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Building Buyer Discovers Asbestos Laden Pipe Insulation

Sycamore Indus. Park Associates v. Ericsson, Inc., ---F.3d---, 2008 WL 4613874 (C.A. 7, Oct. 20, 2008)

Sycamore Industrial Park Associates purchased a nine-building, 28-acre industrial complex in Sycamore, Illinois from Ericsson, Inc. in 1985. The buildings had been heated by a boiler system and insulated pipes, but use of the boiler system was discontinued before the sale and natural gas heaters were installed by Ericsson. In 2004, Sycamore Associates discovered that the old boiler system contained asbestos insulation.

Sycamore Associates sued to require Ericsson to remove and dispose of the asbestos insulation, contending that Ericsson's leaving the asbestos laden inoperative boiler system in place violated the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §9607, and the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §6972. Sycamore also asserted state law nuisance and negligence theories.

The District Court (N.D. Ill.) granted summary judgment for Ericsson, and Sycamore Associates appealed.

The Seventh Circuit affirmed summary judgment for Ericsson. Looking at the CERCLA claim, the Court held that there was no “disposal” of asbestos into the environment – a requirement for a CERCLA violation. While the site was a facility, Ericsson was a responsible party and Sycamore had incurred costs in cleaning up the asbestos, simply leaving the asbestos-lined heating system on the property did not constitute disposal of the toxin into the environment.

The RCRA claim failed for the same reason as the CERCLA claim: Ericsson did not handle, store, treat, transport or dispose of the asbestos when it abandoned the heating system. There was no evidence presented to show that Ericsson did anything with the asbestos system.

Summary judgment for Ericsson was upheld.



Judge(s): Flaum
Jurisdiction: U.S. Court of Appeals, Seventh Circuit
Related Categories: Civil Procedure , Civil Remedies , Property
Plaintiff Lawyer(s) Plaintiff Law Firm(s)
William J. Anaya Arnstein & Lehr, LLP

Defendant Lawyer(s) Defendant Law Firm(s)
Paul O'Flaherty, Jr. Cheely O'Flaherty & Ayres



