ELR Citation: ELR 20665
No(s). S-91-760 DFL/GGH (E.D. Cal. Jan 18, 1993)

The court holds that past and present owners of dry cleaning stores at a California shopping center are liable under §7002 of the Resource Conservation and Recovery Act (RCRA) and §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for discharging through their floor drains wastewater containing tetrachloroethylene (PCE), which contaminated local groundwater. The court first holds that RCRA §1004(27)'s domestic sewage exclusion does not apply to the PCE-laden wastewater, because the store owners' proposed interpretation of "domestic sewage" would render the word "domestic" meaningless. No upgradient residences are connected to the sewer system servicing the shopping center, so no discharges from any residences would pass through the sewers beneath the center. Any mingling of the stores' sewage with residential sewage occurred past the places in the sewage lines from where PCE leaked. The court rejects the defendants' argument that their waste falls within the U.S. Environmental Protection Agency's (EPA's) definition, at 40 C.F.R. §261.4(a), of the exclusion's scope, because §261.4 was promulgated pursuant to RCRA Subtitle C. The domestic sewage exclusion is contained in Subtitle A, and the shopping center owner brought its claim under Subtitle G. The court further holds that even if Subtitle C's regulations did apply, they would not govern the contaminants in question, because the contaminants never reached a publicly owned treatment works (POTW). The court holds that new EPA regulations intended to improve the control of hazardous wastes introduced into POTWs under the domestic sewage exclusion do not alter the scope of the exclusion for purposes of Subtitle G.

The court next holds that conditions at the shopping center present imminent and substantial harm to the environment, because the contaminants' invasion of the water table has significantly degraded the environment. A plume of PCE contamination occupies a substantial area of the shopping center's subsurface, and PCE and related chemicals have migrated vertically and laterally in the subsurface and may continue to so migrate. This movement presents a threat of further endangerment to the environment. The court holds that neither RCRA nor case law interposes an additional requirement that human or other life forms be threatened. The court notes that the contamination is not isolated, because the beneficial uses of the water beneath the center include domestic, municipal, agricultural, and industrial supply. Although this does not appear to establish a sufficient possibility of imminent and substantial endangerment to health to warrant injunctive relief, the possible health effects are relevant to the question of environmental endangerment.

The court holds that the endangerment stems from the handling, storage, treatment, transportation, or disposal of solid or hazardous waste. EPA has determined that PCE is a hazardous waste under RCRA, and even if PCE was not previously hazardous, it became so when it was discarded by the dry cleaning stores. The court holds that the stores handled hazardous wastes, because they were responsible for and dealt with PCE. They disposed of PCE when PCE or PCE-laden wastewater spilled or leaked from each dry cleaning facility into the soil and groundwater underneath the center.

The court holds that it is appropriate to grant the plaintiff equitable relief requiring the store owners to participate in monitoring and investigating the PCE in the groundwater, because the balance of hardships weighs heavily in the plaintiff's favor. The plaintiff has already expended a considerable amount of money and injunctive relief would not alter the dry cleaning stores' current practices. Further, a RCRA injunction requires the same financial contribution from the store owners as the court could award under CERCLA. The court also notes that an injunction will lead to a determination of the existence and extent of the endangerment through further investigation, monitoring, and testing, and will prevent irreparable injury to the environment.

The court next holds that the store owners are liable under CERCLA for the plaintiff's past and future response costs. Each dry cleaning shop is a "facility" within the meaning of CERCLA, because a hazardous substance—PCE—has come to be located at the shops. There has been a release at each shop, in that PCE is present in the soil and groundwater under each site. Also, it is undisputed that PCE was spilled, leaked, or discharged from each site. Although the shopping center owner has not established that PCE seeped through the facility foundations, the statute does not on its face provide that a release into the environment must be direct, and judicial imposition of this additional requirement would be inconsistent with the necessarily broad construction of "release." Further, the shopping center owner has incurred over $3 million in response costs, and the store owners are "operators" within the meaning of CERCLA §101, because they had the authority to control PCE when it was released. The court holds that they are jointly and severally liable for the entire harm, because they have not established that the harm can be apportioned. The court holds that the defendants' releases of PCE were not federally permitted under CERCLA §101(10)(J). This exemption applies only to the introduction of pollutants into a POTW, and the PCE that was released into the soil and groundwater never reached a POTW. Even if the shopping center's sewer lines were POTWs, the stores' releases into the lines did not comply with enforceable requirements in a local, federally approved pretreatment program. Before 1978, the county had no federally approved pretreatment program. In 1978, the county enacted a requirement that persons discharging industrial waste into a public sewer must first obtain a wastewater discharge permit, but no store owner ever obtained such a permit.

The court holds that the dry cleaning stores created a public nuisance, because the release of human-made, carcinogenic chemical compounds in the soil and groundwater under the shopping center interferes with the owner's free use and comfortable enjoyment of its property, and the nuisance affects a considerable number of persons. The fact that the nuisance is located on the plaintiff's property does not bar recovery. The court holds that the plaintiff established nuisance per se. A county statute provides that any condition existing in violation of any county statute is a public nuisance, and the store owners violated county discharge permit requirements. The court rejects the defendants' argument that they did not cause the contamination, because they created or assisted in the creation of the nuisance by depositing PCE in their floor drains. Their discharges of PCE were not expressly permitted by law, because they never obtained a discharge permit, in violation of county statutes. The shopping center owner did not consent to the discharges by providing in the leases that the store owners use the premises only for conducting dry cleaning operations, because the leases required the store owners to conduct their businesses in accordance with law and valid regulations, which they did not do.

Finally, the court holds that an individual who provided only financial contributions to one dry cleaner is not liable under RCRA or CERCLA as an "operator," because he was not intended to, and did not, have authority over any aspect of the store's operations. The court further holds that the wife of one of the store owners was not liable under CERCLA or RCRA as an "operator," because no evidence exists that she had authority to control PCE or that she was actively involved in or responsible for the dry cleaning shop's operations.

Counsel for Plaintiffs
J. Martin Robertson, Michael Donovan, Louis Green
Ware & Freidenrich
400 Hamilton Ave., Palo Alto CA 94301
(415) 328-6561

Counsel for Defendants
David Frank
Trainor, Robertson, Smits & Wade
701 University Ave., Ste. 200, Sacramento CA 95825
(916) 929-7000

Robert Zaro
Donahue & Callaham
83 Scripps Dr., Ste. 200, Sacramento CA 95825
(916) 648-7444

Robert Goodman
Feldman, Waldman & Kline
235 Montgomery St., Ste. 2700, San Francisco CA 94104
(415) 981-1300