In Team Enterprises, LLC v. Western Investment Real Estate Trust, et al (2011 WL 3075759 (C.A.9 (Cal.))), Team Enterprises, LLC (“Team,” a dry cleaner) pursued R.R. Street and Co. (“Street,” the manufacturer of a PCE filter & still) in an attempt to get CERCLA contribution for cleanup costs as an arranger and disposer of hazardous waste (used PCE). The original action was brought in the eastern district of California where Judge O’Neill granted Street’s motion for summary judgment, finding that Street’s manufacture and sale of the useful dry-cleaning equipment did not rise to the level of arranging for the disposal of the hazardous waste and that Street’s facilitation of PCE delivery to Team did not make Street responsible for its ultimate disposal.

Following Judge O’Neill’s summary Judgment, Team appealed on several similar grounds, asserting that Street “took intentional steps” and “planned a disposal” of PCE, neither of which Circuit Judge O’Scannlain accepted, again referencing the useful product doctrine (the sale of useful products for legitimate business purposes is not the same as selling or arrange the transfer of hazardous waste, which no longer has a useful purpose and is likely done to avoid liability for disposing of hazardous waste). Judge O’Scannlain’s example clarifies the issue, “It would be odd, for example, to say that an auto parts store sells motor oil to car owners for the purpose of disposing of hazardous waste.” Without Team’s proving that Street’s sale of the Rescue 800 distiller was intended to result in Team’s disposal of the PCE, no liability could be attached under CERCLA.

Although Team argued that Street’s failure to warn that contamination would result from improper disposal of the PCE, the circuit court was unconvinced that CERCLA extended liability to that extent unless Team proved that was Street’s intent.  As there was insufficient evidence to try the issue, the district court’s grant of summary judgment on this issue was proper.

Similarly, Team’s claim that Street “exercised control over the disposal process,” by suggesting that its users direct drycleaning wastewater into a bucket or barrel was unpersuasive to the court, which compared instruction manuals to recommendations not controlling Team’s actions in disposing of the used PCE. Team claimed that disposal options other than pouring PCE down the drain were cost prohibitive and did not leave it with any other choices. Despite that argument, the court noted that while Team leased the equipment from Street, Street did not own or possess the PCE that Team disposed of, make dumping the wastewater down the drain a condition of its sales contract with Team or actually pour wastewater down the drains in Team’s stores.  In short, Street did not exercise actual control over how Team disposed of the PCE and was not responsible for contributing to Team’s cleanup costs.