Vine Street LLC v. Borg Warner Corp.
776 F.3d 312
5th Cir.2015Background
- College Cleaners operated a Norge-branded self-service dry-cleaning business (1961–1975) using perchloroethylene (PERC); Norge (a former Borg Warner subsidiary) sold machines and an initial supply of PERC and helped design/install the facility and drainage.
- Norge’s machines included water separators intended to recycle PERC and discharge wastewater to the sewer; the separators were not 100% effective so some PERC entered the sewer and later contaminated soil and groundwater on-site and off-site.
- Vine Street acquired the contaminated properties, entered Texas’s voluntary cleanup program, and sued Borg Warner (as successor/related to Norge) for cleanup costs under CERCLA § 9607(a)(3) (arranger liability) and the Texas Solid Waste Disposal Act (TSWDA).
- At bench trial the district court found Borg Warner (via Norge) liable for 75% of cleanup costs, concluding there was a sufficient nexus/arrangement for disposal; Borg Warner appealed.
- On appeal the Fifth Circuit applied the Supreme Court’s Burlington Northern standard (intentional steps to dispose) and concluded Norge did not intend to dispose of PERC; the court reversed and remanded with judgment for Borg Warner.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Borg Warner/Norge is an “arranger” under CERCLA § 9607(a)(3) | Norge knew separators leaked and was involved in design/installation, so it intended/disposed PERC (arranger) | Sale of unused/useful product and equipment; leaks were unintended; no intent to dispose | Not an arranger — Burlington Northern requires intentional steps to dispose; knowledge alone insufficient |
| Whether Norge’s design/connection of machines to drains supports inferring intent | Connecting machines to sewer and designing drainage shows disposal was inherent and therefore intentional | Connection was to enable legitimate use and PERC recycling, not to dispose; design aimed to conserve PERC | Design/connection insufficient to show intent to dispose; parallels to Team Enterprises favor defendant |
| Applicability of pre-Burlington “nexus” / useful-product doctrine | Nexus between seller and disposal supports liability despite lack of explicit intent | Burlington Northern supersedes the broader nexus standard; useful-product sale negative for arranger liability | Court applies Burlington Northern; useful-product sale and lack of intent defeat arranger claim |
| Whether TSWDA claim survives under Texas law | State claim should impose arranger liability similar to CERCLA | Texas would apply Burlington Northern standard; same analysis defeats claim | TSWDA claim fails for same reasons as CERCLA claim |
Key Cases Cited
- Burlington N. & S.F. Ry. Co. v. United States, 556 U.S. 599 (2009) (arranger liability requires intentional steps to dispose; knowledge alone insufficient)
- Amoco Oil Co. v. Borden, Inc., 889 F.2d 664 (5th Cir. 1989) (elements for CERCLA cost-recovery claim)
- Dayton Indep. Sch. Dist. v. U.S. Mineral Prods. Co., 906 F.2d 1059 (5th Cir. 1990) (useful-product doctrine context; sale of product not disposal)
- Geraghty & Miller, Inc. v. Conoco Inc., 234 F.3d 917 (5th Cir. 2000) (prior nexus-based approach to arranger liability)
- Celanese Corp. v. Martin K. Eby Constr. Co., 620 F.3d 529 (5th Cir. 2010) (recognizing Burlington Northern’s effect on Fifth Circuit law)
- United States v. Gen. Elec. Co., 670 F.3d 377 (1st Cir. 2012) (contrast where seller disposed of scrap product disguised as sale)
- Team Enters., LLC v. W. Inv. Real Est. Tr., 647 F.3d 901 (9th Cir. 2011) (dry-cleaning equipment maker not an arranger; design to recycle, not dispose)