In re: September 11 Litigation, No. 10-4197 (2d Cir. 2014)

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Justia Opinion Summary

Cedar & Washington, a real estate developer, filed suit against the owners and lessees of the World Trade Center and others under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601-9675, seeking recovery of costs incurred in remediating a nearby building contaminated by the September 11, 2001 attack on the World Trade Center. The court concluded that the attack constituted an "act of war" for purposes of CERCLA's affirmative defense. The attacks directly and immediately caused the release of harmful substances (WTC dust), and were the "sole cause" of the release because the attack "overwhelm[ed] and swamp[ed] the contributions of the defendant[s]." Accordingly, the court affirmed the district court's dismissal of Cedar & Washington's claim.

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10-4197-cv In re September 11 Litigation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2012 (Submitted: July 12, 2013 Decided: May 2, 2014) Docket No. 10-4197 - - - - - - - - - - - - - - - - - - - -x IN RE SEPTEMBER 11 LITIGATION: Cedar & Washington Associates, LLC, Plaintiff-Appellant, - v.The Port Authority of New York and New Jersey, Silverstein Properties, Inc., World Trade Center Properties LLC, Silverstein WTC Management Co. LLC, 1 World Trade Center LLC, 2 World Trade Center LLC, 3 World Trade Center LLC, 4 World Trade Center LLC, 7 World Trade Company, L.P., HMH WTC, Inc., Host Hotels and Resorts, Inc., Westfield WTC LLC, Westfield Corporation, Inc., Consolidated Edison Company of New York, AMR Corporation, American Airlines, Inc., UAL Corporation, and United Airlines, Inc. Defendants-Appellees. - - - - - - - - - - - - - - - - - - - -x Before: JACOBS, CABRANES, and LIVINGSTON, Circuit Judges. 1 Cedar & Washington Associates, LLC, appeals from a 2 judgment of the United States District Court for the 3 Southern District of New York (Hellerstein, J.), dismissing 4 its CERCLA indemnity claim for remediation costs it incurred 5 as owner of a building contaminated by toxic dust from the 6 September 11, 2001 attack on the World Trade Center. 7 Because the attack constituted an act of war for which 8 CERCLA provides an affirmative defense, we affirm. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 SARI E. KOLATCH (Jay B. Spievack, Kara Gorycki, Cohen Tauber Spievack & Wagner P.C., New York, N.Y., Robert D. Fox, Neil Witkes, Manko, Gold, Katcher & Fox LLP, Bala Cynwyd, PA, on the brief), Cohen Tauber Spievack & Wagner, P.C., New York, N.Y., for Appellant. LEAH W. SEARS (Beth D. Jacob, Judith S. Roth, on the brief), Schiff Hardin LLP, New York, N.Y., for Appellee The Port Authority of New York and New Jersey. Richard Williamson, Thomas A. Egan, Flemming Zulack Williamson Zauderer LLP, New York, N.Y., for Appellees Silverstein Properties, Inc., et al. Christopher Walsh, Paul M. Hauge, Gibbons P.C., Newark, N.J., for Appellees Host Hotels and Resorts, Inc. & HMH WTC, LLC. 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 PETER L. WINIK, Latham & Watkins LLP, Washington, D.C., for Appellees Westfield WTC LLC & Westfield Corp., Inc. Charles F. Rysavy, Dawn M. Monsen, K&L Gates LLP, Newark, N.J., for Appellee Consolidated Edison Co. of New York, Inc. MAURA K. MONAGHAN (Roger E. Podesta, Debevoise & Plimpton, New York, N.Y., Desmond T. Barry, Jr., Condon & Forsyth LLP, New York, N.Y.), Debevoise & Plimpton, New York, N.Y., for Appellees American Airlines, Inc. & AMR Corp. Jeffrey J. Ellis, Quirk and Bakalor, P.C., New York, N.Y., Michael R. Feagley, Mayer Brown, LLP, Chicago, Ill., for Appellees United Air Lines, Inc. & United Continental Holdings, Inc. DENNIS JACOBS, Circuit Judge: Real estate developer Cedar & Washington Associates, 31 LLC, sues the owners and lessees of the World Trade Center 32 (and the owners of the airplanes that crashed into it) under 33 the Comprehensive Environmental Response, Compensation, and 34 Liability Act ( CERCLA ), 42 U.S.C. §§ 9601-9675, seeking 35 recovery of costs incurred in remediating a nearby building 36 contaminated by the September 11, 2001 attack on the World 37 Trade Center. The case returns to us after a remand to the 3 1 district court to determine in the first instance whether 2 the defendants are insulated by CERCLA s act of war 3 defense. 