ELR Citation: ELR 20832
No(s). 89-8094 (11th Cir. May 23, 1990)

The court holds that a secured creditor is liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) if its involvement with the management of the facility is sufficiently broad to support the inference that it could affect hazardous waste disposal decisions. The court first holds that this secured creditor is not currently an owner or operator of the facility within the meaning of CERCLA §107(a)(1). The court construes CERCLA §107(a)(1) as making liable the owner and operator as of the time the lawsuit's complaint was filed. The local county government acquired title due to tax delinquency, so the court looked to CERCLA §101(20)(A)(iii)'s provisions transferring liability to the owner and operator "immediately beforehand." Because the trustee in bankruptcy owned the site before it was conveyed to the county government, the secured creditor is not liable under this provision. The court next holds that the secured creditor may be liable as a prior owner or operator under CERCLA §107(a)(2). In a footnote, the court observes that it analyzes the case in terms of whether the secured creditor fits the creditor exemption of CERCLA §101(20)(A). The court rules that a creditor becomes liable when it participates in the financial management of a facility to a degree indicating a capacity to influence the corporation's treatment of hazardous waste. Neither active day-to-day management involvement nor participation in hazardous waste decisions is necessary. However, monitoring the business and occasional involvement in decisions relating to the protection of the security interest are not enough to make a creditor liable.

[The district court decision appears at 19 ELR 20529.]

Counsel for Plaintiff-Appellee
Anne S. Almy
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2749

Counsel for Defendant-Third Party Plaintiff-Appellant
Richard E. Miley
Nixon, Yow, Waller & Capers
1500 First Union Bank Bldg., Augusta GA 30910-2599
(404) 722-7541

Before VANCE^* and KRAVITCH, Circuit Judges, and LYNNE^**, Senior District Judge.