General Industry News

Supreme Court Rules on CERCLA Liability

On Dec. 13, 2004, the U.S. Supreme Court upheld a decision ruling that without a government mandate to clean up a site, a current property owner could not sue the property's former holder for cleanup costs. Aviall Services Inc. originally filed the case in 1997 against Cooper Industries Inc., who had owned the site until 1981, to recover cleanup costs from ground and groundwater contamination discovered several years after its purchase. The state of Texas directed Aviall to clean it up, however, judicial or administration action was never filed by the state or the EPA.

Aviall claimed it could sue Cooper under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Cooper admitted to being a potentially responsible party (PRP), but claimed it was not liable because Aviall was never sued to clean up the land and had no federal requirement to do so. The district court and a panel for the 5th Circuit Court of Appeals ruled against Aviall. However, an appellate court had reversed that decision, ruling that CERCLA does not require a PRP to first be sued before seeking cleanup funds from other PRPs.

The Supreme Court ruled 7-2 in favor of Cooper. The justices said the company improperly tried to use the Superfund law to sue because the government had not demanded that the cleanup be done. However, the court left open the possibility that another part of the law could permit such lawsuits.

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