92 F.4th 415
2d Cir.2024Background
- From the 1950s–1993 GM’s Inland Fisher Guide (IFG) plant released PCBs and other pollutants into Ley Creek near Syracuse; remediation work began under EPA/NYSDEC orders.
- GM filed for bankruptcy in 2009; the 2011 bankruptcy consent decree created the RACER Trust to assume title/funding and continue remediation at 89 defined "Properties," including the GM‑IFG Syracuse Property (OU‑1).
- The 2011 Agreement provided covenants not to sue and contribution protection for environmental liabilities "with respect to the Properties" and for migration of hazardous substances emanating from those Properties, but reserved rights for sites that were not Properties and for Lower Ley Creek downstream of the Route 11 Bridge.
- RACER completed further investigation and remediation for OU‑2 (Ley Creek sediments/floodplain between Townline Road and Route 11 Bridge) and remediated an "Expanded Territory" of adjacent areas; EPA/NYSDEC issued a 2015 ROD for OU‑2 and a 2021 consent order addressing the Expanded Territory.
- RACER sued multiple defendants (2018) under CERCLA §107 and §113 seeking recovery/contribution for costs in OU‑2 and the Expanded Territory; the district court dismissed, holding the 2011 Agreement resolved RACER’s liability for the disputed area and that §113 claims were time‑barred.
- The Second Circuit VACATED and REMANDED: it held the 2011 Agreement unambiguously covered only the listed Properties and contamination that emanated from those Properties (not the entire OU‑2/Expanded Territory), and that whether contamination in the disputed areas derived from migration from the IFG Property is a factual question unsuited to dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural: Whether the district court improperly relied on extrinsic documents without converting to summary judgment | RACER: the court relied on extraneous exhibits (Proofs of Claim, affidavit, Michigan complaint) and should have converted or excluded them | Defendants: the U.S. Proof of Claim (Claim 64064) was incorporated by reference into the 2011 Agreement and thus properly considered on a Rule 12(b)(6) motion | Held: No reversible error — Claim 64064 was incorporated into the 2011 Agreement attached to the complaint; other exhibits did not affect the decision |
| Scope: Whether the 2011 Settlement Agreement resolved RACER’s CERCLA liability for OU‑2/Expanded Territory | RACER: the Agreement covers only the enumerated Properties and migration emanating from them; it did not resolve liability for OU‑2/Expanded Territory unless contamination migrated from the IFG Property | Defendants: the covenant not to sue incorporates the Government Proofs of Claim and thus covers the broader OU‑2/Upper Ley Creek area claimed in the Proofs of Claim | Held: The Agreement is unambiguous and limits protection to the defined Properties and migration from them (no farther downstream than Route 11 Bridge); reference to Proofs of Claim does not expand that scope |
| Remedy/Timeliness: Whether RACER can pursue §107 cost‑recovery or is limited to §113 contribution (and thus time‑barred) | RACER: if liability for disputed costs was not resolved by the 2011 Agreement, RACER may proceed under §107; otherwise §113 applies | Defendants: the 2011 settlement was a judicially‑approved resolution triggering §113 and the three‑year statute of limitations | Held: If the 2011 Agreement resolved RACER’s liability for particular costs, RACER’s remedy is §113 and those claims are time‑barred; if not, §107 remains available. Determination whether the 2011 Agreement resolved liability for the disputed areas is factual and cannot be resolved on the pleadings |
| Reassignment on remand | RACER: judge should be recused/reassigned to avoid appearance of partiality | Defendants: no basis for reassignment; complex history argues for continuity | Held: Denied — no unusual circumstances or appearance of partiality warrant reassignment |
Key Cases Cited
- Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (2009) (explains CERCLA’s purpose and framework for cleanup liability)
- Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir.) (2010) (distinguishes §107 and §113 and holds settlement channeling claim into §113)
- United States v. Atlantic Research Corp., 551 U.S. 128 (2007) (clarifies §107 v. §113 remedies for voluntary cleanups)
- Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004) (addresses availability of contribution remedies under CERCLA)
- DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104 (2d Cir. 2010) (documents attached to or incorporated by reference in a complaint may be considered on Rule 12(b)(6))
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (limits on considering extrinsic material on a motion to dismiss and Rule 12(d) conversion rule)
- Greenfield v. Philles Records, 98 N.Y.2d 562 (N.Y. 2002) (New York contract‑interpretation principles: plain meaning and whole‑text construction)