16‐2592‐cv Bethpage Water Dist. v. Northrop Grumman Corp., Northrop Grumman Systems Corp.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
August Term 2017
(Argued: September 29, 2017 Decided: March 2, 2018)
Docket No. 16‐2592‐cv
BETHPAGE WATER DISTRICT,
Plaintiff‐Appellant,
v.
NORTHROP GRUMMAN CORPORATION, NORTHROP GRUMMAN SYSTEMS CORPORATION,
Defendants‐Appellees.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK
Before:
CHIN and DRONEY, Circuit Judges, and RESTANI, Judge.*
Judge Jane A. Restani, United States Court of International Trade, sitting by
*
designation.
Appeal from a judgment of the United States District Court for the Eastern District of New York (Feuerstein, J.), entered pursuant to an order granting a motion for partial summary judgment dismissing plaintiff‐appellantʹs claims of nuisance, trespass, and negligence arising from water contamination as barred by the statute of limitations.
AFFIRMED.
ALANI GOLANSKI (Curt D. Marshall, Robin L. Greenwald, on the brief), Weitz & Luxenberg, P.C., New York, New York, for Plaintiff‐ Appellant Bethpage Water
District.
MARK A. CHERTOK (Elizabeth Knauer, Adam Stolorow, Victoria S.
Treanor, on the brief), Sive, Paget & Riesel, P.C., New York, New York, for
Defendants‐Appellees Northrop Grumman Corporation, Northrop Grumman Systems Corporation.
CHIN, Circuit Judge:
This case involves drinking water contamination caused by the activities of defendants‐appellees Northrop Grumman Corporation and Northrop Grumman Systems Corporation (together, ʺNorthrop Grummanʺ) in
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Bethpage, Long Island. Plaintiff‐appellant Bethpage Water District (the ʺDistrictʺ) sued Northrop Grumman below for negligence, trespass, and nuisance based on groundwater contamination in Bethpage, and seeks damages for the cost of remediation.
Northrop Grumman filed a motion for partial summary judgment, arguing that the Districtʹs claims are barred by the three‐year statute of limitations found in N.Y. C.P.L.R. § 214‐c(2), which governs pollution claims. The magistrate judge (Shields, J.) issued a report and recommendation (ʺR&Rʺ) recommending that the motion be granted. The district court (Feuerstein, J.) adopted the R&R.
On appeal, the principal question is when a cause of action for groundwater pollution accrues, so as to trigger the statute of limitations. Northrop Grumman argues that a cause of action accrues when the water provider learns that contamination threatens water quality to such an extent that remedial action must be promptly taken, even if the contamination has not yet reached the water source. The District argues that the statute of limitations does not accrue until contamination is actually detected in the water source itself. We
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affirm the decision of the district court and hold that the Districtʹs claims are time‐barred.
BACKGROUND
A. Facts 1. The Pollution and Threat to the District The District provides drinking water to the residents of the Town of Bethpage (ʺBethpageʺ) and its environs from the Long Island Aquifer System. Because the Long Island Aquifer System is the principal drinking water source for the area, it has been classified as a ʺsole sourceʺ aquifer under the Safe Drinking Water Act, 42 U.S.C. § 300f. Although the District employs eight different wells to provide drinking water, only two wells are at issue in this suit: Well 4‐1 and Well 4‐2 located at Plant 4.
Beginning in the 1930s, the Grumman Corporation (ʺGrummanʺ)
conducted manufacturing activities on its 600‐acre property in Bethpage (the ʺPropertyʺ), including manufacturing heavy industrial and military equipment during World War II. In 1994, Grumman was bought by Northrop Corporation.
At some point, volatile organic compounds (ʺVOCsʺ) from Grummanʹs property began to contaminate the groundwater in Bethpage. The
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primary VOC contaminating the water was trichloroethylene (ʺTCEʺ), which has been linked to liver problems and is a possible carcinogen.1 The Maximum Contaminant Level (ʺMCLʺ) for TCE is 5 μg/L (micrograms per liter).2 There are three different sites involved in this litigation, known as ʺOperable Units.ʺ3 a. Operable Units One and Two In 1983, the New York State Department of Environmental Conservation (ʺDECʺ) listed the Property, known as the Grumman Aeropsace‐ Bethpage Facility Site, in the Registry of Inactive Hazardous Waste Disposal Sites.
