JOANNA SEYBERT, District Judge.
Before the Court in this Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") action is a motion for summary judgment by Defendant Robert Liere, d/b/a Liere Farms ("Liere") (D.E. 32); a motion for summary judgment by Defendants D&D Grading, Inc. and Donald Dondero ("Dondero" and together with D&D Grading, Inc., "D&D") (D.E. 34); and Lilia Factor, Esq.'s motion to withdraw as counsel for D&D (D.E. 36). For the following reasons, Liere's motion for summary judgment is DENIED; D&D's motion for summary judgment is DENIED; and counsel's motion to withdraw is GRANTED to the extent that the Court will conduct a hearing.
Thomas and Melissa Sheridan ("Plaintiffs") live with their four children in St. James, New York. At all times relevant to this action, they resided and continue to reside at 131 Hobson Avenue. (Sheridan Aff., D.E. 33, ¶ 6.) In 2015, Plaintiffs installed a pool in their backyard, and in 2016, added a patio. They then decided to grade the backyard, add a layer of topsoil, seed, and apply fertilizer. (Sheridan Aff. ¶ 7.) They contracted
Plaintiffs paid D&D $1,000 cash on June 3 and $1,100 in cash on June 6, and D&D acknowledged payment in full. Dondero requested cash payment because his topsoil supplier—Liere—worked in cash. (Sheridan Aff. ¶¶ 12-13.) Dondero told Plaintiffs several times that the supplier was Liere and said "this topsoil is the best around." (Sheridan Aff. ¶¶ 9, 14.)
Liere states he is the sole member of a limited liability company known as "Liere Farms, LLC." (Liere 56.1 Stmt. ¶¶ 12-13.) Liere claims that he did not own or operate Liere Farms in his individual capacity because he had formed an LLC in 2004 that owned and operated the farm at all times relevant to this action. (Liere Aff., D.E.32-3, ¶ 4-6.) According to Liere, on June 3 and June 6, 2016, Liere Farms, LLC sold 30 yards
Dondero believed that Liere's topsoil was good because he had visited the facility and seen burned wood and ashes added to the soil. Liere told him the ash improves the quality. (D&D 56.1 Counterstmt. ¶ 5.) Dondero had used Liere's soil for other clients and there were no problems. While working on Plaintiffs' backyard, Dondero did not detect any foreign substances in the soil. (D&D 56.1 Resp. ¶¶ 6-7, 16.)
A few days after the project was completed, Plaintiffs noticed metal nails, construction debris, rebar, gypsum, asbestos shingles, glass, ash, plastic, electrical wire, plywood, and lumber in the soil. They immediately notified the New York State Department of Environmental Conservation ("DEC") and the DEC inspected their yard, took samples, and instructed them not to remove any material until the investigation was complete. (Sheridan Aff. ¶¶ 15-16.) DEC performed laboratory analysis on the soil samples and detected numerous hazardous materials including arsenic, chromium, benzo (b) fluoranthene, chrysene, zinc, copper, and lead. (Sheridan Aff. ¶ 17; DEC Lab Report, Ex. F, D.E. 33-10; Chart, Ex. G, D.E. 33-11.) DEC told Plaintiffs they "needed to retain licensed environmental professionals to investigate and remove the contamination," so they hired an environmental consultant Peter Dermody, C.P.G., and a remediation company Eastern Environmental Solutions, Inc. (Sheridan Aff. ¶ 19.) Plaintiffs incurred response costs and have included receipts along with their papers: $4,890 to Dermody for consultation; $27,914.24 to Eastern Environmental Solutions, Inc. for remediation; $902.50 for replacement soil; $2,282.75 for spreading and re-seeding the soil; $646.32 for sprinkler repair; and $23,735.27 in attorneys' fees, for a total of $60,367.08. (Sheridan Aff. ¶ 21; Receipts, Exs. H-M, D.E. 33-12 through 33-17.)
Plaintiffs commenced this action on September 13, 2016, alleging CERCLA claims (Counts 1-2) and state law claims of strict liability, fraud and deceit, breach of contract, unjust enrichment, and negligence (Counts 3-7). (Compl., D.E. 1.) Liere answered on October 24, 2016. (Liere Ans., D.E. 11.) D&D answered on December 8, 2016. (D&D Ans., D.E. 13.) D&D asserted a counterclaim against Plaintiffs—that any foreign materials were present before D&D did work and Plaintiffs were potentially responsible parties. It also asserted a crossclaim against Liere claiming that all topsoil was obtained from him and it was entitled to contribution from Liere should it be found liable. Plaintiffs filed their reply on December 9, 2016. (Pls. Reply, D.E. 15.) Liere replied to the crossclaims on December 30, 2016. (Liere Reply, D.E. 17.)
