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,

, 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.,

, 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.,

(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.,

, 82‐83 (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.,

, 429

(1998) (internal citation omitted); see also Atkins v. Exxon Mobil Corp.,

(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,

; Jensen, 82 N.Y.2d at 88‐89. This limitation only applies to

claims for damages, not claims for injunctive relief. Bano,

, 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

(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.,

(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.

. 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,

, 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.,

. 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

. It was undisputed that the City had detected MTBE at levels below the

MCL over three years before filing suit. See In re MTBE,

, 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,

.

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The district court conducted an eleven‐week jury trial, in three

phases.

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.

. 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.

.

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.

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,

. 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

.

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

. 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.

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.

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

(emphasis added); see also In re

MTBE,

, 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.,

.

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,

(3d Depʹt 2002), affʹd,

(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,

(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.,

(2d Depʹt 2013) (emphasis

added) (citation omitted); see also Oliver Chevrolet v. Mobile Oil Corp.,

(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

.

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.,

(2017), statutes of limitations

are ʺdesigned to encourage plaintiffs ʹto pursue diligent prosecution of known

claims.ʹʺ

at 2049 (citing CTS Corp. v. Waldburger,

(2014)).

Toward that end, the limitations period begins to run ʺwhen the cause of action

accrues.ʹʺ

(citation omitted). In a property damage case, such as this, the

cause of action accrues ʺwhen the injury occurred or was discovered.ʺ

(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,

(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,

. Rather, we required knowledge that the contamination was

significant enough to justify ʺan immediate or specific remediation effort.ʺ

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.

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