ELR Citation: ELR 20250
No(s). IP 88-1345-C (S.D. Ind. Jun 29, 1992)

The court holds that a seller of convenience stores with facilities for the retail sale of gasoline violated a Kentucky statute prohibiting the unpermitted disposal of waste when gasoline from its underground storage tanks (USTs) inadvertently leaked into the surrounding soil. The purchaser of the stores moved for summary judgment on its claim that the seller breached its warranties in the purchase agreement by violating state environmental laws. The court first holds that substances meeting the statutory definition of waste escaped from the USTs during the time that the seller owned the store sites. The statute defines waste to include discarded material, the Kentucky administrative regulations define discarded material as material that is disposed of, and the Kentucky statute defines disposal to include leaking. The court notes that no evidence exists in the record that the seller intended to release and to abandon the petroleum product inventory that was leaking from its USTs.

The court finds that the language of the Kentucky statute is unambiguous and its terms have a plain and ordinary meaning, which is not contrary to the overall purpose of the Kentucky environmental protection scheme. The court finds that the term leaking does not commonly imply an intentional act and, by itself, plainly includes an unintentional or inadvertent release. The term "leaking," which may also include an affirmative, intentional act, does not create any relevant ambiguity. The court notes that the seller's construction of the term "leaking" requires additional terms, since the seller implicitly argued that the term must be read to mean intentional, knowing, or discovered leaking. The court notes that if Kentucky desired to target intentional releases only, it easily could have included that concept somewhere in the definition of disposal. Further, in the definition of disposal, the terms leaking and spilling would be entirely unnecessary if they were intended to include intentional releases only.

The court finds that no Kentucky court or federal court rendering binding precedent in the district has ruled on the Kentucky statute at issue. To the extent that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), and the Kentucky statutes are analogous, and to the extent the opinions cited by the parties that discuss CERCLA and RCRA have addressed a relevant issue, they support the conclusion that the Kentucky waste disposal statute proscribes inadvertent leaking of waste. The court also concludes that the purpose of the relevant section of the Kentucky statute very probably includes prohibiting passive releases, since it is not a criminal statute requiring a guilty state of mind, but is a regulatory statute, which plainly may be violated by inadvertent conduct. Also, the statutory section imposing criminal penalties for violation of the waste disposal statute requires intentional or knowing conduct, which would serve little purpose if the disposal statute required intentional or knowing conduct. The court notes that each case cited by the seller in favor of its reading of the term "leaking" is either inapplicable or otherwise unpersuasive, and that cited interpretive statements of the U.S. Environmental Protection Agency relate to CERCLA and RCRA only, but to the extent they are persuasive, they support the court's conclusion. Finally, the court holds that the seller violated the environmental warranties of the purchase agreement with the purchaser, and grants the purchaser's motion for partial summary judgment.

[A prior decision in this litigation is published at 23 ELR 20247.]

Counsel for Plaintiff
William C. Barnard, Frank J. DeVeau
Sommer & Barnard
4000 Bank One Tower, 111 Monument Cir.
P.O. Box 44363, Indianapolis IN 46244
(317) 630-4000

Counsel for Defendant
Robert F. Wagner, R. Robert Stommel
Lewis, Bowman, St. Clair & Wagner
NASCO Bldg., 5101 Madison Ave., Indianapolis IN 46227
(317) 783-9261