15 ELR 20370 | Environmental Law Reporter | copyright © 1985 | All rights reserved

Mardan Corp. v. C.G.C. Music, Ltd.

No. Civ. 83-707-TUC-WDB (D. Ariz. December 6, 1984)

The court rules that costs incurred to comply with the Resource Conservation and Recovery Act (RCRA) are response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but that plaintiff waste site owner's action against the prior owner is barried by a release in the sale agreement and by the clean hands doctrine. Initially the court rules that nothing in CERCLA precludes its application to active hazardous waste disposal sites. Sites with RCRA permits are expressly exempted from the notice requirement of CERCLA § 103, but not from the liability provisions in § 107. The court rules that government action is not a prerequisite to a private cost recovery action in this case, decisions in other courts to the contrary notwithstanding, because the cleanup is under Environmental Protection Agency supervision pursuant to a RCRA consent decree.

Turning to the several defenses, the court first rules that a warranty disclaimer included in the purchase agreement is irrelevant to this action, which is not based on a warranty theory. However, the court also rules that the Settlement Agreement and Release associated with the purchase agreement govern liability in this case to the extent the parties intended to address that issue. The clear language of the general release and the facts surrounding its negotiation lead the court to rule that the release governs CERCLA liability.

Finally, the court also rules that the clean hands doctrine applies in CERCLA liability actions among private parties, and that in this case it bars recovery. Actions based on § 107 are in the nature of restitution and so equitable defenses apply. In this case, unlike an earlier case in which one potentially responsible party was allowed to sue another, plaintiff operated the facility it purchased from defendant as a hazardous waste disposal site for some time. The relative waste contributions of the parties are, the court rules, irrelevant. The result does not undermine the broad liability purposes of CERCLA since defendant can still be liable in a government cost recovery action.

Counsel for Plaintiff
John E. Lindberg
Bilby & Shoenhair
Ninth Floor, Valley National Bldg., Congress at Stone, P.O. Box 871, Tucson AZ 85702
(602) 792-4800

Robert P. Johnstone, Renee R. Mawhinney
Bawes & Thornburg
1313 Merchants Bank Bldg., Indianapolis IN 46204
(317) 638-1313

Counsel for Defendant
Leo N. Smith
Molloy, Jones, Donahue, Trachta, Childers & Mallamo
33 N. Stone, P.O. Box 2268, Tucson AZ 85702
(602) 622-3531

Warren S. Radler, Barbara B. Guibord
Rivkin, Leff, Sherman & Radler
Suite 3900, 30 N. LaSalle St., Chicago IL 60602
(312) 782-5680

[15 ELR 20370]

Browing, J.:


This case presents complex and novel issues regarding environmental law, statutory construction, contract law, and remedies. The principal statutory authorities involved in this case are theComprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 6901 et seq., and the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. § 6901 et seq. The entire text of each of the Act is attached to this Order as Exhibit "A."

CERCLA represents a relatively new body of law. It was enacted hastily in the wake of publicity surrounding the Love Canal controversy. See United States v. A & F Materials Co., Inc., 20 ERC 1353, 1357 [14 ELR 20105] (S.D. Ill. 1984). Accordingly, the legislative history with respect to some of CERCLA's provisions is sketchy. With respect to still others, a clear expression of legislative intent is nonexistent. For the foregoing reasons, many of the issues raised by the parties' cross motions for summary judgment have yet to be squarely addressed by the courts. Because of the unsettled nature of the law in this area, the Court has decided to publish its Order in this matter.


This lawsuit stems from the operation of a musical instrument manufacturing business in Nogales, Arizona. The business is currently owned by the plaintiff in this action, Mardan Corporation. Mardan's president, Daniel J. Henkin, purchased the Nogales facility from C.G.C. Conn, Ltd., a subsidiary of Macmillan, Inc. Following the sale, Macmillan, Inc. changed the name of its subsidiary from C.G.C. Conn, Ltd. to C.G.C. Music Ltd. and subsequently dissolved C.G.C. Music Ltd. on October 31, 1980.1

Prior to its sale on September 5, 1980, the Nogales facility was used by C.G.C. Conn, Ltd. to manufacture musical instruments. Electroplating processes utilized in the manufacturing process resulted in the generation of waste streams consisting of heavy metals, solvents, and cyanide. These wastes were deposited by C.G.C. into a settling pond or lagoon located on the facility property. Following [15 ELR 20371] the sale, Mardan continued to manufacture musical instruments at the Nogales facility, generating many of the same waste by-products as those previously generated by C.G.C.2 Mardan also continued to use the settling pond for waste storage purposes.

