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CERCLA
Liability for Disposal
of Innocuous Items
Liability under CERCLA is rather Draconian.
Any person who "operates" a facility and pollutes it is
liable, even if the person is "a saboteur who sneaks into the
facility at night to discharge its poisons out of malice." United
States v. Bestfoods, 524 U.S. 51, 65 (1998). Because of the nature
of the statutory scheme, the discharge of even a minute amount of
seemingly innocuous material can lead to liability. This is demonstrated
by the following cases.
In Dartron Corp. v. Uniroyal Chem. Co.,
917 F. Supp. 1173 (N.D. Ohio 1996), the plaintiff alleged that the
defendant contaminated the property then sold it to plaintiff. Defendant
counter-claimed, arguing that plaintiff was liable to it for certain
CERCLA response costs. The court found defendant liable on several
counts, but also found plaintiff partially responsible for the environmental
damage to the property.
The court did this because "on at
least one occasion," id. at 1183, plaintiff spilled "used
oil" on the ground. As the court stated:
Spilling of a substance on to the ground
qualifies as a 'disposal.' . . . A disposal of any detectable
hazardous substance into the environment, regardless of amount,
constitutes a release. HRW Systems, Inc. v. Washington Gas Light
Co., 823 F. 8upp. 318, 340-41 (D. Md. 1993).
Dartton, 917 F. Supp. at 1183
(emphasis in original).
Further, the court noted that, under
CERCLA, unadulterated petroleum products are not hazardous wastes.
Id. (citing 42 U.S.C. § 9601(14)). Thus, spilling "virgin" motor oil is not a violation of CERCLA. However, spilling used
motor oil, which contains substances not found in virgin motor
oil, is a violation. Id. (citing New York v. Exxon Corp., 766 F. Supp.
177 (S.D.N.Y. 1991); United States v. Western Processing Co., 761F.
Supp. 713 (W.D. Wash. 1991)).
With this case (and those cited therein),
a spillage of used motor oil, in a minute amount, can lead to CERCLA
liability. This is not a unique result.
In Nutrasweet Co. v. X-L Engineering
Corp., 933 F. Supp. 1409 (N.D. Ill. 1996), an employee of defendant
was observed emptying a mop bucket near the edge of defendant's property
on a large number of occasions. The employee was mentally handicapped,
and dumped the mop bucket without the knowledge of the defendant's
president and majority shareholder. Plaintiff alleged that substances
in the bucket polluted its property after they migrated onto its property.
Plaintiff spent more than $560,000 in cleaning up its property. The
court found the defendant's president/majority shareholder personally
liable under CERCLA, as well as the entity.
Liability was not predicated upon the
president as an "owner" of the property, since a limited
partnership owned the property. Further, "operator" liability
was not imposed, as the president did not participate or have knowledge
of the bucket dumps. However, "arranger" liability was imposed
on the president, since he arranged for the disposal of hazardous
substances through his control over the substances. This is so, since
CERCLA "arranger" liability is strict. Id. at 1418-19.
The court then set the case for trial,
for damages to be determined by a jury. All of this, because a handicapped
man emptied a mop bucket.
Similar results often occur where paint
and paint cans are involved, along with paint removing solvents. For
example, in Premium Plastics v. LaSalle National Bank, 904 F. Supp.
809 (N.D. Ill. 1995), CERCLA liability attached where a company, inside
its building, varnished the floor three times a year with varnish
and benzene, and spilled paint on the floor while moving containers
of it, which was cleaned up with toluene-soaked rags. The toxic materials
then seeped through the concrete foundation and contaminated the
soil beneath.
In United States v. Carr, 880 F.2d 1550
(2d Cir. 1989), the court upheld a criminal conviction under CERCLA
against Carr. His crime? As a civilian employee at an army base in
New York, he directed workers to dispose of paint cans in a man-made
pit on the base's firing range. After doing so, he failed to report
this action to the appropriate federal officials, in violation of
42 U.S.C. § 9603(b)(3). Thus, not only does the dumping of paint cans
constitute a CERCLA violation, the failure to implicate yourself is
a crime.
Similarly, in United States v. Goodner
Brothers Aircraft, Inc., 966 F.2d 380 (8th Cir. 1992), the court upheld
a criminal conviction under CERCLA for the release of hazardous substances
into the environment without a permit. The defendant used solvents
to remove paint from aircraft prior to repainting them. The old paint
was placed in barrels and buried on a farm. The paint leaked and contaminated
the surrounding soil.
Finally, in ABD Assocs. v. American Tobacco
Co., 1995 U.D. Dist. LEXIS 11094 (D. N.C. 1995), the court ruled that
where lead-based paint is used on the interior and exterior of a building,
a "disposal" (under CERCLA) of a hazardous substance has
occurred, since the paint could enter the environment or be
emitted to the air.
As all of these cases reveal, CERCLA
liability can arise in seemingly innocuous situations.
If you have incorporated and you get sued personally, can you still
lose your company?
