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Team Enterprises, LLC v. Western Investment Real Estate Trust

ELR Citation: 41 ELR 20245
Nos. No. 10-16916, (9th Cir., 07/26/2011) Aff'd

The Ninth Circuit upheld the dismissal of a dry cleaner's CERCLA and tort law claims against the manufacturer of dry cleaning equipment. The dry cleaner failed to present evidence giving rise to a genuine dispute as to any material fact with respect to its CERCLA claim. A person may be subject to arranger liability "only if the material in question constitutes 'waste' rather than a useful product," and the dry cleaner presented no evidence indicating that the manufacturer designed the equipment for the alleged "purpose of being a waste disposal machine." The dry cleaner urged the court to infer intent from the manufacturer's failure to warn the dry cleaner about the risk of contamination that would result from improper disposal. But allowing intent to be inferred from a mere failure to warn would greatly expand the scope of arranger liability. To satisfy the intent requirement, a company selling a product that uses and/or generates a hazardous substance as part of its operation may not be held liable as an arranger under CERCLA unless the plaintiff proves that the company entered into the relevant transaction with the specific purpose of disposing of a hazardous substance. Here, the dry cleaner failed to present evidence giving rise to a triable issue as to whether the manufacturer sold the machine with such a purpose. The dry cleaner also failed to present evidence giving rise to a genuine dispute as to any material fact with respect to its nuisance and trespass claims. The lower court's grant of summary judgment in favor of the manufacturer was therefore affirmed.