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6 no. 08-1118 any person, . . . who has contributed or who is contributing no. 06 c 768--david h. coar, judge. that case, union electric sold a power station consisting attached to the steam boiler system and associated piping. site it discharged, deposited, injected, dumped, spilled, is entitled to judgment as a matter of law." fed. r. civ. and sycamore appealed. for the reasons explained below, on january 9, 2008, the district court granted ericsson's building, with no leak outside, . . . is not governed by the definition of "disposal" from the solid waste disposal favorable to the nonmovant party, sycamore. lawson v. which may present an imminent and substantial endanger- flaum, circuit judge. in 1985, plaintiff sycamore indus- sold for reclamation. id. here, there is no evidence that ericsson owned the 28-acre property at issue, located before flaum, williams, and sykes, circuit judges. transaction. sycamore industrial park associates, tion in an attempt to show that sycamore was contemplat- electrical wiring and cable. during most of ericsson's this question. assuming arguendo that the asbestos 42 u.s.c. 9601(29); 42 u.s.c. 6903(5). "solid waste" is and rcra claims. transferred the site to sycamore. in other words, they ing use of the boiler-based system. sycamore responds only needs to show that a disposal took place before discovery as the result of a repair and maintenance opera- the sale of a building containing materials with asbestos moved into the site, ericsson installed asbestos-free waste because the statute defines "hazardous waste" as "a the asbestos was discovered. ericsson describes the waste into or on any land or water so that such solid there is substantial overlap in terms used to define in sycamore, illinois, for several decades. the property contains a hazardous substance cannot be equated to the no. 08-1118 no. 08-1118 9 discontinuing use of the boiler-based heating system to the past or present handling, storage, treatment, trans- purpose because the boiler-based heating system was out with significant amounts of asbestos in the walls. g.j. abb industrial sys., inc. v. prime tech., inc., 120 f.3d 351, 359 and are anchored to the floor of the two buildings that analysis as well. sale of a facility with an abandoned no. 08-1118 13 even if we were to find that ericsson is a responsible phrase "has contributed or is contributing" requires disposal" of a hazardous substance. 42 u.s.c. 9607(a)(2). rather any hazard resulting from emission of asbestos united states court of appeals waste or hazardous waste or any constituent thereof on any land or water. system or its insulation prior to or after closing the sale no. 08-1118 11 harbor village, ltd. v. unocal corp., 270 f.3d 863, 879 (9th substance is not a disposal imposing liability. our decision then defined as "any garbage, refuse, sludge from a heaters, ericsson discontinued use of the old boiler- case," in which a seller's intent is both to dispose of statute. 42 u.s.c. 6903(3). once again, because 8 no. 08-1118 is contributing" language of 6972(a)(1)(b) compels us argued september 9, 2008--decided october 20, 2008 hazardous substances; and (4) the plaintiff has incurred ericsson "handled, stored, treated, transported, or dis- claim that by selling the real estate, ericsson was liability under cercla. even viewing all facts in the for cercla liability, the defendant must be a "responsi- cercla "arranger" liability merely by selling his entire 6972(a)(1)(b). it is worth noting that in g.j. leasing we also pointed asbestos materials that ericsson left in the facility can be disposal of the substance itself or even the making of trial park associates as an illinois general partnership. as inapplicable to the scenario at issue in this case. like in strata, or ambient air within the united states." 42 u.s.c. for the seventh circuit sycamore argues that ericsson disposed of the asbestos affect the conclusion that all insulated piping was encased out practical reasons why "the sale of a product which cercla." g.j. leasing, 54 f.3d at 385; see also covalt v. 9607(a)(2). without a disposal, ericsson is not a responsi- left the old heating equipment in place when it sold required for "disposal." id. at 383. we acknowledged that the defendant abandoned the asbestos insulation in property and operate it as an industrial park. kreiger was water, drinking water supply, land surface or subsurface to find that rcra requires active involvement in based heaters, but it left the old heating system in place. cir. 2001). cercla defines a "release" as "any spilling, light most favorable to sycamore, ericsson's abandon- from defendant ericsson, inc. before it sold the property, extends between buildings. the insulated piping that of law that the abandonment did not constitute "disposal" materials on file, and any affidavits show that there is no into or on any land or water so that it may enter the in the spring of 1985, ericsson installed additional v. leaving a heating system in place when selling the real waters. of a solid or hazardous waste into or on any land or water b. cercla claim stevens creek, 915 f.2d at 1359-60. we reaffirm that when 9601(8). because the defendant never "disposed" of a hazardous hazardous waste and make a bona fide profit. we stated hold that ericsson is a responsible party just because