In 1990, Grumman entered into a Consent Order with DEC to conduct a Remedial Investigation/Feasibility Study (ʺRI/FSʺ) to analyze
1 See EPA, National Primary Drinking Water Regulations (2009), https://www.epa.gov/ sites/production/files/2016‐06/documents/npwdr_complete_table.pdf. 2 ʺMaximum Contaminant Levelsʺ are federally set maximum allowable
concentrations of contaminants in drinking water and are set ʺas close to the health goals as possible, considering cost, benefits and the ability of public water systems to detect and remove contaminants using suitable treatment technologies.ʺ EPA, What are EPAʹs Drinking Water Regulations for Trichloroethylene?, https://safewater.zendesk.com/ hc/en‐us/articles/212075407‐4‐What‐are‐EPA‐s‐drinking‐water‐regulations‐for‐ trichloroethylene (last visited Feb. 28, 2017). 3 An Operable Unit ʺrepresents a portion of a remedial program for a site that for
technical or administrative reasons can be addressed separately to investigate, eliminate or mitigate a release, threat of release or exposure pathway resulting from the site contamination.ʺ App. at 636.
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contamination at the Property.4 As part of the RI/FS process, DEC identified two sites of contamination: (1) the Property, which it designated as Operable Unit 1 (ʺOU1ʺ), and (2) the plume of contamination associated with the Property, which it designated as Operable Unit 2 (ʺOU2ʺ).
In 1994, the District and Grumman entered into a tolling agreement (the ʺ1994 Agreementʺ) to address VOC contamination from OU1 and OU2 in Well 4‐1 and Well 4‐2 at Plant 4. In the 1994 Agreement, Grumman admitted that the ʺsource of the contaminantsʺ at Plant 4 was ʺlocated on property owned by Grumman.ʺ The Agreement also provided that:
(1) Grumman would pay $1.5 million for an air stripping tower (ʺASTʺ)5 to remove VOCs and protect Plant 4, up to a concentration of 600 parts per billion (ʺppbʺ) total VOCs, and
(2) The District would not make any further demand for pollution remediation at Plant 4 for ʺcontaminants identified to date.ʺ App. 16.
4 A Remedial Investigation is conducted to ascertain the nature and extent of the contamination, and a Feasibility Study is designed to determine remedies for the contamination. See N.Y. Depʹt of Envtl. Conservation, Remedial Investigation/Feasibility Study, http://www.dec.ny.gov/chemical/8658.html (last visited Dec. 7, 2017). 5 Air stripping is the process of removing VOCs from contaminated groundwater or
surface water by moving air through the water. Because VOCs evaporate easily, the air passing through the contaminated water accelerates the removal of the VOCs. Air stripping is usually performed by use of an air stripper or an aeration tank. See EPA, A Citizenʹs Guide to Air Stripping, https://www3.epa.gov/region9/superfund/ montrose/pdf/outreach/air‐stripping.pdf.
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The following forms of damages were expressly excluded from the Agreement:
(1) any damages incurred by the District for migration of the existing contamination;
(2) any damages incurred by the District caused by the discovery of ʺnew contaminants or an increase in the present levels of the already identified contaminants to a total of 600 [ppb], excluding pollution from sources other than Grumman,ʺ App. 15;
(3) any additional costs incurred by the District if the ASTs ʺbecome obsolete or require modificationsʺ to address ʺnew drinking water standards,ʺ App. 15;
(4) any damages from ʺthe discovery of contaminants in any other part of the Water District not already described,ʺ App. 15; and
(5) any damages arising from contamination covered by the Agreement, incurred by the District as a result of ʺgovernment remediation programs,ʺ App. 15.
b. Operable Unit Three In October 1962, Grumman donated approximately 12 acres of land to the Town, including 3.75 acres that were used between 1949 and 1962 as settling ponds to ʺdewater . . . sludge, including neutraliz[ing] chromic acid waste, from the waste water treatment facilityʺ located at the Property. App. 635.
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After contamination from the area was found to threaten groundwater, DEC designated the parcel as Operable Unit (ʺOU 3ʺ) in 2005.
2. Remedial Actions Northrop Grummanʹs argument turns on when the pollution was detected in the groundwater and the subsequent actions taken by the District to address the threat of pollution. Between June 2007 and February 2013, the threat of groundwater pollution generated a great deal of activity, much of it on the part of the District.
a. Soil Sampling
Beginning in 2007, soil samples taken by environmental consultants indicated the existence and extent of the contamination.
i. Vertical Profile Boring 104 In June 2007, Northrop Grummanʹs consultant Arcadis took groundwater samples from Vertical Profile Boring 104 (ʺVPB‐104ʺ),6 which showed VOC contamination at 6,300 μg/L threatening the water in Well 4‐1 and
6 Vertical profile boring involves drilling holes into the ground to obtain groundwater and soil samples used to determine the presence of contamination. See generally Minn. Stormwater Manual, Understanding and Interpreting Soils and Soil Boring Reports for Infiltration BMPs, https://stormwater.pca.state.mn.us/index.php?title= Understanding_and_interpreting_soils_and_soil_boring_reports_for_infiltration_BMPs (last modified Feb. 13, 2017).
