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DOES THE DOCTRINE OF SUCCESSOR LIABILITY APPLY TO THE CLEAN AIR ACT?

December 29, 2011

Category: Arkansas Environmental, Energy, and Water Law

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Author: Walter G. Wright A federal district court in Louisiana addressed a number of issues involving the Big Cajun II coal fired power plant in Louisiana. See United States of America, et al vs. Louisiana Generating, LLC 2011 U.S. Dist. LEXIS 137973 (Dec. 1, 2011). The opinion involves an enforcement action by the federal Environmental Protection Agency and addresses a variety of questions regarding the liability of successor owners of the facility. The opinion states that the plant began operating in 1981 and that in 1994 its owner filed for bankruptcy protection. Apparently, as part of its reorganization plan, the opinion indicates that substantially all of the owner's assets, including the facility, were put up for sale through auction. NRG Energy was involved in the auction process from beginning of 1994. A number of asset purchase agreements were executed and the opinion indicates that a portion of the fifth agreement called for the defendant to assume any environmental liability that was attached to the owner of the acquired assets by operation of law. NRG formed the defendant, Louisiana Generating, LLC as a subsidiary. One of the issues that the federal district court addressed was whether the doctrine of successor liability applied to the Clean Air Act. The court ultimately found that the theory of successor liability was applicable to this particular situation under the Clean Air Act. A copy of the opinion can be downloaded below.
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