Company Not Liable For Disposal By Employee

A federal district court ruled that a company was not liable for improper disposal of PCB-contaminated capacitors by a former employer because the employer was not aware of nor had authorized the actions of its former employee. In essence, the court concluded that the employee had engaged in an independent venture for which his employer should not be held liable under CERCLA as well as common law.

In Lancaster v Northern States Power Company, 2011 U.S. Dist. LEXIS 130128 (D. Minn. 11/9/11), Axicor Trihus, had electrical engineer employed by Excel Energy, transported and stored PCB-containing capacitors on his property located in Roseville, Minnesota. After Mr. Trihus died, his widow contacted the defendant and requested that it remove certain electrical equipment at the property, including the capacitors. One week later, Mrs. Trihus entered into an agreement to sell the property to the plaintiffs. In connection with the sale, Mrs. Trihus completed a required Property Disclosure Statement but did not mention the capacitors. In late 2009 or early 2010, the defendant removed the capacitors from the Trihus property and collected soil samples. The closing took place on January 4, 2010.

On February 25, 2010, the defendant sent a letter to the plaintiffs advising them a “tar like substance” had been observed leaking from one of the capacitors during the removal and that the sampling analysis determined that the substance contained PCBs. Subsequent sampling identified the presence of PCBs at other locations on the Roseville property

Plaintiffs filed a complaint against the defendant alleging that the presence of the PCB-containing capacitors had caused the property to lose substantially all its value and that the plaintiffs suffered substantial economic, physical, and emotional damages. The complaint included a CERCLA count along with a variety of common law claims. The court granted the defendant filed a motion to dismiss all of the claims.

On the CERCLA arranger claim, the court noted that the complaint alleged that the capacitors had been in the defendant’s possession and control before Mr. Trihus had removed them. However, the court said that under the United States Supreme Court decision in Burlington N. & Santa Fe Railroad v. United States, 556 U.S. 599 (2009), mere possession of hazardous substances is not enough but instead the plaintiffs had to show that the defendant had “intentional steps to dispose of a hazardous substance.” Since the complaint did not set forth any facts indicating how Mr. Trihus came into possession of the capacitors much less that the defendant had any knowledge or involvement in the transportation of the capacitors to the Roseville property, the court ruled that the plaintiffs fail to plead sufficient facts to support its arranger claim.

The court also held that the plaintiffs had not pled sufficient facts to support their common law claims. For example, the court said the facts alleged in the complaint did not establish that the defendant owed a duty to Plaintiffs, or that Mr. Trihus’ transportation or storage of the capacitors was in the scope of his employment. On the trespass claim, the court said the plaintiffs did not allege that Defendant entered onto the Roseville property after Plaintiffs took ownership. On the nuisance claim, the court said the Plaintiffs have not alleged any facts to support the claim that the defendant had intentionally or negligently released or disposed of hazardous substance on the Roseville property, or was otherwise responsible for Mr. Trihus’ placement of the capacitors on his property.

This case is another example of heightened pleading requirements that plaintiffs must comply with in the wake of the Supreme Court decisions in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). While plaintiffs do not have to provide detailed factual allegations to survive a motion to dismiss, the complaint must contain enough facts to show that the claim is “plausible on its face” and that there is a reasonable expectation that discovery will reveal evidence of the claim. Under Twombly, threadbare recitals of the elements of a cause of action that are supported by mere conclusory statements will no longer be sufficient to survive a motion to dismiss. Plaintiffs need to be prepared to plead sufficient facts for each of the elements of the CERCLA cause of action.

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