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Corporations that paid $80 million to clean up two Superfund landfills in Naugatuck, Conn., have a right to get towns to pay their fair share of the cleanup, the 2nd U.S. Circuit Court of Appeals ruled Oct. 29. In reaching that conclusion, the court found that calculating municipalities’ fair share of the cleanup costs is within the broad discretion of a federal judge. On Goodrich Corp. et al. v. Middlebury, et al.‘s third and possibly final trip to the appeals court, the 2nd Circuit upheld U.S. District Court of Connecticut Senior Judge Peter C. Dorsey’s individualized formula for allocating cleanup costs that sharply contrasted the “no cost” recommendation of Dorsey’s special master. Christopher P. McCormack, of New Haven, Conn.’s Tyler, Cooper & Alcorn, represents the Laurel Park coalition of corporate litigants, who sought contribution from the towns. (Laurel Park is one of two landfills.) He said the decision “is the final step on a path the 2nd Circuit has been following since 1992. It lays out the entire scope of municipal liability here from start to finish. I think this represents the finish.” McCormack, who heads his firm’s environmental practice section, has been working on the case virtually his entire legal career. The lawyer for municipal defendants, Ann Catino of Hartford, Conn.’s Halloran & Sage, also has been working on the case since 1987. She said the towns are “disappointed,” but are mulling the fact that Goodrich creates a split of opinion between the 9th Circuit’s “clearly erroneous” and the 2nd Circuit’s “abuse of discretion” standards of review in such disputes. DORSEY’S RX ENDORSED The defendants are six towns that held out to the bitter end, while many others settled. Originally the towns claimed governmental immunity from paying a share of the cleanup costs. Later in the litigation, they argued that competing federal laws carved out exemptions for municipalities. They also argued for years that municipal solid waste is not dangerous enough to be included in the Superfund cleanup calculation. Finally, with this appeal, the towns contended that Dorsey did not impose a high enough standard of proof for imposing cleanup liability on the towns. A three-judge panel of Joseph M. McLaughlan, Rosemary S. Pooler and Barrington D. Parker Jr. upheld Dorsey’s original formulas. It refused to quibble with his specific allocations of costs, concluding that the law requires “an equitable determination based on the district court’s discretionary selection of the appropriate equitable factors in a given case.” The 14-year-old dispute consists of two groups of manufacturing companies that the Environmental Protection Agency held responsible to clean up two Naugatuck landfills. The members of the Laurel Park coalition and the Beacon Heights coalition have sealed off their respective landfills with a waterproof membrane, and now pay the maintenance and monitoring costs to prevent groundwater contamination. Over a period of 50 years, municipal waste from surrounding towns made up a major segment of what was dumped at the two sites. The corporate groups sued for contribution from the towns, many of which have previously settled out of the litigation. Middlebury, Hamden, Orange, Seymour, Westport and New Haven are the remaining defendants. The Laurel Park coalition pegged its remediation costs at more than $30 million, and the Beacon Heights coalition [BHC] claimed $50 million. An expert for BHC calculated costs in five categories: excavation and capping of the landfill, venting and treatment of methane, leachate treatment, leachate collection and off-site groundwater contamination costs. The experts for the corporations found the towns’ shares of the costs should range from 2 percent to a whopping 32 percent, depending on the amount and nature of what each town dumped, with New Haven being the highest. Experts for the towns came up with minuscule percentages — from 0.54 percent for Orange to 1.36 percent for Westport. Dorsey appointed Woodbridge, Conn., lawyer Peter Cousins as a special master. After hearing testimony, Cousins recommended “that the district court allocate no responsibility whatsoever to the Municipal Defendants,” the circuit court wrote. Dorsey considered the recommendation, but rejected it. Instead he came up with his own series of equitable factors, based on the total volume of waste disposed, the amount of hazardous substances in each party’s waste, whether the waste was solid or liquid, the “releasability” of the waste and the mobility of the hazardous substances in each party’s waste. Dorsey’s Aug. 2, 2000 ruling allocated contribution costs and interest from the towns, ranging from a high of $2.7 million for Westport to a low of $46,933 for Naugatuck, which reflected a reduction due to a settlement by the Naugatuck Treatment Company using funds that belonged to the town. Since Dorsey’s decision was so complex, a hotly contested issue in the appeal was the standard of review. The 2nd Circuit emphasized that the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) affords a court broad discretion to balance the equities in the interests of justice. “Essentially, what the District Court said was that they’re not going to require us to show that this bottle of nail polish remover here caused $1.89 worth of response costs over there,” said McCormack, the Laurel Park coalition’s lawyer. “If you require that kind of proof, you’re going to be letting a lot of people out of the net that the statute wants to keep in.” Pepe & Hazard’s David E. Rosengren represented the Beacon Heights coalition of corporate plaintiffs, while Kevin McSherry, of the McSherry Law Office in Naugatuck, defended the Borough of Naugatuck.

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