Opinion
01-CV-196A.
June 18, 2004
DECISION AND ORDER
INTRODUCTION
Currently before the Court is a motion by the defendants, Kevan Green and Polymer Applications, Inc., to vacate a default judgment entered on May 10, 2002. For the reasons stated, the motion is denied.
BACKGROUND
This action was filed by the plaintiff, the Department of Environmental Conservation for the State of New York ("DEC"), on March 20, 2001, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, seeking a finding of liability by the defendants for costs incurred by the DEC in investigating and remediating a contaminated site located at 3445 River Road, Tonawanda, New York ("site"). The site was owned by defendant Polymer Applications, Inc., of which defendant Kevan M. Green was the sole shareholder and president.
I. History of Contamination of Site and Earlier Litigation Proceedings
The history of contamination at the site is extensive and is briefly summarized as follows. Between 1968 and 1988, the DEC documented a number of releases of hazardous substances at the site. United States v. Green, 33 F. Supp.2d 203, 210 (W.D.N.Y. 1998); Affidavit of Michael DiPietro ("DiPietro Aff."), at ¶ 8. These included: (1) water, sludge and phenol in 1972; (2) 670 gallons of phenol in 1984; (3) 50 gallons of fuel oil in 1985, an unknown quantity of diisobutylene in 1985; (4) 275 gallons of phenol in 1987; and (5) 600 gallons of a phenol/toluene mixture in 1988. DiPetro Aff., at ¶ 8. Additionally, in July 1988, the Polymer facility on the site was heavily damaged by a fire that resulted in the release of an estimated 70,000 gallons of phenol solution and solvents. Id. at ¶ 9. Polymer ceased operations after the fire, but hazardous materials used in polymer's processing remained stored at the site in drums, tanks and other containers. Id. at ¶¶ 7, 9. DEC consultants performed a Phase II environmental investigation in 1990 and determined that organic compounds used or produced by Polymer were being released to groundwater, surface water, soil and sediment. Id. at ¶ 10. Based upon the Phase II investigation report, the site was reclassified as a "significant threat to the public health or environment — action required." Id. at ¶ 11.
DEC consultants preformed a state-funded remedial investigation and feasibility study in 1993 and 1994. That study found contamination in the soil, groundwater and surface water. In 1994, the DEC requested that the Environmental Protection Agency ("EPA") perform an emergency response because of leaking tanks, drums and chemicals. Id. At ¶¶ 10-14. Defendant Green had initially given permission for EPA access to the site, but with drew it during the course of the EPA emergency response. The EPA filed a complaint and motion seeking access to the site in order to complete its emergency response, see United States v. Kevan Green and Polymer Applications, Inc., 96-CV-0338A, and on August 30, 1996, this Court issued an order granting the EPA's motion for access to the property. The Court also enjoined the defendants from interfering with the EPA's entry and access onto the site.
In March 1996, the DEC issued a Record of Decision ("ROD") which selected a remedial plan for the site. See ROD, at i, attached as Ex. 1 to DiPietro Aff. The DEC considered five possible alternative responses and held a public hearing before reaching its conclusion as to the appropriate remedial plan. The DEC also concluded that if the selected remedial plan was not implemented, the actual or threatened release of hazardous waste from the site presented "a current or potential threat to public health and the environment." Id. The defendants did not seek judicial review of the ROD.
The DEC contacted the defendants and requested that they undertake the remedial plan selected in the ROD. The defendants failed to do so. They also refused to allow the DEC access to the site to implement the selected remedial plan. DiPetro Aff., at ¶ 22.
B. Proceedings in this Case
On March 20, 2001, the DEC brought the instant action seeking access to the site for the purpose of implementing the remedial plan and seeking a determination that the defendants are liable for costs incurred in connection with that cleanup. The defendants were personally served with the complaint, but failed to answer or otherwise appear in the action. On May 23, 2001, an entry of default was filed by the Clerk of the Court and copies of the notice were sent to the defendants. On April 8, 2002, the DEC filed a motion for default judgment. On May 10, 2002, the motion for default judgment was granted. Default judgment was entered in favor of the DEC on that same date.
