ELR Citation: ELR 20316
No(s). 84-1030 (8th Cir. Feb 25, 1985)

The court rules that a landowner may pursue an action under the Declaratory Judgment Act against a former lessee to determine his indemnification rights regarding liability to the federal government under Clean Water Act §311 and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for oil and hazardous substance pollution from a waste pit operated on the leased property, despite the absence of a government suit to recover cleanup costs. The court affirms the district court's decision to exercise jurisdiction under the Act, ruling that there was a live legal dispute between the parties. Although no government action to recover cleanup costs had been filed, federal agencies had notified plaintiff that plaintiff, defendant, or both were liable for those costs and civil penalties, thus creating an actual controversy. The court rejects defendant's argument that any government claim would be barred by the three-year statute of limitations for actions founded in tort. The trial court could apply the six-year limitation for actions founded in contract to any action to recover costs, and a five-year statute of limitations applies to the action for civil penalties, for which proceedings have been commenced.

The court next holds that defendant's liability to indemnify plaintiff continued after the premature termination of the lease in 1976, since defendant created a dangerous condition and misrepresented to plaintiff that the waste pit had been sealed in compliance with state law. The court rules that extending the indemnification period to the date when the lease originally was to have expired does not entail retroactive application of CERCLA, because the Act does not impose new obligations between landowner and tenant. The court also holds that the jury's finding that defendant is fully responsible for the pollution is supported by the evidence. The court affirms the lower court's ruling that the lease be considered to have remained in force despite the early termination, ruling that substantial evidence supports the jury verdict of material misrepresentation. Finally, the court rejects defendant's challenges to the judge's charges to the jury below.

[A related decision is published at 12 ELR 20759.]

Counsel for Plaintiff
Elton A. Rieves IV
Rieves & Mayton
Plaza Office Bldg., 200 Shoppingway Blvd., P.O. Box 1359
West Memphis, AK 72301
(501) 735-3420

Counsel for Defendants
Charles R. Nestrud
House, Wallace, Nelson & Jewell, P.A.
1500 Tower Bldg., Little Rock AK 72201
(501) 375-9151

David Orsini
Lincoln & Orsini
212 Center St., Suite 200, Little Rock AK 72201
(501) 376-3344

Before Bright and McMillian, JJ.