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Media Alerts - New York v. Next Millennium Realty--Second Circuit
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October 16, 2013
  New York v. Next Millennium Realty--Second Circuit
Headline: Second Circuit Holds That CERCLA Allows New York State To Recover Costs of Addressing Groundwater Contamination in Hempstead, Long Island

Area of Law: Environmental Law

Issue(s) Presented: Whether the installation of systems to remove contaminants from drinking water supplies constituted a "remedial" or "removal" action under CERCLA, each of which have different statutes of limitations.

Brief Summary: New York sued under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. et seq. (CERCLA) to recover costs incurred in the cleanup of groundwater contamination in the Town of Hempstead, New York. The Town had installed cleanup systems on its wells in 1990 and 1995, and the State's long-term remediation plan incorporated these systems in 2003. The United States District Court for the Eastern District of New York granted summary judgment to defendants-appellees (various owners and operators of facilities in the relevant area), holding that the suit was time-barred. In so concluding, the district court applied the six-year statute of limitations applicable to "remedial actions" under CERCLA, calculated from commencement of cleanup construction. The Second Circuit, however, held that the cleanup systems were not "remedial," but rather "removal" actions. Therefore, a three-year statute of limitations applied, calculated from completion of the removal action, and the action was not time-barred. The court vacated and remanded for further proceedings consistent with its opinion. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1d9dcfeb832/1/hilite/

Extended Summary: The State of New York sued defendants-appellees under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. et seq. (CERCLA) to recover costs incurred in investigating and addressing groundwater contamination emanating from the New Cassel Industrial Area (the "NCIA") in the Town of Hempstead, New York (the "Town"). Under CERCLA, the federal and state governments can clean up hazardous waste spills with public money and then seek the recovery of costs from the polluters.

The NCIA lies above an aquifer that serves as an important source of drinking water for the Town. Volatile organic compounds ("VOCs") from light industry in the NCIA seeped into the aquifer's groundwater in the 1950s. In 1989, the Town detected VOCs in two of its wells at levels approaching the State's Maximum Contaminant Levels. The Town installed a granulated activated carbon absorption system (the "GAC system") to remove the VOCs in 1990. The Town installed a tower aeration system to supplement the GAC in 1995 because rising concentrations of VOCs increased the cost of running the system and threatened its effectiveness. The DEC began a remedial investigation in 1995 and selected a remedy in 2003 that, among other things, incorporated the Town's GAC and tower aeration systems. Concurrently, the State entered into agreements with potentially responsible parties (owners and operators of facilities in the NCIA), tolling the statute of limitations starting in 2001.

In 2006, New York State filed suit against the various potentially responsible parties under CERCLA, seeking to recover the costs incurred in investigating and responding to the groundwater contamination at the NCIA. Adopting a report and recommendation of the magistrate judge, the United States District Court for the Eastern District of New York deemed the action time-barred. The district court applied the six-year statute of limitations governing suits to recover costs for "remedial" actions. Under 42 U.S.C. § 9613(g)(2)(B), remedial actions are measures to permanently remediate hazardous wastes. That statute of limitations is triggered by the commencement of cleanup construction. The district court found that construction began more than six years before the suit was brought, either upon installation of the GAC in 1990 or upon construction of the tower aeration system in 1995. It also noted that the first tolling agreement took effect more than six years after those dates - in 2001. Therefore, the district court held that the suit was time-barred as a remedial action. The State appealed.

The Second Circuit reversed. It began by explaining that the court has construed CERCLA liberally to advance its dual goals: to allow governments to respond to spills immediately, and to ultimately hold polluters responsible for that cost. It further concluded that the lawsuit here involved a removal action, not a remedial action. Removal actions, in contrast to remedial actions, are "clean-up or removal measures taken to respond to immediate threats to public health and safety." Under CERCLA, removal actions have a different statute of limitations than remedial actions: 42 U.S.C. § 9613(g)(2)(A) imposes a three-year statute of limitations on removal actions, triggered by the completion of the removal action, as opposed to a six-year statute of limitations triggered by the action's commencement. The Second Circuit explained that the installation of the GAC and tower aeration systems were removal actions because they were installed in response to an imminent public health hazard and were designed to address contamination in the wells (not to permanently address the release of the VOCs from the NCIA). Even though they were incorporated into a permanent remedial solution by the DEC, they remained "removal" actions at all times relevant for purposes of the statute of limitations.

The court concluded that removal measures cannot be deemed completed before the State's adoption of a remediation plan incorporating them. Because this suit was brought within three years of the DEC's adoption of a remediation plan in 2003, the action was not time-barred. The court thus vacated and remanded for further proceedings consistent with its opinion.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1d9dcfeb832/1/hilite/

Panel: Circuit Judges Chin and Lohier; District Judge Swain.

Argument Date: 05/13/2013

Date of Issued Opinion: 10/15/2013

Docket Number: No. 12-2894-cv

Decided: Vacated and Remanded

Case Alert Author: Bárbara M. Santisteban

Counsel: Barbara D. Underwood, Solicitor General (Cecelia C. Chang, Deputy Solicitor General, Matthew W. Greico, Assistant Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, New York, for Plaintiffs-Appellants.

Kathleen M. Sullivan (William B. Adams, on the brief), Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York, and Kevin Maldonado, Kevin Maldonado & Partners LLC, Windham, New York; Philip C. Landrigan and Peter D. Aufrichtig, McCarthy Fingar LLP, White Plains, New York; Paul B. Sweeney and Barry S. Cohen, Certilman Balin Adler & Hyman, LLP, East Meadow, New York; John Gregory Martin and Suzanne M. Avena, Garfunkel Wild, P.C., Great Neck, New York; Charlotte A. Biblow and Franklin C. McRoberts, Farrell Fritz, P.C., Uniondale, New York; Michael S. Cohen, Nixon Peabody LLP, Jericho, New York; Miriam Villani, Sahn Ward Coschignano & Baker, PLLC, Uniondale, New York; Thomas R. Smith, Bond, Schoeneck & King, PLLC, Syracuse, New York; Kenneth L. Robinson, Robinson & Associates, P.C., Syosset, New York, and Theodore Warren Firetog, Law Offices of Theodore W. Firetog, Farmingdale, New York; Robert R. Lucic, John E. Peltonen, and Daniel K. Fink, Sheehan Phinney Bass & Green, P.A., Manchester, New Hampshire; Sheila A. Woolson, Epstein Becker & Green, P.C., Newark, New Jersey; and Richard P. O'Leary, McCarter & English, LLP, New York, New York, for Defendants-Appellees.

Author of Opinion:
Judge Chin

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 10/16/2013 07:56 AM     2nd Circuit  

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