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Well 4‐2. On June 19, 2007, the Districtʹs engineers, H2M Engineers and Architects (ʺH2Mʺ), sent an email to DEC stating that VPB‐104 results showed ʺanother apparently massive plumeʺ of contamination. App. 1273 ¶ 29. On July 10, 2007, H2M sent a letter to DEC stating that the groundwater contamination from VPB‐104 was related to OU3, and asking DEC to investigate the new plume because the ʺimminent threat of groundwater contamination to public supply wells . . . would likely exceed the existing treatment system capacity at Plant 4.ʺ App. 1273 ¶ 31. By October 30, 2007, H2M was so concerned about the ʺexcessive contaminationʺ at VPB‐104 that it informed DEC that if the contamination reached the wells, ʺthe existing treatment system would be rendered ineffective.ʺ App. 1273 ¶ 32.
ii. Vertical Profile Boring 116 In a letter to DEC dated April 28, 2008, H2M described VOC contamination found on April 8, 2008 in a new VPB test, VPB‐116, as being in the ʺheart of the screen zoneʺ for Well 4‐1 and Well 4‐2, and noted that contamination at 1,900 μg/L would ʺrender the existing treatment system useless.ʺ App. 1274 ¶ 34. H2M also noted that because the contamination was ʺonly 700 feet away from the plant and [wa]s in the zone of capture of the supply
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wells, it [wa]s only a matter of time until excessive contamination hit[] the supply wells. This time frame could be within the next 12 months.ʺ Id.
b. Construction of Remediation Measures i. The Second AST
In October 2008, H2M submitted an engineering report (the ʺ2008 Engineering Reportʺ) to the Board of Commissioners for the District (the ʺBoard of Commissionersʺ). The 2008 Engineering Report, which addressed the need for a second AST, stated that a VPB conducted 700 feet upgradient from Plant 4 showed concentrations of VOCs that ʺ[we]re too great and would overcome the existing treatment system at Plant No. 4 and not allow for complete removal of VOC contamination.ʺ App. 764. It also stated that Plant 4 was expected to ʺbe significantly impacted by extremely high VOC levels in the very near future.ʺ App. 816. Because the existing air stripping treatment system would be insufficient to address the expected increase, a second air stripping tower would be needed, at an estimated cost of $4.3 million. In February 2009, H2M submitted the 2008 Engineering Report to the Nassau County Department of Health (ʺNCDOHʺ) for approval of the proposed AST at Plant 4. On June 30,
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2009, NCDOH approved it and authorized the District to submit engineering plans for a second AST.
On July 23, 2009, the Board of Commissioners authorized the District to request bond financing for the construction of a second AST at Plant 4. On July 30, 2009, H2M prepared a Capital Improvement Plan (ʺCIPʺ) which included (1) a new AST for Plant 4 designed to address VOCs ʺemanating from the former Grumman settling ponds [i.e., OU3],ʺ App. 1277, and (2) a new supply well. The CIP stated that ʺ[w]ith the existing treatment system incapable of treating the higher influent levels expected to impact this site, the District must immediately implement the upgrade of the treatment system to properly treat both wells on site to avoid the loss of the production wells.ʺ App. 959. On July 31, 2009, the District asked the Towns of Oyster Bay and Hempstead (the ʺTownsʺ) for $15.5 million in public bond financing to pay for the actions recommended in the CIP, including a second AST costing $3.7 million, and a new Plant 4 supply well costing $3.3 million. App. 1281.
On November 18, 2009, counsel for the District demanded that Northrop Grumman pay for VOC treatment system improvements at Plant 4.
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Counsel also stated that the District had authorized ʺemergency implementationʺ of VOC treatment systems at Plant 4.
ii. The Granular Activated Carbon Polishing System
On November 25, 2009, the Board of Commissioners held a meeting, the notice for which stated that ʺ[n]ew information obtained at District and H2M meeting with Grumman on 11/16 revealed a much greater threat to public supply wells at [Plant] 4. Immediate action is required for well head protection by the summer 2010 pumping season.ʺ App. 1035. At the meeting, the District determined that the second AST would not be sufficient to address the higher level of VOCs at Plant 4, and it would need to add a granular activated carbon polishing system (ʺGACʺ). The GAC ʺconstituted an interim emergency wellhead treatment proposal.ʺ App. 1302 ¶ 34.
