Jul 26: In the U.S. Court of Appeals, Ninth Circuit, Case No. 10-16916. Appealed from the United States District Court for the Eastern District of California. The Appeals Court explains that, "We must decide, among other things, whether the manufacturer of a machine used in the dry cleaning process may be held liable for contribution to environmental cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act." Plaintiff-Appellant Team Enterprises, LLC (Team) has, since 1980, leased space in a shopping center in Modesto, California, where it operates a dry cleaning store. From 1980 to 2004, Team used perchlorethylene (PCE), a volatile organic compound defined as a "hazardous substance" by the State of California, in its dry cleaning operation. Team's dry cleaning machines used PCE as part of the cleaning process, thereby generating wastewater containing the chemical.
Team used Puritan Rescue 800 filter-and-still combination equipment (Rescue 800), designed and manufactured by Defendant-Appellee R.R. Street & Co., Inc. (Street), to filter and to recycle the PCE-laden wastewater for reuse. The Rescue 800 returned distilled PCE to Team's dry cleaning machines and deposited the resulting wastewater into an open bucket. Once in the bucket, some of the remaining PCE would separate from the water, allowing Team to recapture "pure" (or visible amounts of) PCE for reuse. The remaining wastewater contained dissolved -- and invisible -- PCE. Team disposed of this wastewater by pouring it down the sewer drain. Some of the PCE then leaked into the soil, and the California Regional Water Quality Control Board deemed the affected property in need of cleanup, which Team duly performed at its own expense.
Team sued Street and several other defendants in the Eastern District of California, for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Team also alleged various state-law causes of action, including claims for trespass and nuisance. The district court granted summary judgment to Street on all claims and entered final judgment as to it. Team appealed the district court's grant of summary judgment as to Team's CERCLA, trespass, and nuisance claims. The Appeals Court affirmed the district court decision.
On the CERCLA claim, the Appeals Court said, "Team does not point to any evidence in the record that Street hooked up the Rescue 800 to the sewer, that Street continued to own the Rescue 800 used in Team's store, that Street owned or possessed the PCE that Team disposed of, that Street made dumping wastewater down the drain a condition of its sales contract with Team, or that Street employees poured wastewater down the drain at Team's stores. In short, there is a dearth of evidence indicating that Street exercised actual control over Team's disposal. Accordingly, we conclude that Team has not presented evidence giving rise to a genuine dispute as to any material fact with respect to its CERCLA claim."
The Appeals Court ruled in part, "Although Team presented evidence that Street instructed it to pour wastewater containing PCE into a bucket, there is no evidence in the record that Street 'instructed the dry cleaners to set up their equipment to discharge solvent-containing wastewater into the drains and sewers,' or that Street 'gave dry cleaners instructions to dispose of spilled [PCE] on or in the ground.' . . . And despite Team's protestations that once wastewater from the Rescue 800 had been poured into a bucket there was no alternative but to pour it down the drain, Team's alleged lack of alternatives do not indicate that Street engaged in the "kinds of affirmative acts or instructions" that would 'support a finding that [Street] assisted in creating a nuisance.'"
The Appeals Court concludes, ". . .it is clear from the record that the Rescue 800 is not a disposal system. The Rescue 800 was not designed to route wastewater from the dry cleaning machines to the sewer; it was designed to filter and to recycle used PCE that otherwise would have been lost. We therefore agree with the district court's conclusion that Team failed to present evidence giving rise to a genuine dispute as to any material fact with respect to its nuisance claim."
On the trespass issue the Appeals Court rules, "Team, however, did not present any evidence that either the Rescue 800 or the PCE entered the property without Team's consent. Moreover, Team's employees contaminated the soil by pouring the wastewater down the drain, and 'one cannot commit an actionable interference with one's own possessory right.' Capogeannis, 15 Cal. Rptr. 2d at 799. Because Team's contamination of the land was not a trespass against itself, Street may not be held liable for assisting in a trespass."
In a separate concurring opinion, one Justice indicated, "I am pleased to join the majority's well-reasoned and insightful opinion. I write separately to explain my view that CERCLA, by its plain language, should not apply to this case. . . In this case, the undisputed evidence reveals that Street did not, at any point, own or possess the relevant PCE. Accordingly, Street is entitled to summary judgment on Appellant's CERCLA claim."
Access the complete opinion (click here). [#Remed, #CA9]
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