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United States v. Summit Equip. & Supplies, Inc.

ELR Citation: 26 ELR 20082
Nos. No. 5:90CV1704, 805 F. Supp. 1422/(N.D. Ohio, 07/21/1992)

The court holds that a scrap metal processing company, its owner, and several companies that sold it used equipment are liable under §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for costs the United States incurred during a removal action at the processing company's facility. The court first holds that a report on the extent of the contamination at the facility, a report summarizing the removal actions taken at the facility, and an affidavit by the on-scene coordinator, based on those reports, are all admissible to prove that a release or threatened release of hazardous substances took place at the facility. The documents are not inadmissible hearsay. It is clear that the on-scene coordinator played an important role in the creation and compilation of one of the reports. Authentication for the other report is provided by the removal contractor's senior project manager, who was the chief coordinator and records custodian for the contract. Since the preparation of that report was a regular business activity, it is admissible under Fed. R. Evid. 803(6). The court holds that both reports are also admissible under Fed. R. Evid. 803(6). The court holds that both reports are also admissible under Fed. R. Evid. 803(8)(C), which provides for the admission of factual findings resulting from investigation made pursuant to authority granted by law. Both reports were made under the direction of the U.S. Environmental Protection Agency, which has the authority to take all necessary action to remedy a release or threatened release of hazardous substances. Moreover, the preparation, sources, and content of the reports do not indicate a lack of trustworthiness. The court holds that there is no genuine issue of material fact that a release or threatened release occurred at the facility. The court thus holds that the company and its owner, who do not dispute that they are "owners and operators" of a "facility," are liable under CERCLA. The court next holds that the affidavits of the company owner and a company employee indisputably establish that the employee was not an operator of the facility. He was a salaried employee and merely acted as a buyer of scrap. The employee did not have an equity share of the company's earnings and possessed no authority over operations at the facility. Accordingly, the court holds that the employee is not liable under CERCLA.

The court next holds that the sellers of the used equipment are only liable if they arranged for disposal or treatment of hazardous substances at the facility. The court holds that if a company sells equipment that contains hazardous substances to another company for a purpose other than its disposal, it will not be liable for the costs that result from the purchaser's subsequent decision to dispose of the product after using it. On the other hand, if a company sells equipment that contains hazardous substances in order to dispose of the product, it will be liable for the costs that result from that disposal even if the equipment is valuable and useable at the time of sale. The court notes that while all three of the sellers made serious and aggressive attempts to market their equipment to companies that would use it, they never placed any limitations on the future use of the product and never inquired about the purchasers' intentions. The court holds that they cannot avoid liability simply by keeping blinders on during the transaction. Any other interpretation of §107(a)(3) would clearly frustrate the government's ability to hold the generators of hazardous waste accountable for the damages caused by its disposal. The court concludes that there are no genuine issues of material fact with respect to the sellers' liability and that the government is entitled to summary judgment.

On the sellers' motion for reconsideration, the court holds that the sellers raised no new issues, and thus denies the motion. But the court grants their motion to certify for interlocutory appeal its decision on liability. The decision resolved a controlling question of law on which substantial grounds for a difference of opinion exist. Furthermore, immediate appeal will materially advance the ultimate termination of the litigation, because the sellers will have contribution claims against numerous third-party defendants, and the expense and inconvenience of adding these defendants will be avoided if the sellers are found not liable on appeal.

Counsel for Plaintiff
Peter Colby
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Susan R. Squire
Roetzel & Andress
75 E. Market St., Akron OH 44308
(216) 376-2700