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Keywords

plaintiffdefendantliabilitystatuteappealsolid waste

plaintiffdefendantlitigationliabilityleasesolid waste

Related Cases

Vine Street LLC v. Borg Warner Corp., 776 F.3d 312, 79 ERC 1977

Facts

The environmental damage arose from the operation of a dry cleaning business, College Cleaners, in Tyler, Texas, from 1961 to 1975, which used perchloroethylene (PERC) supplied by Norge, a subsidiary of Borg Warner. Norge sold dry cleaning machines and provided an initial supply of PERC, while also assisting in the design and installation of the facility. Although some PERC escaped into the sewer system due to ineffective water separators, both College Cleaners and Norge took measures to minimize waste, leading the district court to conclude that neither party intended to allow PERC to discharge into the ground.

The environmental damage at issue in this litigation stems from the operation of a dry cleaning business on a piece of property in Tyler, Texas, from 1961 until 1975. The business, called “College Cleaners,” operated in collaboration with Norge, a former subsidiary of Borg Warner, to function as a “Norge Laundry & Cleaning Village” that offered customers self-service dry cleaning.

Issue

Whether Borg Warner is liable as an arranger under CERCLA and the Texas Solid Waste Disposal Act for the contamination caused by PERC discharged from the dry cleaning business.

Rule

To establish arranger liability under CERCLA, the plaintiff must show that the defendant took intentional steps to dispose of a hazardous substance. The term 'arrange' implies a scienter requirement, distinguishing between waste and useful products.

To establish CERCLA liability, the plaintiff must show: (1) that the site in question is a “facility” as defined in [42 U.S.C.] § 9601(9); (2) that the defendant is a responsible person under [42 U.S.C.] § 9607(a); (3) that a release or a threatened release of a hazardous substance has occurred; and (4) that the release or threatened release has caused the plaintiff to incur response costs.

Analysis

The court applied the standard from Burlington Northern, emphasizing that Borg Warner's subsidiary, Norge, did not intend to dispose of PERC when it sold the dry cleaning equipment and provided PERC. The district court's findings indicated that the discharges were unintentional, and the court noted that the transaction was centered around the sale of useful products rather than waste disposal. The court concluded that Norge's actions did not meet the threshold for arranger liability.

Thus, the Court interpreted the term “arrange” to imply “action directed to a specific purpose” and held that “an entity may qualify as an arranger under § 9607(a)(3) when it takes intentional steps to dispose of a hazardous substance.”

Conclusion

The Court of Appeals reversed the district court's judgment, holding that Borg Warner was not liable as an arranger under CERCLA or TSWDA, and remanded the case for entry of judgment in favor of Borg Warner.

Consequently, Borg Warner is entitled to judgment in its favor on Vine Street's CERCLA and TSWDA claims because Norge, its subsidiary, did not intentionally dispose of a waste product when it sold dry cleaning equipment and an initial supply of PERC to College Cleaners.

Who won?

Borg Warner prevailed in the case because the court found that it did not intend to dispose of PERC, and thus was not liable under the relevant statutes.

Borg Warner now concedes that its liability is co-extensive with Norge's, and thus our review focuses on Norge's actions.

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