ELR Citation: ELR 20610
No(s). 87-2054 (W.D. La. Jul 8, 1993)

The court holds that a past owner of one portion of a site contaminated with wood treatment chemicals is not liable under §113 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or the Louisiana Environmental Quality Act (LEQA) for response costs incurred by a wood treatment company that previously owned the parcel, and that the wood treatment company may not recover its response costs from a railroad company from which it leased a second portion of the site. The court first holds that the site is a facility as defined by CERCLA §101(9), that a release or threatened release of hazardous substances occurred, and that the release or threatened release caused plaintiff to incur response costs. The court finds that the evidence does not establish that the past owner of the first parcel dismantled its entire wood-treating facility, thus allegedly releasing hazardous substances, or that it allowed any hazardous substances to be discharged onto the site. The court distinguishes the Fourth Circuit's decision in Nurad v. William E. Hooper & Sons Co., 22 ELR 20936 (1992), which held that CERCLA §107(a)(2) imposes liability not only for active involvement in the dumping or placing of hazardous waste at a facility, but also for ownership of a facility at a time when hazardous waste was spilling or leaking. In this case, there is no evidence that leaking or spilling of hazardous substances occurred during the past owner's brief period of ownership. The court also holds that §107(a)(2) does not extend liability to all prior owners solely on the basis that rainfall causes hazardous materials to leach through the soil.

The court next holds that plaintiff may not recover response costs under CERCLA from the owner of the second parcel, because plaintiff's leases for that portion of the site require plaintiff to indemnify the parcel owner for any damages caused by the previous lessee, from whom plaintiff acquired its leasehold interest in the parcel. Thus, although the parcel owner, as the owner of the land when hazardous substances were disposed of, is liable to plaintiff for response costs under CERCLA, any amount the landowner owes plaintiff is cancelled out by plaintiff's obligation under the leases.

Turning to plaintiff's state-law claims, the court holds that the past owner of the first parcel is not liable under the LEQA, because plaintiff failed to establish that the past owner disposed of or discharged a hazardous substance at the site. The court holds that plaintiff cannot recover under the LEQA from the owner of the second parcel, because technically plaintiff is entitled to recover response costs from the parcel owner under CERCLA, and CERCLA §114(b) precludes plaintiff from asserting state-law claims identical to successful CERCLA claims. The court notes that even if CERCLA §114(b) did not preclude plaintiff's state-law claims, the indemnity provisions of its leases would cancel out any amounts to which it was entitled. Finally, the court holds that the owner of the second parcel is not liable as a transporter under the LEQA, a claim for which plaintiff did not assert an identical CERCLA claim, because the LEQA's transporter liability provisions require more than mere transportation of a hazardous substance to the site. The court finds that plaintiff and the prior lessee of the parcel selected the site for disposal.

[Prior decisions in this litigation are published at 19 ELR 20518 and 20 ELR 20382.]

Counsel for Plaintiff
Jay Canel, Stephen Davis
Canel, Davis & King
10 S. La Salle St., Ste. 3440, Chicago IL 60603
(312) 580-0085

Counsel for Defendant
Robert Shuftan, Steven Danekas
Wildman, Harrold, Allen & Dixon
225 W. Wacker Dr., 30th Fl., Chicago IL 60606
(312) 201-2000