New York State Elec. & Gas v. FirstEnergy Corp., No. 11-4143 (2d Cir. 2014)

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NYSEG filed suit against FirstEnergy under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. 9601 et seq., to recover certain costs incurred in remediating coal tar contamination at certain of NYSEG's manufactured gas plants in upstate New York. NYSEG contends that FirstEnergy is liable as the successor to NYSEG's former parent company, AGECO, for a portion of the cleanup costs. FirstEnergy filed counterclaims against NYSEG and third-party claims against I.D. Booth, the current owner of one of the sites, for cost contribution under section 113(f). The district court held that NYSEG was entitled to recover certain cleanup costs from FirstEnergy based on a veil piercing theory, but limiting that recovery to certain sites. The district court also found I.D. Booth liable for a portion of the cleanup costs at one site. The court held that NYSEG's CERCLA claims against FirstEnergy are not barred by the covenant not to sue; AGECO is not directly liable under CERCLA as an operator; FirstEnergy is liable to NYSEG on a veil piercing theory based on AGECO's control of NYSEG from 1922 to January 10, 1940, but not for contamination created by other AGECO subsidiaries before those subsidiaries merged into NYSEG; NYSEG's claims as to the (a) Plattsburgh site are timely, (b) Norwich site are untimely, and (c) Oswego site are untimely; the district court did not err in calculating total gas production at the sites; the district court did not abuse its discretion in reducing NYSEG's recovery from FirstEnergy by a portion of NYSEG's $20 million insurance settlement; the district court did not abuse its discretion in declining to reduce NYSEG's recovery to reflect the increased value of the remediated properties or NYSEG's alleged delay in the remedial efforts; and I.D. Booth is liable for a portion of cleanup costs and the district court did not abuse its discretion in apportioning liability in this respect. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings.

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11 4143 cv (L) New York State Elec. & Gas Corp. v. FirstEnergy Corp. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2013 (Argued: March 6, 2014 Decided: September 11, 2014) Docket Nos. 11 4143 cv(L); 11 4146 cv(XAP); 11 4149 cv(XAP) NEW YORK STATE ELECTRIC AND GAS CORPORATION, Plaintiff Counter Defendant Appellant Cross Appellee, v. FIRSTENERGY CORPORATION, Defendant Counter Claimant Appellee Cross Appellant, FIRSTENERGY CORPORATION, Third Party Plaintiff Appellee, v. I.D. BOOTH, INC., Third Party Defendant Appellant. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK Before: RAGGI, LYNCH, AND CHIN, Circuit Judges. Appeal from a judgment after trial before the United States District Court for the Northern District of New York (Peebles, M.J.), addressing claims under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq., for costs incurred in cleaning up coal tar contamination at manufactured gas plant sites in upstate New York. The district court held the corporate successor to plaintiffÊ¹s former parent company liable for a portion of the costs on a veil piercing theory, and it held the current owner of one site liable for a portion of the costs as well. AFFIRMED IN PART, VACATED IN PART, AND REMANDED. ____________________________ DAVID L. ELKIND (Keisha A. Gary, Woody N. Peterson, Geoffrey M. Long, on the brief), Dickstein Shapiro LLP, Washington, DC, for Plaintiff Counter Defendant Appellant Cross Appellee New York State Electric and Gas Corporation. PAUL D. CLEMENT (Gregory W. Hicks, Jr., Erin E. Murphy, on the brief), Bancroft PLLC, Washington, DC, and John F. Stoviack, Saul 2 Ewing LLP, Philadelphia, PA, for Defendant Counter Claimant Appellee Cross Appellant Third Party Plaintiff Appellee FirstEnergy Corporation. BRYAN J. MAGGS (Donald S. Thompson, on the brief), Davidson & OÊ¹Mara, P.C., Elmira, NY, for Third Party Defendant Appellant I.D. Booth. ____________________________ CHIN, Circuit Judge: In this case, New York State Electric and Gas Corporation (ÊºNYSEGÊº) sued FirstEnergy Corporation (ÊºFirstEnergyÊº) under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. (ÊºCERCLAÊº), to recover certain costs incurred in remediating coal tar contamination at certain of NYSEGÊ¹s manufactured gas plants in upstate New York. NYSEG contends that FirstEnergy is liable as the successor to NYSEGÊ¹s former parent company, Associated Gas & Electric Company (ÊºAGECOÊº), for a portion of the cleanup costs. FirstEnergy filed counterclaims against NYSEG and third party claims against I.D. Booth, Inc. (ÊºI.D. BoothÊº), the current owner of one of the sites, for cost contribution under section 113(f) of CERCLA. 3 On July 11, 2011, following a bench trial, the United States District Court for the Northern District of New York (Peebles, M.J.) issued a decision and order holding that NYSEG was entitled to recover certain cleanup costs from FirstEnergy based on a veil piercing theory, but limiting that recovery to certain sites. New York State Elec. & Gas Corp. v. FirstEnergy Corp., 808 F. Supp. 2d 417, 499 502 (N.D.N.Y. 2011) (ÊºNYSEGÊº).1 The district court also found I.D. Booth liable for a portion of the cleanup costs at one site. Id. at 519. We affirm in part, vacate in part, and remand. STATEMENT OF THE CASE A. The MGPs This case arises from the cleanup of hazardous waste created at certain former manufactured gas plants (ÊºMGPsÊº) in upstate New York, currently or formerly owned by NYSEG or its predecessor companies. MGPs began operating in the United States in the 1800s, producing gas used for cooking, lighting, and heating. The plants created gas by heating coal to very high temperatures in large ovens. The gas was then cleaned, processed and piped out for use. Unfortunately, as the gas cooled, it created a number of by products, 1 In accordance with 28 U.S.C. § 636(b)(1)(B), the parties consented to have a United States magistrate judge conduct the proceedings. 4 including coal tar, which inevitably leaked from tar handling equipment. Because coal tar is heavier than water, it tends to migrate in the subsurface, and travels underground from a site through the water table until it runs into a confining layer, such as bedrock. Coal tar also leaches into groundwater, causing groundwater contamination. The Environmental Protection Agency (ÊºEPAÊº) listed coal tar as a hazardous waste in 1992. See 40 C.F.R. § 261.32(a) (2012); see also Identification and Listing of Hazardous Waste; CERCLA Hazardous Substance Designation; Reportable Quantity Adjustment; Coke By Products Wastes, 57 Fed. Reg. 37,284 285 (Aug. 18, 1992) (codified at 40 C.F.R. Pts. 261, 271, & 302). Most of the MGPs closed in the 1930s and 1940s when natural gas began to be delivered through interstate pipelines. In this case, all of the waste in dispute was manufactured before 1940. NYSEG or its predecessors owned at least thirty eight MGP sites, including the sites at issue in this case. B. The Cleanup Most of the sites at issue were listed by the New York State Department of Environmental Conservation (ÊºDECÊº) in 1986 as Class Êº2aÊº sites 5 on the Registry of Inactive Hazardous Waste Disposal Sites in New York.2 In the 1980s, NYSEG investigated all the MGP sites involved in this case, except Newark and Corning. In March 1994, DEC entered into a Consent Order with NYSEG addressing the investigation and cleanup of coal tar and associated hazardous substances at all the sites in this action, except Corning. Since then, DEC has retained oversight of the cleanup process and approved all cleanup projects at each MGP site at issue in this case. C. Corporate History The history of the corporations involved in this case is long and tortured. We relate only the points relevant to the issues before us.3 AGECO was incorporated as a public utility holding company in 1906. By 1907 it owned the common stock of several utility companies. Mergers of certain of its subsidiaries in 1916 and 1918 eventually led to what became 2 Generally, Class 2 sites present a Êºsignificant threat to public health or the environment.Êº N.Y. Comp. Codes R. & Regs. tit. 6, § 375 2.7(b)(3)(ii). Class 2a is a temporary classification assigned to a site that has had inadequate and/or insufficient date for inclusion in any of the other classifications. See Hazardous Waste Site Classification, New York State Department of Environmental Conservation, www.dec.ny.gov/chemical/8654.html (last visited Sept. 9, 2014). 3 As the district court noted, FirstEnergy is collaterally estopped from challenging the findings of the district court in Rochester Gas & Elec. Corp. v. GPU, Inc., No. 00 CV 6369, 2008 WL 8912083 (W.D.N.Y. Aug. 8, 2008), affÊ¹d, 355 Fed. AppÊ¹x 547 (2d Cir. 2009), regarding the corporate history of AGECO and FirstEnergy. FirstEnergy is in privity with GPU, as the two were merged in 2001. NYSEG, 808 F. Supp. 2d at 430 n.3. 6 known as the New York State Gas and Electric Corporation. In 1928, the latter entity changed its name to the New York State Electric Corporation, and a year later it adopted its current name, New York State Electric and Gas Corporation. Hence, NYSEG was created through the merger of certain AGECO subsidiaries. Over the years, AGECO acquired other utility companies and MGPs, either directly or through other holding companies. In the 1930s, NYSEG acquired a number of MGPs from AGECO subsidiaries. By 1939, NYSEG had acquired all the MGPs at issue in this action from AGECO. D. The Bankruptcy On January 10, 1940, AGECO filed for bankruptcy. Pursuant to the reorganization plan, AGECO merged into AGECORP, which subsequently changed its name to General Public Utilities Corporation, which later became GPU. In 2001, GPU merged into FirstEnergy. Hence, FirstEnergy is the successor to AGECO. On June 26, 1945, during the bankruptcy proceedings, NYSEGÊ¹s board of directors adopted a resolution not to bring any claims against AGECO, instead assigning NYSEGÊ¹s claims to N.Y. PA NJ Utilities Company: [T]hat in accordance with the request of N.Y. PA NJ Utilities Company dated May 9, 1945, this Company shall take no action 7 with respect to the filing of any claim or claims against the Estate of [AGECO] or the Estate of [AGECORP] . . . ; provided, however, that in consideration therefor N.Y. PA NJ Utilities Company shall release this Corporation and its officers and directors from any liability arising from the omission of this Corporation to file such claim or claims and also from any liability for having made or approved allegedly excessive payments through various service corporations or funds prior to 1939; and provided, further that the Trustees of the above mentioned Estates shall execute and deliver to this Corporation [an] appropriate covenant not to sue on account of any alleged failure to pay its pro rata share of any alleged Federal tax liability for the years 1927 to 1993, inclusive. NYSEG, 808 F. Supp. 2d at 433 (emphasis added). E. Procedural History This litigation began in April 2003, when NYSEG sued FirstEnergy under section 107(a) of CERCLA for cleanup costs at twenty four MGPs in upstate New York. This number was reduced to seventeen sites before trial. During the trial, NYSEGÊ¹s claims with respect to the Auburn Clark Street site were dismissed pursuant to Fed. R. Civ. P. 52(c), leaving sixteen sites at issue. NYSEG, 808 F. Supp. 2d at 446 n.11. At trial, NYSEG alleged that it spent more than $94 million in cleanup costs on the sixteen sites through the end of 2009, and that it faced another $144 million in future cleanup costs. Id. at 428. 