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Case Summary: Jaeckle Prevails in Federal Appeal of Superfund Case

Release Date: January 11, 2012

To read the entire case summary, please click here.

For more information regarding the case please contact Dennis P. Harkawik at 716.843.3848 or dharkawik@jaeckle.com.

Jaeckle Fleischmann's environmental practice group recently won a significant victory on behalf of its client, Solvent Chemical Company, Inc. ("Solvent") when it obtained a Decision and a separate Summary Order from the United States Court of Appeals for the Second Circuit in New York v. Solvent Chemical Company, Inc., et al. (Docket No. 10-2026-cv (L)) (December 19, 2011) in which Solvent prevailed on both issues it raised on appeal from a Judgment from the Western District of New York issued in 2010. In the Decision, the Circuit Court panel reversed the Trial Court's ruling that Solvent was not entitled to a declaratory judgment enabling it to recover a portion of its future costs related to its ongoing remediation of the Solvent Chemical site in Niagara Falls, New York. In the Summary Order, the Circuit Court panel also adopted Solvent's position and reversed the Trial Court's allocation of approximately one-half of Solvent's remedial costs (i.e. the so-called "Hot Spot" costs), remanding the case back to the Western District for a reallocation. In the Summary Order, the Circuit Court also rejected all of the arguments raised by the Appellants, DuPont de Nemours & Company ("DuPont") and Olin Corporation ("Olin"). In combination, the award of future costs related to Solvent's ongoing remedial operations (which are expected to continue indefinitely) and the reallocation of almost 50% of its remediation costs are likely worth millions of additional dollars to Solvent.

Case Summary

Jaeckle Fleischmann & Mugel, LLP has represented Solvent during the course of the litigation since 1996, when it negotiated a consent decree with the New York State Department of Environmental Conservation ("DEC") requiring implementation of an environmental cleanup at Solvent's former chemical facility in Niagara Falls, New York ("Site"). Entry of the consent decree with DEC had the effect of settling litigation commenced against Solvent and its parent by the State of New York pursuant to the Comprehensive Environmental Response, Compensation & Liability Act ("CERCLA"), while ensuring that Solvent could pursue other responsible parties for a portion of its cost incurred in implementing the long-term multi-million dollar clean up of the Site.

Before and during the pendency of the cleanup, Solvent commenced third-party litigation against over sixty parties who had contributed to Site contamination. The third-party defendants were former owners, operators, waste generators and arrangers who sent hazardous substances to the Site. In addition, Solvent pursued DuPont and Olin in the litigation for contamination migrating from their adjacent facilities which Solvent found itself unavoidably collecting and treating in connection with implementing the remedy for the Site. Solvent eventually negotiated settlements with all parties except DuPont and Olin, recovering over $2.6 million in the process. Solvent then tried the case against DuPont and Olin before United States District Court Judge John T. Curtin in a six-week trial which took place in 2007.

In its January 2010 Decision, the Trial Court found DuPont and Olin to be liable parties under CERCLA and allocated to DuPont and Olin approximately 28% of Solvent's past costs (which at trial were defined as remediation costs incurred prior to June 30, 2007), plus prejudgment interest, for a total judgment of $3.2 million. While undeniably significant, the Trial Court also dismissed Solvent's claim for a declaratory judgment for future costs, concluding that such judgment would be "premature". Because Solvent will continue to pump and treat groundwater indefinitely, its future costs will run into millions of additional dollars. Also, despite expressly adopting Solvent's proposed allocation methodology, the Trial Court allocated the portion of Solvent's cleanup costs related to a so-called "Hot Spot" located on Olin's property in a manner that Solvent argued was inconsistent with that methodology as well as the Court's own findings of fact, leaving Solvent responsible for a majority of the Hot Spot costs.

Consequently, Solvent appealed (1) the Trial Court's refusal to grant Solvent any recovery of future costs, and (2) the Hot Spot allocation. DuPont and Olin also appealed a number of issues including legal, evidentiary and allocation matters. DuPont in particular raised a number of legal issues that it more...

This Jaeckle Environmental Alert, prepared by the attorneys at Jaeckle Fleischmann & Mugel, LLP, is intended for general information purposes only and should not be considered legal advice or an opinion on specific facts. For more information on these issues, contact one of the attorneys listed above or your existing Firm contact. Prior results do not guarantee a similar outcome. The invitation to contact is not a solicitation for legal work in any jurisdiction in which the contacted attorney is not admitted to practice. Any attorney/client relationship must be confirmed in writing.