Friday, September 25, 2015

Seventh Circuit Holds that 1920 Agreement Bars CERCLA Contribution Claim Arising Out of Coke Plant

On September 21, the Seventh Circuit (Bauer, Kanne, Williams) issued a decision in Peoples Gas Light and Coke Co. v. Beazer East, Inc.  This case involves liability under CERCLA for response costs associated with the Crawford Station site, the location of a former coke plant in Chicago.  Both Peoples Gas Light and Coke Co. and Koppers, Beazer East’s predecessor, were involved with the construction and operation of the coke plant in the 1920s.  When decades later Peoples incurred liability and response costs in connection with the Crawford Station site, Peoples sued Beazer East under CERCLA for cost recovery and contribution.  The district court dismissed the cost recovery claim because Peoples had resolved its liability to the United States via an administrative settlement and dismissed the contribution claim because it was time barred and barred by a 1920 agreement between Peoples and Koppers.  Peoples appealed the dismissal of its contribution claim.

The Seventh Circuit affirmed.  The 1920 agreement between People and Koppers absolved Koppers of “liability of any character . . . except as expressly assumed under the terms of this contract.”  According to the court, reading this provision to bar Peoples’ contribution claim was consistent with the overall agreement, which limited Koppers’ role in the coke plant to financing and operating the plant for a limited time until it had been repaid.  In addition, the provision was general enough to cover CERCLA liability.  Because the court concluded that the 1920 agreement barred the contribution claim, it did not reach the question whether some aspects of the claim were time barred.

—Todd Aagaard

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