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You're viewing Docket Item 1 from the case LOCKHEED MARTIN CORPORATION et al v. UNITED STATES OF AMERICA. View the full docket and case details.

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Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 1 of 14

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA



LOCKHEED MARTIN CORPORATION
6801 Rockledge Drive
Bethesda, MD 20817

UNISYS CORPORATION
Unisys Way
Blue Bell, PA 19424




UNITED STATES OF AMERICA,




Defendant.

Plaintiffs,

vs.

























Civil Action No.



COMPLAINT FOR RECOVERY OF RESPONSE COSTS

AND DECLARATORY RELIEF

1.

Lockheed Martin Corporation ("Lockheed Martin") and Unisys Corporation

("Unisys") (Lockheed Martin and Unisys will hereafter be referred to as "Plaintiffs") hereby

complain against the United States of America ("the United States" or "the Government") to

recover response costs pursuant to Section 107 of the Comprehensive Environmental Response,

Compensation, and Liability Act of 1980 ("CERCLA"), as amended, 42 U.S.C. 9607. These

claims involve a military equipment manufacturing facility at 365 Lakeville Road in Great Neck,

New York (the "Great Neck Manufacturing Facility"), at which hazardous substances, including,

without limitation, trichloroethylene ("TCE") and tetrachloroethylene ("PCE"), have been

detected in the soil and groundwater underneath and surrounding the facility. Plaintiffs seek to

recover certain remediation and cleanup costs, including, but not limited to, all costs incurred in

the past and to be incurred in the future to clean up the groundwater and soil at and around the

Great Neck Manufacturing Facility.



Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 2 of 14

THE PARTIES

2.

Plaintiff Lockheed Martin is a Maryland corporation. Lockheed Martin is the

corporate parent of Lockheed Martin Tactical Systems, a wholly owned subsidiary. Lockheed

Martin Tactical Systems was formed in 1996 when LAC Acquisition Corporation merged with

the Loral Corporation.

3.

Plaintiff Unisys is a Delaware corporation. Unisys was formed in 1986 by the

merger of Sperry Rand Corporation and Burroughs Corporation. Sperry Rand Corporation, in

turn, was formed by the merger of Sperry Corporation and Remington Rand in 1955. The

predecessor of Sperry Corporation, Sperry Gyroscope Company, was founded in 1910. In 1995,

Loral Corporation purchased certain assets of Unisys, including the Great Neck Manufacturing

Facility.

4.

Defendant United States resides, may be found, and has its principal office in the

District of Columbia. The Government conducts business through its various agencies, including

the General Services Administration; the Departments of Defense, including the Army, the Air

Force, the Navy, and their predecessors in interest; and through its former agencies, including the

War Assets Administration, the Defense Plant Corporation, and the Reconstruction Finance

Corporation.1

1 The Reconstruction Finance Corporation was a Government corporation established by



Congress in 1932. H.R. 7360, 72d Cong., 1st Sess., ch. 8, Pub. L. No. 2, 47 Stat. 5-12 (Jan. 22,
1932). The Reconstruction Finance Corporation established the Defense Plant Corporation as a
subsidiary on August 23, 1940, pursuant to Section 5-d of the Reconstruction Finance Act. After
World War II, pursuant to a joint resolution of Congress, the Reconstruction Finance
Corporation succeeded to all functions, rights and assets of the Defense Plant Corporation, S.
Con. Res. 65, 79th Cong., 2d Sess., ch. 215, Pub. L. No. 109 (June 30, 1945). The
Reconstruction Finance Corporation continued to act by and through the General Services
Administrator pursuant to the Surplus Property Act of 1944, H.R. 5125, 78th Cong., 2d Sess., ch.
479, Pub. L. No. 457, 58 Stat. 764, the Federal Property and Administrative Services Act of

2

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 3 of 14

JURISDICTION AND VENUE

5.

