                                                                                                                           Opinions of the United
1997 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-17-1997

Al Tech Spec Steel v. Algheny Intl Credit
Precedential or Non-Precedential:

Docket 95-3415




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             UNITED STATES COURT OF APPEALS
                 FOR THE THIRD CIRCUIT
                      ____________

                      No. 95-3415
                      ____________

          AL TECH SPECIALTY STEEL CORPORATION,
                        Appellant

                           v.

     ALLEGHENY INTERNATIONAL CREDIT CORPORATION;
     SUNBEAM CORPORATION; SUNBEAM HOLDINGS, INC.,
     ALMET/LAWNLITE, INC; CHEMETRON CORPORATION;
             INTERGRATED SPECIALTIES, INC.;
         ALLEGHENY INTERNATIONAL (USA), INC.;
              AL INDUSTRIAL PRODUCTS, INC.;
        ALLEGHENY INTERNATIONAL EXERCISE, CO.;
    WOODSHAFT, INC.; CHEMETRON INVESTMENTS, INC.,
            INFOWSITCH, INC.; ELISKIM, INC.
                  ____________________

   ON APPEAL FROM THE UNITED STATES DISTRICT COURT
      FOR THE WESTERN DISTRICT OF PENNSYLVANIA
              (D.C. Civil No. 93-01445)
                 ____________________

                  Argued: May 6, 1996
Before:   GREENBERG, ALITO, and MCKEE, Circuit Judges:

           (Opinion Filed: January 17, 1997 )
                  ____________________

               David P. Flynn, Esq.
               Kevin M. Hogan, Esq. (Argued)
               Phillips, Lytle, Hitchcock,
               Blaine & Huber
               3400 Marine Midland Center
               Buffalo, New York 14203

               Attorneys for Appellant
               William L. Gardner, Esq.
               Anthony C. Roth, Esq. (Argued)
               Morgan, Lewis & Bockius LLP
               1800 M Street, N.W.
               Washington, D.C. 20036

               Attorneys for Appellee



                           1
                         ____________________

                         OPINION OF THE COURT
                         ____________________



ALITO, Circuit Judge:

          This is an appeal from a district court order affirming

the bankruptcy court's disallowance of AL Tech Specialty Steel

Corporation's ("AL Tech") claim against Allegheny International,

Inc. ("Allegheny International") in Allegheny International's

Chapter 11 proceeding.    AL Tech's claim was based on certain

environmental liabilities, under the federal Comprehensive

Environmental Response, Compensation, and Liability Act

("CERCLA") and the New York Oil Spill Act, at two steel plants

that it purchased from Allegheny International's corporate

predecessor in 1976.    The bankruptcy court held that AL Tech's

claim was not barred by either § 502(c) or § 502(e)(1)(B) of the

Bankruptcy Code, 11 U.S.C. §§ 502(c),(e)(1)(B), and it estimated

the total remediation cost at the two plants for which Allegheny

International might share responsibility at $12,792,000.     The

bankruptcy court also ruled that Allegheny International's

equitable share of AL Tech's federal liabilities was zero,

primarily because of a dollar-for-dollar discount taken off the

purchase price by the current owner of AL Tech's stock in 1989.

It further held that the New York statute created a private right

of action but that any action that AL Tech could bring against

Allegheny International under the New York statute was time-




                                  2
barred.    The district court affirmed the bankruptcy court's order

in all respects.

            We conclude that there was insufficient evidence before

the bankruptcy court to support the finding of a dollar-for-

dollar discount in the 1989 purchase of AL Tech by its current

corporate parent and that any discount that may have been given

accrued to the benefit of AL Tech's parent and not to AL Tech.

We therefore reverse the order of the district court as it

relates to Allegheny International's equitable share of AL Tech's

federal environmental liabilities.     We also conclude that the

bankruptcy court applied the wrong limitations period in

assessing the portion of AL Tech's claim that relied on the New

York statute.    However, in light of a 1995 decision by the New

York Court of Appeals on the availability of a private right of

action under the New York statute, we remand that issue for

application of the holding of that decision to the present case.

 We affirm the order of the district court as it relates to §§

502(c) and 502(e)(1)(B) and the bankruptcy court's estimation of

remediation costs to be allocated between AL Tech and Allegheny

International.

                                  I.

