Court Rules No Apportionment Under Connecticut Transfer Act

Author:Mr John Bashaw, Dean M. Cordiano and Cindy J. Karlson
Profession:Day Pitney LLP
 
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Entities that have signed as the Certifying Party pursuant to the Connecticut Transfer Act take note - for Transfer Act sites with multiple Certifying Parties on file with the Department of Environmental Protection ("DEP"), DEP can opt to enforce Transfer Act obligations against only one Certifying Party. Although a Certifying Party may have other avenues to recover cleanup costs from other responsible parties, a Connecticut Superior Court has ruled that asserting the special defense of apportionment in a DEP enforcement action is not one of those avenues. In Commissioner of Environmental Protection v. Sergy Company, LLC et al., No. X0684018262S, 2010 Conn. Super. LEXIS 615 (Conn. Super. Ct. March 10, 2010), the court (Stevens, J.) ruled that the harm at issue was solely caused by the defendant's failure to meet its own statutory obligations when it signed as the Certifying Party pursuant to the Transfer Act. Thus, there was no harm to apportion.

Transfer Act Liability Scheme

The underlying goals of the Transfer Act are to protect transferees of contaminated properties and to promote cleanup of properties by requiring a person associated with the transfer to assume certain investigation and cleanup obligations. Upon the transfer of a business or real property involved in the generation of hazardous waste (referred to as an "establishment"), the Transfer Act requires a party (the "Certifying Party") to that transfer to certify to DEP that it will be responsible for undertaking necessary investigation and cleanup work. DEP may seek penalties against a Certifying Party that fails to fulfill its obligations.

Underlying Facts

In the Sergy case, DEP sued Sergy Company, LLC ("Sergy"), the current owner of the contaminated property, and Magnetek, Inc. ("Magnetek"). In 2001, Magnetek signed a Form III under the Transfer Act as the Certifying Party when it sold the property to Sergy. In 2002, DEP informed Magnetek that it was required to submit a proposed schedule to investigate and remediate the property as required by the Transfer Act as a result of its Form III filing. Magnetek failed to file this schedule. Further, Sergy and Magnetek disputed which entity was responsible for costs to operate a groundwater PCB treatment system for the property. The system ceased to operate and, as a result, caused PCB contamination.

DEP filed suit seeking an order requiring Magnetek to comply with the Transfer Act and an order to pay a civil penalty not to exceed $25,000 per day...

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