Relying on the 2009 Supreme Court decision in Burlington Northern, the Fifth Circuit recently overtuned a CERCLA liability finding against a supplier of perchloroethylene. Vine Street LLC v. Borg Warner Corp. involved the familiar CERCLA issue whether the seller of a hazardous substance can be liable for its disposal by the buyer. The lower court, in a pre-Burlington Northern decision, had found it sufficient that the seller had sold unused PERC to a dry cleaner with knowledge that the dry cleaner would inadvertently dispose of some of that PERC in wastewater because the dry cleaner was using a water separator installed by the seller that was not 100% effective in removing all of the solvent before the wastewater was dischared to a sewer.
The Fifth Circuit reversed on the holding in Burlington Northern:
knowledge alone is insufficient to prove that an entity ‘planned for’ the disposal, particularly when the disposal occurs as a peripheral result of the legitimate sale of an unused, useful product.”
The Fifth Circuit decision also squares with the unstated rule of CERCLA arranger liability for the sale of a useful product which I have previously mentioned: a party will be held liable if it sells a waste that cannot be used or won’t be used as delivered without first causing the release of a hazardous substance.