This Court has jurisdiction pursuant to Sections 107(a) and 113(b) of CERCLA,

42 U.S.C. 9607(a) and 9613(b), and 28 U.S.C. 1331.

6.

Venue is proper in this judicial district pursuant to Section 113(b) of CERCLA,

42 U.S.C. 9613(b), and 28 U.S.C. 1391(b) and (e), because the defendant resides, may be

found, or has its principal office within this district.

GOVERNMENT OWNERSHIP AND CONTROL OF OPERATIONS AT

THE GREAT NECK MANUFACTURING FACILITY

7.

Prior to World War II, Sperry Gyroscope Company was a producer of maritime

gyrocompasses. At the direction of Army Air Forces personnel, Sperry expanded its research

and development activities and manufacturing to include bombsights, fire control systems and

other necessary wartime equipment and materials.

8.

In 1941, the United States War Department determined that "the substantial

expansion of the existing capacity for the production of scientific equipment for navigation,

communication and fire control, and other products required by the Government for its National

Defense Program is essential," and, accordingly, "the establishment of an additional plant at or

near North Hempstead, Long Island, New York for operation by Sperry Gyroscope Company,

Inc. (hereinafter called 'Sperry') and the acquisition of machinery and equipment for use by

Sperry in said plant are required." The War Department agreed to reimburse the Defense Plant

Corporation for acquisition of property and construction of the new plant.


1949, H.R. 4754, 81st Cong., 1st Sess. ch. 288, Pub. L. No. 152, 63 Stat. 377, and regulations
and orders promulgated thereunder.

3

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 4 of 14

9.

After a wide-ranging search for a suitable plant location, the United States

Defense Plant Corporation identified approximately 130 acres of undeveloped land owned

primarily by individual landowners around Lake Success, New York as the best available site for

a new aeronautical equipment plant. The individual landowners sold or donated their parcels of

land to the Government to allow the war production plant to be built.

10.

In July of 1941, the Defense Plant Corporation entered into a contract and lease

with Sperry Gyroscope Company under which Sperry, acting expressly as an agent for the

Defense Plant Corporation, hired Stone Weber Guy, Inc. to construct the Great Neck

Manufacturing Facility on the Lake Success property. Under the contract between Sperry

Gyroscope Company and the Defense Plant Corporation, the United States reviewed and

approved all construction and equipment plans for the Great Neck Manufacturing Facility.

Construction on the Great Neck Manufacturing Facility was completed at a cost of almost

$40,000,000, and the facility began war production in February of 1942.

11.

The Great Neck Manufacturing Facility

lease between Sperry and

the

Government prohibited Sperry from performing any non-governmental work at the facility

without prior approval from the Government. That lease also provided that all of the equipment

used at the Great Neck Manufacturing Facility was Government owned.

12.

During World War II, the Government controlled every aspect of the Great Neck

Manufacturing Facility's day-to-day operations, including the following:

a)

The Government determined the products, rate of production and delivery of

military equipment from Sperry;

4

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 5 of 14

b)

The Government required Sperry to use particular subcontractors to facilitate

production;

c)

The Government controlled the price and supply of raw materials, including

solvents such as TCE and PCE, used at the Great Neck Manufacturing Facility;

d)

The Government controlled the price Sperry would be paid for its finished

products by, among other things, requiring Sperry to renegotiate its supply

contracts with third parties under the Renegotiation Act, P.L. 77-528, 403, 56

Stat. 245 (April 28, 1942), and other price control legislation;

e)

The Government controlled Sperry's labor force by, among other things,

controlling employee hours and pay rates at the Sperry facility, handling

personnel issues at the Sperry facility, and obtaining draft deferrals for certain key

Sperry employees.

13. More than 100 military personnel were stationed at the Great Neck Manufacturing

Facility throughout most of World War II. These military personnel took over many of the

traditional functions of management including, without limitation, controlling the source of raw

materials; expediting materials to Sperry; inspecting and testing raw materials, manufacturing

processes and completed equipment; and providing security for the facility.