Upon completion of discovery, Liere moved for summary judgment. (Liere Mot., D.E. 32.) Plaintiffs filed their brief in opposition to Liere's motion. (Pls. Opp., D.E. 33-4.) D&D filed its motion for summary judgment (D&D Mot., D.E. 34) and a reply in response to Plaintiffs' opposition to Liere's motion and in further support of the motion (D&D Reply, D.E. 35). Plaintiffs then filed another opposition, this time to Liere's motion and D&D's motion. (Pls. Second Opp., D.E. 37-4.) D&D filed another reply, in response to Plaintiffs' opposition to both motions and in further support of its motion for summary judgment. (D&D Second Reply, D.E. 38.)
During the above motion practice, D&D's attorney filed a motion to withdraw (Mot. to Withdraw, D.E. 36) and the Court deferred ruling on.
Summary judgment will be granted where the movant demonstrates that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine factual issue exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."
The movant bears the burden of establishing that there are no genuine issues of material fact.
In moving for summary judgment, Liere contends that this case falls within CERCLA's "fertilizer exception," 42 U.S.C. § 9601(22). He further argues that Plaintiffs have not demonstrated a "release" of any "hazardous substance" as CERCLA defines the terms. (Liere Mem., D.E. 32-7, at 6.) He also maintains that he is not liable as an owner or operator because "Liere Farm, LLC was and is the owner and operator of the Liere Farms at all times referenced in the [C]omplaint." (Liere Mem. at 9.) Finally, Liere argues the state law claims should be dismissed as he is not responsible in an individual capacity, and that in the event the Court dismisses the CERCLA claims, it should not exercise supplemental jurisdiction over the remaining state law claims. (Liere Mem. at 9-10.)
D&D argues that it is not a "generator" or "transporter" under CERCLA and that it did not possess the requisite level of knowledge or intent. (D&D Second Reply at 5.) D&D also raises several defenses: topsoil is a useful product, the materials disposed of were not hazardous, and the fertilizer exception. (D&D Second Reply at 6-9.) D&D believes Liere may have personal liability and requests that if this Court denies its motion, Liere should remain a party. (D&D Second Reply at 10.)
Plaintiffs oppose both motions. They respond that there are material facts in genuine dispute, precluding summary judgment. (Pls. Second Opp., D.E. 37-4, at 5-6.) Turning to Defendants' specific arguments, Plaintiffs respond that contaminated topsoil is not a useful product; even if CERCLA requires intent, triable issues exist as to Defendants' intent here; the substances in the soil were hazardous; there was no normal application of fertilizer because Defendants released hazardous substances; and Liere is responsible for his actions and his LLC attempts to evade responsibility (Pls. Second Opp. at 10-15.) Plaintiffs do not address their state law claims or whether the Court should exercise supplemental jurisdiction if it grants summary judgment as to the CERCLA claims.
"`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.'"
42 U.S.C. § 9607(a).
Liere argues that Plaintiffs' expert, Peter Dermody, C.P.G., merely stated what Plaintiffs said they found in the soil, and not that he himself had found the substances when he sampled it. (Liere Mem. at 7.) This is contradicted by Dermody's affidavit, where he states that "[l]aboratory analysis of the samples taken by DEC at plaintiffs' residence found the presence of significant quantities of seven (7) `hazardous substances' (the relevant term used in and defined by CERCLA). These substances are: arsenic; chromium; copper; zinc; lead; benzo (b) fluoranthene; and chrysene." (Dermody Aff., D.E. 33-1, ¶ 10.) Another expert, Jeffrey Bohlen, made similar statements about the presence of hazardous substances. (Bohlen Aff., D.E. 33-2, ¶ 8 ("The fact that the contamination found at plaintiffs' residence was non-hazardous waste under RCRA [Resource Conservation and Recovery Act] does not mean they were not hazardous substances under CERCLA; to the contrary, laboratory analysis conclusively determined that the contamination found at plaintiffs' residence included seven (7) `hazardous substances' under CERCLA's statutory definition."));
Next, the hazardous substance must be "released" to impose CERCLA liability. CERCLA defines a "release" as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment." 42 U.S.C. § 9601(22). The term "release" is "liberally construed."
Defendants make a cursory argument that this case falls under the "fertilizer exception" because the Complaint states that the purpose of the transaction was to apply top soil and fertilizer. (Liere Mem. at 6-7; D&D Second Reply at 9-10.) CERCLA imposes strict liability for the release of hazardous substances but excludes "the normal application of fertilizer." 42 U.S.C. § 9601(22)(D). As a prior court has noted, "CERCLA itself does not define what a `normal' application of fertilizer is."
Here, Plaintiffs argue that "the normal application of fertilizer" permits only that, and appear to argue that "fertilizer" such as this, containing numerous hazardous substances, does not fall within the exception. (Pls. Second Opp. at 13.) The Court agrees. In
Plaintiffs generally allege that Defendants are liable as arrangers, generators, and transporters of hazardous substances. (Compl. ¶¶ 37-43;
Liere cursorily argues that he is not liable because Liere Farms, LLC was the owner and operator of Liere Farms at all relevant times. (Liere Mem. at 8-9.)
