Avx Corp. v. Corning Inc.

AVX CORPORATION, Plaintiff, v. CORNING INCORPORATED; COMPONENTS, INCORPORATED;CORNING INTERNATIONAL CORPORATION; CORNING SAS;CORNING LIMITED; and CORNING GMBH, Defendants.

NO. 5:15-CV-543-FL

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

April 25, 2018

ORDER

This matter is before the court on defendants' motion to stay (DE 117), to which plaintiff has responded in opposition and defendants have replied. In this posture the issues raised are ripe for ruling.¹ For the following reasons, defendants' motion to stay is denied.

BACKGROUND

Plaintiff commenced this action on October 15, 2015, asserting claims for cost recovery, damages, and injunctive relief, associated with alleged environmental contamination on its property, located at 3900 Electronics Drive in Raleigh, North Carolina, formerly owned by defendants or affiliated corporate entities (hereinafter "defendants"), between 1962 and 1987. Defendants sold the property to plaintiff in 1987, with contractual agreement to retain liability for existing violationsof environmental laws, including agreement to "effect all remedial measures required by law or regulation." (Compl. ¶¶ 14, 21). According to the original complaint, the State of North Carolina noticed an illegal "dry well" on the property in 1991, and sampling and environmental assessment reports since then have indicated "the presence of hazardous substances in the soil and groundwater on the Property, but . . . have never fully delineated the vertical or horizontal extent of the impacts." (Id. ¶¶ 22, 26). In its original complaint, plaintiff asserted the following claims:

1) CERCLA cost recovery claim, 42 U.S.C. § 9607(a)(1);

2) Breach of contract;

3) CERCLA declaratory relief claim, 42 U.S.C. § 9613(g)(2);

4) Federal law declaratory relief;

5) Negligence;

6) Negligence per se;

7) Nuisance;

8) Trespass;

9) Injunction;

10) State law declaratory relief.

Plaintiff filed a first amended complaint in June 2016, adding information about certain defendant affiliations, and adding a CERCLA claim for contribution, under 42 U.S.C. § 9613(f)(1). The court entered case management order on June 1, 2016, providing a January 27, 2017, deadline for completion of discovery and a February 28, 2017, deadline for dispositive motions, which deadlines since have been extended and continued upon motion of the parties, as described further herein.

The court held discovery conference on March 8, 2017, at which the court granted motion to withdraw by defendants' counsel, directed consent modification of deadlines, awarded costs and expenses to plaintiff for cancelled depositions, and directed plaintiff to amend complaint to correct certain references to defendants' names and affiliations.

Plaintiff filed a second amended complaint on April 20, 2017, which clarified the status of certain defendants' affiliations, and added several factual allegations about the extent of release of hazardous substances. (See, e.g., 2nd Am. Compl. ¶¶ 26, 27, 28, 43 (alleging hazard substances are present in the "surface water" on the property, in addition to soil and groundwater)).

Defendants filed answer and a corresponding motion to amend answer to the second amended complaint on May 22, 2017, seeking to add six counterclaims for CERCLA recovery and breach of contract, contending that plaintiff is responsible for additional environmental contamination on the property. In addition, defendants filed a motion to dismiss plaintiff's common law claims asserted in second amended complaint and to stay remaining claims.

On June 14, 2017, plaintiff moved to amend the complaint a third time, which motion defendants opposed.² Prior to decision on motions then pending, the court received notice of a multi-faceted discovery dispute on October 10, 2017. On October 11, 2017, the court granted defendants' consent motion to extend the discovery deadline from October 20, 2017, to extend through the week of October 23, 2017, to allow for completion of two depositions.

At telephonic conference held October 13, 2017, the court addressed certain remaining disputed discovery issues, as summarized in the clerk's minute entry on the face of the case docket:

At issue is [defendants'] Demand for Inspection of the AVX property and plaintiff's request to strike evidence obtained by [defendants'] in alleged violation of [defendants'] work plan. Court holds discussion regarding the sampling process of [defendants] and disputes arising therefrom. The court determines and counsel consents that the 6 CSIA³ samples at dispute, obtained by [defendants], will be voided. Counsel is [sic] to consult among each other and submit a revised work plan setting out with specificity of what type of samples will be obtained as well as what type of analysis will be run. Revised work plan shall be filed with the court by Friday 10/20/17. Should counsel desire to file under seal, counsel may do so without motion, if both sides consent.

