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Magistrate: Uniroyal not liable for cleanup costs

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As a federal magistrate judge puts it, "All good things must come to an end."

That is the beginning line of U.S. Magistrate Judge Christopher Nuechterlein's order issued Thursday in City of Mishawaka v. Uniroyal Holding, No. 3:04-CV-125, which finds the liability holding company with the tire maker's name isn't legally obligated to pay for environmental cleanup expenses at a site its corporate predecessors have occupied since 1874.

The magistrate judge's 14-page order is part of a 5-year-old case involving a long history of corporate ownership changes and who should ultimately be responsible for paying Mishawaka's cleanup costs related to the 43 acres at 312 N. Hill St.

Originally, the site was a rubber company purchased in the 1920s and manufacturing operations happened there for 75 years. The name changed to Uniroyal in the 1980s and a subsidiary holding company was created. Agreements detailed liability through the years through corporate ownership changes, but the holding company remained.

The Environmental Protection Agency had removed hazardous substances from the site in 1998 and the city claimed it spent more than $3.5 million in subsequent cleanup costs. A settlement resulted in the holding company paying about $50,000 to the city, but Uniroyal denied it was liable for the entire amount because of the ownership agreements and changes through the years. The court ultimately agreed based on insufficient proof and arguments from Mishawaka, and express language contained in restructuring plans.

"Other than pointing to two persons exercising control over both entities (Uniroyal's manufacturing operations and Uniroyal Holding), Mishawaka has failed to show how Uniroyal Holding can reasonably be seen as maintaining the same essential characteristics of Uniroyal," he wrote, granting the company's motion for summary judgment. "As such, this Court concludes that Mishawaka has not established that Uniroyal Holding is responsible for the site, based either on the legal theories argued or on the equitable theory of successor liability."

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