14.

In October of 1950, Sperry Corporation, the successor to the Sperry Gyroscope

Company, purchased the Great Neck Manufacturing Facility from the Reconstruction Finance

Corporation, the successor to the Defense Plant Corporation.

5

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 6 of 14

15.

The Government required the sale of the Great Neck Manufacturing Facility to be

subject to a National Security Clause, which was affixed to the deed for the property pursuant to

the National Industrial Reserve Act of 1948, Pub. L. No. 80-883, 62 Stat. 1225 (1948). That

National Security Clause expressly reserved to the Government an ownership interest in the

Great Neck Manufacturing Facility for a period of twenty years. The Government maintained

this ownership interest in the Great Neck Manufacturing Facility from October of 1950 until

December 2, 1970.

16.

At various times between 1950 and 1970, the Government exercised its property

rights under the National Security Clause. The Government refused to allow Sperry to install a new sewer connector to the Great Neck Manufacturing Facility until Sperry paid the Government to release the clause. The Government also refused to allow Sperry to sell an unused, outdated building on the site without prior government approval.

17.

After Sperry purchased the plant in 1950, the vast majority of the work at the
Great Neck Manufacturing Facility continued to be performed under Government contracts.

18.

The Government assigned permanent resident military representatives to the
Great Neck Manufacturing Facility to oversee each contract. After World War II, the number of resident military representatives located at the Great Neck Manufacturing Facility varied.

19.

The Government controlled which customers could purchase equipment produced
at the Great Neck facility after World War II by, among other things, preventing Sperry from exporting equipment it manufactured. 6

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 7 of 14

20.

Pursuant to federal procurement regulations and procurement contracts with the
Government, all equipment, parts, tooling, supplies, and other materials acquired or
manufactured at the Great Neck Manufacturing Facility in connection with a contract, the cost of which was chargeable to the contract, became the property of the Government. Under these regulations and contracts, the Government owned the raw materials, including solvents such as TCE and PCE, trichloroethylene (TCE)  tetrachloroethylene (PCE) used to manufacture aeronautical equipment. The Government also owned all scrap material generated from any government furnished material.

21.

Upon completion of a production contract, personnel at the Great Neck Manufacturing Facility were required to obtain the Government's approval for the disposition of
all Government property, return it to the Government, or use the property on another
Government contract. All proceeds for the sale of surplus Government property were paid to the Government.

22.

Government contracts required the use of Government-owned or Government-
specified materials in connection with the production of aeronautical equipment at the Great
Neck Manufacturing Facility.

23. During the entire period of operations at the Great Neck Manufacturing Facility, the Government promulgated technical, operational and material specifications for
manufacturing processes and materials. Compliance with military specifications was mandatory for every contract with the Government. In order to deviate from a military specification, formal written approval was required from the Government. Internal process standards and reliability standards at the Great Neck Manufacturing Facility were based on military specifications.

7

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 8 of 14

24. Many of the military specifications governing production at the Great Neck
Manufacturing Facility required the use of TCE and PCE in the manufacturing process.

25. TCE or PCE was used in vapor degreasing operations and in other manufacturing
processes from 1942 through 1979. After 1969, the use of TCE was largely replaced by PCE. Manufacturing activities at the Great Neck Manufacturing Facility slowed significantly in the 1970s and 1980s.

PLAINTIFFS' RESPONSE TO THE RELEASE OF HAZARDOUS
SUBSTANCES FROM THE GREAT NECK MANUFACTURING
FACILITY

26. The "Great Neck Site" is the area of soil and groundwater contamination, including, without limitation, TCE, PCE, and/or other volatile organic compounds, presently located at, under or around the Great Neck Manufacturing Facility in Nassau County, New York, and includes any areas to which such groundwater and soil contamination may migrate.

