Daily Development for
Wednesday, November 8, 1995

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

HAZARDOUS SUBSTANCES; CERCLA; ASBESTOS: Sale of plant containing asbestos was not a disposition of hazardous substances in violation of CERCLA and was not an abnormally hazardous activity G.J. Leasing Co. Inc. v. Union Elec. Co., 54 F.3d 379 (7th Cir. 1995).

Company sold a decommissioned power plant. Asbestos was used as the principal material for heat insulation. Successor to the purchaser, nine years after the sale, removed some of the asbestos and filed suit to recover costs for removal and for future removal. The suit charged that the sale constituted the disposal or the arranging of the disposal of a hazardous substance in violation of CERCLA and, also, constituted an abnormally dangerous activity within the meaning of Illinois tort law, making Seller strictly liable.

Held: the sale of a product which contains a hazardous substance cannot be equated to the disposal of the substance itself or the making of arrangements for its disposal. Release of asbestos inside a building with no leak outside is not governed by CERCLA. Had the primary purpose and likely effect of the sale been to bring about the removal of asbestos in circumstances that would make the release of fibers into the environment outside the plant inevitable or at least highly likely, then seller could be found to have disposed of or arranged for the disposal of a hazardous substance.

The court also held tha,t under Illinois tort law, the ownership or operation of a building containing asbestos insulation is not an abnormally hazardous activity. When the danger of accident can be adequately contained, there is no compelling reason to impose strict liability.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. Contact Shawn Kaminsky at the ABA. (312) 988 5260.

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.