A federal appeals court recently held that prior owners and operators of contaminated property were not liable under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for "passive migration" of contamination, which is the gradual spreading of contamination already in the ground.
After purchasing property in Orange, Connecticut, ABB Industrial Systems, Inc. (ABB) performed environmental testing that indicated the property was contaminated with perchloroethylene (PCE) and trichloroethene (TCE), which are hazardous substances under CERCLA. ABB then sued to recover cleanup costs from several companies that previously owned or controlled the property, including Pacific Scientific Company (Pacific), General Resistance, Inc. and Zero-Max, Inc. ABB produced evidence that Pacific, which owned the property before General Resistance or Zero-Max, contaminated the property and that the contamination continued to migrate while General Resistance and Zero-Max controlled the property. ABB argued, therefore, that General Resistance and Zero-Max were liable for passive migration under CERCLA.
The United States District Court for the District of Connecticut rejected ABB's claims against General Resistance and Aero-Max because there was not sufficient evidence to show the prior owners and operators spilled hazardous substances or otherwise contaminated the property. On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court's decision and held that prior owners and operators who merely controlled contaminated property, without fault for the contamination, are not liable under CERCLA for the gradual spreading of the contamination on the property.
Under CERCLA, a prior owner or operator of contaminated property is liable for the cleanup costs of this property if the owner controlled it "at the time of disposal" of a hazardous substance. CERCLA adopts the definition of "disposal" from the Solid Waste Disposal Act, which states that "the term 'disposal' means the discharge, deposit, injection, dumping, spilling, leaking, or placing of any...hazardous waste into or on any land or water so that [it] may enter the environment." To make a case under CERCLA, ABB had to prove that a spill, discharge, leak, etc., occurred when the other companies controlled the site.
In holding that passive migration did not constitute "disposal" under CERCLA, the Second Circuit observed that the terms included in CERCLA's definition of "disposal" of a hazardous substance do not refer to the gradual spreading of contamination already in the ground.
ABB Industrial Systems, Inc. v. Prime Technology, Inc., 1997 WL 414596 (2nd Cir. (Conn.) July25,1997).
This article was prepared by Daniella D. Landers, an associate in our Environmental Department, and previously appeared in the September 1997 edition of Michigan Environmental Compliance, a monthly newsletter written by Honigman Miller Schwartz and Cohn on environmental regulatory developments in Michigan and published by M. Lee Smith Publishers. To subscribe, contact the publisher by either phone at 1-800-274-6675; email at custserv@mleesmith.com; the internet at http://www.mleesmith.com; or by mail at M. Lee Smith Publishers LLC, 5201 Virginia Way, P.O. Box 5094, Brentwood, TN 37024-5094.