ELR Citation: ELR 20810
No(s). CV 91-0272-DWW(JRx) (C.D. Cal. Feb 18, 1993)

The court holds that the past and current operators of a dry cleaning store, the former owner of the shopping center in which the dry cleaning store is located, and the former property manager of the shopping center, are liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for response costs related to the cleanup of perchlorethylene (PCE) contamination at the store site. The current owner of the shopping center claims that PCE, a chemical used in dry cleaning, leaked through the floor of the store into the sewer drain and into the soil and groundwater in levels 2,000 times the accepted limit.

The court first denies a defendant's cross-claim against the current and past operators of the dry cleaning store for contractual and equitable indemnity, and the defendant's third-party complaint against the current owner of the shopping center. The defendant, not named in plaintiff's action, has known of evidence relevant to bringing its motions for at least 18 months, and its excuse that it was engaged in settlement negotiations is not convincing. Thus, the defendant's delay prejudices plaintiff, is undue, and is denied.

Turning to the merits of determining the CERCLA liability of the defendants, the court notes that the defendants do not dispute three of the four elements for determining CERCLA liability. The defendants do not dispute that the shopping center is a "facility," that PCE is a hazardous substance, or that a release of PCE occurred. Defendants do, however, question the consistency of the plaintiff's response costs with the national contingency plan (NCP). The court holds that consistency with the NCP is not a defense to CERCLA liability, although it could be relevant to the issue of damages.

The court next holds that the former property manager of the shopping center is liable for CERCLA response costs as an owner and operator of the facility. The former manager handled day-to-day operations, maintenance, control of common areas, insuring compliance with government rules and regulations, and other similar responsibilities. It also received four percent of the rents in compensation for carrying out those duties. The court holds that the former manager may not raise the affirmative defense of unclean hands to its CERCLA liability, because CERCLA does not provide for that defense. The court also holds that the former manager cannot assert CERCLA's third-party defense, because it has a contractual relationship with other defendants connected with the handling of hazardous substances. CERCLA's third-party defense is available only where a totally unrelated third party is the sole cause of the release or threatened release of a hazardous substance. Finally, the court holds that plaintiff is entitled to a declaratory judgment to establish liability for future response costs under CERCLA §113(g)(2) as to the named defendants.

Counsel for Plaintiff
Jeffrey D. Dintzer
Gibson, Dunn & Crutcher
333 S. Grand Ave., Los Angeles CA 90071
(213) 229-7000

Counsel for Defendants
Holly Burgess
Selman, Breitman & Burgess
11766 Wilshire Blvd., Ste. 600, Los Angeles CA 90025
(310) 445-0800