Cases & Deals

GenCorp wins summary judgment in environmental indemnity dispute

Clients GenCorp Inc.

Jones Day successfully obtained a summary judgment for GenCorp Inc. ("GenCorp") in an environmental indemnity contract dispute. In May 1990, the plaintiff, Textileather Corporation, purchased a vinyl manufacturing facility in Toledo, Ohio, from GenCorp. In December 1990, Textileather voluntarily decided to close several waste management units at the facility. For the next sixteen years, Textileather negotiated and litigated with Ohio Environmental Protection Agency over what must be done with the units to comply with Ohio EPA's closure regulations. In 2008, Textileather filed suit seeking indemnity from GenCorp under the terms of the parties' 1990 asset purchase agreement for costs associated with the closure of the units. Textileather also asserted CERCLA cost recovery claims against GenCorp.

GenCorp moved for summary judgment based on, among other things, that the purchase agreement only required GenCorp to indemnify Textileather against claims or actions brought against Textileather by third parties. GenCorp argued that the closure costs Textileather incurred negotiating with Ohio EPA were first-party regulatory costs for which GenCorp owed no indemnity obligation under the terms of the contract. GenCorp also argued that the CERCLA claims were barred by the purchase agreement. After oral arguments, the district court agreed with GenCorp's arguments and dismissed all claims.

Textileather Corporation v. GenCorp Inc., Case No. 3:08-cv-171, 2010 WL 1801794 (N.D. Ohio May 5, 2010)