8 On July 11, 2011, the district court issued a decision and order, NYSEG, 808 F. Supp. 2d 417, holding principally that: 1) NYSEG was not barred by a covenant not to sue from seeking contribution from FirstEnergy under CERCLA. 2) FirstEnergy was not liable for cleanup costs as an Êºowner.Êº 3) FirstEnergy was not directly liable for cleanup costs as an Êºoperator.Êº 4) NYSEG was permitted to pierce the corporate veil to hold FirstEnergy liable as an ÊºoperatorÊº for the period from 1922 to 1940. 5) NYSEG was not permitted to pierce the corporate veil for the period prior to 1922 or after 1940. 6) Cost recovery by NYSEG at the Norwich and Owego sites was precluded by the statute of limitations. 7) Cost recovery by NYSEG at the Plattsburgh site was not precluded by the statute of limitations. 8) A portion of a $20 million insurance payment to NYSEG could be used to offset costs assigned to FirstEnergy. 9) The court could rely on FirstEnergyÊ¹s coal tar production calculations for (1) the pre 1887 period and (2) the post 1930 period. 10) FirstEnergy was entitled to contribution from I.D. Booth based on I.D. BoothÊ¹s status as an owner of one of the sites. 9 An Amended Final Judgment was entered on September 7, 2011, awarding NYSEG $29,715,225 for past and future cleanup costs for sixteen sites. I.D. Booth was held liable for $179,122 plus a share of future costs with respect to the Cortland Homer site. These appeals followed. DISCUSSION A. CERCLA Congress enacted CERCLA, 42 U.S.C. §§ 9601 et seq., to address the cleanup of hazardous waste by imposing strict liability for necessary cleanup costs incurred that are Êºconsistent with the national contingency plan.Êº CERCLA § 107(a)(4)(B), 42 U.S.C. § 9607(a)(4)(B). Private parties who engage in cleanup activity can recover costs associated with such actions by bringing claims under either section 107(a) or section 113(f) of CERCLA against Êºpotentially responsible partiesÊº (ÊºPRPsÊº). CERCLA created four classes of PRPs: (1) present owners and operators of facilities that accepted hazardous substances for transport; (2) past owners and operators of such facilities; (3) generators of hazardous substances; and (4) certain transporters of hazardous substances. 42 U.S.C. § 9607(a); see also Price Trucking Corp. v. Norampac Indus., Inc., 748 F.3d 75, 79 80 (2d Cir. 2014). 10 Private parties have two options to recover their cleanup costs from other PRPs. First, under section 107(a), a property owner or operator who has spent money on cleaning up hazardous waste may seek reimbursement for cleanup costs from other PRPs. See Niagra Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 120 21 (2d Cir. 2010). This option, however, is limited to the Êºnecessary costs of response . . . consistent with the national contingency plan.Êº 42 U.S.C. § 9607(a)(4)(B). Second, under section 113(f), Êº[a]ny person may seek contribution from any other person who is liable or potentially liable under [section 107(a)] during or following any civil action under section 9606 of this title or under section 9607(a) of this title.Êº 42 U.S.C. § 9613(f)(1). In other words, a PRP who has been sued under section 107(a) to contribute to cleanup costs even if it has not yet spent any money on cleanup activities can seek contribution from other PRPs for cleanup costs, including from the initial plaintiff who sued the PRP under section 107(a). Here, NYSEG has sued FirstEnergy under section 107(a) and FirstEnergy has filed claims against NYSEG and I.D. Booth under section 113(f). 11 We construe CERCLA liberally to advance its Êºdual goals of cleaning up hazardous waste and holding polluters responsible for their actions.Êº New York v. Next Millenium Realty, LLC, 732 F.3d 117, 124 (2d Cir. 2013); see also Prisco v. A&D Carting Corp., 168 F.3d 593, 602 (2d Cir. 1999) (ÊºAs a remedial statute, CERCLA should be construed liberally to give effect to its purposes.Êº (quoting B.F. Goodrich v. Betkoski, 99 F.3d 505, 514 (2d Cir. 1996), overruled on other grounds by New York v. NatÊ¹l Serv. Indus., Inc., 532 F.3d 682, 685 (2d Cir. 2003) (internal quotation marks omitted)); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1198 (2d Cir. 1992) (ÊºBecause it is a remedial statute, CERCLA must be construed liberally to effectuate its two primary goals: (1) enabling the EPA to respond efficiently and expeditiously to toxic spills, and (2) holding those parties responsible for the releases liable for the costs of the cleanup.Êº). B. Analysis These appeals present the following issues: (1) whether NYSEGÊ¹s CERCLA claims against FirstEnergy are barred by the covenant not to sue; (2) whether AGECO is directly liable under CERCLA as an operator; (3) whether FirstEnergy is liable to NYSEG on a piercing the corporate veil theory (a) based on AGECOÊ¹s control over NYSEG from 1922 to 1940, and (b) for contamination 12 created by other AGECO subsidiaries before the subsidiaries were merged into NYSEG, and before AGECO owned the subsidiaries that were later merged into NYSEG; (4) whether NYSEGÊ¹s claims as to the Plattsburgh, Norwich, and Owego sites are time barred; (5) whether the district court erred in calculating total gas production at the sites; (6) whether NYSEGÊ¹s recovery from FirstEnergy could be reduced by a portion of NYSEGÊ¹s $20 million insurance settlement; (7) whether NYSEGÊ¹s recovery should have been reduced either (a) to reflect the increased value of the remediated properties or (b) because of NYSEG s alleged delay in the remedial efforts; and (8) whether I.D. Booth is liable for a portion of cleanup costs. We review the district courtÊ¹s interpretation of the covenant not to sue, its decisions whether to pierce the corporate veil, and its statute of limitations determinations de novo. See Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 144 (2d Cir. 2000) (waiver); Thrift Drug, Inc. v. Universal Prescription AdmÊ¹rs, 131 F.3d 95, 97 (2d Cir. 1997) (veil piercing); Castagna v. Luceno, 744 F.3d 254, 256 (2d Cir. 2014) (statute of limitations). We review the district courtÊ¹s findings of fact for clear error and its conclusions of law de novo, Amalfitano v. Rosenberg, 533 F.3d 117, 123 (2d Cir. 2008), and its evidentiary 13 rulings for abuse of discretion, Boyce v. Soundview Tech. Grp., Inc., 464 F.3d 376, 385 (2d Cir. 2006). We review the district courtÊ¹s allocation of response costs for abuse of discretion. Goodrich Corp. v. Town of Middlebury, 311 F.3d 154, 168 69 (2d Cir. 2002). 1. The Covenant Not To Sue FirstEnergy argues the district court erred when it held that NYSEGÊ¹s claims were not foreclosed by the covenant not to sue that AGECO included in the resolution adopted by NYSEGÊ¹s board of directors during the bankruptcy proceedings in 1945. NYSEG, 808 F. Supp. 2d at 503. NYSEG argues that the covenant does not bar its claims because: (1) there is no evidence the covenant was ever executed and delivered and (2) the resolution is limited to claims of NYSEG in 1945 against the bankruptcy estates of AGECO and AGECORP in the bankruptcy proceedings. A covenant not to sue is Êºan agreement by one having a present right of action against another not to sue to enforce such right.Êº Colton v. New York Hosp., 53 A.D.2d 588, 589, 385 N.Y.S.2d 65, 66 (1st DepÊ¹t 1976); accord McMahan & Co. v. Bass, 250 A.D.2d 460, 461, 673 N.Y.S.2d 19, 14 21 (1st DepÊ¹t 1998) (covenant not to sue Êºconstitutes an agreement to exercise forbearance from asserting any claim which either exists or which may accrueÊº). Although a covenant not to sue is distinct from a release, which is the Êºpresent abandonment of a right or claim,Êº Colton, 53 A.D.2d at 589, a covenant not to sue has been Êºheld to operate as a release . . . in so far as the person to whom the covenant, in terms, runs, is concerned.Êº Shaw v. Crissey, 182 Misc. 27, 28, 43 N.Y.S.2d 237, 239 (Sup. Ct. Saratoga Cnty. 1943). Here, however, the covenant never became operative because a condition precedent to its validity never occurred. Under New York Law, Êºwhen there is a Ê¹condition precedent to the formation or existence of the contract itself . . . no contract arises Ê¹unless the condition occurs.Ê¹Êº Adams v. Suozzi, 433 F.3d 220, 227 (2d Cir. 2005) (quoting Oppenheimer & Co., Inc. v. Oppenheim, Appel, Dixon, & Co., 86 N.Y.2d 685, 690 (1995)) (emphasis omitted). The board resolution explicitly stated that NYSEG releases its claims Êºprovided . . . that [AGECO Trustees] shall execute and deliver to [NYSEG] an appropriate covenant not to sueÊº for certain alleged failures. NYSEG, 808 F. Supp. 2d at 433. Yet FirstEnergy failed to offer 15 proof that satisfied this condition. Because FirstEnergy failed to carry its burden of proof to show that the conditions precedent to the existence of the NYSEG covenant occurred, we affirm the district courtÊ¹s ruling that the covenant does not bar NYSEGÊ¹s claims.4 2. AGECOÊ¹s direct liability as a CERCLA ÊºoperatorÊº NYSEG argues that FirstEnergy is directly liable as an operator of the Cortland Homer, Ithaca Court Street, and Norwich MGPs between 1906 and 1910 and the Oneonta MGP between 1916 and 1922 because AGECO Êºdirectly managed and operatedÊº these MGPs. NYSEG Br. at 24. Under CERCLA, Êºany person who operates a polluting facility is directly liable for the costs of cleaning up the pollution . . . regardless of whether that person is the facilityÊ¹s owner [or] the ownerÊ¹s parent corporation.Êº United States v. Bestfoods, 524 U.S. 51, 65 (1998) (internal citations omitted). An ÊºoperatorÊº is defined as Êºsomeone who directs the workings of, manages, or 4 Although the district court held that the resolution did not bar NYSEGÊ¹s claims against FirstEnergy because the language was not broad enough to cover CERCLA liability, NYSEG, 808 F. Supp. 2d at 503, we may and do affirm on other grounds. See Olsen v. Pratt & Whitney Aircraft Div. of United Techs. Corp., 136 F.3d 273, 275 (2d Cir. 1998) (ÊºIt is well settled that we may affirm on any grounds for which there is a record sufficient to permit conclusions of law, including grounds not relied upon by the district court.Êº (internal quotation marks omitted)). 16 conducts the affairs of a facility.Êº Id. at 66. To be held liable under CERCLA, an operator must Êºmanage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.