Scenario: a corporate property owner constructs a building, coats it with a previously unknown carcinogen and many years later the property and assets of the owner are purchased by a company that merges with another company. The new company learns that the chemical coating has slowly migrated into and contaminated a nearby stream. Can the new company recover its response costs for cleaning up the contamination under CERCLA Sec 107(a)(2) from the original owner who built the building? Based upon the Sixth Circuit Court of Appeals’ decision in Lockheed Martin Corp v. Goodyear Tire & Rubber Co., 6th Cir. , no 12-4108 (July 9, 2013) that answer is NO.
In Lockheed, Goodyear was sued after Lockheed spent millions of dollars cleaning up PCB contamination around an airship hangar and adjacent stream. Apparently, the hangar, which was built in the ’20s by Goodyear Zeppelin Corporation, was constructed of steel siding that had a protective coating of PCBs. Over time, the PCBs leached off the steel and contaminated the surrounding soil and stream. Loral Corporation acquired the site when it purchased all the assets and assumed all the liabilities of Goodyear Aerospace Corporation. Loral subsequently merged with Lockheed Martin.
As part of its claim against Goodyear, Lockheed argued that Goodyear should be liable, under CERCLA §107(a)(2), for the cleanup of the PCBs in the stream, which Goodyear owned at the time. CERCLA §107(a)(2) imposes liability on anyone “who at the time of disposal of any hazardous substance, owned or operated any facility at which such hazardous substances were disposed of”. The Court of Appeals, in rejecting Lockheed’s argument, noted that CERCLA 107(a)(2) only imposes liability on the owner of a site “at which the hazardous substances were disposed of”. Because the PCBs were released from the steel siding 1,000 feet away and not “disposed of” at the stream, there was no “disposal” contemplated by CERCLA §107(a)(2). Also, citing U.S. v. 150 Acres of Land, 204 F.3d 698 (6th Cir, 2000), the Court explained that “a disposal occurs only when there was human activity involved in whatever movement of hazardous substances occurred on the property.” Lockheed, at 8.
It will be interesting to see if future courts apply the ruling in this case to claims by property owners who allege their property has been contaminated by contaminants migrating from adjacent property. Even though a release of hazardous substances may have occurred at the time the prior owner of the adjacent property owned the property, the defendant could use the ruling in Lockheed to argue that it is not liable for the contaminants that migrated off-site either because: (1) it did not own the off-site property or (2) no human activity was involved in the movement of the contamination from its property to the off-site property and, therefore, it did not constitute a “disposal” under CERCLA §107(a)(2).