Toward that end, in a letter to the NCDOH dated December 17, 2009, H2M stated that ʺ[e]mergency action is recommended and warranted to have the treatment system improvements immediately in place to address th[e] imminent threatʺ that the OU3 plume posed to Plant 4. App. 1005‐06. H2M asked NCDOH to recognize the need for a GAC system to be installed expeditiously in addition to a second AST, because there was ʺnot enough time
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available to the District to wait for the completion of the new air stripping system.ʺ App. 1006. H2M stated that the contamination revealed by VPB‐116 would overwhelm the Plant 4 treatment systems by spring 2010, and proposed that the GAC be operational by May 2010, and the additional AST be operational by May 2011.
iii. Declaration of Emergency On December 23, 2009, H2M sent a letter to the District stating that ʺthe contamination found at [VPB 116] will likely reach Plant 4 by this springʺ and recommended ʺthat the District declare an emergency and expedite the planned improvements at Plant No. 4.ʺ App. 1054. The letter also cited three bids received by H2M for the first phase of the project, and recommended accepting the lowest bid.
On December 29, 2009, the Board of Commissioners adopted a resolution declaring that ʺan emergency situation affecting the public health, safety and welfare existsʺ and authorizing a contract to begin construction on an emergency GAC and a second AST. App. 1059. That same day, H2M sent DEC a letter stating that ʺ[r]ecent VOC detections have been found in the effluent of both Plant Nos. 4 and 6. The District is restricted to the use of only one well at a
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time at each facility.ʺ App. 1063. The letter also stated that, ʺbased on the imminent threat that this plume has on the supply wells at Plant No. 4, one or more I[nterim] R[emedial] M[easures] are absolutely warranted.ʺ App. 1064. It stated: ʺ[t]his is an emergency situation for the District, as it has restricted [Plant No. 4] to half capacity, and as the risk of losing Plant No. 4 for the peak pumping season will jeopardize the districtʹs ability to meet peak domestic demand plus fire protection.ʺ App. 1068.
On January 5, 2010, the Town of Oyster Bay authorized a $13.95 million bond issuance for, among other things, ʺconstruction and equipping of water treatment facilitiesʺ at Plant No. 4. App. 1072. In February 2010, NCDOH approved the design and plan for the emergency GAC and the second AST. The GAC and AST were completed in January 2012.
iv. Well 4‐1 and Well 4‐2 Removed from Service In February 2006, the District detected combined radium‐226 and radium‐228 in Well‐2 at levels of 5.69 picocuries per liter (ʺpCi/Lʺ).7 The District
7 The federal standard for combined radium‐226 and radium‐228 in drinking water is
an MCL of 5 pCi/L. EPA, Radionuclides Rule, https://www.epa/gov/dwreginfo/ radionuclides‐rule (last visited Dec. 7, 2017).
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detected combined radium‐226 and radium‐228 in Well‐1 at 5.55 pCi/L in May 2006, and at 7.03 pCi/L in September 2010.
In December 2009, the District took Well 4‐2 off line in preparation for the installation of ʺnew VOC removal systems.ʺ App. 1103. In November 2010, the District took Well 4‐1 off line in preparation for the installation of the GAC and AST. In February 2013, the District took Well 4‐1 out of service because radium was detected at 5.87 pCi/L. B. Proceedings Below On November 18, 2013, the District filed this diversity suit against Northrop Grumman alleging negligence, trespass, and nuisance, and seeking to recover the costs of remediating pollution at Plant 4, as well as punitive damages.
On June 5, 2015, Northup Grumman moved for partial summary judgment seeking dismissal of the Districtʹs claims related to Plant 4 as time‐ barred.8 On February 29, 2016, the magistrate judge issued an R&R
8 The operative complaint here is the Second Amended Complaint, filed on March 20, 2015. On March 24, 2014, Northrop Grumman filed a motion to dismiss the original complaint, arguing that it was barred by the statute of limitations. The district court permitted limited discovery on the statute of limitations issue. By Order dated December 3, 2014, the district court allowed Northrop Grumman to convert the motion to dismiss into a motion for summary judgment.
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recommending that the district court grant Northrop Grummanʹs motion for partial summary judgment. The magistrate judge determined that the Districtʹs claims were barred by CPLR § 214‐c(2) because the statute of limitations had begun to run by November 2009 at the latest, based on actions taken by the District to remediate the contamination. This was over three years before the District filed this action on November 18, 2013. On March 31, 2016, the district court adopted the R&R in its entirety.
On June 15, 2016, the parties submitted a stipulation of voluntary dismissal without prejudice as to all of the Districtʹs claims not dismissed by the district courtʹs March 31, 2016 order. On July 12, 2016, the district court entered final judgment as to all claims.