Êº Id. at 66 67. Whether an entity directly operates a facility is a factual issue that we review for clear error. See Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 23 (1st Cir. 2004). There are three circumstances under which a parent can be held liable as a direct operator of a subsidiaryÊ¹s facilities: (1) Êºwhen the parent operates the facility in the stead of its subsidiary or alongside the subsidiary in some sort of a joint ventureÊº; (2) when Êºa dual officer or director . . . depart[s] so far from the norms of parental influence exercised through dual officeholding as to serve the parent, even when ostensibly acting on behalf of the subsidiaryÊº; and (3) when Êºan agent of the parent with no hat to wear but the parent s hat . . . manage[s] or direct[s] activities at the facility.Êº Bestfoods, 524 U.S. at 71. In considering these questions, a court must focus on the relationship between 17 the parent and the facility in question, not the parent and the subsidiary. See id. at 67 68. 5 Here, the district court found that AGECO was not an operator during this period because it did not sufficiently Êºparticipate[ ] in the activitiesÊº of the facilities. Id. at 68. Specifically, the district court relied on the fact that: [E]ach MGP facility retained its own superintendent on site who was responsible for the day to day activities, and there is no evidence that the superintendent reported to and was controlled by AGECO and the service companies, as distinct from the corporate management and board of directors of NYSEG and those of other subsidiary utility companies. NYSEG, 808 F. Supp. 2d at 493. The district court noted that while NYSEG and AGECO entered into service agreements under which AGECO was Êºretained to provide such services as general operator and financial manager of NYSEGÊ¹s properties,Êº those agreements did not Êºreveal the type of management and control over polluting activities envisioned by Bestfoods as necessary to support a finding of direct operator liability.Êº Id. at 493 94. The fact that AGECO took steps to Êºmonitor and controlÊº its subsidiariesÊ¹ activities, including arranging for these service 5 As discussed below, the parentÊ¹s control over the subsidiary can establish indirect liability under a veil piercing theory. Bestfoods, 524 U.S. at 70. 18 agreements, was consistent with AGECOÊ¹s role as a parent corporation managing the activities of its subsidiary. Id. As the Bestfoods court observed: Activities that involve the facility but which are consistent with the parentÊ¹s investor status, such as monitoring of the subsidiaryÊ¹s performance, supervision of the subsidiaryÊ¹s finance and capital budget decisions, and articulation of general policies and procedures, should not give rise to direct liability. 524 U.S. at 72 (alterations omitted). NYSEGÊ¹s arguments to the contrary are not persuasive because the activities it cites are consistent with acceptable practices of a parent corporation. For example, NYSEG points to a series of reports issued by the Federal Trade Commission between 1932 and 1934, which stated that after AGECOÊ¹s owners transferred the stock of Ithaca Gas Light, Norwich Gas Company, and Homer & Cortland Gas Light Company (the owners of the Cortland Homer, Ithaca Court Street, and Norwich MGPs) to AGECO, AGECO brought the companies under Êºcommon control and managementÊº and managed and operated their MGPs from 1906 to 1910. NYSEG Br. at 5. More specifically, NYSEG cites BrownÊ¹s Directory of American Gas Companies (ÊºBrownÊ¹s DirectoryÊº), which reported that the same AGECO personnel held the offices of President, Vice President, Secretary, and General Manager of the three MGPÊ¹s during this period. NYSEG also points 19 to the previously mentioned service contracts with W.S. Barstow & Company and J.G. White & Company, which were in effect at various points between 1910 and 1922 as evidence of direct control of the Cortland Homer, Ithaca Court Street, Norwich, and Oneonta MGPs. The district court did not err in holding that these general allegations failed to support a finding of direct operator liability as they do not show that AGECO operated the facility Êºin the stead of its subsidiary.Êº See Bestfoods, 524 U.S. at 71. The holding of dual officerships and directorships, without more, is insufficient to establish operator liability. Id. at 70 71. To warrant direct liability, a dual officer or director must Êºdepart so far from the norms of parental influence exercised through dual officeholding as to serve the parent, even when ostensibly acting on behalf of the subsidiary in operating the facility.Êº Id. The district court did not commit clear error in finding no such departure in this case. F.D.I.C. v. Providence Coll., 115 F.3d 136, 140 (2d Cir. 1997) (ÊºWe will set aside a district courtÊ¹s findings of fact following a bench trial only if those findings are clearly erroneous.Êº). Similarly, the supervisory activities engaged in by AGECO (monitoring performance, supervising finances, etc.) fall within the parameters of the parent subsidiary relationship. Bestfoods, 524 U.S. at 20 72. Thus, we affirm the district courtÊ¹s decision not to find direct operator liability. 3. Piercing the Corporate Veil a. Contamination Created by NYSEG. FirstEnergy argues that the district court erred in piercing the corporate veil to hold it liable for cleanup costs for pollution created by NYSEG. It is fundamental that a parent is considered a legally separate entity from its subsidiary, and cannot be held liable for the subsidiaryÊ¹s actions based solely on its ownership of a controlling interest in the subsidiary. Bestfoods, 524 U.S. at 61; Carte Blanche (Singapore) Pte., Ltd. v. Diners Club Intern., Inc., 2 F.3d 24, 26 (2d Cir. 1993). Under New York law,6 however, a parent can be held liable for the actions of a subsidiary where a plaintiff shows: (1) the parent corporation dominates the subsidiary in such a way as to make it a Êºmere instrumentalityÊº of the parent; (2) the parent company exploits its control to Êºcommit fraud or other wrongÊº; and (3) the plaintiff suffers an unjust loss or injury as a result of the fraud or wrong. Wm. Passalacqua Builders, Inc. v. Resnick Developers S., Inc., 933 6 The parties agree that this issue is governed by New York law. See NYSEG, 808 F. Supp. 2d at 496. 21 F.2d 131, 138 (2d Cir. 1991) (internal quotations omitted); accord Bestfoods, 524 U.S. at 63 64. As to the first prong, courts consider the following factors to determine the degree of domination by the parent: (1) the absence of the formalities and paraphernalia that are part and parcel of the corporate existence, i.e., issuance of stock, election of directors, keeping of corporate records and the like[;] (2) inadequate capitalization[;] (3) whether funds are put in and taken out of the corporation for personal rather than corporate purposes[;] (4) overlap in ownership, officers, directors, and personnel[;] (5) common office space, address and telephone numbers of corporate entities[;] (6) the amount of business discretion displayed by the allegedly dominated corporation[;] (7) whether the related corporations deal with the dominated corporation at arms length[;] (8) whether the corporations are treated as independent profit centers[;] (9) the payment or guarantee of debts of the dominated corporation by other corporations in the group[;] and 22 (10) whether the corporation in question had property that was used by other of the corporations as if it were its own. Passalacqua, 933 F.2d at 139. The ultimate question is whether Êºthe policy behind the presumption of corporate independence and limited shareholder liability encouragement of business development is outweighed by the policy justifying disregarding the corporate form the need to protect those who deal with the corporation.Êº Id. NYSEG sought to pierce the corporate veil here in three respects: (a) AGECOÊ¹s control over NYSEG from 1922 to 1940; (b) contamination created by other subsidiaries before they were merged into NYSEG; and (c) contamination created by other subsidiaries before AGECO owned the subsidiaries that were merged into NYSEG. FirstEnergy argues that the district court failed to make sufficient NYSEG specific findings to warrant piercing the corporate veil.7 We disagree. FirstEnergy also argues that a subsidiary cannot pierce its own corporate veil to reach 7 its former parent under New York law. We previously addressed this issue in Rochester Gas & Elec. Corp. v. GPU, Inc. (ÊºRG&EÊº), a case which involved a different former AGECO subsidiary and FirstEnergy: [I]f a third party, such as the government, may pierce a subsidiaryÊ¹s corporate veil to impose CERCLA liability on a dominating parent, . . . it is hard to see why a company that voluntarily cleans up contamination caused by its former parent (through its then domination of the company) 23 The district court made numerous findings regarding AGECOÊ¹s domination of NYSEG when it carefully considered the Passalacqua factors in reaching its decision. These include findings specific to NYSEG as well as more general findings regarding AGECOÊ¹s abuse of all its subsidiaries, including NYSEG. While it is true that not every factor is present in this case, that is not a requirement under Passalacqua, which recognized the Êºinfinite variety of situations that might warrant disregarding the corporate form.Êº Passalacqua, 933 F.2d at 139; see also Freeman v. Complex Computing Co., Inc., 119 F.3d 1044, 1053 (2d Cir. 1997) (holding Êº[n]o one [Passalacqua] factor is decisiveÊº). As an initial matter, the district court found that between 1922 and 1940 AGECO was dominated and controlled by Howard C. Hopson and John I. Mange. NYSEG, 808 F. Supp. 2d at 436. Hopson and Mange had acquired all AGECOÊ¹s shares of voting stock by April 1923. Id. One way in which Hopson should be barred from seeking similar recovery. To preclude a company from piercing its own veil in such circumstances would run directly counter to CERCLAÊ¹s twin goals of encouraging the timely cleanup of hazardous waste sites and placing the cost of that cleanup on those responsible for creating or maintaining the hazardous condition. 355 Fed. AppÊ¹x 547, 551 (2d Cir. 2009) (internal quotations and citations omitted). Although RG&E was only a summary order, we agree with this reasoning and we reach the same conclusion here. 24 controlled the subsidiary companies was by holding the directorsÊ¹ undated, signed resignations in hand. Id. at 499. While the district court found that NYSEG was not undercapitalized, it did find that Hopson freely transferred funds in and out of AGECO and its subsidiaries, and that the subsidiaries were considered Êºmere pocketsÊº of AGECO. Id. For example, the New York Public Service Commission (ÊºPSCÊº) examined the books, records, accounting methods and documents of NYSEG, as well as other subsidiaries, from 1934 to 1938. Id. at 439 40. It issued a report (the ÊºBrewster ReportÊº) finding that AGECO and its affiliates Êºsiphon[ed]Êº off funds from the operating companies and deposited them into the Êºpockets of those individuals and corporations engaged in milking the operating companies through the device of servicing and management contracts.