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WIEGMANN & ROSE INTL. CORP. v. NL INDUS.

April 18, 1990

WIEGMANN & ROSE INTERNATIONAL CORP., a South Carolina corporation, Plaintiff,
v.
NL INDUSTRIES, a New Jersey corporation, and ESSELTE PENDAFLEX CORPORATION, a New York corporation, Defendants



The opinion of the court was delivered by: SMITH

 FERN M. SMITH, UNITED STATES DISTRICT JUDGE

 This is an action arising under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. ("CERCLA") in which the plaintiff seeks to hold the defendants liable for the costs of cleaning up property contaminated with hazardous wastes. The matter is currently before the Court on defendant NL Industries' motion for summary judgment. For the reasons discussed herein, the Court hereby DENIES the motion for summary judgment.

 FACTUAL BACKGROUND

 On May 23, 1975, NL Industries, Inc., ("NL"), sold 23 acres of property located at 2801 Grant Road, Richmond, California to Wiegmann & Rose Machine Works. In September of 1975, Wiegmann & Rose Machine Works sold all of its stock to Wiegmann & Rose International Corp. ("Wiegmann & Rose"), the plaintiff in this lawsuit. It is undisputed that a portion of the Grant Road property, designated "Site R" by the plaintiffs, is contaminated with hazardous wastes.

 There are two different kinds of hazardous wastes on the property, each of which is from a different source. In 1980, the California Department of Health Services investigated the site and discovered that it was contaminated with heavy metals. The source of these heavy metals has been determined to be used foundry sands dumped on the property in the early 1970s. When the heavy metals were discovered, the Department of Health Services ordered Wiegmann & Rose to begin an extensive remedial investigation of the site. Pursuant to this directive, Wiegmann & Rose installed groundwater monitoring wells, analyzed soil borings, and prepared proposals and reports regarding the cleanup of the site.

 In 1987, based on evidence of possible additional contamination, the Department of Health Services directed Wiegmann & Rose to investigate whether there were buried metal drums on the site. Wiegmann & Rose excavated a portion of the site in August of 1988 and did indeed discover buried metal drums. These drums had been leaking over the years and had contaminated the site with used industrial solvents known as "volatile organic carbons" ("VOCS"). There is evidence in the record that these drums were buried on the site in 1973 or 1974. (See, Fromm Declaration at 2, para. 4.) Wiegmann & Rose has spent over $ 500,000.00 thus far in investigating the contamination and planning for remedial action on the site.

 In December of 1988, Wiegmann & Rose filed this action against NL Industries and Esselte Pendaflex Corporation seeking to recover the response costs it has already incurred, and those it will incur in the future, in the cleanup of the site. Wiegmann & Rose contends that NL Industries owned the land during the time it was contaminated with hazardous wastes, and that Esselte Pendaflex ("Esselte") is the successor to the corporation that buried the metal drums on the site. The complaint contains four causes of action -- two arising under the CERCLA statute and two arising under the state law of equitable indemnity. *fn1"

 ANALYSIS

 The issue to be decided by this Court is whether an "as is" clause, contained in a deed conveying property prior to the enactment of CERCLA, operates as a release of CERCLA liability for a party who would otherwise be strictly liable under the statute. For the reasons discussed below, the Court holds that such a provision does not act as a general release of CERCLA liability.

 I. CERCLA.

 Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., in 1980 to facilitate the cleanup of hazardous waste disposal sites. Exxon Corp. v. Hunt, 475 U.S. 355, 359-360, 89 L. Ed. 2d 364, 106 S. Ct. 1103 (1986). The Act was a response by Congress to the threat to public health posed by the widespread use and disposal of toxic materials. Its purpose was "to ensure the prompt and effective cleanup of waste disposal sites, and to assure that parties responsible for hazardous substances bore the cost of remedying the conditions they created." Mardan Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1455 (9th Cir. 1986), citing 126 Cong. Record 31964 (statement of Rep. Florio). In order to effectuate these purposes, in Section 107(a) of the statute, Congress created a private cause of action for recovery of "response costs" against any person who owned or operated a facility at the time hazardous substances were disposed of at the facility or who otherwise contributed to the dumping of hazardous wastes at the facility. See, 42 U.S.C. § 9607(a); Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir. 1989); Cadillac Fairview/California v. Dow Chemical Co., 840 F.2d 691, 693 (9th Cir. 1988); Mardan, 804 F.2d at 1455.

 To state a claim under Section 107(a), a plaintiff must allege (1) that the waste disposal site is a "facility" within the meaning of 42 U.S.C. § 9601(9); (2) that a "release" or "threatened release" of a "hazardous substance" has occurred; and (3) that such release has caused the plaintiff to incur response costs that are "consistent with the national contingency plan." 42 U.S.C. § 9607(a); Ascon Properties, supra, 866 F.2d at 1152. In addition, the defendants must fall within one of the four categories ...


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