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United States v. Dico

ELR Citation: 45 ELR 20237
Nos. 14-2762, (8th Cir., 12/10/2015)

The Tenth Circuit reversed in part and affirmed in part a lower court decision holding the seller of contaminated yet commercially viable buildings liable as an arranger under CERCLA. Due to hazardous substance contamination, the buildings were under an EPA order regulating their use. The prior owner, however, sold the buildings without informing EPA. The purchaser then tore them down and stored them in an open field where polychlorinated biphenyls (PCBs) were later found. The U.S. government filed suit against the seller, arguing that the seller violated CERCLA by arranging for the disposal of PCBs in the buildings and for violating the EPA order. On motions for summary judgment, the lower court found the seller liable for both violations and awarded response costs, civil penalties, and punitive damages. Material issues of fact, however, preclude summary judgment on the issue of arranger liability. A seller's knowledge of eventual disposal alone is insufficient to find liability as a matter of law. Likewise, the usefulness of a product, however defined, is an important but not dispositive factor to consider in determining the seller's intent. Here, the record fails to demonstrate as a matter of law that the seller was merely trying to get rid of a hazardous substance. Rather, it is possible the buildings had at least some commercial value, based on which a fact finder may find the seller did not intend to dispose of the PCBs by selling the buildings. The issue of the seller's intent with respect to arranger liability, therefore, should not have been decided at summary judgment, and the court vacated the lower court's award of response costs. Nor can the seller be liable for punitive damages at this stage of the litigation. The court, however, affirmed the lower court's summary judgment order as to the EPA order violation and civil penalties.