Honeywell Int'l Inc. v. Buckeye Partners, L.P.

HONEYWELL INTERNATIONAL INC., Plaintiff, v. BUCKEYE PARTNERS, L.P.; BUCKEYE GP, LLC;BUCKEYE PIPE LINE COMPANY, L.P.;BUCKEYE PIPE LINE HOLDINGS, L.P.; Defendants-Third-Party Plaintiffs,YAD ASSOCIATES, INC.; PYRAMID COMPANY OF ONONDAGA;ROBERT CONGEL; AND BRUCE A. KENAN, First Third-Party Defendants.

5:18-CV-646 (FJS/ML)

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK

March 31, 2021

APPEARANCES

OF COUNSEL

ARNOLD & PORTER KAYE

SCHOLER LLP

601 Massachusetts Avenue N.W.

Washington, D.C. 20001

Attorneys for Plaintiff

BRIAN D. ISRAEL, ESQ.

LAUREN COLE DANIEL, ESQ.

HANCOCK ESTABROOK, LLP

1800 AXA Tower I

100 Madison Street

Syracuse, New York 13202

Attorneys for Defendants and

Third-Party Plaintiffs

JOHN G. POWERS, ESQ.

WENDY ANN MARSH, ESQ.

JAMES J. O'SHEA, ESQ.

THE WLADIS LAW FIRM, PC

6312 Fly Road

East Syracuse, New York 13057

Attorneys for First Third-Party Defendants

KEVIN C. MURPHY, ESQ.

TIMOTHY J. LAMBRECHT, ESQ.

SCULLIN, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Pending before the Court are Magistrate Judge Lovric's ("MJ Lovric") April 24, 2020 Order and Report-Recommendation ("R&R"), see Dkt. No. 201, and Plaintiff's and First Third-Party Defendants' objections thereto. See Dkt. Nos. 201, 205, 206.

II. BACKGROUND

On June 1, 2018, Plaintiff Honeywell International Inc. ("Plaintiff" or "Honeywell") filed a complaint against Defendants Buckeye Partners, L.P.; Buckeye GP LLC; Buckeye Pipe Line Company, L.P.; and Buckeye Pipe Line Holdings, L.P. (collectively referred to as "Defendants" or "Buckeye"). See generally Dkt. No. 1. In its complaint, Plaintiff asserted the following six causes of action claiming that (1) Buckeye was liable under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") § 107(a), 42 U.S.C. § 9607(a) for the necessary costs of response that Plaintiff incurred by investigating and remediating SYW-12; (2) Buckeye was liable under CERCLA §§ 107(a), 113(f), 42 U.S.C. §§ 9607(a), 9613(f) for an equitable share of the necessary costs of response that Plaintiff incurred, consistent with the National Contingency Plan ("NCP"), by investigating and remediating the Onondaga Lake Bottom Subsite and investigating SYW-12; (3) Buckeye was liable under CERCLA §§ 107, 113(f) for an equitable share of the costs Plaintiff incurred, pursuant to the 2018 NRD Consent Decree, for injury to, destruction of, or loss of natural resources resulting from hazardous substances being released at or from its facilities at the Onondaga Lake Superfund Site; (4) Buckeye was liable in contribution to Plaintiff under the Oil Pollution Act of 1990 ("OPA") §§ 1009, 1017, 33 U.S.C. §§ 2709, 2717 for (a) oil-related removal costs that were incurredconsistent with, and not inconsistent with, the NCP at both the Onondaga Lake Bottom Subsite and SYW-12, and (b) damages for injury to, or economic losses resulting from destruction of, loss of, and/or loss of use of, natural resources; (5) Buckeye was liable to Plaintiff (a) under New York Navigation Law for contribution of petroleum discharge cleanup and removal costs that Plaintiff has incurred, and will continue to incur, with regard to investigating and remediating the Onondaga Lake Bottom Subsite and investigating SYW-12, and (b) for contribution of natural resource costs incurred pursuant to the 2018 NRD Consent Decree; and (6) Buckeye was liable under New York Civil Practice Law and Rules ("NYCPLR") § 1401 and New York common law for costs that Plaintiff has incurred, and will continue to incur, in excess of its equitable share under the 2007 Consent Decree, the 2018 Response Costs Consent Decree, the 2018 NRD Consent Decree, and the SYW-12 investigation as a result of contamination at Onondaga Lake. See id. at ¶¶ 263-327. Accordingly, Plaintiff seeks, among other things, declaratory judgment and contribution by Defendants of their equitable share of response, removal and/or cleanup costs and natural resource development costs that Plaintiff has incurred or will incur. See id. at ¶¶ 328-32.

