22-1589-cv
Revitalizing Auto Communities Environmental Response Trust v. National Grid USA
In the
United States Court of Appeals
For the Second Circuit
August Term, 2022
(Argued: February 23, 2023 Decided: February 5, 2024)
No. 22-1589-cv
______________
REVITALIZING AUTO COMMUNITIES ENVIRONMENTAL RESPONSE TRUST, RACER
PROPERTIES LLC, EPLET, LLC, NOT INDIVIDUALLY BUT SOLELY IN ITS
REPRESENTATIVE CAPACITY AS ADMINISTRATIVE TRUSTEE OF REVITALIZING AUTO
COMMUNITIES RESPONSE TRUST,
Plaintiffs-Appellants,
v.
NATIONAL GRID USA, NIAGARA MOHAWK POWER CORPORATION, CARRIER
CORPORATION, UNITED TECHNOLOGIES CORPORATION, CARLYLE AIR
CONDITIONING COMPANY, INC., GENERAL ELECTRIC COMPANY, FKA GENERAL
ELECTRIC CORPORATION, BRISTOLMEYERS SQUIBB COMPANY, MAGNA POWERTRAIN
USA, INC., SOLVENTS AND PETROLEUM SERVICE, INC., THOMPSON CORNERS, LLC,
METALICO SYRACUSE REALTY, INC., METALICO NEW YORK, INC., GARDNER DENVER,
INC., ONX1 LLC, ONONDAGA POTTERY COMPANY, INC., AMPARIT INDUSTRIES, LLC,
6181 THOMPSON ROAD, LLC, CARRIER CIRCLE BUSINESS COMPLEX LLC,
TELESECTOR RESOURCES GROUP, INC, WESTERN ELECTRIC COMPANY,
INCORPORATED, SYRACUSE LEPAGE LLC, LENNOX INDUSTRIES INC., SYRACUSE
DEERE ROAD ASSOCIATES, LLC, JAGAR ENTERPRISES, INC., CALOCERINOS AND
SPINA, C & S ENGINEERS, INC., B&B FAMILY LIMITED PARTNERSHIP, HAULER'S
FACILITY LLC, 6223 THOMPSON ROAD SUITE 1000 SYRACUSE, NY 13206,
HONEYWELL INTERNATIONAL INC., 80 STATE STREET ALBANY, NY 122072543,
LOCKHEED MARTIN CORPORATION, 6801 ROCKLEDGE DRIVE BETHESDA, MD 20817,
NEW PROCESS GEAR, INC., 6600 NEW VENTURE GEAR DRIVE EAST SYRACUSE, NY
13507, NOKIA OF AMERICA CORPORATION, 600 MOUNTAIN AVENUE MURRAY HILL,
NJ 07974, NORTH MIDLER PROPERTIES LLC, 6041 SEWICKLEY DRIVE JAMESVILLE, NY
13078, NORTHEAST MANAGEMENT SERVICES, INC., C/O FLORINE BASILE, JR.,
PRESIDENT P.O. BOX 1238 CICERO, NY 13039, NORTHERN INDUSTRIAL HOLDINGS,
LLC, 1675 SOUTH STATE STREET SUITE B DOVER, DE 19901, THOMPSON LAWN, LLC,
7050 CEDARBAY ROAD FAYETTEVILLE, NY 13066, THOMPSON NW, LLC, 7050
CEDARBAY ROAD FAYETTEVILLE, NY 13066, CENTER CIRCLES LLC, CHRYSLER
GROUP LLC, ALERIS PARTNERS LLC, COOPER CROUSE-HINDS, LLC, PRESTOLITE
ELECTRIC INCORPORATED, AKA NEW PRESTOLITE, FKA PEI 1991 ACQUISITION, INC.,
FULTON IRON & STEEL CO. INC., DEERE & COMPANY, OLD CARCO LIQUIDATION
TRUST, BY ITS TRUSTEE RJM I, LLC 251 LITTLE FALLS DRIVE WILMINGTON, DE
19808, OLD CARCO LLC, 555 CHRYSLER DRIVE AUBURN HILLS, MI 48236, FKA
CHRYSLER LLC, UNITED STATES HOFFMAN MACHINERY CORPORATION, 105 FOURTH
AVENUE NEW YORK, NY 10003,
Defendants-Appellees,
LIBBEY GLASS INC., BURKO CORPORATION, EMPIRE PIPELINE CORPORATION, OLD
ELECTRIC, INC., FKA OLD PRESTOLITE, FKA PRESTOLITE ELECTRIC INCORPORATED,
NEW PROCESS GEAR CORPORATION, SYRACUSE CHINA COMPANY, JOHN DOES,
Defendants.
Before: CALABRESI, LYNCH, and ROBINSON, Circuit Judges.
Plaintiffs-Appellants Revitalizing Auto Communities Environmental
Response Trust, RACER Properties LLC, and Eplet, LLC (the administrative
trustee of the Revitalizing Auto Communities Response Trust) (collectively,
“RACER”) were created to fund and continue General Motors’ (“GM”)
environmental remediation activities at former GM properties nationwide
following GM’s 2009 bankruptcy. RACER filed this suit in the Northern District
of New York seeking cost recovery or contribution from dozens of Defendants
under the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., for the costs of environmental
cleanup in and abutting a stretch of Ley Creek near the GM-IFG Plant, located
near Syracuse. The district court (Hurd, J.) dismissed RACER’s Second
2
Amended Complaint on the ground that RACER’s CERCLA liability with respect
to the area in question was resolved by a 2011 consent decree. As a result,
RACER was foreclosed from predicating its claims on CERCLA § 107 (42 U.S.C. §
9607(a)), and its claims under CERCLA § 113 (42 U.S.C. § 9613(f)(3)(B)) were
barred by the applicable three-year statute of limitations.
We conclude that the 2011 consent decree did not definitively resolve
RACER’s liability as to the entire area in dispute; it only resolved RACER’s
liability as to the site of the IFG Plant and pollutants that emanated and migrated
from that site. Whether and to what extent the response costs for which RACER
seeks recovery arise from pollution that migrated or emanated from the Plant site
is a factual question that we cannot resolve based on the pleadings alone. Thus,
the district court erred in dismissing RACER’s claims. We deny RACER’s
request that we reassign, and accordingly, VACATE the district court’s judgment
dismissing the case and REMAND for further proceedings consistent with this
opinion.
JEFFREY D. TALBERT (Laura E. Jensen, on
the brief), Preti, Flaherty, Beliveau &
Pachios, LLP, Portland, ME, for
Plaintiffs-Appellants.
Alan J. Knauf, Linda R. Shaw, Amy K.
Kendall, Jonathan R. Tantillo, Knauf
Shaw LLP, Rochester, NY, for Plaintiffs-
Appellants.
ROBERT A. WIYGUL (Steven T. Miano,
Peter V. Keays, on the brief), Hangley
Aronchick Segal Pudlin & Schiller,
Philadelphia, PA, for Defendant-Appellee
Lockheed Martin Corporation.
Dean S. Sommer, Kristin Carter Rowe,
Young/Sommer LLC, Albany, NY, for
Defendant-Appellee General Electric
Company.
3
Douglas H. Zamelis, The Law Office of
Douglas H. Zamelis, Cooperstown, NY,
for Defendant-Appellee Northeast
Management Services, Inc.
Gregory M. Brown, Fogel & Brown,
P.C., Syracuse, NY, for Defendants-
Appellees Syracuse Deere Road Associates,
LLC and Hauler’s Facility LLC.
Yvonne E. Hennessey, Barclay Damon
LLP, Albany, NY, for Defendants-
Appellees National Grid USA and Niagara
Mohawk Power Corporation.
Philip H. Gitlen, Whiteman Osterman &
Hanna LLP, Albany, NY, for Defendant-
Appellee Verizon New York Inc. as
successor to Telesector Resources Group,
Inc.
Geoffrey Michael, Lauren C. Daniel,
Arnold & Porter Kaye Scholer LLP,
Washington, DC, for Defendant-Appellee
Honeywell International Inc.
Michael A. Fogel, Fogel & Brown, P.C.,
Syracuse, NY, for Defendants-Appellees
Carrier Circle Business Complex LLC,
North Midler Properties, LLC, and Syracuse
LePage LLC.
Patrick D. Donnelly, McGivney, Kluger
Clark & Intoccia, P.C., Syracuse, NY, for
Defendants-Appellees Carrier Circle
Business Complex LLC, North Midler
Properties, LLC, Syracuse LePage LLC,
4
Syracuse Deere Road Associates, LLC,
Hauler’s Facility LLC.
Lori E. Petrone, Kenney Shelton Liptak
Nowak, LLP, Buffalo, NY, for Defendant-
Appellee Amparit Industries, LLC.
Joseph R. Talarico, II, Talarico Law
Firm, Fayetteville, NY, for Defendant-
Appellee B&B Family Limited Partnership.
Linda E. Alario, Syracuse, NY, for
Defendant-Appellee Jagar Enterprises, Inc.
John J. Kuster, Sidney Austin LLP, New
York, NY, for Defendants-Appellees Magna
Powertrain USA, Inc., and New Process
Gear, Inc.
Andrew C. Rose, Nixon Peabody LLP,
Albany, NY, for Defendant-Appellee
Onondaga Pottery Company, Inc.
Albert J. Millus, Jr., Hinman, Howard &
Kattell, LLP, Binghamton, NY, for
Defendants-Appellees Metalico New York,
Inc. and Metalico Syracuse Realty, Inc.
Paul D. Sylvestri, Harter Secrest &
Emery LLP, Rochester NY, for
Defendants-Appellees C&S Engineers, Inc.
and Calocerinos and Spina.
Elizabeth C. Barton, Erick M. Sandler,
Day Pitney LLP, Hartford, CT, for
Defendants-Appellees Carrier Corporation,
Carlyle Air Conditioning Company Inc.,
and Raytheon Technologies Corporation
f/k/a United Technologies Corporation.
5
Glen R. Stuart, Adina D. Bingham,
Morgan, Lewis & Bockius LLP,
Philadelphia, PA, and Bernard J.
Garbutt, III, Morgan, Lewis & Bockius
LLP, New York, NY, for Defendant-
Appellee Bristol-Meyers Squibb Company.
Meaghan G. Boyd, Alston & Bird LLP,
Atlanta, GA, and David Venderbush,
Alston & Bird LLP, New York, NY, for
Defendants-Appellees Nokia of America
Corporation and Western Electric
Company, Incorporated.
Daniel T. Flaherty, Daniel C.W. Narvey,
Godfrey & Kahn, S.C., Milwaukee, WI,
for Defendant-Appellee Gardner Denver,
Inc.
John T. Kolaga, Rupp Pfalzgraf LLC,
Buffalo, NY, for Defendants-Appellees
6181 Thompson Road LLC, Thompson
Corners, LLC, Thompson Lawn, LLC, and
Thompson NW, LLC.
Melody D. Westfall, Westfall Law PLLC,
Syracuse, NY, for Defendant-Appellee
Northern Industrial Holdings, LLC.
Donald W. O’Brien, Jr., Woods Oviatt
Gilman LLP, Rochester, NY, for
Defendant-Appellee ONX1 LLC.
Charles T. Wehland, Jones Day,
Chicago, IL, for Defendant-Appellee
Lennox Industries.
6
ROBINSON, Circuit Judge:
Between the 1950s and 1993, General Motors Company (now General
Motors) (“GM”) operated the Inland Fisher Guide plant (“IFG Plant” or “the
Plant”) in the Onondaga Lake region near Syracuse, New York. The Plant was
the site of car manufacturing work that caused chemical pollutants, including
polychlorinated biphenyls (“PCBs”), to enter the nearby Ley Creek, a tributary of
Onondaga Lake.
Beginning in the 1980s—before Onondaga Lake was designated a
Superfund Site 1 by the United States Environmental Protection Agency (EPA) in
1994—GM entered into a series of consent decrees with the EPA and the New
York State Department of Environmental Conservation (NYSDEC) to help clean
up pollution caused by the IFG Plant. These studies and initial remediation
efforts were ongoing when GM declared bankruptcy in 2009.
