Court Reverses More Expensive Cleanup Plan

(CN) - A manufacturing company cannot sue the Indiana Department of Environmental Management for breach of contract after the department demanded an expensive environmental cleanup plan from the federal government, the Indiana Supreme Court ruled.

Raybestos Products Inc. makes brakes and clutches in Crawfordsville, Ind. The state environmental agency found polychlorinated biphenyls (PCBs) in nearby Shelley Ditch. The company's internal investigation revealed that its predecessor had dumped the chemicals.

The agency found that a risk assessment was not adequate, and it advocated a more stringent and expensive plan. It successfully asked the Environmental Protection Agency to approve the tougher plan.

Raybestos won its breach of contract suit and judgment for $11.6 million, the cost of the more expensive cleanup.

The Indiana Court of Appeals reversed the decision, and Justice Boehm agreed that the environmental cleanup plan was an order, not a contract.

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