State v. Alfa Laval Inc.

213 A.D.3d 1171

185 N.Y.S.3d 326

STATE of New York, Appellant,

v.ALFA LAVAL INC., Respondent.

534091

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: January 11, 2023

Decided and Entered: February 23, 2023

Letitia James, Attorney General, Albany (Owen Demuth of counsel), for appellant.

Hunton Andrews Kurth LLP, Richmond, Virginia (Alexandra B. Cunningham of counsel), for respondent.

Before: Clark, J.P., Pritzker, Reynolds Fitzgerald, Ceresia and McShan, JJ.

MEMORANDUM AND ORDER

Reynolds Fitzgerald, J.

Appeal from an order of the Supreme Court (Peter A. Lynch, J.), entered August 23, 2021 in Albany County, which granted defendant's motion to dismiss the complaint.

Defendant owned property in the City of Poughkeepsie, Dutchess County from 1887 through 1965 and operated a petroleum product storage and dispensing system and manufacturing plant during said time period. In 1968, the City became the owner of the property and permitted dumping thereon. In 1999, the City identified contamination on the property, including petroleum, and sought to remediate the property. Subsequently, the City sought and obtained funding from plaintiff for an environmental restoration project – a program that provides funding to municipalities to remediate "brownfield" properties to develop the property for commercial and recreational uses (see ECL art 56, title 5). From 2003 through 2016, the City and plaintiff worked together to remediate the property, with plaintiff expending over $9 million in remediation funds.

In 2021, plaintiff commenced this action, pursuant to Navigation Law article 12 (known as the Oil Spill Act), alleging that defendant was a petroleum discharger within the meaning of the act, and, as such, strictly liable for remediation costs. Prior to joining issue, defendant moved to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7), alleging that as plaintiff utilized Environmental Restoration Program funds (see ECL 56–0501 ) and not funds from the "Oil Spill Fund" (see Navigation Law § 179 ) to rehabilitate the property, it was barred from seeking recovery under the Navigation Law. Supreme Court granted defendant's motion, prompting this appeal.¹

"The Legislature enacted the Oil Spill Act ... to prevent the unregulated discharge of petroleum and to accomplish speedy, effective cleanups when spills occur" ( State of New York v. Getty Petroleum Corp., 89 A.D.3d 262, 264, 933 N.Y.S.2d 114 [3d Dept. 2011] [internal quotation marks and citation omitted]). The act does this by empowering the state "to control the transfer and storage of petroleum and to provide liability for damage sustained within this state as a result of the discharge of said petroleum" ( Navigation Law § 170 ; see Navigation Law § 171 ). Under the Oil Spill Act, any person who has discharged petroleum is strictly liable for cleanup and remediation costs (see Navigation Law § 181[1] ; State of New York v. C.J. Burth Servs., Inc., 79 A.D.3d 1298, 1301, 915 N.Y.S.2d 174 [3d Dept. 2010], lv dismissed 16 N.Y.3d 796, 919 N.Y.S.2d 510, 944 N.E.2d 1150 [2011] ). A municipality that receives funds for an environmental restoration project does so "as agent of the state with respect to the incurrence of eligible costs" ( ECL 56–0507[1] ). "The state shall make all reasonable efforts to recover the full amount of any state assistance provided under this title through litigation brought under this section or other statute or under the common law" ( ECL 56–0507[2] ).

"On a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a claim, this Court must afford the complaint a liberal construction, accept the facts as alleged in the pleading as true, confer on the nonmoving party the benefit of every possible inference and determine whether the facts as alleged fit within any cognizable legal theory" ( Hilgreen v. Pollard Excavating, Inc., 210 A.D.3d 1344, 1346, 179 N.Y.S.3d 405 [3d Dept. 2022] [internal quotation marks, brackets and citations omitted]; see County of Saratoga v. Delaware Eng'g, D.P.C., 189 A.D.3d 1926, 1927, 139 N.Y.S.3d 381 [3d Dept. 2020] ).