The District filed a timely notice of appeal on July 26, 2016. This appeal only addresses claims regarding Plant 4, as the Districtʹs remaining claims have been dismissed.9
9 On September 6, 2016, the district court granted the Districtʹs Rule 54(b) motion, and final judgment was entered with respect to the ʺPlant 4ʺ claims dismissed pursuant to the Partial Motion for Summary Judgment.
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DISCUSSION
A. Standard of Review This Court reviews a district courtʹs decision on a motion for summary judgment de novo and reviews facts in the light most favorable to the losing party. See Watson v. United States, 865 F.3d 123, 130 n.5 (2d Cir. 2017) (denial of motion for summary judgment based on accrual date of claim is reviewed de novo); Buttry v. Gen. Signal Corp., 68 F.3d 1488, 1492 (2d Cir. 1995) (applying de novo review to a grant of summary judgment regardless of whether the motion is ʺgranted on the merits of the claim, or on an affirmative defense such as the statute of limitationsʺ).
Two issues relating to the statute of limitations are presented: (1)
VOC contamination and (2) radium contamination. B. VOC Contamination 1. Applicable Law The central issue is whether the Districtʹs claims for nuisance, trespass, and negligence based on VOC contamination are barred by the statute of limitations set forth in § 214‐c(2). See Bano v. Union Carbide Corp., 361 F.3d 696, 709 (2d Cir. 2004) (ʺ[A] damages claim for latent injury to property resulting from the
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seepage or infiltration of a toxic foreign substance over time is governed by the § 214‐c limitations period.ʺ); Jensen v. Gen. Elec. Co., 82 N.Y.2d 77, 82‐83 (1993). Under § 214‐c(2):
the three year period within which an action to recover damages for personal injury or injury to property caused by the latent effects of exposure to any substance or combination of substances, in any form, upon or within the body or upon or within property must be commenced shall be computed from the date of discovery of the injury by the plaintiff or from the date when through the exercise of reasonable diligence such injury should have been discovered by the plaintiff, whichever is earlier.
N.Y. C.P.L.R. § 214‐c(2) (emphasis added). The New York Court of Appeals has held that, ʺ[f]or purposes of CPLR 214‐c, discovery occurs when, based upon an objective level of awareness of the dangers and consequences of the particular substance, ʹthe injured party discovers the primary condition on which the claim is based.ʹʺ MRI Broadway Rental, Inc. v. U.S. Min. Prods. Co., 92 N.Y.2d 421, 429 (1998) (internal citation omitted); see also Atkins v. Exxon Mobil Corp., 780 N.Y.S.2d 666, 760 (3d Depʹt. 2004). Thus, knowledge of both the ʺdangers and consequencesʺ posed by contamination and harmful impact are required. Mere detection of contamination is not enough.
Moreover, the claim accrues when the plaintiff first discovers its injury, regardless of whether the defendantʹs damaging conduct continues. See
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Bano, 361 F.3d at 709; Jensen, 82 N.Y.2d at 88‐89. This limitation only applies to claims for damages, not claims for injunctive relief. Bano, 361 F.3d at 710, Jensen, 82 N.Y.2d at 89‐90 (CPLR § 214‐c(2) applies ʺonly to actions ʹto recover damages.ʹʺ). As the statute of limitations is an affirmative defense, the defendant bears the burden of proof. See N.Y. C.P.L.R. § 3018(b).
The District filed its complaint on November 18, 2013. Northrop Grumman argues that the District either sustained its injury or knew of its injury ‐‐ the impact of contamination in the groundwater ‐‐ more than three years prior to filing because it was aware of the imminent threat posed by contamination and took remedial action well before November 18, 2010. The District argues that its injury did not occur until sometime after November 18, 2010 because the contamination did not actually enter its wells until after November 18, 2010. It is undisputed that both Northrop Grumman and the District knew contamination existed in the vicinity of Plant 4 before November 2010. The question is when an ʺinjuryʺ sufficient to trigger the statute of limitations occurred.
This Court addressed a similar issue in In re Methyl Tertiary Butyl Ether (ʺMTBEʺ) Prod. Liab. Litig., 725 F.3d 65 (2d Cir. 2013), which involved MTBE contamination in drinking water in New York City (the ʺCityʺ). Beginning
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in the 1980s, Exxon Mobil and other gasoline companies used MTBE as a gasoline additive to increase the oxygen content in gasoline. Id. at 78. Gasoline spills and leaks led to MTBE contamination in the Cityʹs groundwater.
