The Ninth Circuit Court of Appeals has ruled that the manufacturer of a
machine used in the dry-cleaning process is not liable under RCR A or CERCL A
for contamination at a strip mall in California. Team Enters., LLC v. W. Inv. Real
Estate Trust,
No. 10-16916 (9th Cir. 7/26/11)
. In 1980, Team Enterprises, LLC
began operating a dry-cleaning business at a shopping center in Modesto.
The company used a machine designed and built by R.R. Street & Co. to filter
and recycle wastewater containing perchlorethylene (PCE ) for reuse.
The machine returned distilled water to the dry-cleaning machines and
deposited wastewater into a bucket that Team Enterprises poured into the
sewer drain.

The California Regional Water Quality Control Board found that PCE had leaked
into the soil and ordered Team Enterprises to remediate the contamination. After
doing so, the company sued several parties, including the machine’s manufacturer,
under both RCR A and CERCL A. The district court dismissed the complaint, finding
no evidence that the manufacturer had the intent to dispose of the PCE and no
evidence that it exercised sufficient control over the disposal to be liable as an
“arranger” under CERCL A. Plaintiff appealed, arguing that intent to dispose can be
inferred from the machine’s design or from the manufacturer’s failure to warn that
improper disposal could cause contamination.

Affirming the district court, the Ninth Circuit rejected plaintiff’s argument
stating, “the design of the [machine] does not indicate that Street intended the
disposal of PCE ,” but only “that Street was indifferent to the possibility that Team
would pour PCE down the drain.” Citing Burlington Northern & Santa Fe Railway
Co. v. United States
, 129 S. Ct. 1870 (2009), the court said: “[a]bsent a showing
that Street intended for its sale of the [machine] to result in the disposal of PCE ,
we must conclude that Street lacks the requisite intent for arranger liability”
under CERCL A. The court also rejected plaintiff’s argument that the failure to
warn about the risk of contamination from improper disposal was enough to
infer intent.