906 F.3d 85
3rd Cir.2018Background
- Trainer Custom Chemical, LLC bought the Stoney Creek Site in October 2012 for $20,000 after PADEP and EPA had already conducted removal actions and PADEP had incurred substantial cleanup costs (over $818,000 for electricity through June 2009).
- At purchase, the sale documents disclosed ongoing environmental remediation; hazardous materials and prior releases existed on the Site.
- After acquisition, Trainer’s principals (Hunter and Halkias) demolished structures and sold salvaged materials, and PADEP observed ongoing hazardous conditions including asbestos and spills.
- PADEP sued Trainer, Hunter, and Halkias under CERCLA §107(a) and Pennsylvania’s HSCA seeking recovery of all response costs (totaling ~$932,580 through Nov. 2015).
- The District Court held Trainer liable only for response costs incurred after Trainer’s acquisition, reserving apportionment and damages for trial; PADEP appealed interlocutorily the temporal limitation.
- The Third Circuit concluded that a current owner is liable under CERCLA and HSCA for all response costs, including those incurred before acquisition, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a current owner is liable under CERCLA §107(a)(1) for response costs incurred before the owner acquired the property | PADEP: “all costs” in §107(a) includes costs incurred before ownership; no temporal limitation exists and statutory structure supports full liability | Trainer: liability should be limited to costs incurred after acquisition (District Court adopted this temporal cut-off) | Held: §107(a)’s phrase “all costs” includes costs incurred before and after acquisition; current owner liable for all response costs. |
| Whether HSCA imposes the same temporal reach as CERCLA | PADEP: HSCA mirrors CERCLA §107 and likewise imposes liability for all response costs regardless of timing | Trainer: (implicitly) HSCA liability should align with District Court’s temporal limitation | Held: HSCA parallels CERCLA here; Trainer liable for all response costs under HSCA as well. |
| Whether any statutory or equitable limits (e.g., statutes of limitation, innocent owner, bona fide prospective purchaser, divisibility/contribution) negate pre-acquisition liability | PADEP: existing statutory mechanisms address limits and allocation — they do not create a temporal exclusion to §107(a) “all costs” language | Trainer: relied on temporal limitation adopted by district court; raised (through record) corporate veil/piercing and factual disputes for damages/apportionment | Held: Court declines to read a temporal exception into §107(a); other statutory defenses/limits (statute of limitations, innocent owner, BFP purchaser, contribution/divisibility) remain available where applicable but do not negate that “all costs” covers pre-acquisition costs. |
| Procedural question: whether interlocutory appeal permissible on this legal question | PADEP: certification appropriate under §1292(b) because question is controlling and separate issue of law | Trainer: (opposed) interlocutory review not warranted | Held: Court granted interlocutory review and resolved the legal question de novo. |
Key Cases Cited
- Litgo N.J. Inc. v. Comm’r N.J. Dep’t of Envtl. Prot., 725 F.3d 369 (3d Cir. 2013) (discussing PRP identification and allocation of response costs)
- Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (2009) (CERCLA’s purpose to ensure timely cleanup and cost allocation to responsible parties)
- United States v. CDMG Realty Co., 96 F.3d 706 (3d Cir. 1996) (treating current owner/operator as PRP under §107(a)(1))
- United States v. Nicolet, Inc., 857 F.2d 202 (3d Cir. 1988) (on owner/operator liability under CERCLA)
- United States v. Alcan Aluminum Corp., 990 F.2d 711 (2d Cir. 1993) (discussing liability and apportionment in §107 actions)
- Alcan Aluminum Corp. v. Alcoa, 964 F.2d 252 (3d Cir. 1992) (addressing joint and several liability and divisibility analyses)
- Agere Sys., Inc. v. Adv. Envtl. Tech. Corp., 602 F.3d 204 (3d Cir. 2010) (noting HSCA §702 mirrors CERCLA §107 for purposes of liability)
- TRW Inc. v. Andrews, 534 U.S. 19 (2001) (statutory interpretation principle that enumerated exceptions preclude implied ones)
- United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th Cir. 1989) (contribution actions permit reallocation of cleanup costs among PRPs)