ELR Citation: ELR 20811
No(s). 99-3865 (3d Cir. Jul 17, 2001)

The court holds that a New York state court declaratory judgment requiring the owner of a contaminated site to indemnify the former owner of the site for all environmental costs arising from the current owner's purchase is sufficiently final to be given preclusive effect in federal court despite the fact that damages have yet to be decided by the state court. The state court held the current owner contractually liable for costs stemming from environmental damage at the site, including Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) claims, pursuant to an indemnification agreement the parties entered into. Although the New York state courts have not yet determined damages, the current owner filed a contribution action against the former owner in federal court. The former owner moved for summary judgment asking the district court to invoke New York's collateral estoppel law to give preclusive effect to the state court decision, and the district court properly did so.

The court first holds that the district court's decision should be affirmed because all three requisite elements of New York collateral estoppel law—finality, identical issues, and a full and fair opportunity to litigate—are present. Although the state decision is not final for purposes of an appeal to the New York Court of Appeals given that damages remain to be litigated, the nature of the lower state court's decision as to liability is in no way tentative. Moreover, under New York law, the scope of the indemnity provision is sufficiently broad to encompass the identical issues in the federal CERCLA contribution case, and the parties had a full and fair opportunity to litigate the issue before the New York courts.

[No counsel available at this printing.]

Ambro, J. Before Barry and Greenberg, JJ.^*