In the wake of GM’s bankruptcy, Plaintiffs-Appellants Revitalizing Auto
Communities Environmental Response Trust, RACER Properties LLC, and Eplet,
1Under the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA), the EPA designates National Priority List Sites (commonly called “Superfund
Sites”) to receive funding from the Hazardous Substance Superfund to remediate
environmental contamination. See 26 U.S.C. § 9507 (creating the Superfund); 42 U.S.C. § 9611
(setting out purposes of Superfund); see also United States Environmental Protection Agency,
Superfund: CERCLA Overview, https://www.epa.gov/superfund/superfund-cercla-overview (last
updated Oct. 30, 2023) [https://perma.cc/3G7B-HM7C].
7
LLC (the administrative trustee of the Revitalizing Auto Communities Response
Trust) (collectively, “RACER”) were created to fund and continue GM’s
environmental remediation activities at former GM properties nationwide.
Beginning in 2011, the year it was formed, RACER began remediation efforts and
continued environmental response study investigations at the former IFG Plant
site and in the nearby Ley Creek.
In this suit, initially filed in 2018, RACER seeks cost recovery or
contribution from dozens of Defendants 2 under the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), Pub. L.
No. 96-510, 94 Stat. 2767 (1980), Pub. L. No. 99-499, 100 Stat. 1613 (1986), codified
together at 42 U.S.C. § 9601 et seq., for the costs of environmental cleanup in and
abutting a stretch of Ley Creek near the former Plant. 3 In particular, RACER
2 The opposition brief on appeal was filed on behalf of thirty-five Defendants-Appellees. See
generally Appellees’ Brief. Defendants-Appellees Solvents and Petroleum Service, Inc.; Center
Circles LLC; Chrysler Group LLC; Cooper Crouse-Hinds, LLC; Prestolite Electric Incorporated,
FKA New Prestolite, FKA PEI 1991 Acquisition, Inc.; Deere & Company; Aleris Partners LLC;
Fulton Iron & Steel Co. Inc.; Old Carco Liquidation Trust, by its Trustee RJM I, LLC, Old Carco,
LLC, FKA Chrysler, LLC; and United States Hoffman Machinery Corporation, did not file an
appellate brief.
3 This is the second time this case has been before us. The United States District Court for the
Northern District of New York (Hurd, J.) previously dismissed RACER’s complaint, concluding
its claims were not yet ripe. Revitalizing Auto Communities Environmental Response Trust v.
National Grid USA, No. 5:18-CV-1267, 2020 WL 2404770, at *14 (N.D.N.Y. May 12, 2020) (RACER
I). In 2021, this Court vacated that decision and remanded, concluding that the claims were, in
fact, prudentially ripe. Revitalizing Auto Communities Environmental Response Trust v. National
Grid USA, 10 F.4th 87, 105 (2d Cir. 2021) (RACER II).
8
invokes CERCLA § 107(a) (42 U.S.C. § 9607(a)), which authorizes suits for
recovery of response costs incurred, and § 113(f)(3)(B) (42 U.S.C. § 9613(f)(3)(B)),
which authorizes a party that has resolved its liability pursuant to a settlement
agreement with a state or the United States to seek contribution from other
potentially responsible parties for costs incurred pursuant to that settlement.
RACER alleges that Defendants conducted manufacturing or other activities that
contributed to contamination of the portion of the Ley Creek area for which
RACER seeks contribution or cost recovery.
In 2022, the district court dismissed RACER’s Second Amended Complaint
(the “Complaint”), concluding that RACER’s only viable claim under CERCLA
was time-barred, and declining to exercise supplemental jurisdiction over the
remaining state law claims. See Racer Properties LLC v. National Grid USA, 610 F.
Supp. 3d 451, 474 (N.D.N.Y. 2022) (RACER III). In particular, the district court
concluded that RACER’s CERCLA liability with respect to the area in question
was resolved by the 2011 consent decree that created RACER and imposed on it
certain obligations and protections (the “2011 Settlement Agreement”). Id. at
467–70. As a result, RACER was foreclosed from predicating its contribution
9
claims on § 107, and its claims under § 113 were barred by the three-year statute
of limitations applicable to § 113 claims. Id. at 472. RACER timely appealed.
The pivotal issue before us is whether the 2011 Settlement Agreement did,
in fact, resolve RACER’s liability as to the area in question. Although this
question is primarily a legal one—it’s a matter of contract interpretation—
understanding the issues requires a deep dive into the facts. We ultimately
conclude that the 2011 Settlement Agreement did not definitively resolve
RACER’s liability as to the entire area in dispute; it only resolved its liability as to
the site of the IFG Plant and pollutants that migrated or emanated from that site.
Whether and to what extent the response costs for which GM seeks recovery
arise from pollution that migrated or emanated from the Plant site, as opposed to
pollution that arrived in the disputed area through other means, requires factual
determinations that we cannot make in the context of this motion to dismiss.
Thus, for the reasons explained more fully below, we agree with RACER
that the district court erred in ruling on the basis of the pleadings that RACER’s
only viable CERCLA claim is time-barred. Accordingly, we VACATE the district
10
court’s judgment dismissing the case and REMAND for further proceedings
consistent with this opinion.
BACKGROUND
I. Facts 4
To illuminate the competing arguments and the context of the 2011
Settlement Agreement, we first describe the history of pollution and the
geography of the area at issue, then summarize several key agreements and
claims that collectively provide context.
A. The Pollution
At the IFG Plant, GM made auto parts by metal die casting and injection
molding. These manufacturing processes used PCB-containing hydraulic oils,
4Because we are at the motion to dismiss stage, we treat all factual allegations in RACER’s
complaint as true and draw all reasonable inferences from those allegations in RACER’s favor.
See, e.g., Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009). We also consider documents attached to
or incorporated by reference to the complaint as part of RACER’s allegations. See, e.g., Cooper v.
Parsky, 140 F.3d 433, 440 (2d Cir. 1998). Accordingly, this account of the facts draws from
allegations on the face of RACER’s complaint as well as the exhibits attached thereto, including
a 1997 Administrative Consent Order between GM and NYSDEC; the 2011 Settlement
Agreement and 2011 Trust Agreement creating RACER; a 2015 Record of Decision between
RACER, NYSDEC, and the EPA; and a 2021 Record of Decision between RACER and the EPA.
In addition, we rely on—where noted—information in a 2009 Proof of Claim filed by the United
States in the GM bankruptcy proceeding. RACER argues the district court erred in considering
this document in deciding the motion to dismiss. Because this specific Proof of Claim was
expressly identified in and incorporated into the 2011 Settlement Agreement that was attached
to the Complaint, as explained below, we conclude that the document can properly be
considered. See Discussion, Section I, below.
11
which leaked from the machines and onto the factory floor. Moving through the
floor drains, these oils—plus other processing wastes—made their way into a
drainage swale that eventually drained into the nearby Ley Creek.
PCBs were “domestically manufactured in commercial quantities from
1930 until 1979,” at which time they were for the most part banned under the
Toxic Substances Control Act. App’x 30. “PCBs were used in a wide variety of
products and materials,” from electrical equipment to oil used in motors and
hydraulic systems to thermal insulation material to carbonless copy paper. Id.
According to the EPA, PCBs “do not readily break down once in the
environment” and therefore “can remain for long periods cycling between air,
water and soil.” United States Environmental Protection Agency, Learn About
Polychlorinated Biphenyls, https://www.epa.gov/pcbs/learn-about-polychlorinated-
biphenyls (last updated Apr. 12, 2023) [https://perma.cc/7PGH-XSHC]. PCBs can
cause a “variety of adverse health effects,” including potential carcinogenic
effects in humans. Id.
RACER alleges that GM was not alone in contributing to pollution in the
Ley Creek watershed. It alleges that the defendants it dubs “Owner and
Operator Defendants” also released or discharged “contaminants (including
petroleum, some of which contained PCBs) into the Ley Creek Watershed.”
12
App’x 19, 30. RACER further alleges that between around 1970 and continuing
through the mid-1980s, the defendants it calls the “Arranger Defendants” placed
dredged spoils on both banks of Ley Creek and adjacent lands as part of a project
to widen the creek and prevent flooding. Id. at 19, 73–74. RACER alleges that
these dredged spoils included PCBs and other hazardous substances discharged
or released by numerous Defendants, including Defendants who had discharged
or released the hazardous substances into a landfill implicated in the dredging
project.
B. The Geography
In 1994, when the EPA designated portions of the Onondaga Lake
Watershed as the Onondaga Lake National Priority List (“NPL” or “Superfund”)
Site, to facilitate environmental remediation activities, the EPA and the NYSDEC
divided the Onondaga Lake Superfund Site into subsites.
The contaminated areas of Ley Creek at issue here are generally located
within what the EPA designated as the General Motors-Inland Fisher Guide
subsite (“GM-IFG Subsite”) of the Onondaga Lake Superfund Site. The GM-IFG
Subsite lies within the 30-square mile Ley Creek watershed, in the Town of
Salina, New York. The GM-IFG Subsite generally consists of the former IFG
13
Plant, a portion of Ley Creek, and surrounding commercial and residential
parcels.
Ley Creek flows east to west through the Subsite, beginning at the
Townline Road bridge on the site’s eastern edge. From there, it flows past the
IFG Plant’s northern property boundary. Continuing its downstream course, the
creek lies between the New York State Thruway to the north, and Factory
Avenue to the south. It then flows through a developed area with smaller
residential and commercial parcels. Ley Creek eventually reaches the Route 11
bridge, at the far western edge of the Subsite. After flowing under the Route 11
Bridge, Ley Creek continues west until it eventually reaches Onondaga Lake.
Within the GM-IFG Subsite, the EPA and NYSDEC further identified two
distinct Operable Units: “OU-1” and “OU-2.” OU-1 is the distinct tract of land
that the IFG Plant sat on, on the eastern portion of the GM-IFG Subsite. It abuts
the western edge of Townline Road, and sits just to the south of Ley Creek.
OU-2, on the other hand, defies such tidy description. It comprises
“approximately 9,200 linear feet of Ley Creek channel sediments, surface water,
and adjacent floodplain soils/sediments upstream of the eastern edge of the
Route 11 Bridge and downstream of the western edge of the Townline Road
Bridge.” App’x 28. It also includes a 10-acre wetland (the “National Grid
14
Wetland”), soil within the “Factory Avenue Area” between OU-1’s Northern
property boundary and Factory Avenue, soil along the northern shoulder of
Factory Avenue, and the National Grid/Teall Avenue Substation access road. Id.
App’x 414. This map, created by RACER, provides a satellite overview of the land in
question. The former IFG Plant, described as “OU-1,” is outlined in dark blue. Ley
Creek and the National Grid Wetland, and several small patches included within “OU-
2” are highlighted in orange. The Ley Creek Dredgings Subsite, discussed below in note
5, is in aqua. Finally, the land that RACER describes as the “Expanded Territory”
(discussed below) is in magenta. Defendants reject the characterization of the magenta
area as a distinct “Expanded Territory.”
The parties do not dispute that the 2011 Settlement Agreement established
RACER’s liability for cleanup costs within the area described as OU-1— that is,
the former IFG Plant, and RACER does not seek recovery for costs incurred with
respect to cleanup in that area. RACER’s CERCLA claims against Defendants
relate to OU-2 and what it calls the Expanded Territory. The parties differ in
15
their views about the contours of OU-2 (in particular, whether it includes the so-
called “Expanded Territory”) and whether RACER’s liability for cleanup in that
area was resolved in the 2011 Settlement Agreement. A number of
administrative and judicial consent orders and claims through the years shed
further light on the controversy.