MTBE was initially detected in the groundwater in wells in Queens at levels below the MCL. See In re MTBE, 2009 WL 2634749, at *2 (S.D.N.Y. Aug. 25, 2009). Exxon Mobil argued that the Cityʹs claims were barred by CPLR § 214‐ c(2) because the City knew about the ʺinjuryʺ ‐‐ the presence of MTBE contamination in drinking water ‐‐ more than three years before filing its action against Exxon Mobil. In re MTBE Prod. Liab. Litig., 725 F.3d at 111. The City argued that the ʺinjuryʺ did not occur until ʺthe concentration of MTBE . . . rose to a level at which a reasonable water provider would have treated the water.ʺ Id. at 111. It was undisputed that the City had detected MTBE at levels below the MCL over three years before filing suit. See In re MTBE, 2009 WL 2634749, at *1‐ 2. Therefore, the issue was whether that was sufficient to trigger the accrual of a cause of action, that is, whether the statute of limitations began to run when the MTBE was first detected in the water or only after it reached concentrations that would cause a ʺreasonable water providerʺ to treat the groundwater. In re MTBE, 725 F.3d at 112.
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The district court conducted an eleven‐week jury trial, in three phases. Id. at 78‐79, 83. In the third phase, the jury considered Exxonʹs claim that the City had failed to file within the three‐year statute of limitations because it knew or should have known more than three years prior to filing that ʺthere was a sufficient level of MTBE in the capture zone of the . . . wellsʺ to cause an injury. Id. at 91. The jury found that the Cityʹs claims were timely because Exxon failed to meet its burden to show that the City knew or should have known of its injury three years prior to suit. Id. at 111.
On appeal, Exxon argued that no reasonable juror could have reached such a conclusion, because the statute of limitations was triggered once the City learned that it would need to treat the water sometime in the future. Id. at 111‐112. In other words, Exxon argued, the statute of limitations began to run once the City could anticipate the need for remediation. In support of its argument that the City learned of this need more than three years before filing suit, Exxon pointed to the testimony of William Yulinsky, the Director of Environmental Health and Safety at the Cityʹs Department of Environmental Protectionʹs Bureau of Waste Water Treatment. He testified that as early as September 1999, the City knew that, considering that ʺnumerous potential
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sources of MTBE exist[ed] within [one] mile of Station 6, the need to treat for MTBE should be anticipated.ʺ In re MTBE, 725 F.3d at 112. Yulinsky, however, also testified that in 1999 and 2000, ʺit was way too soon to determine what we were going to need to treat for.ʺ Id. at 91.
In upholding the verdict for the City, we held that the statute of limitations began to run only when ʺa reasonable water provider would have treated [the contaminated] groundwater.ʺ Id. at 112. In doing so, we rejected the idea that mere knowledge of a future need would trigger the statute of limitations:
[A]nticipat[ing] a future need to remediate MTBE does not prove that the City knew in 1999 [before the statute began to run] that Station Six had already been contaminated or that the contamination was significant enough to justify an immediate or specific remediation effort.
Id. Hence, mere knowledge of the need for future action was insufficient.
We also held that the mere presence of contamination in the water, i.e., at low levels, was not enough to trigger the statute of limitations. The City conceded that MTBE was first detected in the Cityʹs water before the start of the statute of limitations period. Id. We held, however, that this was not fatal to the Cityʹs claims because Exxon did not prove that ʺa reasonable juror was required
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to find that a reasonable water provider would have treated groundwater containing MTBE at these concentrations.ʺ Id. (emphasis added); see also In re MTBE, 2007 WL 1601491, at *6 (S.D.N.Y. June 4, 2007) (holding that because ʺNew York, like other states, does not have a zero‐tolerance policy on contaminants in drinking water . . . . the mere detection of MTBE in wells at very low levels would not make a reasonable person aware of a legally‐cognizable injury sufficient to trigger the statute of limitationsʺ).
In MTBE, the contaminant was already in the water source. The question was whether low levels would trigger the statute of limitations. We held that low levels would not, but we made clear that at some point before the MCL was exceeded, the statute of limitations could be triggered ‐‐ when the water source was sufficiently contaminated or the threat of contamination was sufficiently significant to justify immediate or specific remediation. See In re MTBE Prod. Liab. Litig., 725 F.3d at 112.
2. Applicable Law With these principles in mind, we turn to this case. Northrop Grumman argues that the statute of limitations began to run when the District learned of the potential need to remediate, or at least when a reasonable water
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provider would have taken action to protect the water. The District argues that the statute of limitations should not begin until an ʺactual injuryʺ is sustained, which it contends would be when contamination was actually detected in the water in the wells.
