ELR Citation: ELR 20774
No(s). 3 CV-91-1714 (M.D. Pa. Jan 15, 1997)

The court holds that the purchaser of a junk battery business and its parent corporation are successors to the seller and, therefore, are liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for cleanup costs apportioned to the seller based on its battery shipments. The court first holds that the parent is not a successor under the mere continuation doctrine, because there was no continuation of stockholders between the purchaser and the seller, nor was there an overlap of stock ownership among the corporations. The court holds, however, that the purchaser and its parent are successors under the continuity of enterprise theory. The court rejects the parent's argument that the continuity of enterprise theory does not apply because the purchase occurred before CERCLA's enactment, and the purchaser and its parent therefore had no notice of potential CERCLA liability. Interpreting present case law as requiring knowledge of potential liability is incorrect in light of the goals and purpose of CERCLA. If the factors of the continuity of enterprise theory are present, the corporation is holding itself out to be the same corporation, and the end result is merely the same corporation wearing a new hat under the guise of the successor corporation. In this case, most of the seller's employees became employees of the purchaser. The seller's business was not interrupted after the purchaser bought it. The seller's name was retained once the business continued, and all of the seller's accounts receivable were transferred and continued under the purchaser after the closing. The fact that the seller was acquired for only one of its four subdivisions is not dispositive. Collectively, the seller disposed of the batteries, and collectively, the seller was acquired by the parent through the purchaser.

[Prior decisions in this litigation are published at 26 ELR 20516 and 21614. A decision in related litigation is published at 21 ELR 20415.]

Counsel for Plaintiffs
Dennis R. Suplee
Schnader, Harrison, Segal & Lewis
1600 Market St., Ste. 3600, Philadelphia PA 19103
(215) 751-2000

Counsel for Defendants
Adam Schultz, Patricia Hoover
Devorsetz, Stinziano, Gilberti, Heintz & Smith
Bridgewater Place
500 Plum St., Ste. 600, Syracuse NY 13204
(315) 442-0100