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Peoples Gas Light & Coke Co. v. Beazer East, Inc.

ELR Citation: 45 ELR 20180
Nos. 14-3634, (7th Cir., 09/21/2015)

The Seventh Circuit held that a utility may not seek contribution against a corporation for remediation costs the utility incurred at a former coke plant that was operated by the corporation's predecessor more than 90 years ago. In 1920, the utility and the corporation's predecessor entered into a contract under which the predecessor agreed to build and operate a coke plant at the site. In return, the utility agreed to purchase all of the gas and coke manufactured at the plant for distribution to consumers. The utility acquired the plant in 1928 and took over operations in 1938. The plant was eventually dismantled in the 1960s, but the utility still owns some of the land. The utility, which has incurred over $70 million in costs, filed a contribution action under CERCLA, arguing that the successor corporation should be held liable as a former operator. But the 1920 agreement unambiguously absolves the successor of any and all liability resulting from the predecessor's operation of the coke plant. The agreement contains clear and unequivocal language that the predecessor's obligation to operate the coke plant is assumed "without liability of any character on the part of" the predecessor. This general release language is broad enough to absolve the successor of liability for contribution costs under CERCLA.