflict
preemption, where local law conflicts with federal law such that it
is impossible for a party to comply with both or the local law is an
obstacle to the achievement of federal objectives.
Figueroa v. Foster, 864 F.3d 222, 227–28 (2d Cir. 2017) (quoting N.Y. SMSA, 612 F.3d at 104).
“[C]ourts should not lightly infer” that state or local law has been preempted by federal law.
Bedford Affiliates v. Sills, 156 F.3d 416, 426 (2d Cir. 1998) (quoting Int’l Paper Co. v. Ouellette,
479 U.S. 481, 490 (1987)), overruled on other grounds by W.R. Grace & Co.-Conn. v. Zotos
Int’l, Inc., 559 F.3d 85, 90 (2d Cir. 2009).
5
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The Second Circuit has “held that CERCLA does not expressly preempt applicable state
law.” Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 138 (2d Cir. 2010)
(quoting Marsh v. Rosenbloom, 499 F.3d 165, 177 (2d Cir. 2007)). The Second Circuit has also
concluded that field preemption does not apply because “CERCLA is not such a comprehensive
scheme that it cannot be supplemented by state law.” Niagara Mohawk, 596 F.3d at 138 (quoting
Bedford Affiliates, 156 F.3d at 427).
That leaves conflict preemption. “Congress created the statutory right to contribution in
§ 9613(f) of CERCLA in part to encourage settlements and further CERCLA’s purpose as an
impetus to efficient resolution of environmental hazards.” Niagara Mohawk, 596 F.3d at 138. As
the Second Circuit explained, CERCLA’s section 9613 was “intended to provide the only
contribution avenue for parties with response costs incurred under CERCLA” and “is intended to
standardize the statutory right of contribution and, in doing so, avoid the possibility of fifty
different state statutory schemes that regulate the duties and obligations of non-settling
[potentially responsible parties (“PRPs”)]3 who might be viewed as tortfeasors under the law of
any particular state.” Id.; 42 U.S.C. § 9613(f)(3)(C) (“Any contribution action brought under this
paragraph shall be governed by Federal law.”). Thus, in Niagara Mohawk, the Second Circuit
3
Under CERCLA, a PRP is defined as:
(1) the owner and operator of a vessel or a facility, (2) any person who at the time
of disposal of any hazardous substance owned or operated any facility at which
such hazardous substances were disposed of, (3) any person who by contract,
agreement, or otherwise arranged for disposal or treatment, or arranged with a
transporter for transport for disposal or treatment, of hazardous substances owned
or possessed by such person, by any other party or entity, at any facility or
incineration vessel owned or operated by another party or entity and containing
such hazardous substances, and (4) any person who accepts or accepted any
hazardous substances for transport to disposal or treatment facilities, incineration
vessels or sites selected by such person, from which there is a release, or a
threatened release which causes the incurrence of response costs, of a hazardous
substance.
42 U.S.C. § 9607(a); see also Niagara Mohawk, 596 F.3d at 121 n.6.
6
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concluded that “state law contribution claims for CERCLA response costs conflict with
CERCLA contribution claims and therefore are preempted.” Niagara Mohawk, 596 F.3d at 138
(emphasis added); id. at 138 n.28 (“[O]ur conclusion is in keeping with other courts’
determinations that CERCLA is intended to be the exclusive scheme governing hazardous waste
claims that fall within its purview.”); Bedford Affiliates, 156 F.3d at 426 (“CERCLA as a whole
does not expressly preempt state law, but simply prohibits states from ‘recovering compensation
for the same removal costs or damages or claims’ under both CERCLA and state or other federal
laws.”) (quoting State of New York v. Shore Realty Corp., 759 F.2d 1032, 1041 (2d Cir. 1985)).
The question here, then, is whether National Grid’s contribution claim plausibly alleges a theory
of recovery apart from “CERCLA response costs.” Niagara Mohawk, 596 F.3d at 138.
B.
Application
CBS argues that allowing the state contribution claim to proceed would contravene
CERCLA’s plain language, which precludes “recovering compensation for the same removal
costs or damages or claims pursuant to any other State or Federal law.” (Dkt. No. 189-1, at 6
(quoting 42 U.S.C. § 9614(b))). It also argues that “CERCLA Section [9613] preempts state-law
claims seeking contribution for response costs” and that to find otherwise would undermine
CERCLA’s incentive structure that encourages settlement. (Id. at 7–8; Dkt. No. 193, at 9). CBS
argues that National Grid’s contribution claim is based “on the underlying federal liability
alleged against CBS” through CERCLA. (Dkt. No. 189-1, at 8–9).
National Grid acknowledges that CERCLA preempts “state law and common law claims”
to the extent the claim would entail recovery for the “same removal costs or damages,” (Dkt. No.
