ELR Citation: ELR 21125
No(s). 89-1031 (D.N.J. Oct 4, 1993)

The court holds that the former owner of an 80-acre contaminated site in Fords, New Jersey, is liable under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §107 for response costs the current owner incurred cleaning up most of the site, but that the former owner is not liable for response costs the current owner incurred remediating contamination in areas at the site that both parties used and for which the current owner had full or partial responsibility. The court first makes a series of findings of fact, sorting out the relationship between the parties' respective activities at the site and the contamination and distinguishing the respective parties' uses of the site, including time of use, manufacturing activities, and production rates. The court also makes findings of fact regarding the migration of contaminants at the site. The court holds that the former owner is liable under CERCLA §107 for the current owner's response costs. The site is a facility, the contaminants are hazardous substances, and the current owner incurred response costs due to releases and threatened releases of these substances. The court holds that the former owner failed to establish a §107(b)(3) third-party defense, because it did not show that the act or omission of a third party was the sole cause of the releases and threatened releases at issue and the resulting damages. The court holds, however, that if the former owner can establish the divisibility of harm at the site, it may be relieved of some of the costs. The court notes that the former owner must establish that the harms are distinct. The court also notes that "time of use" provides a reasonable way to determine what portion of harm is fairly attributable to the current owner, because it directly links manufacturing and waste disposal activities with harm to the environemt. The court holds that the former owner is liable to the current owner under §107 for all the necessary response costs the current owner incurred or will incur consistent with the national contingency plan (NCP) remediating portions of the site that the former owner was the only party to use. The court holds that the former owner is liable to the current owner under §107 for all the necessary response costs the current owner incurred or will incur consistent with the NCP for remediating contamination found in areas of joint use. The court holds, however, that the former owner is not liable to the current owner under §107 for any response costs the current owner incurred or will incur remediating contamination found in areas of joint use for which full or partial responsibility is attributable to the current owner. The court notes that necessary costs include expenses for investigating, testing, sampling, and monitoring environmental contamination. The court holds that the current owner is entitled to receive prejudgment interest under §107(a).

The court next holds that the former owner's CERCLA §113(f)(1) contribution counterclaim may proceed, noting that equitable factors guide the court's evaluation of this claim. The current owner's principal shareholder's knowledge of the former owner's operations did not warrant an adjustment of liability, because the shareholder did not gain a familiarity with the plant's operations necessary to anticipate the environmental damage. But its practices warrant an adjustment to the extent they enhanced the contamination, especially because it continued to use contaminated property after it was aware that such use could worsen the contamination, and it constructed a new facility in the contaminated area. The court holds that the current owner's delay in addressing the contamination does not warrant an adjustment of CERCLA liability, because there was no evidence that less remediation would have been necessary without delay. Finally, the court holds that the New Jersey Spill Compensation and Control Act provides that cleanup actions should be in accordance with the NCP to the greatest extent possible. Therefore, determining whether the current owner is entitled to recover on its contribution claim against the former owner under the Act must await trial on NCP compliance.

Counsel for Plaintiff
Aubrey M. Daniel III, Paul Mogin
Williams & Connolly
725 12th St. NW, Washington DC 20005
(202) 434-5000

Counsel for Defendant
Thomas H. Sear, Randy Paar
Anderson, Kill, Olick & Oshinsky
1251 Avenue of the Americas, New York NY 10020
(212) 278-1000