Jump to Navigation
Jump to Content

FMC Corp. v. Northern Pump Co.

ELR Citation: 18 ELR 20293
Nos. No. 4-84-1365, 668 F. Supp. 1285/26 ERC 1566/(D. Minn., 08/20/1987)

The court holds that the buyer of a contaminated hazardous waste site may not recover cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) from a seller that did not itself dispose of hazardous waste at the site, is not accountable for its subsidiary's hazardous waste disposal at the site, and has obtained a release from the buyer of the subsidiary's liabilities. The court first holds that although the seller, which owned the facility when the hazardous wastes were disposed of, is potentially liable under CERCLA §107, it is not accountable for the hazardous waste disposal of its subsidiary. Accountability, in addition to legal liability, is necessary before a private party can recover its response costs from another private party. The court holds that the buyer released the seller from its subsidiary's liabilities, including liabilities based on future causes of action such as those arising under CERCLA. Moreover, the seller neither generated nor disposed of hazardous waste, nor knew that the subsidiary did so. The court holds that the buyer has not sufficiently demonstrated the existence of an agency relationship between the seller and the subsidiary. The seller was not involved in the subsidiary's day-to-day operations or financial affairs. Even if there were an agency relationship, there is no reasonable basis for inferring that the seller authorized the disposal of hazardous waste. It is unlikely that high management, such as the officers common to the two companies, would be concerned with waste disposal. Although the seller's officers knew that the subsidiary disposed of waste, they did not know that the waste contained hazardous constituents.

Counsel for Plaintiff
Joe A. Walters, William E. Flynn
O'Connor and Hannan
3800 IDS Ctr., 80 S. 8th St., Minneapolis MN 55402-2254
(612) 343-1200

Counsel for Defendant
William Killian, David Coyne
Gray, Plant, Mooty, Mooty & Bennett
3400 City Ctr., 33 S. 6th St., Minneapolis MN 55402
(612) 343-2800