191, at 11 (citation and quotation marks omitted)), but argues that CBS’s motion should be
denied because National Grid’s contribution claim encompasses non-CERCLA damages (Id. at
11–12). National Grid argues that it seeks contribution from CBS “commensurate with ELG[]’s
7
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state law claims against” National Grid, which include allegations that National Grid is
responsible for waste related to petroleum, which CERCLA does not cover. (Id. at 6–7, 11–14).
National Grid further argues that the mere possibility for double recovery does not warrant
dismissal at this early stage of the proceedings. (Id. at 14–16).
While state law contribution claims for CERCLA response costs are preempted, to the
extent National Grid is found liable for and seeking contribution for costs incurred outside of
CERCLA, it may have a basis for contribution under New York Law. Niagara Mohawk, 596
F.3d at 138–139.4 See MPM Silicones, LLC v. Union Carbide Corp., 931 F. Supp. 2d 387, 404
(N.D.N.Y. 2013) (finding that Second Circuit in [Niagara Mohawk] “clearly implied” that “there
are grounds for state-law contribution when the PRP has incurred costs outside of CERCLA”).
Here National Grid argues that, “there may be . . . areas not covered by CERCLA,” citing to the
allegations regarding petroleum contamination and the fact that petroleum is not a hazardous
substance covered by CERCLA. See 42 U.S.C. § 9601(14); e.g., Town of Halfmoon v. Gen. Elec.
Co., 105 F. Supp. 3d 202, 221 (N.D.N.Y. 2015) (“CERCLA specifically excludes from coverage
damages related to petroleum contamination.” (citing 42 U.S.C. § 9601(33))); Coastline
Terminals of Conn., Inc. v. USX Corp., 156 F. Supp. 2d 203, 209 (D. Conn. 2001) (same).
ELG has alleged that National Grid is responsible for petroleum contamination at the Site
(Dkt. No. 43, ¶¶ 65–66), and National Grid has alleged that Westinghouse was responsible for
that contamination. “Contribution liability [under section 1401] ‘may flow from either of two
sources: breach of duty to the plaintiff [the injured party] or to the party seeking contribution.’”
Perkins Eastman Architects, P.C. v. Thor Eng’rs, P.A., 769 F. Supp. 2d 322, 327 (S.D.N.Y.
4
N.Y. C.P.L.R. Section 1401 provides, in relevant part, that “two or more persons who are subject to liability for
damages for the same personal injury, injury to property or wrongful death, may claim contribution among them
whether or not an action has been brought or a judgment has been rendered against the person from whom contribution
is sought.”
8
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2011) (quoting Westport Marina, Inc. v. Boulay, 783 F. Supp. 2d 344, 357 (E.D.N.Y. 2010)
(second alteration in original)); id. (“[T]he ‘critical requirement’ for a successful contribution
claim is that ‘the contributing party must have had a part in causing or augmenting the injury for
which contribution is sought.’” (quoting Fashion Shop LLC v. Virtual Sales Group Corp., 525 F.
Supp. 2d 436, 446 (S.D.N.Y. 2007))). For instance, here, National Grid alleges that
“Westinghouse transported or arranged for the transport and disposal of scrap materials and other
equipment containing oils and lubricants at the Site where such scrap materials and equipment
were broken open, shredded, or otherwise processed” and that this “resulted in discharges of
petroleum at the Site from Westinghouse’s scrap material and other equipment.” (Dkt. No. 69, ¶¶
181–82). National Grid further alleges that “numerous types of oil from the Westinghouse . . .
transformer repair shop [were] reportedly dumped into the Mohawk River, buried onsite, or
buried at local dumps.” (Id. ¶ 161). These allegations were all incorporated by reference in
National Grid’s contribution claim.5 (Id. ¶ 185).
In its reply, CBS argues that the petroleum exclusion does not apply to National Grid’s
claims against CBS because the contamination was inextricably intertwined with PCBs. CBS
argues—without citation to caselaw—that contamination from PCB-containing oils is covered
under CERCLA. (Dkt. No. 193, at 5). There appears to be caselaw support for this contention.
E.g., City of New York v. Exxon Corp., 744 F. Supp. 474, 490 (S.D.N.Y. 1990) (analyzing
CERCLA’s legislative history and explaining that “the primary purpose of the exclusion for
petroleum, which is defined principally in terms of crude oil and crude oil fractions, was to
exclude from CERCLA’s coverage spills or other releases strictly of oil . . . not releases of
5
To the extent CBS suggests that National Grid may not rely on allegations incorporated by reference from its nowdismissed Navigation Law claim to support its contribution claim, the Court rejects that suggestion. (See Dkt. No.