             The factual and procedural history of this case may be

summarized as follows.    AL Tech bought two steel plants in

Dunkirk and Watervliet, New York, from Allegheny International's

predecessor, Allegheny Ludlum Industries ("Allegheny Ludlum"), in

1976.     (Allegheny Ludlum had owned and operated the plants since

1937.)     Since then, AL Tech's stock has been sold three times: in


                                  3
1981, to GATX Corporation; in 1986, to Rio Algom, Inc. and Rio

Algom Limited (collectively "Rio Algom"); and most recently (in

1989) to Sammi Steel Company, Limited ("Sammi").   Environmental

assessments of the two plants performed in the mid- and late

1980s revealed numerous areas of contamination with oil,

polychlorinated biphenyls ("PCBs"), and other hazardous

substances that would require costly remediation in order to come

into compliance with applicable environmental statutes and

regulations.

          After Allegheny International filed a bankruptcy

petition in 1988, AL Tech filed a timely proof of claim, alleging

that Allegheny International was liable for a share of the

incurred, contingent, and unliquidated response costs required to

remediate the contamination at the two plants.   The bankruptcy

court initially denied the claim, but its decision was reversed

by the district court, In re Allegheny Int'l, Inc., 126 B.R. 919

(W.D. Pa. 1991), and a panel of this court affirmed by judgment

order, Allegheny Int'l, Inc. v. AL Tech Specialty Steel Corp.,

950 F.2d 721 (3d Cir. 1991) (table).   The case was remanded to

the bankruptcy court for a trial to allow for estimation and

allocation of AL Tech's claim.

          On the basis of evidence presented at that 1992 trial,

the bankruptcy court (1) estimated the allowable liabilities at

$12,792,000, (2) found that Sammi had received a $22 million

discount (3) held, primarily for that reason, that Allegheny

International's equitable share of the cleanup costs was zero,

and (4) held that AL Tech's Oil Spill Act claim was time-barred


                                 4
by the applicable limitations period.   In re Allegheny Int'l,

Inc., 158 B.R. 361 (Bankr. W.D. Pa. 1993).    The district court

affirmed the bankruptcy court's order in its entirety.   AL Tech

Specialty Steel Corp. v. Allegheny Int'l, Inc., No. 93-1445 (W.D.

Pa. June 27, 1995).   This appeal followed.

          On appeal, AL Tech argues that there was no discount;

that if there was one, it was received by Sammi, not AL Tech;

that the bankruptcy court abused its discretion in focusing on

only one equitable factor when it concluded that Allegheny

International's equitable share was zero; that the bankruptcy

court erred in finding that AL Tech failed to prove that

Allegheny International was responsible for any of the PCB

contamination at one of the contaminated sites, Willowbrook Pond;

that the bankruptcy court underestimated response costs at

Willowbrook Pond (at $1.3 million, versus AL Tech's estimate of

approximately $14 million); and that the bankruptcy court applied

the wrong limitations period and used the wrong triggering event

in holding AL Tech's Oil Spill Act claim to be time-barred.

          Allegheny International disagrees on every point and

raises two independent grounds for affirming the district court:

first, that AL Tech's claim is barred by Bankruptcy Code §

502(e)(1)(B) because it is a contingent co-liability to the

government, rather than a direct claim against Allegheny

International; and second, that it should be disallowed pursuant

to Bankruptcy Code § 502(c) because AL Tech has not taken

sufficient steps to remove the contingencies (i.e., has not done
enough to assess and clean up the contamination since 1976).     We



                                5
address Allegheny International's arguments first and then turn

to AL Tech's arguments.

                                  II.

          Section 502(e)(1)(B) of the Bankruptcy Code provides:
(e)(1) . . . [T]he court shall disallow any claim for
          reimbursement or contribution of an entity
          that is liable with the debtor on or has
          secured, the claim of a creditor, to the
          extent that --
. . .
(B) such claim for reimbursement or contribution is
          contingent as of the time of allowance or
          disallowance of such claim for reimbursement
          or contribution.


11 U.S.C. §§ 502(e)(1), (e)(1)(B).

          Allegheny International argues that § 502(e)(1)(B) bars

AL Tech's claim.    The bankruptcy court originally agreed with

Allegheny International, but in its 1991 decision, the district

court held that this section barred only contingent claims on

which the claimant and the debtor are co-liable to a third party

and that to the extent that AL Tech's claim against Allegheny

International was based on CERCLA, 42 U.S.C. §§ 9601 et seq.,1 it

was not excluded because it was a direct claim against Allegheny

International.     126 B.R. at 923-24.   This court affirmed the

district court's order by judgment order.      950 F.2d 721 (3d Cir.

1991)(table).    On remand, the bankruptcy court considered itself

bound by the district court's 1991 decision under the "law of the
1. The parties did not brief the applicability of § 502(e)(1)(B)
to AL Tech's Oil Spill Act claim in the earlier appeal to the
district court. In the present appeal, Allegheny International
has again focused its arguments on the applicability of §
502(e)(1)(B) to CERCLA claims, leaving the Oil Spill Act claim
virtually unaddressed. We thus read Allegheny International's
argument as limited to AL Tech's CERCLA claim.



