Ashley II of Charleston LLC v. PCS Nitrogen Incorporated
714 F.3d 161
| 4th Cir. | 2013Background
- Ashley II of Charleston, Inc. seeks CERCLA cost recovery from PCS Nitrogen, Inc. for cleanup of a Charleston site.
- District court bifurcated trials: liability (PRP status) first, allocation of costs second.
- PCS contends it is not liable as a successor to Old CNC; Ashley argues liability transfer under 1986 Acquisition Agreement.
- Old CNC’s assets were sold to New CNC (later Columbia Nitrogen Corp.); by mergers, PCS is a successor to New CNC, but liability transfer is disputed.
- Holcombe and Fair owned the site and undertook substantial earth-moving; several parcels were later sold or leased; contamination spread across the site.
- Ashley incurred at least $194,000 in response costs; EPA has studied the site but not required remediation by Ashley yet.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PCS is a PRP as successor to Old CNC | Ashley says New CNC assumed Old CNC CERCLA liabilities | PCS argues Acquisition Agreement unambiguously limited liabilities | Ambiguity; district court's finding preserved; PCS affirmed as PRP based on extrinsic evidence supporting transfer |
| Whether New CNC unambiguously assumed CERCLA liabilities | Ashley contends transfer included latent CERCLA liabilities | PCS contends liability not clearly transferred by agreement | Not unambiguous; extrinsic evidence supports Ashley; court affirms district court’s conclusion of transfer |
| Whether Holcombe & Fair are PRPs for secondary disposals | PCS contends evidence insufficient for disposal during ownership | Holcombe & Fair argue no discrete proof of disposal | Affirmed—disposal inferred from extensive earth-moving and site-wide contamination |
| Whether RHCE is a PRP as current operator | — | RHCE claims no disposal occurred during its leasehold | RHCE is a PRP as current operator; leasehold part of contaminated facility; no defense of innocent landowner |
| Whether Ashley qualifies BFPP exemption | Ashley seeks BFPP exemption under §9607(r)(1) | Ashley failed to meet eight criteria of BFPP, including appropriate care | BFPP denial affirmed; Ashley remains PRP as current owner |
Key Cases Cited
- Monsanto Co. v. United States, 858 F.2d 160 (4th Cir. 1988) (strict liability; limited defenses; joint and several liability)
- Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (U.S. 2009) (apportionment requires a reasonable basis; extreme care in divsibility analyses)
- Axel Johnson, Inc. v. Carroll Carolina Oil Co., 191 F.3d 409 (4th Cir. 1999) (apportionment available when a reasonable basis for contribution exists)
- United States v. Bestfoods, 524 U.S. 51 (1998) (limits derivative liability and contours of successor liability)
- United States v. Atlantic Research Corp., 551 U.S. 128 (2007) (contribution actions allowed for equitable allocation)
- Minyard Enters., Inc. v. Southeast Chem. & Solvent Co., 184 F.3d 373 (4th Cir. 1999) (allocation under §9613(f) informs equitable sharing among PRPs)
- Lyondell Chemical Co. v. Occidental Chemical Corp., 608 F.3d 284 (5th Cir. 2010) (orphan shares and allocation principles in CERCLA)