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American Nat'l Bank & Trust Co. v. Harcros Chems., Inc.

Citation: 28 ELR 21385
No. 95 C 3750, 997 F. Supp. 994/(N.D. Ill., 03/06/1998)

The court holds that material questions of fact preclude finding a timber company immune from Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) liability for the past and future cleanup costs of a chemical storage site allegedly contaminated, in part, by releases from the timber company's property. The owners of the chemical storage site claimed that the contamination resulted from releases from the chemical storage site, the timber company's site, and a canal between the two sites, which the timber company supposedly owned. The court first holds that the two sites that allegedly constitute the timber company's property meet the definition of a facility under CERCLA. The court next holds that the presence of hazardous substances at the sites at issue supports a conclusion that releases have occurred on the timber company's sites, even if questions remain as to whether those substances have migrated to the adjacent chemical storage site. The court further holds that the timber company is a covered person under CERCLA § 107. The fact that a fence currently stands on the property that was the canal approximately midway between the chemical storage site and the timber company's site calls into question the ownership of the canal. The issue of whether the timber company owns the canal, however, is not necessarily dispositive of the larger issue of liability, because liability may rest with the timber company's site. It is clear that the timber company owns its own site and, thus, is a responsible person as to the site. The court also holds that a material question of fact exists as to whether the cleanup costs incurred are in response to releases in the canal, the timber company's site, or the chemical storage site.

In addition, the court holds the timber company is not entitled to CERCLA § 107(b)(3)'s third-party affirmative defense. The timber company satisfies the contractual relationship of the CERCLA § 107(b)(3) third-party defense. The broader interpretation of § 107(b)(3), which requires a connection between the contractual relationship and the act or omission that resulted in the contamination, is the most reasonable interpretation based on the plain language of the statute. The timber company had a contractual relationship with the third parties allegedly responsible for a release from the canal, but there is no evidence in the record that this contract was in any way connected to the contamination in the canal. However, there is no evidence that the timber company attempted to ascertain the nature or degree of the threat posed by the hazardous substances in the canal. And a reasonable jury could find that the timber company should have exercised more care to prevent adverse consequences arising from the contamination in the canal.

Counsel for Plaintiffs
Laurence H. Levine
Latham & Watkins
Sears Tower, Ste. 5800, Chicago IL 60606
(312) 876-7700

Counsel for Defendants
Steven J. Martin
Pretzel & Stouffer
One S. Wacker Dr., Ste. 2500, Chicago IL 60606
(312) 346-1973