The Second Circuit recently addressed the complex timeliness and statute of limitations issues arising under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) in its July 23, 2020 decision in MPM Silicones, LLC v. Union Carbide Corporation.[1]
The dispute arose because the defendant (Union Carbide Corporation), a former owner/operator of the subject chemical plant, did not disclose that it used polychlorinated biphenyl (“PCB”) compounds at the property, nor that it buried certain PCB waste around the property. Plaintiff (MPM Silicone, LLC), the current owner/operator, discovered the contamination during routine facility upgrades and brought this action to: (1) recover $374,540.25 in past cleanup costs; and, (2) obtain a declaratory judgment that defendant would be liable for all future cleanup costs. Defendant cross-claimed for plaintiff to take on a portion of the liability.
Initial Decision by the Northern District of New York (“NDNY”)
CERCLA differentiates between cleanups that constitute “removal” activity, which includes urgent and possibly temporary measures taken to handle immediate health hazards, and cleanups that constitute “remedial” activities, which are generally less urgent and aimed at a comprehensive, permanent remedy to an issue.[2] The statutes of limitations for cost recovery are different for these two categories: three years after the completion of the removal activities to file an action; six years after the commencement of remedial activities to sue for those costs. The NDNY found that, as to remedial costs, there was an issue of timeliness. Defendant moved for summary judgment and argued that the matter was time barred. Defendant asserted that the controversy was subject to the cost recovery statute of limitations for remedial costs, and that the six year clock was triggered by some remedial measures taken by defendant in the early 1990s to address other contamination on the property. The NDNY agreed, consistent with Second Circuit case law, stating that there can only be one remedial action at any given site. Thus, the NDNY determined that the statute of limitations ran well before this action was filed in 2011.
As to removal costs, however, the NDNY did not grant summary judgment, and held that while the defendant was liable to plaintiff for costs, it was not liable in full. After a bench trial, the NDNY determined that 95% of future removal costs would be assigned to the defendant, and 5% to plaintiff, given that the defendant was the only entity that brought in and benefited from the PCBs that have contaminated the site. The liability assessment to plaintiff was predicated on the fact that while it did not have notice of the contamination, it did fail to timely alert regulators. Each party appealed.
The Second Circuit’s Decision
The Second Circuit agreed with the NDNY that the prior site activities were remedial in nature, as they were not an...
