Differential Development-1994, Ltd. v. Harkrider Distributing Co.
Differential Development and Pro Cleaners, a former shopping center owner and a current dry-cleaning business operator, sued the City of Houston, Harkrider Distributing Co., KSB, Inc., and Safety-Kleen Systems, Inc. under CERCLA sections 107(a) and 113(f) for cost recovery and contribution related to PERC contamination. They also brought state-law claims. The plaintiffs argued they were not 'potentially responsible parties' (PRPs) or, alternatively, qualified for an 'innocent landowner' defense. They also contended their voluntary cleanup agreement with the TCEQ constituted a settlement under CERCLA section 113(f)(3)(B). The court determined that Differential Development and Pro Cleaners are indeed PRPs and do not qualify for the innocent landowner defense. The court further ruled that their voluntary cleanup agreement with the TCEQ does not qualify as a settlement under CERCLA section 113(f)(3)(B) and that section 107(a) does not provide a separate cause of action for PRPs to sue other PRPs for cost recovery or contribution. Consequently, the court granted the motions to dismiss all federal CERCLA claims and, declining supplemental jurisdiction, dismissed the remaining state-law claims without prejudice.