                                  6
case" doctrine, and it thus declined Allegheny International's

invitation to revisit the issue in light of two 1992 bankruptcy

court decisions, In re Cottonwood Canyon Land Co., 146 B.R. 992

(Bankr. D. Colo. 1992), and In re Eagle-Picher Indus., Inc., 144

B.R. 765 (Bankr. S.D. Ohio 1992), aff'd, 164 B.R. 265 (S.D. Ohio

1994).   158 B.R. at 367.

           In this appeal, Allegheny International urges us to

reexamine the question whether AL Tech's claim is barred by §

502(e)(1)(B), but under the law of the case doctrine, we believe

that it would be inappropriate for us to do so.      Under the law of

the case doctrine, an appellate court should generally decline to

reconsider a question that was decided in a prior appeal.      See 18

Charles A. Wright, et al., Federal Practice and Procedure § 4478,

at 788 (1981 & 1996 Supp.).      "The doctrine is not a

jurisdictional limitation; rather, it `merely expresses the

practice of courts generally to refuse to reopen what has been

decided.'"   Alliance for Cannabis Therapeutics v. DEA, 15 F.3d

1131, 1134 (D.C. Cir. 1994) (quoting Messenger v. Anderson, 225

U.S. 436, 444 (1912)).      Accordingly, it is appropriate for an

appellate court to reconsider a decision made in an earlier

appeal in exceptional circumstances, such as where there has been

an intervening change in the law, where new evidence has become

available, or where reconsideration is necessary to prevent clear

error or a manifest injustice.      18 Charles A. Wright, et al.,

supra, § 4478, at 790.
           In this case, the panel that heard the prior appeal

necessarily decided that AL Tech's claim was not barred by §


                                   7
502(e)(1)(B).   The law of the case doctrine applies to this

decision even though it was rendered by judgment order because

that doctrine "applies both to issues expressly decided by a

court in prior rulings and to issues decided by necessary

implication."   Bolden v. SEPTA, 21 F.3d 29, 31 (3d Cir. 1994);

see also United States v. Local 560 (I.B.T.), 974 F.2d 315, 329-

30 (3d Cir. 1992) (applying doctrine to judgment order).

           Moreover, we do not believe that there are exceptional

circumstances here that make it appropriate to reconsider the

prior panel's decision.   While Allegheny International points to

two intervening bankruptcy court decisions that disagree with the

district court's decision in this case, those decisions do not

represent the type of authority necessary to invoke the exception

that applies when there has been an intervening change in the

law.   Nor do those decisions convince us that a refusal to

reconsider the issue would amount to clear error or a manifest

injustice.

           We likewise reject Allegheny International's argument

that this court's opinion in In re Penn Cent. Transp. Co., 944

F.2d 164 (3d Cir. 1991), cert. denied, 503 U.S. 906 (1992),
represents an intervening change in the law sufficient to relax

the usual strictures of the law of the case doctrine.   There are

two problems with Allegheny International's argument.   First,

while the decision in Penn Central came after the district

court's 1991 decision, it was handed down more than two months

before the filing of judgment order by which this court affirmed

the district court's order.   Second, the Penn Central decision


                                8
did not directly address the issue at hand but rather concerned

the government's ability to assert CERCLA claims against a

reorganized debtor where the consummation order, which protected

the reorganized debtor against lawsuits based on the debtor's

activities, predated the enactment of CERCLA.    Accordingly, we

believe that it is inappropriate in this case to reconsider the

merits of Allegheny International's § 502(e)(1)(B) argument.

            Allegheny International also argues that § 502(c) of

the Bankruptcy Code precludes estimation of AL Tech's claim

because AL Tech has not taken sufficient steps to remove the

contingencies in its claim, i.e., has not done enough to assess

and remediate the various contamination problems at its plants.

We agree with the district court that this argument must fail.

The cases that Allegheny International cites do not support its

position.   All three cases, Kessler v. Jefferson Storage Corp.,

125 F.2d 108 (6th Cir. 1941), In re Hot Springs Broadcasting,

Inc., 210 F. Supp. 533 (W.D. Ark. 1962), and In re KDI Corp., 119

B.R. 594 (Bankr. S.D. Ohio 1990), concern § 57(d) of the

Bankruptcy Act of 1898, which provided that unliquidated claims

were not to be allowed where liquidation would unduly delay the

administration of the estate.    Thus, a claimant had the burden of

liquidating its claim as a condition precedent to its allowance.