27. Hazardous substances, including, without limitation, TCE, PCE, and/or other volatile organic compounds, were released in the course of operations at the Great Neck
Manufacturing Facility. As the result of these releases, hazardous substances, including, without limitation, TCE, PCE and other volatile organic compounds, have come to be located in the groundwater and real property at the Great Neck Site.

28. In 1978, solvent contamination was discovered outside the southeast corner of the
manufacturing building in the area where a dry well was located. The dry well was part of the original design and construction of the facility in 1941 and 1942, and was connected to floor 8

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 9 of 14

drains throughout the manufacturing building. In response to this discovery, working with the
Nassau County Department of Health, Unisys plugged the drains leading to the dry well.

29. In 1988, as a result of a voluntary investigation, Unisys notified state environmental regulators of possible soil and groundwater contamination in the area of the former dry well.

30. On or about December 13, 1991, Unisys and the New York State Department of
Environmental Conservation ("NYSDEC") entered into an Agreed Order on Consent ("Order"), declaring the Great Neck Site to be an inactive hazardous waste disposal site that presented a significant threat to the public health or environment. Under the terms of the Order, Unisys was required to delineate the extent of contamination, design an Interim Remedial Measure, and develop and implement a Remedial Investigation and Feasibility Study to address the releases of hazardous substances at the Great Neck Site.

31.

The Order required Unisys to address both on-site contamination and off-site

contamination attributable to the Great Neck Manufacturing Facility. The Order required that all

work be completed in accordance with EPA's "Guidance for Conducting Remedial Investigations

and Feasibility Studies under CERCLA."

32.

Interim remedial measures were initiated in 1993, and a Record of Decision

identifying a final remedy for on-site contamination was issued by NYSDEC in 1997. The

Record of Decision required Plaintiffs to implement certain remedial activities at the Great Neck

Site.

9

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 10 of 14

33.

Beginning in 1998, and continuing to the present, Lockheed Martin and Unisys

entered into a series of agreements with the United States tolling the limitations period applicable

to any cause of action under CERCLA for costs of response, recovery of costs and/or

contribution related to environmental response costs that have been and/or may be incurred in

connection with the Great Neck Manufacturing Facility.

34.

Plaintiffs have incurred and will continue to incur response costs for remediation

at the Great Neck Site in compliance with the Order and the Record of Decision, in an amount to

be proven at trial, to facilitate an expeditious clean-up, to further the public interest, and to

protect the environment. Prior to its sale of the property, Unisys incurred approximately $11

million in response costs. Since acquiring the property, Lockheed Martin has incurred more than

$30 million in response costs, and anticipates that the cost of completing remediation of the soil

and groundwater at the Great Neck Site could be in excess of $70 million.

FIRST CAUSE OF ACTION

(Cause of Action under CERCLA 107(a), 42 U.S.C. 9607(a))

35.

Plaintiffs reallege and incorporate herein by reference the allegations in

paragraphs 1 through 34 inclusive, as set forth in full.

36.

The United States is a "person" as defined in Section 101(21) of CERCLA, 42

U.S.C. 9601(21), and has waived its sovereign immunity pursuant to Section 120(a) of

CERCLA, 42 U.S.C. 9620(a).

37.

Lockheed Martin and Unisys are both "persons" as defined in Section 101(21) of

CERCLA, 42 U.S.C. 9601(21).

10

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 11 of 14

38.

The Great Neck Site and Manufacturing Facility is a "facility" under Section
101(9) of CERCLA, 42 U.S.C. 9601(9), where hazardous substances, including TCE, PCE and other volatile organic compounds, have come to be located.

39.

TCE, PCE and the other volatile organic compounds are "hazardous substances"
as defined in Section 101(14) of CERCLA, 42 U.S.C. 9601(14).

40.

The release or threatened release of hazardous substances at the Great Neck Site
has caused Plaintiffs to incur "response costs," as defined in Section 101(25) of CERCLA, 42U.S.C. 9601(25). Plaintiffs are incurring and will continue to incur additional response costs at the Great Neck Site.

