ELR Citation: ELR 21416
No(s). 92-1728 (MLP) (D.N.J. Feb 15, 1994)

The court holds that a dissolved corporation that distributed its assets before commencement of a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) cost recovery and contribution suit against it is not subject to liability as a "person" within the meaning of CERCLA §101(21). The court first reaffirms its earlier dismissal of common-law and state statutory claims against the dissolved corporation because under Fed. R. Civ. P. 17(b), Delaware's three-year post-dissolution limitation period applies to bar these claims. Section 101(21) defines "person" to include a corporation, but does not address whether a dissolved corporation and its shareholders may be liable for response costs. After a review of the relevant case law, the court holds that the overall purposes of CERCLA preempt Rule 17(b) and state statutes governing the capacity of a dissolved corporation to be sued. A contrary determination would frustrate congressional purpose and would relieve otherwise responsible parties from liability. Moreover, corporate dissolution is not among the enumerated defenses to liability in CERCLA §107(b), and Congress did not intend to allow different schemes of liability based on state statutes defining corporate capacity to be sued.

After reviewing two approaches to whether a dissolved corporation is subject to suit under CERCLA, the court holds that the corporation may not be held liable under CERCLA because it is "dead and buried"—all of its assets have been distributed. Finally, the court holds that insurance policies and contractual indemnification rights do not constitute assets that would permit recovery under CERCLA for pre-dissolution liabilities of the dissolved corporation.

Counsel for Plaintiff
Vincent E. Gentile
Cohen, Shapiro, Polisher, Shiekman & Cohen
Princeton Pike Corporation Ctr.
1009 Lenox Dr., Bldg. 4, Lawrenceville NJ 08648
(609) 895-1600

Counsel for Defendants
Robert A. Bourque
Simpson, Thacher & Bartlett
425 Lexington Ave., New York NY 10017
(212) 455-2000