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POLLUTION FROM DRY CLEANERS:
In a recent report on cleanup trends,[1] U. S. Environmental Protection Agency (USEPA) dedicated an entire section to dry cleaner pollution. USEPA estimates that more than 30,000 dry cleaners are currently operating across the country and as many as 75% may have caused soil and groundwater contamination. The cost of investigating and cleaning up these sites—along with the thousands of already closed dry cleaners that may have caused pollution—could be in the billions of dollars.
COMPLICATED SITUATION While more than 90% of all dry cleaners are small “family-owned” businesses, the problems arising from them are complicated due to several factors. First, the usual contaminant of concern is perchloroethylene (PCE), which was introduced in the early 1940s as a new wonder solvent because it was less flammable than previously used petroleum solvents and had much greater cleaning power. PCE soon became the solvent of choice at most dry cleaners. Unfortunately, it is also a recalcitrant and hazardous chemical, meaning that once released to the environment it is difficult to accurately delineate and cleanup. A second complicating factor is that most dry cleaners are located in populated urban areas, which increases the likelihood that nearby residents (and their properties) may be impacted by a dry cleaner solvent release. Third, most dry cleaners have had multiple owner/operators, have been operated for decades, and many of these owner/operators do not have sufficient assets to fund pollution investigation and cleanup if it is discovered. Taken together, these factors make investigation and cleanup costly and identification of the parties responsible for a drycleaning solvent release difficult. In a recent study commissioned by the California Regional Water Quality Control Board (Water Board), the water district catalogued the locations and operational history of hundreds of dry-cleaning facilities in the Silicon Valley (South San Francisco Bay) in order to assess the potential risk of groundwater contamination from these facilities. The report recommendations included requesting that the Water Board issue investigation letters at high risk dry cleaner facilities. WHOSE POLLUTION IS IT? Beside the typical regulatory-driven investigation to define the extent of contamination, figuring out how and when a dry cleaner solvent was released to the environment is often the million dollar question. Although establishing liability and allocating contribution can be technically complicated and costly due to factors such as multiple operators / owners and poor record keeping practices, it may be well worth the effort given that damages associated with dry cleaner facilities can easily be in the millions of dollars. Evaluating offsite contributors, such as leaking sewer systems and potential solvent sources on other nearby properties, can reduce the overall individual liability of each responsible party. Potentially responsible parties can turn to forensic investigation tools to help them with liability determination. Dry cleaning technology has gone through at least five generations of machines in the last 60 years. Knowing what kind of dry cleaning machines were used at a site, exactly where on the premises the machines were operating, and the various waste handling practices of each operator can be very important in conducting forensic investigations. For example, as late as 1993, the first generation machines, which use more PCE and generated more waste, were still being used at 34% of the dry cleaning facilities, or some 8,000 sites. Depending upon the machines used, the layout and historic operation of the site, solvent releases have resulted from unintentional—and intentional—spills, equipment leakage, releases during PCE transfer, storage problems, and/or discharges to local sewer lines. For all of these reasons, forensic examinations and data-intensive analyses are an essential part in any effort to establish liability. Forensic techniques can involve detailed operational record searches or collection of chemical data in order to rely on isotopic or chemical ratio analysis for fingerprinting sources. WHO WILL PAY? Thirteen states, including Connecticut, Illinois and Florida, have created tax-based funds to pay for dry cleaner investigation and cleanup. However, it is our experience that most dry cleaner investigation and cleanup activities have been funded by the insurance industry. While comprehensive general liability insurance policies from the 1940s to the 1980s—before the absolute pollution exclusion—are the primary funding mechanism, environmental impairment liability policies issued in the 1990s and after may also be affected. The insurers for dry cleaner owner/operators are not the only ones who may be affected. In June 2006, a Superior Court ruling found four PCE manufacturers (Dow Chemical, Vulcan Materials, PPG Industries and Occidental Chemical) and one drycleaning equipment manufacturer (R.R. Street & Company) liable for the $3.2 million cost of cleaning up PCE-contaminated groundwater beneath the City of Modesto, California. That verdict, which is currently under appeal, also included more than $175 million in punitive damages with Vulcan Materials being held liable for $100 million, Dow Chemical for $75 million, and R.R. Street for $75,000. On October 13, 2007, Vulcan Materials agreed to pay City of Modesto $20 million to settle its part of this lawsuit, but to-date neither Dow Chemical nor R.R. Street & Co. have yet to settle with the City. If you would like assistance in dealing with any of your dry cleaner sites, please contact Alborz Wozniak at (925) 403-6200. 
[1] U. S. Environmental Protection Agency, Cleaning Up the Nation’s Waste Sites: Markets and Technology Trends, 2004.
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