Sole Shareholder Of Company That Owns Contaminated Property Can Be Held Liable Under CERCLA As Current Operator

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In the case of Litgo v. Martin, 2011 WL 65933 (D.N.J. Jan. 7, 2011) the federal District Court of New Jersey held that a shareholder of a single-purpose entity that owns a contaminated facility is liable as a current operator under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et al. (“CERCLA”). In 1983, the New Jersey Department of Environmental Protection (“NJDEP”) was ordered to clean up a property located in Newark, New Jersey. NJDEP removed drums of hazardous waste from the Newark site and stored them at a warehouse located at 40 Haynes Road, Somerville, New Jersey (the “Site”). The warehouse at the Site was determined to be contaminated with hazardous substances.

While the remediation at this Site was being conducted by NJDEP, plaintiff Sheldon Goldstein entered into negotiations with the current owner of the Site. On August 6, 1985, the current owner of this Site entered into an agreement to sell the Site to plaintiff Goldstein. Subsequently a dispute broke out over the sale of the Site and the Court ultimately ordered the plaintiff Goldstein to take title to the Site. On February 14, 1990, plaintiff Goldstein took title to the Site and pursuant to the contract of sale assumed the obligations to clean up the Site. On April 14, 1990, plaintiff Goldstein transferred the Site to plaintiff Litgo New Jersey, Inc.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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