ELR Citation: ELR 20975
No(s). s. C89-214M et al (W.D. Wash. Oct 30, 1990)

The court holds that sufficient evidence exists that a successor corporation is liable in this Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contribution action for substantially continuing the previous business. The court earlier denied defendant's similar summary judgment motion on successor liability after finding genuine issues of material fact, even though discovery was incomplete. The court first holds that although discovery is still incomplete, materials in support of resisting summary judgment indicate a substantial continuation of the previous business exists sufficient to impose liability on the successorcorporation. Relying on the Ninth Circuit's recent decision in Louisiana-Pacific Corp. v. ASARCO, Inc., 20 ELR 21079, which held that the traditional rules of successor liability in operation in most states should govern rather than the "excessively narrow" statutes of a few states, the court observes that the Ninth Circuit did not reject the "continuing business enterprise" exception to nonliability of asset purchasers. In addition, the Ninth Circuit did not rule whether the substantial continuity and product line tests were rejected, making them viable factors in CERCLA cases. The court finds that defendant movant has not demonstrated that the evidence does not raise issues of material fact, making summary judgment inappropriate. Evidence exists that defendant movant had knowledge of the possible liabilities associated with hazardous waste disposal, and that CERCLA and the Resource Conservation and Recovery Act were both in effect at the time the defendant movant purchased the previous business. Moreover, because CERCLA contemplates a sharing of cleanup costs by responsible parties, a more expansive view of successor liability under CERCLA fosters a more equitable sharing of remediation costs.

[Previous cases in this litigation are published at 20 ELR 20986 and 20990. A subsequent decision in this litigation is published at 21 ELR 20976.]

Counsel for Plaintiff
Susan L. Barnes
Office of the U.S. Attorney
3600 Sea-First Plaza Bldg., 800 Fifth Ave., Seattle WA 98104
(206) 442-7970

David W. Zugschwerdt
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
William A. Gould
Perkins Coie
1201 Third Ave., 40th Fl., Seattle WA 98101-3099
(206) 583-8888