Following the sale of the Nogales facility, Mardan applied for a federal hazardous waste disposal permit pursuant to RCRA § 3005 and the regulations promulgated thereunder. See 42 U.S.C. § 6925; 40 C.F.R. part 265 et seq.3 The State of Arizona also granted Mardan temporary approval to operate the facility pursuant to Arizona Code of Rules and Regulations R9-8-1820.H.1. The state's temporary approval was conditioned upon Mardan's compliance with EPA interim status standards then in effect. Mardan did not, however, comply with those standards. On two different occasions, the EPA notified Mardan that it was in violation of federal and state requirements. The EPA also proposed that civil penalties in the amount of $36,000 be assessed against Mardan.

Mardan determined that the cost of bringing the waste disposal operation at the Nogales facility up to EPA standards was too high to justify continued use of the lagoon for waste storage purposes. Therefore, Mardan decided instead to "close" the settling pond.4 On September 30, 1983, Mardan entered into a Consent Agreement and Final Order with the EPA in which Mardan agreed, inter alia, to close the settling pond in lieu of operating it under an EPA permit.

Law and Discussion

Mardan's lawsuit is based primarily upon Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA").5 § 107(a) provides, in pertinent part:

Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section

(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,

shall be liable for —

(A) all costs of removal or remedial action incurred by the United States Government or a State not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan; and

(C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release.

Mardan characterizes its cost of complying with RCRA as CERCLA "response costs."6 It seeks to recover those costs from defendants pursuant to Section 107(a)(4)(B). As a first line of defense, C.G.C. and Macmillan argue that costs of complying with RCRA requirements cannot be considered "response costs" under CERCLA. Therefore, the first question which must be addressed is whether the monies expended by Mardan in order to fulfill its obligations under the 1983 Consent Agreement and Final Order with the EPA constitute "response costs" under CERCLA.

Defendants argue that the provisions of CERCLA were not intended to apply to an ongoing and useful disposal site such as the Nogales facility operated by Mardan. It is defendants' position that CERCLA was enacted to "address the complex problems posed by abandoned and inactive hazardous waste disposal sites." See Memorandum in Support of Defendants' Motion for Summary Judgment (hereinafter "Defendants Memorandum") at 25-26. Accordingly, defendants contend that CERCLA has no application to the Nogales facility. Instead, defendants claim that the provisions of RCRA should govern the operation of such an active site. Implicit in defendants' argument is the notion that RCRA and CERCLA are mutually exclusive. But such a conclusion is supported by neither the language nor the legislative history of CERCLA.

That CERCLA was intended to operate independently of and in addition to RCRA is indicated by the first clause of Section 107 of CERCLA which provides: "Notwithstanding any other provision or rule of law . . . [liability may be established]." Similarly, the fact that RCRA facilities were specifically exempted from the notice requirements of Section 103(c), but not the liability provisions of Section 107(a) suggest that RCRA and CERCLA were intended to be cumulative.See also Jones v. Inmont Corp., supra note 6, 584 F. Supp. at 1430-35 (holding that RCRA applies to both active and inactive hazardous waste disposal sites). Finally, the exemption from CERCLA's notice requirements applies only to facilities which have been issued "a legally enforceable final permit issued pursuant to [RCRA]." The committee report accompanying the Senate version of CERCLA contained the following statement regarding the "federally permitted release" exemption:

The reported bill tightly limits the types of disposal site releases that would be covered by this [federally permitted release] definition. First, only final [RCRA] permits are included. Sites or facilities which have interim status under [RCRA] do not adequately utilize acceptable levels of technology, and do not qualify for this exclusion.

S. Rep. No. 848, 96th Cong., 2d Sess. 48 (1980) (emphasis added). Hence, it appears that the Nogales facility was not even exempted from the notice requirements to CERCLA let alone the Act's liability provisions. From the foregoing it is evident that CERCLA applies both to active and inactive waste disposal sites and that Mardan's RCRA compliance costs may also be considered "response costs" under CERCLA.