Êº Id. at 439 (internal quotation marks ommitted). It also found that Hopson and Howard C. Hopson & Company defrayed personal expenses with funds from the operating companies within the AGECO system. Id. at 440. Furthermore, the district court found abuses by the Utility Management Corporation (ÊºUMCÊº), which charged operating companies in the AGECO system, including NYSEG, a management fee of 2.5 percent of their 25 gross revenues even though no management employees from UMC were located on any property owned by the operating companies. Id. The court also found substantial overlap in officers, directors, and personnel of AGECO and the subsidiaries. For example, during virtually all the years from 1922 to 1940, Mange served as president of AGECO and a director of NYSEG, and Hopson was on the NYSEG board from 1927 to 1934. Id. at 442 43. Between 1922 and 1940, board meetings for NYSEG and various other AGECO operating companies were usually held in New York City at or near AGECOÊ¹s office at 61 Broadway, which was also the primary location of HopsonÊ¹s accounting and financial organization that rendered financial, legal, accounting, and auditing services to AGECO and its subsidiaries. Id. at 442. The district court found that the terms of the service contracts between the service companies run by AGECO and the operating utility companies, including NYSEG, left the utility companies with Êºno vestige of independent authority or controlÊº because Êº[u]nder the provisions of these contracts, the service corporations manage, dominate, and practically operate the utilities.Êº Id. at 439 (quoting 1932 PSC Report). 26 The district court found that AGECO and the subsidiaries did not deal at arms length, as no one represented NYSEG or any of the other subsidiaries in the service contract negotiations. Id. at 443. In addition, AGECO loaned money to NYSEG and guaranteed debts by others to NYSEG. Id. at 499. Considering the totality of these NYSEG specific findings, we conclude the district court correctly found that veil piercing was warranted. See Passalacqua, 933 F.2d at 139.8 8 As noted above, we upheld a similar decision to allow an AGECO subsidiary, Rochester Gas & Electric (ÊºRG&EÊº), to pierce the corporate veil to hold FirstEnergy liable for cleanup at two MGPs. See RG&E, 355 Fed. AppÊ¹x 547. There, RG&EÊ¹s expert, Jonathan Macey (also NYSEGÊ¹s expert) testified that under Hopson and Mange, AGECO used a pyramidal holding company structure to exercise dominance over RG&E the same structure that was used to control NYSEG. RG&E, 2008 WL 8912083, at *5. Through the service companies, AGECO engaged in abuses such as siphoning off revenues from RG&E. Id. at *6. Reports by the Securities and Exchange Commission, the Federal Trade Commission, and Federal Power Commission also documented AGECOÊ¹s domination and abuse of its subsidiaries through the service companies. Id. at *2 3. As with NYSEG, we found the use of overlapping directors and officers within the holding company structure allowed Hopson and Mange to control the financial matters of the subsidiaries. Id. at *6. Furthermore, Mange exercised general supervision of the physical operations of the system through the same management corporation that he used to control NYSEG, namely UMC. Id. at *7. Hopson controlled the financial, legal, and accounting side of the companies through his service company, H.C. Hopson & Company, located at 61 Broadway (the same location for many of NYSEG meetings). Id. RG&E held numerous Board and Executive Committee meetings, as well as at least three shareholder meetings at AGECOÊ¹s 61 Broadway offices. Id. at *8. The service contracts between AGECO and RG&E were also not negotiated at arms length. Id. at *9 10. 27 The question remains as to when AGECOÊ¹s domination of NYSEG ended. FirstEnergy argues that any domination ended on January 10, 1940, the day the bankruptcy was filed. The district court held that AGECOÊ¹s domination did not end until December 31, 1940. NYSEG, 808 F. Supp. 2d at 539. The district courtÊ¹s conclusion that domination continued throughout 1940 is not supported by the record. 9 As the party seeking to pierce the corporate veil, NYSEG has the Êºheavy burdenÊº of demonstrating domination, TNS Holdings v. MKI Secs. Corp., 92 N.Y.2d 335, 339, 680 N.Y.S.2d 891 (1998), yet it adduced a paucity of affirmative evidence that AGECO continued to control NYSEG after filing for bankruptcy. Indeed, in its findings of fact the district court found that ÊºNYSEG . . . failed to prove a basis for veil piercing . . . for the period following AGECOÊ¹s bankruptcy filing.Êº NYSEG, 808 F. Supp. 2d at 502 (emphasis added). It was only later, in its conclusions of law, that the district court concluded that liability would extend throughout 1940 because there was testimony from NYSEGÊ¹s expert that Êºcontrol and dominance of AGECO over its subsidiaries extended well into 1941.Êº Id. at 539. We conclude that these seemingly contradictory statements betray the lack of affirmative evidence We need not decide whether duration of control is reviewed de novo, or, as an arguably more factual question, for clear error, because the district courtÊ¹s holding fails even clear error review. 9 28 needed for NYSEG to have carried its burden of proving dominance and control sufficient to warrant piercing the corporate veil past AGECOÊ¹s bankruptcy filing. b. Contamination Created by Other AGECO Subsidiaries. The parties have raised two additional issues regarding veil piercing: (1) whether the district court erred in piercing the corporate veil to hold FirstEnergy liable for contamination created by other AGECO subsidiaries before those subsidiaries were merged into NYSEG by AGECO; and (2) whether the district court erred in refusing to pierce the corporate veil to hold FirstEnergy liable for contamination that was created by companies before they were owned by either NYSEG or AGECO. Between 1929 and 1939, AGECO merged five subsidiaries into NYSEG: (1) Eastern New York Electric and Gas Company (owner of the Granville, Mechanicville and Plattsburgh MGPs); (2) Elmira Light, Heat & Power Corporation (owner of the Elmira MGP); (3) New York Central Electric Corporation (owner of the Corning, Dansville, Newark, and Penn Yan MGPs); (4) Empire Gas & Electric Company (owner of the Geneva MGP); and (5) Owego Gas Corporation (owner of the Owego MGP). 10 NYSEG, 808 F. Supp. 2d at 501. 10 The record contains ample evidence that NYSEG merged with Eastern New York Electric & Gas Company, Elmira Light, Heat and Power Corporation, Empire Gas & 29 NYSEG also acquired the Federal New York Company, Inc., owner of the Goshen MGP during this period. Id. Hence, these five subsidiaries owned ten MPGs. According to NYSEG, FirstEnergy absorbed all of the subsidiariesÊ¹ preexisting liabilities when NYSEGÊ¹s veil was pierced, even those liabilities that were incurred before either NYSEG or FirstEnergy owned the subsidiaries. NYSEG argues that because AGECO merged the five subsidiaries into NYSEG, these subsidiaries fall into one of the exceptions to the general rule regarding liabilities acquired through asset purchases. We disagree. When a corporation purchases the assets of another corporation, it does not acquire its liabilities, unless one of four exceptions applies. See New York v. NatÊ¹l Serv. Indus., Inc., 460 F.3d 201, 209 (2d Cir. 2006). The four exceptions are: (1) the buyer Êºexpressly or impliedly assumed the predecessorÊ¹s tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling corporation, or (4) the transaction [wa]s entered into fraudulently to escape such obligations.Êº Id. Electric Company, New York Central Electric Corporation and Owego Gas Corporation. Not only did the district court explicitly make findings about such mergers, see NYSEG, 808 F. Supp. 2d at 429 30, the parties stipulated to these mergers. See Pretrial Stipulations of Facts, Dkt. No. 28 (November 23, 2010), at ¶ 21, ¶ 35, ¶ 104, ¶ 159, ¶ 314. 30 (internal quotation marks omitted). Here, because there is no question that AGECO merged these five subsidiaries into NYSEG, NYSEG acquired their liabilities, including liabilities for past contamination. See Maline v. City of Utica, 267 A.D.2d 1022, 1022, 701 N.Y.S.2d 202, 203 (4th DepÊ¹t 1999) (as a result of merger with co defendant, defendant became the owner of co defendantÊ¹s property and assumed all of its Êºliabilities, obligations and penaltiesÊº). That does not answer the question, however, as to what extent those liabilities flowed to NYSEGÊ¹s parent, AGECO, under a veil piercing theory. 1. Pre Merger Liability FirstEnergy argues that the district court erred in piercing the corporate veil to hold it liable for contamination created at the ten MGPs owned by AGECO subsidiaries before the subsidiaries were merged into NYSEG. FirstEnergy notes that six of the AGECO owned MGPs ceased producing gas before AGECO merged these subsidiaries with NYSEG.11 The subsidiaries and MGPs are as follows: (1) Elmira Light, Heat & Power 11 Corporation merged into NYSEG in 1936 and the Elmira MGP ceased production in 1931; (2) Empire Gas & Electric Company merged into NYSEG in 1936 and the Geneva MGP ceased production in 1934, and the Newark MGP ceased production in 1929; (3) New York Central Electric Corporation merged into NYSEG in 1936 and the Penn Yan MGP ceased production in 1929, and the Dansville MGP ceased production in 1930; and, (4) Owego Gas Corporation was merged into NYSEG in 1939 and the Owego MGP ceased production in 1935. 31 As a general matter, under a veil piercing theory, a parent can only be liable for a wrong committed by the subsidiary under the influence of the parent. Passalacqua, 933 F.2d at 138. The use of control to commit a wrong is a key component to veil piercing. Id. (control of the subsidiaries by the parent Êºis the key; the control must be used to commit a fraud or other wrong that causes plaintiffÊ¹s lossÊº); Bedford Affiliates v. Sills, 156 F.3d 416, 431 (2d Cir. 1998) (court must find that parental control was used to cause a wrong), overruled on other grounds by W.R. Grace & Co. Conn. v. Zotos Intern., Inc., 559 F.3d 85, 89 90 (2d Cir. 2009). Domination and control by themselves are not sufficient to support a finding of veil piercing. Id. (ÊºMere domination or control of the corporation is insufficient to permit a court to disregard the existence of the corporate entity.Êº). The district court held that the veil of the non NYSEG subsidiaries could be pierced to hold FirstEnergy liable for contamination created while the subsidiaries were dominated by AGECO but before they were merged into NYSEG. NYSEG, 808 F. Supp. 2d at 491 500. (Êº[E]quity requires piercing of the NYSEG corporate veil as well as the other operating companies within the AGECO Empire and ultimately folded into NYSEG . . . during the times between 1922 and 1940 when AGECO acquired domination and control over the various 32 subsidiary operating utility companies owning those facilities.