ELR Citation: ELR 21010
No(s). 91-158-JPG (S.D. Ill. Jul 9, 1993)

The court holds that fact issues preclude summary judgment on the application of limitations periods to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and common-law claims against the former owner of an outdated power plant by the current owner relating to demolition of the plant. The court also holds that the potential of developing an illness due to exposure to asbestos contained in the plant is not a personal injury for purposes of a negligence claim and that the former owner of the power plant is the owner of underground storage tanks (USTs) for notification purposes under the Resource Conservation and Recovery Act (RCRA). The former owner sold an outdated power plant for demolition to a salvage company that resold the property and equipment to the current owner in exchange for a lease to salvage equipment from the property. The court first holds that a genuine issue of material fact exists as to when the current owner knew or should have known about the presence of hazardous substances on the property and summary judgment is precluded with respect to the application of the limitations period under CERCLA and Illinois law. The court determines that the limitations period under CERCLA and Illinois law require the same amount of knowledge. Specifications in the former owner's request for bids for purchase of the plant referred to the possibility of hazards with respect to equipment only. Moreover, a visual inspection of the property does not necessarily provide notice to a purchaser with no training or knowledge in identifying the presence of hazardous substances. Furthermore, a salvage contractor's bid to remove equipment and dispose of asbestos on the property could have been understood by the current owner to indicate that the salvage contractor would remove all hazardous substances encountered there.

The court next holds that the current owner cannot sustain a claim for negligent disposal of hazardous substances because, under Illinois law, the former owner does not owe a duty to the current owner not to dispose of the hazardous substances by selling the plant for demolition. The current owner's claim that the possibility of developing an illness due to exposure to asbestos constitutes personal injury is not supported by precedent and is not a sufficient basis for a negligence claim. Therefore, even though the current owner may be able to show that the former owner negligently failed to disclose the disposal of hazardous substances by sale of the plant for demolition, the court holds that the current owner cannot show the personal or property damages, only economic loss, necessary for a negligence claim. The court holds that the former owner is also entitled to summary judgment on the current owner's claim of willful and wanton conduct, because such conduct is merely an aggravated form of negligence.

Even though the court notes that the current owner is the proper person to sue a remote vendor for ultrahazardous activity performed on the property, the court holds that cleanup of hazardous substances is not the type of activity the state supreme court intended to include when it decided that the demolition of buildings in cities is an ultrahazardous activity subject to strict liability. Because neither party addressed the facts required to determine whether the demolition of an outdated power plant and cleanup of hazardous substances on the site is an ultrahazardous activity under the Restatement (Second) of Torts §520, the court holds that there is a genuine issue of material fact regarding the classification of this activity and the application of strict liability. The court also holds that there is a genuine issue of material fact as to whether the former owner sold the plant simply as a real estate transaction, or for purposes of demolition, which would prevent application of the jurisdictional bar to asbestos abatement actions under CERCLA. The court notes that the facts support the existence of a threat of release of asbestos and that a genuine issue of material fact exists as to whether the presence of polychlorinated biphenyls transformers on the property constitutes a release or threat of release under CERCLA. The court also notes that the current owner does not have to establish that the response costs are consistent with the national contingency plan (NCP) to establish a prima facie case for liability under CERCLA. Rather, consistency with the NCP is an issue that is relevant at trial and necessary only for the recovery of damages.

Next, the court holds that the Illinois UST program is preempted by the federal UST program established under RCRA, because Illinois has never applied for federal approval of its UST program, as required under RCRA. Therefore, the court holds that it is not required to stay proceedings regarding the USTs on this site pending the outcome of state agency action. The court will not voluntarily stay proceedings pending the state agency action either, because the state agency's decision will apply state law, rather than federal law, and would provide little guidance to the court in resolving this matter. Based on the facts presented, the court holds that the USTs are abandoned under RCRA. Finally, the court holds that the former site owner is the owner of the USTs for notification purposes because the current owner did not know the USTs existed when the statute took effect and notification to the U.S. Environmental Protection Agency was required, and the court interprets "in use" to mean in conscious use.

Counsel for Plaintiff
Joseph G. Nassif, Ronald L. Hack
Coburn & Croft
One Mercantile Ctr., St. Louis MO 63101
(314) 621-8575

Counsel for Defendants
Paul Venker, Edwin Noel
Armstrong, Teasdale, Schlafly & Davis
One Metropolitan Sq., St. Louis MO 63102
(314) 621-5070