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PVO Int'l, Inc. v. Drew Chem. Corp.

Citation: 19 ELR 20077
No. No. 87-3921, (D.N.J., 06/27/1988)

The court holds that the purchaser of contaminated property may sue the seller for response costs under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but the plaintiff's assumption of defendant's obligationsin state consent orders may defeat its innocent purchaser status. The court holds that CERCLA § 107(a) requires it to allocate cleanup costs between the parties in an equitable manner. Although § 107(a) does not explicitly provide for apportionment of costs between liable parties, the provision should be read in conjunction with CERCLA § 113(f), which allows for equitable allocation of response costs. The court notes that a relevant equitable consideration in allocating liability could be the increase in the property's value once it is cleaned up. The court holds that the fact that the defendant seller has not incurred response costs is irrelevant to a determination of the plaintiff's liability under § 107(a). The court declines to rule at this time on plaintiff's liability. Plaintiff's assumption of the defendant's obligations in consent orders entered into with state environmental authorities provides some evidence that it had reason to know of the contamination when it purchased the property, which would negate its innocent purchaser defense, but it is not clear whether the discharges were actually sufficient to put plaintiff on notice of the contamination.

Counsel for Plaintiff
Edward A. Zunz
Riker, Danzig, Scherer, Hyland & Perretti
1 Speedwell Ave., Headquarters Plaza, Morristown NJ 07960
(201) 538-0800

Counsel for Defendant
Frederick L. Whitmer
Pitney, Hardin, Kitt & Szuch
163 Madison Ave., CN 1945, Morristown NJ 07960
(201) 267-3333