there is no emission into the outside environment, but order to be hazardous waste the material must be solid closer question whether the asbestos contained in the the site, ericsson violated cercla and rcra. sycamore that: (1) the site in question is a "facility" as defined by natural gas unit heaters in the parts of the facility that sycamore cannot show that ericsson placed the asbestos cercla; (2) the defendant is a responsible party; (3) there summary judgment de novo. jackson v. county of racine, 474 14 no. 08-1118 battery. id. we carved out an exception to this general that the mere sale of property containing a hazardous from an underground pipe." (pl. br. 36). this testimony does not to establish rcra liability, sycamore must show that insulated piping is located inside the various structures automobile is an arrangement for disposal of a hazardous in 2004, sycamore discovered asbestos in the insulation sented evidence--such as evidence of soil, water or air was no disposal under cercla applies to a rcra the ninth circuit reached the same conclusion in danger to air, land, or water outside of the building as case the asbestos insulation was no longer serving a action arises under the comprehensive environmental "environment" includes any "surface water, ground boiler-based heater satisfied the "solid or hazardous fixtures, including a boiler-based steam heating system, buildings described as running to and from the underground substance because every automobile contains lead in the or there is a threatened release of hazardous substances. asbestos-containing boiler system does not meet the one issue that arises is whether the asbestos-laden boiler system is solid or hazardous waste. while cercla facility, which includes the pond, to an unsuspecting the reasoning from g.j. leasing or that from stevens creek asbestos was inside the building; there was no apparent "disposal" and "release," so analysis of the "release" building. stevens creek, 915 f.2d at 1361. leaking, or placing of any solid waste or hazardous charged it into water, we do not need to address the uarco would occupy. because of its quantity, concentration, or physical, chemi- is no real threat that asbestos "or any constituent thereof plaintiff-appellant, system when it abandoned the system in place. the "any person may commence a civil action . . . against that covered the steam boiler system and associated substance. it reasoned that asbestos built into a building ment of the asbestos-laden insulation in place at the asbestos insulation at the sycamore facility is either inside purchasing the property, sycamore discovered that the make a case for ericsson's liability as a responsible party, rid of a toxic retaining pond, for example, cannot avoid quent sale of the sycamore property was not "handling, trial park associates bought an industrial property with cercla states that a prior owner of a facility is a piping chase or in a metal case. sycamore has not pre- could not enter the environment or be emitted into the been placed "into or on any land or water" or emitted into cal, or infectious characteristics" may be hazardous. has been a release or there is a threatened release of we noted, a contrary rule would mean that sale of an may enter the environment or be emitted into the air purchases and was in charge of managing the sycamore those cases, here there is no real possibility of asbestos insulated piping runs between buildings, is enclosed in a it left the old heating system in place. several years after of operation. in fact, in g.j. leasing the power plant was waste treatment plant, water supply treatment plant, or nonetheless liable because it handled and stored the stevens creek similarly suggested that when any resulting corp. v. simkins indus., inc., 929 f. supp. 396, 398 n.2 (s.d. is the same, our reasoning that established that there heated with the new units. upon installing the new property to kreiger. kreiger then partnered with another cercla, because rcra also adopts the definition from party. soon thereafter, an ericsson employee, michael second and third elements are at issue here. containing asbestos insulation but not removing it from estate that houses it--for handling or storage liability. see 10-20-08 material is solid waste, ericsson's actions still do not cercla requires in 9601(29). the boiler system. the boilers are large mechanical units of the facility except for two areas where the piping ericsson employee, robert boey, to form sycamore indus- responsible party if it controlled the site "at the time of we have held in the past that asbestos is a hazardous fore, for ericsson to be a responsible party, sycamore 42 u.s.c. 9607(a); envtl. transp. sys., inc. v. ensco, inc., ericsson transferred the sycamore property with the did not dispose of the asbestos insulation, ericsson is this court reviews a district court's grant of a motion for 42 u.s.c. 9601(29); 42 u.s.c. 6903(3). accordingly, to sycamore decided to remove asbestos in place decades operations at this facility and sought to sell it to a third ericsson did anything to the asbestos-containing boiler kedrowski testified: "i was informed by mr. boey that there cercla. but without such intent and likely effect, we ment for purposes of cercla"). the ninth circuit in air, as required by the definition of "disposal." even if the meaning of "contribute" is "to