Yankee Gas Services Co. v. UGI Utilities, Inc.
852 F. Supp. 2d 229
D. Conn.2012Background
- Yankee Gas sues UGI under CERCLA §107(a) to recover cleanup costs for Waterbury North MGP pollution; UGI counterclaims under §113(f) seeking equitable allocation among liable parties.
- This is a bifurcated, previously partially tried action; phase I resolved limitations and liability for multiple MGP sites; Waterbury North remains for allocation.
- Waterbury North operated 1854–1928 with coal gas prior to 1883 and CWG thereafter; UGI operated 1884/1889–1914, overlapping with Yankee Gas’s ownership.
- Dispute centers on whether UGI is liable for 1884–1889 operations, whether an owner’s share applies, and how to allocate costs among three site areas: Holders, Tailrace, and Areas Beyond the Holders.
- Court also addresses whether UGI is a de facto merger successor to UGIC and whether insurance and rate-recovery payments reduce liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yankee Gas and UGI are jointly and severally liable under CERCLA §107(a). | Yankee Gas | UGI | Yes; both liable under CERCLA §107(a). |
| How the costs should be allocated among the parties once liability is established. | Yankee Gas seeks allocation favoring its past ownership and benefits | UGI seeks a more proportional or operation-based allocation | Allocation approved using Gore/Torres factors with Yankee Gas 75% base plus 25% owner’s share; UGI 25% base; site-area allocations set (Holders, Tailrace, Beyond Holders) with specific percentages. |
| Whether UGI is responsible for UGIC’s liabilities due to a de facto merger or mere continuation (1884–1889 period). | Yankee Gas argues TUGIC assumed UGIC liabilities; de facto merger | UGI contends no full assumption or de facto merger | De facto merger found; UGI liable for UGIC’s 1884–1889 operations at Waterbury North. |
| What impact do insurance proceeds and rate recovery have on CERCLA allocation? | Yankee Gas argues collateral source rules apply; insurance offsets reduce liability | UGI asserts no collateral source offset; rate recovery should be treated differently | Insurance proceeds partially offset liability (assigned share of $836,364 per site); rate recovery not reduced; overall allocation excludes rate recovery but includes insurance offset. |
| What is the legal effect of allocating costs to the Tailrace and Beyond the Holders Areas given evidentiary uncertainties? | Yankee Gas argues stricter link to operational periods | UGI argues broader historical factors | Allocation based on gas production ratio for Tailrace; Beyond the Holders allocated 26.8% to UGI and 73.2% to Yankee Gas, with adjustments. |
Key Cases Cited
- Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (US 2009) (strict liability; apportionment proper with a reasonable basis)
- Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir. 2010) (cost allocation and causation principles in CERCLA context)
- United States v. Atl. Research Corp., 551 U.S. 128 (US 2007) (contribution claims and allocation under §113(f))
- Consol. Edison Co. of N.Y. v. UGI Utils., Inc., 423 F.3d 90 (2d Cir. 2005) (discussion of §113(f) allocation and liability)
- John S. Boyd Co. v. Boston Gas Co., 992 F.2d 401 (1st Cir. 1993) (transfer of CERCLA liability; breadth of assumptions in asset transactions)
- U.S. v. Alcan Aluminum Corp., 990 F.2d 711 (2d Cir. 1993) (causation in CERCLA liability; no need to prove exact waste source)
- New York v. Nat’l Serv. Indus., Inc., 460 F.3d 201 (2d Cir. 2006) (de facto merger/continuation questions in CERCLA context)
- New York v. Solvent Chem. Co., 664 F.3d 22 (2d Cir. 2011) (future response costs; declaratory judgment approach)
- Trs. of the Nat’l Lab. v. Phelps Dodge Copper, Not cited here (—) ((not used; placeholder to indicate absence))