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Schiavone v. Pearce

ELR Citation: 26 ELR 20824
Nos. No. 95-7627, 79 F.3d 248/42 ERC 1225/(2d Cir., 03/14/1996)

The court holds that an indemnification agreement between two corporations that allocated responsibility for the liabilities of a subsidiary that one of the corporations sold to the other does not affect the seller's direct operator liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for contamination at the subsidiary's Connecticut plant. The court first holds that the agreement limits indemnification to suits concerning the subsidiary's business operations. The agreement does not mention the seller's liabilities. The court holds that any operator liability the seller may have, even though related to the subsidiary's activities, is specific to the seller alone. An interpretation of CERCLA that imposes operator liability directly on parent corporations whose own acts violate the statute is consistent with the general thrust and purpose of the legislation. It is also compatible with CERCLA's statutory language. The court further holds that a parent corporation may incur direct liability for environmental harm under Conn. Gen. Stat. §22a-452. The court remands the case for a determination of the seller's liability under CERCLA §107(a)(2) and Conn. Gen. Stat. §22a-452.

Counsel for Plaintiff
Gregory A. Sharp
Murtha, Cullina, Richter & Pinney
City Place I
185 Asylum St., 29th Fl., Hartford CT 06103
(860) 240-6000

Counsel for Defendant
Elizabeth C. Barton
Updike, Kelly & Spellacy
One State St.
P.O. Box 231277, Hartford CT 06123
(860) 548-2600

Before Newman, Mahoney, and Sand,* JJ.