On February 25, 2019, Defendants filed their First Third-Party Complaint against First Third-Party Defendants YAD Associates, Inc. ("YAD"), Pyramid Company of Onondaga ("Pyramid"), Robert J. Congel, and Bruce A. Kenan (collectively "FTP Defendants"). See Dkt. No. 38. In their First Third-Party Complaint, Defendants assert the following three causes of action: (1) a declaratory judgment claim that FTP Defendants have a duty to indemnify and defend Defendants relative to the Sale Agreement they entered with YAD (the "Agreement"); (2) a declaratory judgment claim that FTP Defendants have a duty to indemnify and defend Defendants relative to the Guaranty and Surety Agreement that Pyramid executed (the"Guaranty"); and (3) a breach of contract claim based on FTP Defendants' breach of their duty to defend Defendants. See id. at ¶¶ 41-58. Accordingly, Defendants seek, among other things, a declaratory judgment and a money judgment against FTP Defendants jointly and severally, in the amount of the attorney's fees, litigation costs, and court costs that Defendants previously expended in defense of Plaintiff's action. See id. at pp. 12-14.

The Court referred several motions to MJ Lovric for a report-recommendation. In his April 24, 2020 Order and Report-Recommendation, MJ Lovric considered the following motions: (1) Defendants' motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure and first motion to consolidate pursuant to Rule 42 of the Federal Rules of Civil Procedure, see Dkt. No. 25; (2) FTP Defendants' motion to dismiss Defendants' First Third-Party Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, see Dkt. No. 55; and (3) Defendants' second motion to consolidate pursuant to Rule 42 of the Federal Rules of Civil Procedure, see Dkt. No. 107.

After reviewing the parties' arguments, MJ Lovric ruled as follows: (1) granted Defendants' first motion to consolidate this action with Honeywell Int'l Inc. v. Sunoco (R&M), LLC, No. 5:18-CV-1176 (FJS/ML) ("Honeywell II"); (2) granted Defendants' second motion to consolidate this action with Honeywell Int'l Inc. v. Citgo Petroleum Corp., No. 5:19-CV-1219 (FJS/ML) ("Honeywell III"); (3) denied without prejudice FTP Defendants' request to stay further proceedings against them; (4) recommended that this Court grant in part and deny in part Defendants' motion for judgment on the pleadings, specifically recommending that this Court dismiss Plaintiff's OPA and common law contribution claims and allow Plaintiff's claims pursuant to CERCLA and New York Navigation Law to go forward; and (5) recommended thatthis Court deny FTP Defendants' motion to dismiss Defendants' First Third-Party Complaint. See Dkt. No. 201 at 45-46.

Plaintiff filed objections to MJ Lovric's recommendation that the Court grant Defendants' motion for judgment on the pleadings with regard to its common law contribution claims. See generally Dkt. No. 206. FTP Defendants filed objections to MJ Lovric's recommendation that the Court deny their motion to dismiss Defendants' First Third-Party Complaint. See generally Dkt. No. 205. None of the parties filed objections to MJ Lovric's recommendations that the Court grant Defendants' motion for judgment on the pleadings as to Plaintiff's OPA claim and deny that motion as to (1) Plaintiff's CERCLA claims, (2) Plaintiff's New York Navigation Law claim, and (3) to the extent that Defendants "adopt" and join Sunoco's arguments from Honeywell II.¹ The Court will address each of the objections in turn.

III. DISCUSSION

A. Standard of review

"When a court reviews a magistrate judge's recommendations, its review is de novo as to those recommendations to which a party objects . . . and for clear error or manifest injustice as to those recommendations to which a party does not object or makes only conclusory or general objections. . . ." Widi v. Hudson, No. 9:16-CV-1042 (FJS/DJS), 2019 WL 3491250, *1 (N.D.N.Y. Aug 1, 2019) (internal citations omitted). Likewise, the court reviews for clear error objections that merely reiterate the same arguments that were presented to the magistrate judge. See Praileau v. Cnty. of Schenectady, No. 7:09-CV-0924 (TJM/GHL), 2010 WL 3761902, *1 (N.D.N.Y. Sept. 20, 2010) (citation and footnote omitted). "After conducting its review, 'theCourt may "accept, reject, or modify, in whole or in part, the . . . recommendations made by the magistrate judge."'" Widi, 2019 WL 3491250, at *1 (citation omitted).

B. Recommendations to which the parties have filed no objections

As noted, the parties filed no objections to MJ Lovric's recommendations that the Court grant Defendants' motion for judgment on the pleadings as to Plaintiffs OPA claim and deny that motion (1) as to Plaintiff's CERCLA claims, (2) as to Plaintiff's New York Navigation Law claim, and (3) to the extent that Defendants "adopt" and join Sunoco's arguments from Honeywell II.

The Court has reviewed these recommendations for clear error and manifest injustice and finding none, the Court accepts these recommendations for the reasons stated in MJ Lovric's April 24, 2020 Order and Report-Recommendation.

C. Defendants' motion for judgment on the pleadings

1. Plaintiff's objections to MJ Lovric's recommendations

Plaintiff's only objection is to MJ Lovric's recommendation that this Court grant Defendants' motion for judgment on the pleadings and dismiss its common law contribution claim. See Dkt. No. 206 at 3-5. Plaintiff argues that the Second Circuit has held that CERCLA does not expressly preempt applicable state law, nor is CERCLA such a comprehensive scheme that state law cannot supplement it. See id. at 3 (quoting Niagara Mohawk Power Corp., 596 F.3d at 138). As such, Plaintiff argues that conflict preemption is the only way that CERCLA can preempt its state law contribution claims, which is not the case as to its claims for costs that are not...