4 the Southern District of New York (Hellerstein, J.) 5 concluded that the attack constituted an act of war for 6 purposes of CERCLA s affirmative defense, and that the 7 defendants therefore were entitled to judgment on the 8 pleadings. 9 On remand, the United States District Court for We agree. Although CERCLA s strict liability scheme 10 casts a wide net, an act of war defense avoids ensnarement 11 of persons who bear no responsibility for the release of 12 harmful substances. 13 As the act of war defense shows, CERCLA was not intended 14 to create liability for the dispersal of debris and wreckage 15 from a catastrophe that was indistinguishable from military 16 attack in purpose, scale, means, and effect. 17 President and Congress responded to the September 11 attacks 18 by labeling them acts of war, and this classification 19 warrants notice, and perhaps some deference, in the CERCLA 20 context. 21 and immediately caused the release, and were the sole 22 cause of the release because the attacks overwhelm[ed] and The attacks come within this defense. Both the The decisive point is that the attacks directly 4 1 swamp[ed] the contributions of the defendant[s]. 2 September 11 Litigation, 931 F. Supp. 2d 496, 512 (S.D.N.Y. 3 2013) (quoting William H. Rodgers, Jr., Environmental Law: 4 Hazardous Wastes and Substances § 8.13 (1992)). In re 5 6 7 BACKGROUND After the September 11, 2001 attacks that leveled the 8 World Trade Center ( September 11 attacks ), real estate 9 developer Cedar & Washington began renovating its leased 12- 10 story downtown office building into a 19-story business 11 hotel. 12 Environmental Conservation and the United States 13 Environmental Protection Agency notified Cedar & Washington 14 that the interstitial spaces of the building might contain 15 finely-ground substances from the World Trade Center, 16 including concrete, asbestos, silicon, fiberglass, benzene, 17 lead, and mercury: 18 renovation to continue, the government agencies required 19 Cedar & Washington to perform costly remediation. 20 suit, Cedar & Washington seeks to recover those costs from: 21 the owner of the World Trade Center site, lessees of World 22 Trade Center buildings, and the companies that owned the two In late 2004, the New York State Department of so-called WTC Dust. 5 To permit In this 1 2 aircraft that were crashed into the towers. The claims are premised on CERCLA and common-law 3 indemnification. 4 complaint on statute of limitations grounds and 5 (alternatively) on the ground that Cedar & Washington failed 6 to allege a necessary element of a CERCLA cost recovery 7 claim: either a release or a disposal of hazardous 8 substances. 9 (AKH), 2010 WL 9474432 (S.D.N.Y. Sept. 22, 2010) (citing 42 The district court initially dismissed the In re September 11 Litigation, No. 08-9146 10 U.S.C. § 9607(a)(1)-(2)). 11 these thorny questions of statutory interpretation ; 12 instead, we remanded under United States v. Jacobson, 15 13 F.3d 19, 22 (2d Cir. 1994), for the district court to 14 determine, in the first instance, whether the defendants 15 could invoke CERCLA s act of war defense. 16 11 Litigation, 485 F. App x 443 (2d Cir. 2012). 17 affirmative defense requires the alleged polluter to prove 18 by a preponderance of evidence that the release of a 19 hazardous substance was caused solely by . . . an act of 20 war. 21 22 On appeal, we declined to resolve In re September This 42 U.S.C. § 9607(b). Pursuant to our mandate, the district court ordered briefing and heard argument, and then held, in a March 20, 6 1 2013 opinion, that Cedar & Washington s claim could be 2 dismissed on this alternative ground (in addition to those 3 identified in its earlier opinion). 4 Litigation, 931 F. Supp. 2d 496 (S.D.N.Y. 2013). 