For decades, the dry-cleaning industry’s cleaning chemical of choice has been perchloroethylene, also know as “perc” or “PCE”. Unfortunately, PCE is also a hazardous waste; and until recent hazardous-waste laws came into being, PCE was routinely leaked and spilled into the ground by dry-cleaning processes.
The result has been federal and State-mandated clean ups that have sorely taxed the resources of dry-cleaner owners and have in some cases caused significant pay-outs by the owners’ insurance companies. In the search for people to contribute to clean-up expense, some dry-cleaners have tried suing their dry-cleaning machines’ manufacturers on the theory that the manufacturers contributed to the hazardous-waste discharges by employing faulty designs and distributing use instructions that failed to warn how to prevent such discharges. The suits have been able to posit claims based on the manufacturers’ alleged violation of the federal Resource Conservation and Recovery Act, or “RCRA”, which is the main federal statute governing the generation, handling, transportation and disposal of hazardous waste.
RCRA provides for liability on the part of “any person . . . including any past or present generator, past or present transporter, or past or present owner or operator of a treatment, storage, or disposal facility, who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment . . . .” In the case of Hinds Investments v. Patricia McLaughlin, plaintiffs relied on this RCRA language to contend that various manufacturers of dry-cleaners were liable for the PCE contamination at issue because their allegedly defective machines and operating instructions were “contributing” to disposals of PCE into the environment.
On August 1, 2011, the Court rejected plaintiffs’ claims, saying that as a matter of law manufacturers who do nothing more than make the dry-cleaning machines cannot be held responsible for leaks or spills that occur in the dry cleaners’ use of the machines. The Court concluded that: “Handling the waste, storing it, treating it, transporting it, and disposing of it are all active functions with a direct connection to the waste itself. From the language Congress chose, it seems plain that Congress was concerned with those who handle, store, treat, transport, or dispose of the waste, not with manufacturers who design machinery that might generate a waste byproduct that could be disposed of improperly at hazard to the public.”
The appellate Court’s requirement that, to be liable for the disposal of hazardous waste, one must have some active involvement in the disposal settles (in the 9th Circuit at least) a longstanding issue of just how far liability under RCRA extends in dealing with the decades-old problem of responding to PCE contamination from dry-clearing operations. However, the decision does not entirely put an end to the controversy.
In this regard, plaintiffs may still try to hold dry-cleaning machine manufactures liable under other, State-law theories. Nonetheless, the just-decided Hinds case provides manufacturer defendants in the dry-cleaning industry (and perhaps other industries) with ammunition to support a policy argument that holding such defendants liable for what their customers do is too far of a judicial reach even at the State level.
Originally published in my column for the Valley News Group.