 By contrast, § 502(c) of the Bankruptcy Code specifically

provides for estimation, for purposes of allowance, of such

unliquidated claims.    The three cases are also factually

distinguishable from the present case; for instance, the claimant

in KDI Corp. was denied permission to amend a claim filed 12


                                 9
years earlier, after it had waited eight years before even

seeking permission to amend.   As the bankruptcy court noted, the

law does not require that all contingencies be removed, and AL

Tech has taken some steps to remove the contingencies in its

claim.

                               III.

          AL Tech's principal arguments on appeal concern the

bankruptcy court's determination of Allegheny International's

equitable share of AL Tech's allowable CERCLA liabilities.    After

estimating AL Tech's response costs to total $12,792,000, the

bankruptcy court proceeded to determine Allegheny International's

equitable share of those costs pursuant to § 113(f) of CERCLA,

which authorizes a court to allocate response costs among

responsible parties "using such equitable factors as [it]

determines are appropriate."   42 U.S.C. § 9613(f).   The court

considered a number of factors, but its ultimate conclusion --

that Allegheny International's equitable share was zero -- was

based on its findings that Sammi was fully aware of AL Tech's

future environmental liabilities and that, as a result, Sammi

"discounted the purchase price dollar for dollar until the total

purchase price was $1.00" and thus "held no real expectation that

[Allegheny International] would pay for any portion of the

remediation costs."   158 B.R. at 383.   AL Tech argues that there

is no record evidence, let alone sufficient evidence, to support

such findings and that, even if there were such a discount, the

beneficiary of that discount was not AL Tech, the claimant in

this case, but Sammi.


                                10
            With respect to this issue, the following facts are

undisputed or at least beyond dispute under a clearly erroneous

standard.    Sammi was aware of $22 million in environmental

liabilities on the part of AL Tech when it purchased AL Tech's

stock in 1989.    An agreement among Rio Algom, Sammi, and AL Tech

provided for an adjustment to the purchase price in the event of

changes in AL Tech's net worth.    At the time of the sale, AL Tech

and Sammi "accrued" $22 million in expenses to cover future

environmental liabilities; these were charged against sales

during the first seven months of 1989.    This substantially

reduced the net worth of AL Tech,2 and after litigation and

arbitration over the propriety of this accounting procedure, Rio

Algom was required to pay Sammi in excess of $5 million to assume

ownership of AL Tech.3   Of this amount, $2.4 million was awarded

to Sammi to account for the increased environmental liabilities.

            AL Tech argues that there was insufficient evidence to

show that Sammi reduced the sale price dollar for dollar to

account for the $22 million in liabilities of which it was aware

at the time of the transaction.    Allegheny International relies

on the testimony of two officers of AL Tech: Ronald Hansen, the

chief financial officer, and James Mintun, the chief executive

officer.    Both Hansen and Mintun testified that the environmental

2. AL Tech points out that the net worth of its stock on the
date of purchase was approximately negative $16 million. A.
1515. Thus, it argues, even considering the subsequent
adjustment in the purchase price, Sammi overpaid for AL Tech's
stock by some $11 million.

3. The parties cite a figure of $5.3 million, while the
bankruptcy court quoted the figure of $6.5 million.



                                  11
liabilities reduced AL Tech's value and reduced the purchase

price, A. 301, 303, 325-27, and Hansen testified that these

liabilities brought the purchase price down "[a]pproximately

dollar for dollar."    A. 327.   However, Hansen also testified that

he had "absolutely no idea whatsoever how [the purchase price]

was arrived at," A. 335, and had not come to know the reason for

the one dollar purchase price, A. 322, and Mintun likewise

testified that he had no knowledge of how the price was arrived

at.   A. 398.   Mintun also testified that neither he nor Hansen

participated in any of the discussions concerning the price to be

paid for AL Tech, A. 398-99, and Hansen testified that he had no

involvement in determining what the purchase price would be.      A.

323; see also A. 335 (Hansen testifying that he "[did] not know

specifically what Sammi paid in fact for AL Tech or what was

going through their mind and how they arrived at that").

           Also of some relevance is the fact that the agreement

for the sale of AL Tech to Sammi makes reference to the proof of

claim that AL tech had filed against Allegheny International.      A.

1415.4   Allegheny International points out that this claim was

4. In a reference to possible recoupment from GATX, the notes
accompanying AL Tech's financial statements also refer to its
management's belief that:

part of [the $22 million] environmental liability may
          be recovered through negotiations or
          litigation with certain of the Company's
          previous owners. Because of the uncertainty,
          no recognition has been given to a recovery
          of these liabilities in the accompanying
          financial statements.

