A property owner who sold contaminated buildings knowing they’d be demolished is liable as an arranger for disposal of hazardous substances under the Superfund law, the Eighth Circuit said.

Dico Inc. is on the hook for $11 million—$5.5 million in cleanup costs and the same amount in punitive damages—the U.S. Court of Appeals for the Eighth Circuit affirmed April 11.

The court rejected Dico’s argument that the buildings contained steel beams that could be recycled, making the sale a legitimate transaction under the useful product defense.

Even if the buildings contained useful products, Dico is still liable as an arranger because it entered into the sale with the intent that at least a portion of the product—polychlorinated biphenyls in the insulation—would be disposed of as a result of the transfer, the court said.

Dico owned several buildings in Des Moines, Iowa, that were contaminated with PCBs.

The EPA in 1994 ordered Dico to remove some of the insulation, encapsulate the remainder, and enter into a long-term maintenance program, according to the court.

Without informing the EPA, Dico sold the properties without informing the buyer they were contaminated and subject to an EPA order, the court said.

The buyer demolished the buildings and left them in a field, where the EPA later found PCBs.

Akerman LLP, Hinshaw & Culbertson, and Belin & McCormick represented Dico and Titan Tire Corp.

The case is United States v. Dico, Inc., 8th Cir., No. 17-3462, 4/11/19.