But CERCLA requires not only that funds expended by the plaintiff be characterizable as "costs of response," but also that they be "incurred . . . consistent with the national contingency plan . . . ." See Section 107(a)(4)(B). Defendant contends that in order to meet this requirement, it is necessary for the plaintiff to show that its clean-up effort was government approved and that it followed [15 ELR 20372] some enforcement activity initiated by the federal government. In defendants' words,

many of the decisions addressing the question have limited private cost recovery actions under CERCLA because of concerns over opening the door to a proliferation of such actions absent some standards or guidelines set by the government. Despite CERCLA's policy for swift and voluntary clean-up activities, these decisions emphasize the need for governmental activity and supervision under CERCLA. See, e.g., Bulk Distribution Centers, Inc. v. Monsanto Co., No. 83-6805 [15 ELR 20151] (S.D. Fla. June 19, 1984); Wickland Oil Terminals v. ASARCO, Inc., No. 84-5906 [14 ELR 20494] (N.D. Cal. May 4, 1984); Cadillac Fairview/California, Inc. v. Dow Chemical Co., Cv. Nos. 83-7996 and 83-8034 [14 ELR 20376] (C.D. Cal. March 5, 1984).

See Defendants' Reply Memorandum at 13. White it is true that virtually every reported decision or order addressing the issue has found some degree of governmental involvement or supervision to be a prerequisite to a private cause of action under Section 107(a) of CERCLA, those courts have done so on the ground that to hold otherwise could lead to haphazard and ineffectual clean-up efforts by private parties.7 In the present case, Mardan's activities in closing the settling pond are under the supervison of the EPA and pursuant to a Consent Agreement and Final Order with EPA. Therefore, the danger that Mardan's efforts will be "haphazard and ineffectual" does not exist.

Having determined that Mardan's claim against C.G.C. and Macmillan is authorized by Section 107(a) of CERCLA, it becomes necessary to examine the various defenses to plaintiff's claim which have been raised by defendants. Defendants' first argument is that Section 8.4 of the Purchase Agreement between Mardan and C.G.C. precludes plaintiff's recovery.8 Section 8.4 provides:

Purchaser acknowledges that neither Conn nor Macmillan is making any representations or warranties, expressed or implied, about the condition of the Assets (including the Fee Simple Assets) or the Leased Assets, and that the sale and/or Sublease thereof will be strictly "AS IS". Conn and Macmillan EXPRESSLY DISCLAIM ALL WARRANTIES AS TO THE ASSETS, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.

Defendants argue that the effect of Section 8.4 is "to negative the existence of any representations by the seller as to the particular condition, fitness, type of construction, etc., of the premises sold." See Defendants' Memorandum at 18, citing Approved Properties, Inc. v. City of New York, 52 Misc. 2d 956, 277 N.Y.S.2d 236, 238 (Sup. Ct. Richmond Co. 1966). As Mardan correctly points out, the warranty disclaimer is effective to preclude only causes of action which are based upon breach of warranty theory. Mardan's lawsuit is based not upon warranty theory but rather upon the statutory cause of action created by Section 107(a) of CERCLA. Therefore, Section 8.4 of the Purchase Agreement does not defeat plaintiff's recovery.

A distinct but related argument raised by the defendants is that the Settlement Agreement and Release executed by the parties in November of 1981 prevents Mardan from asserting any cause of action it might otherwise have under CERCLA. In the Memorandum of Points and Authorities accompanying their Motion for Summary Judgment, defendants recount the sequence of events which led to the execution of the Settlement Agreement and Release. See Defendants' Memorandum at 5-9, 18-23. Defendants capsulize those developments thusly:

After eleven months of extensive negotiations, in November 1981 Mardan and Macmillan executed the Settlement Agreement and Release. During that time, both parties brought to the bargaining table each and every claim which they deemed in dispute. Mardan raised, discussed, pressed and eventually conceded its hazardous waste disposal claim. All Mardan claims, including its hazardous waste disposal claim, were ultimately resolved with the execution of the Settlement Agreement and Release.

Defendants' Memorandum at 18. Mardan argues that the Settlement Agreement and Release have no effect on its right to recover. According to Mardan and the express language of the Release, Mardan released only those claims

based upon, arising out of or in any way relating to the Purchase Agreement (including, without limitation, Article 7 thereof), the Assignment Agreement, the Severance Escrow Agreement or any other agreement or transaction pursuant to any of such agreements.