C. The Orders and Claims
Various administrative consent orders over the years created remediation
obligations on the part of GM, and later RACER, in and around the GM-IFG
Subsite, including OU-1, OU-2, and the so-called “Expanded Territory.” In
addition, the court-approved 2011 Settlement Agreement assigned to RACER
liability for certain cleanup costs.
Whether that 2011 Settlement Agreement resolved RACER’s liability
throughout all of OU-2 and the Expanded Territory is the pivotal issue in this
case. Administrative and court orders in 1997, 2011, 2015, and 2021, combined
with a 2009 Proof of Claim, collectively tell the story of GM’s and then RACER’s
obligations with respect to pollution and remediation in the stretch of Ley Creek
at issue in this case. Each document except the 2009 Proof of Claim was attached
to the Complaint. See note 4, above. We hit the highlights below.
16
i. September 1997 Administrative Consent Order
In September 1997, NYSDEC, as lead agency for the Onondaga Lake site,
and GM entered into an administrative consent order in which GM agreed to
conduct a Remedial Investigation/Feasibility Study (“RI/FS”) of the IFG Plant
and the stretch of Ley Creek between Townline Road and the Route 11 Bridge—a
precursor to the areas that would later be designated OU-1 and OU-2,
respectively. See App’x 316–61 (Order on Consent Index # D-7-0001-97-06) (the
“1997 Consent Order”).
The RI/FS called for by the 1997 Consent Order was a response to
documented contamination in ground water in the area described in that order.
In addition, the RI/FS included a portion of GM’s investigation report involving
the separate Ley Creek PCB Dredgings Subsite insofar as it related to evaluation
of “ground water underlying the dredgings, and the surface water and
sediments in Ley Creek” (identified as the “Deferred Media”). 5 Id. at 323–24. In
5Not to be confused with the stretch of Ley Creek at issue in this case is the Ley Creek PCB
Dredgings Subsite, located nearby. The Ley Creek PCB Dredgings Subsite is “bounded by
Factory Avenue to the south, Ley Creek to the north, Townline Road to the East, and 4,300 feet
downstream to the west.” App’x 78. The Subsite was initially designated by NYSDEC, in
cooperation with the EPA, in 1987. Following years of remediation by GM, in 2006, EPA and
NYSDEC concluded the Subsite was “no longer considered a significant threat to human health
and the environment” and no further cleanup was needed, though they recommended a deed
restriction to preclude activities on the Subsite that could potentially expose contaminated
materials. Id. at 79.
17
a March 1997 Record of Decision, NYSDEC had deferred this component of GM’s
response obligations regarding the Ley Creek PCB Dredgings Subsite to the
RI/FS required by the 1997 Consent Order. Id.
Accordingly, the 1997 Consent Order defined its “Site” of interest as the
former IFG Plant and Deferred Media in the area “from Townline Road to the
Route 11 bridge.” Id. The Site is illustrated in the below exhibit to the 1997
Consent Order.
App’x 363; see also App’x 324 (incorporating Exhibit D as map of the Site that is the
subject of the 1997 Administrative Consent Order). The cross-hatched section makes up
the Site of that Order. On the right side of the image, the boundaries of the former IFG
Plant can be seen (captioned “GM Facility”). Following the cross-hatching to the left on
the image shows the stretch of Ley Creek between Townline Road and the Route 11 bridge
that makes up the rest of the Site.
Pursuant to the 1997 Consent Order, GM was tasked with submitting a
preliminary RI/FS report describing “the nature and extent of contamination at
18
the Site.” Id. at 330. The Order also outlined the next steps following the
preliminary RI/FS report, including supplemental studies and investigations, and
the proposal of interim remedial measures.
By the 1997 Consent Order’s express terms, GM’s consent to and
compliance with the order did not constitute “an admission of liability or an
admission … of law or fact or the applicability of any law to the conditions at the
Site, the Dredgings Site or the Onondaga Lake NPL Site.” Id. at 329. In fact,
Exhibit E to the 1997 Consent Order outlined the scope of work required by the
Order and provided that “upstream sample locations will need to be collected in
order to assist in evaluating impacts from the GM site relative to other potential
contaminant sources upstream.” D. Ct. Dkt. No. 334-11 at 57.
Similarly, the 1997 Consent Order expressly reserved NYSDEC’s right to
bring claims against GM in the future with respect to the Site, “including, but not
limited to, claims to require [GM] to undertake further response actions, and
claims to seek reimbursement of response costs and/or natural resource damages
pursuant to Section 107 of CERCLA.” App’x 349–50.
From 2002 to 2004, in accordance with the 1997 Consent Order, GM
implemented three removal actions limited to the former IFG Plant—by then
designated OU-1—to “prevent further migration of PCBs to Ley Creek”; but
19
these did “not permanently address contamination within OU-1.” Id. at 80. The
RI/FS for OU-1 was still ongoing in 2015, and in 2020, in connection with its sale
of the former IFG Plant property, RACER kept an easement for the purpose of
“completing any Environmental Actions.” Id. at 28 (internal quotation marks
omitted). The RI/FS for OU-2 continued through 2015, when it was completed
with the issuance of a March 2015 Record of Decision for OU-2, discussed more
fully below.
In the meantime, in 2009, GM declared bankruptcy, sparking the creation
of the RACER trust to carry on GM’s environmental remediation work—
including the ongoing RI/FS work in OU-1 and OU-2. For that part of the story,
we turn first to the proofs of claim filed in response to GM’s bankruptcy.
ii. 2009 Proofs of Claim
After GM declared bankruptcy in 2009, the EPA and state environmental
agencies, including NYSDEC, needed to ensure that GM’s promised remediation
work would continue. Accordingly, the United States, a dozen states, and the St.
Regis Mohawk Tribe filed proofs of claim against GM in the bankruptcy action.
The United States filed Proof of Claim Number 64064, which asserted claims
against GM for response costs incurred under CERCLA related to contamination
at numerous GM sites around the country, including the Onondaga Lake
20
Superfund Site. Claim 64064 specifically asserted that GM was liable to the EPA
and the Department of the Interior for “future response actions, response costs,
and natural resource damages and assessment costs incurred and to be incurred
under CERCLA” for several subsites of the Onondaga Lake Superfund Site.
App’x 812.
Claim 64064 divided the Onondaga Lake Superfund Site into five subsites
that GM was allegedly responsible for remediating. Subsites 2 and 5 are most
relevant here, as they generally correlate with what have respectively been
described as operating units OU-1 and OU-2 of the GM-IFG Subsite. 6 Subsite 2
comprises “certain areas alongside Ley Creek, which discharges into Onondaga
Lake, including the 85 acres on which GM operated the IFG Facility.” Id. at 808.
In other words, Subsite 2 is essentially what the EPA also describes as OU-1: the
tract of land where the IFG Plant sat.
6Subsites 1 and 3 are related to but located outside of the GM-IFG subsite. Subsite 1, the “Lake
Bottom Subsite,” is the bottom of Onondaga Lake, where industrial processing and municipal
wastewater plants have historically and routinely discharged their wastes. Ley Creek is one
such contributing source—the IFG Plant disposed of its hazardous wastewater in the Creek.
Subsite 3, the “Salina Landfill Subsite,” is a 55-acre former municipal landfill in the Town of
Salina that operated from 1964 to 1974. GM disposed of hazardous substances (such as paint
sludge, thinner, boiler ash, and PCBs) at this off-site landfill. Subsite 4 correlates to the PCB
Dredgings Subsite, described in note 5, above.
21
Subsite 5, meanwhile, “includes certain downstream banks of Ley Creek.”
Id. at 810. Claim 64064 describes Subsite 5 in relation to Subsite 4 (the PCB
Dredgings Subsite): “Subsite 4, which is upstream of Subsite 5, historically
contributed to the contamination of Subsite 5. . . . The hazardous substances
disposed of by GM at Subsite 4 and detected at Subsite 5 include PCBs.” Id.
Broad language in Claim 64064 reserved the EPA’s right to amend its Proof
of Claim “to assert additional liabilities, including but not limited to liabilities for
additional costs for the matters discussed herein.” Id. at 849.
iii. 2011 Agreements
In 2011, the bankruptcy court entered a consent decree reflecting GM’s
agreement with the EPA, NYSDEC, other state environmental regulatory
agencies, and the St. Regis Mohawk Tribe to settle its environmental liabilities
nationwide and establish a trust to carry on GM’s remediation work. The
consent decree adopted the 2011 Settlement Agreement, which, in turn, included
and attached a Trust Agreement (the “2011 Trust Agreement”). As noted above,
the 2011 Trust Agreement established what became known as the RACER Trust
to carry on GM’s remediation work in numerous former plant sites around the
country.
22
As relevant to this case, the 2011 Settlement Agreement recites that GM has
environmental liabilities “at certain of the properties set forth and defined in
Attachment A,” which are defined as the “Properties.” App’x 422, 430. In the
recitals, the 2011 Settlement Agreement recognizes that many of the Properties
“have been and/or will be the subject of environmental response activities and
other work.” Id. at 422; see also id. at 519 (2011 Trust Agreement) (similar
preamble). It further notes GM is a “potentially responsible or liable part[y] with
respect to the Properties and surrounding areas where Hazardous Substances
have migrated, are continuing to migrate, or otherwise have or will come to be
located.” Id. at 423.
The Properties, listed in Attachment A to the 2011 Settlement Agreement,
include the “GM-IFG Syracuse” site. 7 Id. at 510. An attachment to the 2011 Trust
Agreement includes a metes-and-bounds description of the GM-IFG Syracuse
site. See id. at 586–88. RACER asserts that the property described is coextensive
with OU-1—the site of the IFG Plant itself—and Defendants do not appear to
dispute that.
7 The Ley Creek PCB Dredgings Site, discussed in note 5 above, is another related Property
listed in Attachment A, and corresponds both to Subsite 4 in the 2009 Proof of Claim and the
description given in the 1997 Consent Order. The GM-IFG Syracuse Property is the focus of the
parties’ arguments in this appeal.
23
The general mechanics of the combined agreements are as follows:
RACER agreed to take title to 89 GM properties across 14 states, perform
environmental response activities at the properties, and later sell them for
productive use. The 2011 Settlement Agreement created a trust fund to allow
RACER to “conduct, manage and/or fund Environmental Actions with respect to
certain of the Properties, including the migration of Hazardous Substances
emanating from certain of the Properties.” Id. at 431. GM was to fund the trust
with a payment “in the amount of no less than $641,434,945.” Id. at 435. In
exchange, the EPA, state governments, and the St. Regis Tribe (collectively the
“Governments”) covenanted “not to sue or assert any administrative or other
civil claims or causes of action” against GM or RACER for environmental
liabilities associated with the Properties as defined in the agreement. Id. at 475–
76.
The funding allocation reflected in the 2011 Settlement Agreement funds a
minimum estimate property funding account and a reserve property funding
account for each Property listed in Attachment A, as well as long-term funding
accounts to preserve funding for “operation, monitoring, and maintenance
activities required as Environmental Action[s]” for certain of the Properties. Id.
at 430. The GM-IFG Property is allocated $31,121,812, including about $18
24
million in minimum estimated property funding, $3 million in reserve property
funding, and $10 million for long-term operation, monitoring, and maintenance
funding. Id. at 510. A separate paragraph of the 2011 Settlement Agreement
breaks down the approximately $31 million allocation another way, providing
about $22.5 million “for remediation within the IFG Syracuse facility property
boundaries,” in other words, OU-1, and about $8.5 million “for the property
extending from the facility property boundaries to the Route 11 Bridge.” Id. at
457–58.
The Governments’ covenants not to sue are framed as follows:
With respect to the Properties (including release of Hazardous
Substances from any portion of the Properties and all areas affected
by migration of such substances emanating from the Properties), and
except as specifically provided in Section VIII (Reservation of Rights
and Regulatory Authority), upon the Effective Date and [GM’s]
transfer of the Properties and full funding of the [trust accounts], the
[Governments] covenant not to sue or assert any administrative or
other civil claims or causes of action against [GM], any successor
entity thereto, or [RACER] under CERCLA, RCRA, and State
environmental statutes, as well as any other environmental liabilities
asserted in the Government Proofs of Claim.