Êº). The district court based this holding primarily on the testimony of NYSEGÊ¹s expert, Jonathan Macey, who stated that AGECO treated these other operating companies in the same manner as NYSEG. Id. at 443. The district court, however, did not make any specific veil piercing findings or discuss the Passalacqua factors with respect to AGECOÊ¹s alleged control over the non NYSEG subsidiaries before NYSEG acquired them. The district court did not make any findings concerning, for example, capitalization, director/officer overlap, and observance of corporate formalities, with respect to these subsidiaries during this time period. Hence, the district courtÊ¹s findings are insufficient to support a conclusion of veil piercing in this respect. See William Wrigley Jr. Co. v. Waters, 890 F.2d 594, 601 02 (2d Cir. 1989) (vacating finding of veil piercing where evidence showed individual defendant was personally involved with corporationÊ¹s work but not that he controlled corporation and was using it for fraudulent ends). Accordingly, we conclude that the district court erred by piercing the corporate veil of the five subsidiaries to hold FirstEnergy 33 liable for contamination that occurred while under AGECOÊ¹s control, but before the subsidiaries were merged into NYSEG.12 2. Pre Ownership Liability NYSEG then goes one step further with its argument. Because all five of these subsidiaries were merged into NYSEG during the period when AGECO improperly dominated NYSEG (between 1922 and 1940), NYSEG argues that AGECO is responsible for all of the subsidiariesÊ¹ liabilities, even those that pre date AGECOÊ¹s ownership. NYSEG reasons that all of the subsidiariesÊ¹ liabilities became NYSEGÊ¹s liabilities as a result of the merger, even those incurred before the subsidiaries were purchased by AGECO. Thus, once NYSEGÊ¹s veil was pierced, all of its liabilities including those inherited from the merged subsidiaries became AGECOÊ¹s liabilities. Courts will pierce the corporate veil to prevent fraud or achieve equity by imposing a corporate obligation upon a parent. Matter of Morris v. New York State Dept. of Taxation and Fin., 82 N.Y.2d 135, 141 (N.Y. 1993). But to successfully pierce the veil, a plaintiff must show both domination of the 12 To the extent these five subsidiaries caused any contamination after they were merged into NYSEG, however, FirstEnergy is liable for such contamination under a veil piercing theory for the reasons previously discussed. 34 corporation and that Êºsuch domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiffÊ¹s injury.Êº Id. Here, the ÊºfraudÊº or ÊºwrongÊº committed by AGECO would be the merger of the subsidiaries into NYSEG, not the creation of coal tar. There is nothing in the record to suggest AGECO was directing the creation of coal tar at the subsidiaries prior to purchasing them. While AGECO may have sought to merge its subsidiaries into NYSEG to further its financial improprieties, NYSEG does not allege AGECO did so to avoid CERCLA liability. Environmental liability for spilling coal tar was not a major concern at the time these subsidiaries were merged. AGECOÊ¹s domination was not used to commit a fraud or wrong against NYSEG regarding pollution, and domination by itself is not enough to justify veil piercing it must be accompanied by a showing of wrongful or unjust action toward the plaintiff. Id. at 142 (plaintiff must show that owners Êºabused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party such that a court in equity will interveneÊº); see also Freeman v. Complex Computing Co., 119 F.3d 1044, 1053 (2d Cir. 1997); Passalacqua, 933 F.2d at 138 (control by parent must be used Êºto commit a fraud or other wrong that causes plaintiffÊ¹s lossÊº). Thus, the district court 35 correctly declined to pierce the corporate veil to hold AGECO responsible for contamination on sites that occurred prior to when either NYSEG or AGECO owned the sites. NYSEG, 808 F. Supp. 2d at 500. 4. Statute of Limitations Regarding the Plattsburgh, Norwich, and Owego MGP Sites The district court held that that the statute of limitations barred NYSEG from recovering cleanup costs from FirstEnergy for the Norwich and Owego sites, but not the Plattsburgh site. NYSEG, 808 F. Supp. 2d at 504 14 . FirstEnergy argues that cost recovery actions for cleanup expenses at the Plattsburgh, Norwich, and Owego sites are all barred by CERCLAÊ¹s six year statute of limitations on remedial actions. See 42 U.S.C. § 9613(g)(2)(B). Because we conclude that the cleanup at the Norwich and Owego sites were remedial actions and the cleanup at the Plattsburgh site was a removal action, we affirm the district courtÊ¹s decisions. Removal and remedial actions are governed by different statutes of limitations. For removal actions, a party must seek to recoup cleanup costs within three years Êºafter completion of the removal action.Êº Id. at § 9613(g)(2)(A). For remedial actions, a party must seek to recoup costs within six years Êºafter initiation of physical on site construction of the remedial action.Êº Id. 36 at § 9613(g)(2)(B).13 Because a statute of limitations is an affirmative defense, FirstEnergy bears the burden of proof to show it bars the claims. See Overall v. Estate of Klotz, 52 F.3d 398, 403 (2d Cir. 1995); Yankee Gas Servs. Co. v. UGI Utils, Inc., 616 F. Supp. 2d 228, 269 (D. Conn. 2009). Whether a suit to recover response costs under section 107 of CERCLA is a Êºremoval actionÊº or a Êºremedial actionÊº is a question of law that we review de novo. Next Millenium, 732 F.3d at 126; United States v. W.R. Grace & Co., 429 F.3d 1224, 1234 (9th Cir. 2005) (ÊºWhether the . . . cleanup activity was a removal action or, on the other hand, a remedial action in removal actionÊ¹s clothing is a question of statutory interpretation.Êº). Removal actions are generally clean up measures taken in response to immediate threats to public health and safety. See 42 U.S.C. § 9601(23); 14 see 13 Section 9613(g)(2)(B) further provides that any Êºcosts incurred in the removal action may be recovered in the cost recovery actionÊº for the remedial action, Êºif the remedial action is initiated within 3 years after the completion of the removal action.Êº 42 U.S.C. § 9613(g)(2)(B). 14 42 U.S.C. § 9601(23) provides: The terms ÊºremoveÊº or ÊºremovalÊº mean[] the cleanup or removal of released hazardous substances from the environment, such actions as may be necessary taken in the event of the threat of release of hazardous substances into the environment, such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances, the disposal of removed material, 37 also Next Millenium, 732 F.3d at 124 25); W.R. Grace & Co., 429 F.3d at 1244 (ÊºCourts have . . . stressed the immediacy of a threat in deciding whether a cleanup is a removal action.Êº (collecting cases)); Minnesota v. Kalman W. Abrams Metals, Inc., 155 F.3d 1019, 1024 (8th Cir. 1998) (removal actions are those Êºtaken to counter imminent and substantial threats to public health and welfareÊº). Removal actions are also generally designed to address contamination at its endpoint and not to permanently remediate the problem. See 42 U.S.C. § 9601(24); Next Millenium, 732 F.3d at 127; W.R. Grace & Co., 429 F.3d at 1247 (finding cleanup activity to be removal action where it did not Êºfully eliminate the public health threat or amount to a full blown remediationÊº). Remedial actions are typically actions designed to permanently remediate hazardous waste. 42 U.S.C. § 9601(24); 15 see also Next Millenium, 732 15 or the taking of such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare or to the environment, which may otherwise result from a release or threat of release. The term includes, in addition, without being limited to, security fencing or other measures to limit access, provision of alternative water supplies, temporary evacuation and housing of threatened individuals not otherwise provided for, action taken under section 9604(b) of this title, and any emergency assistance which may be provided under the Disaster Relief and Emergency Assistance Act [42 U.S.C.A. § 5121 et seq.]. 42 U.S.C. § 9601(24) provides in part: 38 F.3d at 125; Schaefer v. Town of Victor, 457 F.3d 188, 195 (2d Cir. 2006) (remedial actions are Êºgenerally long term or permanent containment or disposal programsÊº (quoting New York v. Shore Realty Corp., 759 F.2d 1032, 1040 (2d Cir. 1985) (internal quotation marks omitted))); California ex rel. Cal. DepÊ¹t of Toxic Substances Control v. Neville Chem. Co., 358 F.3d 661, 667 (9th Cir. 2004) (Êºremedial actions generally are permanent responsesÊº (quoting Geraghty & Miller, Inc. v. Conoco, Inc., 234 F.3d 917, 926 (5th Cir. 2000) (internal quotation marks omitted))). a. Plattsburgh The district court held that NYSEGÊ¹s claim to recover costs for the cleanup at the Plattsburgh MGP pursuant to a 1994 DEC Consent Order was The terms ÊºremedyÊº or Êºremedial actionÊº mean[] those actions consistent with permanent remedy taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment, to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment. The term includes, but is not limited to, such actions at the location of the release as storage, confinement, perimeter protection using dikes, trenches, or ditches, clay cover, neutralization, cleanup of released hazardous substances and associated contaminated materials, recycling or reuse, diversion, destruction, segregation of reactive wastes, dredging or excavations, repair or replacement of leaking containers, collection of leachate and runoff, onsite treatment or incineration, provision of alternative water supplies, and any monitoring reasonably required to assure that such actions protect the public health and welfare and the environment. 39 timely. NYSEG, 808 F. Supp. 2d at 510 11. FirstEnergy argues that NYSEGÊ¹s claim was untimely because the cleanup NYSEG conducted in 1981 was a remedial action, triggering the six year statute of limitations. Although NYSEG is not seeking to recover cleanup costs associated with the 1981 Consent Order, id. at 511 n.53, FirstEnergy contends that the 1981 cleanup triggered the statute of limitations. 16 The Plattsburgh MGP, which sits adjacent to the south bank of the Saranac River, functioned as a coal gasification plant from 1896 to 1960. Coal tar had been kept on site in unlined ponds since 1898. As coal tar is heavier than water, it migrated from these ponds through the subsurface soils into the Saranac River, creating both soil and groundwater contamination. In 1975, NYSEG began investigating the coal tar seeping into the Saranac River. Id. at 482. In mid 1980, DEC became aware that coal tar was seeping into the river. In 1981, NYSEG entered into a consent order with DEC to 16 At the time the work commenced in 1981, CERCLA did not contain any statute of limitations. The statute of limitations was created in 1986 when Congress passed the Superfund Amendments and Reauthorization Act of 1986 (ÊºSARAÊº), Pub. L. No. 99 499, Oct. 17, 1986, 100 Stat. 1613 (codified at 42 U.S.C. §§ 9601 et seq.). Accordingly, the district court found that the earliest the statute of limitations could have commenced was the day SARA took effect, October 17, 1986. NYSEG, 808 F. Supp. 2d at 509 10 n.51. If the statute of limitations indeed started to run on that date, as FirstEnergy contends, it would have expired in 1992. 