## Facts

- Gurley Refining Company, Inc. (GRC) operated a used-oil rerefining facility in Arkansas from about 1970–1975.
- The rerefining process generated acidic sludge and spent clay containing hazardous substances, including heavy metals, PCBs, and sulfuric acid.
- GRC disposed of these wastes in a borrow pit leased from a landowner under a state-issued permit.
- GRC stopped using the pit in October 1975.
- In 1978, federal wildlife officials found that contaminated water from the pit had spilled over and harmed nearby habitat.
- EPA took interim measures, later listed the site on the National Priorities List, and conducted a cleanup under CERCLA.
- The United States sought recovery of response costs under CERCLA § 107.
- A prior federal lawsuit (filed in 1983) under the Clean Water Act addressed discharges from the same pit and ended in a final resolution.
- William Martin Gurley, GRC’s principal shareholder and president, played a central role in corporate decision-making during disposal activities.
- Larry Gurley, a non-officer employee, negotiated leases, oversaw construction, supervised employees, and personally participated in disposal activities; the district court found he had extensive authority over disposal policies and practices.
- The district court imposed past costs of $1,786,502.92 and estimated future costs of $6,000,000 against GRC, William, and Larry.

## Issues

1. Whether claim preclusion barred the CERCLA cost-recovery claim against GRC because of the earlier Clean Water Act case involving the same site and contamination events.
2. Whether William and Larry were individually liable as CERCLA “operators” under § 107(a)(2) based on their authority and involvement in disposal operations.
3. Whether applying CERCLA liability to pre-1980 disposal conduct violated due process.

## Decision

- The Eighth Circuit reversed the judgment against GRC, holding the CERCLA claim against the corporation was barred by claim preclusion because it arose from the same nucleus of operative facts as the earlier Clean Water Act litigation and could have been brought then.
- The court affirmed individual liability against William and Larry as “operators” under CERCLA, concluding each had sufficient authority and involvement in the waste-disposal operations tied to the releases.
- The court rejected the due process challenge, holding CERCLA may be applied to pre-enactment conduct without violating due process.
- Disposition: affirmed in part (William and Larry) and reversed in part (GRC).

## Legal Principles

- Claim preclusion bars later claims that were or could have been raised in an earlier action resulting in a final judgment on the merits when both actions arise from the same transaction or nucleus of operative facts.
- CERCLA “operator” liability turns on actual authority to control, and involvement in, operations causing disposal or releases of hazardous substances; formal corporate title is not required.
- Corporate officers, owners, and employees may be personally liable as CERCLA operators when they personally direct or control waste-handling and disposal decisions connected to contamination.
- Retroactive application of CERCLA cost-recovery provisions to pre-1980 disposal conduct is constitutionally permissible where rationally related to Congress’s legitimate purpose of shifting cleanup costs to responsible parties.

## Conclusion

The court held that the government’s CERCLA cost-recovery action against the corporate defendant was barred by claim preclusion due to prior federal litigation over the same contamination, but affirmed that both a corporate president/owner and a non-officer employee could be personally liable as CERCLA operators based on their authority and participation in disposal activities, and it upheld CERCLA’s retroactive application against due process objections.


United States v. Gurley, 43 F.3d 1188 (8th Cir. 1994)