5 district court emphasized that: 6 ¢ the attacks were unique in our history, id. at 509; 7 ¢ al-Qaeda s leadership declared war on the United In re September 11 The 8 States, and organized a sophisticated, coordinated, and 9 well-financed set of attacks intended to bring down the 10 leading commercial and political institutions of the 11 United States, id.; 12 ¢ Congress and the President responded by recognizing 13 al-Qaeda s attacks as an act of war and sent U.S. 14 troops to wage war against those who perpetrated the 15 attacks and the collaborating Taliban government, id.; 16 and 17 ¢ the Supreme Court clarified in Hamdi v. Rumsfeld, 542 18 U.S. 507 (2004), and Hamdan v. Rumsfeld, 548 U.S. 557 19 (2006), that the attacks were acts of war against the 20 United States. 21 Supp. 2d at 512.1 In re September 11 Litigation, 931 F. 1 These facts are subject to judicial notice under Federal Rule of Evidence 201(b) because they are not 7 1 Further, the district court held that this act of war was 2 the sole cause of any release of hazardous substances from 3 the World Trade Center s collapse because the September 11 4 attacks overwhelm[ed] and swamp[ed] the contributions of 5 the defendant[s]. 6 Id. (quoting Rodgers, supra, at § 8.13). The district court cautioned that its holding as to 7 the act-of-war defense should be read narrowly, fitting the 8 facts of this case only. 9 necessarily applicable in contexts presenting different Id. at 514. Its decision was not 10 considerations, such as cognate laws of insurance or the 11 Anti-Terrorism Act of 1992. 12 Id. Once the district court issued its opinion, Cedar & 13 Washington promptly notified this Court to restore 14 jurisdiction, and the appeal was reinstated. 15 16 DISCUSSION 17 The district court s decision that the September 11 18 attacks constitute an act of war under CERCLA, and that 19 those attacks were the sole cause of the release of WTC subject to reasonable dispute, are generally known within the trial court s territorial jurisdiction, and can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned [here, the 9/11 Commission Report]. 8 1 dust, is reviewed de novo. 2 150, 160 (2d Cir. 2010) (grant of a motion for judgment on 3 the pleading accorded de novo review). 4 all well-pled allegations and draw all reasonable inferences 5 in Cedar & Washington s favor. 6 F.3d 52, 56 (2d Cir. 1999) ( In deciding a Rule 12(c) 7 motion, we apply the same standard as . . . under Rule 8 12(b)(6), accepting the allegations contained in the 9 complaint as true and drawing all reasonable inferences in 10 Hayden v. Paterson, 594 F.3d We accept as true Burnette v. Carothers, 192 favor of the nonmoving party. ). 11 12 I 13 CERCLA imposes strict liability for hazardous waste 14 cleanup on owners and facility operators, on certain persons 15 who arrange for the disposal or treatment of hazardous 16 waste, and on certain persons who transport hazardous waste. 17 42 U.S.C. § 9607(a)(1)-(4). 18 made available when CERCLA liability would not be linked to 19 responsibility for contamination. 20 in Section 107(b): 21 22 23 24 Three affirmative defenses are These defenses are listed There shall be no liability under [CERCLA] for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting 9 1 2 3 4 5 6 7 8 9 10 11 12 13 therefrom were caused solely by-(1) an act of God; (2) an act of war; (3) an act or omission of a[n unrelated] third party . . . ; or (4) any combination of the foregoing paragraphs. 42 U.S.C. § 9607(b) (emphasis added). Act of war is undefined in the statutory text, and 14 the legislative history is silent on the intended meaning of 15 the term. 16 1061 (9th Cir. 2002). 17 the bare meaning of the . . . phrase but also its placement 18 and purpose in the statutory scheme. 19 Robinson, 702 F.3d 22, 31 (2d Cir. 2012) (quoting Holloway 20 v. United States, 526 U.S. 1, 6 (1999) (internal quotation 21 marks omitted)). 22 United States v. Shell Oil, Co., 294 F.3d 1045, To construe it, we consider not only United States v. There is no doubt that CERLCA commands a broad reading, 23 and that, accordingly, its several exceptions (including 24 act of war ) are generally read narrowly. 