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Redwing Carriers, Inc. v. Saraland Apartments, Ltd.

ELR Citation: 27 ELR 20028
Nos. 95-6198, 94 F.3d 1489/(11th Cir., 09/12/1996) aff'd in part, rev'd in part

The court holds that the limited partners in a limited partnership that owns an apartment complex on contaminated land are not liable to the site's former owner for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but the general partners may be indirectly liable based on the partnership's liability. The court first holds that although the former owner alleged claims under both §§107(a) and 113(f), its claims are for contribution and are governed by §113(f). To bring a cost recovery action based solely on §107(a), it would have to be an innocent party. The court next holds that the district court's conclusion that a defendant can only be liable under §107(a)(1) if it is both the owner and operator of a site is not the law of the circuit. A person is a responsible party under §107(a)(1) if it is the current owner or operator of a facility. The limited partners are not owners of the site, because neither state law nor the partnership agreement suggests that they hold title to the partnership's assets. In addition, because they have not lost their limited liability status under state law, they cannot be held accountable for the partnership's CERCLA liability based on the partnership's ownership of the site. Furthermore, the former site owner failed to show that they are operators of the site, because it failed to demonstrate that they actually control the partnership or the site or have any connection to the alleged disposals that occurred after they bought their partnership interests. The district court properly granted summary judgment that they are not arrangers under §107(a)(3), because the former owner failed to show that the deal under which they acquired their interests involved any arrangement for the disposal of hazardous substances at the site. Their failure to excavate tar at the site does not amount to a disposal arrangement, because they took no affirmative action to dispose of the tar.

The court next holds that the general partners carried their burden of proving that they are entitled to the third-party defense under §107(b), because they exercised due care toward the hazardous substances contaminating the property and they never had any direct or indirect contractual relationship with the former site owner or the contractor that excavated the site and constructed the complex. The former owner and the contractors are the only parties whose conduct potentially caused the release or threat of release of hazardous substances at the site. The court notes, however, that whether the general partners are accountable for the partnership's CERCLA liability remains an open issue. The court reverses summary judgment against the former owner on its claim that the partnership's managing agent is liable as a current site operator, because the evidence of the agent's role could support such a claim. The agent is actively involved in the occupational business affairs of the complex. The agent is actively involved in the occupational business affairs of the complex. The court holds, however, that the district court properly granted summary judgment against the former owner on its claim that the agent is a former owner under §107(a)(2). Section 107(a)(2) covers persons who were operators of a facility "at the time of disposal of any hazardous substances." CERCLA's definition of disposal should be read broadly to include the subsequent movement and dispersal of hazardous substances within a facility. The record lacks any evidence that either gas-line work at the site or the repaving of the complex's parking lot, which the former owner alleged to be disposals of hazardous substances, resulted in a movement of contaminated soil. The court reverses summary judgment against the former owner on its claim that the contractor is liable as an arranger, because the district court erred in finding that the grading and filling of the site could not have resulted in a disposal of hazardous substances. And the court holds that defendants' divisibility defense is irrelevant, because there is no joint and several liability among the defendants in a contribution action.

[The district court's opinion is published at 25 ELR 21319.]

Counsel for Plaintiff
F. Edwin Hallman Jr., David C. Moss
Decker & Hallman
Marquis Two Tower
285 Peachtree Center Ave., Ste. 1200, Atlanta GA 30303
(404) 522-1500

Counsel for Defendants
Christopher M. Weil
Weil & Petrocchi
Plaza of the Americas
1900 N. Tower, Lock Box 364, Dallas TX 75201
(214) 969-7272

Before DUBINA and BLACK, Circuit Judges, and MARCUS*, District Judge.