Id. at 475–76. In addition, the Agreement provides:
With respect to the Properties, except as specifically provided in
Section VIII (Reservation of Rights and Regulatory Authority), the
Government Proofs of Claim shall be deemed satisfied in full in
accordance with the terms of this Settlement Agreement, [and the
Governments] shall not be entitled to file any further claims under
25
CERCLA, RCRA, or State environmental statutes, as well as any other
environmental liabilities asserted in the Government Proofs of Claim.
Id. at 476. The “Government Proofs of Claim” are defined as the United States,
state, and St. Regis Tribe proofs of claim, collectively. Id. at 425. The 2011
Settlement Agreement expressly references United States Proof of Claim 64064,
as well as a duplicate federal government claim.
Section VIII of the 2011 Settlement Agreement (“Reservation of Rights and
Regulatory Authority”), states that “[t]he covenants not to sue . . . do not apply to
any matters other than those expressly specified therein.” Id. at 479. The 2011
Settlement Agreement specifically reserves rights with respect to certain
geographic areas. Relevant here, subsection (ii) of Paragraph 100 specifically
reserves rights with respect to:
any general unsecured claim with respect to the release of Hazardous
Substances into Lower Ley Creek, the Lake Bottom Subsite, or the
Salina Landfill Subsite, which are part of the Onondaga Lake
Superfund Site in Onondaga County, New York or the Old Ley Creek
Channel in Onondaga County, New York. “Lower Ley Creek” for
purposes of this Settlement Agreement shall mean the entire portion
of Ley Creek which is downstream from the Route 11 Bridge.
Id.
Additionally, and significantly, subsection vii of that reservation of rights
paragraph reserves “all rights with respect to any site that is not a Property,
26
other than claims or causes of action for migration of Hazardous Substances
emanating from a Property.” Id. at 480.
In addition, the 2011 Settlement Agreement provides contribution
protection, stating the agreement “constitutes a judicially-approved settlement
for purposes of Section 113(f)(2) of CERCLA, 42 U.S.C. § 9613(f)(2),” and that GM
and RACER “are entitled to protection from contribution actions or claims as
provided by Section 113(f)(2) of CERCLA . . . or as may be otherwise provided by
law, for ‘matters addressed’ in this Settlement Agreement.” Id. at 483. The
Agreement defines “matters addressed” as:
all costs of Environmental Actions incurred or to be incurred by the
U.S. EPA, the States, or the Tribe or any other person or entity relating
to or in connection with the Properties, including releases of
Hazardous Substances from any portion of the Properties, and all
areas affected by migration of such substances emanating from the
Properties; provided, however, that the “matters addressed” in this
Settlement Agreement do not include (i) any matters reserved in
Paragraph 100 of this Settlement Agreement; or (ii) any claims for past
costs asserted by potentially responsible parties who are not parties
to this Settlement Agreement.
Id. at 483–84.
The 2011 Trust Agreement likewise provides,
To the extent provided in the Settlement Agreement, the
Environmental Response Trust Protected Parties are deemed to have
resolved their civil liability to the Governments arising from or relating
to the Properties under CERCLA, RCRA, and State environmental
statutes, as well as any environmental liabilities asserted in the
27
Governments’ proofs of claim, and have protection from contribution
actions or claims as provided by Sections 113(f)(2) of CERCLA, 42
U.S.C § 9613(f)(2) or similar state law for matters addressed in the
Settlement Agreement.
Id. at 544 (emphasis added).
Finally, the 2011 Settlement Agreement outlines RACER’s outstanding
obligations concerning GM’s continuing environmental remediation and
monitoring activities. It terminates GM’s obligations to perform work under any
outstanding agreement or order and allows the lead agency to substitute RACER
for GM in any outstanding consent decree, administrative order, or other
settlement agreement “so long as the amended or substituted decrees or orders
are not inconsistent with the terms of, and funding provided under, this
Settlement Agreement and the Trust Agreement.” Id. at 474. With respect to the
IFG Plant specifically, it identifies the 1997 Administrative Consent Order and a
July 15, 1999, administrative consent order (the “1999 Consent Decree”) and
states that RACER “shall be substituted [for GM] as respondent to such Orders
and [RACER] shall comply with such Orders” to the extent doing so is consistent
with the Settlement Agreement and Trust Agreement. Id. at 474–75. 8
8The 1999 Consent Decree focused on developing an inactive hazardous waste disposal site
remedial program for the Ley Creek PCB Dredgings Site. See App’x 248–284 (Order on Consent
Index # D7-0008-97-06).
28
iv. 2015 Record of Decision and Consent Order
After the 2011 Settlement Agreement was in place, RACER began taking
over GM’s remediation efforts at the GM-IFG Site, including finishing the
remedial investigation/feasibility study for OU-2 in 2013. In March 2015, the
EPA and NYSDEC—the lead agency at the time—issued a record of decision
(“ROD”), which defined the scope of work and selected a remedy for OU-2 of the
GM-IFG Subsite. The ROD details NYSDEC and the EPA’s findings concerning
contamination in OU-2 and sets out the remediation plan agreed to by the
agencies and RACER.
The ROD explains that the subsite consisting of the former GM-IFG plant
consists of two operable units:
OU1, which addresses the former plant and groundwater on, and
emanating from, the former plant, and OU2 (which is the subject of
this ROD), which includes “other media” not addressed under OU1 .
. . . includ[ing] Ley Creek channel sediments, surface water and
floodplain soils/sediments in the reach from Townline Road to the
Route 11 Bridge, and the National Grid Wetland, Factory Avenue
Area and Factory Avenue/LeMoyne Avenue Intersection Area.
App’x 150. The ROD earlier notes that the relevant stretch of Ley Creek consists
of “approximately 9,200 linear feet . . . including the adjacent floodplains
between Townline Road and the Route 11 Bridge.” Id. at 149. The 2015 ROD
29
then selects a remedy for OU-2, which primarily involves excavating the PCB-
laden contaminated soils and sediments in the area.
Later in 2015, NYSDEC and RACER executed an administrative consent
order under which RACER would perform remedial action within OU-2 as
outlined in the ROD. The preamble to this agreement reiterates the definitions of
OU-1 and OU-2 from the 2015 ROD, stating:
The [GM-IFG] Site consists of the former plant, located south of Ley
Creek on Townline Road and approximately 9,200 linear feet of Ley
Creek including the adjacent floodplains between Townline Road and
the upstream plane of the Route 11 Bridge . . . . OU1 addresses the
former plant and groundwater on, and relating to the former plant,
and OU2 addresses other media not addressed under OU1.
Id. at 109. The preamble further states that the goals of the 2015 Consent Order
are to develop and implement a remedial program for OU-2.
While the 2015 ROD set the remediation work to be completed in OU-2,
RACER maintained in the Complaint that in entering into the 2015 Consent
Order, it “did not admit that hazardous substances emanating from the Former
GM-IFG Plant had migrated to any specific part of OU-2.” Id. at 85.
v. 2021 Administrative Consent Order
As part of the 2015 ROD work program, NYSDEC directed RACER to
sample the soils in areas that RACER contends are beyond OU-2. That sampling
revealed that areas in the floodplain that RACER contends are beyond the scope
30
of the 2015 Consent Order, including residential backyards, were also
contaminated with PCBs. The area in question is what RACER describes as “the
Expanded Territory.” RACER remediated nineteen contaminated residential
backyards while maintaining that it was not required to do so under the 2015
Consent Order.
As RACER’s work continued, the EPA took over as the lead agency
handling cleanup of OU-2. In 2021, RACER and the EPA executed another
administrative consent order (the “2021 Consent Order”) which obligated
RACER to design the site remediation for an area that included OU-2 and an
“Expanded Territory,” as those terms were specially defined for purposes of that
2021 Consent Order. App’x 656–57. For purposes of the 2021 Consent Order
alone, the EPA agreed to separately define these areas, but the EPA did “not
acknowledge the distinction between OU-2 and the Expanded Territory.” Id. at
654. The parties further agreed the terminology of OU-2 and the “Expanded
Territory” as used in the 2021 Consent Order would have no precedential value
31
in any requests for additional RACER funding to be allocated toward response
activities at OU-2, the Expanded Territory, or the site more broadly. 9
In the 2021 Consent Order, the Expanded Territory is defined as:
(i) the majority of the area north of Ley Creek lying between Ley
Creek and the New York State Thruway from Townline Road to
LeMoyne Avenue; (ii) the area south of Ley Creek from
approximately the Town of Salina Highway Department Garage at
601 Factory Avenue to State Route 11 . . . between the Creek and
Cambridge Avenue, Brown Avenue and Factory Avenue; and (iii) the
back yards of 19 residential properties on Brookline Road
immediately north of the top of the northern bank of Ley Creek.
Id. at 656. OU-2 is defined as:
the portion of the GM-IFG Subsite that includes the following:
approximately 9,200 linear feet of Ley Creek channel sediments,
surface water, and adjacent floodplain soils/sediments upstream of
the eastern edge of the Route 11 Bridge and downstream of the
western edge of the Townline Road bridge; a 10-acre wetland located
on the northern portion of the National Grid property that is directly
west of the GM-IFG Facility (“National Grid Wetland”); soil in the
approximately 1.8-acre area located directly between the GM-IFG
Facility’s northern property boundary and Factory Avenue (“Factory
Avenue Area”); soil in the area located along the northern shoulder
of Factory Avenue in the vicinity of LeMoyne Avenue; and National
Grid/Teall Avenue Substation access road (“NG Access Road”).
9Because the 2021 Consent Order distinguishes between OU-2 and the Expanded Territory, and
because RACER’s Complaint makes this distinction, we use the same terminology for purposes
of this appeal. As reflected in our analysis below, the distinction, or lack thereof, between OU-2
and the Expanded Territory is immaterial to our conclusion that the district court erred in
dismissing RACER’s claims. We express no opinion as to whether the Expanded Territory is
distinct from OU-2 for any purpose.
32
Id. at 657.
RACER, for its part, alleges in the Complaint that its agreement to the 2021
Consent Order “does not constitute any admission or finding as to where
hazardous materials emanating from the property comprising the Former GM-
IFG Plant have migrated.” Id. at 87. By the same token, a reservation of rights
section provides that nothing in the 2021 Consent Order will limit the power and
authority of the EPA to take action to “protect public health, welfare, or the
environment,” or to prevent or abate release of hazardous substances from OU-2
or the Expanded Territory “to the extent such actions are not inconsistent with
the Trust Consent Decree.” Id. at 671. Moreover, the EPA may seek legal or
equitable relief to enforce the terms of the 2021 Consent Order or to require
RACER to “perform additional activities pursuant to CERCLA or any other
applicable law.” Id. at 671–72.
This is the last of the orders we describe for the purpose of setting the
stage.
II. District Court Decision
In the Complaint, RACER brought several claims under CERCLA, as well
as various state law claims. It sought a declaration that Defendants are jointly
and severally responsible, or alternatively liable for their equitable share, of the
33
costs associated with the past and future investigation and remediation costs in
OU-2 and the Expanded Territory.
Defendants filed a motion to dismiss RACER’s CERCLA claims on the
basis that the 2011 Settlement Agreement established RACER’s liability for
cleanup costs throughout the entire area in question, and any claim for
contribution pursuant to CERCLA § 113(f)(3)(b)—the only potential claim
available—was untimely. In the Defendants’ view, the 2011 Agreement “plainly
covers” the Upper Ley Creek where OU-2 and the “so-called expanded territory”
are located. Appellees’ Br. at 6.
