ELR Citation: ELR 21026
No(s). s. 87-5740, -5741 (3d Cir. Jun 30, 1988)

The court rules that caveat emptor is not a defense to liability for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and that the doctrine of corporate successor liability is appropriate in CERCLA contribution claims. The purchaser of a tract of industrial land that cleaned up an asbestos-laden waste pile seeks indemnification under CERCLA from the corporate successors of a company that sold the land to plaintiff's predecessor in 1963. The court first holds that caveat emptor is not a defense to liability for contribution under CERCLA, but may be considered in calculating the award. The court's decision in Philadelphia Electric Co. v. Hercules, 15 ELR 20554, applying the caveat emptor defense in a case involving a cleanup under the Pennsylvania Clean Streams Law, does not apply to CERCLA claims. CERCLA provides that contribution claims shall be governed by federal law. The doctrine of caveat emptor is not consistent with CERCLA's policies of encouraging cleanup by any responsible party and of allocating response costs equitably among responsible parties. The court rules that CERCLA imposes successor liability on corporations that have merged or consolidated with a corporation that is a responsible party under CERCLA. The general doctrine of successor liability used by most states should apply, not the laws of the few states that unduly restrict successor liability.

[The district court decision is published at 18 ELR 20769. The complaint is digested at ELR PEND. LIT. 65900. Briefs from the Third Circuit are digested at ELR PEND. LIT. 65990.]

Counsel are listed at 18 ELR 20769.

Before Weis^[*], Greenberg, and Aldisert, JJ.