Jump to Navigation
Jump to Content

Franklin Cty. Convention Facilities Auth. v. American Power Underwriters, Inc.

ELR Citation: 31 ELR 20470
Nos. 99-4095, 240 F.3d 534/(6th Cir., 02/13/2001)

The court affirms a district court decision finding the prior owner of a contaminated site liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and ordering the prior owner to pay $239,280.07 in past response costs incurred by the current owner of the site. The site became contaminated after the current owner's contractor accidentally split open a box buried under the site that contained benzene and creosote. In light of the evidence supporting the conclusion that the box contained creosote mixed with benzene, and in light of the deference it must pay to the district court's ability to judge witness credibility, the court first affirms the district court's finding that the substance in the box was a hazardous substance under CERCLA. The court next holds that the district court properly determined that the current owner substantially complied with the national contingency plan (NCP) under CERCLA. Although the current owner's compliance was not perfect, the NCP requirements are not intended to be a checklist of required actions for private remediations. Further, to allow the prior owner to avoid liability for its share of the response costs under these circumstances would undermine CERCLA's intended purposes. The court also holds that the district court did not err in relying on circumstantial evidence to conclude that the prior owner's predecessor corporation was an owner or operator of the property at the time the hazardous substance was deposited. There is nothing objectionable in basing findings solely on circumstantial evidence, especially where the passage of time has made direct evidence difficult or impossible to obtain.

The court then holds, however, that the district court erred in concluding that the current owner qualified for CERCLA's "innocent landowner" defense. Although the current owner could not have reasonably been aware of the box's presence nor responsible for splitting the box, the owner failed to exercise due care after discovering the box. Nevertheless, the court holds that the district court's allocation of the total response costs to the prior owner was proper because in addition to the innocent landowner defense, the district court concluded, alternatively, that the prior owner was responsible for a 100% contribution share under CERCLA §113 due to equitable factors, such as the prior owner's refusal to participate in cleanup efforts. The court also affirms the district court's $10,818 award for attorney fees incurred by the current owner's attorney. The fees were closely tied to the actual cleanup and therefore recoverable.

Additionally, the court rejects the prior owner's argument that the retroactive application of CERCLA violates substantive due process and amounts to an unconstitutional taking under the Fifth Amendment. Apportioning liability to the prior owner fulfills Congress' goal of spreading costs to responsible parties, and the potentially significant impact of liability on the prior owner does not interfere with its reasonable investment-backed expectations because CERCLA liability is tied directly to the past actions of responsible parties.

Counsel for Plaintiff
Richard A. Frye
Chester, Willcox & Saxbe
17 S. High St., Ste. 900, Columbus OH 43215
(614) 221-4000

Counsel for Defendant
Jonathan A. Conte
Pierce E. Cunningham Company
312 Walnut St., Cincinnati OH 45202
(513) 361-0100

Before Moore and Edmunds,* JJ.