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United States v. Gen. Battery Corp.

United States Court of Appeals for the Third Circuit

January 26, 2005, Argued ; September 6, 2005, Filed

No. 03-3515

Opinion

 [*296]  OPINION OF THE COURT

SCIRICA, Chief Judge.

This appeal addresses successor liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq., for environmental response costs incurred by the United States at a lead-contaminated Superfund site. The District Court granted summary judgment in favor of the United States on a "de facto merger" theory of successor liability. We will affirm.

The matter begins with a now defunct company,  [**2]  Price Battery Corporation. From the 1930s through 1966, Price Battery manufactured lead acid batteries at a plant in Hamburg, Pennsylvania. During that time, it arranged for the disposal of waste materials -- including spent battery casings -- at locations in and around Hamburg. In 1992, the United States Environmental Protection Agency discovered two of the disposal sites, and upon further investigation found three more. The properties contained elevated levels of lead. After testing and monitoring, the EPA concluded remedial action was necessary to protect human health. The United States has since incurred response costs of several million dollars associated with the removal of contaminated soil and the installation of a remedial "cap" at the properties.

Seeking to identify a responsible party under CERCLA, see 42 U.S.C. § 9607(a)(1)-(4), EPA determined that Price Battery, through its disposal of battery casings, was responsible for the lead contamination. Price Battery, however, was long since out of business, having been acquired for cash and stock by General Battery Corporation in 1966. General Battery, in turn, merged with Exide Corporation in 2000.  [**3]  The United States filed this action against Exide, alleging it was responsible for Price Battery's CERCLA liability as a successor in interest.

The parties agree that as a consequence of the 2000 merger, Exide is General Battery's successor. The disputed issue is whether General Battery, by virtue of its 1966 acquisition of Price Battery, was a successor to Price Battery. The relevant aspects of the Price/General transaction are as follows. On February 11, 1966, General Battery, a diversified public company, entered into an agreement with Price Battery, a smaller, privately-held battery manufacturing firm. Price Battery was owned by a single shareholder, William F. Price Sr., who sold General Battery most of his company's assets in exchange for $ 2.95 million in cash, 100,000 shares of General Battery stock, and a seat on General's board of directors. 1 At the time, 100,000 General Battery shares were valued at approximately $ 1 million and represented 4.537% of General's outstanding equity. William Price Sr.'s resulting stake in General Battery was comparable to that of the company's cofounders, W.A. Shea and H.J. Nozensky, who in 1966 remained on General's  [*297]  board and held 5.12% [**4]  and 4.44% of its outstanding equity, respectively.

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423 F.3d 294 *; 2005 U.S. App. LEXIS 19216 **; 61 ERC (BNA) 1001; 35 ELR 20182

UNITED STATES OF AMERICA v. GENERAL BATTERY CORPORATION, INC.; EXIDE CORPORATION, Exide Corporation, Appellant

Subsequent History: US Supreme Court certiorari denied by Exide Techs. v. United States, 127 S. Ct. 41, 166 L. Ed. 2d 250, 2006 U.S. LEXIS 7414 (U.S., Oct. 2, 2006)

Prior History:  [**1]  Appeal from the United States District Court for the Eastern District of Pennsylvania. D.C. Civil Action No. 00-cv-03057. (Honorable Ronald L. Buckwalter).

United States v. Exide Corp., 2002 U.S. Dist. LEXIS 3303 (E.D. Pa., Feb. 27, 2002)

CORE TERMS

Battery, successor liability, state law, federal common law, continuity, federal rule, de facto merger, federal statute, cases, successor, seller, costs, courts, federal policy, principles, ownership, court of appeals, stock, federal law, liquidate, significant conflict, federal liability, shareholders, indirect, corporate law, environmental, displacement, decisions, parties, federal standard

Civil Procedure, Appeals, Standards of Review, De Novo Review, Jurisdiction, Subject Matter Jurisdiction, General Overview, Summary Judgment Review, Standards of Review, Appellate Jurisdiction, Final Judgment Rule, Environmental Law, Hazardous Wastes & Toxic Substances, CERCLA & Superfund, Administrative Law, Separation of Powers, Executive Controls, Enforcement, Contribution Actions, Settlements, Cleanup Costs, Potentially Responsible Parties, Successors, Mergers & Acquisitions Law, Liabilities & Rights of Successors, Successor Liability Doctrine, Real Property Law, Environmental Regulations, Liabilities & Risks, Contractual Relationships, Federal & State Interrelationships, Federal Common Law, Preliminary Considerations, Erie Doctrine, Torts, Torts, Procedural Matters, Conflict of Law, Choice of Law, Public Entity Liability, Liability, Interstitial Law, Governments, Legislation, Interpretation, Preemption, Business & Corporate Compliance, Cleanup Standards, Vicarious Liability, Corporations, Predecessor & Successor Corporations, General Business Considerations, Business & Corporate Law, Corporate Finance, Corporate Ownership of Stock, De Facto Mergers, Dissolution & Receivership, Termination & Winding Up, Limited Survival, Taxable Acquisitions, Asset Acquisitions, Admiralty & Maritime Law, Shipping, Partners, Operators & Owners, Criminal Law & Procedure, Crimes Against Persons, Assault & Battery, Simple Offenses, Courts, Common Law, Mere Continuation