RACER disagreed. RACER argued, among other things, that the 2011
Agreement applies only to defined Properties and hazardous substances that
emanated from those defined properties. Any claims for recovery of cleanup
costs that do not relate to a Property, as defined in that 2011 Settlement
Agreement, or to hazardous substances that migrated from a Property, are not
subject to a time-barred claim under CERCLA § 113, and are properly the subject
of a timely claim under § 107. RACER contended that the 2011 Agreement did
not establish its liability as to contamination in OU-2 and the Expanded Territory
because OU-2 and the Expanded Territory were not part of a defined “Property,”
and RACER alleges that the contamination in OU-2 and the Expanded Territory
34
“arrived there by means other than ‘migration of Hazardous Substances
emanating from’ former GM Property.” App’x 17. In RACER’s view, because
the 2011 Settlement Agreement did not resolve its liability as to the response
costs in OU-2 and the Expanded Territory, it may pursue a claim for recovery of
those costs under § 107 of CERCLA.
RACER offers two theories as to how OU-2 and the Expanded Territory
became contaminated by means other than migration from the Plant site (OU-1).
The first is that Ley Creek was substantially relocated as part of the New York
State Thruway Authority project in the mid-twentieth century. Construction of
the Thruway in the 1950s involved relocating the stream channel, which, RACER
alleges, spread the contaminated sediments in the then-existing creek bed around
to nearby areas.
The second theory is that, as part of Onondaga County’s effort to improve
storm water drainage, Ley Creek was dredged in the 1970s and 1980s. At
different times since, Ley Creek was restructured and dredged for flood control,
which was necessary because of the highly impervious nature of this
industrialized watershed. The reach of Ley Creek from Townline Road to the
Route 11 Bridge was most recently dredged in 1983. Some of that dredged
material was spread along the banks of Ley Creek, included in OU-2 and the
35
Expanded Territory. RACER alleges that the “2011 Agreement did not make
RACER Trust responsible for responding to such contamination” from either
source. Id. at 83.
The district court agreed with Defendants that the 2011 Agreement
included OU-2 and the Expanded Territory within its covenant not to sue, and
that RACER’s § 113 claim was time-barred in light of the three-year statute of
limitations applicable to claims under that provision. RACER III, 610 F. Supp. 3d
at 462, 470. In so ruling, the district court interpreted the interlocking provisions
of the 2011 Agreements and relied in part on the broad scope of the federal
government’s 2009 Proofs of Claim referenced in the 2011 Settlement Agreement.
See id. at 466–70. The district court held that the “Proofs of Claim establish the
bounds of the Governments’ covenants not to sue, which in turn interact with the
Governments’ reservations of rights, which, finally, impose a limit on the matters
addressed by the 2011 Agreement.” Id. at 466. The court reasoned the 2009
Proofs of Claim could be considered in the context of Defendants’ motion to
dismiss because they were incorporated by reference into the 2011 Agreement,
which was attached to RACER’s complaint. Id. at 465.
Finally, the court held RACER could not in the alternative pursue a claim
under § 107, and thus dismissed both CERCLA claims with prejudice. Id. at 471–
36
72. It dismissed pendant state-law claims for lack of supplemental jurisdiction.
Id. at 473. RACER timely appealed.
DISCUSSION
On appeal, RACER raises three issues. First, it argues that we must vacate
the district court’s judgment dismissing its Complaint because the court failed to
convert the defendant’s motion to dismiss into one for summary judgment when
it considered evidence extraneous to the pleadings—in particular, the 2009
Proofs of Claim. Next, RACER argues that even with the Proofs of Claim in the
mix, its CERCLA claims survive dismissal on the merits. Finally, RACER
requests we reassign this case to another judge in the event of a remand. We
address each issue in turn.
I. RACER’s Procedural Challenge
RACER argues that this Court could resolve this appeal in its favor based
solely on “the procedural mechanisms by which this matter was decided”—that
is, granting the Defendants’ motion to dismiss while relying on matters
extraneous to the Complaint without converting the motion to one for summary
judgment. Appellants’ Br. at 56. According to RACER, the district court erred
when it considered three documents attached to Defendants’ motion to dismiss:
Exhibits A and B (containing the federal 2009 Proofs of Claim), Exhibit C
37
(containing an Affirmation of attorney Kristin Carter Rowe in Support of
Defendant’s Motion to Dismiss) (“Rowe Affidavit”), and a separate complaint by
RACER in Michigan against DTE Pontiac North (the “Michigan Complaint”).
RACER argues that the court could not properly consider these documents in the
context of a dismissal motion, and even if the district court did not consider the
attached exhibits, it erred by failing to expressly exclude them.
We disagree. In considering a motion to dismiss under Fed. R. Civ. P.
12(b)(6), “a district court may consider the facts alleged in the complaint,
documents attached to the complaint as exhibits, and documents incorporated by
reference in the complaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d
Cir. 2010). Moreover, even if a document is not expressly incorporated by
reference, the court may still consider it if the complaint “relies heavily upon its
terms and effect,” rendering the document “integral to the complaint.”
Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006) (quoting Chambers v.
Time Warner, Inc., 282 F.3d 147, 152–53 (2d Cir. 2002)).
Pursuant to Fed. R. Civ. P. 12(d), a district court must convert a motion to
dismiss into one for summary judgment if the court goes beyond these
permissible sources and considers material outside of the pleadings. See Friedl v.
City of New York, 210 F.3d 79, 83 (2d Cir. 2000). This conversion-to-summary-
38
judgment requirement is “strictly enforced whenever a district court considers
extra-pleading material in ruling on a motion to dismiss.” Chambers, 282 F.3d at
154 (internal quotation marks omitted).
The corollary to this point is that the mere attachment of a document to a
motion to dismiss does not alone establish that conversion is required. See
Amaker v. Weiner, 179 F.3d 48, 50–51 (2d. Cir. 1999) (attaching an attorney’s
affidavit as an exhibit to a motion to dismiss did not require conversion). Rather,
conversion is required when “there is reason to believe that the extrinsic
evidence actually affected the district court’s decision.” Id. at 51 (emphasis added).
Finally, we have recognized that, “generally, the harm to the plaintiff
when a court considers material extraneous to a complaint is the lack of notice
that the material may be considered,” and so where a plaintiff has “actual notice”
of information in the defendant’s papers and has “relied upon these documents
in framing the complaint[,] the necessity of translating a Rule 12(b)(6) motion
into one under Rule 56 is largely dissipated.” Chambers, 282 F.3d at 153 (internal
quotation marks omitted).
Applying these principles, we conclude the district court committed no
reversible procedural error. There can be no doubt that the district court
considered Exhibit A to the Motion to Dismiss (containing one of the 2009 Proofs
39
of Claim, specifically Claim 64064), in ruling on the motion to dismiss. See
RACER III, 610 F. Supp. 3d at 465–66; see also Appellants’ Br. at 24 (noting the
district court cited the Proof of Claim thirteen times). But that was not error
because Claim 64064 is incorporated into an attachment to the Complaint. See
DiFolco, 622 F.3d at 111.
In particular, the Complaint attaches and relies heavily on the terms and
effect of the 2011 Settlement Agreement. The 2011 Settlement Agreement, in
turn, expressly acknowledges that the EPA filed Claim 64064 in the bankruptcy
court, setting forth “claims or causes of action for future work with respect to the
Properties, and . . . claims for past costs for the Properties.” App’x 424. The 2011
Settlement Agreement specifically identifies Claim 64064 as part of the collective
“Government Proofs of Claim.” Id. at 424–25. And a crucial section of the 2011
Agreement containing the covenants not to sue provides, in relevant part:
With respect to the Properties . . . the United States on behalf of [the
EPA] and the States and Tribe covenant not to sue or assert any
administrative or other civil claims or causes of actions against
[GM] . . . or [RACER] under CERCLA, RCRA, and State
environmental statutes, as well as any other environmental liabilities
asserted in the Government Proofs of Claim.
Id. at 475–76 (emphasis added). This last sentence, in particular, effectively
incorporates the Government Proofs of Claim, defined by the 2011 Settlement
Agreement to include Claim 64064, into an essential provision in the Settlement
40
Agreement. Because the claims are incorporated into—that is, they are
considered part of—a document that is in turn incorporated into—that is, is part
of—RACER’s complaint, they are essentially incorporated into RACER’s
complaint.
We reject RACER’s argument that Exhibit A is not sufficiently identified to
treat it as incorporated into the 2011 Settlement Agreement. The Settlement
Agreement lists the precise claim number and filer (the United States) as Exhibit
A; there is no colorable dispute regarding the authenticity of the document. And
the 2011 Settlement Agreement’s invocation of the Proof of Claim submitted as
Exhibit A did not, as RACER suggests, amount to a “mere mention.” Appellants’
Br. at 20. Rather, the claims in Exhibit A were specifically incorporated by
reference into the covenant not to sue—a critical provision in that Settlement
Agreement.
Moreover, this Court has previously noted that the harm to a plaintiff in
considering extraneous material is due to “lack of notice” of the information
provided in the defendant’s papers. Chambers, 282 F.3d at 153. But the 2009
Proof of Claim was part and parcel of a document, the 2011 Settlement
Agreement, that was integral to RACER’s formation, liabilities, and protections.
41
RACER’s arguments regarding Defendants’ Exhibit B (which contains
forms that reference other Government Proofs of Claim but do not provide the
actual claims) and Exhibit C (containing the Rowe Affidavit and the Michigan
Complaint) also fail, but for a different reason. We have no reason to believe that
the court relied on either exhibit in deciding the motion to dismiss; the decision
only quotes from Exhibit A—Claim 64064—and contains no reference to or
mention of the Rowe Affidavit or the Michigan Complaint. Thus, we have no
reason to believe that either attachment “actually affected” the court’s decision.
Amaker, 179 F.3d at 51 (emphasis added).
Although we conclude that the district court did not err in considering the
United States’ 2009 Proof of Claim, that document has little bearing on our
analysis of the merits of the case for the following reasons.
II. The Merits
Our determination that the district court erred in dismissing RACER’s
claims on the pleadings flows from three conclusions: First, RACER is time-
barred from seeking contribution for costs incurred with respect to liabilities
RACER resolved in the 2011 Settlement Agreement, and only with respect to
those liabilities. So to the extent that the 2011 Settlement Agreement resolved
42
RACER’s liability as to OU-2 and the Expanded Territory, RACER’s claims are
time-barred. To the extent that it did not, they are not.
Second, the 2011 Settlement Agreement resolved RACER’s liability only
with respect to Properties, as defined in that Agreement, and causes of action for
migration of Hazardous Substances emanating from Properties. To the extent
that OU-2 and the Expanded Territory are within a Property, as defined in the
2011 Settlement Agreement, or have been contaminated through the migration of
hazardous substances emanating from a defined Property, the 2011 Settlement
Agreement resolved RACER’s liability with respect to cleanup costs in those
areas. To the extent OU-2 and the Expanded Territory do not lie within a defined
Property, and have not been contaminated through migration from a defined
Property, the 2011 Settlement Agreement did not resolve RACER’s liability with
respect to those areas.
Third, neither OU-2 nor the Expanded Territory lie within a defined
Property in the 2011 Settlement Agreement, and we cannot determine at the
pleading stage whether and to what extent the costs RACER seeks to recover
arise from the migration of Hazardous Substances emanating from OU-1.
The first of these points requires discussion of the legal framework under
CERCLA. The second flows from an analysis of the 2011 Settlement Agreement.
43
And the third requires a close read of the 2011 Settlement Agreement and
RACER’s allegations as they relate specifically to contamination from the IFG
Plant. In our analysis below, we review without deference the district court’s
grant of a Rule 12(b)(6) motion to dismiss, accepting all factual allegations as true
and drawing all reasonable inferences in favor of the plaintiff—here, RACER.
See, e.g., Sierra Club v. Con-Strux, LLC, 911 F.3d 85, 88 (2d Cir. 2018).
A. Cost-Recovery and Contribution under CERCLA
CERCLA was enacted in 1980 to respond to the environmental and health
risks caused by the release of hazardous substances into the environment. See
Burlington Northern and Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602 (2009).
CERCLA was designed to “assur[e] that those responsible for any damage,
environmental harm, or injury from chemical poisons bear the costs of their
actions.” Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 120
(2d Cir. 2010) (alteration in original) (quoting S. Rep. No. 96-848, at 13 (1980)).
