Daily Development for Thursday, July 12, 2001

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

The Reporter for this item is Larry Schnapf of the New Jersey Bar. The editor, however, has made a number of changes, and it is likely that any mistakes are the editor's.

HAZARDOUS SUBSTANCES; DRY CLEANER CONTAMINANTS: Shopping center landlord liable in nuisance to adjacent owner for tenant dry cleaner's contamination, notwithstanding state law providing protection against liability to state for clean up costs.

Courtney Enterprises v. Publix Super Markets, Inc (2001 Fla. App.

LEXIS 5109, 2d DCA

Many property owners and lenders have been comforted by state dry cleaning laws that seem to limit the liability of owners of property that have been contaminated with dry cleaner solvents. This case, however, demonstrates the limited nature of the protection afforded by these laws.

Publix Super Markets, Inc. ("Publix") had operated a shopping center in Fort Myers, Lee County under a 99year lease that commenced in 1970. From 1978 to 1996, Publix had leased space in the shopping center to a dry-cleaning establishment. In 1990, the plaintiff discovered that a tenant on its property had discharged petroleum into the soil and groundwater and the county installed a remediation system to address the petroleum contamination. In 1991, Publix found a leaking 55gallon drum of Perchloroethylene ("Perc") sitting outside the dry cleaner but did not take any action to assess the extent of the contamination until 1995.

In 1996, the county was forced to remove the groundwater treatment system at the adjacent property because it was drawing the Perc contamination onto the plaintiff's property. As a result, the plaintiff commenced a lawsuit against Publix in October 1996 seeking damages for negligence, nuisance, trespass, and strict liability. The plaintiff asserted that contamination had materially reduced the value of its property.

Publix subsequently enrolled in the state dry cleaner program which provides that a person who owns, operates, or who otherwise could be liable as a result of a discharge from a dry cleaning facility shall not be subject to administrative or judicial action brought by any government agency or third party to compel rehabilitation or pay for the costs of rehabilitation of environmental contamination resulting from dry cleaning solvents. The dry cleaning fund also reimburses property owners for cleanup costs associated with Perc contamination.

Publix then filed a motion for summary judgment, claiming that it was immune from any liability under the state dry cleaner trust fund. The plaintiff filed an affidavit from the Department of Environmental Protection case manager for the site who said that a cleanup was scheduled for the site, and that it would proceed if the legislature approved funding for the program and the site had a ranking high enough to qualify for the funding. The trial court granted summary final judgment to Publix, ruling that sections 376.3078(3) and (11) of the Florida Dry Cleaning Statute granted immunity from all causes of action.

The appellate court reversed, finding that the express statutory language did not abolish common law remedies. The court said that statutes should not be construed to abolish common law rights unless absolutely necessary. Indeed, the court point out that section 376.313(3) stated that the remedies were cumulative and not exclusive.

Publix argued property damages were included in the definition of restoration costs that were addressed by the statute. However, the appeals court said that the measure of damages under the common law was either the diminution of value or the restoration costs but not restoration costs that exceeded the diminution in value of the property. Since section 376.3078 immunized a real property owner from liability for restoration costs, the court said it should not be read to eliminate common law causes of action altogether but to limit damages in those actions to diminution in property value. The court noted that in this case, the plaintiff had not sought damages for restoration costs but only the diminution in property value.

The court did say it was troubled by the fact that the decision would allow the plaintiff recover damages that Publix may not be able to recover if the state eventually funded the cleanup of the plaintiff's property.

However, the court said this was an issue that had to be addressed by the legislature.

Reporter's Comment: Perc is a chlorinated hydrocarbon that was originally developed as a metal degreaser for airplane parts. More than 34,000 dry cleaners use 57 million pounds of Perc each year. These businesses may vent Perc into the air and generate a sludge that must be incinerated or disposed of a hazardous waste. Dry cleaners also often discharge wastewater containing Perc down floor drains. A California study in the mid1990s found that discharges from leaky sewer pipes were the leading cause of Perc contamination in soil and groundwater in that state.

A 1994 study by the National Institute for Occupational Safety and Health found that dry cleaning workers had seven times the average rate of esophageal cancer and twice the rate of bladder cancer. A study published in the February 2001 issue of the American Journal of Industrial Medicine found excess deaths among 1,708 dry cleaning workers exposed to Perc for at least a year before 1960.

People living near dry cleaners may be exposed to potentially high levels of Perc if vapors move up through apartment buildings or office buildings. Indeed, New York recently forced dry cleaning shops in residential buildings to meet strict new standards for equipment, pollution prevention and ventilation.

In 1996, Consumers Union estimated that there are 150 excess cases of cancer among every million people who wear freshly dry cleaned clothing once a week for 40 years. For the study, a panel of volunteers was given a garment to wear that had been picked up from the dry cleaner the day before. A strip of activated carbon inside a porous plastic covering was attached to the lapel and measured Perc emissions. The cancer risk was estimated based on the Perc exposure levels. As a result, Consumers Union recommended that the people should remove clothes from the bag as soon as they get home and hang the clothes outside or in a seldomused room for a few days to give Perc residues time to dissipate.

Newly drycleaned clothing that has an odor should be returned to the cleaner to further high temperature drying which should eliminate the residual Perc.

Editor's Comment: Of course, a landlord will not always be liable for a nuisance created by the tenant. Here, the landlord was aware of the leaking drum and did nothing. Further, it is not clear whether the landlord had the right to exercise other controls over the tenant during the term of the lease that might have prevented the damage.

This days, a court might find that dry cleaners present special risks of pollution, requiring landlords to take special steps to monitor or control their activities or else be liable in nuisance.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

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