A. 1582.



                                  12
not identified as an asset on AL Tech's balance sheets.     In

addition, the schedule of the sale agreement in which it appears

seems designed to disclose pending or threatened litigation that

might result in judgments against AL Tech.   See A. 1331.   Still,

on the basis of the sale agreement, it is clear that Sammi was

aware of the existence of AL Tech's claim against Allegheny

International.

          A reduction in the purchase price of a facility is

certainly a valid factor to be considered in allocating CERCLA

response costs among responsible parties, see, e.g., Smith Land &

Improvement Corp. v. Celotex Corp., 851 F.2d 86, 90 (3d Cir.

1988), cert. denied, 488 U.S. 1029 (1989), and the amount of the

discount is, of course, important, id.    On the record before the

bankruptcy court, however, we do not think that there was

sufficient evidence to support a finding that the discount

received by Sammi equalled $22 million.   The testimony of Hansen

and Mintun reflects, at best, informed speculation as to the

existence and magnitude of any discount in the price paid by

Sammi for AL Tech's stock.

          An even more fundamental issue raised by AL Tech is

whether any discount received by Sammi in its purchase of AL Tech

from Rio Algom should be reflected in a dispute that involves

neither Sammi nor Rio Algom, but rather AL Tech and Allegheny

International.   AL Tech point out that Smith Land and all of the
other cases cited by Allegheny International and the bankruptcy

court -- Amoco Oil Co. v. Borden, Inc., 889 F.2d 664 (5th Cir.
1989); BTR Dunlop, Inc. v. Rockwell Int'l Corp., 1992 WL 159203



                                13
(N.D. Ill. June 29, 1992); South Fla. Water Management Dist. v.

Montalvo, 1989 WL 260215 (S.D. Fla. Feb. 15, 1989); and Southland

Corp. v. Ashland Oil, Inc., 696 F. Supp. 994 (D.N.J.), modified

on reconsideration, 1988 WL 125855 (D.N.J. Nov. 23, 1988) --

involved allocation between the seller and the purchaser of the

subject property (or their successors, see Smith Land, 851 F.2d

at 88).   Here, the seller (Rio Algom) is not in the picture;

Allegheny International's predecessor received full value for the

plants when it sold them to AL Tech in 1976 for $23.5 million in

cash and stock.   A. 647-702 (purchase agreement).   In addition,

AL Tech, not Sammi, is the claimant here, and under traditional

corporate law principles the two companies are considered

separate entities.   Thus, even if it is assumed that there was a

discount in the 1986 sale, this discount would work against Sammi

and in favor of Rio Algom, but it does not necessarily work

against AL Tech and in favor of Allegheny International.

           Allegheny International's counterargument is that the

bankruptcy court properly disregarded corporate forms in light of

AL Tech's status as a wholly-owned subsidiary of Sammi.

Allegheny International cites several cases describing bankruptcy

courts as courts of equity that will disregard legal fictions

when justice requires.   The problem here is that the bankruptcy

court did not find that justice required that it regard Sammi and

AL Tech as a single entity.   In the absence of such a finding, it

was error to assume, as the bankruptcy court appears to have

done, that any windfall reaped by Sammi should be imputed to AL

Tech.


                                14
           Nor do we believe, on the record before us, that such a

finding would be warranted.    Allegheny International has pointed

to no facts that would allow the piercing of the corporate veil.

 Without sufficient facts of record to warrant veil-piercing,

i.e., facts of sufficient dominance of the affairs of the

subsidiary by the parent corporation, AL Tech and Sammi must be

considered separate entities.   See In re Cohn, 54 F.3d 1108,

1116-17 (3d Cir. 1995); see also Mellon Bank, N.A. v. Metro

Communications, Inc., 945 F.2d 635, 643 (3d Cir. 1991) ("[T]here

is a presumption that a corporation, even when it is a wholly

owned subsidiary of another, is a separate entity."), cert.

denied, 503 U.S. 937 (1992).

           AL Tech also argues that the bankruptcy court abused

its discretion in relying exclusively on a single equitable

factor -- the discount received by Sammi -- in deciding that

Allegheny International's equitable share of the cleanup cost was

zero.   It is within the court's discretion to rely on a single

factor, see Environmental Transp. Sys., Inc. v. ENSCO, Inc., 969

F.2d 503, 509 (7th Cir. 1992), but here the court also considered

several other factors, e.g., actual years of ownership and
operation of the two plants, 158 B.R. at 383, Allegheny Ludlum's

compliance with federal environmental laws that were in effect

before it sold the plants to AL Tech, id. at 384, and AL Tech's

less-than-enthusiastic cleanup efforts since the sale, id.

