     13-132(L)
     New York v. Solvent Chem. Co.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 24th day of January, two thousand fourteen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                DENNY CHIN,
 8                CHRISTOPHER F. DRONEY,
 9                              Circuit Judges.
10
11       - - - - - - - - - - - - - - - - - - - -X
12       State of New York,
13                Plaintiff,
14
15                    -v.-
16
17       Solvent Chemical Company, Inc.,
18                Defendant-Third-Party
19                Plaintiff-Appellee,
20
21                    -v.-                                               13-132(L)
22                                                                       13-148
23       Olin Corporation,
24                Third-Party Defendant-
25                Appellant,
26
27       E.I. du Pont de Nemours and Company,
28                Third-Party Defendant-
29                Appellant.
30       - - - - - - - - - - - - - - - - - - - -X

                                                  1
 1
 2   FOR APPELLANTS:            MICHAEL T. WETMORE (JoAnn T.
 3                              Sandifer, Joel B. Samson, on the
 4                              brief), Husch Blackwell LLP, St.
 5                              Louis, Missouri.
 6
 7                              DANIEL M. DARRAGH, Cohen &
 8                              Grigsby, P.C., Pittsburgh,
 9                              Pennsylvania.
10
11   FOR APPELLEE:              DENNIS P. HARKAWIK, (Charles D.
12                              Grieco, on the brief), Jaeckle
13                              Fleischmann & Mugel, LLP,
14                              Buffalo, New York.
15
16        Appeal from a judgment of the United States District
17   Court for the Western District of New York (Curtin, J.).
18
19        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
20   AND DECREED that the judgment of the district court be
21   AFFIRMED in part, VACATED in part, and REMANDED.
22
23        Olin Corporation (“Olin”) and E.I. du Pont de Nemours
24   and Company (“DuPont”) appeal from the judgment of the
25   United States District Court for the Western District of New
26   York (Curtin, J.), holding them liable to Solvent Chemical
27   Company, Inc. (“Solvent”) for contribution in connection
28   with the remediation of two Niagara Falls, New York
29   properties, the “Solvent Site” and the “Olin Hot Spot.” In
30   a December 19, 2011 summary order, we affirmed the
31   allocation of response costs for the Solvent Site for the
32   period prior to July 1, 2007 (“Past costs”), but vacated the
33   district court’s Past costs allocation for the Olin Hot
34   Spot, and remanded for reallocation. New York v. Solvent
35   Chem. Co., 453 Fed. App’x 42 (2d Cir. 2011) (“2011 Summary
36   Order”). In an accompanying opinion, we ruled that Solvent
37   was entitled to a declaratory judgment holding Olin and
38   DuPont liable for a portion of future response costs.1 New
39   York v. Solvent Chem. Co., 664 F.3d 22, 26 (2d Cir. 2011)
40   (“2011 Opinion”). On remand, the district court entered the
41   declaratory judgment in favor of Solvent, and in addition,
42   (i) reallocated Past costs for the Olin Hot Spot; (ii)
43   allocated costs for both sites for the period July 1, 2007

