Farmland Industries, Inc. v. Colorado & Eastern Railroad Co.

A pesticide-formation plant was operated in Commerce City, Colorado, and was destroyed by a fire in 1965. The rubble from the fire contained pesticides that contaminated the property. A subsidiary of Farmland Industries, Inc. (Farmland) (plaintiff) acquired the property in 1968. In 1983, the United States Environmental Protection Agency (EPA) determined that hazardous substances were being released from the former pesticide-plant site. The EPA placed a 2.2-acre parcel of land on the National Priorities list as the Woodbury Chemical Superfund Site (Woodbury Site). The 2.2-acre parcel was purchased in 1984 by Colorado Eastern Railroad Company (CERC) (defendant). In 1989, the United States filed suit against Farmland, CERC, and other potentially responsible parties under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Farmland entered into a partial consent decree with the United States that required Farmland to undertake remedial actions at the Woodbury Site. In 1992, Farmland had completed the remediation and paid 51 percent of an additional cleanup cost of $1,439,330 to remove soil and debris from CERC’s parcels. Farmland alleged this extra cost was partially the result of CERC’s conduct regarding the collapse of a large berm on CERC’s property, which caused a drainage ditch to give way and spill contaminated water onto the property. CERC refused to repair the berm or permit Farmland access to remediate. CERC granted the EPA access to repair the berm 20 months after the initial damage. Farmland alleged the other portion of additional costs was attributed to CERC’s failure to act reasonably to prevent the public from dumping waste onto the Woodbury Site. The CERC properties were not fenced in, allowing the public to dump debris and refuse on the property. The EPA repeatedly instructed CERC to install a fence, but CERC refused and did not grant access to Farmland to erect one. In the time it took CERC to erect a fence, a large amount of debris had accumulated. Farmland moved for partial summary judgment on the issue of the amount and reasonableness of the additional cleanup costs. The district court held that Farmland could recover its response costs against CERC. CERC appealed, and the Tenth Circuit court held that Farmland’s contribution claim was not barred, and the case was remanded.