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FISHBEIN FAMILY PSHP. v. PPG INDUS.

December 28, 1994

THE FISHBEIN FAMILY PARTNERSHIP, plaintiff,
v.
PPG INDUSTRIES, INC. and PUBLIC SERVICE ELECTRIC AND GAS COMPANY, defendants, PUBLIC SERVICE ELECTRIC AND GAS COMPANY, defendant third-party plaintiff, -v- UGI UTILITIES, INC. and JOHN DOES 1-25 (being fictitious names), third-party defendants.


JOEL A. PISANO, U.S. MAGISTRATE JUDGE


The opinion of the court was delivered by: JOEL A. PISANO

JOEL A. PISANO, U.S. MAGISTRATE JUDGE:

 INTRODUCTION

 This matter comes before the Court upon the motion of third-party plaintiff Public Service Electric and Gas Company ("PSE&G") for leave to amend the third-party complaint. *fn1" Through the amended third-party complaint, PSE&G seeks to expand its claim against defendant UGI Utilities, Inc. ("UGI") for reimbursement and contribution under the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"), 42 U.S.C. ยงยง 9607 and 9613 and the New Jersey Spill Compensation and Control Act ("Spill Act") N.J.S.A. 58:10-23.11 et seq. to include UGI's years of operation of an industrial site between 1899 through the early 1940's. Opposition was filed by third-party defendants UGI. No position was taken on this motion by plaintiff Fishbein Family Partnership. Oral argument was heard on October 11, 1994. Because the Court finds that PSE&G fails to assert an independent cause of action for contribution, its motion is denied.

 BACKGROUND

 Plaintiff Fishbein Family Partnership ("Fishbein") filed its complaint against defendants PSE&G and PPG Industries ("PPG") in February of 1993. In this suit, plaintiff seeks, inter alia, to recover remediation costs from defendants resulting from the release or threatened release of hazardous substances on property in Jersey City which plaintiff owns ("the Site"). Plaintiff's claim against PSE&G is predicated upon its alleged ownership or operation of a manufactured gas plant on a portion of the Site from 1886 through 1954. Similarly, plaintiff's claim against PPG is based on PPG's alleged ownership or operation of a chromium ore processing facility on the Site until 1963.

 Three months after plaintiff's complaint was filed, PSE&G answered, cross-claimed and filed a third-party complaint against UGI. PSE&G's third-party complaint is for contribution and reimbursement under CERCLA and the Spill Act. Its claim is predicated on the lease and operation of a gas plant on the Site by UGI's predecessor, The United Gas Improvement Company ("TUGIC"), from 1886 until 1889.

 In September 1993, UGI answered and counterclaimed. Through the pleadings, UGI raised the affirmative defense that PSE&G's predecessor, Hudson County Gas Company ("Hudson"), in a transaction occurring in 1899, released TUGIC, its successors and assigns from all liability relating to the operation of the manufactured gas plant on the Site for the period between 1886-1899. At initial pretrial scheduling conferences, UGI made clear that it intended to file a motion for summary judgment based on the release as soon as discovery on that issue was complete. Varon Decl. P 4.

 In late March of 1994, PSE&G claims to have become aware of a Third Circuit reported opinion from 1942 which contained evidence establishing a post-1899 nexus between UGI and the gas manufacturing operations on the Site. *fn2" At that time, PSE&G requested supplemental discovery in order to further establish such a link. This Court denied PSE&G's request by a written order entered July 21, 1994.

 In the meantime, UGI prepared a motion for summary judgment that was to be heard in October, 1994, and PSE&G retained new counsel to prosecute their third-party claims against UGI. *fn3"

 On August 23, 1994 a status conference was held. At that conference, PSE&G requested leave to file an amended third-party complaint. The original pleading was based on Consumers Gas Company's lease of the manufactured gas plant to UGI for the period between 1886-1899. The amended third-party complaint alleges that UGI is liable to PSE&G for contribution and reimbursement based on the following set of alleged facts and circumstances: In 1899, Hudson County Gas Company ("Hudson") was formed through a merger with Consumers Gas Company and assumed control of the lease previously held by UGI. McPhee Aff. P 6. From 1899 until 1903, UGI owned a majority of the authorized issued and outstanding common stock of Hudson. Am. Comp. P 14. In 1903, Public Service Corporation of New Jersey ("PSC") acquired control of the manufactured gas plants by a lease from Hudson. McPhee Aff. P 7. At that time UGI owned 25% of the original common stock of PSC. In addition, the president of UGI was also the first Chairman of the Board of Directors of PSC, and the chief engineer of UGI became the first Superintendent of PSC's gas department. Am. Comp. P 15. From 1903 until the early 1940's, UGI and/or its parent were the largest shareholder of common stock of PSC. Am. Comp. P 15. In 1909, PSC assigned the lease held by Hudson to the Public Service Gas Company ("PSGC"), which was a subsidiary of PSC. In 1924, PSGC merged to form PSE&G. McPhee Aff. P 7. In 1939, Hudson also merged into PSE&G. Am. Comp. P 16.

 Based upon the foregoing, PSE&G now seeks to expand its contribution claim against UGI on the theory that UGI, as a stockholder of PSC, was an owner or operator of the Site. The Court granted leave to PSE&G to file this motion to amend the complaint over UGI's objection that it was not timely.

 ARGUMENT

 I. Standard of Review

 Pursuant to Fed.R.Civ.P. 15(a) the party wishing to amend a pleading must seek leave of the court to do so. Leave to amend a pleading "shall freely be granted when justice so requires." Fed.R.Civ.P. 15(a). Generally, the moving party ought to be afforded an opportunity to test its claim on the merits, if the underlying facts and circumstances may be a proper subject for relief. Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962). The denial of a motion to amend is proper only when there is a finding of "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Id.

 The discretion of the trial court "must be tempered by considerations of prejudice to the non-moving party, for undue prejudice is the 'touchstone for the denial for leave to amend.'" Harrison Beverage Co. v. Dribeck Importers, Inc., 133 F.R.D. 463, 468 (D.N.J. 1990), citing Cornell & Co., Inc. v. Occup. Safety and Health Review Comm'n, 573 F.2d 820, 823 (3rd Cir. 1978). A court will find that prejudice is undue "when the opponent shows it would be ...


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