Under CERCLA, the EPA is directed to compile a prioritized list of contaminated
sites (commonly known as Superfund Sites), which the EPA can either clean
itself or compel responsible parties to clean. See Atlantic Richfield Co. v. Christian,
140 S. Ct. 1335, 1346 (2020) (citing 42 U.S.C. §§ 9604, 9605, 9606, 9615). CERCLA
was designed in this way to “promote the ‘timely cleanup of hazardous waste
44
sites’ and to ensure that the costs of such cleanup efforts were borne by those
responsible for the contamination.” Burlington Northern, 556 U.S. at 602 (quoting
Consolidated Edison Co. of New York, Inc. v. UGI Utilities, Inc., 423 F.3d 90, 94 (2d
Cir. 2005)).
Under CERCLA, responsible parties are strictly liable for the costs of the
cleanup. 42 U.S.C. § 9607(a). CERCLA offers a “reprieve” to these responsible
parties by allowing them to “seek reimbursement of their cleanup costs from . . .
potentially responsible parties (‘PRP’s).” Niagara Mohawk, 596 F.3d at 120 (citing
42 U.S.C. § 9607(a)). There are generally three types of CERCLA claims a
responsible party may bring to seek contribution: under § 107, § 113(f)(3)(B), and
§ 113(f)(1). See id. at 120–21. Only the first two are potentially relevant here.
Section 107 “authorizes the United States, a state, or ‘any other person’ to
seek reimbursement for all removal or remedial costs associated with . . .
hazardous materials on the property” if those actions are consistent with the
“federal government’s roadmap for responding to the release of hazardous
substances.” Id. (quoting 42 U.S.C. § 9607(a)(4)). “Any person” “includes a PRP
that voluntarily cleans the site.” Id. at 121. A person suing under § 107 may seek
repayment of the cleanup costs from “any person” who “at the time of disposal
of any hazardous substance owned or operated any facility at which such
45
hazardous substances were disposed of,” “arranged for disposal or treatment, or
arranged with a transporter for transport for disposal or treatment, of hazardous
substances,” or “accepted any hazardous substances for transport to disposal or
treatment facilities.” 42 U.S.C. § 9607(a)(2)–(4). “Section 107 allows for complete
cost recovery under a joint and several liability scheme; one PRP can potentially
be accountable for the entire amount expended to remove or remediate
hazardous materials.” Niagara Mohawk, 596 F.3d at 121.
When CERCLA was first enacted in 1980, § 107 was the only available
remedy, leaving some question as to whether PRPs who were themselves liable
for some of the cleanup costs could use § 107 to seek contribution from other
PRPs, rather than seeking full cost recovery. Id. “Congress finally provided the
express language necessary to authorize a contribution right under CERCLA
with the Superfund Amendments and Reauthorization Act of 1986, adding § 113
to the statutory scheme.” Id.
Section 113(f)(3)(B) accordingly enables a party that has settled its
CERCLA liability with the government, including in an “administrative or
judicially approved settlement,” to seek contribution from others not party to
46
such a settlement. 42 U.S.C. § 9613(f)(3)(B). 10 Section 113 claims must be brought
within three years of the settlement resolving the responsible party’s CERCLA
liability. Id. § 9613(g)(3). The clock starts ticking once the relevant court
approves a consent decree. See New York v. Solvent Chem. Co., Inc., 664 F.3d 22, 26
(2d Cir. 2011).
Sections 107 and 113 are generally understood to be “clearly distinct”
remedies, Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 163 n.3 (2004),
available to parties in “different procedural circumstances,” United States v.
Atlantic Research Corp., 551 U.S. 128, 139 (2007). In Niagara Mohawk, this Court
held that a responsible party (the Niagara Mohawk Power Company) that had
incurred costs to investigate and remediate a former power plant site pursuant to
an administrative settlement with NYSDEC could bring a § 113(f)(3)(B) claim
because the settlement released the party from liability under CERCLA. 596 F.3d
at 125–26. Because its claim for reimbursement based on the settlement fit
“squarely within the more specific requirements of § 113(f)(3)(B),” Niagara
Mohawk could not also proceed under § 107—allowing them to do so “would in
10Under § 113(f)(1), a PRP who has been sued under § 106 or § 107 may sue for contribution
during or following that action. 42 U.S.C. § 9613(f)(1); see also Niagara Mohawk Power Corp. v.
Chevron U.S.A., Inc., 596 F.3d 112, 122 (2d Cir. 2010). RACER’s liability was established through
settlement rather than litigation, so this subsection of § 113 has no potential applicability here.
47
effect nullify the [] amendment [to CERCLA] and abrogate the requirements
Congress placed on contribution claims under § 113.” Id. at 127–28.
The parties generally agree that § 113 and § 107 claims are mutually
exclusive in this context, 11 and RACER acknowledges that “where a plaintiff’s
claim fits squarely within the more specific requirements of § 113, the plaintiff
cannot choose instead to proceed under § 107.” Appellants’ Br. at 36 (quoting
RACER II, 10 F.4th at 103).
11In Atlantic Research, the Supreme Court left open the possibility that in certain circumstances,
§ 107 and § 113 claims may not be mutually exclusive:
We do not suggest that §§ 107(a)(4)(B) and 113(f) have no overlap at all. For
instance, we recognize that a PRP may sustain expenses pursuant to a consent
decree following a suit under § 106 or § 107(a). In such a case, the PRP does not
incur costs voluntarily but does not reimburse the costs of another party. We do
not decide whether these compelled costs of response are recoverable under
§ 113(f), § 107(a), or both. For our purposes, it suffices to demonstrate that costs
incurred voluntarily are recoverable only by way of § 107(a)(4)(B), and costs of
reimbursement to another person pursuant to a legal judgment or settlement are
recoverable only under § 113(f).
United States v. Atlantic Research Corp., 551 U.S. 128, 139 n.6 (2007) (internal citations omitted).
The federal Courts of Appeal have yet to identify a situation in which a PRP can seek
reimbursement under both §§ 107(a) and 113. See Cranbury Brick Yard, LLC v. United States, 943
F.3d 701, 705 (3d Cir. 2019) (collecting cases).
RACER argued below—and briefly on appeal, see Appellant’s Br. at 36 n.7—that as a trust
tasked with carrying on GM’s environmental remediation work, its situation resembles the
hypothetical posited by the Atlantic Research footnote, making a § 107 claim available alongside
its § 113 claim. We disagree. To the extent that RACER seeks contribution for costs incurred
pursuant to the CERCLA liability established in the 2011 Settlement Agreement, those costs are
recoverable only under § 113(f).
48
Moreover, Defendants argue, and RACER does not dispute, that the 2011
Agreement constitutes a judicially approved settlement of RACER’s CERCLA
liability for purposes of § 113. We agree. See, e.g., ASARCO LLC v. Goodwin, 756
F.3d 191, 201–02 (2d Cir. 2014) (settlement); Niagara Mohawk, 596 F.3d at 125–27
(administrative consent decree).
Because the 2011 Settlement Agreement is a court-approved settlement
that resolved RACER’s CERCLA liability, any claim for contribution for costs
associated with RACER’s liability under the 2011 Settlement Agreement could be
brought only pursuant to § 113(f)(3)(B). Section 107(a) remains available for
recovery of costs for which RACER’s CERCLA liability was not established by
the 2011 Settlement Agreement, and § 113 could potentially apply to a
contribution claim by RACER with respect to costs for which RACER became
liable under CERCLA pursuant to a settlement or adjudication after the 2011
Settlement Agreement.
Put into the context of RACER’s claims here, to the extent RACER settled
its liability under CERCLA for cleanup in OU-2 or the Expanded Territory under
the 2011 Agreement, its only available route to seek reimbursement was via
§ 113(f)(3)(B)—and due to the three-year statute of limitations, it lost its chance.
However, to the extent the 2011 Agreement did not resolve RACER’s liability
49
under CERCLA for cleanup in part or all of OU-2 and the Expanded Territory, it
may seek reimbursement for those costs under § 107(a), or potentially under
§ 113 if it is later held liable under CERCLA pursuant to a settlement or
judgment for cleanup in those areas.
In short, the sole issue before us is whether—or to what extent—the 2011
Settlement Agreement settled RACER’s liability under CERCLA for cleanup in
OU-2 and the Expanded Territory. Accordingly, we turn to the 2011 Settlement
Agreement.
B. The Limits of the 2011 Settlement Agreement
The parties agree that principles of contract interpretation should guide
our reading of the 2011 Settlement Agreement, which is a consent decree. See
Doe v. Pataki, 481 F.3d 69, 75 (2d Cir. 2007). We look to state law for guidance on
contract interpretation principles, and here, apply New York law. See, e.g., Schurr
50
v. Austin Galleries of Illinois, Inc., 719 F.2d 571, 575 (2d Cir. 1983) (applying New
York law). 12
Under New York law, contracts are “construed in accord with the parties’
intent.” Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569 (2002). The best
evidence of the parties’ intent is their writing, so we interpret an unambiguous
contract “according to the plain meaning of its terms.” Id. In interpreting a
contract, it “should be read as a whole to ensure that undue emphasis is not
placed upon particular words and phrases.” Bailey v. Fish & Neave, 8 N.Y.3d 523,
528 (2007). Additionally, we must avoid “adopting an interpretation that would
render any individual provision superfluous.” Scholastic, Inc. v. Harris, 259 F.3d
73, 83 (2d Cir. 2001) (quoting Sayers v. Rochester Telephone Corp. Supplemental
Management Pension Plan, 7 F.3d 1091, 1094–95 (2d Cir. 1993)).
A contract is unambiguous if its language has “a definite and precise
meaning,” providing “no reasonable basis for a difference of opinion.”
Greenfield, 98 N.Y.2d at 569 (internal quotation marks omitted). If a contract is
ambiguous, extrinsic evidence of the parties’ intent may be considered, see id.,
12The parties agree that general contract interpretation principles apply but did not brief the
issue of which state’s contract law should guide our review of the 2011 Settlement Agreement.
The district court applied New York law. See RACER III, 610 F. Supp. 3d at 463. In the absence
of any contrary argument or authority from the parties, we do the same.
51
making the meaning of the ambiguous contract “a question of fact for the
factfinder,” and precluding dismissal on the pleadings, see, e.g., JA Apparel Corp.
v. Abboud, 568 F.3d 390, 397 (2d Cir. 2009).
The district court held that the 2011 Settlement Agreement unambiguously
settled RACER’s CERCLA liabilities as to OU-2, in large part because it
“covenanted not to sue for any liability asserted in the Proofs of Claim, which
expressly include OU-2.” RACER III, 610 F. Supp. 3d at 470. We review both the
district court’s determination of whether the contract is ambiguous and its
interpretation of the terms of an unambiguous contract without deference. See
Law Debenture Trust Co. of New York v. Maverick Tube Corp., 595 F.3d 458, 468 (2d
Cir. 2010).
On appeal, RACER renews its argument that the covenants not to sue in
the 2011 Settlement Agreement resolve only its environmental liabilities for the
89 Properties set forth in Attachment A, as well as migration emanating from
those defined properties. In RACER’s view, the Agreement does not purport to
reach, and in fact expressly excludes, liabilities other than that. During oral
argument, RACER put it more bluntly, arguing that the district court “was so
focused on trying to figure out what was included in the Agreement that it didn’t
focus on what was explicitly excluded.” Transcript of Oral Argument at 2, Racer
52
Properties LLC, et al. v. National Grid USA, et al., No. 22-1589-cv (2d Cir. Feb. 23,
2023).
Defendants disagree, arguing that because the covenant not to sue in the
2011 Agreement included the “other environmental liabilities asserted in the
Government Proofs of Claim,” the 2011 Agreement resolved RACER’s CERCLA
liability with respect to each of the environmental liabilities asserted in Claim
64064—not just those related to the GM-IFG Property or some other defined
property. Appellees’ Br. at 29–30.
