When Is An Arranger Not An Arranger? When It Sells Some Good Stuff Along With The Junk


As Superfund lawyers know, the Supreme Court decision in Burlington Northern required proof of an intent to dispose hazardous substances as a prerequisite to imposition of arranger liability.  While lower courts have often blissfully ignored the holdings in Supreme Court decisions under CERCLA, arranger liability seems to be one area in which the lower courts have taken the Supreme Court decision to heart.

In any event, while I have been pleased that lower courts have applied the rule in Burlington Northern, the arranger liability decision last week in United States v. D.S.C. of Newark Enterprises suggests to me that the pendulum may actually have swung too far.  In D.S.C., a predecessor of the former owner had manufactured brake linings, shoes, and pads at the site.  Those operations generated asbestos dust, which the operator captured in baghouses.  In 1983, the operator sold the property and equipment, including the baghouses.

On these facts, the court granted the former owner’s summary judgment motion that it was not liable as an arranger.  The transaction documents did not mention waste disposal and instead “aimed to transfer a going concern.”  As a result, the Court concluded, an intent to dispose could not be found.

Since the point of baghouses is to collect waste asbestos dust and since, if it had continued to operate the site, the former owner would have had to dispose of that dust, this would seem one instance where a true intent to dispose could have been inferred by the court.  Certainly, at the summary judgment stage, it seems premature to grant judgment to the defendant.

It may be that this case is at least as much an object lesson regarding how to conduct discovery in Superfund cases as it is a meaningful development in arranger liability jurisprudence.  The contribution plaintiff apparently opposed the summary judgment motion on the ground that there was a witness who might have knowledge of the sale who should be deposed.  The court rejected this “speculation.”  Why the plaintiff had not deposed the witness prior to summary judgment briefing is not apparent.

Bottom line?  Intent is a required element of arranger liability – and inferences and speculation are not sufficient to make a case.


Written by:

Published In:

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.

© Foley Hoag LLP - Environmental Law | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.