On May 7, 2003, nearly one year after default judgment was entered, defendants filed a pro se motion seeking to have the default judgment set aside. On March 19, 2004, the plaintiff filed a response in opposition to the motion to set aside the judgment and on March 22, 2004, the defendants, who are now represented by counsel, filed a reply. Oral argument was held on March 23, 2004. Only counsel for the DEC appeared for oral argument. C. Basis for Defendant's Motion
Counsel for the defendants filed a notice of appearance on March 17, 2004.
Counsel for the defendants failed to timely appear for oral argument. The Court was advised that counsel arrived late, but the Court had already recessed and taken up other matters. Having reviewed all of the papers relating to this issue, oral argument will not be rescheduled. The Court finds that the facts and legal arguments are adequately presented by the parties' papers and the decisional process would not be significantly aided by oral argument.
The defendant argues that default judgment should be vacated because he did in fact appear in the instant action. According to the defendant, he and his counsel appeared informally in this action when they entered into brief negotiations with the DEC shortly after this action was filed. The "negotiations" are summarized as follows.
Several days after this action was commenced, defendant Green contacted DEC's counsel and asked her to send copies of the summons and complaint to attorney Jeffrey Blum, Esq. Plaintiff's counsel complied with this request by serving a copy of the complaint upon attorney Blum. On April 2, 2001, Blum telephoned DEC's counsel and stated that defendant Green was talking to other investors about a cleanup of the site. He then stated that Green continued to disagree with the remediation plan selected in the ROD. Counsel for the DEC told Blum to put any proposal for cleanup in writing, showing in particular how the proposed cleanup was to be financed. Affidavit of Linda E. White, dated April 2, 2002 ("White Aff.") at ¶ 9. Blum did not do so.
On April 30, 2001, Blum faxed a letter to plaintiff's counsel requesting a meeting to discuss "alternative remediation strategies." Id. at Ex. 5. In the letter, Blum claimed that he was waiting for her response to his request for an extension of time to file an answer to the complaint, and that if she would not stipulate to an extension, he would file a motion. Id. According to plaintiff's counsel, Blum had not asked for an extension of time to file an answer to the complaint, nor was she authorized to grant an extension.
On May 2, 2001, plaintiff's counsel responded to Blum's April 30th letter stating that Blum had never requested an extension of time to file an answer and that even if he had, she did not have authority to grant that request. Id. at ¶ 12 and Ex. 6. She also advised Blum that further negotiations were unlikely to be fruitful. Approximately a month later, Blum telephoned plaintiff's counsel to discuss alternative remediation strategies, but plaintiff's counsel again advised Blum that the DEC would not review any alternative plans absent acceptable financial assurances from the defendants. Id. at ¶ 14.
As noted, on May 23, 2001, a Clerk's entry of default was filed. Notice of the entry of default was sent to the defendants. The defendants took no action in response to the Clerk's entry of default.
In June 2001, Green sent plaintiff's counsel a ten-page document entitled "POLYMER APPLICATIONS, Proposed Remediation Actions" which essentially consisted of an unsigned narrative of possible remediation actions, but contained no documentation of any funding sources to cover the cost of cleanup. Plaintiff's counsel responded to the document by sending Blum a letter reiterating that the DEC would not discuss any plan for remediation with Green absent documentation showing his ability to cover the cost of doing so. There were several other communications between Blum and plaintiff's counsel, where in Blum claimed that he "did not understand" what the DEC wanted. The DEC again reiterated that it was seeking evidence of Green's financial ability to pay for the cleanup. In a letter dated July 18, 2001, Blum told the DEC that Green would endeavor to "provide additional documentation as it becomes available." Blum never provided the requested documents. That was the last communication between Blum and the DEC.
