New York v. Shore Realty Corp.

759 F.2d 1032 (1985)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

LeoGrande (D) incorporated D solely for the purpose of purchasing the Shore Road property. D agreed to purchase the 3.2-acre site, a small peninsula surrounded on three sides by the waters of Hempstead Harbor and Mott Cove, for condominium development. Five large tanks in a field in the center of the site hold most of some 700,000 gallons of hazardous chemicals located there, though there are six smaller tanks both above and below ground containing hazardous waste, as well as some empty tanks, on the property. One of the two dilapidated masonry warehouses on the site had contained over 400 drums of chemicals and contaminated solids, many of which were corroded and leaking. It is beyond dispute that the tanks and drums contain 'hazardous substances' within the meaning of CERCLA. The purchase agreement could be voided by D without penalty if after conducting an environmental study D had decided not to proceed. LeoGrande (D) was fully aware that the tenants, Applied Environmental Services, Inc., and Hazardous Waste Disposal, Inc., were then operating -- illegally, it may be noted -- a hazardous waste storage facility on the site. D's environmental consultant's report found that there had been several spills of hazardous waste at the site, including at least one large spill in 1978. Hazardous substances, such as benzene, were still leaching into the groundwater and the waters of the bay immediately adjacent to the bulkhead abutting Hempstead Harbor. The report detailed the sorry state of the facility. The report estimated that the cost of environmental cleanup and monitoring would range from $650,000 to over $1 million before development could begin. D sought a waiver from the State Department of Environmental Conservation (DEC) of liability as landowners for the disposal of the hazardous waste stored at the site. DEC denied the waiver. D took title. Under D's ownership, nearly 90,000 gallons of hazardous chemicals were added to the tanks. The tenants did not clean up the site before they left. P sued D for the cleanup of the site. Ds were found liable and appealed.