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Pneumo Abex Corp. v. Bessemer & Lake Erie R.R.

ELR Citation: 26 ELR 21224
Nos. 2:94cv716, 921 F. Supp. 336/43 ERC 1037/(E.D. Va., 03/25/1996) cause of action

The court holds that the owner of a contaminated railroad-parts foundry may sue railroad companies that sold it scrap parts under both §§107 and 113 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and that the railroad companies are liable under CERCLA §107 for arranging for the disposal or treatment of hazardous substances. The court first holds that the scrap journal bearings that the railroad companies sold are hazardous substances within the meaning of CERCLA §101(14)(B). The bearings contained lead, zinc, copper, and antimony, which are listed as hazardous substances in 40 C.F.R. §302.4, and the railroad companies have not contested the foundry owner's allegations that the constituent parts of the bearings contributed to the contamination of the foundry. The court holds that the owner has met its burden of proving that the companies' waste was shipped to the site and that hazardous substances similar to those contained in the waste remained present at the time of release. The court next holds that the journal bearings are not "useful products." The railroad companies were not sellers of reclaimed material and were not in the business of selling worn journal bearings and castings. Their primary objective was not to convey a useful product, but to get rid of a substance for which the only remaining use was to serve as part of a process that led to environmental damage. The court next holds that the sale and subsequent processing of the worn bearings falls within CERCLA's definition of "treatment" of hazardous substances. The processing at the site reduced the parts in volume from whole, worn bearings and castings to residual amounts of the constituent elements, and rendered the constituent elements of the worn bearings amenable for recovery. The court holds that although CERCLA imports the term "treatment" from the Solid Waste Disposal Act, it does not also import the term "hazardous waste," which would require a substance to be a solid waste in order to be a CERCLA hazardous substance. The court further holds that by selling the worn parts, the railroad companies arranged for their ultimate disposal, either through the emission of particulate matter from the foundry furnaces or through the dumping of the contaminated sand once used as molds for new bearings onto the back lot of the site. Although the railroad companies may not have played a direct role in transporting the worn parts or in the process that led to the ultimatedisposal, they made the crucial decision to sell the worn parts to a facility that processed hazardous substances. The court thus holds the railroad companies liable under §107.

The court next holds that it is appropriate to permit the foundry owner and municipal plaintiffs, all of whom are potentially responsible parties (PRPs), to seek recovery under §107. Allowing the PRPs to bring a §107 suit preserves CERCLA's incentives for PRPs to settle early and subjects the defendants to joint and several liability. The court holds that the burden rests with the defendants to prove that the harm is divisible and to provide the court with a rationale for apportionment. The court holds that the plaintiffs must bear their equitable share of liability, but that defendants are liable for any orphan shares. The court holds that plaintiffs' §113 contribution claims are not longer necessary, and dismisses those claims. The court holds that it need not address defendants' motion for summary judgment on plaintiffs' §107 liability, because the court is requiring plaintiffs to pay an equitable portion of the cleanup costs anyway. Finally, the court holds that genuine issues of material fact regarding whether the predecessors of two railroad companies sold scrap parts to the foundry preclude summary judgment on their liability.

Counsel for Plaintiff
James Gorry
Taylor & Walker
P.O. Box 3490, Norfolk VA 23514
(804) 625-7300

Counsel for Defendants
Michael H. Wojcik
Weinberg & Stein
1825 Dominion Tower, Norfolk VA 23514
(804) 627-1066