Two inquiries are required, one legal and one factual: First, as a legal matter, may a water provider bring suit for remediation damages before the water source is polluted, that is, when there is a threat of pollution? And second, assuming so, as a factual matter, did the threat of pollution reach the point where the water provider should have taken immediate and specific action?
a. The Legal Question The District argues that state law cases support their reading that an ʺactual injuryʺ is required to trigger the statute of limitations. See, e.g., Germantown Cent. Sch. Dist. v. Clark, Clark, Millis & Gilson, AIA, 743 N.Y.S.2d 599, 602 (3d Depʹt 2002), affʹd, 100 N.Y.2d 202 (2003) (holding that CPLR § 214‐c(2) did not apply to claims to recover asbestos abatement costs caused by defendantsʹ negligent abatement services because statute only applies to injuries caused by the ʺlatent effects of exposure,ʺ and injury in this case was immediate); Hanna v. Motiva Enter., LLC, 839 F. Supp. 2d 654, 665 (S.D.N.Y. 2012) (holding that
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presence of a strong odor on the property, installation of monitoring wells on nearby property, and being informed that pollution ʺmayʺ be found ʺin or aboutʺ their property are not sufficient to trigger the statute of limitations). These cases, however, do not support the proposition that contamination must be found in the wells, rather than merely in the groundwater leading into the wells, for an injury to be sustained. Indeed, the Second Department has held that knowledge of ʺpossible infiltration of contaminants into the vicinity of the subject propertyʺ is sufficient to trigger the statute of limitations, because the plaintiff had ʺobtained knowledge that would place ʹa reasonable person on notice of the need to undertake further investigation to ascertain the scope of the contamination.ʹʺ Benjamin v. Keyspan Corp., 963 N.Y.S.2d 128, 129 (2d Depʹt 2013) (emphasis added) (citation omitted); see also Oliver Chevrolet v. Mobile Oil Corp., 249 A.D.2d 793, 794 (3d Depʹt 1998) (holding that statute of limitations began to run with knowledge of gasoline discharge from leaking underground storage tanks but before gasoline was detected in well water because plaintiff was ʺaware that some amount of leakage had occurredʺ). These cases are consistent with our conclusion in MTBE that a water provider may sue if a water source has ʺalready
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been contaminated or . . . the contamination [is] significant enough to justify an immediate or specific remediation effort.ʺ 725 F.3d at 112.
In considering this issue, we must consider the purpose of a statute of limitations. As the Supreme Court noted in California Public Employees’ Retirement System v. ANZ Sec., Inc., 137 S. Ct. 2042 (2017), statutes of limitations are ʺdesigned to encourage plaintiffs ʹto pursue diligent prosecution of known claims.ʹʺ Id. at 2049 (citing CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2183 (2014)). Toward that end, the limitations period begins to run ʺwhen the cause of action accrues.ʹʺ Id. (citation omitted). In a property damage case, such as this, the cause of action accrues ʺwhen the injury occurred or was discovered.ʺ Id. (citation omitted).
With this purpose in mind, we reject the argument that the statute of limitations begins to run only after contamination is actually detected in an intake well. If a cause of action does not accrue until contamination is found in a well, a claim might never accrue, as contaminated portions of a nearby aquifer might not ultimately reach a well, or might be so toxic as to require shutting down an intake well before contact is made. Furthermore, a diligent water provider may take action to prepare its intake wells to treat incoming
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contaminants prior to actual contact. The approach advocated by the District would lead to the odd result of encouraging water providers to allow contamination to reach the wells so that a cause of action could accrue. A diligent water provider that successfully prepares its wells to treat increased levels of incoming contaminants is still injured if it has to expend resources to prevent the pollution from reaching the drinking water.
We do not, however, hold that the statute of limitations commences when a reasonable water provider takes any action in anticipation of future contamination or has any knowledge of potential contamination. Such a holding could deter water providers from investigating leaks or taking steps to address future contamination for fear of triggering the statute of limitations. See Hanna, 839 F. Supp. 2d at 666 (holding that ʺ[p]laintiffs should not be punishedʺ for investigating source of odor of hydrocarbons on their property because such actions are not sufficient to trigger statute of limitations). As addressing water contamination is often a complex, multi‐year process, a holding that any anticipatory action triggers the statute of limitations would run the risk of curtailing a municipalityʹs ability to sue to recover costs. In MTBE, this Court specifically refused to hold that ʺanticipat[ing] a future need to remediate
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[pollution]ʺ by itself was enough to trigger the statute of limitations. In re MTBE, 725 F.3d at 112. Rather, we required knowledge that the contamination was significant enough to justify ʺan immediate or specific remediation effort.ʺ Id.
