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United States v. Barrier Indus., Inc.

Citation: 28 ELR 21128
No. 95 Civ, 9114(JSR), 991 F. Supp. 678/(S.D.N.Y, 01/27/1998)

The court holds that a chemical manufacturer is liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the response costs incurred at its New York facility. The court first holds that the manufacturer's CERCLA § 107(b) act of God defense must be rejected. The manufacturer claimed that spills at its facility were caused by a bursting of pipes occasioned by an unprecedented cold spell. However, nothing in the record before the court remotely suggests that this cold spell falls within the CERCLA definition of an act of God. Moreover, CERCLA § 107(b) permits such a defense only if the release or threatened release of hazardous substances was caused solely by the act of God. The government has adduced substantial undisputed evidence that numerous other factors antedating the cold weather causally contributed to the problems at the manufacturer's site. The court also rejects the manufacturer's argument that the U.S. Environmental Protection Agency's remedial actions did not conform with the national contingency plan. Thus, summary judgment is granted in favor of the government and against the manufacturer on the issue of CERCLA liability.

The court next voids a divorce settlement property transfer, which the manufacturer intended to hinder the government's ability to collect CERCLA response costs. The court rejects the argument that the manufacturer's ex-wife is entitled to keep the property because she took it in good faith and for reasonably equivalent value. While the government has adduced substantial evidence that the ex-wife neither took the farm property in good faith nor gave reasonably equivalent value, the ex-wife relies on the legal argument that a property settlement duly incorporated in a state court divorce judgment automatically satisfies the requirement for taking in good faith. This contention, however, has previously been rejected by other courts. The dissolution of marriage was never intended to be a vehicle to effect a fraudulent end or to transmute that which would otherwise be fraudulent into something lawful.

The court next holds that the manufacturer's CERCLA contribution claim against a former occupant of the manufacturer's facility must be dismissed on the pleadings. Any liability on the part of the occupant would have to be predicated on either former operator liability under CERCLA § 107(a)(2), or arranger liability under § 107(a)(3). The manufacturer's one-sentence complaint against the former occupant fails to allege that the occupant was either an operator of the facility at the time of disposal of hazardous waste or arranged for such disposal.

Counsel for Plaintiff
Mary Jo White, U.S. Attorney
U.S. Attorney's Office
One St. Andrew's Plaza, New York NY 10007
(212) 791-0008

Counsel for Defendants
Neil D. Grossman
Chase A. Caro & Associates
The Lincoln Bldg.
60 E. 42d St., Ste. 2001, New York NY 10165
(212) 682-6000