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Pneumo Abex Corp. v. High Point, Thomasville & Denton R.R.

Citation: 28 ELR 21261
(04/29/1998)

The court holds that railroad companies that sold used wheel bearings to a railroad parts foundry for conversion to new wheel bearings are not liable as arrangers under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) § 107. The court first holds that the railroad companies are not covered persons under CERCLA. The phrase "treatment of hazardous substances" as used in CERCLA refers to a party arranging for the processing of a discarded hazardous substances or processing resulting in the discard of hazardous substances. The conversion agreements between the railroad companies and the foundry were not transactions for disposal. Although the conversion process produced slag and dust, slag and dust would be produced even if virgin materials were used to make new bearings. The intent of both parties was that the wheel bearings would be reused in their entirety in the creation of new wheel bearings. The foundry paid the railroads for the bearings; the railroads did not pay the foundry to dispose of unwanted metal. The court also holds that on remand the apportionment of liability should be governed by CERCLA § 113. The case before the district court involved entirely potentially responsible parties, and such parties must seek contribution under CERCLA § 113.

Counsel for Plaintiffs
Kevin A. Gaynor
Vinson & Elkins
The Willard Office Bldg.
1455 Pennsylvania Ave. NW, Washington DC 20004
(202) 639-6500

Counsel for Defendant
Joseph G. Homsy
Zevnik, Horton, Guibord & McGovern
77 W. Wacker Dr., 33d Fl., Chicago IL 60601
(312) 977-2500

Before Luttig and Goodwin, JJ.