ELR Citation: ELR 20740
No(s). Civ. A. 90-31-VAL (WDO) (M.D. Ga. Dec 22, 1992)

The court holds that a corporate owner of property contaminated with creosote, and its president and sole stockholder, are liable for response costs incurred by the U.S. Environmental Protection Agency (EPA) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The court first holds that the United States established a prima facie case of CERCLA liability. The site is a "facility" within the meaning of CERCLA §101(9), because creosote and other hazardous wastes were present at the site prior to EPA's cleanup. Noting that the court previously determined that a release or threatened release occurred at the site, the court holds that the defendants are collaterally estopped from retrying this issue. The previously decided issue is identical to the second element of CERCLA liability in the present action; it was actually litigated in the previous action, and it was necessary and critical to the judgment in that litigation. The court holds that the United States incurred extensive response costs as a result of releases at the site. The court holds that the company is a potentially responsible party under CERCLA, because it owned and operated the site from March 30, 1978, until operations ceased in 1980. Also, the company holds fee simple title to the site. The court holds that the company's president is also a potentially responsible party under CERCLA, because he actively participated in the company's management. As president, sole director, and sole stockholder, he had the authority to control hazardous waste disposal practices and to abate the pollution at the site. He had the authority to hire, fire, and direct employees at the site; he dealt with customers; he signed checks on behalf of the corporation; he made extensive loans to the corporation; he had an office at the site; and he actively participated in the corporation's wood-treatment process.

The court next refuses to address affirmative defenses raised by the defendants relating to the costs that the government may recover in this action. The court notes that these defenses will be addressed at trial when the court will determine the actual amount of recoverable costs. The court rejects the defendants' argument that they are entitled to CERCLA §107(b)(3)'s third-party defense because the state of Georgia is responsible for some of the contamination. Even if the state did cause some of the contamination at the site, the defendants cannot show that the state is solely responsible. The court also rejects the defendants' claim that a flood caused the contamination, because the flood did not occur until after the cleanup was already in progress. The court holds that the defendants are not entitled to rely on the equitable defenses of laches, estoppel, or unclean hands, because equitable defenses are not available in CERCLA cost recovery actions. The court holds that the government is entitled to summary judgment on the defendants' defenses attacking the constitutionality of CERCLA, because courts have universally rejected due process and ex post facto law challenges to CERCLA and an equal protection challenge to CERCLA was found insufficient by the court in a previous case. The court grants summary judgment for the United States on the defendants' "land ban" defense under CERCLA §121(d)(3), because the landfill in which waste from the site was deposited was a permitted facility at the time of the cleanup. The court holds that the United States complied with the competitive bidding requirements of 41 U.S.C. §253(c)(2), because the government's independent contractor competitively bid for the cleanup contract. Finally, the court holds that the government's claims are not barred by CERCLA §104(c)(1)'s statute of limitations, because the defendants' actions delayed the cleanup and the government's cleanup was completed within the limitations period applicable at that time.

Counsel for Plaintiff
Valerie A. Lee, Heidi E. Weckwert
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Howard B. Slocumb
P.O. Box 436, Homerville GA 31634
(912) 487-3279

Alan M. Wolper
Hunton & Williams
950 E. Paces Ferry Rd., Ste. 2500, Atlanta GA 30326
(404) 841-5733