We agree with the district court that the 2011 Settlement Agreement is
unambiguous. But our read of that Agreement diverges from the district court’s
and aligns with RACER’s. We conclude that the 2011 Settlement Agreement
unambiguously resolved RACER’s CERCLA liability only with respect to
“Properties,” as defined in that Agreement, “including releases of Hazardous
Substances from any portion of the Properties, and all areas affected by
migration of such substances emanating from the Properties.” App’x 483–84.
Our view is compelled by the unambiguous terms of the 2011 Settlement
Agreement, including the critical terms establishing the scope of RACER’s
protection from future suit, and it is consistent with the purpose and structure of
the Agreement. And to give the Government Proofs of Claim the weight that
53
Defendants assign would require us to ignore the plain language of the
Agreement, including the context in which it references those claims.
i. Unambiguous Terms
The 2011 Settlement Agreement expressly and unambiguously revolves
around RACER’s liabilities relating to violations of environmental laws with
respect to the Properties specifically defined in that Agreement.
The preamble sets the stage, establishing that the Agreement resolves
RACER’s liability with respect to defined properties. Explaining the reasons for the
Agreement, it first says, “Whereas, [GM has] environmental liabilities at certain of
the properties set forth and defined in Attachment A (the ‘Properties’) and many of
those Properties have been and/or will be the subject of environmental response
activities and other work.” App’x 422 (emphases added). It acknowledges the
claims by the Governments “with respect to the Properties and surrounding areas
where Hazardous Substances have migrated, are continuing to migrate, or
otherwise have or will come to be located.” Id. at 423 (emphasis added). And it
54
references the “Properties”—capital P—in a half-dozen other paragraphs
describing the potential liabilities to be addressed in the Agreement. 13
After providing for the transfer of the Properties to RACER and
establishing funding for their cleanup, the 2011 Settlement Agreement resolves
RACER’s liabilities through provisions reflecting covenants not to sue,
satisfaction of claims, and protections against contribution, combined with an
express reservation of rights, all of which emphasize that the release of RACER’s
liability is limited to the specific defined Properties and areas affected by
migration of substances emanating from those Properties.
Specifically, and critically, the covenant not to sue provision in the 2011
Settlement Agreement states:
With respect to the Properties (including release of Hazardous
Substances from any portion of the Properties and all areas affected
by migration of such substances emanating from the Properties), and
except as specifically provided in Section VIII (Reservation of Rights
and Regulatory Authority), upon the Effective Date and [GM’s]
transfer of the Properties and full funding of the [trust accounts], the
United States on behalf of [the] EPA and the States and Tribe covenant
not to sue or assert any administrative or other civil claims or causes
of action against [GM], any successor entity thereto, or [RACER]
under CERCLA, RCRA, and State environmental statutes, as well as
13For clarity, when we refer to “Property” or “Properties” with a capital “P,” we likewise mean
the specific properties listed in Exhibit A to the 2011 Settlement Agreement.
55
any other environmental liabilities asserted in the Government Proofs
of Claim.
Id. at 475–76 (emphasis added).
Likewise, the satisfaction of claims provision states,
With respect to the Properties, except as specifically provided in Section
VIII (Reservation of Rights and Regulatory Authority), the
Government Proofs of Claim shall be deemed satisfied in full in
accordance with this Settlement Agreement.
Id. at 476 (emphasis added).
The contribution protection provision in the 2011 Agreement is similarly
limited to claims relating to the defined Properties and migration from those
Properties. The provision states that the Agreement “constitutes a judicially-
approved settlement for purposes of Section 113(f)(2) of CERCLA,” and that
RACER is entitled to protection from contribution actions under CERCLA “for
‘matters addressed’” in the Agreement. Id. at 483.
“Matters addressed” are defined as “all costs of Environmental Actions
incurred or to be incurred by the U.S. EPA, the States, or the Tribe or any other
person or entity relating to or in connection with the Properties, including releases of
Hazardous Substances from any portion of the Properties, and all areas affected
by migration of such substances emanating from the Properties,” but do not
include, among other exceptions, “any matters reserved in [the Reservation of
56
Rights and Regulatory Authority provision] of this Settlement Agreement.” Id.
at 483–84 (emphasis added).
The Reservation of Rights and Regulatory Authority section, which limits
the scope of all of the above provisions, provides that the covenants not to sue do
not apply, and the United States, the States, and the Tribe specifically reserve all
rights with respect to “any site that is not a Property, other than claims or causes of
action for migration of Hazardous Substances emanating from a Property.” Id. at
479–80 (emphasis added). The clear language of the Reservation of Rights
provision puts to rest any potential doubt as to whether the 2011 Settlement
Agreement resolves liabilities other than those attached to specific Properties or
contamination emanating from those Properties.
Together, these provisions clearly establish that the 2011 Settlement
Agreement, which addresses RACER’s liabilities across the country with respect
to dozens of sites, resolves RACER’s liability only with respect to liability for
cleanup at each of the 89 Properties listed in Exhibit A, including migration of
hazardous substances emanating from those defined Properties.
ii. Structure and Purpose of the 2011 Settlement Agreement
This conclusion, driven by the plain language of the 2011 Settlement
Agreement, fully jibes with the history, purpose, and structure of that
57
Agreement. As explained above, through the 2011 Settlement Agreement and
accompanying 2011 Trust Agreement, the bankruptcy court addressed GM’s
nationwide environmental obligations by transferring title to 89 former GM
Properties to RACER and requiring RACER to remediate the Properties and later
sell them for productive use. The scope of RACER’s obligations is tied to the
Properties it is charged with remediating.
We know precisely what those Properties are because they are listed in
Attachment A of the Agreement. Moreover, we know the precise boundaries of
each Property because the metes and bounds are attached to the Trust
Agreement, which is itself an exhibit to the 2011 Settlement Agreement.
Pollution is not always cabined to property boundaries, so the Agreement
also provides that RACER will take on remediation work both within the
Properties and outside of them, to the extent hazardous substances “migrat[ed]”
or “emanat[ed]” from the Properties. App’x 432.
This struck a balance: it ensured RACER would remediate the areas that
GM had polluted, but limited RACER’s exposure by tying its obligations to the
former GM Properties transferred to RACER, as well as the migration of
pollutants from those sites. This helps ensure that the funds provided to RACER
will cover all the promised remediation and that other potentially responsible
58
parties do not avoid contribution based on the mere fact of GM’s bankruptcy and
the creation of RACER.
iii. The 2009 Proofs of Claim
We reject Defendants’ argument, and the district court’s conclusion, that
the reference to the “Government Proofs of Claim” in the covenants not to sue
significantly expanded the scope of the 2011 Settlement Agreement. See RACER
III, 610 F. Supp. 3d at 466–70. Specifically, the district court concluded that
because the covenants not to sue incorporated “any other environmental
liabilities asserted in the Government Proofs of Claim,” id. at 464 (internal
quotation marks omitted), the Settlement Agreement resolved RACER’s liability
not only for Properties and hazardous substances migrating from them, but for
any claims asserted in the Government Proofs of Claim, see id. at 466–70.
We disagree. This view disregards the critical qualifying language in the
covenant not to sue and satisfaction of claims provisions that makes them
applicable only “[w]ith respect to the Properties (including releases of Hazardous
Substances from any portion of the Properties and all areas affected by migration
of such substances emanating from the Properties),” and expressly conditions
their reach on the limitations in the Reservation of Rights provision. App’x 475–
76 (emphasis added). And it fails to grapple with the Governments’ reservation
59
of rights with respect to “any site that is not a Property,” other than claims for
migration of hazardous substances from a Property. Id. at 480 (emphasis added).
It also ignores the limitations in the contribution protection provision
limiting its reach to the “matters addressed” in the Settlement Agreement, which
is defined as the costs incurred “relating to or in connection with the Properties,
including releases of Hazardous Substances from any portion of the Properties,
and all areas affected by migration of such substances emanating from the
Properties,” and does not include “any matters reserved in [the Reservation of
Rights provision].” Id. at 483–84 (emphasis added).
We reject Defendants’ argument that the “relating to or in connection
with” language is broader than the language in the covenants not to sue, such
that the “matters addressed” by the Settlement could include remediation within
OU-2 even if it does not lie within a defined Property because it “relate[s] to” or
is “in connection with” the remediation within OU-1 (the IFG Plant site).
Appellants’ Br. at 26–28. The phrase cannot bear that much weight; even if we
could plausibly read the provision regarding protection from contribution as
having a broader scope than its related provisions, it would still be limited by the
Reservation of Rights provision.
60
In short, the reference within the covenant not to sue for “any other
environmental liabilities asserted in the Government Proofs of Claim” is subject
to the same limitations as the rest of the covenant not to sue; it does not, in
derogation of the limitation on the covenant not to sue paragraph and the
Reservation of Rights clause, override those limitations and incorporate by
reference every single environmental claim asserted nationwide in the
Government Proofs of Claim. App’x 476.
Moreover, Defendants’ read of the reference to “any other environmental
liabilities asserted in the Government Proofs of Claim” fails to recognize the
context in which that phrase appears. Id. The phrase follows a specific list of
potential statutes under which RACER could be held liable—CERCLA, RCRA,
and other State environmental statutes. Under the “ejusdem generis” principle
(that’s Latin for “of the same kind”), a more general phrase that comes at the end
of a specific list takes on the qualities of the list. See, e.g., Pfizer, Inc. v. United
States Department of Health and Human Services, 42 F.4th 67, 76 (2d Cir. 2022), cert.
denied, 143 S. Ct. 626 (2023). So the “other environmental liabilities asserted in
the Government Proofs of Claim,” App’x 476, is properly understood as “any
61
other statutes or authority under which the Governments could assert claims
against RACER” with respect to the Properties.
It’s worth remembering the context in which the Proofs of Claim were
filed. In 2009, numerous states and environmental agencies, including the EPA
and NYSDEC, filed proofs of claim against GM, in the wake of its bankruptcy, to
preserve ongoing remediation work at GM sites across the country, including the
former IFG plant site and its environs. These proofs of claim did not create
obligations under CERCLA where none had previously existed. Rather, they
aimed to preserve the status quo and ensure that GM’s bankruptcy did not cause
its many environmental responsibilities that it had negotiated and agreed to over
the previous decades to vanish into thin air. See, e.g., id. at 316–60 (1997 Consent
Decree between GM and NYSDEC). 14
For the above reasons, we conclude that the 2011 Settlement Agreement
unambiguously resolves RACER’s liability as to the Properties, and the
migration of hazardous substances emanating from those Properties, and does
14We have no reason to look beyond the four corners of this unambiguous contract.
Nevertheless, we note that in the 2015 and 2021 Consent Orders, the history of the GM-IFG Site
and enforcement activity is extensively recapped, including descriptions of the 1980s and 1990s-
era Consent Decrees and, of course, the 2011 Settlement Agreement. But the 2009 Proofs of
Claim are never mentioned. See, e.g., App’x 152, 660. This suggests the parties here—EPA,
NYSDEC, and RACER—did not understand the 2009 Proofs of Claim to have altered GM’s or
RACER’s obligations concerning the GM-IFG Property.
62
not resolve its liability with respect to costs incurred in connection with sites that
fall outside of this definition. The final question, then, is whether the costs
incurred by RACER for remediation in OU-2 and the Expanded Territory are
costs for remediation of a defined Property or contamination that emanated from
such a Property, in which case RACER’s claims are time-barred.
