Bancamerica Commercial Corp. v. Trinity Industries, Inc.
900 F. Supp. 1427 | District Court, D. Kansas | 1995
What This Case Means for Subcontractors
A Kansas court ruled that CERCLA environmental liability for hazardous waste cleanup cannot be avoided through indemnification clauses in contracts. Trinity Industries operated a contaminated facility and tried to shift cleanup costs to BACC through an indemnity agreement, but the court enforced CERCLA's strict liability rules instead. The decision means subcontractors and operators cannot contractually escape responsibility for pre-existing environmental contamination at job sites.
Key Takeaways
- •Indemnification clauses do not protect you from CERCLA liability—you remain responsible for environmental cleanup costs even if your contract says the other party must indemnify you.
- •Operating a hazardous waste facility makes you a 'responsible party' under CERCLA regardless of who caused the contamination; liability is strict and non-delegable.
- •Before taking on a project at an industrial or previously-used site, conduct environmental due diligence and negotiate explicit environmental liability caps or exclusions in your contract, knowing they may not hold up in court.
BACC is required to indemnify Trinity from claims alleging Trinity is a successor to KCSS II.
Frequently Asked Question
Can I use an indemnification clause in my subcontract to avoid paying for environmental cleanup?
No. Courts have ruled that indemnification clauses cannot override CERCLA's strict liability rules for environmental contamination. Even if your contract requires the other party to indemnify you, you remain legally responsible for cleanup costs if you operated the contaminated facility. Always get environmental site assessments before signing on to industrial projects.
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