Environmental Law: 500 ASSOCIATES, INC. V. NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET (COA 9/22/2006)

500 ASSOCIATES, INC. V. NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET
ADMINISTRATIVE LAW:  Environmental Protection; Kentucky Superfund 

2004-CA-000339
PUBLISHED: AFFIRMING (JOHNSON)
DATE RENDERED:  9/22/2006

The Natural Resources and Environmental Protection Cabinet had filed an administrative complaint to hold the prior owner (Vermont American Corp. – VAC) and current owner (500 Associates, Inc.) of an industrial lot in Louisville which had been used for electroplating and heat treatment operations liable for environmental contamination. 500 filed contribution claim against prior owner VAC, and following a hearing, the Secretary of the Cabinet adopted hearing officer’s recommendations that both owners were jointly and severally liable, with prior owner bearing 95% of the responsibility for contamination. Both owners filed petitions for judicial review.

500 Associates, Inc. (500) appealed from opinion and order of the Franklin Circuit Court which assessed liability for environmental contamination at a vacant industrial lot located at 500 East Main Street in downtown Louisville, Kentucky, (the property site) where hazardous substances have been released. Vermont American Corporation (VAC) filed a cross-appeal in this case, appealing the same order.  Having concluded that the circuit court’s ruling was not clearly erroneous, COA affirmed.

Court of Appeals held there was sufficient evidence to establish that actions of current owner contributed to the contamination of the property; that current owner failed to exercise due care in regard to contamination on property and thus was not entitled to the innocent purchaser defense; and $160,000 penalty against prior owner was supported by evidence.

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