ELR Citation: ELR 20942
No(s). s. 88-0200-L(J) -0201-L(J) (W.D. Ky. Feb 9, 1990)

The court holds that a successor corporation to a company that allegedly contracted to have hazardous substances transported for disposal is liable for response costs under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §107. The court holds that Congress intended the courts to develop common law to supplement CERCLA §§107 and 101 because it is unlikely that Congress intended to abrogate the common law doctrince of successor liability implicitly. Because CERCLA is remedial in nature, the court should not interpret §107(a) in a way that frustrates the statute's goals. The court also holds that the common-law doctrine of successor liability fulfills CERCLA's remedial purpose by making responsible parties, rather than taxpayers, pay for hazardous waste cleanups. Although the court declined to apply the traditional test of successor liability, noting that courts should apply the doctrine to further CERCLA's policy of holding responsible parties liable, the court holds that the successor corporation is liable under the substantial continuity exception. The company retained essentially the same employees and management, operated out of the same physical facilities, produced the same products immediately following the transfer, held itself out to the public as the same company, retained the same operating assets, and succeeded to all liabilities necessary for the orderly transition of ownership and to prevent the interruption of the daily business operation. The company's change of production subsequent to the transfer was a natural response to market conditions and does not change the fact that the companies were virtually identical at the time of the transfer.

Counsel for Plaintiff
Dick Dennis
Office of U.S. Attorney
Bank of Louisville, 10th Fl., 510 W. Broadway, Louisville KY 40202
(502) 582-5911

Counsel for Defendants
Edward C. Airhart
440 S. Seventh St., Ste. 200, Louisville KY 40203
(502) 587-0789