However, it is clear to us that the bankruptcy court's ultimate

conclusion can be justified only on the basis of the discount, as

the bankruptcy court itself seemed to recognize.   See id. at 383


                                 15
("[T]his court considers the discounted purchase price for the AL

Tech steel plants to be the most compelling and dispositive

allocation factor in this case.").   Other factors may weigh in

Allegheny International's favor, but they are insufficient to

drive Allegheny International's equitable share down to zero.     In

other words, it was inconsistent with the sound exercise of its

discretion for the bankruptcy court to rely, not simply on a

single factor, but on a single factor where the factual finding

underlying the factor was clearly erroneous.

          AL Tech raises two arguments with respect to

Willowbrook Pond, a cooling pond at the Dunkirk plant that is

contaminated with PCBs.5   First, AL Tech argues that the

bankruptcy court erred in concluding that it failed to prove, by

a preponderance of the evidence, that Allegheny International (as

successor to Allegheny Ludlum) is responsible for any of the PCB

contamination.   Second, AL Tech argues that the bankruptcy court

committed reversible error in choosing Allegheny International's

estimate of the response costs at Willowbrook Pond ($1.3 million)

instead of AL Tech's estimate (approximately $14 million).

          We find no fault in the bankruptcy court's

determination on the liability question here.   AL Tech presented

no reports, analyses, or other documentation of the use of PCB-

containing materials at the plants during the period when the

plants were owned by Allegheny Ludlum.   AL Tech's evidence


5. The sediments in the pond also contain high levels of nickel,
but the dispute here concerns responsibility for, and remediation
of, the PCB problem.



                                16
consisted of the testimony of Edwin Diehl and Morton Parker,

neither of whom could establish that the materials used by

Allegheny International before the purchase of the plants by AL

Tech contained PCBs.   Mr. Diehl, AL Tech's Director of

Engineering (and previously its Director of Environmental

Affairs), pointed to a hydraulic fluid, first used in new rolling

mill machinery in 1970, as the source of the PCBs in Willowbrook

Pond.   A. 437-40, 454, 457.   He had no personal knowledge,

however, as to whether the fluid contained PCBs.

           Mr. Parker visited the Dunkirk plant in the mid-1970s

to determine whether oils and greases that Allegheny Ludlum had

collected from Willowbrook Pond were suitable for reclamation by

his employer, Wallover Oil Company.   A. 465-69.    He testified

that Allegheny Ludlum had recently switched to a new hydraulic

fluid that did not contain PCBs, that the fluid previously used

sank because it was heavier than water, and that fluids that

contained PCBs also were heavier than water and sank.     A. 467-69.

 Mr. Parker also testified that his company rejected Allegheny

Ludlum's oils and greases for reclamation and that, while PCB

contamination was the reason for most such rejections, he did not

recall the reason for rejecting Allegheny Ludlum's materials.      A.

470-72.   Mr. Parker also could not recall the results of any

chemical analyses done on the materials from Willowbrook Pond.

A. 470.   Nor could he recall the year in which he visited the

plant or the name of anyone whom he met there.     A. 466.   Like Mr.

Diehl, then, Mr. Parker could provide no specific information as




                                 17
to whether any materials used by Allegheny Ludlum before the 1976

sale of the plants to AL Tech contained PCBs.

           It may well be that Allegheny Ludlum used PCB-

containing materials during the relevant period, and it may be

that the only reasonable explanation for the presence of PCBs in

the pond sediments, based on the evidence adduced, is that

Allegheny Ludlum dumped them there.    But that is different from

proving, by a preponderance of the evidence, that Allegheny

International is responsible for at least some of the

contamination.   This AL Tech failed to do.   In light of this

conclusion, it is not necessary to reach AL Tech's second

argument regarding Willowbrook Pond.

                                IV.

           We deal last with two related questions concerning AL

Tech's claim under the New York Oil Spill Act, N.Y. Nav. Law §§

171-197 (McKinney 1989 & Supp. 1996).    First, may AL Tech bring

an action against Allegheny International under the Oil Spill

Act?   Second, is any such action time-barred?   Because our

decision concerning these questions of New York law is unlikely

to have much precedential significance, we will deal with them in

an abbreviated fashion.

           A.    Under White v. Long, 650 N.E.2d 836 (N.Y. 1995), a

case not considered by either the bankruptcy court or the

district court, it is clear that a property owner may under

certain conditions sue a prior owner to recover cleanup costs.

