Freeman v. Glaxo Wellcome, Inc.

189 F.3d 160, 1999 WL 765956
CourtCourt of Appeals for the Second Circuit
DecidedSeptember 16, 1999
DocketDocket No. 98-9508
StatusPublished
Cited by22 cases

This text of 189 F.3d 160 (Freeman v. Glaxo Wellcome, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freeman v. Glaxo Wellcome, Inc., 189 F.3d 160, 1999 WL 765956 (2d Cir. 1999).

Opinion

STRAUB, Circuit Judge.

Third-Party-Plaintiffs-Appellants Joel G. Freeman, Paul D. Freedman,1 Freeman Industries, Inc. (“FII”), and Freeman Realty Associates, L.P., appeal from a judgment of the United States District Court for the Southern District of New York (Charles L. Brieant, Judge), granting summary judgment dismissing their complaint on the ground that Third-Party Defendant Glaxo Wellcome, Inc. (“GWI”) is not a responsible party liable for contribution under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601 et seq. The appellants contend that the District Court erred in holding that, as a matter of law, GWI did not [162]*162“arrange[ ] for disposal ... of hazardous substances” within the meaning of § 107(a)(3) of CERCLA, 42 U.S.C. § 9607(a)(3), when it sold unused chemicals from its laboratories to FII. We disagree and, for the reasons that follow, affirm.

BACKGROUND

Established in the 1950s, FII is a small company run by Joel Freeman and his brother Paul. FII’s primary business is the manufacturing and processing of vitamin concentrates and related bulk line additives for the food and dairy industries, but in the late 1960s, the Freemans decided to expand the scope of FII’s business to include the purchase and resale of chemical intermediates. FII’s facility has always been in Tuckahoe, New York, which until 1970 was also home to a pharmaceutical research and development facility of GWI.2 Due to the proximity of the two businesses, Walter Ide, a GWI employee, would frequently stop by the FII facility and, thus, became familiar with FII and the Freemans.

In 1970, GWI decided to relocate its facility to North Carolina. According to Joel Freeman:

Walter Ide approached FII and stated that [GWI] would be relocating and offered FII all of the chemical reagents from [its] laboratories rather than worry about the legal requirements in transporting them to North Carolina. [GWI] felt that it would be better to just get rid of the reagents and start fresh.

Joel Freeman inspected the chemicals before accepting GWI’s offer on behalf of FII. According to the appellants, FII purchased the chemicals “both for use in the Freeman laboratories and for resale.” Although in some cases the containers in which the chemicals were sold had been opened, the chemicals contained in them at the time of sale had not been used. FII paid GWI $674 for the inventory, an amount that the appellants contend,was only a fraction of the chemicals’ retail value at the time of the sale.

After retrieving the chemicals from GWI’s facilities and transporting them to FII’s facilities, FII employees sorted the chemicals by categories and stored them in a laboratory, a vault, and a forty-foot box trailer. FII subsequently used some of the chemicals it had purchased for its own production and research and development. FII also sought to market the GWI chemicals. Within two months of FII’s purchase, a chemical resale company offered to buy the entire inventory for $1000, but Joel Freeman rejected the offer because he felt that the chemicals’ retail value was greater. FII subsequently prepared and distributed a sales catalogue listing the manufacturer and technical grade of each chemical that it had purchased from GWI. As a result of its marketing efforts, FII sold some of the chemicals to local schools and companies. However, after 1975, FII made no systematic efforts to sell the chemicals, and few sales of the remaining chemicals were made.

In 1993, the United States Environmental Protection Agency determined that the chemicals from GWI that remained in FII’s vault and box trailer represented a release or threatened release of hazardous substances. The EPA promptly initiated a removal action pursuant to CERCLA. In connection with the EPA’s investigation, FII represented to the EPA that the chemicals purchased from GWI were ‘Virgin chemicals ... and were not wastes.”

In March 1996, the EPA commenced this action to recover its response costs from the Freemans, FII, and Freeman Realty Associates, L.P. In June 1996, the appellants filed an answer with counterclaims and commenced a third-party action for contribution against GWI pursuant to [163]*163CERCLA § 113(f), 42 U.S.C. § 9613(f). The appellants alleged that GWI was liable as a responsible party under CERCLA because it had “arranged for disposal” of the chemicals within the meaning of CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3). After answering the third-party complaint and concluding discovery, GWI moved for summary judgment on the ground that it had not “arranged for disposal” of any hazardous substances. By memorandum and order dated April 1, 1997, the District Court granted GWI’s motion. The remaining issues were settled by the United States and the appellants pursuant to a consent decree filed in the District Court on October 19, 1998. This timely appeal of the District Court’s grant of summary judgment ensued.

DISCUSSION

The appellants argue that the District Court erred in granting summary judgment dismissing their third-party complaint for contribution based on CERCLA liability. ‘We review a district court’s grant of summary judgment de novo, construing the evidence in the light most favorable to the non-moving party and drawing all reasonable inferences in its favor.” Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 235 (2d Cir.1998) (citation omitted). We will affirm if “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c).

Congress enacted CERCLA to “provide for liability, compensation, cleanup, and emergency response for hazardous substances released into the environment and the cleanup of inactive hazardous waste disposal sites.” Pub.L. No. 96-510, 94 Stat. 2767, 2767 (1980). “It was Congress’ intent that CERCLA be construed liberally in order to accomplish [the statute’s] goals.” General Elec. Co. v. AAMCO Transmissions, Inc., 962 F.2d 281, 285 (2d Cir.1992) (per curiam). CERCLA § 113(f)(1) authorizes “[a]ny person” to “seek contribution from any other person who is liable or potentially liable under [CERCLA § 107(a)].” 42 U.S.C. § 9613(f)(1). Thus, “[t]he elements of an action under § 113(f)(1) are the same as those under § 107(a).” Bedford Affiliates v. Sills, 156 F.3d 416, 427 (2d Cir.1998).

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Joel G. Freeman v. Glaxo Wellcome, Inc.
189 F.3d 160 (Third Circuit, 1999)

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Bluebook (online)
189 F.3d 160, 1999 WL 765956, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freeman-v-glaxo-wellcome-inc-ca2-1999.