Nine months later, on or about April 30, 2002, defendant Green sent a letter to the DEC proposing to lease a ware house on the contaminated site. The letter was forwarded to DEC's counsel, who responded expressing concern for the safety of the tenant.
Several weeks later, on May 10, 2002, DEC counsel appeared for a hearing on the motion for default judgment. At the hearing, the Court asked whether counsel had heard from either of the defendants. Counsel responded:
Regarding this matter, no, that's set forth in the affidavit of Linda White, who is the Assistant Attorney General previously assigned to the case.
We did get correspondence regarding efforts to float different remediation plans, things of that nature, but there has neither been a formal or informal request on the part of Kevan Green or Polymer Applications to extend time to answer in this case, and we are not aware of any answer in this case.
Transcript of May 10, 2002 hearing, at 4. Default judgment was entered on that same date.
DISCUSSION
Pursuant to Rule 55(c) of the Federal Rules of Civil Procedure, the Court may set aside a default judgment in accordance with Rule 60(b). Rule 60(b) permits the Court to relieve a party from a judgment for the following reason s:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud . . . misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.A. Fraud or Misrepresentation
The defendants argue that the DEC engaged in fraud or misrepresentation when it appeared at the oral argument on May 10, 2004, and stated that it had not heard from the defendants on this matter. The defendants' claim of fraud is wholly without merit. In response to the Court's question (as to whether the DEC had heard from the defendants), counsel for the DEC told the Court that it did get correspondence from the defendants "regarding efforts to float different remediation plans," Tr. at 4, but it that there had "never been a formal or informal request on the part of Kevan Green or Polymer Applications to extend the time to answer." Id. That statement was true. Counsel also referred the Court to the affidavit of Linda White, Esq., which sets forth in detail the substance of those communications. The defendants have not disputed the accuracy of White's affidavit. When read in context, counsel's response to the Court's inquiry was entirely accurate and the Court finds no evidence of fraud or misrepresentation.
B. Lack of Notice
The defendants next argue that the default judgment should be set aside because they were never served with notice of the hearing or with the DEC's moving papers. According to Green, he was engaged in extensive discuss ions with the DEC at the time the motion for default judgment was made. He claims that, even though he had not formally appeared in the matter, his ongoing discussions with the DEC entitled him to notice of the motion for default judgment.
Rule 55(b)(2) requires that an adverse party be served with notice of a motion for default only if that adverse party has "appeared" in the action. It is clear that the defendants did not formally appear in this action, as neither they nor counsel ever filed an answer or other responsive pleading. "[A]ppearance in an action typically involves some presentation or submission to the court . . ." Key Bank of Maine v. Tablecloth Textile Co., 74 F.3d 349, 353 (1st Cir. 1996); see also Black's Law Dictionary, 6th ed. (defining "appearance" as " coming into court as a party to a suit, either in person or by attorney") (emphasis added). Nevertheless, under certain circumstances, informal communications between parties may rise to the level of an appearance if the adverse party indicates a clear intent to defend the litigation. Id. at 353 and n. 6 (collecting cases); but see Bermudez v. Reid, 733 F.2d 18, 22 and n. 8 (2d Cir. 1984), cert. denied, 469 U.S. 874 (1984) (stating that a single letter to the Court asking for an extension of time to file an answer did not constitute an "appearance" for the purposes of Rule 55(b)(2)); see also Zuelzke Tool Engineering Co. v. Anderson Die Castings, Inc., 925 F.2d 226, 230 (7th Cir. 1991) (holding that "appearance" with in the meaning of Rule 55(b)(2) requires "some presentation or submission to the district court in the pending action") (emphasis in original).
