Keywell Corporation v. Weinstein

Keywell Corporation (plaintiff) purchased a metals-recycling plant from Vac Air Alloys Corporation (Vac Air). Daniel C. Weinstein and Anthony Boscarino (defendants) were shareholding directors and officers of Vac Air at the time of the sale and signatories to the purchase agreement. Weinstein and Boscarino falsely warranted in the agreement that there had been no on-site disposal of hazardous substances that would require remediation under any law. The agreement limited breach-of-warranty claims against stockholders, directors, and officers to two years and against Vac Air to 30 years. In a postsale agreement resolving an unrelated dispute, Keywell released Vac Air management (including Weinstein and Boscarino) from any claims arising under the purchase agreement. A year after the release, a grand jury investigation revealed groundwater contamination from Vac Air’s disposal of hazardous waste at the site, and Keywell entered into an agreement with a state environmental agency to complete hazardous-waste remediation. Keywell brought an action in federal district court, claiming that Weinstein and Boscarino were strictly liable for remediation costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The case was transferred to a different federal district court, and the parties filed cross-motions for summary judgment. The district court granted summary judgment for Weinstein and Boscarino, finding that the postsale release waived Keywell’s statutory right to seek contribution for CERCLA costs. Keywell appealed the district court’s grant of summary judgment.