Superfund. Asarco, Inc, had a copper smelter at Ruston, Washington. As part of its op-erations, Asarco produced a by-product called "slag," a hard, rocklike substance. Industrial Min-eral Products (IMP) sold the slag for Asarco to Louisiana-Pacific Corp

Question

and other businesses, which used the slag as a ballast to stabilize the ground at log-sorting yards in Tacoma, Wash-ington. About nine months after IMP stopped selling the slag, it sold substantially all of its assets to L-Bar Products, Inc Government agencies later discovered that the slag reacted with the acidic wood waste in the log-sorting yards, causing heavy metals from the slag to leach into the groundwater and soil. Louisiana-Pacific and the Port of Tacoma sued Asarco under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), claiming that Asarco was liable for cleanup costs. Asarco brought a third party claim against L-Bar as corporate successor to IMP. L-Bar moved for summary judgment, claiming that it was not the successor to IMP and could not be liable under CERCLA for IMP's actions. Will the court agree with L-Bar? Discuss fully.

Answer 1

Superfund
The court held that although Congress failed to address the specific issue of corporate succes-sor liability under CERCLA, it did intend such liability. The court further held that L-Bar was not a corporate successor to IMP and therefore was not liable under CERCLA for clean-up costs. Although a successor corporation in a consolidation or merger assumes the liabilities of the predecessor corporations, L-Bar had neither merged nor consolidated its corporation with IMP, but only purchased IMP's assets. Under the traditional rules of successor liability, purchasers of another corporation's assets are not liable as successors unless (1) the purchasing corporation expressly or impliedly agrees to assume the liability, (2) the transaction amounts to a de facto consolidation or merger; (3) the purchasing corporation is merely a continuation of the selling corporation, or (4) the transaction was fraudulently entered into to escape liability. The court found that none of these exceptions applied in this case, and thus L-Bar was not liable for IMP's obligations.