See Exhibit 11 to Naughton Aff. Defendants contend that Mardan's lawsuit is inextricably bound up with the Purchase Agreement, as evidenced by the fact that Mardan, in its Notice of Claim to defendants, referred to both Section 107(a) of CERCLA and the Purchase Agreement. Plaintiff strenously urges the Court to find that its cause of action "did not arise out of the purchase agreement, is not connected therewith, and was in no way contemplated thereby." See Plaintiffs' Memorandum at 28. Instead, Mardan claims that its lawsuit is grounded solely upon the statutory cause of action created by Section 107(a) of CERCLA. In Mardan's words:

While Macmillan's and C.G.C.'s prior ownership and operation of the Nogales site are necessary elements of this case (and the fact of those elements is undisputed), the existence of a purchase agreement is not a necessary element, and Mardan's claim in no way is premised or dependent upon the Purchase Agreement. If the exchange of ownership of the Nogales site had taken place in the absence of any purchase agreement whatsoever, Mardan's CERCLA Section 107 action would still stand. Section 107(a) does not require the existence of a purchase agreement, and Section 107(b) does not allow the use of a purchase agreement as a defense.9 The Purchase Agreement, and its mention in Mardan's Notice of Claim, are merely surplussage — above and beyond the requirements of a Section 107 case.

Plaintiffs' Reply Memorandum at 13.

It appears that the nexus between Mardan's cause of action and the Purchase Agreement is sufficiently close to justify a finding that the Settlement Agreement and Release are applicable in the present situation. The broad language of the Release covers not only those claims based upon the Purchase Agreement, but also [15 ELR 20373] all claims "in any way relating to the Purchase Agreement . . . ." if Mardan had not acquired an ownership interest in the property by virtue of the Purchase Agreement, it would have not have incurred "response costs" pursuant to the EPA Consent Agreement and Final Order and would not have acquired a cause of action under Section 107(a) of CERCLA. The fact that Mardan could have acquired title to the property "in the absence of any purchase agreement whatsoever" is irrelevant. It was the Purchase Agreement in this case that transferred title to the Nogales facility to Mardan. Therefore, the Settlement Agreement and Release are effective to bar all claims which the parties reasonably contemplated and intended to dispose of at the time the Settlement and Release were executed. See Cahill v. Regan, 5 N.Y.2d 292, 184 N.Y.S.2d 505 (1959).

As to what claims were contemplated by the parties when the Settlement and Release were executed, plaintiff and defendants sharply disagree. The primary purpose of the release, according to Mardan, was to settle severance pay and accounts receivable issues. See Affidavit of Joseph D. Sharp P6. Nevertheless, it is undisputed that both the existence of the settling pond and the nature of the substances stored in the pond were known to all parties at the time they were negotiating the settlement. In the course of those negotiations the parties specifically addressed the possible need for a waste pretreatment system at the Nogales facility. Price Aff. at 2-3. Likewise, the parties agree that CERCLA had been in existence for nearly a year at the time the Settlement Agreement and Release were executed. Therefore, Mardan had at least constructive knowledge of its potential claim under Section 107(a). Given the broad and unambiguous language of the general release involved in this case, it must be concluded that Mardan intended to give up all claims which it had or might someday have against C.G.C. and Macmillan in exchange for approximately $995,000.

Mardan claims that the response costs which it incurred "were totally unanticipated at the time the release was executed." Plaintiff's Memorandum at 29. This statement is not supported by the facts, however. Throughout settlement negotiations Mardan was aware of RCRA's requirements, the same requirements which ultimately led to Mardan's incurrence of "response costs," Furthermore, as mentioned above, CERCLA was enacted before the parties finally reached a settlement and executed the Release here in question.

Defendants raise the additional, equitable defense of unclean hands. Citing City of Philadelphia v. Stepan Chemical, 544 F. Supp. 1135 [12 ELR 20915] (E.D. Pa. 1982), defendants argued that one "responsible party" may sue another "responsible party" under Section 107(a) only where the first is merely a passive party who did not participate in the creation of the hazardous waste site.10 In the Stepan Chemical case, the plaintiff City of Philadelphia owned a landfill on which third parties had illegally dumped certain hazardous wastes. When the city became aware of the illegal dumping, it brought suit under Section 107(a) of CERCLA against the generators of the hazardous waste material. The defendants brought a motion for judgment on the pleadings, arguing, inter alia, that Section 107(a) of CERCLA did not authorize suits by one "responsible party" against another. The court denied defendants' motion, finding that nothing in CERCLA precluded the city's cause of action. The court, however, made specific mention of the fact that "the City . . . did not voluntarily allow the placement of the hazardous substances on its property and . . . sustained damages as the result of their illegal disposal . . . ." Id.

