North Shore Gas Co. v. Salomon, Inc.

In 1927, William Baehr founded the North Shore Coke & Chemical Company (the Coke Company). In 1934, Coke Company subsidiary North Continent Mines dumped radium slimes at a mineral-processing facility in Denver. The site was owned by the S.W. Shattuck Chemical Company (Old Shattuck). The Coke Company and the North Shore Gas Company (NSG) (plaintiff) were closely intertwined, sharing ownership, officers, and directors, and issuing joint bonds. The Coke Company sold all its produced gas to NSG. In 1941, however, the companies reorganized, and the Coke Company sold all its assets to NSG, except its stock in North Continent Mines and Old Shattuck, which it transferred to North Continent Utilities, a Baehr holding company. Under the reorganization, NSG agreed to assume the Coke Company’s existing liabilities. After the reorganization, Baehr and North Continent Utilities retained effective control of NSG. In 1969, the predecessor in interest to Salomon, Inc. (defendant) purchased Old Shattuck. In 1992, the Environmental Protection Agency ordered the predecessor in interest to Salomon to remove hazardous substances from the Denver site under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Salomon sought out other companies that had previously used the site to share in the financial responsibility of the cleanup, which would cost millions of dollars. NSG filed suit, seeking a declaratory judgment that it was not liable for any remediation costs. The district court granted NSG summary judgment. Salomon appealed.