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The Second Circuit decides another CERCLA contribution case in Niagara Mohawk v. Chevron (Part I)

The Second Circuit's recent decision in Niagara Mohawk Power Corp v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir. Feb 24, 2010), is a study (yet again) in the claims available to private parties to recover costs incurred in remediating hazardous wastes. The primary issue on this appeal is whether a potentially responsible party ("PRP") that settled its CERCLA liability with the state, but not with the EPA, has a right to seek contribution from other PRPs.

The Second Circuit's recent decision in Niagara Mohawk Power Corp v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir. Feb 24, 2010), is a study (yet again) in the claims available to private parties to recover costs incurred in remediating hazardous wastes. The primary issue on this appeal is whether a potentially responsible party ("PRP") that settled its CERCLA liability with the state, but not with the EPA, has a right to seek contribution from other PRPs.

This case has a long and storied procedural history. Suffice it to say, every time the case was on appeal, the United States Supreme Court would issue a new proclamation in a case concerning the claims to which a CERCLA plaintiff was entitled. Thus, before the appeal could be heard, the Second Circuit would be forced to remand the case back to the District Court for findings consistent with the new ruling. Those Supreme Court cases were Cooper Indus. v. Aviall ("Aviall"),543 U.S. 157 (2004), and United States v. Atlantic Research Corp., 551 U.S. 128 (2007).

The property at issue, the Water Street Site in upstate Troy, New York, had housed industrial uses over the past 100 years including a coke plant, a steel manufacturing facility, a manufactured gas plant (MGP) and a petroleum distribution facility. Niagara Mohawk ("NiMo") and its predecessor owned portions of the site from 1922 until 1951, and operated the preexisting MGP there during that time. NiMo's operations generated coal tar which was found on-site. By 1951, NiMo conveyed most of its interest at the site to Republic Steel, but today still owns a small parcel used as a natural gas regulator station.

NiMo entered into an Order on Consent with the New York State Department of Environmental Conservation ("NYSDEC") in 1992 to investigate and remediate 21 MGP sites throughout the state, including the Water Street Site. In 2003, NiMo and NYSDEC executed an amended Order on Consent whereby NiMo incurred additional cleanup costs while obtaining a specific release of CERCLA liability, again including the Water Street Site.

NiMo brought this action in 1998 against other parties that owned and operated at the Site or portions of the Site during which contamination was released on site, seeking recovery of its CERCLA response costs. The defendants counterclaimed and cross-claimed for contribution and the parties eventually moved for summary judgment. The District Court denied the defendants' motions for summary judgment against NiMo, holding that NiMo had a cause of action under ยงยง 107 and 113(f)(1), but dismissed NiMo's claims against some of the defendants as lacking in evidence that those parties were liable under CERCLA. For various reasons, in a complicated procedural history, several defendants and NiMo appealed. While the appeal was pending, the Supreme Court decided Aviall, and the Second Circuit remanded the case back to the District Court for findings in light of that opinion.

Our next post will pick up with the District Court's decision in light of the Aviallcase.

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