id. § 9607(a)(2). These so-called "covered parties" are liable for "all costs of removal or remedial action incurred by the United States or a State not inconsistent with the national contingency plan," if "there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance" from the facility. Id. § 9607(a)(4).
Absent a showing by a preponderance of the evidence that one of the affirmative defenses contained in 42 U.S.C. § 9607(b), has been satisfied, the liability of covered parties for costs incurred in the clean-up is strict. B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992); New York v. Shore Realty Corp., 759 F.2d 1032 (2d Cir. 1985). Where the environmental harm is indivisible, liability is also joint and several. B.F. Goodrich, 958 F.2d at 1197.
Of the defenses available to a defendant otherwise liable under 42 U.S.C. § 9607(a), two are relevant here. First, under the "third party defense" set forth in section 9607(b)(3), a defendant is not liable if it establishes by a preponderance of the evidence that the release or threatened release was caused by third parties other than those with whom it has a direct or indirect contractual relationship, assuming that the defendant has also exercised due care under the circumstances and has taken precautions against foreseeable acts or omissions by the third parties. 42 U.S.C. § 9601(35) defines a "contractual relationship" to include "land contracts, deeds or other instruments transferring title or possession."
The second defense relevant in this case is the "innocent purchaser" or "innocent landowner" defense. In 1986 Congress created an exception to the "no contractual relationship" requirement of the third-party defense, thereby making the third-party defense available to some owners who acquired the relevant property after the disposal or placement of hazardous substances occurred. See CERCLA § 9601(35)(A). To plead this defense successfully, property owners must show, by a preponderance of the evidence, that the disposal of the hazardous substances occurred before they purchased the property, and that at the time of acquisition they "did not know and had no reason to know" that the substances had been disposed at the facility. 42 U.S.C. § 9601(35).
To qualify as an "innocent purchaser," one must have undertaken "all appropriate inquiry" into the previous ownership and uses of the property, consistent with "good commercial or customary practice" at the time of transfer. 42 U.S.C. § 9601(35)(B). "Good commercial practice" is not defined in the statute. The legislative history of this section is also vague on the definition of "good commercial practice," indicating only that it requires that "a reasonable inquiry must have been made in all circumstances, in light of best business and land transfer principles." H.R. Rep. No. 99-962, 99th Cong., 2d Sess., at 187 (1986). In deciding whether a defendant has complied with this standard, courts consider any specialized knowledge or expertise the defendant has, whether the purchase price indicated awareness of the presence of a risk of contamination, commonly known or reasonable information about the property, the obviousness of the presence of contamination at the property, and the ability to detect such contamination by appropriate inspection. 42 U.S.C. § 9601(35)(B).
Summary judgment may be granted only when there is no genuine issue of material fact remaining for trial and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). "All ambiguities and inferences to be drawn from the underlying facts should be resolved in favor of the party opposing the motion, and all doubts as to the existence of a genuine issue for trial should be resolved against the moving party." Bay v. Times Mirror Magazines, Inc., 936 F.2d 112, 116 (2d Cir. 1991) (citations omitted). The court will find that there is no genuine issue of material fact and may therefore grant summary judgment where, "viewing the evidence produced in the light most favorable to the nonmovant, . . . a rational trier could not find for the nonmovant." Binder v. Long Island Lighting Co., 933 F.2d 187, 191 (2d Cir. 1991); see also Bay, 936 F.2d at 116. Summary judgment may be an appropriate mechanism for resolving liability issues under CERCLA. See, e.g., New York v. Shore Realty Corp., 759 F.2d 1032, 1042 (2d Cir. 1985); United States v. Hooker Chems. & Plastics Corp., 680 F. Supp. 546, 551 (W.D.N.Y. 1988).
The Government asserts that the Berkman Defendants are liable under 42 U.S.C. § 9607 (a)(1) and (2) as the current and past owners of the Property. In opposition, the Berkman Defendants counter that they are relieved of liability under the third party defense because they did not have a contractual relationship with A & N and/or Forcucci during the period of time that any releases occurred. Furthermore, they claim that they meet the requirements of the innocent landowner defense.
In denying the Government's motion for summary judgment, the April 3 Opinion held that no contractual relationship existed between Marine's sublessees A & N or Forcucci and the Berkman Defendants. See A & N Cleaners, 788 F. Supp. at. 1326-29. In addition, the April 3 Opinion held that triable issues of material fact remained as to when A & N Cleaners ceased its disposal activities at the Property. Id. at 1329-30.
The Government argues that "key facts" have emerged which resolve these issues and make the Berkman Defendants' assertion of the third-party and innocent purchaser defenses ripe for summary judgment. The first "key fact" is that the Government has now submitted evidence that A & N Cleaners leased its premises directly from the Berkman Defendants since October 1, 1990.
The second "key fact" is that, in a February 4, 1993 response to question 10 of the Government's third set of interrogatories ("Answer 10"), Benjamin Forcucci and A & N conceded that they had disposed of ironing machine condensate at the Property until 1991. Since the Berkman Defendants, who purchased the Property in 1979, cannot invoke the innocent purchaser defense unless they establish that they acquired the property after the disposal of hazardous substances, the Government claims that Answer 10 entitles them to summary judgment on this issue.
The April 3 Opinion held that a triable issue of fact existed as to the date after which A & N ceased disposing of contaminated wastes down the Drain. The Court reached this conclusion because Forcucci had given conflicting accounts in both sworn and unsworn accounts regarding the date that A & N had ceased such disposal.
Mr. Forcucci's sworn testimony consisted of the following. First, in his deposition in this action dated December 5, 1990, Mr. Forcucci was asked what he did with the water that collected in the water separator at the rear end of his dryer, to which Mr. Forcucci responded that he ceased disposing of that water in 1978.
Second, EPA's November 17, 1989 Supplemental Request for Information under 42 U.S.C. § 9604(e) posed the following question to Forcucci:
Were dry cleaning wastes or any other substances ever disposed of or discharged by Alben Cleaners or any of its employees or agents into the drywell located adjacent to the premises currently occupied by Alben Cleaners? If so, describe in detail (i) the nature and quantities of such wastes or other substances, (ii) the dates of such disposal or discharge, (iii) the location of the disposal or discharge (e.g., into a drain or pipe), and (iv) the names of the persons who performed such disposal or discharge.