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Flow Control Shields Hauler

Barry Shanoff

December 1, 1999

3 Min Read
Flow Control Shields Hauler

Hauler-friendly flow control?

Most haulers believe that anyone who falls for that notion is also a candidate for a taxpayer-friendly IRS audit. But this mindset may soon change, thanks to a federal district court that treated a flow control ordinance like a "Get Out of Jail Free" card.

A hauler that heeds a flow control regulation by taking waste to a designated site can avoid Superfund transporter liability. [Miami County Incinerator Qualified Trust v. Acme Waste Management Co., et al., No. C-3-96-101, S.D.Ohio, (July 21, 1999)]

The plaintiff sued several potentially responsible parties for contribution to its cleanup costs at a site where wastes were dumped from 1968 to 1978. The plaintiff did not claim that defendant Waste Management of Ohio (WMO) was liable because the hauler itself dumped or transported waste. Rather, it argued that WMO was responsible for waste handled by four hauling firms whose assets WMO purchased after waste disposal at the site had ended.

Under Ohio law, a corporation that buys the assets of another is not responsible for its predecessor's obligations unless (1) it agrees to assume the liability, (2) the deal is a merger, (3) the buyer is merely a continuation of the seller, or (4) the transaction would fraudulently enable the buyer to escape liability.

For three of the firms whose assets WMO purchased, the plaintiff could not prove any of the four exceptions, and the court refused to relax the standards for successor liability. However, WMO had merged with the fourth firm, Industrial Waste Disposal (IWD), which meant WMO could be held liable for IWD's actions. But, WMO answered by denying that IWD itself had liability.

Under the Superfund law, a party may recover contribution from a defendant within any of four categories of responsible parties, including transporters of hazardous substances. Admittedly, IWD's dealings with the site were limited to transporting waste from three generators.

"WMO can be liable ... only if IWD accepted hazardous substances for transport and ... only if [IWD] selected the ... site ... for disposal," the district judge said. Without deciding whether the waste contained hazardous substances, he instead focused on whether IWD had selected the disposal site.

The judge found that IWD had transported waste to the site when the local waste district strictly enforced an ordinance requiring all commercial haulers to transport waste to the county incinerator. Indeed, WMO presented uncontradicted deposition testimony that, without such a requirement, IWD would have taken the waste to a nearby landfill where the tipping fees were lower.

The court brushed aside the plaintiff's argument that faulted IWD for not challenging the validity of the flow control law. Ruling in favor of WMO, the court said, "Merely because IWD complied with the flow control ordinance, rather than adding to the eruption of litigation by filing a lawsuit challenging its constitutionality, ... does not raise an inference that [the] hauler actually participated in or had substantial input into the decision to dispose of its customers' waste at the ... site."

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