ELR Citation: ELR 21403
No(s). 90-1761 (E.D. Pa. Jul 18, 1990)

The court holds that the federal government may be liable as an "owner or operator" under §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the release of hazardous substances at a private rayon manufacturing facility due to the federal government's comprehensive regulation and control of the rayon market during World War II. From 1942 through 1945, plaintiff's corporate predecessor increased its production of high tenacity rayon tire cord, allegedly because the War Production Board (WPB) determined the quantity of rayon to be produced, the alternative products plaintiff's predecessor could produce, and the sales price of the rayon. Plaintiff later purchased the facility and was subsequently notified that a listed hazardous substance under CERCLA was discovered in groundwater in the vicinity of the facility. The court holds that it is unable to grant the federal government's motion to dismiss because it cannot conclude with certainty that plaintiff is not entitled to CERCLA relief against the federal government under any set of facts that could be proved. Although there was no express authority for the WPB to make management decisions at plaintiff's predecessor's facility, there is little evidentiary significance in an omission of statutory authority to control marketing and production method choices when the WPB had the authority to determine the level of output and it is the guaranteed purchaser of all rayon at a predetermined price. Construing the complaint in the light most favorable to plaintiff, the plaintiff may be able to draw other more specific inferences from the record. The court observes that while the government's argument that unrestrained liability for regulatory agencies could lead to severe and unintended consequences, that is a consideration that Congress, not the court, addressed by enacting CERCLA §120(a).

Counsel for Defendant
Virginia Gibson-Mason, Ass't U.S. Attorney
3310 U.S. Courthouse, 601 Market St., Philadelphia PA 19106
(215) 597-1716

Counsel for Plaintiff
Alan B. Epstein
Jablon, Epstein & Wolf
The Bellevue, 200 S. Broad St., 9th Fl., Philadelphia PA 19102
(215) 922-7100