ELR Citation: ELR 20633
No(s). IP 90-1877C (S.D. Ind. Dec 9, 1992)

The court holds that liability for response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the cleanup of a release of polychlorinated biphenyls (PCBs) into the environment at a warehouse in Lebanon, Indiana, attached when equitable title to the property passed to the company president, but the court cannot determine on summary judgment whether the company is entitled to CERCLA §107(b)(3)'s third-party defense, or §§106(b)(1) and 107(c)(3)'s good-faith defense to the imposition of penalties and treble liability. The court first notes that the only element missing from the government's prima facie case for CERCLA liability is an allegation that the company and its president presently own or operate the site or did so when the PCBs were disposed of there. The court then finds that the company presently owns the site and is therefore liable, and that the president was the owner of the site at the time of the release, even though he might not have had the deed in his possession or might have only paid a fraction of the purchase price. He had entered into a contract to purchase the site, and, under Indiana law, equitable title passed to him then. The court denies the defendants' motion for summary judgment on their third-party defense claims, holding that whether PCB's releases occurred at the site prior to the date of the release, or whether a third party or parties were the sole cause of any releases after that date, are issues of fact that remain in dispute. The court finds that there is some evidence that capacitors at the site were leaking PCBs before the alleged release, and that questions remain as to how the release was initiated. If there were multiple causes of the release, §107(b) is inapplicable. Because factual disputes also surround the availability of good-faith defenses, the court rejects the government's motion for summary judgment on the imposition of penalties and treble damages pursuant to §§106(b)(1) and 107(c)(3).

The court declines to rule on the liability of manufacturing defendants as "arrangers" under §107(a)(3) for selling capacitors to the company, noting that it cannot make necessary, fact-specific determinations about the capacitors from which the PCBs leaked. Merely characterizing a transaction as a sale is insufficient to constitute arranging for the disposal or treatment of hazardous waste. However, given the interrelationship of the inquiries regarding §§103(3) and 107(a)(3), which build on the facts established concerning the nature of the material exchanged, the court leaves to the trier of fact to determine whether the manufacturer defendants are liable as arrangers. Next, the court grants the government's motion to strike a laches defense, holding that because laches is not listed in §107(b) as an available defense, it is not a defense to CERCLA liability. Finally, the court refuses to strike unsworn and unauthenticated testimony submitted as exhibits, holding that the motion to strike is moot, because the exhibits were not relied on by the court in its rulings on any motions, and the testimony was apparently covered by later depositions.

Counsel for Plaintiff
Harold Bickham, Ass't U.S. Attorney
U.S. Attorney's Office
U.S. CrtHse., 46 E. Ohio St., 5th Fl., Indianapolis IN 46204
(317) 226-6333
Richard Stewart, Thomas P. Carroll
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Jan Feldman, Joseph A. Strubbe
Pope & John
311 S. Wacker Dr., Ste. 4200, Chicago IL 60606
(312) 362-0200