by Melissa Jones, Stoel Rives, LLP
Retailers that fail to comply with various state and local regulations in California regarding hazardous waste disposal and reporting requirements can face significant penalties. Numerous large and mid-sized retailers have agreed to settle disputes regarding hazardous waste reporting obligations for millions of dollars in recent years. For instance, in the past year alone, a drugstore chain agreed to a $16 million settlement; another drugstore chain (competitor) agreed to a $12 million settlement; a home improvement chain agreed to an $18.1 million settlement; a grocery store chain agreed to a $10 million settlement; and a telecommunications company agreed to a $52 million settlement – all involving alleged failures to comply with hazardous waste disposal and reporting obligations. Other settlements dating back to 2010 have involved many eight figure settlements, including a few over $20 million.
Most of these settlements have involved cases initiated by district attorneys in various counties throughout the state of California such as Alameda County, Orange County, and San Joaquin County. In these cases, the retailers agreed to hefty settlements after being accused of improperly disposing of potentially hazardous materials, such as batteries, medication and paint. Investigators alleged that the retailers failed to comply with regulations that require proper handling of hazardous waste by licensed transporters and proper labeling, among other alleged violations. In many of these cases, counties have investigated dumpsters used by the companies and alleged that companies were regularly sending materials to landfills that were not permitted to receive hazardous waste. In some instances, the alleged violations occurred over a period of several years, resulting in the higher settlement amounts for some of the alleged violators.
One county that has been the most active in pursuing these types of cases is Alameda County, which is located in the bay area. The Alameda County Environmental Health's Hazardous Material/Waste Program administers several programs that relate to this area, including the Hazardous Waste Generator Program and the Hazardous Materials Business Plan Program, which parallel California state regulations.
In the Alameda County program, as with the state and other local regulations, the definition of hazardous waste is quite broad; to determine if the waste is hazardous, the regulations analyze whether the waste is toxic, reactive, ignitable or corrosive. California has over 750 chemicals identified as "hazardous waste" and "hazardous materials" including chemicals and materials such as cleaning solvents, aerosols, dyes, helium, paint or varnish remover or stripper, paint thinner, paint waste, pigments, printing ink, and solvents, among others.
Retailers need to be aware of any requirements in counties in which they operate stores, warehouses, and distribution centers. Indeed, many counties have specific requirements for retailers to register and request a Hazardous Waste Generator Permit. First, the company must apply for a California EPA ID number, which is required for each facility that generates hazardous "non-saleable" merchandise, including spilled, customer returned, excess or overstocked, damaged, used, and/or discounted merchandise that as a consequence of the spillage, damage, use or company policy, cannot or will not be sold. Second, the company must submit the facility information to the California Environmental Reporting System (CERS) and CERS will notify individual affected counties of the report. Third, the company must post the permit that it receives from the agency in the facility. Often, many smaller retailers are not aware of these requirements and fail to take the steps necessary to obtain a Hazardous Waste Generator Permit.
As another example of a local requirement, Alameda County requires that companies in its jurisdiction prepare a Hazardous Waste Materials Business Plan ("HMBP") if the company is meeting the threshold levels of hazardous waste production and disposal. A HMBP contains basic information on the location, type, quantity, and health risks of hazardous materials and/or waste.
Companies must also be aware of how they are disposing of materials and products that fall within the definition of hazardous waste. Companies should additionally consider maintaining a Spill Prevention Control & Countermeasures Plan, implementing an Environmental Management System, and doing a complete and thorough assessment of waste disposal for each location in California that generates and disposes of waste.
Melissa Jones, Partner, Stoel Rives, LLP, is a trial lawyer who provides experienced and practical counsel in complex business disputes, appellate matters, and internal investigations. Her practice includes an emphasis on Proposition 65 defense as well. Melissa's civil experience includes litigating claims for breach of contract, fraud, negligent misrepresentation, misappropriation of trade secrets, products liability, false advertising and unfair competition. She regularly defends companies in litigation claims related to California's Proposition 65 and Unfair Competition Law (17200) and advises companies on Prop 65 compliance. She also advises clients on California's Safer Consumer Products Regulations and other California regulations. Melissa may be contacted at firstname.lastname@example.org.
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