         1
           The Solvent Site is east of the Olin Hot Spot. Both
     properties are bordered on the south by DuPont property.
                                  2
 1   through December 31, 2011 (“Past Future costs”); and (iii)
 2   established a formula for the allocation of costs for
 3   periods beginning on or after January 1, 2012 (“Future
 4   Future costs”). In this appeal, Olin and DuPont challenge
 5   all three of these allocations. We assume the parties’
 6   familiarity with the underlying facts, the procedural
 7   history, and the issues presented for review.
 8
 9        As a threshold matter, Olin and DuPont argue that,
10   before ruling on remand, the district court was required to
11   hold an evidentiary hearing under the Declaratory Judgment
12   Act (“DJA”), 28 U.S.C. § 2202, or alternatively, under the
13   2011 Opinion. We need not decide whether Olin and DuPont
14   waived this argument, as Solvent contends. The 2011 Opinion
15   ordered entry of a declaratory judgment “leaving for the
16   future only the need to fix the amount of contribution and
17   affording the court flexibility with respect to the time and
18   manner for doing so.” The district court thus was given
19   broad discretion to rely on the developed record and to set
20   past and future allocations without an additional hearing.
21
22        The remaining challenges relate to the court’s
23   allocation of (1) all costs (Past, Past Future, and Future
24   Future costs), (2) Past costs only, and (3) Past Future
25   costs only. We review the district court’s allocation of
26   response costs for abuse of discretion.   Goodrich Corp. v.
27   Town of Middlebury, 311 F.3d 154, 169 (2d Cir. 2002).   A
28   district court abuses its discretion where (1) its decision
29   rests on a legal error or clearly erroneous factual finding
30   or (2) its allocation cannot be located within the range of
31   permissible outcomes. Id.
32
33   1.   Olin argues that the district court erred in all cost
34   allocations by using combined monitoring well data for the
35   Solvent Site and Olin Hot Spot rather than site-specific
36   data, and by allocating 98% of the chlorinated benzenes at
37   the Olin Hot Spot to Olin.2


         2
           Olin also argues that the cost allocation between the
     Olin Hot Spot and the Solvent Site should have been based on
     the relative amount of contaminants filtered at each site
     rather than on the volume of water pumped. The 2011 Summary
     Order affirmed the use of the water-volumetric approach for
     allocating Solvent Site Past costs, and on remand the
     district court reasonably applied it to the Olin Hot Spot
     (and all Past Future and Future Future costs).
                                  3
 1
 2        Our 2011 Summary Order upheld the allocation of Past
 3   costs for the Solvent Site, which utilized combined
 4   monitoring well data. This data (when averaged with site-
 5   specific pumping well data) was used to bridge the wide
 6   variation between the experts’ estimates. New York v.
 7   Solvent Chem. Co., 685 F. Supp. 2d 357, 451 (W.D.N.Y. Jan.
 8   26, 2010). The use of combined monitoring well data was
 9   therefore within the court’s discretion in allocating Past
10   costs for the Olin Hot Spot and all Past Future and Future
11   Future costs (for both sites).
12
13        The allocation of 98% of the chlorinated benzenes at
14   the Olin Hot Spot to Olin was also within the bounds of
15   discretion. The 2011 Summary Order observed that
16   attributing 6.35% of the Olin Hot Spot costs to Olin was
17   without support in the record; when the district court
18   properly applied its factual findings, it came to a
19   different result. The flow of groundwater from Olin’s plant
20   to the Olin Hot Spot as affected by the bedrock formation,
21   and the elevated levels of certain classes of benzenes,
22   strongly support the conclusion that Olin’s plants are the
23   chief source of the benzene contaminants at the Olin Hot
24   Spot.
25
26   2.   DuPont argues for a 10% reduction in its share of
27   liability for the Olin Hot Spot, on the ground that the
28   district court discounted its Solvent Site liability by this
29   percentage. The district court explained its reason for
30   treating the site differently. The chlorinated benzenes at
31   the Solvent Site (and not those at the Hot Spot) were the
32   primary reason for the remediation. Accordingly, as the
33   district court concluded, “it would be inequitable to
34   discount DuPont’s share of response cost liability at the
35   Olin Hot Spot based on the existence of chlorinated benzene
36   contamination at the Solvent Site that, in all likelihood,
37   could not have migrated to the Hot Spot.” DuPont was
38   therefore not entitled to any reduction in its liability for
39   Olin Hot Spot response costs.
40
41   3.   With regard to Past Future costs, Olin and DuPont argue
42   that 2012 pumping well data (not the 2002 pumping well data)
43   should have been used for allocation. In addition, Olin




