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ALLIED CORP. v. ACME SOLVENTS RECLAIMING

January 26, 1993

ALLIED CORPORATION, et al., Plaintiffs,
v.
ACME SOLVENTS RECLAIMING, INC., et al., Defendants.



The opinion of the court was delivered by: PHILIP G. REINHARD

 INTRODUCTION

 Plaintiffs have sued, inter alia, defendant, Valspar Corporation (Valspar), individually and as successor in interest to Minnesota Paints, Speed-O-Laq Chemicals Corporation (Speed-O-Laq), Rocco Paint and Rockcote Paint Company. Valspar has filed a motion for summary judgment on the issue of whether it is a successor in interest to Speed-O-Laq. *fn1"

 Speed-O-Laq was a manufacturer of private label paints, lacquers and industrial coatings. On November 30, 1973, Valspar entered into an asset purchase agreement with Speed-O-Laq. Included in this transaction were the land, buildings, improvements, machinery, equipment, fixtures, furniture and other tangible property located at Speed-O-Laq's production facility in St. Paul, Minnesota, and its storage facility in Menomonee Falls, Wisconsin. Also included in the sale were all current usable inventories of raw materials, packaging materials, finished products, all valid accounts and notes receivable as of the effective date resulting from Speed-O-Laq's prior sales, and all trade names and trademarks. Valspar also assumed Speed-O-Laq's obligations under contracts with the Housing Redevelopment Authority and the Roberts Construction Company.

 The agreement also provided as follows:

 Recital: In connection with its business of manufacturing and selling paint and industrial coatings at various locations in the United States, Speed-O-Laq owns and operates plants at St. Paul, Minnesota, and Menomonee Falls, Wisconsin. The purpose of this Agreement is to enable Valspar to acquire these two plants and other specified assets and to carry on Speed-O-Laq's "business".

 The above language notwithstanding, Valspar asserts that immediately after the sale it discontinued manufacturing lacquers. Valspar also contends that it discontinued the manufacture of industrial coatings within 10 days after the asset purchase. Valspar did, however, continue to manufacture the private label paints previously manufactured by Speed-O-Laq, but only after changes had been made to the paint formulas. Within 60 days after the asset purchase, Valspar closed the warehouse in Menomonee Falls, Wisconsin. Valspar closed the St. Paul facility on July 31, 1975.

 At the time of the asset purchase, Speed-O-Laq had approximately 25 hourly employees and 12 salaried employees. Of these, four salaried employees and two hourly employees continued to work for Valspar. *fn3" Valspar and Speed-O-Laq did not share common officers, directors or incorporators. Speed-O-Laq was dissolved by court order on September 26, 1978.

 DISCUSSION

 Summary judgment is appropriate where the pleadings, depositions and affidavits show that there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Poller v. Columbia Broadcasting Sys., 368 U.S. 464, 467, 7 L. Ed. 2d 458, 82 S. Ct. 486 (1962). A dispute about a material fact is "genuine" if the evidence would allow a reasonable jury to return a verdict for the non-moving party. Anderson, 477 U.S. at 248. A mere "scintilla of evidence" is insufficient; the non-movant must offer evidence on which a jury could reasonably find for him. Brownell v. Figel, 950 F.2d 1285, 1289 (7th Cir. 1991). The non-moving party must do more than raise a "metaphysical doubt" as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Co., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248; United States v. McCaughey, 977 F.2d 1067, 1073 (7th Cir. 1992). As always, in deciding a motion for summary judgment, the court must read all facts in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255; Richardson v. Penfold, 839 F.2d 392, 394 (7th Cir. 1988). Although plaintiffs generally argue that genuine issues of material fact are present, this court disagrees. Any disputes are legal arising from the facts before the court.

 The parties agree that successor corporations can be held liable for environmental cleanup costs under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. See, e.g., U.S. v. Mexico Feed and Seed Co., 980 F.2d 478, (8th Cir. 1992); United States v. Carolina Transformer Co., 978 F.2d 832, 837 (4th Cir. 1992); Anspec Co. v. Johnson Controls, Inc., 922 F.2d 1240, 1245 (6th Cir. 1991); Louisiana-Pacific Corp. v. Asarco, Inc., 909 F.2d 1260, 1262-63 (9th Cir. 1990); Smith Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86 (3d Cir. 1988), cert. denied, 488 U.S. 1029, 102 L. Ed. 2d 969, 109 S. Ct. 837 (1989). Under traditional rules of successor liability, asset purchasers are not liable as successors unless one of the following four exceptions applies:

 (1) The purchasing corporation expressly or impliedly agrees to ...


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