189-1, at 5; Dkt. No. 191, at 9–10). See Allen v. Dairy Farmers of Am., Inc., 748 F. Supp. 2d 323, 353 (D. Vt. 2010)
(“Incorporation by reference is proper pleading.”) (citation omitted).
9
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hazardous substances mixed with oil”); see also Mid Valley Bank v. N. Valley Bank, 764 F. Supp.
1377, 1384 (E.D. Cal. 1991) (collecting cases and concluding at summary judgment that “waste
oil containing CERCLA hazardous substances does not fall under the CERCLA petroleum
exclusion”).
National Grid acknowledges that contamination from petroleum and contamination from
PCB’s, which are “generally suspended in a very high percentage of oil,” “may be related.” (Dkt.
No. 191, at 10 n.3). And ELG has alleged contamination from “PCB-containing oils and
petroleum.” (Dkt. No. 43, ¶ 25). There are also, however, allegations of petroleum discharge and
contamination which do not refer to PCBs. (Dkt. No. 43, ¶¶ 27, 35, 65). Further, as mentioned,
National Grid alleges that “numerous types of oil” from Westinghouse’s repair shop were
disposed. (Dkt. No. 69, ¶ 161). Construing the allegations in the light most favorable to National
Grid, the Court cannot say, at this early stage of the case that National Grid’s sole basis for
recovery is response costs under CERCLA. See Volunteers of Am. of W. N.Y. v. Heinrich, 90 F.
Supp. 2d 252, 258 (W.D.N.Y. 2000) (denying motion to dismiss “on the basis of CERCLA
preemption” where the plaintiff “alleged conduct which may fall under CERCLA’s ‘petroleum
exclusion’ (such as releases of unadulterated gasoline)”); Gen. Elec. Co., 105 F. Supp. 3d at 221
(explaining, in the context of a Navigation Law claim, that claims relating to “release of
petroleum are not preempted by CERCLA” and “whether the PCBs that have been resuspended
in the Hudson River during the dredging project are petroleum-based or have been mixed with
petroleum is an issue of fact to be determined at trial”); see also HLP Props., LLC v. Consol.
Edison Co. of N.Y., No. 14-cv-01383, 2014 WL 6604741, at *8, 2014 U.S. Dist. LEXIS 163336,
at *21 (S.D.N.Y. Nov. 21, 2014) (“While the Complaint does not specify the nature of those
costs or the reason that they are not covered by CERCLA, drawing all inferences in Plaintiffs’
10
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favor at this stage of the proceedings, the Complaint sufficiently pleads a request for costs not
recoverable under CERCLA.”).
Thus, the Court concludes at this stage that National Grid’s contribution claim is not
preempted by CERCLA.6
V.
CONCLUSION
For these reasons, it is hereby
ORDERED that Third-Party Defendant CBS’s Motion to for Judgment on the Pleadings
(Dkt. No. 189) is DENIED.
IT IS SO ORDERED.
Dated: May 22, 2020
Syracuse, New York
6
In support of its argument that National Grid’s state law contribution claim is preempted, CBS cites N.Y. State
Elec. & Gas Corp. v. FirstEnergy Corp. (“NYSEG”), No. 03-cv-0438, 2007 WL 1434901, 2007 U.S. Dist. LEXIS
35141 (N.D.N.Y. May 11, 2007), a case that is inapposite. In NYSEG, the court ruled on summary judgment that
conflict preemption precluded a PRP’s contribution claim under section 1401, after its Navigation Law claim had
been dismissed by stipulation and its CERCLA contribution claim had been dismissed because the plaintiff, who had
remediated a site voluntarily, had no contribution right of action under CERCLA. Id., 2007 WL 1434901, at *2–3,
*7, *11, 2007 U.S. Dist. LEXIS 35141, at *7, *22, *36–37; NYSEG, Dkt. No. 90 (N.D.N.Y. June 27, 2005). In that
case, the plaintiff was “conspicuously vague” regarding the remaining source of liability. Id., 2007 WL 1434901, at
*7 n.6, 2007 U.S. Dist. LEXIS 35141, at *22 n.6. The court ruled that allowing state contribution in that situation
where “none [was] available under CERCLA” would undermine CERCLA’s contribution scheme. Id., 2007 WL
1434901, at *11, 2007 U.S. Dist. LEXIS 35141, at *36–37. In so doing, the court distinguished state law claims
seeking damages that are not available under CERCLA, which are not subject to conflict preemption. Id., 2007 WL
1434901, at *10, 2007 U.S. Dist. LEXIS 35141, at *34. Here, National Grid’s contribution claim is viable to the
extent it seeks contribution for costs incurred for contamination not covered by CERCLA.
11
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