Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 11

After paying to clean the portion of the Mohawk River around its oil refinery and storage operation, Niagara Mohawk Power Corporation (NMPC) filed claims for contribution against several other companies that had maintained facilities in the area. One of the companies, Mohawk Valley Oil (MVO), had used a parcel to store oil as part of its own petroleum business. On one side of that parcel was the river and on the opposite side was land used by a tar manufacturing company, Tar Asphalt Services (TAS). Among other activities, TAS washed tar from its trucks with kerosene. TAS allowed the contaminated runoff to flow across MVO's property into the river. MVO became aware of this practice after it purchased the land and took steps to prevent the runoff from reaching its property as it developed the location. NMPC argued that although MVO had prevented additional kerosene-tainted water from flowing across its property, it had done nothing to remediate the prior disposals and therefore remained liable under CERCLA. Does failing to prevent contaminated water from crossing one's property qualify as a "disposal" of hazardous waste under CERCLA? What liability would MVO have faced if it had failed to take steps to prevent the runoff from TAS's activities once it became aware of it? [Niagara Mohawk Power Corp. v. Jones Chemical Inc., 315 F.3d 171 (2d Cir. 2003).]