41.

Plaintiffs' response actions taken at the Great Neck Site and the costs incurred in
connection therewith were and are necessary and consistent with the National Contingency Plan, as codified at 40 C.F.R. Part 300 ("NCP").

42.

Plaintiffs have satisfied any and all conditions precedent to the undertaking of
response actions, the incurrence of response costs, and the recovery of those costs under Section 107 of CERCLA, 42 U.S.C. 9607.

43.

Pursuant to Section 107(a) of CERCLA, 42 U.S.C. 9607(a), the United States
falls within the class of persons subject to liability for past and future response costs that
Plaintiffs have incurred or will incur at the Great Neck Site. At the Great Neck Site, the UnitedStates owned, operated and controlled the land, facilities, equipment and materials used in the production of aeronautical equipment, including TCE, PCE and other volatile organic compounds and hazardous substances; and had the authority, and actually exercised its authority,

11

Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 12 of 14

to control the use and storage of hazardous substances at the Great Neck Manufacturing Facility at the time of release or threatened release of hazardous substances, including TCE, PCE and other volatile organic compounds.

44.

The United States also arranged for the disposal of hazardous substances, supplied
raw materials including hazardous substances for production at the Great Neck Site, owned and controlled the work at the Great Neck Site, and knew or should have known that the generation and disposal of hazardous substances was inherent in the production processes that were performed for the United States and at the United States' direction.

SECOND CAUSE OF ACTION

(Declaratory Relief Under CERCLA 113(g), 42 U.S.C. 9613(g) and the Declaratory 
Judgment Act, 28 U.S.C. 2201)

45.

Plaintiffs reallege and incorporate herein by reference the allegations in

paragraphs 1 through 44, inclusive, as set forth in full.

46.

An actual legal controversy has arisen and now exists between Plaintiffs and the

United States, and Plaintiffs seek a judicial declaration of rights and legal relations with respect

to the United States pursuant to CERCLA Section 113(g)(2), 42 U.S.C. 9613 (g)(2) and 28

U.S.C. 2201. Plaintiffs contend that the United States is liable to Plaintiffs under CERCLA

Section 107(a), 42 U.S.C. 9607(a), and that the United States is liable to Plaintiffs for their

past, current, and future response costs related to the Great Neck Site. Plaintiffs are informed

and believe, and based thereon allege, that the United States contends in all respects to the

contrary.

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Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 13 of 14

47.

A declaratory judgment is appropriate and is in the interests of justice because,

among other reasons, it will obviate the need for multiple lawsuits in the future, thereby

providing a complete resolution of the disputes between the parties.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, Lockheed Martin and Unisys, pray for a judgment against the

United States as follows:

a.

For recovery from the United States under CERCLA for the response costs and
damages relating to the Great Neck Site incurred by Plaintiffs, or for recovery of a portion of the response costs equitably allocated to the United States, in an amount to be determined at trial;

b.

For pre-judgment interest at the maximum rate allowable by law, from the time
Plaintiffs incurred their response costs and damages relating to the Great Neck Site;

c.

For Plaintiffs' reasonable attorney's fees and costs of investigating the potential
responsibility of the United States, and for conducting other reasonable and related
investigations;

d.

e.

For Plaintiffs' costs of litigation;

For a declaratory judgment that future costs of response at the Great Neck Site

will be paid in whole or in equitable part by the United States; and

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Case 1:06-cv-01438-RJL Document 1 Filed 08/15/2006 Page 14 of 14

f.

For such other and further relief as the Court may deem just and proper.
Dated: August 15, 2006

Respectfully submitted,
/s/ Peter E. Seley

Peter E. Seley, D.C. Bar Number 440936
Michael K. Murphy, D.C. Bar Number 468907
GIBSON, DUNN & CRUTCHER, LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 955-8500

Counsel for Plaintiffs Lockheed Martin Corporation
and Unisys Corporation

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