Revitalizing Auto Communities Environmental Response Trust v. National Grid USA, No. 20-1931 (2d Cir. 2021)
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Racer, which was created and funded to clean up polluted locations connected to the former General Motors Corporation during that company's bankruptcy, appealed the district court's dismissal of their federal claims for violations of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and related state law claims. Racer alleges cost and recovery and contribution claims under CERCLA sections 107 and 113 against dozens of defendants, which RACER alleges contributed to pollution at one of the New York sites it has been tasked with cleaning up.
The Second Circuit concluded that the district court was correct to require RACER Trust to substitute its trustee as plaintiff, because the trust lacks capacity to sue. On the merits, the court held that the district court erred in dismissing RACER's complaint at this early stage. In this case, RACER's section 107 claim is ripe because it is based on costs RACER has already incurred for which it may not receive repayment through the EPA investigation, and because further delay in adjudicating the claim would cause RACER hardship. Furthermore, the district court erred in dismissing RACER's section 113 claim where, to the extent that the district court concluded that it too was prudentially unripe, the court disagreed for the same reasons that apply to the section 107 claim. To the extent the district court's dismissal rested on other grounds, the court concluded that the district court failed to adequately explain its reasoning and the court remanded for further analysis.
The court declined to address the other issues raised by the parties, which should be addressed by the district court in the first instance. Accordingly, the court vacated and remanded the district court's dismissal of RACER's CERCLA claims, and vacated and remanded the district court's dismissal of RACER's state law claims so that the district court may reconsider its ruling.
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