Liability Act

January 21, 2013

Dry-cleaning machine manufacturer not liable under CERCLA

Source: http://www.lexology.com, January 11, 2013
By: David Erickson and Mark Anstoetter, Shook Hardy & Bacon LLP

A federal court in California has determined that the manufacturer of a dry-cleaning machine is not liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for releases that occurred during the machine’s operation. KFD Enters. Inc. v. City of Eureka, No. 08-CV- 4571 (N.D. Cal. 12/14/12).

Multimatic, the manufacturer of the dry-cleaning machine operated by plaintiff KFD Enterprises, issued an operation manual that provided “Waste water must flow into an open drain.” When KFD operated the machine, it discharged waste water containing perchloroethylene (PCE) into a drain, activity that allegedly caused subsurface contamination. KFD asserted that Multimatic had arranged for disposal of a hazardous substance via its instruction manual and that Multimatic was liable under CERCLA for cleanup costs.

The court found that the manual did not demonstrate the requisite intent to render Multimatic liable as an arranger under CERCLA, i.e., Multimatic did not enter into sale of its equipment “with the specific purpose of disposing of a hazardous substance.” The court rejected an allied argument that Multmatic exercised control over disposal via its manual, finding the manual more akin to recommendations that do not control the actions of the purchaser. While the court dismissed a continuing trespass cause of action against Multimatic, it declined to grant Multimatic summary judgment on common law claims sounding in public and private nuisance, strict liability, negligence, indemnity, and contribution, and seeking declaratory relief.

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April 2, 2012

No Coverage for Town That Used Tainted Water

Source: Courthouse News Service, March 15, 2012
By: Joe Celentino

An insurance company can use the “pollution exclusion” to disclaim a Chicago suburb that circulated water from a contaminated well, the 7th Circuit ruled.

The village of Crestwood is an 11,000-resident suburb of Chicago. Around 1985, the mayor and other village officials learned that one of the wells used to supply residents with water had been contaminated by perchloroethylene dry-cleaning solvent. Perc or PCE, as it is commonly known, is a carcinogenic that is more difficult to clean than oil spills.

Despite knowing that a local dry cleaner had leaked the perc into the groundwater, Crestwood officials continued to use the well as a daily water source until 2007. It was finally sealed in 2009.

When Crestwood residents learned of the contamination from a Chicago Tribune article, hundreds filed suit. Illinois is also suing to have Crestwood finance a site inspection and cleanup efforts.

Crestwood’s liability insurance company, Scottsdale Indemnity Co., sought a declaration that it did not have to defend the tort suits or indemnify the village if it lost. The company cited the “pollution exception” in its policy, which precludes covering personal injury suits, property damage and clean-up costs caused by the “discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any time.”

Finding that perc clearly qualified as a pollutant under the exclusion, and constituted “traditional environmental pollution” as defined by the Illinois Supreme Court, U.S. District Judge Virginia Kendall granted summary judgment in favor of Scottsdale.

Though the 7th Circuit affirmed Monday, it noted that the history of the pollution exception and its use within the insurance industry requires a thorough analysis.…

September 24, 2010

Settlement Awarded for Contaminated Scrap Yards

After three years of environmental litigation, a Trust in Indiana was awarded $4.3 million in cleanup costs for two sites contaminated with lead and polychlorinatedbiphenals (PCBs).  The Trust filed the suit in 2007 under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Indiana Environmental Legal Action (ELA) statute for cleanup costs for the polluted scrap yards.  “The Trust claimed that defendants discarded batteries and transformers containing lead and polychlorinatedbiphenyls (PCBs) at the scrap yards, contaminating both properties.” (Source:  http://envfpn.advisen.com)