Assuming without deciding that the informal communications between Blum and the DEC constituted an "appearance" under Rule 55(b)(2) thereby triggering the notice requirement, that does not end the matter. Failure to give notice as required by Rule 55(b)(2) generally renders a default judgment voidable under Rule 60(b)(6), rather than void under Rule 60(b)(4). Traveltown, Inc. v. Gerhardt Investment Group, 577 F. Supp. 155, 157 (N.D.N.Y. 1983). In determining whether to set a side a judgment as voidable, "lack of notice `is merely one consideration to be weighed by the court in exercising its discretion.'" Martha Stewart Living Omnimedia LLC v. Beers Flower Shop, Inc., 1998 WL 646648, at * 4 (S.D.N.Y. Sept. 21, 1998) (quoting Wright, Miller Kane, Civil 2d § 2695). The Court should also consider: (1) whether the default was willful; (2) whether the moving party has presented a meritorious defense; and (3) whether the opposing party would be prejudiced. See Brock v. Unique Racquetball Health Clubs, Inc., 786 F.2d 61, 64 (2d Cir. 1986); Davis v. Musler, 713 F.2d 907, 915 (2d Cir. 1983); see also Silverman v. RTV Communications Gp., Inc., 2002 WL 483421 (S.D.N.Y. Mar. 28, 2002) (finding that default judgment should not be vacated despite failure to give notice required by Rule 55(b)(2));Sexton v. M.V. Silver Happiness, 1997 WL 642348, at *5-6 (E.D.N.Y. Sept. 9, 1997) (same).
In considering the motion to vacate default judgment, the Court is mindful of the Second Circuit's expressed "preference that litigation disputes be resolved on the merits." Cody v. Mello, 59 F.3d 13, 15 (2d Cir. 1995). Default judgment has been described as "the most severe sanction with the court may apply," id. (internal quotations omitted), and a "trial court's desire to move its calendar should not overcome its duty to do justice." Id. Finally, in ruling on a motion to vacate default judgment, all doubts are to be resolved in favor of the party seeking relief from judgment to facilitate resolution of disputes on their merits. See Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980); Sony Corp. v. S.W.I. Trading, Inc., 104 F.R.D. 535, 539-40 (S.D.N.Y. 1985).
C. Willfulness
The Second Circuit has interpreted the willfulness standard to include conduct that is deliberate, egregious, or evidencing bad faith. See American Alliance Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 60-61 (2d Cir. 1996). "`[T]he basic purpose of default judgment is to protect parties from undue delay-harassment.'"Id. at 61 (quoting Baez v. S.S. Kresge Co., 518 F.2d 349, 350 (5th Cir. 1975)). Although strong public policy favors resolving disputes on the merits, the Second Circuit has also recognized that enforcing default judgments that arise from egregious or deliberate conduct may help prevent abuses in process. "The subjective inquiry into willfulness effectively distinguishes those defaults that, though due to neglect, are excusable, from those that are not." Id. Accordingly, mere careless or negligent errors by an attorney or client do not constitute "willfulness," Id., at 61, n. 1, whereas deliberate, egregious and bad faith conduct does. Furthermore, "the degree of negligence in precipitating a default is a relevant factor to be considered." Id. "Gross negligence can weigh against the party seeking relief from a default judgment, though it does not necessarily preclude relief." Id.
In determining whether the conduct in this case was willful, the Court must determine whether Blum's default in this case was more culpable than negligence or even gross negligence. If so, the Court must also consider whether Blum's conduct should be attributed to the defendants. See S.E.C. v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998), cert. denied, 525 U.S. 931 (1998). For the reasons stated, the Court answers both questions in the affirmative.
With regard to the first question, there is no dispute that Blum received a copy of the complaint and was aware of his obligation to file an answer. Blum even advised opposing counsel that he intended to seek an extension of time to answer, but never did so. See White Aff. at Ex. 5. The record contains no affidavit from Blum explaining his conduct and no reason has been offered by the defendants to explain Blum's failure.