b. The Factual Inquiry Accordingly, we must consider whether the District was aware that the threat of contamination was sufficiently significant to warrant ʺimmediate or specific remediation efforts.ʺ We agree with the district court that the record here establishes as a matter of law that the District had suffered injury and was aware of that injury before November 2010. Indeed, the indisputable facts show that before November 2010, the District took a myriad of substantial and specific steps to address the contamination, including:
The District took numerous steps in 2008 and 2009 toward building a second AST for Plant 4 and a new supply well, steps that would require the expenditure of millions of dollars;
In doing so, the District recognized in a CIP that ʺthe existing treatment system [is] incapable of treating the higher influent levels expected to impact this site, [and the District] must immediately implement the upgrade of the treatment system,ʺ App. 959 (emphasis added);
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In 2009, the District proposed an additional emergency GAC system, to be operational by May 2010, and in January 2010, the Town of Oyster Bay authorized a $13.95 million bond issuance for additional treatment facilities at Plant 4, App. 1054;
On December 23, 2009, H2M sent a letter to the District stating that ʺthe contamination found at [VPB 116] will likely reach Plant 4 by this springʺ and recommended that the District ʺdeclare an emergency and expedite the planned improvements at Plant No. 4,ʺ App. 1054;
On December 29, 2009, the Board of Commissioners declared such an emergency; and In December 2009, the District took Well 4‐2 off line in preparation for the installation of the GAC/AST.
A reasonable jury could only conclude that these actions taken by the District prior to November 2010 constituted ʺimmediate and specific remediation effortsʺ by a reasonable water provider to address pollution. As a result, the Districtʹs claims for damages arising from contamination of Plant 4 accrued before November 18, 2010, and thus are barred by the statute of limitations.
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C. Radium Contamination The District alleges that radium was detected in Well 4‐1 and Well 4‐ 2 in 2013, and therefore its suit against Northrop Grumman in November 2013 was timely. Northrop Grumman argues that the District knew of the radium contamination in 2006, and therefore the claim is barred by the statute of limitations.
It is undisputed that the District detected radium in its wells at the following levels at the following times:
February 2006 5.69 pCi/L in Well 4‐2 May 2006 5.55 pCi/L in Well 4‐1 September 2010 7.03 pCi/L in Well 4‐1 January 2013 5.87 pCi/L in Well 4‐1
The R&R recommended dismissal of the Districtʹs radium claims because the record established that: (1) the District could not ʺdetermine the source and seriousness of any radium contamination,ʺ in part because radium is naturally occurring in the water on Long Island, and (2) the District was aware of radium in 2006, and the level in 2013 was lower than the level in 2006, more than three years prior to suit. The district court adopted the R&R concluding that the radium claim was barred by CPLR § 214‐c(2) because the District had knowledge of the contamination before November 2010.
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On appeal, the District does not deny the earlier knowledge of the presence of radium, but argues that it did not know that the source of the radium was the Grumman site, rather than merely naturally occurring, until it filed this suit in 2013 and obtained information about the source from DEC.
Northrop Grumman argues that the District waived its argument concerning the timeliness of this claim by failing to raise that point in its objections to the R&R. It argues that the only objection raised by the District was an assertion that the district court should have considered new radium sampling results from a former Northrop Grumman property as a factual basis to establish causation.
The Districtʹs argument fails. Even if the District did not know the source of the radium until 2013 at the earliest, its claim is still barred by the statute of limitations because suit was filed more than five years after the District discovered the injury. While CPLR § 214‐c(2) does not carve out an exception for delay in discovering the source of the injury, CPLR § 214‐c(4) extends the limitations period to one year after the discovery of the cause of the injury in these circumstances:
[n]otwithstanding the provisions of subdivisions two and three of this section, where the discovery of the
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cause of the injury is alleged to have occurred less than five years after discovery of the injury or when with reasonable diligence such injury should have been discovered, whichever is earlier, an action may be commenced or a claim filed within one year of such discovery of the cause of the injury.
N.Y. CPLR § 214‐c(4). Hence, if a plaintiff discovers an injury and discovers within the next five years the cause of that injury, the statute of limitations is extended to one year after the discovery of the cause.
Here, the District first learned of radium contamination in 2006. It claims it did not learn of the source of the contamination until discovery began in this suit in 2013. There was a seven‐year gap between the discovery of the injury in 2006 and the discovery of the source of the injury in 2013. As a result, the Districtʹs claims regarding radium are also time‐barred.
CONCLUSION
For the reasons set forth above, we AFFIRM the decision of the district court.