A federal court in New Jersey has ruled that the sole shareholder of a single-purpose entity which owns a contaminated facility is liable as a current operator under CERCLA. Litgo N.J., Inc. v. Martin, No. 06-2891 (D.N.J. 1/7/11). The facility is located in Somerville, New Jersey, where trichloroethylene (TCE) was released during a fire in 1983. Thereafter, the New Jersey Department of Environmental Protection (NJDEP) undertook a remedial action on the property. In 1985, the facility was purchased by Sheldon Goldstein, who sold it to Litgo New Jersey, Inc., which Goldstein owned.
In 2006, after discovering an underground plume of TCE, Goldstein and Litgo sued NJDEP, alleging a failure to properly remediate the property. NJDEP counterclaimed, and plaintiffs filed an amended complaint to add CERCLA counts, among others. Following a bench trial, the court found Goldstein liable as a current operator under section 113 of CERCLA, and Goldstein filed a motion for reconsideration arguing that his involvement in the property was insufficient to make him a responsible party under section 107(a)(1).
The court disagreed and refused to reconsider its prior decision. According to the court, its decision as to Goldstein’s liability was based on his actual control over day-to-day operations on the property, including remediation activities, and on his status as the sole shareholder of Litgo, a single purpose entity.