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Nutrasweet Co. v. X-L Eng'g Corp.

ELR Citation: 27 ELR 20064
Nos. 95 C 6024, 933 F. Supp. 1409/(N.D. Ill., 08/07/1996) summary judgment on CERCLA liability granted, damages denied

The court holds that an aerospace machine-part manufacturer and its president are liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for response costs the former owner of a neighboring property and its parent company incurred in cleaning up soil and groundwater contamination caused by the migration of chlorinated volatile organic compounds (VOCs) from the manufacturer's property. The court first holds that the former owner has standing to bring the lawsuit. That the former owner sold all its assets to the parent company is of no practical consequence, because the parent company is also a plaintiff and the former owner has at all relevant times been a wholly owned subsidiary of the parent company. The court then holds that the former owner has suffered an injury-in-fact because an agreement between it and the current owner requires the former owner to continue funding a soil and groundwater remediation system. Further, CERCLA §107(a), which allows private companies to sue alleged CERCLA violators provides the former owner and its parent with standing. The court next holds that the manufacturer is liable for all response costs attributable to the dumping of VOCs. The manufacturing site and the former owner's property are both facilities under CERCLA, the manufacturer and its president are responsible persons, and the former owner sufficiently proved that a release of a hazardous substance occurred. The former owner has also provided sufficient evidence to prove that the manufacturer violated CERCLA: the former owner did not use chlorinated VOCs in its food-manufacturing process; the manufacturer not only stored and used VOCs, but one of its employees repeatedly dumped a mop bucket containing VOCs on land adjacent to the former owner's property; experts stated that the VOCs migrated to the former owner's property via groundwater flow; the VOCs contaminating the property are markedly high in concentration and identical to the VOCs detected in the dumping area; and the unrebutted scientific evidence reveals that the dumping activity was a proximate if not the sole cause of the presence of VOCs on the former owner's property. The court then holds that although the former owner and its parent may seek contribution from the manufacturer and its president, a genuine issue of material fact still exists as to the extent of the injury and the amount of response costs. Thus, the court defers to a jury to decide the appropriate damages. Turning to the former owner's state-law claims, the court holds that the manufacturer is liable to the former owner for nuisance. The dumping of the mop-bucket contents, which constitutes an invasion for private nuisance purposes, was substantial and unreasonable. The court holds that the former owner established a cause of action for trespass, because it sufficiently proved that the hazardous substances dumped by the manufacturer entered the former owner's property by way of the groundwater flow and that entry was unlawful as it violated CERCLA. The court also holds that the former owner was entitled to summary judgment on the issue of the manufacturer's negligence. The manufacturer had a duty of care not to contaminate the environment, which it breached by violating CERCLA. The court holds, however, that the president, a shareholder and corporate officer, cannot be held individually liable for the negligent acts of the manufacturer's employees and dismisses the president as a defendant to the state-law claims.

Counsel for Plaintiffs
Andrew R. Running
Kirkland & Ellis
200 E. Randolph Dr., Chicago IL 60601
(312) 861-2000

Counsel for Defendants
Edmund B. Moran Jr.
Schopf & Weiss
304 W. Randolph St., Chicago IL 60606
(312) 701-9300