C.G.C. and Macmillan argue that Stepan Chemical restricts private causes of action under CERCLA to those in which the plaintiff is not himself responsible in some way for the creation of the hazardous condition.11 It has been held that actions based upon Section 107 are actually equitable actions in the nature of restitution. United States v. Northeastern Pharmaceutical and Chemical Co., Inc., 19 ERC 2186 [13 ELR 20992] (W.D. Missouri 1983). Therefore, the equitable defense of unclean hand is applicable in a private response cost recovery action under CERCLA. See D. Dobbs, Remedies Section 2.4 at 45-47 (1973).

In the present case Mardan operated the Nogales facility for approximately three years before it was required by the EPA to close the settling pond on the property. During that time Mardan continued to deposit electroplating byproducts in the pond. Thus, Mardan actively participated in the creation of the hazardous waste site. The fact that defendants may have been responsible for producing the majority of the hazardous waste material in the pond is not important. Mardan contributed to some degree to the creation of the hazardous waste site.

Contrary to mardan's assertion, application of the clean hands doctrine in CERCLA cases will not defeat the intent and purpose of the Act nor will it contravene public policy. Defendants remain liable to the state or federal government in an action based upon Section 107(a)(4)(A) of the Act. Neither defendants' contractual defenses nor the unclean hands doctrine would present a bar to recovery if such an action were brought. Hence, the public policy of assuring that responsible parties bear the costs of hazardous waste clean-up is not defeated by application of the clean hands doctrine in a private recovery action under Section 107(a)(4)(B).12


Mardan's claim for response costs, although authorized by Section 107(a)(4)(B) of CERCLA, is barred by both the Release and the doctrine of clean hands. Therefore, it is ORDERED that defendants' motion for summary judgment is GRANTED.

1. Pursuant to 8 DEL. C. §§ 259, 278, claims against C.G.C. Music Ltd. had to be commenced within three years of the dissolution, or by October 31, 1983. The present action was filed on October 24, 1983.

2. Mardan points out that during the time defendants held title to the Nogales facility, wastes deposited in the settling pond included cyanides, nickel, copper, trichloroethylene and cadmium.The latter two substances were never used by Mardan after it acquired the facility from C.G.C.

3. Mardan obtained "interim status" by filing a permit application pursuant to Section 3005(e) of RCRA. That section allows a pre-existing facility which has filed an application under Section 3005(b) to "be treated as having been issued such permit until such time as final administrative disposition of such application is made. . . ."

4. Closure of a facility includes either 1) proper containment of the waste materials combined with long-term monitoring and maintenance, or 2) removal of all hazardous wastes and contaminated soil.

5. Plaintiff's complaint also includes Counts based upon such theories as: 1) unjust enrichment, see Count IV; 2) lindemnity, see Count III; and subrogation, see Count II. The thrust of plaintiff's moving papers has been directed at its Section 107 claim, however. Plaintiff's claims for indemnity and subrogation can be disposed of summarily. Under Arizona law it is well settled that there may be no indemnity among joint tortfeasors. DePinto v. Landoe, 411 F.2d 297 (9th Cir. 1969). Because Mardan was responsible for depositing at least some of the hazardous wastes in the settling pond it is not entitled to indemnity.

Mardan's subrogation claim must also be dismissed. Section112(c)(2) provides that

[a]ny person, including the Fund, who pays compensation pursuant to this Act to any claimant for damages or costs resulting from a release of a hazardous substance shall be subrogated to all rights, claims, and causes of action or such damages and costs of removal that the claimant has under this Act or any other law.

42 U.S.C. § 9612(c)(2). Section 112(c)(2) applies only where a "release" of hazardous waste has caused someone to incur costs or damages. In the present case, there is no evidence that there was any such "release." In addition, Mardan has not [p]aid compensation to "any claimant." Instead, Mardan has merely incurred costs itself in conjunction with the closure of the lagoon.