                                  4
 1   argues that 2007-11 monitoring well data (not the 2004-06
 2   data) should have been used.3
 3
 4        The district court was not obliged to obtain new site-
 5   specific pumping well data for purposes of allocating Past
 6   Future costs. The 2012 data, collected after the district
 7   court allocated Past Future costs, indicated a change in
 8   groundwater chemistry. The district court was thus faced
 9   with two alternatives: to utilize the 2012 data and
10   extrapolate back to the 2007-11 period, or to extrapolate
11   forward from 2002 utilizing the older data. The latter
12   approach was within its discretion.
13
14        However, the district court committed an abuse of
15   discretion by using 2004-06 monitoring well data in
16   allocating Past Future costs when contemporaneous 2007-11
17   monitoring well data was available. In denying Olin’s Rule
18   59 motion, the district court “found nothing in the site-
19   specific monitoring well data from 2007-2012 . . . that
20   might reasonably be expected to cast doubt on these findings
21   or observations, or to otherwise alter the equitable
22   allocation determinations reached by the court . . . .”
23   This conflates two distinct challenges: (1) use of combined
24   monitoring well data in lieu of site-specific monitoring
25   well data, and (2) use of 2004-06 data in lieu of
26   contemporaneous 2007-2011 monitoring well data. As
27   explained above, the court committed no abuse of discretion
28   in creating a formula that utilizes combined monitoring well
29   data. But the district court offers no explanation for
30   ignoring contemporaneous monitoring well data from 2007-11,
31   which in combined form could be plugged right into the
32   court’s equation.
33
34        For the foregoing reasons, and finding no merit in
35   Olin’s and DuPont’s other arguments:
36
37        With respect to Olin Hot Spot Past costs, we AFFIRM the
38   district court’s allocation.



         3
            These arguments were raised in the parties’ Fed. R.
     Civ. P. 59(e) motions to alter or amend the August 27, 2012
     judgment of the district court. We review the December 6,
     2012 order denying these motions for abuse of discretion.
     Munafo v. Metro. Transp. Auth., 381 F.3d 99, 105 (2d Cir.
     2004).
                                  5
 1        With respect to Future Future costs for both sites, we
 2   AFFIRM the allocation formula established by the district
 3   court, which averages new site-specific pumping well data
 4   and combined monitoring well data gathered twice a year to
 5   determine the relative concentrations of chlorinated
 6   benzenes and chlorinated aliphatics at each site.4
 7
 8        With respect to Past Future costs for both sites, we
 9   VACATE and REMAND for reallocation, and direct the district
10   court to replace the 2004-06 combined monitoring well data
11   with 2007-11 combined monitoring well data. The formula
12   averaging site-specific pumping well data with combined
13   monitoring well data, as well as the use of 2002
14   site-specific pumping well data, are not to be altered for
15   purposes of this reallocation.5
16
17                              FOR THE COURT:
18                              CATHERINE O’HAGAN WOLFE, CLERK
19
20
21
22
23
24

         4
            For the Solvent Site: DuPont is responsible for 88%
     of the chlorinated aliphatics, and Solvent for the remaining
     12%. Solvent is responsible for 98% of the chlorinated
     benzenes. Liability for the remaining 2% of chlorinated
     benzenes is split between Olin and Solvent. Solvent, 685 F.
     Supp. 2d at 452.
          For the Olin Hot Spot: DuPont is responsible for 100%
     of the chlorinated aliphatics; Olin is responsible for 98%
     of the chlorinated benzenes; and Solvent is responsible for
     2% of the chlorinated benzenes.
         5
           The district court has discretion to average combined
     monitoring well data for the entire Past Future costs period
     and fix the relative percentages of chlorinated aliphatics
     and benzenes; alternatively, the district court may
     calculate relative percentages for each year or half year
     (and, in the case of 2007, the second half of the year)
     separately. If monitoring well data has been collected more
     than once in any year between 2007-11, the district court
     has discretion to use some or all of the data collected in
     that year. For example, if data is gathered quarterly, the
     district court may choose to utilize the first and third
     quarter data and ignore the data from the second and fourth
     quarters.
                                  6