In the defendants' reply papers, new counsel for the defendants states that she would have endeavored to provide an affidavit from Mr. Blum, but did not have sufficient time to do so because she was retained shortly before the hearing on the defendants' motion to vacate. See Aff. of Diane R. Tiveron, at ¶ 18. Although counsel was retained only recently, the defendants had ample opportunity to retain counsel to look into this matter before oral argument was scheduled. As noted, default judgment was pending for almost a year before the defendants made their motion to vacate, and the motion to vacate was pending for quite some time thereafter before it was scheduled for oral argument. As with all other aspects of this case, the defendants failed to diligently pursue the motion to vacate and should not now be entitled to benefit from such conduct.
Such failure, standing alone, ordinarily might only amount to mere negligence. However, the facts of this case make clear that Blum's omission was part of an overall plan to delay the proceedings and remediation of the site. Blum's overtures toward DEC's counsel regarding settlement were not sincere, as evidenced by the communications themselves. The DEC made clear from the outset that it would not even consider engaging in settlement discussions until the defendants provided it with evidence of their ability to finance a remediation plan. The DEC also advised Blum that any remediation plan would have to be consistent with the ROD. Rather than provide the requested information, Blum sent sporadic communications to DEC counsel requesting meetings to discuss an "alternate remediation plan." Each time, the DEC responded stating that an alternate remediation plan would not be discussed until the defendants provided documentation showing how the cleanup was to be financed.
As part of this delay tactic, Blum then claimed that he did not understand what information the DEC was seeking despite unequivocal requests from DEC's counsel. See e.g. White Aff., at Exs. 11, 12 and 13. It is obvious that Blum's professed ignorance was nothing more than an effort to further delay the proceedings. It is also obvious from his repeated refusal to provide the requested information that he never had any intention of reaching a compromise. To date, neither Blum nor the defendants have provided the requested financial information.
Blum's complete and unexplained disregard of his obligation to answer the complaint and his insincere overtures toward settlement support the conclusion that his decision to default was strategic, deliberate and willful. See McNulty, 137 F.3d at 738-39; see also Gonzalez v. City of New York, 104 F. Supp.2d 193, 196 (S.D.N.Y. 2000) ("[A] default may be found to have been willful where the conduct of counsel or the litigant was egregious and was not satisfactorily explained.").
In Gonzalez, the court found that the default was not willful because counsel for the defendants had explained that he did not believe a formal response was required while the parties were engaged in good-faith settlement negotiations. There was no such misunderstanding here. Blum clearly acknowledged his obligation to file an answer or a motion for an extension of time to do so. See White Aff., at Ex. 5. Moreover, the Court has found that the defendants were not engaged in good-faith settlement negotiations. Accordingly, the facts of this case are distinguishable from those in Gonzalez.
Having determined that Blum's conduct was willful, the question remains as to whether Blum's conduct should be imputed to the defendants. "Normally, the conduct of an attorney is imputed to his client, for allowing a party to evade the consequences of the acts or omissions of his freely selected agent would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent." McNulty, 137 F.3d at 739 (internal quotations omitted). Thus, in the default judgment context, the Second Circuit has consistently "refused to relieve a client of the burdens of a final judgment entered against him due to the mistake or omission of his attorney." Id. Accordingly, "where the attorney's conduct has been found to be willful, the willfulness will be imputed to the party himself where [that party] makes no showing that he has made any attempt to monitor counsel's handling of the lawsuit." Id. at 740.
As in McNulty, the defendants in this case have failed to make any showing that they attempted to monitor Blum's handling of this case. There is no allegation of any effort to contact Blum to ascertain the status of the case prior to his default.Id. at 739-40. In fact, the evidence is to the contrary. As noted above, a Clerk's entry of default was entered on May 23, 2001, and a copy was sent to the defendants them selves. See White Aff., at Ex. 14. The Clerk's entry of default is a procedural requirement "that affords the defaulted party an opportunity to move, pursuant to Rule 55(c), to vacate the default" under a less rigorous standard than applies to Rule 60(b) motions. American Alliance, 92 F.3d at 59. After receiving the notice, the defendants did not move to vacate the entry of default or otherwise contact the Court. Nor have they provided any explanation for their failure to do so. Where, as here, the defendants were specifically notified of their attorney's default but failed to take any action, the attorney's default is properly imputed to the clients.