40 undertake work to prevent coal tar from reaching the Saranac River from a tar lagoon located across the street from the MGP. Id. This work was also to include cleaning up coal tar that had already migrated from the lagoon into the Saranac River, roughly thirty feet away. Id. at 509. As part of this effort, NYSEG built a slurry wall around the lagoon to isolate the coal tar, as well as a second slurry wall to catch any coal tar that made it past the first wall. It also excavated contamination from the river, filled in excavated areas with clean fill, capped containment areas, and constructed a treatment system for the water collected from behind the slurry wall. Id. This work did not involve the area where the former MPG plant was located. Id. at 482. This project took one year and cost less than $2 million. Unfortunately, by the 1990s, coal tar was found in the river again. Between October 1997 and November 2000, NYSEG conducted further study of the Plattsburgh site. Id. at 483. Between April and August 2002, NYSEG excavated and removed waste from three gas holder foundations, coal tar containing process pipe, and other MGP associated structures. DEC approved this work in 2003. Id. 41 In 2004, DEC issued a Record of Decision (ÊºRODÊº) requiring additional remedial efforts. Id. This work included excavation of the former MGP tar lagoon and surrounding areas where coal tar had migrated to the subsurface, as well as excavation of the contaminated sediment from the parts of the Saranac River immediately adjacent to the MGP site. Id. The excavated soils were disposed of off site. Id. NYSEG performed the ROD mandated work between 2006 and 2009. Id. This included paying the City of Plattsburgh approximately $900,000 to move a substation and associated electrical lines owned by the cityÊ¹s municipal power company from the northeast portion of the site. Id. NYSEG also relocated a twenty one inch sewer crossing, constructed a stabilized soil barrier wall, and removed 150,816 tons of soil Êºdown to till or bedrock inside the wall.Êº Id. In 2009, NYSEG prepared another report which proposed Êºdewater[ing] the Saranac River channelÊº to permit further excavation of coal tar containing sediment. Id. NYSEG has implemented the first phase of this project and was scheduled to begin the second phase in 2011. Id. at 483 84. Between 1994 and 2009, NYSEG incurred $29,086,329.86 in response costs. Id. at 484. 42 FirstEnergy argues that because the cleanup pursuant to the 1981 Consent Order was a remedial action that triggered the six year statute of limitations, all later cost recovery efforts at the site are time barred, including the work done pursuant to the 1994 Consent Order. The district court disagreed, and held instead that the statute of limitations was not triggered because at the time the 1981 cleanup was conducted, coal tar was not a hazardous substance: The work performed at Plattsburgh under the 1981 Consent Order . . . cannot properly be regarded as consistent with the EPAÊ¹s remedial plan under CERCLA based upon more modern notions regarding the hazards presented by the presence of coal tar and soils contaminated with coal tar, and thus the actions taken at Plattsburgh did not commence the running of the statute of limitations. Id. at 510. The district court also noted that the cleanup was Êºfar more akin to a removal actionÊº than a remedial action because it only addressed work Êºperformed at a discrete portion of the site, which was significantly removed from the location of the former MGP facility [the source of contamination],Êº and was designed to contain the contamination migrating from the lagoon to the Saranac River. Id. Accordingly, the district court concluded that the 1981 43 removal action did not trigger the statute of limitations for the later remedial effort for which NYSEG now seeks contribution. Assuming the 1981 cleanup was a triggering event, we agree with the district court that the 1981 cleanup was more akin to a removal than a remedial action. This cleanup was a discrete project designed both to prevent coal tar from reaching the river and to remove it from the river. See NYSEG, 808 F. Supp. 2d at 509. It was not designed to clean up contamination at the source, namely by removing the coal tar from the area around the MGP. Id. at 482. Instead, as the district court pointed out, Êº[t]he evidence at trial reflected that neither DEC nor NYSEG envisioned the project as encompassing a CERCLA quality clean up of the entire MGP site.Êº Id. at 538 (emphasis added). As we noted in Next Millenium, measures taken to minimize and mitigate contamination, but not to permanently eliminate it, are properly classified as removal actions. 732 F.3d at 127; see also W.R. Grace & Co., 429 F.3d at 1247 (cleanup activity was a removal action where it did not Êºfully eliminate the public health threat or amount to a full blown remediationÊº). Here, the 1981 cleanup was an immediate response to a health concern about coal tar in the Saranac River. DEC first became aware of the 44 problem in the mid 1980s and by 1981 had a Consent Order in place with NYSEG. Moreover, the cleanup was not a ÊºpermanentÊº solution designed to remove the ultimate source of contamination at the MGP. Rather, it involved building slurry walls to contain coal tar from further migrating into the river. These actions were not Êºdesigned to remedy the underlying source of the contamination, namely, the hazardous waste at the [MPG].Êº Next Millennium, 732 F.3d at 127; accord Schaefer, 457 F.3d at 195. The work in 2002 and pursuant to the 2004 ROD, in contrast, was designed to remediate the pollution at its source. It included excavating the former MPG tar lagoon and surrounding area, moving an entire substation and corresponding electrical wires, the relocation of a sewer line, and the removal of over 150,000 tons of soil. The 2004 remedial action was clearly designed to permanently remediate the coal tar on the site. In addition, the 2004 cleanup has already taken several years and cost over $29 million, with costs expected to rise to $54 million. This is in keeping with a remedial, rather than removal, action. See 42 U.S.C. § 9604(c)(1) (generally removal measures Êºshall not continue after $2,000,000 has been obligated for response actions or 12 months has elapsed from the date of initial 45 responseÊº); accord 40 C.F.R. § 300.415(b)(5). In sum, the district court correctly held that, because the 1981 cleanup was a removal action, it did not trigger the statute of limitations for the later remedial actions.17 b. Norwich The district court held that NYSEGÊ¹s cost recovery claims for its 1997 cleanup at Norwich were barred by the six year statute of limitations on remedial actions. NYSEG argues that the 1997 cleanup was a removal action, subject to a different statute of limitations. The Norwich MGP produced gas from 1863 to 1952. In 1993, NYSEG began a three phase Interim Remedial Measure (ÊºIRMÊº) in conjunction with DEC to clean up this site. In Phase I, which ran from 1993 to the last quarter of 1994, NYSEG excavated the former distribution holder area and stockpiled the soil. In Phase II, which ran from May to September 1996, NYSEG transported and thermally treated 1,600 tons of the stockpiled soil. In Phase III, which ran from April to August 1997, NYSEG removed two or more feet of soil from the surface of the entire site, as well as the former FirstEnergy argues that the contemporaneous use of the word ÊºremedialÊº by NYSEG 17 and DEC supports its argument that the 1981 cleanup was a remedial action. The word Êºremedial,Êº however, is often used in its every day sense of Êºintended as a remedy,Êº and the mere usage of the word does not render an action ÊºremedialÊº for the purposes of CERCLAÊ¹s statute of limitations. Next Millenium, 732 F.3d at 130 31. 46 relief holder, the former tar well, and process piping. This project was conducted to protect potential customers at an adjacent supermarket to be constructed shortly thereafter. In total, more than 11,000 tons of soil were removed. Phase III cost less than $2 million and was completed in four months. This is the cleanup for which NYSEG is seeking to recover costs. FirstEnergy argues that the three phases of the IRM constituted one remedial project that commenced in 1997, and thus NYSEGÊ¹s cost recovery action is barred by the six year statute of limitations. NYSEG argues its claims are timely because all three phases of the IRM were removal actions, including the 1997 IRM. According to NYSEG, the 1997 IRM was a discrete project undertaken to address an immediate health hazard to future customers at a soon to be built nearby supermarket. NYSEG also argues that because DEC approved the work as an IRM, it is a removal action. The district court correctly found that the three phase IRM cleanup was one remedial cleanup. First, NYSEG stipulated that the Norwich IRM was a single action comprised of three phases. Second, the cleanup was not designed to address an imminent health concern. See Next Millenium, 732 F.3d at 124 25 (holding that removal actions are cleanup measures taken in response to 47 immediate threats to public health and safety). As the court noted, Êºimmediate action . . . was not required to address high levels of toxic chemicals.Êº NYSEG, 808 F. Supp. 2d at 513. Similarly, in its 1987 preliminary assessment, EPA deemed cleanup at the site a Êºmedium priority,Êº rather than a high priority. Id. Hence, this was not an immediate threat to public health and safety. Third, while IRMs can resemble removal actions, they can also resemble remedial actions. Under New York law, IRMs are defined as: [A]ctivities to address both emergency and non emergency site conditions, which can be undertaken without extensive investigation and evaluation, to prevent, mitigate or remedy environmental damage or the consequences of environmental damage attributable to a site. N.Y. Comp. Codes R. & Regs. tit. 6, § 375 1.2(ab). This definition encompasses elements of both removal (emergency) and remedial (non emergency) actions, as well as elements common to both (preventing or mitigating environmental damage). See 42 U.S.C. § 9601(23) (defining ÊºremovalÊº to include actions to Êºprevent, minimize, or mitigate damage to the public health or welfare or to the environmentÊº); id. § 9601(24) (defining ÊºremedialÊº to include actions to Êºprevent or minimize the release of hazardous substancesÊº so that they do not endanger public health or the environment). 48 DECÊ¹s present internal guidance and the guidance in effect during the Norwich IRM make clear that IRMs are not always removal actions. See, e.g., New York State Department of Environmental Conservation, DER 10 / Technical Guidance for Site Investigation and Remediation, at 35 (May 3, 2010), available at http://www.dec.ny.gov/docs/remediation_hudson_pdf/der10.pdf (describing Êº[a]n emergency IRMÊº as well as Êº[a] non emergency or non time critical IRM . . . which may be undertaken at any time during the course of the remedial programÊº); PlÊ¹s. Exh. 4, New York State Department of Environmental Conservation, Interim Remedial Measures Procedures (TAGM 4048), at 2 3 (Dec. 9, 1992) (providing guidance for an IRM Êºconsist[ing] of a Ê¹removalÊ¹ as identified in the NCP at 40 C.F.R. § 300.415(d)Êº and an IRM Êºrepresent[ing] a significant portion of the remedy,Êº which Êºmust be part of the Proposed Remedial Action Plan (PRAP)/ROD process at the completion of the Remedial Investigation/Feasibility StudyÊº).18 Clearly, IRMs can either be removal or remedial actions. Accordingly, because the 1997 cleanup was part of a larger remedial action that began in 1993, NYSEGÊ¹s claims are time barred. 