ELR Citation: ELR 20492
No(s). 93-1699 (1st Cir. Jan 28, 1994)

The court affirms a district court decision that a bank is not liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) as an "owner or operator" of property it acquired in foreclosure and then promptly sold without revealing to the purchaser that it was contaminated. The court holds that the purchaser's complaint fails to allege facts under which the bank could be liable under CERCLA. Under CERCLA §101(20)(A), the bank was a "holder" and not an "owner." Section 101(20)(A)'s definition of owner or operator does not include an entity which, without participating in the management of the facility, holds indicia of ownership primarily to protect its security interest. Moreover, the bank's effort to divest itself of title to the property was reasonably prompt. The court finds that the existence of a site assessment revealing possible environmental contamination that was concealed from the eventual purchaser is insufficient on its own to remove the bank from the security interest exception in §101(20)(A). The court also holds that the bank is not liable pursuant to CERCLA §101(35)(C), because the bank was never an "owner" as defined by CERCLA.

[The district court decision is published at 24 ELR 20003.]

Counsel for Plaintiff
Alfred C. Frawley
Brann & Isaacson
P.O. Box 3070, Lewiston ME 04243
(207) 786-3566

Counsel for Defendant
David B. Van Slyke
Preti, Flaherty, Beliveau & Pachios
P.O. Box 11410, Portland ME 04104
(207) 775-5831

Brody, J. (before Torruella, Selya, and Stahl, JJ.):