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Canadyne-Georgia Corp. v. Cleveland

Citation: 30 ELR 20139
No. No. 5:96-CV-114-1 (DF), 72 F. Supp. 2d 1373/49 ERC 1518/(M.D. Ga., 09/30/1999)

The court holds that a pesticide manufacturing partnership is liable for response costs in a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) § 113 contribution action brought by the corporation that purchased the partnership's assets. The court first holds that the validity of an agreement to transfer liability under CERCLA is governed by federal law, but that in this situation state law should be applied in determining whether there was an agreement by the corporation to assume the partnership's CERCLA liability. The court could discern no compelling reason why a uniform federal law should be adopted in this situation. Additionally, Georgia law in this area does not conflict with CERCLA's essential purpose of placing the ultimate responsibility for the cleanup of hazardous waste on those responsible. Moreover, adopting a uniform federal rule in this situation could disrupt commercial relationships predicated on state law. Applying Georgia law, the court next holds that the contract of sale failed to transfer environmental liability from the partnership to the purchasing corporation. The contract specifically stated that the corporation would be responsible for the liabilities listed, and it made no reference to either contingent or environmental liability. Additionally, the bill of sale did not support an inference that the corporation assumed the partnership's liability. Furthermore, even if the corporation is merely a continuation of the partnership, that only means the corporation assumed the partnership's environmental liabilities with respect to third parties. Finally, the court holds that the dissolution of the partnership and distribution of its assets do not absolve it from liability under CERCLA. A partnership's dissolution does not alter the fact that such an entity may have contributed to the disposal of hazardous materials and whether a partnership has assets to satisfy a judgment is irrelevant to the antecedent question of whether such an entity can be found liable under CERCLA.

Counsel for Plaintiff
Walter H. Bush Jr.
Arnall, Golden & Gregory
201 Second St., Ste. 1000, Macon GA 31201
(912) 745-3344

Counsel for Defendants
Russell W. Thorpe
Law Offices of Russell W. Thorpe
1063 Clifton Rd. NE, Atlanta GA 30307
(404) 377-8964