ELR Citation: ELR 20468
No(s). 1:94-CV-057 (E.D. Tex. Sep 21, 1994)

The court holds that a chemical company may be held liable as a successor corporation under §107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and that CERCLA §107(e)(1)'s bar on liability transfers does not shield the company from inheriting its predecessor's liability for costs the government incurred in remediating the Turtle Bayou Superfund site in Liberty County, Texas. The court first holds that a genuine issue precludes summary judgment on whether the chemical company expressly or implicitly agreed to assume its predecessor's liabilities when it purchased the latter's assets. A letter from the chemical company's former parent corporation to the company clearly stating that the company assumed any responsibility for past liabilities associated with the predecessor's operation of a chemical plant is sufficient to raise a substantial doubt as to what liability the company assumed when it acquired the predecessor's assets. The court notes that the argument of the chemical company's parent corporation that CERCLA prevented any exchange of cleanup liability regardless of the asset transfer's terms demonstrates a fundamental misunderstanding of §107(e)(1). The court holds that §107(e)(1) does not shield the chemical company from attaining, as a successor corporation, its predecessor's CERCLA status. Section 107(e) merely provides that notwithstanding the existence of indemnification agreements, all potentially responsible parties are jointly and severally liable to the government for cleanup costs. Once an entity is found to be a responsible party, it cannot enter into an indemnification agreement with another party to extricate itself from CERCLA liability.

Counsel for Plaintiff
Patrick M. Casey
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Patrick R. Cowlishaw
Cohan, Simpson, Cowlishaw, Aranza & Wulff
2700 One Dallas Ctr.
350 N. St. Paul St., Dallas TX 75201
(214) 754-0100