Jump to Navigation
Jump to Content

Harley-Davidson, Inc. v. Minstar, Inc.

ELR Citation: 25 ELR 20176
Nos. No. 94-2171, 41 F.3d 341/39 ERC 1926/(7th Cir., 11/30/1994)

The court holds that an indemnification clause in a purchase agreement for a manufacturing plant that was subsequently found to be contaminated is enforceable under §107(e) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and applies to bar recovery of cleanup costs by the purchaser's successor in a contribution action against the seller's successors. The court first holds that CERCLA §107(e) does not bar indemnification agreements, it merely precludes efforts to divest a responsible party of its liability. The court reasons that indemnification does not shift liability from one person to another because the indemnified party remains fully liable to whomever he has wronged, it merely allows him to share the expense. The court notes that it would be extraordinary if CERCLA's authors had wanted to bar insurance against CERCLA liability in the absence of a determination of negligence or deliberate wrongdoing under CERCLA's strict liability scheme. Moreover, Congress did not express concern about moral hazard that would cause Congress to intend to forbid polluters to insure. The court next holds that the indemnification clause is sufficiently broad to cover the contamination at the York, Pennsylvania, site. Liability arising from the contamination of the land owned by the York division of the sellers' predecessor "relates to" that division.

Counsel for Plaintiff
Jeffrey P. Clark
Reinhart, Boerner, Van Deuren, Norris & Rieselbach
1000 N. Water St., Ste. 2100, Milwaukee WI 53202
(414) 298-1000

Counsel for Defendants
Andrew J. Schlickman
Sidley & Austin
One First National Plaza
Chicago IL 60603
(312) 853-7404

Before POSNER, Chief Judge, BAUER, Circuit Judge, and WILL, District Judge.*