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IN RE READING CO.

September 14, 1995

In the Matter of Reading Company, Debtor.


The opinion of the court was delivered by: DITTER

 Ditter, J

 September 14, 1995

 This case comes before me on a motion to enjoin the United States and numerous third party plaintiffs from prosecuting certain environmental claims against Reading Company. The claims are rooted in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq, and arise out of a civil action captioned United States v. Berks Assoc., Inc., et al., 1992 U.S. Dist. LEXIS 4978, Civil Action No. 91-4868 (E.D. Pa.). It is Reading's position that these claims were discharged by my order of December 31, 1980. For the reasons discussed below, I will grant Reading's motion.

 I. FACTUAL BACKGROUND

 A. The Reading Bankruptcy

 On November 23, 1971, Reading's debtor-predecessor, which then operated the Reading Railroad, entered into a proceeding for reorganization pursuant to section 77 of the Bankruptcy Act of 1898, as amended, formerly codified at 11 U.S.C. § 205 (1976) (repealed 1978) ("section 77"). By the middle of 1979, trustees for the Reading Railroad *fn1" filed an amended plan of reorganization ("the plan"). It included myriad compromises and trade-offs between and among creditors of various kinds and classes, secured and unsecured, including the United States and Reading's stockholders.

 On December 18, 1980, after due notice to all the parties then before the court, a hearing was held on any objections to the proposed consummation of the plan. The United States participated as a creditor during these proceedings and asserted pre-bankruptcy secured and un-secured claims arising under the Interstate Commerce Act and Emergency Rail Facilities Restoration Act, as well as post-petition claims arising under the Regional Rail Reorganization Act of 1973. However, the United States did not assert any environmental claim.

 At the hearing on the plan, the United States raised no objection. See In re Reading Co., No. 71-828, Memorandum and Order at 2 (E.D. Pa., December 23, 1980) (Memorandum and Order No. 2004) ("bankruptcy order"). The bankruptcy was consummated on December 31, 1980, pursuant to the bankruptcy order, which also contained a broad injunction against future lawsuits. See bankruptcy order at 27-28. Reading emerged from reorganization on January 1, 1981.

 B. The Douglassville Site

 Around 1941, a solvent recovery and lubrication oil recycling business, eventually known as Berks Associates, Inc., began to operate on a 50-acre parcel of land located on the southern banks of the Schuylkill River, across from Douglassville, Pennsylvania. From July 6, 1965, until March 12, 1976, the Reading Railroad either shipped its own waste oil or the waste oil of others to this site.

 At least twice, once in 1970 and again in 1972, both state and federal officials attempted to remedy contamination in the river near the site. See Bill Collins, Schuylkill Sludge Spill Spreads; U.S. Vows Aid, PHILA. INQ., July 1, 1972, at 1. Shortly after the 1972 incident, the United States Environmental Protection Agency ("EPA") ordered rail cars from the Reading Railroad for removal of sludge and debris and then ordered storage of the materials in rail cars.

 On October 31, 1980, the EPA preliminarily identified the Berks tract as a potentially hazardous waste site. EPA did not, however, inspect or take samples at the site until April of 1982. The preliminary identification served only to ensure that the site would be investigated in the future.

 The results of the 1982 investigation led to the property's placement on the National Priority List -- a list of the nation's most serious hazardous waste sites. In March of 1985, the operators of the site informed EPA of the Reading Railroad's prior use. United States Memorandum at 7.

 On July 31, 1991, the United States filed an action under CERCLA against 36 defendants, not including Reading, to recover response costs incurred and to obtain a declaration of liability for future response costs to be incurred at the site. A number of these defendants subsequently filed a third party complaint against numerous third party defendants, including Reading, seeking contribution under CERCLA § 113(f), 42 U.S.C. § 9613(f); ...


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