18 TAGM 4048 was superseded by DER 10. See New York State Department of Environmental Conservation, DER 10 / Technical Guidance for Site Investigation and Remediation, at 35 (May 3, 2010), available at http://www.dec.ny.gov/docs/ remediation_hudson_pdf/der10.pdf 49 c. Owego The district court found that the six year statute of limitations barred NYSEG from recovering costs for the 2003 cleanup of a portion of the Owego site because that cleanup was part of a remedial cleanup begun in 1994. NYSEG, 808 F. Supp. 2d at 511. NYSEG argues that the 2003 cleanup was separate from the 1994 cleanup, triggering a separate statute of limitations. Between September 1994 and July 1995, NYSEG remediated the portion of the site known as ÊºOperational Unit 1ÊºÊ¹ (ÊºOU 1Êº) by removing and thermally destroying 13,000 tons of coal tar contaminated soil. Id. NYSEG performed this work pursuant to the ROD issued by DEC in 1994. In 1996, NYSEG discovered more coal tar contamination in the Susquehanna River on what became ÊºOperational Unit 2Êº (ÊºOU 2Êº). In 1998, NYSEG identified a pipe leading to the riverbed as the source of contamination. In 2002, DEC ordered NYSEG to remove the pipe as well as the contaminated river sediments. In 2003, NYSEG completed remediating the river and pipe by removing 1,200 tons of sediment and 30 feet of pipeline. NYSEG now seeks to recover for the cost of groundwater monitoring and pipe and sediment removal performed at OU 2 in 2003, arguing 50 that it was a separate remedial action. FirstEnergy argues that this cleanup is a continuation of the remedial work begun in 1994 on OU 1, and thus time barred. The district court found that the work at OU 2 was part of the earlier remedial action at OU 1. We agree. First, the work at OU 2 was remedial it was designed to permanently eliminate the coal tar contamination from the Susquehanna River by removing the pipe leading to the river and the contaminated sediment. Second, the district court correctly held that there can only be one remedial action at any given site. Id. Virtually every court that has considered this issue has agreed. See generally Colorado v. Sunoco, 337 F.3d 1233, 1241 (10th Cir. 2003) (ÊºIn our view, this language [of the statute] indicates there will be but one Ê¹removal actionÊ¹ per site or facility, as well as a single Ê¹remedial actionÊ¹ per site or facility.Êº); Kelley v. E.I DuPont de Nemours & Co., 17 F.3d 836, 843 (6th Cir. 1994) (holding that all removal activity should be considered part of one removal action because Êº[i]t is simply inconsistent with the[] Ê¹essential purposesÊ¹ [of CERCLA] to require suit on each arguably independent removal activityÊº) (internal citations omitted); Yankee Gas Servs. Co., 616 F. Supp. 2d at 270 (Êº[C]ourts have generally held that there can be only one removal and one 51 remedial action per facility, regardless of the number of phases in which the clean up occurs.Êº); California ex rel Cal. DepÊ¹t of Toxic Substances Control v. Hyampom Lumber Co., 903 F. Supp. 1389, 1394 (E.D. Ca. 1995) (ÊºThere is no authority for the view that each Ê¹remedialÊ¹ activity undertaken at a site triggers a new cause of action for the cost recovery of that activity.Êº). But see United States v. Manzo, 182 F. Supp. 2d 385, 402 (D. N.J. 2000) (finding different statutes of limitation for different operable units); United States v. Ambroid Co., Inc., 34 F. Supp. 2d 86, 88 (D. Mass. 1999) (finding more than one removal action in the Êºunusual circumstanceÊº where eighteen months after EPA closed site leaving behind drums of hazardous waste which had no legally approved method of disposal, site was broken into and drums damaged, requiring second removal action). We agree with the majority view and hold that there can only be one remedial action at a site. The very nature of a remedial action is to permanently remediate hazardous waste. Next Millenium, 732 F.3d at 125. A remedial action is supposed to be a final, once and for all cleanup of a site, and once a PRP completes an approved remediation plan, it would not be logical or fair to subject that entity to additional CERCLA lawsuits seeking yet additional 52 permanent relief, although we recognize that what seems final at a given point in time might come to appear inadequate at a later date as scientific knowledge progresses.19 This limitation on remedial actions does not, however, foreclose cost recovery actions for supplemental cleanup costs incurred after the limitations period has run on the initial cleanup, if they are filed within three years of the completion of the remedial work. Section 9613(g)(2) distinguishes between an Êºinitial actionÊº and a Êºsubsequent action or actionsÊº to recover additional response costs as part of the same remedial action. 42 U.S.C. § 9613(g)(2). Section 9613(g)(2) provides that subsequent actions for Êºfurther response costs . . . may be maintained at any time during the response action, but must be commenced no later than 3 years after the date of completion of all response action.Êº Id. As long as the party seeking to recover costs filed an initial action for cost recovery within the time period specified in § 9613(g)(2)(A) and (B), the party can recover the costs of later cleanups if the action to recover such costs is filed no later than three years after the date of completion of the new cleanup. We express no view as to whether there may only be one removal action under CERCLA. 19 53 See id. Here, the later cleanup could not qualify as a Êºfurther response costÊº because the three year period had expired. Id. Therefore, the district court correctly held that NYSEGÊ¹s claims for cost recovery for the remedial work at OU 2 is time barred. 5. Gas Production The district court used total gas production at each site to allocate liability because both parties agree that coal tar was generally created in proportion to the amount of gas produced. NYSEG, 808 F. Supp. 2d at 484. The parties disagree, however, as to how to determine the amount of gas produced by a particular plant at a particular time. While the parties agree on the amount of coal tar produced between 1887 and 1932, they do not agree about the amount of coal tar produced before 1887 or after 1932.20 Specifically, NYSEG argues that the district court was incorrect in adopting FirstEnergyÊ¹s estimates for the pre 1887 and post 1932 period. Regarding the pre 1887 period, FirstEnergy s expert took the production numbers reported in the first year of the BrownÊ¹s Directory in 1887 for a particular 20 Between 1887 and 1932, BrownÊ¹s Directory of American Gas Companies published specific gas production figures. Both parties agree that BrownÊ¹s Directory production numbers are correct, and therefore do not dispute numbers for this period. NYSEG, 808 F. Supp. 2d at 530 32. 54 plant and assumed that the plant had produced one half of that amount of gas each year, from its first year of operation until 1887. For the period from 1932 to 1940, First EnergyÊ¹s expert used BrownÊ¹s Directory records which contained system wide (not plant by plant) reports for 1932 to 1940. He then made production estimates for each plant based on those records and extrapolated to estimate production for years when exact gas volume data was not available. NYSEG argues that for the period before 1887, the district court should have found no gas production at all even though there was gas production because the numbers are not reliable. For the 1932 to 1940 period, NYSEGÊ¹s expert relied on yearly production figures found in data collected by the PSC for most of the operating plants. If a PSC record was not available for that year, NYSEGÊ¹s expert treated that year as if there were no gas production. In light of the severely limited information available, the district court did not err in using FirstEnergyÊ¹s estimates. It was reasonable for the court to use its best estimates for periods in which there was indisputably some gas production, rather than to treat those years as if there were no production at all. 55 6. NYSEGÊ¹s $20 Million Insurance Settlement NYSEG received $20 million in an insurance settlement, which covered thirty eight sites, including the sixteen sites in this suit. Id. at 484. The settlement also extinguished third party property damage claims against the settling insurer. Id. Although there was no evidence regarding the allocation of the settlement amount among the thirty eight sites, the district court chose to apply a portion of the settlement to reduce FirstEnergyÊ¹s cleanup costs. Id. at 527. In doing so, the district court calculated a pro rata share of the insurance settlement by using 42.1 percent of $20 million, which represented the proportion between the sixteen sites in this case and the thirty eight involved in the insurance settlement. Id. This came to a total of $8,421,052, the pro rata share of the settlement attributable to the sixteen sites. That amount is 8.9 percent of the total amount of money sought for cleanup, $94,277,153, which percentage the court then applied evenly over the sixteen sites to reduce NYSEGÊ¹s recovery. Id. NYSEG argues that none of the money should have been applied to reduce FirstEnergyÊ¹s payments because (1) FirstEnergy did not carry its burden 56 to prove the affirmative defense that the insurance proceeds should be applied to reduce its liability and (2) there is no risk of double recovery for NYSEG.21 The district court did not err in reducing NYSEGÊ¹s recovery to account for the insurance proceeds. To begin, we note that the district court was correct that the collateral source rule does not apply in CERCLA cases. The collateral source rule generally provides that Êºdamages recoverable for a wrong are not diminished by the fact that the party injured has been wholly or partially indemnified for his loss by insurance effected by him and to the procurement of which the wrongdoer did not contribute.Êº Ocean Ships, Inc. v. Stiles, 315 F.3d 111, 116 (2d Cir. 2002) (internal quotations marks omitted). Êº[T]he policy underlying the collateral source rule to provide the innocent party with the benefit of any windfall is simply not advanced in [CERCLA] cases.Êº Friedland v. TIC The Indus. Co., 566 F.3d 1203, 1207 (10th Cir. 2009); see also Basic Mgmt. Inc. v. United States, 569 F. Supp. 2d 1106, 1123 24 (D. Nev. 2008) (refusing to apply collateral source rule to insurance proceeds because ÊºCERCLA contribution actions are not injury actions in which the injured party is seeking compensation for damages to be made whole againÊº). Rather, in resolving contribution claims under CERCLA, 21 NYSEG argues that it paid more than $94 million to clean up the sites and expects to spend another $114 million. Therefore, even with $30 million from FirstEnergy, there is no chance of double recovery if the $20 million is applied. 