As further evidence of the defendants lack of diligence, the Court notes that the defendants did not file the instant motion until almost one year after default judgment was entered. The defendants provide no explanation for this delay. In the Court's view, the motion to set aside the default judgment was simply a last-ditch effort to further delay cleanup of the site. In the meantime, the site remains contaminated and the defendants refuse to provide the DEC access for the purpose of conducting remediation.
D. Meritorious Defense
In addition to willfulness, the Court finds that the motion to vacate default judgment should be denied because the defendants have failed to present evidence of a meritorious defense. When attempting to show the existence of a meritorious defense, the defendants must present more than conclusory denials of liability. Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167, 173 (2d Cir. 2001). Instead, they must proffer some evidence "which would permit a finding for the defaulting part[ies] or which would establish a valid counterclaim." See Augusta Fiberglass Coatings, Inc. v. Fodor Contracting Corp., 843 F.2d 808, 812 (4th Cir. 1988). "The test of such a defense is measured not by whether there is a likelihood that it will carry the day, but whether the evidence submitted, if proven at trial, would constitute a complete defense." Enron Oil Corp. v. Diakuhara, 10 F.3d at 90, 98 (2d Cir. 1993). The existence of a meritorious defense is a critical factor because, without a valid defense, there is "no point in setting aside the default judgment."United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984). 1. Liability Under CERCLA
To establish liability of a defendant under CERCLA, a plaintiff must demonstrate that:
1. the site in question is a "facility" as defined in CERCLA § 101(9);
2. a release or threatened release of hazardous substances has occurred at the facility;
3. the defendant is a "responsible person" under CERCLA § 107(a);
4. the plaintiff has incurred costs in responding to the release or threat of release ("response costs"); and
5. the response costs that were incurred were not inconsistent with the national contingency plan ("NC P"), 40 C.F.R. Part 300.42 U.S.C. § 9607(a); Freeman v. Galxo Wellcome, Inc., 189 F.3d 160, 163 (2d Cir. 1999); Prisco v. A D Carting Corp., 168 F.3d 593, 602-03 (2d Cir. 1999).
In its motion in support of default judgment, the DEC met its burden of showing that the foregoing elements were satisfied. Even at this juncture, the defendants do not dispute that the site is a facility within the meaning of CERCLA, that the release of hazardous substances occurred at the facility, and that they are responsible parties under CERCLA § 107(a). Nor do the defendants dispute that response costs were incurred. Instead, they argue that the costs are excessive, and that an alternate remedial plan can be performed at a lower cost.
Importantly, the defendants do not argue that the remedial plan selected in the ROD is inconsistent with the NCP. The NCP "guides federal and state response activities" and "provides the organizational structure and procedure for preparing for and responding to . . . releases of hazardous substances. . . ."Washington State Dept. of Transp. v. Washington Natural Gas Co., Pacificorp, 59 F.3d 793, 799 (9th Cir. 1995) (internal quotations and citations omitted). It also "`identifies methods for investigating the environmental and health problems resulting from a release or threatened release and criteria for determining the appropriate extent of response activities.'" Id. (quotingMatter of Bell Petroleum Servs., Inc., 3 F.3d 889, 894 (5th Cir. 1993)). Where as here, a state is seeking recovery of response costs, consistency with the NCP is presumed, id. at 799-800, and the defendants bear the burden of showing inconsistency. To do so, the defendants must show that the plaintiff's actions were arbitrary and capricious in choosing a particular response action to respond to a hazardous waste site.Id. at 802; United States v. Hardage, 982 F.2d 1436, 1442 (10th Cir. 1992). Courts apply the arbitrary and capricious standard of review "`because determining the appropriate removal and remedial action involves specialized knowledge and expertise, and therefore the choice of a particular cleanup method is a matter within the discretion'" of the DEC. Hardage, 982 F.2d at 1442 (quoting United States v. Northeastern Pharmaceutical Chemical Co. (NEPACCO), 810 F.2d 726, 748 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987)).
