California District Court dismisses CERCLA claim against manufacturer of dry cleaning machine under BNSF “arranger” test.

SteveK April 12th, 2010

On March 12, 2010, in Hinds Investments v. Team Enterprises, the court for the Eastern District of California found the manufacturer of dry cleaning equipment designed to discharge wastewater containing PCE into open drains was not an “arranger” under CERCLA and dismissed the claims.

The plaintiffs were the former owners of properties that had been leased to dry cleaners. The dry cleaners used a machine that instructed the operators to have the wastewater, which contains PCE, to “flow into an open drain.” Plaintiffs argued that this evidenced a “conscious decision” to discharge and dispose of PCE-contaminated wastewater. The Court, however, focused upon the transaction; the sale of the machine, not how the machine functioned.  The court viewed the machine more in the line of a “useful product.”  As noted in the Supreme Court’s decision in Burlington Northern Santa Fe Railway v. United States (BNSF)(see blog post from August 14, 2009), the Courts have generally refused to hold manufacturers of a “useful product” liable even though the product contains a hazardous substance that was later disposed by the user. The court followed the Supreme Court decision in BNSF, and focused on the question of whether there were “intentional steps to dispose of a hazardous substance.” The court found that the machine itself was not a hazardous substance, and did not produce or directly involve hazardous substances. Since there were insufficient facts alleged in the complaint to support at the conclusion that the sale of the machine substantially involves the disposal of the PCE-contaminated wastewater the matter was dismissed.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

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