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New Jersey Departmen Of Environmental Protection v. American Thermoplast, Corp.

United States District Court, D. New Jersey

July 23, 2018




         Pending before the Court are two summary-judgment motions. In the first, third-party defendants Carter Day Industries, Inc. ("CDI"), Combe Fill Corporation ("CFC"), and Combustion Equipment Associates, Inc. ("CEA") (collectively, the "Carter Day Parties") move for summary judgment on all counts. ECF No. 1341. In the second, third-party plaintiffs Compaction System Corporation of Connecticut, Inc. ("Compaction-CT") and Compaction Systems Corporation (a New Jersey Corporation) ("Compaction-NJ") (together, "Compaction"), move for partial summary judgment. ECF No. 1342.

         Also pending are Compaction's motions for estoppel, ECF No. 1343, and spoliation sanctions, ECF No. 1344. For the reasons that follow, the Carter Day Parties' motion is granted, and Compaction's motions are denied.


         As evidenced by the more than one thousand docket entries, this is a complicated matter with a lengthy procedural history. It involves the allocation of environmental clean-up costs at the Combe Fill South Superfund Site (the "Site"). On October 19, 1998, the New Jersey Department of Environmental Protection ("NJDEP") and the Administrator of the New Jersey Spill Compensation Fund ("Administrator") filed a complaint against Compaction, among many others, under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and various New Jersey environmental laws seeking to recover past and future response costs at the Site. ECF No. 1. The next day, the United States filed a separate complaint against Compaction, among many others, seeking to recover clean-up costs at the Site under CERCLA. Civ. No. 98-4812, ECF No. 1. The Court consolidated these actions on March 16, 1999 under civil docket number 98-4781. ECF No. 60.

         As part of the consolidated proceedings, Compaction agreed in 2009 to pay the United States Environmental Protection Agency ("USEPA") and NJDEP $11 million as settlement to reimburse those agencies' remediation efforts at the Site. See ECF No. 1128 (consent judgment). Compaction accepted an additional $26 million judgment against itself, to be paid in the event that it recovered funds from third-party defendants in excess of $11 million. Id.

         Between 2000 and 2007, Compaction served the Carter Day Parties on multiple occasions with a Third-Party Summons and Complaint; the Carter Day Parties failed to respond, and the Court entered default against them. See generally ECF No. 1073 (ordering entry of default against the Carter Day Parties and summarizing relevant procedural history). The Carter Day Parties then moved to set aside the Court's entry of default, ECF No. 1152, and the Court granted their motion, ECF No. 1162. In December 2011, Compaction filed a First Amended Third-Party Complaint against the Carter Day Parties seeking to recover a portion of the costs it agreed to pay USEPA and NJDEP. ECF No. 1164.

         That five-count First Amended Third-Party Complaint is the subject of the summary-judgment motions now before the Court. In it, Compaction seeks (i) cost recovery under CERCLA Section 107(a) (Count 1); (ii) contribution under CERCLA Section 113(f) (Count 2); (iii) a declaratory judgment under state and federal law (Count 3); (iv) contribution under the New Jersey Joint Tortfeasors Contribution Act (Count 4); and (v) common-law contribution and indemnification (Count 5). Id.


         I. The Site

         The Site is an approximately 65-acre parcel of land located on Parker Road in the Chester and Washington Townships, New Jersey. ECF No. 1348-1 at 2. It operated as a landfill from 1948 to 1981. Rosen Cert. Ex. 1. The USEPA placed the Site on the National Priorities List on September 8, 1983. Rosen Cert. Ex. 1.

         Defendant Chester Hills, Inc., which is not involved in the instant motions, owned and operated the Site from 1948 until September 1978, when ownership passed to CFC. Id. CFC then owned the Site until it filed a bankruptcy petition in 1981; the parties dispute whether CFC's ownership terminated upon its bankruptcy-petition filing. Id.; ECF No. 1347-1 at 2. In November 1981, the Site closed. Rosen Cert. Ex. 2. By agreement with CFC, Compaction conducted operations at the Site from the time of CFCs 1978 purchase until the Site's closure in 1981. Id. Exs. 2, 6. The parties dispute whether Compaction was the exclusive operator of the Site during this time period. ECF No. 1347-1 at 3.

         II. Bankruptcy Proceedings

         a. CEA & CDI

         CEA was a New York corporation and filed for Chapter 11 bankruptcy protection on October 20, 1980, listing Compaction-CT, the NJDEP, and others as unsecured creditors. Rosen Cert. Exs. 8, 9. A bar date for all claims was set for October 29, 1982. Id. Ex. 10. The parties dispute whether CEA also listed the USEPA as an unsecured creditor. ECF No. 1347-1 at 4.

