RECENT FEDERAL DECSIONS

July 2004

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District Court Finds Failure to Conduct All Appropriate Inquiry Costs PRP Innocent Purchaser Status.
XDP Inc. v. Watumull Properties Corp. v. Hongkong & Shanghai Banking Corporation, et al., ___F.Supp.2d___

The U.S. District Court for the District of Oregon recently ruled on the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), Resource Conservation and Recovery Act (RCRA), and common law liabilities of successive owners, each of whom were seeking to avoid remaining potentially responsible parties (PRPs) at the XDP Property. Because the successor ownership in this matter makes “Whose on First” by Abbot and Costello look clear, suffice it to say that there were a number of individual and corporate owners over time. Further complicating ownership are historic asset sales.The court’s rulings in this complicated fact pattern included the following: (1) that a purchaser’s failure to conduct its own phase I investigation and rely instead upon an eight-month old report may have cost that buyer an innocent purchaser defense; (2) that the failure to allege an ongoing discharge against an intermediate owner is an adequate basis for dismissing common claims against that intermediate owner; (3) that son’s serving as temporary foreman while his father was on vacation is an adequate basis to make the son an “operator” under CERCLA; and, inter alia, (4) that state common law claims are preempted by CERCLA.