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Geraghty & Miller, Inc. v. Conoco, Inc.

ELR Citation: 31 ELR 20369
Nos. 99-20020, 234 F.3d 917/(5th Cir., 12/14/2000)

The court holds that property owner's Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) response cost claims against an environmental contractor are not time barred and that the contractor may be liable as an operator or arranger, but not as a transporter. The contractor was hired to assess groundwater quality at the owners' Lake Charles, Louisiana, property. Less than three years after the wells were installed, the owners suspected potentially serious technical and physical deficiencies and received approval from the state environmental agency to plug and abandon the wells. The owners and the contractor entered an interim agreement to allocate responsibility for the costs of plugging and abandoning the well, and according to the owners, to allow time for investigation of the wells without allowing the statute of limitations to run on any claims. The owners then initiated a state court suit against the contractor, and four years later, the contractor sued the owners in federal court seeking reimbursement of its CERCLA response costs.

The court first holds that the six-year statute of limitations found in CERCLA §113(g)(2) applies to initial contribution actions, such as the owners' CERCLA counterclaim against the contractor. If there has been no prior CERCLA §107 cost recovery action, as here, then a contribution action becomes an initial action for recovery and must be brought within six years. The court next holds that the response action in this case was properly classified as a removal action and, therefore, it was brought within the appropriate six-year time period. At the time the contractors began their work, they considered the work to be a recovery effort, not a remedial action. Even if the replacements for these wells are integral to the long-term remediation of the site, that does not mean that their initial placement cannot be categorized as removal. The court then holds that summary judgment declaring that the contractor was not an operator was premature because the facts concerning the contractor's control over the well are in dispute. Likewise, because the parties dispute if and how the hazardous waste was removed at the site, the district court should not have entered summary judgment on this issue. On remand, it must be determined under the totality of the circumstances if the contractor was liable as a CERCLA operator or arranger. The court also holds that the district court correctly decided that the contractor is not liable as a transporter under CERCLA. In addition, the court holds that the district court improperly granted the contractor summary judgment on the owner's state-law claims for breach of contract and fraud. Because disputed facts exist as to when the owners discovered or should have discovered their injury, the court cannot determine from what date the statute of limitations runs. However, the district court properly granted summary judgment to the contractor on the owners' breach of warranty and negligence claims.

Counsel for Plaintiff
John A. Doran
Bryan Cave
Two N. Central Ave., Ste. 2200, Phoenix AZ 85004
(602) 364-7386/7000

Counsel for Defendants
Bradley Beers
Beers & Associates
1415 Louisiana St., Ste. 3200, Houston TX 77002
(713) 654-0750/0700

Before Politz and Higginbotham, JJ.