6. as noted by the Court in Jones v. Inmont Corp., 584 F. Supp. 1425, 1429 [14 ELR 20485] (S.D. Ohio 1984):

The phrase "response costs" is nowhere defined in the Act, and the word "response" is defined only as "remove, removal, remedy, and remedial action." 42 U.S.C. § 9601(25). Subsection (23) of this section defines "remove" and "removal" to include actions necessary to clean up or remove hazardous substances, to monitor, assess, and evaluate a release, to dispose of removed material, or to prevent, minimize, or mitigate damage to the public or the environment. Specific examples given include security fencing, alternative water supplies, temporary evacuation and housing, and other emergency assistance. Subsection (24) defines "remedy" and "remedial action" as actions consistent with a permanent remedy to prevent or minimize the release of hazardous substances. Specific examples given include containment actions, treatment or incineration, provision of alternate water supplies, and any monitoring reasonably required to assure that the action taken protect the public and the environment.

Mardan's RCRA compliance costs indubitably fall under the rubric of "response costs" as that term is derived from the above-quoted language in Jones v. Inmont.

7. See, e.g., Bulk Distribution Centers, Inc. v. Monsanto Co., supra, No. 83-6805,slip op at 15 (asking the question "[i]f the court permitted Bulk to begin cleanup operations without prior government approval, then what assurance would there be that the plan was extensive enough to alleviate the danger given Bulk's limited resources?"); Wickland Oil Terminals v. ASARCO, Inc., supra, No. 84-5906, slip op. at 5 ("[t]he response powers authorized by CERCLA and the [National Contingency Plan] contemplate governmental supervision over, and initiation of, hazardous waste cleanup"); Cadillac Fairview/California, Inc. v. Dow Chemical Co., supa, Nos. 83-7996 and 83-8034, transcript of record at 23 (to permit private suits prior to any government initiated response would "frustrate the intent behind the Act, which is to establish a program to deal with [hazardous waste] sites").

8. It is defendants' contention that the Purchase Agreement as well as the Settlement Agreement and Release executed by the parties should be interpreted in accordance with the laws of the State of New York. Defendants' position is based upon the choice of laws provision found in Section 8.8 of the Purchase Agreement. Because the parties have agreed that New York law should control, this Court is bound to give effect to that intent. See Schram v. Smith, 97 F.2d 662, 664 (9th Cir. 1938).

9. Mardan makes the argument that defendants' contractual defenses are inapposite in this action because such defenses are not enumerated in Section 107(b). That section provides, in pertinent part:

There shall be no liability under subsection (a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by —

(1) an act of God;

(2) an act of war;

(3) an act or omission of a third party [not affiliated with the defendant];

(4) any combination of the foregoing paragraphs.

Because subsection (a) of Section 107 states that liability is "subject only to the defenses set forth in subsection (b) of this section," Mardan contends that the defenses listed in subsection (b) are exclusive.

Mardan's argument does not withstand close analysis. As defendants have suggested, Mardan's interpretation would result in defendants being held liable even if they had already paid Mardan's Section 107(a) claim in a prior lawsuit since res judicata, payment, and accord and satisfaction are not listed as defenses in subsection (b). Similarly under Mardan's interpretation of the statute, defendants would not be able to raise such defenses as statute of limitations, waiver, laches, etc. For the foregoing reasons, the defenses listed in subsection (b) cannot be considered as exclusive.

10. Responsible parties are those listed in subsection (a) of Section 107. They include:

(1) the owner and operator of a vessel (otherwise subject to the jurisdiction of the United States) or a facility,

(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,

(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility owned or operated by another party or entity, at any facility owned or operated by another party or entity and containing such hazardous substances, and

(4) any person who accept or accepted any hazardous substances for transport to disposal or treatment facilities or sites selected by such person, from which there is a release, or a threatened release which cause the incurrence of response costs, of a hazardoussubstance . . . .

11. Subsequent cases support defendants' position. For instance, in Velsicol Chemical Corp. v. Reilly Tar & Chemical Corp., No. 1-81-389 [15 ELR 20103] (E.D. Tenn. August 16, 1984) the court had the following to say:

[P]laintiff is correct in insisting that the dispositive consideration in Stepan was that the plaintiff City "did not operate a hazardous waste disposal facility on the premises and it assert that it did not voluntarily permit the placement of the hazardous substances on its property."

Slip op. at 12.

Similarly, in D'Imperio v. United States, 575 F. Supp. 248 [14 ELR 20428] (D.N.J. 1983), the [court] held that "[i]n order to seek recovery under Section 107(a)(4)(B), it is necessary for the plaintiff to prove that he himself is not liable for these costs."

12. The same analysis is equally applicable to Mardan's claim for unjust enrichment in Count IV of the Complaint.

15 ELR 20370 | Environmental Law Reporter | copyright © 1985 | All rights reserved