United States v. Lawrence Aviation Indus., Inc.

UNITED STATES OF AMERICA, Plaintiff v. LAWRENCE AVIATION INDUSTRIES, INC., GERALD COHEN,and ONE HUNDRED TWENTY-FIVE ACRES OF LAND, MORE OR LESS,LOCATED CONTINGUOUSLY OFF SHEEP PASTURE ROAD,PORT JEFFERSON STATION, NEW YORK, Defendants.

06-CV-4818 (JMA)(AYS)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 19, 2019

For Online Publication Only

MEMORANDUM & ORDER

AZRACK, United States District Judge:

I. INTRODUCTION

The United States of America ("United States" or the "Government") commenced this action on September 6, 2006 asserting five claims for relief pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §9601 et seq. The United States seeks: in Claims 1 and 2, recovery of response costs incurred by the Environmental Protection Agency ("EPA), in personam against defendant Lawrence Aviation Industries, Inc. ("LAI") and defendant Gerald Cohen ("Cohen"), respectively, pursuant to CERCLA § 9607(a); in Claim 3, recovery of the costs incurred by the EPA in rem against defendant One Hundred Twenty-Five Acres of Land pursuant to CERCLA § 9607(l), and; in Claims 4 and 5, the imposition of civil penalties for failure to respond to a request for information against LAI and Cohen, respectively, pursuant to CERCLA § 9604(e). Complaint, Docket Entry ("DE") [1].

Subsequent to the filing of the complaint, eleven in rem claimants (collectively, the In Rem Claimants") have appeared and filed claims of interest in defendant One Hundred Twenty-Five Acres of Land: New York State; Long Island Lighting Company d/b/a LIPA and KeySpan Gas East Corporation d/b/a KeySpan Energy Delivery Long Island (collectively "KeySpan"); the County of Suffolk; Waste Management New England Environmental Transport, Inc.; Maryhaven Center of Hope, Inc.; St. Charles Corporation; North Shore Jewish Center; Merrill Lynch Business Financial Services Inc.; Lawrence Aviation Industries 401(k) Plan; Mary Hines; and Howard Hudson.¹ The In Rem Claimants assert an interest in the defendant property as a means to enforce various asserted liens against LAI and/or Cohen and seek to establish the priority of their liens against each other and against any liens of the United States.

II. PROCEDURAL HISTORY & TRIAL PROCEEDINGS

United States Senior District Judge Leonard D. Wexler presided over this matter during the months directly preceding the trial and at trial.² The Government moved to bifurcate the trial to hear claims 1, 2, 4, and 5 first, and hear claim 3 only if the Government prevailed on claim 1 and/or 2. That motion, which was unopposed, was granted by Judge Wexler on April 25, 2017. At a pretrial conference held on September 6, 2017, Judge Wexler vacated the order granting bifurcation, ruling that "all issues will be presented during the trial." Minute Entry, DE [181]. A bench trial was held on February 1-2 and 5, 2018 before Judge Wexler. The Government addressed its entitlement to liens in relation to Claim 3, but no testimony or other submissions was received from the In Rem Claimants.

At the trial, six witnesses testified for the United States and over 60 exhibits totaling in excess of 11,000 pages of documents, reports, and photographs were introduced into evidence by the Government. Defendants stipulated to the admission of these exhibits. Cohen was the solewitness to testify on Defendants' behalf, and no documentary evidence was submitted by Defendants.

Judge Wexler passed away during preparation of post-trial briefing, and the case was re-assigned to this Court on April 5, 2018. Pursuant to Rule 63, the parties were consulted regarding whether either party wished to recall any witnesses. During a telephone conference held on July 10, 2018, the parties agreed to rely on the trial record without further testimony. Upon review of the record, I certify familiarity with it, and determine that the case may be completed without prejudice to the parties. Accordingly, the purpose of this decision is to provide my Findings of Fact and Conclusions of Law as required by Federal Rule of Civil Procedure 52.

III. FINDINGS OF FACT

The evidence admitted at the trial is largely undisputed.³ The EPA's evidence, both testimonial and documentary, is comprehensive and thorough. Its witnesses are well-qualified and knowledgeable, and the voluminous exhibits were admitted without objection. Defendants' evidence was presented only through the testimony of Cohen without any documentary support. His background does not demonstrate any qualification to speak generally to environmental hazards or cleanup efforts, and thus he was constrained to testifying only about the events that occurred at LAI. On that subject, his limited attempts to contradict liability were based on his own views and beliefs, and were unsupported by any expert opinions. In addition, the Defendants' response, DE [201] ("Defs' Resp."), to the Government's proposed Findings of Fact and Conclusions of Law, DE [195], is limited to a few discrete issues. The Findings of Fact set forth below are undisputed unless otherwise indicated.

