ELR Citation: ELR 20697
No(s). 95-1641 (7th Cir. Feb 5, 1996)

The court holds that a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §107 claim by a buyer of contaminated property against the seller is not so patently without merit as to deprive the district court of subject matter jurisdiciton, even though an agreement between the parties allegedly provided the exclusive remedy for all environmental claims. The court first notes that the U.S. Supreme Court has held that federal courts may not entertain claims otherwise within their jurisdiction if the claims are "so attenuated and unsubstantial as to be absolutely devoid of merit," and has made clear that only the most extreme cases will fail this test. The court further notes that CERCLA allows indemnification or other kinds of expense-sharing agreements. The court applies Illinois law to determine whether the contractual language so plainly precludes CERCLA liability that it defeats federal jurisdiction. The court finds that the language of a supplemental agreement on environmental cleanup of the property does not support the district court's apparent construction of the agreement as a stand-alone document. The agreement makes no sense unless it is read in context with a prior sales contract. The court holds that a facially plausible argument exists that the two agreements taken as a whole did not exclude CERCLA liability. The court thus holds that the district court erred in dismissing the case on the ground that there was no federal subject matter jurisdiction to support the CERCLA claim.

Counsel for Plaintiffs
Jerome Bowman
Ross & Hardies
150 N. Michigan Ave., Ste. 2500, Chicago IL 60601
(312) 558-1000

Counsel for Defendants
Gary Weiss
Beerman, Swerdlove, Woloshin, Barezky, Becker, Genin & London
69 W. Washington St., Rm. 600, Chicago IL 60602
(312) 621-9700

Before BAUER, KANNE, and DIANE P. WOOD, Circuit Judges.