C. OU-2 and the Expanded Territory
Nothing in the Complaint or attached documents establishes that OU-2
and the Expanded Territory fit within the definition of a Property in the 2011
Agreement. In fact, all signs suggest the opposite. And whether part or all of the
costs incurred by RACER in those areas resulted from the migration of
hazardous substances emanating from a defined Property is a factual question
that cannot be resolved on a motion to dismiss. So we cannot conclude as a
matter of law that RACER’s CERCLA liability as to OU-2 and the Expanded
Territory was resolved by the 2011 Settlement Agreement. We consider the two
possibilities—that OU-2 and the Expanded Territory are part of a defined
63
Property, or that contamination from a defined Property migrated to those
areas—in more depth.
i. Defined Property
The relevant defined property at issue here is identified in Exhibit A to the
2011 Settlement Agreement as the “GM-IFG Syracuse” site. App’x 510. An
attachment to the 2011 Trust Agreement, itself an attachment to the 2011
Settlement Agreement, contains the legal descriptions of the Properties by metes
and bounds. We cannot conclude on the basis of the pleadings alone that the
metes-and-bounds description of the GM-IFG Property encompasses part or all
of OU-2 and the Expanded Territory. In fact, the signs suggest otherwise, as
Defendants do not contest RACER’s representation that the metes-and-bounds
description describes the situs of the IFG Plant, or the area identified as OU-1. 15
That makes sense—as the legal definition of the Property is a deed description,
whereas OU-2 is somewhat amorphous. That should be the end of the inquiry.
A metes-and bounds description should leave no mystery as to the contours of
the GM-IFG Property.
15If Defendants contend that the metes-and-bounds description attached to the 2011 Trust
Agreement does include OU-2 and the Expanded Territory, or any part thereof, that would raise
a factual dispute that we cannot resolve on the pleadings. Defendants do not appear to make
that argument.
64
But Defendants don’t tie the contours of the GM-IFG Syracuse Property to
the legal description attached to the 2011 Settlement Agreement. Instead, they
point to a term in the Agreement that allots approximately $8.5 million in
funding for remediation “for the property extending from the [GM-IFG] facility
property boundaries to the Route 11 Bridge.” Id. at 457–58. Defendants argue
that this funding provision shows that the intent of the Agreement was to
include “the property in Upper Ley Creek between Townline Road and the
Route 11 Bridge” within the GM-IFG Syracuse property. Appellees’ Br. at 25.
In so arguing, Defendants stray from the clear terms of the 2011 Settlement
Agreement pursuant to which a “Property” for purposes of the Agreement is (1)
listed in Attachment A and (2) clearly defined by a metes-and-bounds
description.
The funding provision does not change the definition of the GM-IFG
Syracuse Property. And given that the 2011 Settlement Agreement assigns
RACER responsibility for remediation of hazardous substances that emanated
from a Property and migrated elsewhere, there is nothing incongruous about
allocating funding for cleanup beyond the borders of a defined Property. Here,
the 2011 Agreement expressly contemplates that RACER may have cleanup
obligations situated within OU-2 or the Expanded Territory resulting from the
65
emanation and migration of contaminants from OU-1. Moreover, as set forth
more fully below, the 2011 Settlement Agreement expressly contemplates that
RACER will assume GM’s ongoing obligations arising from the 1997 Consent
Order, including obligations in OU-2, making the funding provision even more
sensible. For these reasons, the funding provision does not morph the definition
of the GM-IFG Syracuse “Property,” which is established by a legal metes-and-
bounds description, to necessarily encompass the entirety of OU-2 and the
Expanded Territory, as Defendants contend.
True, the funding provision in question refers to the area between the GM-
IFG facility and the Route 11 bridge as a (lower-case p) “property,” but given
that the 2011 Agreement always capitalizes the word “Property” when referring
to the 89 Properties listed in Attachment A, it’s clear the provision does not
transform the definition of the GM-IFG “Property” into something broader.
Holding otherwise—that is, holding that the funding provision modifies the
clearly delineated bounds of the GM-IFG Syracuse Property under the
Agreement—would place “undue emphasis” on the use of the lower-case-p
“property” in that provision, Bailey, 8 N.Y.3d at 528, and would render the
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metes-and-bounds description of the GM-IFG Syracuse Property “superfluous,”
Scholastic, Inc., 259 F.3d at 83.
Moreover, taking the 2011 Settlement Agreement at its word, and defining
the GM-IFG Property with reference to the metes-and-bounds description in the
2011 Trust Agreement, would best harmonize with the 1997 Consent Decree
between GM and NYSDEC—which is directly incorporated into the 2011
Agreement and became part of RACER’s own obligations.
Recall that pursuant to the 1997 Consent Order, GM did not settle its
CERCLA liability with NYSDEC, but agreed to begin conducting an RI/FS for the
“GM-IFG Site,” defined for purposes of that Order as consisting of both the
former plant boundaries and the “Deferred Media” in Ley Creek between
Townline Road and the Route 11 Bridge. App’x 323–24. In subsequent years, the
Site for purposes of the 1997 Consent Order was split into two operable units:
OU-1 (consisting of the former plant boundaries) and OU-2 (consisting of the
Deferred Media in Ley Creek between Townline Road and the Route 11 Bridge).
The 2011 Settlement Agreement specifically references the 1997 Consent Order,
substitutes RACER for GM in connection with that Order, and requires RACER
to comply with the Order “so long as the amended or substituted [order is] not
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inconsistent with the terms of, and funding provided under, this Settlement
Agreement and the Trust Agreement.” Id. at 474–75.
Importantly, the 1997 Consent Order made clear that GM was not
receiving contribution protection or settling liability by agreeing to conduct the
RI/FS. In fact, Exhibit E to the 1997 Consent Order defined the scope of work
required by the Order and provided that “upstream sample locations will need
to be collected in order to assist in evaluating impacts from the GM site relative
to other potential contaminant sources upstream.” D. Ct. Dkt. No. 334-11 at 57.
In other words, part of the investigatory mission of the RI/FS was to determine
whether and to what extent GM was responsible for the contamination in Ley
Creek between Townline Road and the Route 11 Bridge.
Given this, it makes sense that the 2011 Settlement Agreement did not
resolve RACER’s liability as to the entirety of OU-2 and the Expanded Territory,
did require RACER to continue GM’s work in OU-2 pursuant to the RI/FS to the
extent not inconsistent with the 2011 Settlement Agreement and funding
allocations, did hold RACER accountable for contamination within OU-2 and the
Expanded Territory to the extent it resulted from the migration of hazardous
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substances that emanated from the IFG Plant, and established funding for further
activities in OU-2 pursuant to the 1997 Consent Order.
In addition, nothing about our conclusion is inconsistent with the
Reservation of Rights provision in the 2011 Settlement Agreement reserving “any
general unsecured claim with respect to the release of Hazardous Substances
into . . . . the entire portion of Ley Creek which is downstream from the Route 11
Bridge.” App’x 479. In Defendants’ view, this reservation of rights with respect
to the Lower Ley Creek, downstream from the Route 11 Bridge, “would not have
been necessary (and would be rendered meaningless) if, in the first instance, the
covenants not to sue only extended to the GM plant located far upstream and the
areas to which contaminants directly migrated therefrom.” Appellees’ Br. at 30.
But the Settlement Agreement contemplates that some portion of OU-2 or the
Expanded Territory may lie within the area resolved by the 2011 Settlement
Agreement; the Route 11 Bridge serves as the outer limit of RACER’s established
CERCLA liability under that Agreement.
In short, neither OU-2 nor the Expanded Territory are part of the GM-IFG
Syracuse Property. Thus, the 2011 Settlement Agreement only resolved RACER’s
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liability as to those areas if the contamination in those areas resulted from
migration of substances emanating from the GM-IFG Plant.
ii. Migration and Emanation
Whether and to what extent hazardous substances emanated from the GM-
IFG Plant (OU-1) and migrated to OU-2 and the Expanded Territory is exactly
the kind of question we cannot resolve at the pleading stage. RACER
emphasizes that in the context of the various administrative consent orders
described above, it never admitted that any contaminants emanating from OU-1
migrated to OU-2 or the Expanded Territory, and no adjudication has made such
a determination. And RACER’s complaint contains extensive allegations—that
we must credit at this stage—concerning how PCBs could have reached OU-2
and the Expanded Territory by means other than emanation and migration from
the GM-IFG Plant, including from the dredging of Ley Creek in the 1970s and
1980s.
Thus, to the extent Defendants argue that RACER cannot seek recovery for
the costs it incurred in OU-2 and the Expanded Territory because the
remediation it conducted addressed contamination that emanated from the IFG
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Plant and contaminated those areas, they cannot press this argument at the
pleading stage.
Determining the provenance of hazardous substances contaminating OU-2
and the Expanded Territory will be—as Defendants grouse—a fact-intensive,
time-intensive process. We leave the development of the factual record
necessary to make this determination in the able hands of the district court.
D. Conclusion
To summarize, we conclude that (1) RACER’s CERCLA claims must
proceed under CERCLA § 113, and are time-barred under that provision, only to
the extent that RACER seeks contribution or recovery of costs incurred for
remediation of areas with respect to which RACER’s CERCLA liability was
resolved by the 2011 Agreement; (2) RACER’s liability was resolved by the 2011
Settlement Agreement only with respect to (a) the GM-IFG Syracuse Property, as
defined by the metes-and-bounds description in the 2011 Settlement Agreement
and (b) all areas affected by migration of such substances emanating from that
Property, but no further downstream than the Route 11 Bridge; (3) whether the
metes-and-bounds description of the GM-IFG Syracuse Property in the 2011
Settlement Agreement encompasses OU-2 and the Expanded Territory, or
whether and to what extent the contamination in those areas arose from
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migration of hazardous substances emanating from the GM-IFG Syracuse
Property, are factual questions that cannot be resolved on a motion to dismiss.
Accordingly, the district court erred in dismissing RACER’s claims at the
pleading stage, and we vacate the district court’s judgment of dismissal.
III. Reassignment
Finally, we reject RACER’s request to reassign this case on remand, as we
find no grounds for reassignment. We have held that reassignment is proper
only in “unusual circumstances.” United States v. Robin, 553 F.2d 8, 9–10 (2d Cir.
1977) (en banc). Reassignment “is an extreme remedy, rarely imposed . . . but
occasionally warranted, even in the absence of bias, to avoid an appearance of
partiality.” United States v. City of New York, 717 F.3d 72, 99 (2d Cir. 2013)
(internal citations omitted). RACER claims reassignment is nonetheless
appropriate here, pointing to certain language in RACER III as evidence that the
district judge has a “particular disdain” for its case. Appellants’ Br. 55. Plus,
RACER argues, in light of this second remand, “the appearance of justice would
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be well-served by reassignment.” Id. (quoting Shcherbakovskiy v. Da Capo Al Fine,
Ltd., 490 F.3d 130, 142 (2d Cir. 2007)).
We consider the following “principal factors” when determining if
reassignment is warranted:
(1) whether the original judge would reasonably be expected upon
remand to have substantial difficulty in putting out of his or her mind
previously-expressed views or findings determined to be erroneous
or based on evidence that must be rejected, (2) whether reassignment
is advisable to preserve the appearance of justice, and (3) whether
reassignment would entail waste and duplication out of proportion
to any gain in preserving the appearance of fairness.
Robin, 553 F.2d at 10.
In this case, there are no grounds for reassignment. We have no reason to
believe that the district judge would not accept our decision or follow our
instructions on remand. The district judge’s descriptions of RACER’s claims in
the decision below, even if they do suggest a certain disposition, do not rise to
the level of partiality such that reassignment is warranted. See Ketcham v. City of
Mount Vernon, 992 F.3d 144, 152 (2d Cir. 2021) (declining to reassign a case
because it found “no basis to conclude that the district court would be unable to
set aside its previously expressed views and fairly shepherd the case to
conclusion.”). Plus, given the complex factual and procedural background of
this case, reassignment to another judge would likely entail waste and
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duplication of effort. See Federal Insurance Co. v. United States, 882 F.3d 348, 374
(2d Cir. 2018) (citing “complicated facts and a lengthy procedural history” as
factors in concluding reassignment was not warranted). Accordingly, we decline
to reassign the case.
***
For the reasons stated above, we VACATE the district court’s judgment
dismissing the Second Amended Complaint and REMAND for further
proceedings consistent with this opinion.
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