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The course of the Lower Fox River Superfund litigation has been
a continual set of surprises, and its denouement was true to
that pattern. In his
post-trial decision last week, Judge Griesbach wrote the
sentence that most CERCLA defendants have been waiting 30 years to
hear: "It ... seems doubtful that a defendant can
ever be found to be an arranger if he did not know the
substance in question is hazardous." For a statute in which
liability has always been held to be strict and without fault, a
judicial pronouncement that liability hinges on the defendant's
knowledge is nothing short
of stunning. However, as has often been the case in
the Lower Fox River
decisions, the Court's novel utterances about Superfund
issues ultimately give way to traditional holdings.
Notwithstanding the Court's tantalizing assertion that
knowledge of hazardousness should be an element of CERCLA generator
liability, the Court's actual holding is much more
pedestrian. Specifically, the trial involved the issue of liability
arising from the sale of a usable waste. In an earlier
post, I noted that virtually all the usable waste cases
followed the basic rule that a party will be held liable if it
sells a waste that cannot be used without first causing the
release of a hazardous substance. Judge Griesbach followed
precisely this rule. He found that the defendant had sold scrap
paper which was coated with PCBs to a buyer who recycled that
scrap. The Court found that the defendant's motive was
primarily financial in selling the scrap and the buyer's motive
was to get a product it had a strong incentive to recycle into
a marketable product. While the recycling process produced
wastewater containing PCBs, there was no intrinsic reason why the
buyer had to discharge that contaminated wastewater to
cause the release of a hazardous substance.
As a result, the Court concluded that the defendant, the seller
of the scrap paper, was not liable as an
arranger. Although the Court suggested that it reached
this result in part because the defendant did not know that its
scrap paper was hazardous, the holding is better understood as
simply affirming the rule that a seller of usable waste will not be
liable when it the usable waste is actually sold and can be used
without first causing the release of a hazardous
substance.
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