25 Co. v. AAMCO Transmissions, Inc., 962 F.2d 281, 285 (2d Cir. 26 1992) ( It was Congress intent that CERCLA be construed 27 liberally . . . . ); see also Shell Oil, 294 F.3d at 1061-62 28 (denying act of war defense to oil companies who released 10 See Gen. Elec. 1 hazardous substances during wartime at the government s 2 direction); Westfarm Assocs. Ltd. P ship v. Washington 3 Suburban Sanitary Comm n, 66 F.3d 669, 677 (4th Cir. 1995) 4 (noting CERCLA s narrow defenses for damages caused solely 5 by act of God, war, or third parties ). 6 However, the reason for that rule of construction is to 7 accomplish [CERCLA s remedial] goals. 8 F.2d at 285. 9 responsible for any damage, environmental harm, or injury Gen. Elec., 962 CERCLA was passed to ensure that those 10 from chemical poisons bear the costs of their actions. 2 11 Id. (internal quotation marks omitted); see also Burlington 12 N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602 13 (2009) ( The Act was designed to promote the timely cleanup 14 of hazardous waste sites and to ensure that the costs of 15 such cleanup were borne by those responsible for the 16 contamination. (internal quotation marks omitted)). 17 18 That purpose, however broad, is not advanced here by imposing CERCLA liability on the airlines and the owners 2 CERCLA s primary purposes are axiomatic: (1) to encourage the timely cleanup of hazardous waste sites; and (2) to place the cost of that cleanup on those responsible for creating or maintaining the hazardous condition. Price Trucking Corp. v. Norampac Indus., Inc., --F.3d--, No. 112917-cv, 2014 WL 1012835, at *3 (2d Cir. Mar. 18, 2014) (internal quotation marks omitted). 11 1 (and lessors) of the real estate. 2 of the defense is served by recognizing the September 11 3 attacks as acts of war. 4 defendants all control over the planes and the buildings, 5 obviated any precautions or prudent measures defendants 6 might have taken to prevent contamination, and located sole 7 responsibility for the event and the environmental 8 consequences on fanatics whose acts the defendants were not 9 bound by CERCLA to anticipate or prevent. And the manifest purpose The attacks wrested from the See, e.g., 2 The 10 Law of Hazardous Waste: Management, Cleanup, Liability and 11 Litigation § 14.01[8][b] (Susan M. Cooke, ed.) (delineating 12 CERCLA s act-of-war defense as covering man-made 13 catastrophes beyond the control of any responsible party ). 14 We therefore conclude that, solely for purposes of 15 construing CERCLA s affirmative defenses, the September 11 16 attacks were acts of war.3 17 18 This contextual reading comports with the plain meaning of act of war notwithstanding that the September 11 3 Cedar & Washington contend that the September 11 attacks are more appropriately covered by the third-party affirmative defense, but that discovery would be required for defendants to meet their burden on that defense. See Appellant Br. 15 n.9. Because the claims are barred by the act-of-war defense, we need not decide whether they would also be barred by the third-party defense. 12 1 attacks were not carried out by a state or a government. 2 War, in the CERCLA context, is not limited to opposing 3 states fielding combatants in uniform under formal 4 declarations.4 5 avoided a broad or categorical holding. 6 because the September 11 attacks were different in means, 7 scale, and loss from any other terrorist attack. 8 coordinate branches of government expressly recognized the 9 September 11 attacks as an act of war justifying military At the same time, the district court wisely None was needed Both 10 response, and these decisions are worthy of deference. 