"[U]nder CERCLA, an operator is simply someone who directs the workings of, manages, or conducts the affairs of a facility. To sharpen the definition for purposes of CERCLA's concern with environmental contamination, an operator must manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations."
As the movant, it is Liere's burden to demonstrate there are no issues of fact as to his control over Liere Farms. Liere owned and operated Liere Farm individually and then formed a limited liability company in June 2004. He states that Liere Farms LLC "owned and operated the farm at all times alleged in the complaint." (Liere Aff. ¶ 6.) He has not indicated that he is an absent owner or that someone else exercises control and authority over the day-to-day operations of Liere Farm. To the contrary, he states that the formula for the topsoil is a "trade secret" that he will not "disclos[e] the complete formula" of and the topsoil has "richness, moisture content and jet black color." (Liere Aff. ¶¶ 14-16.) The natural inference is that Liere exercised a significant degree of control over the topsoil operation.
Liere also appears to argue that he did not know where the topsoil would end up, but "had been told." (Liere Aff. ¶¶ 22-27.) However, "the Second Circuit has recognized that `arranger liability can attach to parties that do not have active involvement regarding the timing, manner or location of disposal,' thus suggesting that knowledge of the precise disposal location is immaterial."
D&D, citing
"[T]he determination whether an entity is an arranger requires a fact-intensive inquiry that looks beyond the parties' characterization of the transaction as a `disposal' or a `sale' and seeks to discern whether the arrangement was one Congress intended to fall within the scope of CERCLA's strict-liability provisions."
Though a useful starting point,
Here, the Court finds that while it is a close decision, there are issues of fact as to D&D's knowledge and intent. Dondero has made sworn statements that he and his employee did not observe any foreign materials in the topsoil. (D&D 56.1 Counterstmt. ¶¶ 7, 16; Dondero Aff., D.E. 34-4, ¶¶ 9-10, 19.) Plaintiffs controvert these statements (Pls. Second 56.1 Resp., D.E. 37-3, at ¶¶ 7, 16) with a citation to Thomas Sheridan's affidavit, specifically, the portion where he states that "within a week of delivery [Plaintiffs] began to observe metal nails of various types [and other debris] in the topsoil." (Sheridan Aff. ¶ 15.) Given Plaintiffs' discovery of nails and debris
In addition to their CERCLA claims, Plaintiffs raise several state law claims against Defendants: (1) strict liability in tort; (2) fraud and deceit; (3) breach of contract; (4) unjust enrichment; and (5) negligence. No party has made more than a cursory mention of these state law claims in their papers. The Court thus DENIES summary judgment as to the state law claims.
As the Court is not granting summary judgment to Defendants on the CERCLA or state law claims, it need not consider their arguments regarding its jurisdiction over the state law claims.
The Complaint seeks $1 million in damages, jointly and severally, and a declaratory judgment that Defendants are liable for all future response costs "consistent with the National Contingency Plan." (Compl. ¶ 51, and at 17-18.) Liere seeks summary judgment on Plaintiffs' claim for future response costs, arguing that a predicate for future damages under CERCLA is success on a claim for present liability. D&D does not direct specific arguments at future costs.
CERLCA allows parties to recover "all costs of removal or remedial action incurred . . . not inconsistent with the national contingency plan." 42 U.S.C. § 9607(a)(4)(A). Parties may seek recovery of future response costs under CERCLA, which provides that "the court shall enter a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages." 42 U.S.C. § 9613(g)(2). "`[I]n providing for the recovery of response costs, Congress included language to ensure that a responsible party's liability,
Liere's request for summary judgment on this ground is thus premature. If he is found liable under CERCLA, this Court will be required to enter a declaratory judgment on liability for future costs. If Plaintiffs bring an action for future costs, Liere will have the opportunity to contest the alleged amount,
The Court will conduct a hearing with respect to Ms. Factor's motion to withdraw as counsel for D&D and Dondero (D.E. 36).
For the foregoing reasons, Liere's motion (D.E. 32) is DENIED; D&D's motion (D.E. 34) is DENIED; and counsel's motion to withdraw (D.E. 36) is GRANTED to the extent that the Court will conduct a hearing. Ms. Factor shall contact the Court to advise of her and her clients' availability so the Court can schedule the hearing. Plaintiffs, Liere, and their respective counsel need not be present for the hearing but may attend if they choose.
The parties are further directed to advise the Court within fourteen (14) days of the date of this Order whether they wish to schedule a settlement conference with Magistrate Judge Arlene R. Lindsay by filing a joint letter on ECF.
SO ORDERED.
At points in D&D's 56.1 Statement, it states that it "neither admit[s] nor den[ies] the statements in Liere's Rule 56.1 Statement." (
Further, Plaintiffs "controvert," without more, almost every paragraph of Liere's 56.1 Statement with a citation to Thomas Sheridan's affidavit, paragraphs 8-14 and 33-39, and to a copy of a text message exchange between Thomas Sheridan and Dondero. The Court will not exhaustively search these documents to ascertain why Plaintiffs believe they controvert Liere's statements.