(Minute entry, Oct. 13, 2017 (DE 104)). As further memorialized in memorandum opinion entered October 17, 2017, the court allowed plaintiff's motion to amend and directed plaintiff to file its third amended complaint and defendants to respond in the time prescribed by the Federal Rules of Civil Procedure. As a result of allowing the motion to amend, the court denied as moot defendants' then-pending motion to dismiss and motion to amend answer (DE 67, 70). The court noted that "the deadline for dispositive motions would be held in abeyance pending further proceedings following filing of amended complaint." (Mem. Op. (DE 106) at 4).

"The court further directed that within 15 days of when the pleadings in this matter finally are settled, either party may file a motion seeking time for limited additional discovery, proposing the time period for such discovery, the issues on which discovery is sought, with indication of the position of the other party, accompanied by proposed order if consented." (Id.).

Plaintiff filed its third amended complaint as directed on October 13, 2017. Therein, plaintiff adds claims for: 1) negligent misrepresentation, 2) unfair and deceptive trade practices, and 3) punitive damages. (Third Am. Compl. (DE 105) claims 12-14). In support of the added claims, plaintiff includes allegations, among others, that defendants "falsified" responses to a programeligibility questionnaire submitted to the state to gain entry into a state Registered Environmental Consultant (REC) program in November 2013 (hereinafter the "2013 Questionnaire Response"). (Third Am. Compl. ¶¶ 75-78, 102, 182.D). Plaintiff also includes allegations that defendants "kept secret" from the state and plaintiff a "Data Gap Report" in 2012 that contained recommendations for additional sampling and analysis (hereinafter the "2012 Data Gap Report") (Id. ¶¶ 73-74, 182.F, 189, 190).

On October 20, 2017, the parties filed a consent motion (as corrected on October 23, 2017) for extension of time to January 26, 2018, to conduct additional disputed discovery and to meet and confer regarding the same. On October 25, 2017, the parties filed a consent motion to postpone previously extended deposition deadline. Three times since, by consent, discovery deadlines have been extended, most recently, such that: (1) the parties are allowed to seek the court's assistance regarding outstanding discovery disputes through and including April 30, 2018; and (2) the parties are allowed to take depositions of parties' respective experts (Mark Davidson, David Duncklee, Jay Bennett, Paul Philp Richard Royer and Thomas Hutto) and the two lay witnesses, Dennis Oldland and Larry Blue by May 31, 2018.

In the meantime, the parties briefed the instant motion to stay filed October 27, 2017, as well as the pending motions to dismiss, submitted to the court on March 5, 2018, as corrected March 26, 2018. In the instant motion, defendants seek to stay the case in its entirety through October 2018, based upon the doctrine of primary jurisdiction and the court's inherent powers to stay proceedings. Defendants seek such stay to allow for their anticipated completion of a remedial investigation plan (hereinafter, the "remedial investigation plan"), commenced pursuant to a October 2015 agreementwith the North Carolina Department of Environmental Quality ("NCDEQ") (hereinafter, the "2015 NCDEQ Agreement").

Under the terms of the 2015 NCDEQ Agreement, defendant Corning Incorporated agreed to submit to NCDEQ the remedial remedial investigation plan, certified by its environmental consultant AMEC Foster Wheeler ("AMEC"), within three years, or by October 2018. (2015 NCDEQ Agreement (DE 118-12) at 4, Sec. III.B.).⁴ Within two years thereafter, or by October 2020, defendant Corning Incorporated agreed to "initiate groundwater remedial action" in compliance with state environmental regulations. (Id. Sec. III.C.). Within eight years of execution of the agreement, or by October 2023, defendant Corning Incorporated agreed to complete remaining remedial actions.

In support of the motion to stay, defendants rely upon the following exhibits, in addition to the 2015 NCDEQ Agreement: 1) purchase and sale agreements executed in 1987 between the parties, as referenced in the complaint; 2) a 2016 remedial investigation work plan; 3) expert reports disclosed by defendants and email correspondence regarding the same; 4) declarations of Blake Manuel and Christy Hannan, engineers previously employed by Corning Incorporated, as well as a declaration of James A. Bennett ("Bennett"), a project manager employed by AMEC, with exhibits including the 2015 NCDEQ Agreement and the 2012 Data Gap Report.

On December 1, 2017, defendants filed a notice of subsequent facts, attaching a November 9, 2017, "Compliance Order with Administrative Penalties for Violations of REC Program Rules" to AMEC (hereinafter the "AMEC Compliance Order"). (DE 121-1).

In opposition to the instant motion, plaintiff relies upon twenty-four exhibits,...