Judge D. Michael Fisher, U.S. Court of Appeals for the Third Circuit.

A federal appeals court has ruled that the U.S. government's takeover of the chemical industry during World Wars I and II does not make it liable for cleanup at a former chromium plant in Jersey City.

The U.S. Court of Appeals for the Third Circuit found a U.S. District Court judge made no error in concluding that the government is not liable for the cleanup of the Jersey City site because it never made decisions at the plant pertaining to the handling of toxic waste. PPG, the current owner of the property, never showed any evidence to suggest the government was involved in stockpiling waste outdoors, which led to the contamination, Judge D. Michael Fisher wrote for the panel Monday.

The ruling is a loss for K&L Gates and Miles & Stockbridge, the firms representing PPG.

The case concerns the former Natural Products Refining Corp. plant that began operating in 1915, producing chromium chemicals. The manufacturing process produced large amounts of hazardous chemical waste, which seeped into the soil and groundwater.

During both world wars, the government regulated the production of chromium, setting controls on pricing and labor.

PPG purchased the plant in 1954 and continued production until 1963. Since then, it has spent $367 million on cleanup at the property, and in 2012 it sued the U.S. government under the Comprehensive Environmental Response, Compensation, and Liability Act.

In its appeal of the decision by U.S. District Judge John Michael Vazquez, PPG claimed the government's liability should be decided by a 1994 Third Circuit case, FMC v. U.S. Department of Commerce. In that case, the government was held liable for the cleanup of a rayon manufacturing plant based on a finding that during World War II, it exerted considerable control over the day-to-day operations at the facility. But the Third Circuit on Monday instead applied the standard from United States v. Bestfoods, a 1998 U.S. Supreme Court case.

Bestfoods held that "operator liability requires something more than general control over an industry or facility—it requires some indicia of control over the facility's polluting activities. Thus, the language the Supreme Court used in Bestfoods suggests that operator liability requires something more than general wartime control over an industry," Fisher wrote.

Joseph Lagrotteria of K&L Gates in Newark, who argued for PPG, did not respond to a request for comment. Nor did Allen Brabender of the Environment and Natural Resources Division in the Department of Justice, who argued for the government.