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500 Associates, Inc. v. Vermont American Corp.

ELR Citation: 41 ELR 20097
Nos. No. 3:96CV-847-S, (W.D. Ky., 02/07/2011)

A district court dismissed a CERCLA §107 claim brought by a group of real estate developers who purchased contaminated property from a manufacturing company in 1986. Prior to purchasing the property, the group hired an environmental consultant who performed a cursory environmental audit. The group sought to sell the property in 1991, but was unable to secure a buyer due to concerns about environmental contamination that arose during environmental audits. The group did not report the results of the audit to the state nor take remedial action. Three years later, the state environmental agency began investigating the site and ultimately filed an environmental enforcement action against both the group and the manufacturing company. While the matter was pending before the agency, the group filed the instant action against the manufacturing company. The group, however, cannot recover its costs under §107 because the group failed to establish that its costs were, in fact, response costs. Instead they were incurred for the groups' own business purposes or were incurred in the course of attempting to convince the state that it had no liability for the releases. It failed to provide specifics concerning its alleged "removal" and "remediation" costs. Nor can it identify a "release" or "threatened release" by the company that created an imminent threat to which the group responded. And its reliance on the "innocent purchaser" defense is unreasonable given the facts of this case.