Scott v. NG US 1, Inc.

854 N.E.2d 981, 67 Mass. App. Ct. 474
CourtMassachusetts Appeals Court
DecidedOctober 2, 2006
DocketNo. 05-P-1050
StatusPublished
Cited by3 cases

This text of 854 N.E.2d 981 (Scott v. NG US 1, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Scott v. NG US 1, Inc., 854 N.E.2d 981, 67 Mass. App. Ct. 474 (Mass. Ct. App. 2006).

Opinion

Cypher, J.

The plaintiff, Wayne Scott, trustee of 12 Woodbury Court Trust, purchased property in Salem in January, 2002, with the plan to build two townhouses. As construction got underway, Scott discovered that the site was contaminated with material resembling coal tar. The likely source of the contamination was the property on the northern boundary, formerly home to a gas manufacturing plant that used coal in the production of gas in the 1800’s. Scott has since undertaken remedial action to assess, contain, and remove the hazardous materials, assumed, for our purposes, to have migrated onto his property from the former gas facility. In this action, Scott seeks damages and reimbursement for his response costs from the defendants, pursuant to G. L. c. 21E, the Massachusetts Oil & Hazardous Material Release Prevention Act (Act), based on their prior connections to the gas company that operated the offending facility.

According to the record, the gas manufacturing plant that formerly occupied the site adjacent to Scott’s property was originally owned and operated by Salem Gas Light Company (Salem Gas). Between 1850 and 1890, Salem Gas used the facility, located on Northey Street in Salem, to manufacture gas [476]*476from coal. When the plant ceased operations in 1890, the property was sold to a third party, not here identified. The plant itself was dismantled as of 1906. After leaving Northey Street, Salem Gas resumed operations at a site on Pierce Street in Salem and remained at that site until 1953.

The history that connects Salem Gas to the current defendants is based on undisputed facts. Between 1926 and 1931, North Boston Lighting Properties (NBLP), a utility holding company, purchased shares of Salem Gas stock. New England Power Association (NEPA) then purchased NBLP stock, so that Salem Gas became a subsidiary of NEPA. In 1947, a reorganization of NEPA led to the formation of New England Electric System (NEES), with NEES becoming the parent of Salem Gas. NEES formed an unincorporated gas division in 1951 to oversee its gas operations. In 1952, NEES organized North Shore Gas (North Shore), to acquire Salem Gas and other NEES gas subsidiaries. NEES consolidated the gas operations of Salem Gas, Gloucester Gas Light Company, and Beverly Gas and Electric Company into North Shore in 1953. North Shore thereafter operated the Pierce Street facility.

In 1964, the Securities and Exchange Commission (SEC) ordered NEES to divest itself of all gas subsidiaries. In 1973, NEES entered into an agreement to sell North Shore’s stock, along with that of Lynn Gas Company and Mystic Valley Gas Company, to Boston Gas’s parent, Eastern Gas & Fuel Associates (Eastern), for $26,888,351.75, adjusted for the stock’s book value as of the date of closing. North Shore’s assets were purchased by Boston Gas, which, pursuant to the defendants’ asset purchase agreement, also assumed the liabilities of North Shore “as then existing.” After the closing, all outstanding shares of North Shore were liquidated. Many of North Shore’s employees accepted jobs with Boston Gas, but management of the gas operation was taken over by the existing management of Boston Gas. In 2002, Eastern was merged into KeySpan New England, and Boston Gas became a KeySpan New England subsidiary. NEES has been succeeded by NG US 1, Inc., doing business as National Grid USA.

Scott filed his complaint in this action on September 5, 2002, alleging that the defendants were liable, pursuant to G. L. [477]*477c. 21E, § 5, for the spread of hazardous materials to his property, based on their respective relationships with Salem Gas. The parties filed cross motions for summary judgment. The judge ruled in favor of the defendants, determining that neither NEES nor Boston Gas was hable, directly or as corporate successors, for the harm caused by Salem Gas’s operations. The plaintiff filed this appeal. The defendants filed cross appeals from the judge’s denial of their respective claims for attorney’s fees.

We turn first to the plaintiff’s claims against NEES.

1. NEES as an “operator” under G. L. c. 21E. General Laws c. 21E, § 4, provided Scott, as one who undertook the cleanup of hazardous materials that migrated onto his property, with a private right of action to seek recovery of his response costs from the parties responsible for the contamination.4 See Garweth Corp. v. Boston Edison Co., 415 Mass. 303, 307 (1993); Mailman’s Steam Carpet Cleaning Corp. v. Lizotte, 415 Mass. 865, 873-874 (1993); Hill v. Metropolitan Dist. Commn., 439 Mass. 266, 269 (2003). Scott also sought recovery of damages from the defendants for the diminution in value of his property, as well as other economic losses, pursuant to G. L. c. 21E, § 5(a).5 See Guaranty-First Trust Co. v. Textron, Inc., 416 Mass. 332, 334 (1993); Hill v. Metropolitan Dist. Commn., supra at 269. Persons hable for the release of hazardous material are identified in G. L. c. 21E, § 5(a)(1)-(5). See Martignetti v. Haigh-Farr, Inc., 425 Mass. 294, 298 (1997).

Scott charged NEES with liability for his response costs and damages, under the theory that NEES should be treated as a present operator of the Northey Street site pursuant to G. L. [478]*478c. 21E, § 5(a)(1), as well as a person otherwise responsible for the release of hazardous materials under G. L. c. 21E, § 5(a)(5).6 With respect to liability as a present operator under G. L. c. 21E, § 5(a)(1), the judge correctly rejected the plaintiff’s claim, because NEES was not currently operating the Northey Street site. See Griffith v. New England Tel. & Tel. Co., 414 Mass. 824, 827 (1993), S.C., 420 Mass. 365 (1995) (under § 5[a][1], “only present owners or operators are strictly liable where there has been a release of oil or hazardous materials on their property, regardless of when the release itself occurred”); Martignetti v. Haigh-Farr, Inc., supra at 304 n.20.

On appeal, Scott asserts that NEES should be treated as a present operator nonetheless, because NEES is presently storing hazardous wastes at the site — that is, the coal tar that was left behind by its former subsidiary. The plaintiff argues that the discharge of hazardous materials into the soil at the Northey Street site, and their continued presence there, is equivalent to storage in containers or a lagoon and that, so long as NEES fails to remove the hazardous materials and clean up the site, NEES continues to be an operator of the site under G. L. c. 21E, § 5(a)(1). The plaintiff cites to no authority for this broad interpretation of what constitutes a present operator under the statute, and we decline to extend its meaning to an entity in NEES’s position that never conducted any activities at the site.

In any event, as NEES points out, another subsection of the statute, § 5(a)(2), imposes liability on “any person who at the time of storage or disposal of any hazardous material owned or operated any site at or upon which such hazardous material was stored or disposed of and from which there is or has been a [479]*479release . . .” Section 5(a)(2) encompasses past operators of sites where hazardous wastes were stored or disposed of, and would be superfluous under the plaintiff’s expansive reading of § 5(a)(1). See generally Kobrin v. Gastfriend, 443 Mass. 327, 332 (2005) (no part of a statute should be regarded as superfluous).

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854 N.E.2d 981, 67 Mass. App. Ct. 474, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scott-v-ng-us-1-inc-massappct-2006.