Friday, July 29, 2011

Ninth Circuit Finds No CERCLA Arranger Liability for Manufacturer of PCE Recycling Equipment

On July 26, 2011, the Ninth Circuit held that the manufacturer of equipment designed to filter and recycle perchlorethylene ("PCE") could not be found liable as an "arranger" under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675. 

Plaintiff generated PCE-laden wastewater in its dry cleaning operation.  It used the manufacturer's filtering equipment to recycle and capture the valuable PCE for re-use, and then disposed of the filtered wastewater by pouring it down a sewer drain.  The filtered wastewater contained dissolved and invisible PCE that contaminated the surrounding soil, which plaintiff was required to remediate at its own expense.

Plaintiff sought contribution under CERCLA from the manufacturer of the filtering equipment under a theory of arranger liability.  Plaintiff's contribution claimed rested on two contentions: first, that the design of the equipment contemplated and even necessitated the disposal of wastewater contaminated with PCE, such that the manufacturer had taken "intentional steps" and "planned a disposal" of PCE; and second, that the manufacturer had authority to control and actually exercised control over the disposal process.

The Ninth Circuit rejected both contentions.  With respect to the first contention, the court cited Burlington N. & Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870, 1880 (2009), for the proposition that:
[w]hile it is true that in some instances an entity's knowledge that its product will be . . . discarded may provide evidence of the entity's intent to dispose of its hazardous wastes, knowledge alone is insufficient to prove that an entity "planned for" the disposal, particularly when the disposal occurs as a peripheral result of the legitimate sale of an unused, useful product.
Noting that the filtering equipment itself was a useful product, the court declined to find that the manufacturer intended its product's use to result in the unlawful disposal of PCE.  It further declined to infer intent based on the claimed inevitability of the disposal of PCE or the manufacturer's failure to warn about the risk of contamination that would result from improper disposal. 

In rejecting plaintiff's second contention, the court noted that the manufacturer had no legal authority to direct the conduct of plaintiff's employees and then dispensed with plaintiff's several factual contentions, finding "a dearth of evidence" indicating that the manufacturer exercised actual control over the disposal process.  The court also rejected plaintiff's state law theories of nuisance and trespass, finding that neither theory was supported by evidence sufficient to give rise to a genuine dispute.

The Ninth Circuit's opinion may be found here.

If you have any questions concerning this topic, please contact K. Eric Adair from our office, or the KMTG attorney with whom you normally consult.

California Issues Public Health Goal for Hexavalent Chromium in Drinking Water

On July 27, 2011, the California Environmental Protection Agency's Office of Environmental Health Hazard Assessment ("OEHHA") announced the long-awaited public health goal ("PGH") for hexavalent chromium, or chromium 6, in drinking water.  OEHHA set the goal at 0.02 micrograms per liter, or parts per billion.  This PHG is the first in the nation, either state or federal, specifically for chromium 6. 

Chromium 6 entered the public consciousness when residents of the California desert community of Hinkley sued PG&E for injuries allegedly caused by their exposure to contaminated groundwater, a lawsuit featured in the movie Erin Brockovich.  Chromium 6 is a heavy metal that is commonly found at low levels in drinking water, often the result of historic industrial operations.  It has been linked to a variety of health issues, including cancers, primarily through animal testing.

The setting of a PHG does not establish a regulatory standard for contaminants in drinking water, or a target level for cleanup of ground or ambient surface water contamination.  Per Health and Safety Code Section 116365(c), OEHHA develops PHGs to determine concentrations of drinking water contaminants that pose no significant health risk if consumed for a lifetime, based on current risk assessment principles and practices.  The Department of Public Health ("DPH") is charged with developing primary drinking water standards, or maximum contaminant levels ("MCL"), for contaminants in drinking water.  In that process, DPH must take into account the PHG developed by OEHHA, among other factors, but may also consider technical and economic feasibility in setting MCLs.  Health and Safety Code Section 116365(a), (b).

No MCL has been set for chromium 6.  California has adopted a 50 parts per billion limit for total chromium and has been considering the development of a separate limit for chromium 6 for many years.  OEHHA's development of a 0.02 PHG is a further step in that process.

If you have any questions concerning this topic, please contact K. Eric Adair from our office, or the KMTG attorney with whom you normally consult.

Related links:

Press Release - OEHHA Adopts First-in-the-Nation Public Health Goal For Hexavalent Chromium in Drinking Water

Fact Sheet - Final Public Health Goal for Hexavalent Chromium

Final Technical Support Document on Public Health Goal for Hexavalent Chromium in Drinking Water

Responses to Comments on the Hexavalent Chromium PHG Document

Public Health Goals Developed as of July 2011

KMTG Legal Alert: CEQA Does Not Work In Reverse To Require Environmental Impact Report Where The Environment Will Have An Effect On A Project

In South Orange County Wastewater Authority v. City of Dana Point, (--- Cal.Rptr.3d ----, Cal.App. 4 Dist., June 30, 2011), a court of appeal considered whether the California Environmental Quality Act (“CEQA”) works in reverse to require an environmental impact report (“EIR”) where the environment would have an impact on a project instead of the other way around. In this case, the environment consisted of an existing sewage treatment plant that would impact an adjacent mixed use development project with its bad smells and noise. The court of appeal held CEQA does not require an EIR where it is proposed that the environment needs to be cleaned up for a project instead of vice versa.

For a detailed discussion of the facts of this case, and the rationale behind the court's ruling, please see the full KMTG Legal Alert here.

If you have any questions concerning this topic, please contact Jeffrey L. Massey, Daniel J. O'Hanlon, or Jon Goetz from our office, or the KMTG attorney with whom you normally consult.