Jump to Navigation
Jump to Content

In re Reading Co.

ELR Citation: 26 ELR 20512
Nos. No. 71828, 900 F. Supp. 738/41 ERC 1888/(E.D. Pa., 09/14/1995)

The court holds that parties liable to the United States under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) may not assert §113(f) contribution claims against the successor to a railroad whose CERCLA §107 liability to the government was discharged in bankruptcy. The court first holds that the United States possessed a CERCLA claim against the railroad that predated consummation of the bankruptcy. The government's CERCLA claim was discharged because it knew that the contaminated site at issue posed a serious environmental risk, that the railroad was linked to that property, that CERCLA was intended to redress serious environmental problems, and that the railroad was undergoing reorganization in bankruptcy. Therefore, the government had knowledge of its preconsummation CERCLA claim against the railroad. The court next holds that a §113(f) contribution claim must be predicated on common liability to a third person and cannot be brought against a party whose third-party liability was discharged in bankruptcy. Uniformity of interpretation, accepted canons of construction, CERCLA policies, and the Bankruptcy Code require that the word "contribution" for purposes of §113(f) be given its plain meaning, which requires liability to a third party.

Counsel for Plaintiff
Robert P. Frank
Reed, Smith, Shaw & McClay
2500 One Liberty Pl., Philadelphia PA 19103
(215) 851-8100

Counsel for Defendant
Alan D. Greenberg
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000