Type: Law Bulletins
Date: 01/09/2012

U.S. v. NCR: California District Court Says Not So Fast to Successor Liability under APA

In a recent article, we reported about the questionable December 19, 2011 decision of the United States District Court for the Eastern District of Wisconsin in U.S. v. NCR Corp., which held that an Asset Purchase Agreement (APA) created CERCLA liability because of “noncompliance” with CERCLA Section 107(a).  The article pointed out that Section 107(a) is a cost-recovery provision and that one cannot be in “noncompliance” with or violate Section 107(a).

Three days after the decision in U.S. v. NCR Corp., the United States District Court for the Eastern District of California, also interpreting an Asset Purchase Agreement, denied summary judgment to the United States under an APA because factual issues prevented a finding that all liabilities, including potential CERCLA liabilities, had been assumed by the purchaser defendant.  In addition, the California district court rejected the argument of the United States that the APA created successor liability because it was a de facto merger or consolidation. United States v. Sterling Centrecorp, Inc., 2011 WL 6749801 (E.D. Cal. Dec. 22, 2011).[1]

[1]In two related decisions issued previously on December 8, 2011 in U.S. v. Sterling Centrecorp, the court denied Sterling’s Motion for Summary Judgment on the basis of personal jurisdiction, 2011 WL 6130834 (E.D. Cal.), and granted summary judgment to the United States that it had established some (but not all) of the elements of Section 107(a) liability: a facility from which there was a release of hazardous substances caused response costs to be incurred.  2011 WL 6130887 (E.D. Cal.).


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