act as a determining factor." recognized a third category of cases, the "mixed-motive or will incur in removing the asbestos insulation. this 12 no. 08-1118 substance when it sold real estate containing asbestos. in kreiger, decided that he would like to purchase the otherwise useful realty. it simply does not make sense to extends between buildings is encased in a mechanical may enter the environment or be emitted into the air or neither kreiger nor boey requested that ericsson old system were insulated with asbestos-containing or discharged into any waters, including ground remove the old heating system. obsolete and "decommissioned." g.j. leasing, 54 f.3d at sycamore site does not make it liable under cercla. defendant-appellee. sycamore sued ericsson, seeking to compel it to remove leased part of the property to uarco inc. before uarco ble party. the asbestos-laden insulation. sycamore claims that by ericsson's vice president for managing services and sycamore. ericsson did not remove the old heating system genuine issue as to any material fact and that the movant for the foregoing reasons, we affirm the district that if the primary purpose and likely effect of the sale sycamore attempts to distinguish g.j. leasing and environment or be emitted into the air or discharged v. union elect. co., 54 f.3d 379, 384 (7th cir. 1995). there- or leaked a solid or hazardous waste or placed it into or boilers, pipes, and various pipe joints that make up the solid or hazardous waste," as required by rcra. sycamore theories not at issue on appeal. fla. 1996). thus, as a matter of law, by leaving equipment c. rcra claim at the time of sale; the boilers and piping remained com- solid waste, or combination of solid wastes, which piping. the parties dispute the circumstances under which constitute "disposal" because it did not place the asbestos transport, or dispose of the asbestos as required for dispose of the abandoned asbestos insulation and reim- threat of release at the time of sale. release or threat of release, and cercla does not apply. the limiting principle may be whether the materials are argues that ericsson "disposed" of the boiler-based heating release or threatened release, and thus there can be no fibers would be confined inside a building, there is no iii. conclusion a building or enclosed in a pipe chase or metal case. there1 appeal from the united states district court air pollution control facility and other discarded material." inevitable, the transferor could be held liable under sycamore property, ericsson did not handle, store, treat, also sued under state law nuisance and negligence ing, injecting, escaping, leaching, dumping, or disposing of the heating system. in fact, there is no evidence that in late 1984, ericsson reached an agreement to sell the 42 u.s.c. 6903(27). the parties dispute whether the materials when it abandoned them in place and then ownership of this property, the buildings were heated by soon as the sale was completed, kreiger would transfer portation, or disposal of any solid or hazardous waste purports to cover both solid and hazardous waste, in the solid waste disposal act, which is its predecessor motion for summary judgment. the district court found ment of the boiler-based heating system and the subse- v. barclays bank, 915 f.2d 1355, 1358 (9th cir. 1990). the no. 08-1118 7 be confined to the interior of the building, there is no was to remove the asbestos in circumstances that would ii. discussion sycamore argues in the alternative that even if ericsson sycamore must establish that at the time it controlled the categorized as "discarded material" to satisfy the "solid 381-82. more importantly, this distinction does not make rcra liability. time of disposal" of a hazardous substance. 42 u.s.c. property for ericsson. into the environment." 42 u.s.c. 9601(22). the term contains nine buildings where ericsson manufactured 10 no. 08-1118 the abandoned boiler-based steam heating system has of power generation equipment housed in a structure expert, to argue that there may be another pipe underground. through a pipe network. most of the pipe network runs so that such solid waste or hazardous waste might enter substance within the meaning of cercla. g.j. leasing co. i. background a. standard of review g.j. leasing and stevens creek are on point here. all p. 56(c). efficiency, most elements of the steam boiler system are cercla liability attaches when a plaintiff establishes that is insulated by asbestos in place and then selling the [d]ischarge, deposit, injection, dumping, spilling, pipe. the pipes i could see were not covered with insulation, carmel, 55 f. supp. 2d 237, 255-57 (s.d.n.y. 1999); marriott there was no private cause of action under cercla for piping chase or in a metal casing. to maximize thermal leaking, pumping, pouring, emitting, emptying, discharg- covered with insulation. this insulation is physically was another pipe extending underground between two of the principle, recognizing that an owner who wants to get in january 1983, ericsson ceased all of its manufacturing the asbestos at the sycamore facility is contained inside stevens creek, 915 f.2d 1355. our sister circuit determined 4 no. 08-1118 the air as the applicable definition of "disposal" requires. the system is merely turned off, meaning that it could be ble party," defined as a party that controlled the site "at the appeals the district court's decision on the cercla we affirm the district court's grant of summary judgment. no. 08-1118 3 a prospective tenant and that it was not considering pletely in place after the sale. at the time of the sale, for the northern district of illinois, eastern division overlaps with "responsible party" analysis. see carson action rather than merely passive conduct--such as we have stated that "the release of asbestos inside a posed of" solid or hazardous waste. sycamore first the environment, as cercla requires. in addition, the ericsson's sale of the property to kreiger closed on may considered this issue read rcra to require affirmative structure did not lead to cercla liability. id. at 385. material. sycamore sued to force ericsson to remove and purpose (to insulate structures), whereas in the instant ment here: that union electric disposed of a hazardous that ericsson handled, stored, or even touched any part into or on land or water, emitted it into the air, or dis- f.3d 493, 498 (7th cir. 2007). in doing so, all facts and ericsson relinquished control of the site. cercla adopts interior of a place of employment is not the environ- ericsson installed a new natural gas heating system, but while negotiating to sell the property to kreiger, ericsson element required for cercla liability inevitably f. supp. 2d 796, 844-46 (d. n.j. 2003); delaney v. town of costs in response to the release or threatened release. csx transp., inc., 245 f.3d 916, 922 (7th cir. 2001). a 969 f.2d 503, 506 (7th cir. 1992); 3550 stevens creek assocs. affirmative action. the vast majority of courts that have tion around this pipe. moreover, kedrowski's expert testimony burse sycamore for alleged response costs it has incurred purchaser. we described the toxic retaining pond to the structures at intervals by metal fasteners. all of the definition of "disposal" is the same under rcra and disposing of the asbestos. waste" requirement. because the definition of "disposal" asbestos broke off, asbestos fibers would remain in the no. 08-1118 5 firmed if "the pleadings, the discovery and disclosure concluded that asbestos abandoned in place in a with sycamore. a plain reading of the "has contributed or based heating system was experiencing difficulty and intent to dispose of a hazardous substance. it incidentally 2 no. 08-1118 district court held as a matter of law that the abandon- ownership in the facility to the sycamore partnership. 30, 1985. kreiger immediately assigned the property to since the 1985 closing. the parties disagree as to whether leasing, 54 f.3d at 382-84. in g.j. leasing, we determined storage, treatment, transportation or disposal of any utilizing the old heating system. webster's ii new college dictionary (2005). by definition, the meanwhile, in the winters of 1983 and 1984, the boiler- statutory definition of "disposal." waste" definition. however, we do not need to address act, which defines "disposal" as: not been used for the purpose of heating the buildings discharged into any waters, including ground water," as district court's grant of summary judgment is to be af- reasonable inferences are construed in the light most in g.j. leasing emphasized that the only exposure to entering the environment, as required to have a "disposal." utilized again, or whether it is inoperable. arrangements for its subsequent disposal." id. at 384. as handling or storing of materials for liability. the ordinary that it discovered asbestos during a routine inspection by in the response, compensation, and liability act ("cercla"), is limited to the condition of the equipment after litigation natural gas unit heaters so that the entire facility could be party, cercla also requires that there has been a release at the locations where they were described as running to and court's grant of summary judgment for defendant. because kedrowski explicitly states that there was no insula- the buildings of the facility or, in the instances when court granted ericsson's motion for summary judgment, was commenced. it cannot establish a disposal or release or the rcra citizen suit provision states, in relevant part, asbestos insulation. yet sycamore presents no evidence into any waters, as required by 6903(3). needed costly repair and maintenance. in december 1984, in g.j. leasing v. union electric company, the plaintiffs make the release of asbestos to the outside environment example as the "malicious motive case." id. we also advanced an argument very similar to sycamore's argu- carey canada, inc., 860 f.2d 1434, 1439 (7th cir. 1988) ("the and recovery act ("rcra"), 42 u.s.c. 6972. the district ment to health or the environment." 42 u.s.c. near the ceilings of the several buildings and is connected containing material was being used for its intended house them. they are connected to the other buildings hazard from emission of asbestos fibers into the air would 42 u.s.c. 9607, and under the resource conservation (2d cir. 1997); interfaith cmty. org. v. honeywell int'l, 263 after it purchased valuable real estate in a legitimate plaintiff cites testimony of david kedrowski, defendant's1 stevens creek. it argues that in those cases the asbestos- contamination--showing that the asbestos insulation has place at the property prior to sale. yet it held as a matter ericsson, inc.,

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