A federal appeals court ruled that a landowner is not liable under CERCLA1 for amounts due to a subcontractor, when the owner had already paid the prime contractor for cleanup work. The prime contractor, fully paid, failed to make payment to subs and then went out of business. Although the sub argued that CERCLA required the property owner to pay for cleanup, the court held (decision available here) that the property owner had discharged its obligations under CERCLA when it fully paid the prime contractor for the cleanup work. The sub still retained lien rights against the property (which allowed partial recovery), but could not rely on the federal cleanup statute as a mechanism to ensure payment from the property owner in these circumstances.
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1 Comprehensive Environmental Response, Compensation and Liability Act. The federal law imposes liability on a property owner for the cost of cleaning up contamination on the property.
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