ELR Citation: ELR 20449
No(s). C94-5326FDB, -5518FDB (W.D. Wash. Jun 21, 1996)

The court holds that the successor to a ship repair company is liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for contamination resulting from its predecessor's activities, and that the United States is not liable as an operator under CERCLA for that contamination. The court first holds that application of the substantial continuity test for successor liability is appropriate in CERCLA cases and that the circumstances of the successor in this case satisfy that test. The successor purchased the business and assets of its predecessor. It operated the predecessor's shipyard doing the same kind of business, using the same name, at the same location, for many of the same customers, and using many of the same assets, managers, executives, and employees. It was such activity that resulted in the deposit of toxic substances from the marine painting operations at the shipyard, and benefits flowed to the successor and its predecessor from the ability to release contaminants without care or cost. The court notes that the successor acquired its predecessor's business before CERCLA's enactment, and it therefore had no notice of potential liability for the contamination. But CERCLA imposes strict and retroactive liability and it was enacted to remediate sites contaminated with hazardous waste from past practices.

The court next holds that the United States did not control operations at the shipyard during World War II such that it became an operator under CERCLA. The predecessor ship repair company conducted its operations, and generated and handled wastes, in the same way that it had before the war. The federal government did not conduct any work itself, and government inspectors and accountants had no responsibility for directing activities that led to the deposit of wastes.

[A prior decision in this litigation is published at 26 ELR 21370.]

Counsel for Plaintiffs
Charles F. Secrest, Ass't Attorney General
Attorney General's Office
905 Plum St., Bldg. 3, Olympia WA 98504
(360) 753-6200

Counsel for Defendants
Sean K. Carman
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000