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Andritz Sprout-Bauer, Inc. v. Beazer E., Inc.

Citation: 29 ELR 20003
No. 4:CV-95-1182, 12 F. Supp. 2d 391/(M.D. Pa., 07/22/1998)

The court denies a landowner's motion for partial summary judgment on claims under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Pennsylvania Hazardous Sites Cleanup Act (PaHSCA) against a wire rope manufacturer that previously owned a portion of the contaminated property. The court first holds that the landowner is not entitled to summary judgment on its CERCLA § 107 contribution claim. Third Circuit precedent does not allow recovery under CERCLA § 107 by a party that is itself a potentially responsible party under CERCLA. Thus, evidence from which it can be reasonably inferred that the landowner is not an entirely innocent party precludes it from claiming at summary judgment stage eligibility under a § 107(b) absolute defense. In addition, the landowner's admission that it undertook the cleanup work at the urging of the state environmental agency and under threat of legal action by state agencies is a strong indicator that the landowner bears some culpability for the contamination, and, therefore, cannot claim § 107 status, being relegated instead to a § 113 contribution action.

The court next holds that the landowner's motion for judgment declaring the manufacturer the successor corporation for purposes of assigning CERCLA § 113 liability is denied. The court finds no colorable basis for any assertion that the manufacturer's purchase of one of the plants at the site falls within any of the four traditional exceptions to nonliability on the part of the transferee corporation. In addition, the relevant factors of the continuing enterprise theory do not support a finding that the manufacturer is a successor to the seller's liabilities. Although the manufacturing operation continued uninterrupted after the manufacturer's acquisition, the operation continued under the supervision of different managers, production techniques and practices were modified, and steps were taken to identify the wire rope as a product of the manufacturer's. Furthermore, there is no evidence that the manufacturer held itself out as the seller. The court also denies the landowner's motion for summary judgment on its claim for recovery of response costs under the PaHSCA because it cannot conclude that no defense under PaHSCA § 701(b) applies to the manufacturer.

The court then holds that under CERCLA and the PaHSCA, the landowner has no right to recover response costs associated with the design and implementation of a soil vapor extraction (SVE) system. CERCLA and the PaHSCA exclude from their coverage contamination resulting from the discharge or release of petroleum or petroleum products. The SVE system was designed to eliminate contamination from certain underground storage tanks (USTs), but there is no evidence that the USTs responsible for the contamination contained anything other than gasoline, naphtha, or kerosene, which are all products of petroleum, when the manufacturer owned the property. Furthermore, there is no evidence that the manufacturer maintained a sump hole on the premises and that leachate from that sump hole was responsible for the contamination that the SVE system was designed to eradicate.

The court also holds that the manufacturer is entitled to judgment on the landowner's claim for cleanup costs under the Pennsylvania Clean Streams Law (PaCSL) because there is no private cause-of-action for monetary damages under the PaCSL. In addition, the court holds that the PaCSL does not support negligence per se claims and, thus, judgment will be entered in favor of the manufacturer on the landowner's negligence per se claim alleged under the PaCSL. The court next holds that landowner's negligence per se claim based on alleged violations of the PaCSL and its strict liability claim based on the Pennsylvania Storage Tank and Spill Prevention Act are time barred, because the landowner knew or reasonably should have known all information on which its bases these claims more than two years prior to the filing of this action. The court then holds that the manufacturer is entitled to summary judgment on the landowner's claim in strict liability asserted under Pennsylvania common law based on the alleged storage of hazardous substances on the property. Such claims cannot be asserted against a predecessor-in-title, because no duty is owed to a successor-in-title to refrain from acts that may result in contamination that will have to be dealt with by that individual or entity. The court further holds that under state law, the landowner has no right to invoke claims of contribution, indemnification, and restitution against the manufacturer for costs associated with the SVE system. Last, the court holds that the manufacturer is not liable for costs incurred by the land-owner for contamination associated with a plant it never owned or operated and for contamination offsite because there is no genuine issue of material fact on the issue of migration from the plant that the manufacturer did own to the off-site area.

Counsel for Plaintiff
Steven P. Caley
Kelley, Drye & Warren
101 Park Ave., New York NY 10178
(212) 808-7800

Counsel for Defendants
Hershel J. Richman
Dechert, Price & Rhodes
4000 Bell Atlantic Tower
1717 Arch St., Philadelphia PA 19103
(215) 994-4000