RECENT FEDERAL DECISIONS

April 2005

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District Court in California Finds that Corporations Dissolved Prior to the Enactment of CERCLA Are Not Subject to Causes of Action under CERCLA
City of Rialto v. U.S. Department of Defense, et al., ___F.Supp.2d___

In a case for the recovery of costs due to groundwater contamination, the U.S. District Court for the Central District of California recently found that a California corporation that was dissolved prior to the enactment of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) can not be held liable for causes of action under CERCLA. Although plaintiff’s argued that the California Supreme Court had overturned caselaw relieving corporations of all liability for actions arising after dissolution, the court distinguished the present case by noting that the California Supreme Court specifically excluded causes of action arising under CERCLA in cases where the corporation dissolved prior to the enactment of CERLA. Further, the court held that state law in this case was not preempted by federal environmental regulations.