As noted, the defendants have not even argued much less provided evidence that the remedy chosen is inconsistent with the NCP, nor does it appear to be. See DiPietro Aff., at Ex. 1. Nor have the defendants shown that the response costs incurred ($1,334.168.62) are inconsistent with the NC P. Because the defendants have not show those response costs were inconsistent with the NCP, the fifth element of their liability under § 9607 is established.
See Affidavit of Dorothy A. Norvik, filed April 8, 2002, documenting response costs in the amount of $1,334.168.62.
2. Affirmative Defenses
Liability under § 9607 can be avoided if a defendant establishes one of the affirmative defenses. To do so, the defendant must show by a preponderance of evidence that the hazardous release was caused solely by: (1) an act of god; (2) and act of war; (3) an act or omission of a third party other than an agent of the defendant; or (4) any combination of the foregoing. See 42 U.S.C. § 9607(b).
The defendants assert that they will avail themselves of the "act of god" or "third-party action" defenses arguing that the 1988 fire in the Polymer facility was the cause of the hazardous substance release and/or that thirdparties are responsible for the contamination. As this Court has previously ruled in a related action, these affirmative defenses are only available if the defendants can show that the "release or threat of release of a hazardous substance and the damage resulting therefrom were caused solely by" the act of god and/or third-party action. See United States v. Green, 33 F. Supp.2d 203, 213 (W.D.N.Y. 1998) (quoting 42 U.S.C. § 9607(b)). Furthermore, with respect to the latter defense, the defendants must also show that: (1) they exercised due care with respect to all hazardous substances concerned under all relevant circumstances; and (2) they took precautions against foresee able acts or omissions of third persons and all reasonably foreseeable consequences." Id.
The defendants have failed to provide any evidence in support of their affirmative defenses. In fact, the evidence is to the contrary. As noted above, the release of hazardous substances at the site was well documented prior to the fire. This prior contamination by the defendants, if established, render the affirmative defenses unavailable. The defendants have not provided affidavits or other evidence disputing the allegations of prior contamination. Their assertions of nonliability amount to no thing more than conclusory denials that are insufficient to establish a meritorious defense.
In light of the foregoing, the Court finds that the defendants have failed to establish the existence of a meritorious defense. E. Prejudice to the DEC and the Public
In determining whether the default judgment should be vacated, the Court must also consider the prejudice to the opposing party. In this case, there is a significant danger of prejudice not only to the DEC, but also the public. Remediation of the site is a matter of public safety. The DEC has determined that the actual or threatened release of hazardous waste from the site presents a current or potential threat to public health and the environment. That threat continues to exist and may potentially worsen over time if the contamination continues to migrate further off site. Aff. of David Chiusano, at ¶¶ 3, 4. Further delay could also result in loss of funding necessary to implement the project.Id. ¶ 6. This prejudice to the DEC and the public weighs heavily against granting the motion to vacate.
CONCLUSION
In summary, assuming without deciding that notice was required under Fed.R.Civ.P. 55(b)(2) and was not provided, default judgment should nonetheless stand For the reasons stated, the Court finds that the defendants' willful conduct, their failure to present a meritorious defense, and the prejudice to the DEC and the public all weigh against granting the motion to vacate default judgment. Accordingly, the defendants' motion to vacate default judgment is denied. The Clerk of the Court shall take all steps necessary to close this case.
IT IS SO ORDERED.