The claim in White was asserted under § 181(5), which provides as
follows:



                                 18
          Any claim by any injured person for the costs
          of cleanup and removal and direct and
          indirect damages based on the strict
          liability imposed by this section may be
          brought directly against the person who has
          discharged the petroleum, provided, however,
          that damages recoverable by any injured
          person in such a direct claim based on the
          strict liability imposed by this section
          shall be limited to the damages authorized by
          this section.


N.Y. Nav. Law § 181(5) (McKinney Supp. 1996).

          Another provision of the Act defines a "claim" as "any

claim by an injured person, who is not responsible for the

discharge."   N.Y. Nav. Law § 172(3) (McKinney Supp. 1996)

(emphasis added).   Noting this definition, the New York Court of

Appeals wrote in White:
          Although even faultless owners of
          contaminated lands have been deemed
          "dischargers" for purposes of their own
          section 181(1) liability,[6] where they have
          not caused or contributed to (and thus are
          not "responsible for") the discharge, they
          should not be precluded from suing those who
          have actually caused or contributed to such
          damage. To preclude reimbursement in that
          situation would significantly diminish the
          reach of section 181(5).



650 N.E.2d at 838 (footnote added).

          Since neither the bankruptcy court nor the district

court has applied White to the facts of this case, we remand AL
Tech's Oil Spill Act claim so that this can be done.7

6. This provision states in pertinent part that "[a]ny person
who has discharged petroleum shall be strictly liable, without
regard to fault, for all cleanup and removal costs and all direct
and indirect damages, no matter by whom sustained, as defined in
this section." N.Y. Nav. Law § 181(1)(McKinney Supp. 1996).

7. AL Tech originally argued that its claim arose under N.Y.
Nav. Law § 176(8), which provides:


                                19
          B.    On the issue of the statute of limitations, under

the New York Court of Appeals' decision in State v. Stewart's Ice

Cream, Inc., 473 N.E.2d 1184 (N.Y. 1984), it appears that AL

Tech's claim is governed by the six-year limitations period for

actions on express or implied contracts, N.Y. Civ. Prac. L. & R.

§ 213(2) (McKinney 1990).   In Stewart's Ice Cream, the state paid

for the cleanup and removal of discharged petroleum and then

sought to recover its expenses from the party that caused the

discharge.   The New York Court of Appeals concluded that the

state's claim was one for indemnity and that liability on an

indemnity claim "theoretically springs from an implied contract."

Id. at 1186.     The court further held that the state's claim was

not covered by the three-year limitations period for actions to

recover on a liability created or imposed by a statute, N.Y. Civ.

Prac. L. & R. § 214(2) (McKinney 1990), because that provision

(..continued)

Notwithstanding any other provision to the contrary . .
          . every person providing cleanup, removal of
          discharge of petroleum or relocation of
          persons pursuant to this section shall be
          entitled to contribution from any other
          responsible party.

          AL Tech now argues that its claim arises "under both
Section 176(8) and Section 181(5)," see Appellant's Br. at 46
n.22, and that White v. Long, supra, which was based on § 181(5),
"settled definitively" its right to bring a private action.
Appellant's Br. at 44 n.20. AL Tech does not argue that there is
any difference between the right of action created by § 181(5)
and the right of action that it has asserted under § 176(8). We
therefore do not decide whether there is an independent private
right of action under § 176(8) or whether any such action differs
in scope from the right of action under § 181(5). On remand, the
bankruptcy and district courts need only apply White to the facts
of this case.




                                 20
applies only to liability not recognized in the common or

decisional law and because it could not be said that the state's

claim "would not exist but for the statute."    Stewart's Ice

Cream, 473 N.E.2d at 1187.

          In this case, AL Tech's claim appears to be in the

nature of a claim for indemnity.     Stewart's Ice Cream is arguably

distinguishable on the ground that there the court held that the

Oil Spill Act did not "expressly provide for an indemnity action

such as [the one brought by the state]," 473 N.E.2d 1186, whereas

here § 181(5) does expressly provide for AL Tech's claim.

However, Stewart's Ice Cream made this point to refute the

argument that N.Y. Civ. Prac. L. & R. § 214(2) furnished the

applicable statute of limitations.    Since Allegheny International

does not contend this provision applies here, this arguable

distinction need not concern us.8     Thus, we hold that Stewart's

Ice Cream governs here.   See 145 Kisco Ave. Corp. v. Dufner

Enters., Inc., 604 N.Y.S.2d 963 (App. Div. 1993).




