ELR Citation: ELR 21057
No(s). 2:93-CV-116-RL (N.D. Ind. Feb 8, 1994)

The court denies the federal government's motion to strike equitable defenses in its action for cost recovery under §107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and for recovery of costs it incurred when a contaminated site owner allegedly violated the terms of a partial consent judgment. The government moved to strike affirmative defenses of waiver, estoppel, laches, failure to mitigate costs, inconsistency with the national contingency plan (NCP), and unclean hands. The court first holds that striking the defenses of waiver, estoppel, laches, and unclean hands is inappropriate at this point in the litigation, because motions to strike are disfavored and the issue whether equitable defenses are available in §107 actions is heavily disputed among lower courts. Also, if these defenses apply to the government's claim that the site owner violated the consent judgment, the court should not strike them. The court next holds that asserting these defenses against the government is not prohibited as a matter of law. The government failed to present case law that a waiver defense is foreclosed against the government, and the U.S. Supreme Court and the Seventh Circuit have not precluded an estoppel defense against the government. Although the burden of establishing that the harm defendant suffered outweighs the public interest in enforcement, on the face of the pleadings the estoppel defense is not clearly insufficient. The court holds the laches defense sufficient on the face of the pleadings, because the Seventh Circuit has held that laches can be asserted against the government. The court holds it premature to determine whether the unclean hands defense is inconsistent with public policy, because unclean hands merits the same latitude the Seventh Circuit has granted in applying laches and estoppel against the government. The court also holds that the defense of inconsistency with the NCP is sufficient as a matter of law. Finally, the court holds that striking the defense of failure to mitigate costs is inappropriate at this point in the litigation. Although CERCLA does not require the government to mitigate response costs, the government has not argued that the defense is insufficient as to its consent judgment claim.

Counsel for Plaintiff
Thaddeus Lightfoot, Myles E. Flint
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Ann C. Tighe, James R. Streicker
Cotsirilos, Stephenson, Tighe & Streicker
33 N. Dearborn St., Ste. 600, Chicago IL 60602
(312) 263-0345