Jenner & Block

Equipment Manufacturer Not Liable As CERCLA Arranger

Siros_Steven_COLORBy Steven M. Siros

 

A recent Ninth Circuit decision refused to find a manufacturer of a dry cleaning machine liable as an arranger under CERCLA.  In Team Enterprises LLC v. Western Investment Real Estate Trust (9th Cir. 2011), plaintiff argued that the requisite "intent to dispose" element necessary to trigger CERCLA arranger liability could be inferred from the fact that the dry cleaning machine was designed in a way that made disposal inevitable.  Plaintiff also argued that the manufacturer's failure to warn about the risk of contamination from improper disposal and the fact that the manufacturer exercised control over the disposal process provided a sufficient basis to infer the requisite intent necessary to trigger CERCLA arranger liability.  The Ninth Circuit rejected all three arguments.  First, the Ninth Circuit noted that there was no evidence that by designing the dry cleaning as it did, the manufacturer intended for PCE to be disposed down the drain.  The purpose of the machine was to recover and recycle PCE that otherwise would have been discarded.  Second, the Ninth Circuit noted that allowing intent to be inferred from a mere failure to warn would impermissibly expand the scope of arranger liability. The court acknowledged that a manufacturer that fails to warn a buyer about the inherent risks of a product may be subject to a product liability claim but that such an allegation was insufficient to satisfy the intent requirement necessary to trigger CERCLA arranger liability.  Finally, the Ninth Circuit found that there was simply no evidence that the equipment manufacturer exercised actual control over plaintiff's PCE disposal. This case is a further illustration of the high bar plaintiffs must meet in order to establish CERCLA arranger liability following the Burlington Northern decision.  

TAGS: Cercla, Toxic Tort

PEOPLE: Steven M. Siros