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Axel Johnson, Inc. v. Carroll Carolina Oil Co.

Citation: 30 ELR 20084
No. No. 99-1041, 191 F.3d 409/49 ERC 1270/(4th Cir., 09/14/1999) ruling on CERCLA actions

The court holds that the former owner and operator of a refinery may not bring cost recovery or contribution actions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against the subsequent and current owners. The court first holds that the former owner is a person potentially responsible for cleanup costs under CERCLA §107. Under CERCLA §107 a former owner or operator can be held liable for response costs caused by hazardous substances that were deposited at the facility at times when it did not own or operate the facility, so long as some hazardous substances were deposited when the party did own or operate the facility and the other requirements of the statute are met.

The court next holds that the former owner does not qualify as an "innocent party" and therefore, cannot bring §107 cost recovery actions against the subsequent and current owners. The former owner bears responsibility for at least some of the hazardous materials spilled at the property. In addition, the court holds that liability cannot be limited by dividing the property into multiple, separate parts. Contamination is widespread throughout the property, the refinery was at all relevant times operated by a single party, and both the U.S. Environmental Protection Agency (EPA) and the former owner treated the entire property as a single facility for CERCLA remediation purposes. The court additionally holds that the former owner's claim for contribution under CERCLA §113 is rendered moot by the entry of a consent decree between the subsequent and current owners and EPA.

Counsel for Plaintiff
Kenneth Berlin Sr.
Skadden, Arps, Slate, Meagher & Flom
1440 New York Ave. NW, Washington DC 20005
(202) 371-7000

Counsel for Defendants
Matthew P. McGuire
Hunton & Williams
One Hannover Sq., 14th Fl., Raleigh NC 27602
(919) 899-3000

Before Murnaghan and Luttig, JJ.