A. The Site

Cohen is the President and CEO of LAI, and since his father's death in 1982, is LAI's sole shareholder. The case implicates several lots of real property owned by LAI and/or Cohen off Sheep Pasture Road in Port Jefferson Station, New York. The parties have stipulated to the ownership of the lots. LAI is the owner of real property shown on the Suffolk County tax map as Section 159, Block 2, Lot 19 ("Lot 19"), Section 136, Block 2, Lot 22 ( "Lot 22"), and Section 159, Block 1, Lot 26 ( "Lot 26"). LAI acquired Lots 19 and 22 on April 30, 1959, and acquired Lot 26 on July 27, 1967. Cohen is the owner of real property shown on the Suffolk County tax map as Section 180, Block 4, Lot 1 ("Lot 1"), Section 180, Block 4, Lot 2 ("Lot 2"), and Section 159, Block 2, Lot 20 ("Lot 20"). Lot 1 was previously owned by LAI and was acquired by Cohen on October 2, 1989. Cohen acquired Lots 2 and 20 on January 23, 1984 from his mother, Rita Cohen. LAI's operations were conducted on Lots 1, 2, 19, 20, 22, and 26, which are contiguous (collectively, the "LAI Facility"). Defendants LAI and Cohen conducted titanium sheet metal manufacturing operations at the LAI Facility, mostly for the aeronautics industry, from 1959 to approximately 2004. GX 1(k) at US 00021358-59. In 2008, Cohen, individually and on behalf of LAI, pled guilty to storing hazardous waste without a permit at the LAI Facility. See United States v. Cohen, 06-CR-0596, DE [46]. Cohen was sentenced to a term of imprisonment and was ordered to pay restitution, jointly and severally with LAI, in the amount of $105,816.00. Id. DE [68].

The Superfund Site ("LAI Site"), which was placed on the National Priorities List ("NPL") effective March 6, 2000, includes the LAI Facility as well as the areas where hazardous substances and/or pollutants and contaminants released at the LAI Facility have come to be located. See GX 58; GX 59. The LAI Site includes areas affected by a contaminated groundwater plume movingdowngradient and north of the LAI Facility towards Old Mill Pond, Old Mill Creek, and Port Jefferson Harbor. GX 1(k) at US 00021367. Among the hazardous substances found at the LAI Site are trichloroethylene ("TCE") and polychlorinated biphenyls ("PCBs"), both known carcinogens. Id. at US 00021372.

The LAI Site sits above the Upper Glacial Aquifer, the Magothy Aquifer, and the Lloyd Aquifer. GX 1(k) at US 00021364. These three aquifers are part of the Nassau/Suffolk County Aquifer that supplies Long Island with most of its drinking water. The groundwater in the vicinity of the LAI Site is not currently used as a drinking water supply because it is contaminated by TCE. Tr. 67:2-12.

B. Investigative and Enforcement Activities

Investigative and enforcement activities at the LAI Site began in the 1970s and have continued for four decades. Various agencies of both the state and federal government have been involved in those efforts.

1. Pre-EPA Activities at the LAI Site

The Suffolk County Department of Health Services ("SCDHS") and the New York State Department of Environmental Conservation ("NYSDEC"), were the first agencies involved with the LAI Site. Plaintiff offered the testimony of James Pim ("Pim"), Chief Engineer, Suffolk County Department of Health, now retired, to detail the involvement of Suffolk County and New York State at the LAI Site. Pim, who holds Bachelor's and Master's degrees in Civil Engineering, testified about his interactions with LAI and Cohen and discussed contemporaneous records that were admitted into evidence. SCDHS acted as field agents for the NYSDEC by conducting inspections, informing people of the state requirements, and trying to secure voluntary compliance with its recommendations. The SCDHS did not have enforcement authority, and in cases of non-compliance, it would submit a case report to NYSDEC for it to take action.

The earliest documented contact between SCDHS and LAI is a letter dated January 4, 1971 directed to the attention of Cohen and detailing necessary changes to an environmental analysis report submitted by LAI. See GX 37. Cohen, as LAI's General Manager, responded to that letter. See GX 38. Pim testified that he began interacting with LAI on Suffolk County's behalf in 1972. He met with Cohen to discuss potential discharge violations at the LAI Facility. Pim wrote to Cohen on January 16, 1973 to discuss LAI's proposed pollution abatement program, noting his disappointment "at the leisurely approach that you seem to be taking in this matter." GX 39. Pim requested that LAI stop discharging liquid waste to the ground by February 15, 1973. Cohen also signed waste disposal permits on behalf of LAI in March 1973. See GX 40.

Suffolk County continued to conduct inspections including a series of aerial photographs taken by a police photographer from a police helicopter in May 1980. Pim confirmed that the pictures accurately...