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Principal Mut. Life Ins. Co. v. Western Resources, Inc.

ELR Citation: 27 ELR 21316
Nos. 96-2506-GTV, 963 F. Supp. 1071/(D. Kan., 04/30/1997)

The court holds that a property ownere who was named a potentially responsible party (PRP) may not seek a declaratory judgment exempting it from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) when no enforcement action has been filed. The court first holds that there is no actual controversy ripe for adjudication. The property owner has merely been named as a PRP for the property's contamination. Although a remedial investigation and feasibility study is ongoing, the state environmental agency has not determined the source of contamination or the possible remedial actions that may be required for the site. Nor has the agency isolated responsible parties or initiated cost recovery actions. Next, the court holds that the consent decree entered into between the state agency and a lessee of the property is not the functional equivalent of an adversarial enforcement action. The CERCLA provision governing consent decrees indicates that the entry of such a decree is not an admission of liability. Moreover, the actions taken do not indicate the presence of an actual controversy. A PRP letter is not a final, definitive ruling with the status of law demanding immediate compliance, because it does not impose any liability on the party. Similarly, a remedial investigation and feasibility study does not implicate liability issues because it is merely an investigation; it does not suggest that any entity is a responsible party. The court then holds that the property owner's denial of any duty to indemnify the lessee under the terms of the parties' lease agreement does not create a justiciable controversy. Neither the lessee nor the state agency has requested that the property owner pay for any investigation or remediation of the site. Although the contingent nature of interests is not fatal to a declaratory judgment action, the court does not find under the circumstances that the threat of liability to the property owner is sufficiently immediate to implicate an actual controversy. Last, the court holds that even if such a controversy could be said to exist, the matter is best left for another day. Entertaining this lawsuit invites the distinct possibility of piecemeal litigation. Therefore, the court dismisses the action.

Counsel for Plaintiff
W. Joseph Hatley
Lathrop & Gage
9401 Indian Creek Pkwy., Overland Park KS 66210
(816) 292-2000

Counsel for Defendant
Matthew R. Hale
Polsinelli, White, Vardeman & Shalton
Lighton Plaza III
7500 College Blvd., Ste. 750, Overland Park KS 66210
(913) 451-8788