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United States v. Carolina Transformer Co.

United States Court of Appeals for the Fourth Circuit

October 2, 1991, Argued ; October 20, 1992, Decided

No. 91-1046


 [*834]  OPINION 

WIDENER, Circuit Judge:

This case, which arises under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., stems  [**2]  from the removal of soil contaminated with polychlorinated biphenyls (PCBs) from a site formerly owned and operated by Carolina Transformer, Inc. From 1959 until 1984, Carolina Transformer salvaged and repaired used electrical transformers at the site. During the salvage and repair operations, dielectric fluid from inside the transformers (also known as transformer oil), which contains the carcinogen PCB, was spilled or dumped on the ground at the site. In this action, the United States sued Carolina Transformer Co., Inc., FayTranCo., Inc., Dewey Strother and Kenneth Strother to recover costs incurred in decontaminating the Carolina Transformer site. The United States also sought to recover punitive damages for the defendants' refusal to comply with an administrative order issued by the United States Environmental Protection Agency (EPA) pursuant to Section 106 of CERCLA, 42 U.S.C. § 9606. 1 

 [**3]  The district court granted summary judgment in favor of the United States, finding all of the defendants jointly and severally liable for the costs incurred in decontaminating the Carolina Transformer site, and for punitive damages for their refusal, without sufficient cause, to comply with EPA's cleanup order. In a subsequent order, the district court awarded the United States its response costs, plus punitive damages in the amount of three times the Government's costs.

FayTranCo and the individual defendants, Dewey and Kenneth Strother, appeal. They raise two major issues. First, the Strothers contend that summary judgment was improperly granted against them because there were material issues of fact as to whether either of them "owned or operated" the Carolina Transformer site within the meaning of CERCLA § 107(a), 42 U.S.C. § 9607(a). Second, FayTranCo. contends that material issues of fact remain as to whether it was a successor-in-interest  [*835]  to Carolina Transformer and, therefore, liable for Carolina Transformer's acts.

] We review the grant or denial of summary judgment de novo, applying the same standard applied by the district court. Overstreet v. Kentucky Central Life Ins. Co., 950 F.2d 931, 938 (4th Cir. 1991). [**4]  On summary judgment, we must draw all justifiable inferences in favor of the nonmoving party, including questions of credibility and of the weight to be accorded particular evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

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978 F.2d 832 *; 1992 U.S. App. LEXIS 26723 **; 35 ERC (BNA) 1873


Subsequent History: As Amended November 3, 1992.

Prior History:  [**1]  Appeal from the United States District Court for the Eastern District of North Carolina, at Fayetteville. Terrence W. Boyle, District Judge. (CA-85-82-3-CIV)

Disposition: AFFIRMED.


Transformer, site, district court, continuity, successor, repair, hazardous substance, employees, environmental, electrical, punitive damages, transferred, Enterprise, customers, disposal, salvage, costs, response costs, do business, indicates, grant summary judgment, issue of material fact, successor corporation, business location, built, stock, oil

Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, General Overview, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Environmental Law, CERCLA & Superfund, Enforcement, Abatement, Hazardous Wastes & Toxic Substances, Energy & Utilities Law, Oil, Gas & Mineral Interests, Potentially Responsible Parties, Operators & Owners, Cost Recovery Actions, Strict Liability, Defenses, Administrative Proceedings & Litigation, Nuisances, Strict Liability, & Trespasses, Business & Corporate Compliance, Cleanup Standards, Torts, Vicarious Liability, Corporations, Predecessor & Successor Corporations, Successors, Mergers & Acquisitions Law, Liabilities & Rights of Successors, Federal & State Interrelationships, Federal Common Law, Interstitial Law, Governments, Legislation, Interpretation, Preliminary Considerations, Business & Corporate Law, Types of Transactions, Transfers of Stock, De Facto Mergers, General Business Considerations, Mere Continuation, Hazardous Substance Superfund, Remedies, Damages, Punitive Damages, Statute of Limitations, Time Limitations, Damages