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Farmland Indus., Inc. v. Morrison-Quirk Grain Corp.

ELR Citation: 23 ELR 20869
Nos. Nos. 92-1322, -1390, 987 F.2d 1335/(8th Cir., 03/08/1993)

The court, in a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §113 contribution action for response costs incurred at the FAR-MAR-CO Superfund site near Hastings, Nebraska, remands for a new trial, holding that incomplete jury instructions might have caused jury confusion over a prior court decision in a governmental enforcement case involving the site. The court also holds that the determination in the prior case that the former owner was a responsible person could not have collateral estoppel effect. In the prior action brought by the United States for past and future response costs incurred by the government at the site related to contamination from a liquid grain fumigant, the district court determined that the defendant in the present action owned the subsite during the time that a hazardous release occurred and held that the defendant was a responsible person under CERCLA §107(a)(2). The court expressly noted, however, that its holding was not based on a determination that the defendant had caused the contamination at the site.

The appellate court first holds that the principles of collateral estoppel do not mandate a finding that the prior owner of the site caused the contamination at the site. The issue of whether the prior owner should be liable to the subsequent owner for any expenses incurred as a result of contamination at the site is inextricably linked to causation. However, because the prior judgment involved no determination as to causation, collateral estoppel cannot be applied to the issue of liability. The court also upholds the district court's refusal to grant the prior owner's motion for summary judgment on the issue of CERCLA liability. The determination that a former owner was a responsible party under CERCLA did not establish that it was liable to the subsequent owner for CERCLA contribution. A private party cannot predicate a claim for contribution solely on §107(a) liability to the government as a responsible party, but must prove causation as well.

Addressing the contended impropriety of the jury instructions, the court holds that the lower court's case instructions were confusing to the jury because it informed the jury that the former owner caused the federal government to incur response costs and that it was a person responsible for those costs without explaining the CERCLA statutory scheme with regard to liability to third parties. Although the lower court properly defined the issue before the jury as the causation of the contamination at the site, the instructions given at the close of evidence defined the elements of the contribution claim in terms of causation of response costs, and were therefore incomplete. The lower court should have provided more detailed instructions on the various facets of CERCLA liability, or explained the difference between the standards for liability to the government under §107 and for liability to a third party under §113. The court also holds that the lower court failed to provide the CERCLA definition of "person responsible" in its instructions. Such a definition is necessary because the commonsense definition of the phrase conflicts with applicable law. Finally, the court holds that the district court erred in instructing the jury that it could find both parties to be entitled to a verdict against the other, because the court had already instructed the jury that each party claimed that the other was solely responsible.

Counsel for Appellee
Alvin D. Shapiro
Commerce Tower
911 Main St., Ste. 2302, Kansas City MO 64105
(816) 474-6824

Terry R. Wittler
Cline, Williams, Wright, Johnson & Oldfather
1900 Firstier Bank Bldg., Lincoln NE 68508
(402) 474-6900

Counsel for Appellants
William T. Session, Richard H. Ralston, Miriam Glueck
Polsinelli, White, Vardeman & Shalton
Plaza Steppes
700 W. 47th St., Ste. 100, Kansas City MO 64112
(816) 753-1000

Before FAGG, BEAM, and HANSEN, Circuit Judges.