Supreme Court erred in granting respondent's motion to dismiss the complaint. Nothing in the Navigation Law prohibits plaintiff from seeking indemnification for funds expended from sources other than the Oil Spill Fund. Moreover, the Environmental Conservation Law requires the state to seek recovery of the funds under any statute (see ECL 56–0507[2] ). "When dealing with matters of statutory interpretation, the primary consideration is to discern and give effect to the Legislature's intention. In that regard, the statutory text is the clearest indicator of legislative intent and courts should construe unambiguous language to give effect to its plain meaning" ( Matter of Quigley v. Village of E. Aurora, 193 A.D.3d 207, 212, 142 N.Y.S.3d 636 [3d Dept. 2021] [internal quotation marks, brackets and citations omitted], lv denied 37 N.Y.3d 908, 2021 WL 4164463 [2021] ; see Matter of Level 3 Communications, LLC v. Clinton County, 144 A.D.3d 115, 117–118, 40 N.Y.S.3d 227 [3d Dept. 2016], lv denied 29 N.Y.3d 918, 2017 WL 4015616 [2017] ).

The Legislature clearly set forth its intention by declaring "that the discharge of petroleum within ... the jurisdiction of this state constitutes a threat to the economy and environment"; therefore, "[t]he [L]egislature intends by the passage of this article to exercise the powers of this state to control the transfer and storage of petroleum and to provide liability for damage sustained within this state as a result of the discharge of said petroleum" ( Navigation Law § 170 ). The Legislature proclaimed the article's purpose as "to ensure a clean environment and healthy economy for the state by preventing the unregulated discharge of petroleum ..., and by providing for liability for damage sustained within the state as a result of such discharges" ( Navigation Law § 171 ).

The Legislature carried out the intent and purpose of the statute by broadly defining "[c]leanup and removal costs" as "all costs associated with the cleanup and removal of a discharge ... incurred by the state or its political subdivisions or their agents or any person with approval of the department" ( Navigation Law § 172[5] [emphasis added]), and "[p]erson" to include, among others, "the state of New York and any of its political subdivisions or agents" ( Navigation Law § 172[14] ). Additionally, the Legislature imposed strict liability against "[a]ny person who has discharged petroleum ... without regard to fault, for all cleanup and removal costs and all direct and indirect damages, no matter by whom sustained" ( Navigation Law § 181[1] [emphasis added]). The language of the statute does not limit recovery solely to the Oil Spill Fund. Rather, the fund simply serves as a possible means to effectuate the statute. "[B]arring plaintiff from seeking to hold defendant strictly liable for the [remediation] expenditures would thwart the plain language of Navigation Law § 181, as well as the express purposes of Navigation Law article 12 (see Navigation Law § 171 )" and ECL 56–0507(1) ( State of New York v. Ronney, 163 A.D.3d 1315, 1317–1318, 81 N.Y.S.3d 647 [3d Dept. 2018] ).

Nor, contrary to Supreme Court's ruling, is notice required to be given to defendant prior to cleanup. Furthermore, as the investigative and remedial reports submitted here are not "documentary evidence" within the meaning of CPLR 3211(a)(1), Supreme Court should not have relied upon them to dismiss the complaint (see Shanghai Yongrun Inv. Mgt. Co., Ltd v. Maodong Xu, 203 A.D.3d 495, 495–496, 160 N.Y.S.3d 874 [1st Dept. 2022] ; Fontanetta v. John Doe 1, 73 A.D.3d 78, 86, 898 N.Y.S.2d 569 [2d Dept. 2010] ; Webster v. State of New York, 2003 N.Y. Slip Op. 50590[U], *4–5, 2003 WL 728780 [Ct. Cl. 2003] ). Lastly, the presence of other contaminants does not preclude plaintiff's action under this section, as this relates to...