57 a Êºcourt may allocate response costs among liable parties using such equitable factors as the court determines are appropriate.Êº 42 U.S.C. § 9613(f)(1); see Goodrich Corp. v. Town of Middlebury, 311 F.3d 154, 168 (2d Cir. 2002) (Êº[T]he court must allocate response costs among liable parties in an equitable manner.Êº). Here, in reducing NYSEGÊ¹s recovery in light of the insurance payment, the district court reasonably exercised its equitable powers to allocate response costs between the parties. First, insofar as NYSEG contends that FirstEnergy failed to carry its burden of proving that consideration of the insurance settlement was warranted, the argument fails. FirstEnergy presented evidence of the $20 million insurance payment. NYSEG, the party in position to explain how the proceeds were allocated among the thirty eight sites, failed to present any such evidence. Given the sparseness of the record as to the allocation of the proceeds, therefore, the district courtÊ¹s pro rata allocation based on the number of sites should be applied was not arbitrary or haphazard, but reasonable. Second, while it is undoubtably correct that there was no risk of NYSEG receiving a double recovery, that fact did not preclude the district court from equitably reducing NYSEGÊ¹s recovery to account for the insurance 58 proceeds. See, e.g., Basic Mgmt. Inc., 569 F. Supp. 2d at 1125 (ÊºEquity and common sense . . . dictate that [p]laintiffs cannot recover the remediation costs paid for by their insurance policies.Êº). Instead, CERCLAÊ¹s Êºexpansive language . . . affords a district court broad discretion to balance the equities in the interests of justice.Êº Bedford Affiliates, 156 F.3d at 429. Accordingly, the district court did not err in applying NYSEGÊ¹s insurance settlement to reduce FirstEnergyÊ¹s liability. 7. Should NYSEGÊ¹s Recovery be Reduced Either Because of Economic Benefit or Alleged Delay in Cleaning Up? FirstEnergy argues that the district court should have reduced NYSEGÊ¹s recovery to reflect the fact that NYSEG would benefit from the increased value of the cleaned up sites. It also argues that NYSEGÊ¹s recovery should be reduced because NYSEG was slow to remediate and Êºengaged in unnecessarily piecemeal remediation.Êº FirstEnergy Br. at 87. These arguments are not persuasive. Regarding the economic benefit of the cleanup, the district court recognized the substantial amount of money NYSEG was spending on cleanup $94 million to date with another $114 million expected in future costs. Considering that NYSEG does not expect to collect a comparable amount from other PRPs, NYSEG is hardly gaining a windfall. FirstEnergy also fails to offer 59 evidence about any increase in the value of the land, much less an increase over the $200 million NYSEG will expend to clean up the properties. FirstEnergyÊ¹s argument that NYSEG caused unreasonable delay in the cleanup fails as well. FirstEnergy points to two specific examples of alleged delay: (1) in 1983, a NYSEG employee proposed a program under which all MGP investigation would be completed by 1988, with remediation completed within two years (this plan was not adopted) and (2) in 1989, NYSEG employees proposed a Êºcomprehensive approachÊº to site cleanup, but NYSEG did not move forward with broad remediation efforts until 1994. FirstEnergy Reply Br. at 35. FirstEnergy offers no explanation as to why NYSEG was unreasonable in failing to adopt the 1983 plan, nor has it shown that the plan was even technically or financially feasible. FirstEnergy also fails to explain how NYSEG was unreasonable in adopting the 1994 plan instead of the 1989 proposal. In short, the record simply does not support FirstEnergyÊ¹s argument that NYSEG caused unreasonable delay in the cleanup by declining to follow a plan suggested in 1983 or delaying its cleanup plan until it adopted a joint plan with DEC in 1994. 60 8. I.D. Booth I.D. Booth bought the Cortland Homer MGP from Mack Trucks, Inc. in 1971, which bought it from NYSEG. NYSEG, 808 F. Supp. 2d at 453. As a result, it is liable under CERCLA as a current owner. It now raises two issues on appeal. First, I.D. Booth argues that the district court erred in finding it liable for cleanup costs at the Cortland Homer site. Second, I.D. Booth argues alternatively that the amount of liability assigned to it by the district court was too high. The Cortland Homer site is divided into two parcels: OU 1, which is comprised of the former MGP area and the structures below its surface, and OU 2, which consists of the adjacent land. I.D. BoothÊ¹s office building was located in OU 1 and sat on top of two buried gasholders. Sometime in the mid 1990s, after coal tar contamination was discovered on the Cortland Homer site, NYSEG offered to buy the southern portion of the Booth building from I.D. Booth. Although the building was appraised at $350,000, I.D. Booth demanded $2 million, which included the cost of business disruption. Negotiations began in mid November 2005. On May 8, 2008, NYSEG paid $1.8 million for the southern portion of the building and gave 61 I.D. Booth the right to buy the property back after remediation for $1 in the event NYSEG were to decide to sell it. I.D. Booth retained ownership of the northern portion of the building. I.D. Booth claims to be entitled to a Êºthird partyÊº defense under section 107(b)(3), which requires it to establish that: [T]he offending Êºrelease . . . of a hazardous substance and the damages resulting therefrom were caused solely by . . . an act or omission of a third party,Êº provided that (1) the third party is not Êºone whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant,Êº (2) the defendant Êºtook precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions,Êº and (3) the defendant Êºexercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts and circumstances.Êº New York v. Lashins Arcade Co., 91 F.3d 353, 359 (2d Cir. 1996) (quoting 42 U.S.C. § 9607(b)(3)). I.D. Booth bears the burden of showing by preponderance of the evidence that all four of these conditions are met. NYSEG, 808 F. Supp. 2d at 514. Here, the district court correctly held that I.D. Booth failed to meet its burden with respect to the third requirement because it did not exercise due care with respect to the cleanup effort. Id. at 519; see Lashins Arcade Co., 91 F.3d at 62 361 (explaining that Êºdue care would include those steps necessary to protect the public from a health or environmental threatÊº) (internal citations and quotations omitted). The district court found that I.D. BoothÊ¹s tactics created extensive delays in negotiations. Despite knowing that NYSEG could not begin remediation until it acquired portions of the Cortland Homer site which included the removal of two former gasholders from below I.D. BoothÊ¹s building I.D. Booth engaged in Êºprotracted negotiations.Êº NYSEG, 808 F. Supp. 2d at 518. As a result, I.D. Booth was largely responsible for a two year delay in the cleanup due to its untimely responses to NYSEGÊ¹s proposals and its Êºaggressive price demand.Êº Id. As FirstEnergy s expert testified, this delay most likely allowed more coal tar to migrate. Id. at 519. Because I.D. BoothÊ¹s delays prevented NYSEG from obtaining control of the I.D. Booth building located on OU 1, NYSEG was forced to consider implementing the remedy at OU 2 first, even though this was not the optimal order in which to proceed with cleanup. Id. To further exacerbate the problem, I.D. BoothÊ¹s cooperation in cleanup efforts was Êºsomewhat lackluster,Êº as it failed, for example, to provide 63 NYSEG with Êºfeedback.Êº Id.; see Lashins Arcade Co., 91 F.3d at 361 (landowner failed to exercise Êºdue careÊº where it remained passive Êºsimply because public environmental authorities are addressing a hazardous waste situationÊº). Because this finding was not clearly erroneous, we affirm.22 I.D. Booth also complains that the portion of the cleanup costs assigned to it was too high. The district court assigned I.D. Booth 15 percent of FirstEnergyÊ¹s costs at the Cortland Homer site, or 6.7 percent of NYSEGÊ¹s total Cortland Homer costs. NYSEG, 808 F. Supp. 2d at 535, 542. Accordingly, the district court found that I.D. Booth was liable for $160,089 in past costs, and for 15 percent of all future Êºnecessary and NCP compliant costs incurred by NYSEG.Êº Id. I.D. Booth argues that even if it caused a delay, that delay should be measured from date of the issuance of the ROD approving the remediation method (March 2007) to the date of sale (April 2008), or 14 months. Using those dates, I.D. Booth would only owe 1.35 percent of total costs 14 months out of 75 total years of production (1858 to 1933). In the alternative, I.D. Booth argues that 22 I.D. Booth claims the testimony of NYSEG expert Robert Karls supports its position that any delay had no impact on the contamination. Karls stated that there was no need to Êºre prioritize[ ]Êº the removal of contamination Êºbefore the scheduled implementation of remediation.Êº App. at 1413. This statement, however, merely suggests that Karls agreed with the timing of the remediation plan in place. It does not contradict the district courtÊ¹s findings that I.D. Booth exacerbated the contamination by delaying negotiations. 64 the amount it owes should only be .67 percent, which is one year out of the roughly one hundred and fifty years the site has been in existence (1858 2014). We find that the district court did not abuse its discretion in allocating the response costs. The district court reasonably took into account the fact that I.D. Booth would benefit from the increased property value after remediation and that its negotiating tactics led to significant delays in remediating the property. Id. at 533. Accordingly, we affirm. CONCLUSION In sum, we hold: (1) NYSEGÊ¹s CERCLA claims against FirstEnergy are not barred by the covenant not to sue; (2) AGECO is not directly liable under CERCLA as an operator; (3) FirstEnergy is liable to NYSEG on a veil piercing theory based on AGECOÊ¹s control over NYSEG from 1922 to January 10, 1940, but not for contamination created by other AGECO subsidiaries before those subsidiaries merged into NYSEG; (4) NYSEGÊ¹s claims as to the (a) Plattsburgh site are timely, (b) Norwich site are untimely, and (c) Owego site are untimely; 65 (5) The district court did not err in calculating total gas production at the sites; (6) The district court did not abuse its discretion in reducing NYSEGÊ¹s recovery from FirstEnergy by a portion of NYSEGÊ¹s $20 million insurance settlement; (7) The district court did not abuse its discretion in declining to reduce NYSEGÊ¹s recovery to reflect the increased value of the remediated properties or NYSEGÊ¹s alleged delay in the remedial efforts; and (8) I.D. Booth is liable for a portion of cleanup costs and the district court did not abuse its discretion in apportioning liability in this respect. For the foregoing reasons, the judgment of the district court is AFFIRMED in part and VACATED in part, and the case is REMANDED for further proceedings. 66

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