         During CEA's bankruptcy, Compaction-CT filed a proof of claim for approximately $200, 000. Rosen Cert. Ex. 11. The bankruptcy-court judge expunged that claim on March 11, 1986. Id. Ex. 12. The NJDEP also filed a proof of claim for $5 million arising out of "liability [for] the costs of closure of the sanitary landfills operated by the debtor" at the Combe Fill North and South sites. Rosen Cert. Ex. 13. The court disallowed that claim on July 7, 1983. Id. Ex. 14. The USEPA never filed a claim against CEA. Id. Ex. 11. On December 21, 1983, the court approved CEA's reorganization plan, under which CEA amended its certificate of incorporation to, among other things, change its name to Carter Day Industries, Inc. Id. Exs. 15, 16.

         On May 30, 1986, CEA initiated an adversary proceeding against the USEPA and the NJDEP in its bankruptcy action. Rosen Cert. Ex. 10. In it, CEA noted that the NJDEP had already settled its $5 million claim against CFC for $50, 000; that the NJDEP's identical claim against CEA had been disallowed; that the USEPA had also settled with CFC for $50, 000; and that the USEPA continued to assert that it had a right to pursue a claim against CEA, too. Id. CEA sought a judgment declaring that the NJDEP's and USEPA's claims against it "arising from the Combe Fill landfill sites" were discharged in bankruptcy, and enjoining them from pursuing any further claims. Id. The court dismissed the action against the USEPA as unripe, and the Second Circuit affirmed, observing that the USEPA had simply named CEA as a potentially responsible party ("PRP"), and evidently had not determined whether to bring a CERCLA action against CEA. In re Combustion Equip. Assocs., Inc., 838 F.2d 35 (1988).

         CEA proceeded against the NJDEP, and in November 1991, the bankruptcy judge approved a settlement agreement between CEA and the NJDEP. Rosen Cert. Ex. 17. Under the terms of the settlement, "all claims of NJDEP against Carter Day with respect to the Combe Fill sites [were] discharged." Id.

         b. CFC

         CFC, a New Jersey company, filed for Chapter 7 bankruptcy on October 15, 1981 and listed Compaction-NJ as a creditor. Id. Ex. 20. The bar date for filing claims against CFC was May 3, 1982. Id. Ex. 22. Compaction never filed a proof of claim in the CFC bankruptcy proceedings. Id. Ex. 23.

         The NJDEP filed a proof of claim in April 1982 for approximately $5 million for "liability [for] the costs of closure of the sanitary landfills operated by the debtor[]" at the Combe Fill North and South sites. Id. Ex. 24. That claim was nearly identical to the claim the NJDEP filed in CEA's bankruptcy proceedings. See Id. Ex. 13. The parties reduced and settled the NJDEP's claim for $50, 000 in a January 17, 1984 order of the bankruptcy-court judge. Id. Ex. 25.

         On January 22, 1986, the USEPA filed an Application for Reimbursement of Administrative Expenses in the CFC bankruptcy, claiming costs for CERCLA response actions at the Site. Id. Ex. 26. By a June 4, 1986 order of the bankruptcy-court judge, the parties reduced and settled the USEPA's claim for $50, 000. Id. Ex. 27.

         III. Compaction's Settlement with the NJDEP and USEPA

         In 2009, a number of defendants in this litigation entered into a consent decree with the USEPA and NJDEP. Id. Ex. 31. That settlement included $69 million of past response costs at the Site, approximately $3.2 million for natural resource damages, and the purchase of an annuity for future response costs totaling $27 million. Id. at 16. Compaction paid $11 million as its share of those settlement costs. Id. at 17. In addition, Compaction voluntarily accepted an additional judgment of $26 million, to be paid only if it is able to recover an amount exceeding $11 million from the Carter Day Parties. Id. Ex. 33.


         Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A factual dispute between the parties must be both genuine and material to defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A disputed fact is material where it would affect the outcome of the suit under the relevant substantive law. Scott v. Harris, 550 U.S. 372, 380 (2007). A dispute is genuine where a rational trier of fact could return a verdict for the non-movant. Id.

         The movant bears the initial burden to demonstrate the absence of a genuine issue of material fact for trial. Beard v. Banks, 548 U.S. 521, 529 (2006). Once the movant has carried this burden, the non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts" in question. Scott, 550 U.S. at 380 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). "[W]ith respect to an issue on which the nonmoving party bears the burden of proof... the burden on the moving party may be discharged by 'showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the moving party has satisfied its initial burden, the party opposing the motion must establish that a genuine issue as to a material fact exists. Jersey Cent. Power & Light Co. v. Lacey Township, 772 F.2d 1103, 1109 (3d Cir. 1985). The party opposing the motion for summary judgment cannot rest on mere allegations and instead must present actual evidence that creates a genuine issue as to a material fact for trial. Siegel Transfer, Inc. v. Carrier Express, Inc., 54F.3d 1125, 1130-31 (3d Cir. 1995).

         Each party must support its position by "citing to particular parts of materials in the record ... or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1). Facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts. Scott, 550 U.S. at 380. At this stage, "the judge's function is not... to weigh the evidence and determine the truth of the matter." Anderson, 477 U.S. at 249.


         I. The Carter Day Parties' Motion for ...

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