11 Congress, in the immediate aftermath of 9/11, passed the 12 Authorization for the Use of Military Force ( AUMF ), Pub. 13 L. No. 107-40, 115 Stat. 224 (2001), which constitute[d] 14 the specific statutory authorization necessary for the 15 President to enter military hostilities abroad under the War 16 Powers Act, 50 U.S.C. §§ 1541-1548, and to use all 17 necessary and proper force against those responsible for 18 the September 11 attacks. Similarly, the President declared 4 We recognize that in the international law context, war has been traditionally defined as a use of force or other action by one state against another which [t]he state acted against recognizes . . . as an act of war, either by use of retaliatory force or a declaration of war. Shell Oil, 294 F.3d at 1061 (quoting two international law treatises). 13 1 that the September 11 attacks were acts of war and treated 2 them as such. 3 Congress on the United States Response to the Terrorist 4 Attacks of September 11, 37 Weekly Comp. Pres. Doc. 1347, 5 1347 (Sept. 20, 2011) ( On September 11th, enemies of 6 freedom committed an act of war against our country. ). 7 8 See Address Before a Joint Session of the The Supreme Court has deferred to those acts and declarations of the other branches: 9 10 11 12 13 14 15 16 17 18 19 Hamdan v. Rumsfeld, 548 U.S. 557, 599 n.31 (2006). 20 district court, we need not decide whether other terrorist 21 attacks constitute act[s] of war under CERCLA; the 22 September 11 attacks fit the category without question. 23 [N]othing in our analysis turns on the admitted absence of either a formal declaration of war or a declaration of martial law. Our focus instead is on the September 11, 2001, attacks that the Government characterizes as the relevant act[s] of war, and on the measure that authorized the President s deployment of military force--the AUMF. . . . [W]e do not question the Government s position that the war commenced with the events of September 11, 2001 . . . . Like the This reading is not at odds with precedent that act of 24 war is construed narrowly in insurance contracts. 25 e.g., Pan Am. World Airways, Inc. v. Aetna Cas. & Surety 26 Co., 505 F.2d 989 (2d Cir. 1974). 27 risk insurance contract is to protect against any insurable 14 See, The purpose of an all- 1 loss not expressly excluded by the insurer or caused by the 2 insured. 3 should have expected the exclusions drafted by them to be 4 construed narrowly against them, and should have calculated 5 their premiums accordingly. ). 6 contractual act of war exclusion thus achieves the 7 parties contractual intent, insulating the policyholder 8 from loss. 9 and unrelated. 10 Id. at 1003-04 ( The experienced all risk insurers A narrow reading of a The remedial purpose of CERCLA is both different Nor is our interpretation at odds with the Anti- 11 Terrorism Act ( ATA ), 18 U.S.C. §§ 2331 et seq. 12 purpose of the ATA was [t]o provide a new civil cause of 13 action in Federal law for international terrorism that 14 provides extraterritorial jurisdiction over terrorist acts 15 abroad against United States nationals. 16 Cong. (1992). 17 defines it as any act occurring in the course of--(A) 18 declared war; (B) armed conflict, whether or not war has 19 been declared, between two or more nations; or (C) armed 20 conflict between military forces of any origin. 21 § 2331(4). 22 of terrorism. The H.R. 2222, 102d The statutory exception for an act of war 18 U.S.C. Acts of war, then, are distinguished from acts 15 1 Cedar & Washington argues that we should import that 2 distinction into the CERCLA context. 3 designed precisely to differentiate between acts of 4 terrorism and acts of war, while CERCLA is silent as to 5 terrorism. 6 both an act of war and an act of terrorism; under the ATA 7 regime, it may not. 8 defined in the two statutes differ geographically, because 9 the ATA applies solely abroad, whereas CERCLA only applies 10 11 However, the ATA is Indeed, in the CERCLA context, an event may be In addition, the act[s] of war domestically. Given the manifestly distinct statutory text, 12 structure, and remedial purposes of CERCLA and the ATA, we 13 do not construe act of war to have the identical meaning 14 in both statutes. 15 Cline, 540 U.S. 581, 596 (2004) (reading language of ADEA in 16 light of purpose of statute). See Gen. Dynamics Land Sys., Inc. v. 17 18 19 * * * Because they were an act of war, the September 11 20 attacks fall under CERCLA s exception if they were the 21 sole[] cause of the alleged release. 