## Facts

- In 1976, Fleet Factors Corporation (Fleet) entered a factoring agreement with Swainsboro Print Works (SPW), a cloth-printing company, agreeing to advance funds against SPW’s accounts receivable.
- As collateral, Fleet obtained a security interest in SPW’s textile facility and substantially all related assets, including equipment, inventory, and fixtures.
- SPW filed for Chapter 11 bankruptcy in 1979, and the factoring agreement continued with bankruptcy-court approval.
- In early 1981, Fleet stopped advancing funds after SPW’s indebtedness exceeded Fleet’s estimate of the receivables’ value, and SPW ceased operations on February 27, 1981.
- SPW’s bankruptcy later converted to Chapter 7, and a trustee assumed title and control of the facility.
- In 1982, Fleet foreclosed on certain collateral and hired Baldwin Industrial Liquidators to auction SPW’s collateral; the items were sold “as is” and “in place,” with purchasers responsible for removal.
- Fleet also contracted with Nix Riggers to remove unsold equipment, allegedly in return for leaving the premises “broom clean.”
- In 1984, the Environmental Protection Agency found approximately 700 55-gallon drums and 44 truckloads of hazardous material (including asbestos) at the facility and undertook a CERCLA removal action costing nearly $400,000.
- The United States sued Fleet and SPW’s officers to recover response costs under CERCLA, alleging Fleet was an “owner or operator” under 42 U.S.C. § 9607(a).
- Fleet moved for summary judgment, arguing it fell within CERCLA’s security-interest exemption for secured creditors under 42 U.S.C. § 9601(20)(A); the district court denied the motion.
- Fleet pursued an interlocutory appeal under 28 U.S.C. § 1292(b) from the denial of summary judgment.

## Issues

1. Under CERCLA’s security-interest exemption, can a secured creditor be treated as an “owner or operator” if it participated in management of the facility even without exercising day-to-day operational control?
2. Did the record present genuine disputes of material fact about whether Fleet’s conduct amounted to “participation in management,” making summary judgment inappropriate?

## Decision

- The Eleventh Circuit affirmed the district court’s denial of Fleet’s motion for summary judgment.
- The court held that “participating in the management” is not limited to running day-to-day operations; a creditor may fall outside the exemption when its involvement goes beyond protecting its security interest and is sufficient to affect hazardous-substance handling or disposal decisions.
- The court concluded that the evidence created material factual disputes about the extent and character of Fleet’s involvement with SPW and the facility during the shutdown, foreclosure, auction, and equipment-removal process.
- The case was remanded for further proceedings; the court did not make a final determination that Fleet was liable under CERCLA at this stage.

## Legal Principles

- CERCLA imposes broad liability for cleanup costs on covered “owners or operators,” and exceptions to that liability—including the security-interest exemption—are construed narrowly.
- The security-interest exemption excludes from “owner or operator” status a person who holds indicia of ownership primarily to protect a security interest, so long as the person does so “without participating in the management” of the facility. 42 U.S.C. § 9601(20)(A).
- “Participation in management” can be shown by conduct short of direct, day-to-day operational control; a creditor’s actions may constitute management participation when they extend beyond ordinary loan oversight and materially shape how the facility is run, including matters tied to hazardous substances.
- On summary judgment, if the record would allow a reasonable factfinder to conclude that the creditor’s conduct crossed from creditor protection into management participation, the exemption cannot be applied as a matter of law.

## Conclusion

United States v. Fleet Factors Corp. affirms that CERCLA’s security-interest exemption does not automatically shield a secured creditor from “owner or operator” claims: when the creditor’s role at a contaminated facility may have gone beyond protecting its collateral and into management participation with potential effects on hazardous-substance decisions, disputed facts can bar summary judgment and require further proceedings.


United States v. Fleet Factors Corp., 901 F.2d 1550 (1990)