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Tuesday, May 21, 2024 | Back issues
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Car Wrecks Don’t Have|to Be a Double Whammy

CHICAGO (CN) - An Indiana fire department cannot use federal environmental legislation to bill motorists involved in car accidents under for response costs, the 7th Circuit ruled.

The case involved four separate car accidents in LaPorte County, Ind. After responding to the scene, the Volunteer Fire Department of Westville eventually sent each of the drivers a bill, claiming that they were financially responsible for the release of hazardous substances from their vehicles under the Comprehensive Environmental Response, Compensation and Liability Act.

"Under CERCLA, the owner of a 'facility' from which hazardous substances have been released is responsible for the response costs that result from the release," the court summarized.

The fire department, through its billing agent Emergency Services Billing Corp., claimed that the personally owned and operated vehicles were considered "facilities" under the act, and that their owners were thus responsible for clean-up costs.

When the vehicle owners and their insurance companies refused to pay, ESBC filed suit. The insurance companies countersued, claiming violations of the Fair Debt Collection Practices Act, unjust enrichment, unlawful fee collection, fraud, constructive fraud and insurance fraud.

U.S. District Judge Jon DeGuilio sided with the insurers, finding that CERCLA's "consumer product in consumer use" exemption to the "facilities" definition applied to motor vehicles, and thus could not be held liable under the statute.

ESBC's appeal failed to sway the 7th Circuit.

Though ESBC said the phrase "consumer product" is ambiguous, the three-judge appellate panel found otherwise. Noting that the consumer-product definition is apparent in the statute, the court also found that the EPA's definition clearly included motor vehicles.

Though the Consumer Product Safety Act explicitly excludes motor vehicles from its definition of consumer products, it does so to prevent conflict with the Motor Vehicle Safety Act, Judge Joel Flaum explained for the panel, turning the billing company's evidence on its head.

"Thus, the exclusion of motor vehicles from the CPSA's definition for 'consumer product' does not illustrate the ambiguity of the term; it does the very opposite," Flaum wrote. "The need to exclude motor vehicles from the definition illustrates the fact that under normal circumstances, motor vehicles for personal use constitute consumer products."

Moreover, when Rep. Howard Cannon sponsored CERCLA, he explicitly mentioned clarifying the language to exclude individual consumers from liability. A later amendment changed the working to "preclude any unintended application of notification requirements and liability provisions to consumers," Flaum said.

"ESBC offers no support from CERCLA's legislative history that a category as large as personal motor vehicles should be excluded from the definition of consumer products, nor can we think of a reason for this exclusion," the decision states.

The four individual defendants in the case were David Penton, Juan Jose Gomez Hernandez, Frank Dubczak and Michael Baker, alongside their insurers, Allstate, State Farm and Progressive Insurance.

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