22 The sole cause standard certainly requires more than just 16 42 U.S.C. § 9607(b). 1 proximate and but for causation. 2 because the September 11 attacks overwhelmed all other 3 causes, and because the release was unquestionably and 4 immediately caused by the impacts. 5 § 8.13 (characterizing the sole cause standard as a 6 formidable obstacle . . . allow[ing] escape from liability 7 only where external events overwhelm and swamp the 8 contributions of the defendant ); cf. Aegis Ins. Servs., 9 Inc. v. 7 World Trade Co., L.P., 77 F.3d 166, 180 (2d Cir. But it is satisfied here See Rodgers, supra, at 10 2013) (dismissing negligent design claim against owners of a 11 building destroyed on 9/11 because given severity of the 12 cataclysm that engulfed lower Manhattan . . . , [i]t is 13 simply incompatible with common sense and experience to hold 14 that defendants were required to design and construct a 15 building that would survive the events of September 11, 16 2001 ). 17 Cedar & Washington argues that the composition of the 18 dust and flying debris would have been less harmful but for 19 actions previously taken by the owners of the airplanes and 20 the real estate. 21 an issue of fact or a subject for discovery. 22 is found in the text of the statute. This argument does not succeed in raising 17 The refutation The phrase act of 1 war is listed in parallel with act of God, 42 U.S.C. § 2 9607(b); it is useful and sensible to treat the two kinds of 3 events alike when it comes to showing causation. 4 be absurd to impose CERCLA liability on the owners of 5 property that is demolished and dispersed by a tornado. 6 tornado, which scatters dust and all else, is the sole 7 cause of the environmental damage left in its wake 8 notwithstanding that the owners of flying buildings did not 9 abate asbestos, or that farmers may have added chemicals to 10 It would A the soil that was picked up and scattered. 11 12 II 13 Cedar & Washington incurred costs removing the dust 14 residues of the planes and the World Trade Center, and seeks 15 common-law indemnification. 16 indemnity is a restitution concept which permits shifting 17 the loss because to fail to do so would result in the unjust 18 enrichment of one party at the expense of the other. 19 McCarthy v Turner Constr., Inc., 17 N.Y.3d 369, 375 (2011) 20 (internal brackets omitted); see also City of New York v. 21 Lead Indus. Ass n, Inc., 644 N.Y.S.2d 919, 922-23 (1st Dep t 22 1996) ( The classic situation giving rise to a claim for Implied, or common-law, 18 1 indemnity is where one, without fault on its own part, is 2 held liable to a third party by operation of law . . . due 3 to the fault of another. ). 4 indemnitor must bear some fault for the damages suffered by 5 the indemnitee, whether on account of negligence, equitable 6 considerations, or statutory requirements. 7 Braun, 90 N.Y.2d 177, 183 (1997) ( The duty that forms the 8 basis for the liability arises from the principle that 9 every one is responsible for the consequences of his own 10 negligence, and if another person has been compelled . . . 11 to pay the damages which ought to have been paid by the 12 wrongdoer, they may be recovered from him. (quoting 13 Oceanic Steam Nav. Co. v. Compania Transatlantica Espanola, 14 134 N.Y. 461, 468 (1892)) (omission in original)). 15 polluter who causes (or is obligated by statute to 16 remediate) environmental contamination can be liable to 17 another party who cleans it up. 18 Cream Co., 64 N.Y.2d 83, 86-88 (1984). Under New York law, an See Raquet v. Thus a State v. Stewart s Ice 19 Here, the act-of-war defense bars the CERCLA claim, and 20 Cedar & Washington does not identify any other basis for its 21 claim of indemnification. 22 equitable consideration obligated the defendants to Because no legal duty or 19 1 remediate WTC Dust from Cedar & Washington s building, this 2 common law claim fails. 3 4 5 For the foregoing reasons, we affirm the judgment of the district court. 20