ELR Citation: ELR 21125
No(s). 3:93-CV-0838-P (N.D. Tex. Mar 29, 1996)

The court holds that the successor to a semiconductor manufacturer, but not the successor's corporate sole shareholder, is jointly and severally liable for response costs the United States incurred under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) at the Bio-Ecology Systems site in Texas. The court first holds that the government's potential liability for contribution does not affect its right to full recovery of its response costs from the manufacturer and its successor corporation. The court next holds that the undisputed evidence clearly establishes that hazardous substances contained in the spent solvents that the manufacturer sent to the site were released or threatened to be released at the facility, resulting in the incurrence of response costs. Therefore, the court finds the successor, having assumed all of the debts, liabilities, and obligations of the manufacturer, is liable for the response costs. The court next finds that the manufacturers' evidence failed to show that its arsenic-contaminated hydrofluoric acid wastes were treated so that they did not contribute to the release or threatened release of hazardous waste. The court also holds that the successor failed to establish a reasonable basis for apportioning liability. Therefore, the successor is jointly and severally liable. The court next holds that no showing of a nexus between the manufacturer and the successor's corporate sole shareholder is required for a finding of derivative liability. Also, in the absence of evidence regarding the activities and operations of the successor and its shareholder, the court is unable to determine whether the companies operated as alter egos so as to justify piercing the shareholder's corporate veil. The court holds that the evidence in the record supports the finding that the successor is dissolved de facto. However, material facts regarding whether the shareholder received the successor's assets preclude summary judgment as to the shareholder's joint and several liability. The court further holds that the substantial continuity rule should not be applied in this instance because there is no evidence that the shareholder is an asset purchaser. Finally, the court holds that a consent decree between the United States and the government defendants entitles the federal and state governments to contribution protection.

[A related opinion is published at 26 ELR 20174.]

Counsel for Plaintiffs
Richard Gladstein
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Duane A. Siler
Patton & Boggs
2550 M St. NW, Washington DC 20037
(202) 457-6000