Accepting Liability For Hazwastes

Analytical labs that perform sampling and analysis on behalf of regulatory agencies owe no legal duty of care to firms and businesses targeted for enforcement, according to a ruling by a federal appeals court (Tri-State Mint Inc. v. Riedel Environmental Services).

While investigating allegedly unauthorized handling of chemical substances at Tri-State's facility, the state of South Dakota hired Riedel to analyze samples of a suspect solution. Tests of the samples indicated that the solution contained cyanide and other hazardous substances. The state filed civil and criminal actions against Tri-State for environmental violations and the company settled with the state for $60,000.

Tri-State then sued Riedel in federal district court, alleging that Riedel's negligence produced inaccurate and false test results, which led to the state's enforcement proceedings.

The district court ruled in favor of Riedel and dismissed the case, explaining that Riedel did not owe Tri-State any obligation to act with care. Upholding that decision, the appeals court ruled that the state's duty to properly investigate and prosecute cases involving the illegal handling and discharge of hazardous waste are "general duties owed to the public as a whole, not to any particular individuals - including Tri-State, a suspected violator." Thus, when Riedel did work for the state, he got the benefit of the state's shield against private lawsuits.

Cracking Down On Permits. A federal appeals court upheld a sentence meted out to a man convicted of transporting and storing hazardous waste without a permit (U.S. v. Freeman.)

William K. Freeman urged the appeals court to overturn his sentence, which had been increased in severity as though he had discharged a hazardous waste. In fact, he argued, the jury had specifically acquitted him of discharging wastes without a permit. In fact, he also claimed the trial judge was wrong in increasing his sentence on a charge of leading a criminal activity involving five or more participants.

The appellate court, however, brushed aside these arguments. Freeman's acquittal on the claim that he discharged wastes without a permit doesn't necessarily control the sentencing stage where the standard of proof is lower, said the court. As for the trial judge imposing a second increase in his sentence, the appeals court found no abuse of discretion. The evidence showed that Freeman supervised seven employees involved in the offense, the court noted.

Determining Liability. Used batteries are "waste," said a federal appeals court. As a result, an auto parts firm that sold used automobile batteries to a company that promised to reclaim the lead is potentially liable under Superfund for cleanup costs at the site where the company eventually dumped the battery casings (Catellus Development Corp. v. U.S.)

General Automotive Inc. sold used batteries to Morris P. Kirk & Sons, which extracted the lead. Thereafter, Kirk dumped the battery casings at a site where residue lead from the casings seeped into the nearby soil.

The ruling by the U.S. Court of Appeals for the Ninth Circuit overturns a federal district court decision last year in favor of General Automotive. The lower court ruling had exempted General Automotive from Superfund liability because the batteries still had a "productive purpose." Thus, the firm was held not to have arranged for the disposal or treatment of the batteries.

Not so, said the appeals court. RCRA regulations, which can control how liability is determined under Superfund, define waste to include "reclaimed materials." In turn, the regulations say that reclaimed materials include items "processed to recover a usable product . . . [e]xamples are recovery of lead values from spent batteries . . . ." As the appeals court saw it, General Automotive's arrangements with Kirk could have directly led to contamination of the plaintiff's site. The appellate panel sent the case back to the district court, where a trial will be held on General Automotive's liability under Superfund for arranging the disposal of hazardous wastes.

General Automotive, however, won a small victory in the appeal. The Ninth Circuit upheld the district court's ruling that the company did not arrange for treatment of the batteries. Liability for arranging for treatment requires treatment to occur at the contaminated site, said the appeals court. The plaintiff made no such allegation against General Automotive.

A lawyer for General Automotive insisted that Kirk shirked its obligations by failing to completely flush all lead from the battery casings. General Automotive will likely demand that the site owner fully prove at trial that Kirk actually dumped casings from General Automotive at the site and that these casings caused or contributed to the contamination.

As the site owner sees it, lead contamination could never be fully washed away and, thus, contamination at the site from the General Automotive battery casings was inevitable.