Acme Laundry Co. v. Secretary of Environmental Affairs

Acme Laundry Co., Inc. (Acme I) owned a laundry business on a parcel of land in Chatham. Acme I organized a sale of the land and business to Acme Laundry Co. (Acme II) (plaintiff). In preparing for the sale, Acme II found that there was an oil leak from a storage tank under the property and part of the underground soil was covered with oil. Pursuant to a Massachusetts statute, the Department of Environmental Quality Engineering (DEQE) (defendant) conducted an assessment of the entire property and determined that Acme II was liable. Acme II responded by saying that it would clean up the oil. Before taking any action, Acme II divided the property into four lots, only one of which was contaminated. Acme II conveyed the contaminated lot to a newly formed corporation called Acme Laundry Co., Inc. (Acme III) (plaintiff). Acme III did not conduct business of any kind; it only held the property that was contaminated. Subsequently, after the DEQE conducted more studies, it placed a lien on all four lots owned by Acme II and Acme III, including those three that were not contaminated. The relevant statute provided that liability for environmental contamination may include the costs of necessary response actions incurred by the DEQE and that such liability constitutes a debt to the Commonwealth and creates a lien on the property. Acme II and Acme III filed suit seeking a declaratory judgment that the lien was invalid. The trial court awarded DEQE summary judgment. Acme II and Acme III appealed.