United States: A Cleaner's Guide To Environmental Liability

This article was originally published in the North Carolina Association of Launderers and Cleaners' carolina clean magazine, Holiday 2017 issue. To view the original publication, click here.

OK, OK, I get it: your mother didn't raise you to be a lawyer. But the exposure to environmental claims that characterizes many drycleaning operations makes it imperative that cleaners understand something about the legal framework for that liability.

I will deal principally with two federal statutes: the Resource Conservation and Recovery Act ("RCRA") and the Comprehensive Environmental Response, Compensation & Liability Act ("CERCLA", or "Superfund"). These statutes, the regulations intended to implement them, and the judicial decisions that interpret them, are enormously complicated. Don't worry about that. This is not a scholarly law review article; I will concentrate on the laws' potential impacts upon cleaners.

RCRA was adopted in 1976, an early attempt to regulate the "cradle to grave" movement, storage, and disposal of hazardous wastes. Although it is a federal law, it is administered in our State by the North Carolina Department of Environmental Quality ("DEQ") and, in particular, by DEQ's Division of Waste Management ("DWM").

DWM administers a confusing array of environmental regulatory programs, but let's focus on just two groups of them. These clusters of programs are administered by the Hazardous Waste Section and the Superfund Section.

DWM's Hazardous Waste Section consists of two principal branches, the Facility Management Branch and the Compliance Branch. Facility Management is responsible for issuing necessary RCRA permits and for directing the investigation and remediation of releases of hazardous waste to the environment from RCRA-permitted facilities. The Compliance Branch is responsible for ensuring, well, compliance with applicable regulations and permits by hazardous waste generators, transporters, and treatment, storage, and disposal ("TSD") facilities.

You can read the paragraph just above and file away the information in it, then move on. You need to understand it only because these are the folks with whom your hazardous waste transporter and TSD contractor must deal. But you can help them help you if you understand a little about the programs under which they are regulated.

As a cleaner, on the other hand, your company may well be a RCRA hazardous waste generator but your company is almost certainly a "very small generator" or "conditionally exempt small quantity generator", generating less than 100 kilograms (about 220 pounds) of hazardous waste per month. You are responsible for properly characterizing your company's hazardous waste when it goes out the door, but you are exempt from the other, more detailed, regulations applicable to both large and small quantity generators. You are not required to obtain a unique EPA identification number, for example. You are not required to prepare a formal contingency plan for emergencies. You are allowed to accumulate up to 1,000 kilograms of hazardous waste, and there is no time limit on how long it may accumulate on site (word to the wise on that, however: get it out of your plant on a regular basis).

Thus, on RCRA issues, you will almost certainly deal directly with neither of DWM's Hazardous Waste Section branches but, rather, with the Superfund Section's Dry-cleaning Solvent Cleanup Act ("DSCA", but you knew that already) program and, in particular, with DSCA's Compliance Unit. You already know these folks. They inspect plants principally for DSCA best management practices, but also for such RCRA requirements as the prohibition against open storage containers.

That is what you need to know about RCRA, in a nutshell. Let's move on to CERCLA.

RCRA deals with hazardous wastes. CERCLA deals with hazardous substances. For us, the difference is not important. US EPA lists all hazardous substances in the Code of Federal Regulations, and some of them might surprise you. The silver in those dimes in your pocket, for example, is a hazardous substance. Halogenated solvents, including perchloroethylene, are also hazardous substances. Petroleum products, on the other hand, are not – some say this is a testament to the lobbying power of the petroleum industry.

CERCLA was originally adopted in 1980 and substantially amended in 1986. It is complicated; it has kept judges and lawyers scratching their heads for over three decades now and over the years it has generated quite a number of Supreme Court opinions intended to reconcile contradictory interpretations by the federal courts below.

Here is what CERCLA is not. Despite the nickname "Superfund", it is not a huge pot of federal dollars kept on hand to pay for the correction of environmental problems created by private parties. In fact, perhaps the key words in the statute's title are "Compensation" and "Liability". CERCLA is, as far as cleaners may be concerned, a mechanism for raising money to pay for those cleanups – from the guilty and the innocent alike.

CERCLA facilities may originally have been conceived of by the law's drafters as places where massive quantities of hazardous substances were deliberately disposed of, such as the infamous Love Canal site in Niagara Falls, New York, where elementary schools and a kindergarten playground were built directly over or adjacent to a large burial ground for drums full of hazardous substances. But, under current interpretations of the law, even a small accidental spill can provide the basis for CERCLA liability.

Those who face CERCLA liability are referred to as "potentially responsible parties", or "PRPs". PRPs include, for sure, the party that owned or operated a facility when the release took place there. PRPs include, as well, the current post-spill owner, who is presumed to have conducted a pre-purchase environmental investigation and to have therefore bought the facility at a discount. The current post-spill operator on the property is also a PRP, if the operator is a different company from the owner. And the list of PRPs will include any party that transported the hazardous substances to the site at which they were released into the environment (this is sometimes called "transporter liability").

But CERCLA PRPs also include anyone who arranged, by contract or otherwise, for the transportation of the hazardous substances, or for their treatment or disposal at the property at which they were released ("arranger liability").

Cleaners who deal with hazardous substances are almost inevitably exposed to arranger liability.

What is the nature of PRP liability? Well, first of all, it is what lawyers and judges call "strict liability". The liable party need not have caused the release. It does not need to have done anything wrong. It is simply liable because of its status as an owner, operator, transporter, or arranger. There are virtually no exceptions.

And to what degree is any particular party liable? Liability under CERCLA is "joint and several". That is, each and every PRP at a CERCLA site is theoretically liable for the entire expense of the cleanup.

In the real world, however, a single party is seldom responsible for paying for the entire cost of a CERCLA remediation. US EPA or the DEQ Superfund Branch typically holds one or more of the larger PRPs responsible and forces them to begin the cleanup. Then those initial PRPs, by persuasion, negotiation, or litigation, force other PRPs to cover their costs or contribute to the expense of the cleanup.

Incidentally, CERCLA has two statutory mechanisms for compensating the parties that perform the cleanup; cost recovery and contribution. The difference is not important to us, but you should be aware of both terms.

Superfund cleanups can consume millions of dollars. So what are the bottom lines for cleaners?

First, be extremely careful about the waste transporters with which you do business. Know where your hazardous wastes are going, and who will be responsible for their treatment of disposal. Hiring a company that cuts corners could cost your business a lot of money.

Second, if you have any reason to suspect that the property on which you do business has become contaminated by the release of a hazardous substance, be proactive. Get the property tested, and if the release is confirmed get the property into DSCA. The North Carolina DSCA program is probably the best in the nation, and the costs your business will have to cover directly are minimal when compared to the alternative, the expense of a cleanup for which your company could be held entirely liable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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