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Garrett Day, LLC v. International Paper Co.

ELR Citation: 46 ELR 20034
Nos. 3:15-cv-36, (S.D. Ohio, 02/12/2016) (Rice, J.)

A district court held that the owner of a contaminated property that was once the site of a paper mill may not seek response costs from a company that had purchased the assets of the prior owner of the mill. The owner argued that the company was liable under CERCLA under a de facto merger theory of successor liability. But the court disagreed. Although the company assumed all of the liabilities and obligations that were necessary to continue operating the paper mill, it did not employ any of the mill's former officers or directors, there was no substantial continuity of shareholders, and five years lapsed between the sale of the assets and the dissolution of the mill. Because only one of the four "hallmarks" of a de facto merger is satisfied, the company cannot be held liable as a successor-in-interest, and the court dismissed the owner's CERCLA claims against it.