10 F.4th 87
2d Cir.2021Background
- RACER Trust and RACER Properties were created under a 2011 Trust Consent Agreement in the GM bankruptcy to remediate former GM properties, including IFG Plant (OU‑1) and Ley Creek (OU‑2) in the Onondaga Lake region.
- NYSDEC (and later EPA) asked RACER to sample and remediate an expanded territory beyond OU‑2; RACER alleges the expanded area is contaminated and remediation will cost far more than the Trust funds allocated; RACER alleges other parties contributed to that pollution.
- RACER has already incurred roughly $12.4 million in investigation/cleanup costs and sues dozens of defendants under CERCLA §§ 107 (cost recovery) and 113(f) (contribution), plus related state claims and declaratory relief.
- The district court dismissed RACER’s federal claims without prejudice, holding RACER Trust lacks capacity to sue (ordering trustee substitution) and that RACER’s § 107 claim was prudentially unripe given EPA’s ongoing investigation; it also dismissed § 113 on mixed grounds (ripeness, statute of limitations, or failure to state a claim).
- On appeal, the Second Circuit affirmed that the trustee (EPLET) must be substituted as plaintiff, vacated the district court’s ripeness and dismissal rulings for §§ 107 and 113, and remanded for further proceedings, concluding both federal claims are prudentially ripe and that the district court failed adequately to explain any other bases for dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Capacity to sue (Rule 17) | RACER Trust may sue in its own name under Rule 17(a); trust should be permitted to proceed | Defendants: Trust lacks capacity under Rule 17(b); trustee (EPLET) is the proper party | Held: Trust lacks capacity under NY law; EPLET (trustee) must be substituted as plaintiff |
| Prudential ripeness of §107 cost‑recovery claim | RACER: claim for costs already incurred is fit for adjudication now; delay causes hardship and risk of non‑recovery | Defendants: EPA investigation may identify other PRPs; adjudication should await administrative process; future costs speculative | Held: §107 claim is prudentially ripe — RACER has incurred recoverable costs and would suffer hardship if forced to wait; district court erred to dismiss on ripeness |
| §113 contribution claim (alternative claim) | RACER pleaded §113 in the alternative; it has not resolved liability by settlement so §107 is primary; §113 may be pursued if §107 is foreclosed | Defendants: If RACER’s liability was resolved by the 2011 Agreement, §113 is time‑barred; if not, §113 fails to state a claim; prudential ripeness also argued | Held: Court vacated dismissal; §113 is prudentially ripe for the same reasons as §107; district court failed to clearly address or justify time‑bar / failure‑to‑state grounds and must reconsider on remand |
| State‑law claims & declaratory relief / supplemental jurisdiction | RACER: may pursue state claims and declaratory relief if federal claims proceed | Defendants: District court properly declined supplemental jurisdiction after dismissing federal claims | Held: Vacated and remanded; district court should reconsider supplemental jurisdiction if federal claims proceed; declaratory relief remains available as a remedy |
Key Cases Cited
- W.R. Grace & Co.-Conn. v. Zotos Int’l, Inc., 559 F.3d 85 (2d Cir. 2009) (background on CERCLA’s complexity and remedial framework)
- United States v. Atl. Research Corp., 551 U.S. 128 (2007) (distinguishing §107 cost‑recovery from §113 contribution)
- Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir. 2010) (when §113’s specific requirements displace §107)
- MPM Silicones, LLC v. Union Carbide Corp., 966 F.3d 200 (2d Cir. 2020) (description of §107 cause of action)
- Americold Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378 (2016) (trusts and capacity to sue; trustee vs. trust entity)
- Lexmark Int’l v. Static Control Components, Inc., 572 U.S. 118 (2014) (limits on prudential doctrines and obligations to exercise jurisdiction)
- Susan B. Anthony List v. Driehaus, 573 U.S. 149 (2014) (questioning continuing vitality of prudential ripeness doctrine)
- In re Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., 725 F.3d 65 (2d Cir. 2013) (ripeness doctrine: fitness and hardship factors)