8. Moreover, while § 181(5) expressly authorizes Al Tech's
claim, the right of indemnity also has roots in common law,
although it is also sometimes imposed by statute. See 23 N.Y.
Jur. 2d Contribution, Indemnity, and Subrogation § 2 (1982).
    The conclusions reached above also follow if AL Tech's claim
is characterized as one for contribution rather than indemnity.
It appears well settled under New York law that contribution,
like indemnity, is based on an implied contract. Hard v. Mingle,
99 N.E. 542, 544 (N.Y. 1912); Blum v. Good Humor Corp., 394
N.Y.S.2d 894, 896 (App. Div. 1977). Furthermore, contribution
existed at common law. Mingle, 99 N.E. 542. Consequently, the
six-year limitations period for actions on contracts would apply.
 Blum, 394 N.Y.S.2d at 896; Liberty Mut. Ins. Co. v. Société
Coiffure, Inc., 50 N.Y.S.2d 40, 41 (Sup. Ct. N.Y. Cty. 1944).




                                21
            We reject Allegheny International's argument that AL

Tech's claim is subject to the three-year statute of limitations

for actions to recover for damages or injuries to property.     See

N.Y. Civ. Prac. L. & R. § 214(4) (McKinney 1990).    The cases upon

which Allegheny International principally relies9 -- State v.

King Serv., Inc., 563 N.Y.S.2d 331 (App. Div. 1990), and Town of

Guilderland v. Texaco Ref. & Mktg., Inc., 552 N.Y.S.2d 704 (App.

Div. 1990) -- involved claims that differ from those asserted by

AL Tech.    The claim in Town of Guilderland was explicitly for

property damage, viz., damage to the town's sewer system that

resulted from an explosion of fumes from gasoline that had leaked

into the sewers, rather than one for reimbursement of cleanup

costs.    The claim at issue in King Service was also one for

direct damages under § 190 of the Act, which covers actions

against insurers.    See N.Y. Nav. Law § 190 (McKinney 1989).   On

balance, we believe that Stewart's Ice Cream is a closer fit in

this case than the decisions on which Allegheny International

relies.    We thus hold that the statute of limitation for AL

Tech's Oil Spill Act claim is six years.



9. Allegheny also cites two additional cases that are of limited
relevance to the present appeal: Victorson v. Bock Laundry Mach.
Co., 335 N.E.2d 275 (N.Y. 1975), which applied the three-year
limitations periods for actions for property damage and personal
injury to cases based on strict product liability; and P.B.N.
Assocs. v. Xerox Corp., 529 N.Y.S.2d 877 (App. Div. 1988), order
modified on reargument, 575 N.Y.S.2d 451 (App. Div. 1991), which
applied the three-year limitations period for actions for
property damage to an action for waste stemming from an oil
spill. Neither case involved the Oil Spill Act or an action for
indemnity or contribution.



                                 22
          Furthermore, it is settled law in New York that an

action for indemnity or contribution does not generally accrue

until the payment is made by the party seeking recovery.     Bay

Ridge Air Rights, Inc. v. State, 375 N.E.2d 29 (N.Y. 1978).    AL

Tech may thus seek to recover cleanup costs under the Oil Spill

Act that it incurred within six years prior to its filing of its

proof of claim against Allegheny International.   To the extent

that AL Tech is seeking to recover for future remediation

costs,10 the limitations period has not yet begun.11



                                V.

          For the reasons stated above, we reverse the order of

the district court as it relates to the bankruptcy court's

finding of a discount in the price paid by Sammi in 1989 and as

it relates to the bankruptcy court's determination of Allegheny

International's equitable share of AL Tech's allowable response

costs, and we remand for reconsideration of equitable allocation

without the discount.   We reverse the order of the district court
as it relates to the limitations period applicable to AL Tech's

10. The bankruptcy court appears to have allowed only those
costs related to future remediation efforts.

11. The bankruptcy court disallowed as time-barred only AL
Tech's claim related to the Oil Contamination Area. 158 B.R. at
377-78. However, AL Tech's claims related to three other areas -
- the Pump House and Aboveground Fuel Tank, the Underground Fuel
Tanks, and the Kromma Kill -- are also based on petroleum
contamination. 158 B.R. at 368. Given CERCLA's petroleum
exclusion, see 42 U.S.C. § 9601(14), the Oil Spill Act may be the
only basis for liability at those locations. We thus point out
that our conclusion concerning the applicable limitations period
applies to any of AL Tech's claims involving petroleum
contamination.



                                23
claim under the New York Oil Spill Act, and we remand for

application of the standard set out in the New York Court of

Appeals' decision in White v. Long to the facts of this case.     We

affirm the order of the district court as it relates to the

bankruptcy court's determination that Bankruptcy Code §§ 502(c)

and 502(e)(1)(B) do not bar AL Tech's claim and as it relates to

the bankruptcy court's determination that AL Tech failed to prove

that Allegheny International was responsible for any of the

cleanup costs at Willowbrook Pond.




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