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Plaskon Elec. Materials, Inc. v. Allied-Signal, Inc.

ELR Citation: 26 ELR 20575
Nos. No. 3:92 CV 7572, 904 F. Supp. 644/(N.D. Ohio, 08/04/1995, 10/12/1995)

The court holds that corporations that manufactured plastics at a site they owned are owners or operaters within the meaning of §107(a)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but factual issues exist as to whether hazardous-substance disposal occurred while one of the corporations owned the site and whether costs the current site owner plaintiff incurred were necessary and consistent with the national contingency plan (NCP). The court first holds that the current site owner's CERCLA cost recovery action is a contribution action under §113(f), because the current owner is a potentially responsible party. Therefore, defendants may only be held liable for their individual, several, and equitable share of the current owner's recoverable costs. The court next holds that summary judgment is inappropriate on the liability of one past site owner, because a genuine issue of material fact exists as to whether disposal of hazardous materials occurred during its ownership and operation of the site. The court refuses to pierce the corporate veil to hold liable as owners or operators two corporations that directly or indirectly own the stock of that past site owner. There is no evidence before the court that the past owner was inadequately capitalized, that it was not solvent, that dividends were not paid, that the two corporations siphoned off corporate funds, or that the past owner functioned as a facade for the dominant shareholder. The overlap of their boards is insufficient to justify piercing the corporate veil, and there has been no showing of an overall element of injustice or unfairness. The court further holds that the past owner is not required to indemnify the corporation from which it purchased the site, which is another defendant in this action. The purchase agreement requires the purchaser to indemnify the seller for liability related to incidents occurring after the closing date of the sale. Because defendants are not jointly liable, the seller cannot be held liable to the current site owner for contamination that occurred after the closing date, when the seller no longer owned the property. Thus, the indeminification clause was not triggered.

The court next holds that the site is a facility under CERCLA, that hazardous substances were released or threatened to be released from the site, and that the current owner has incurred response costs in connection with the site. The court also holds that one defendant is a successor-in-interest to a past site owner, and holds that this defendant and the company that purchased the site from it are covered persons under CERCLA §107(a)(2). The court finds, however, that there has been no showing that the response costs the current owner incurred were either necessary or consistent with the NCP. The courts holds that the current owner's costs of demolishing buildings at the site are not recoverable. The current owner's executives testified that the demolition was carried out because it was economically beneficial and the current owner would avoid potential problems resulting from trespassers on the property. The court further holds that the cost of removing asbestos at the site is not recoverable as a matter of law. In addition, the court holds that internal corporate expenditures are recoverable in a private action under CERCLA; however, whether the current owner is entitled to the entire amount of the internal costs it seeks to recover is a question of fact the determination of which is not appropriate on summary judgment. The court rejects the argument that based on the U.S. Supreme Court's holding in Key Tronic Corp. v. United States, 24 ELR 20955 (1994), the current owner should recover attorney fees incurred in this litigation. In Key Tronic, the Supreme Court held that attorney fees incurred in identifying other responsible polluters are recoverable response costs. Holding that the current site owner could recover attorney fees in this case would allow the identification exception to swallow the rule that litigation expenses are not recoverable. The court further holds that although prelitigation identification costs are recoverable pursuant to Key Tronic, the amount of the current site owner's prelitigation costs is an issue to be proven at trial. The court next holds that a past site owner that sold its glass and plastics operations separately did not transfer its liability for environmental problems to the company that acquired the glass operations. Finally, the court denies a past site owner's motion for reconsideration and clarifies two portions of the court's opinion.

Counsel for Plaintiff
Charles R. Light
Rohrbacher, Nicholson & Light
National City Bank Bldg.
405 Madison Ave., Ste. 800, Toledo OH 43604
(419) 248-2600

Counsel for Defendants
Randall W. Knutti
Porter, Wright, Morris & Arthur
41 S. High St., Columbus OH 43215
(614) 227-2000