If a defendant sells a product containing hazardous waste to a buyer that later disposes of the product, and if the product has commercial value and was part of a “legitimate sale,” the defendant may avoid so-called “arranger liability” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), even if the seller knows that the buyer intends to dispose of the hazardous product. That was the holding in United States v. Dico, Inc., in which the US Court of Appeals for the Eighth Circuit partly reversed summary judgment that had been entered in favor of the government and against defendant tire manufacturer Dico.

In this legal update we review the developments of this case and discuss its implications for future CERCLA disputes.

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