NY Can Sue for Leak of Dry-Cleaning Chemical

BROOKLYN, N.Y. (CN) - Dow Chemical and other manufacturers must face a trial for allegedly ignoring a decades-long leak that contaminated four decommissioned drinking-water supply wells in New York with dry-cleaning chemicals, a federal judge ruled.

West Side Corp. owned and operated a chemical storage distribution center in Queens from 1969 to 1990 that dealt with PCE, the nickname commonly given to chemical used in dry cleaning known as tetrachloroethylene or perchloroethene. Dow Chemical, Ethyl Corp. and PPG Industries contracted with West Side to supply it with PCE for redistribution or repackaging.

The manufacturers sent PCE on railroad tankers to transfer the chemical to West Side's storage tanks, a process that caused leaks into four adjacent drinking water-supply wells that were decommissioned due to groundwater contamination.

In 2007, New York and the Department of Environmental Conservation sued Dow Chemical and other companies for six environmental claims, four of which the manufacturers moved to dismiss about a year later.

The environmental conservation department claims it attempted to, but could not, get West Side to agree to investigate the contamination and clean up the site. State prosecutors say that New York has spent $6 million in "response costs." They also think that the manufacturers had control over and knew about the spills and leaks throughout their working relationship with West Side.

On Thursday, U.S. District Judge Eric Vitaliano granted three dismissals, but the surviving claim allows the state to seek restitution for its cleanup of the site.

According to his 32-page order, the controversy came down to a controversial interpretation of a landmark legislation called Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980.

CERCLA granted broad federal authority to clean up spills that may endanger public health or the environment, allowing the government to identify polluters and force them to pay for its cleanup of Superfund sites, a term used to designate areas where hazardous substances have been or threaten to be released into the environment.

In 1985, the 2nd Circuit ruled that CERCLA claims do not preempt state-law claims, but it barred "double recovery" by state and government bodies remediating the same sites.

Judge Vitaliano said that it is too soon to see whether manufacturers face the threat of "double recovery."

"[A]t threshold, double recovery remains merely a threat - premature at best and not sufficiently developed," Vitaliano wrote. "Discovery holds the key in such situations. Plainly, recovery under CERCLA might be unavailable altogether. It is simply too soon to determine whether double recovery is a real possibility."

The judge allowed New York and the conservation department to seek restitution, but dismissed the public-nuisance claims as time-barred under the statute of limitations.

The parties will now proceed to discovery. The New York State Attorney General's office, the conservation department and Dow Chemical did not immediately respond to requests for comment.

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