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United States v. Capital Tax Corp.

ELR Citation: 38 ELR 20247
Nos. No. 07-3744, (7th Cir., 09/19/2008) vacated

The Seventh Circuit vacated a lower court's grant of summary judgment in favor of the United States in its Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) suit to recover response costs the U.S. Environmental Protection Agency (EPA) incurred cleaning up contamination at a former paint factory in Chicago, Illinois. The lower court failed to determine whether the defendant had a valid and enforceable contract for the sale of land under Illinois law and whether the doctrine of equitable conversion applies in this case. If there is no valid contract, then the defendant is the "owner" under CERCLA §107(a)(1) and is liable under the Act. If there is a valid contract and if equitable conversion applies, the defendant is not the owner and is not liable. The court, however, rejected the defendant's argument that it should not be held jointly and severally liable for all the removal costs and instead be found liable for only a portion of those costs. EPA has broad discretion in defining the boundaries of a particular facility, and the boundaries are normally based on the extent of the contamination. Here, contamination was found on almost every parcel of the facility, and all of these parcels are contiguous.

[Prior decisions in this litigation can be found at 37 ELR 20015 and 20208.]