ELR Citation: ELR 21053
No(s). 90-12873-Y (D. Mass. Feb 7, 1994)

The court holds that the current owner of a site contaminated with hazardous substances may bring claims under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and Massachusetts law against the responsible prior owner to recover costs the current owner incurred in cleaning up the site. The court first holds that CERCLA does not provide a cause of action to recover economic damages for diminution in property value. The court next holds that the current owner's claim to recover removal costs is not barred by CERCLA §113(g)(2)'s three-year statute of limitations, because its removal activities—which began in 1986 and ended in 1990—constitute one removal action, and the statute of limitations begins running when the removal is complete. Because the current owner filed suit in 1990, its claim is not barred. The court next holds that a three-year statute of limitations applies to §4 of the Massachusetts Oil and Hazardous Material Release Prevention Act, which provides a cause of action for reimbursement of cleanup costs, and that the statute of limitations begins running when the cleanup costs are incurred. Thus, the current owner has a valid and timely claim under §4 only for those costs that were incurred within the three years before it filed the complaint. The court holds that although the current owner has asserted a valid claim for damages for diminution in property value under §5 of the Massachusetts Oil and Hazardous Material Release Prevention Act, this claim is time barred. Under the discovery rule, the three-year statute of limitations began to run on the §5 action when the current owner discovered, or reasonably should have discovered, that contamination caused damage to its property value, and that the prior owner caused the contamination. The current owner discovered the damage in 1984, and knew or reasonably should have known in 1985, that the prior owner was responsible, but did not file suit until 1990. Finally, the court holds that although the current owner has valid claims in equity for unjust enrichment and restitution, its claims for cleanup costs under CERCLA and Massachusetts law are the statutory equivalent. Because the current owner has other adequate remedies at law, no independent equitable claim will lie.

Counsel for Plaintiffs
Richard A. Johnston, James W. Prendegrast
Hale & Dorr
60 State St., Boston MA 02109
(617) 526-6000

Counsel for Defendant
Louis N. Massery, Roy P. Giarrusso
Cooley, Manion, Moore & Jones
21 Custom House St., Boston MA 02110
(617) 737-3100