Opinion ID: 768662
Heading Depth: 2
Heading Rank: 3

Heading: Blue Bird

Text: 16 We now turn to the more difficult question of the relationship between Blue Bird and PMI. The McCords argue that Blue Bird knew that hazardous waste was generated as an inherent part of PMI's electroplating and arranged for disposal of hazardous substances through its interactions with PMI. According to the McCords, Blue Bird had control over PMI and could have exercised control over PMI's hazardous waste disposal practices. The McCords point to the following facts that they contend would permit a jury to infer Blue Bird's control over PMI: First, a former Blue Bird employee founded PMI, and Blue Bird was PMI's biggest customer. Second, Blue Bird kept PMI in business by loaning PMI money to facilitate PMI's purchase of hazardous substances. According to the McCords, Blue Bird, therefore, made the conscious decision to put hazardous substances in PMI's hands and constructively owned the hazardous substances. Third, Blue Bird's invoices required PMI to comply with all applicable laws and one specific environmental law. Finally, Blue Bird dictated the electroplating services to be performed on its parts by PMI. 17 Blue Bird counters that it neither controlled nor had any duty to control PMI. First, although PMI was founded by a former Blue Bird employee, PMI was a separate and distinct corporate entity. Second, even if Blue Bird's loans somehow facilitated PMI's purchase of hazardous electroplating substances, the McCords have not shown that Blue Bird owned or controlled these hazardous substances, and Blue Bird made only two small loans during a sixteen-year business relationship. Third, although Blue Bird's purchase orders required PMI to comply with all applicable laws, the McCords have not shown that these requirements implied any duty for Blue Bird to police PMI's compliance. Finally, Blue Bird's electroplating instructions dictated the desired result, not the process to be used. 18 Next, the McCords contend that Blue Bird had enough information to infer that PMI was not properly disposing of its hazardous waste. According to the McCords, Blue Bird intentionally ignored signs that PMI was improperly disposing of hazardous waste. First, Blue Bird knew that hazardous waste was generated as an inherent part of the electroplating process. Second, Blue Bird employees knew that PMI's facilities were run-down. Third, Blue Bird employees saw machinery at PMI flinging waste water onto the floor. Finally, Blue Bird knew that PMI was operating on a shoestring and had financial problems. 19 Blue Bird responds that it had no knowledge of PMI's disposal practices. The facts that Blue Bird knew that PMI's facility was dilapidated, that some waste water went through a drain on the floor, and that PMI was, on at least the two occasions of the loans, experiencing financial difficulties, are insufficient (according to Blue Bird) to show that Blue Bird knew or even should have known that PMI was not properly disposing of its hazardous waste. 20 Finally, the McCords argue that the following facts demonstrate Blue Bird's intent to have PMI dispose of Blue Bird's hazardous electroplating waste: First, despite having contractual authority to demand compliance with hazardous-waste-disposal laws, Blue Bird never even inquired as to PMI's compliance. Moreover, PMI was the only electroplating facility near Blue Bird, and Blue Bird knew that without PMI, Blue Bird would have to do its own electroplating and deal with additional hazardous waste disposal, at a time when Blue Bird was already under scrutiny by the Georgia Environmental Protection Division. 21 Blue Bird makes three responses regarding its alleged motive and intent to have PMI dispose of Blue Bird's hazardous waste. First, Blue Bird again argues that requiring a vendor to comply with applicable laws does not imply a duty to police that vendor's compliance. Second, Blue Bird never did its own electroplating, and any problem with the Georgia Environmental Protection Division did not involve hazardous electroplating waste. Finally, Blue Bird's intent was to purchase PMI's services to add value to Blue Bird's useful products, not to dispose of hazardous waste. 22 We conclude that the evidence presented has not created a genuine issue of material fact regarding whether Blue Bird used PMI to otherwise arrange for the disposal of Blue Bird's hazardous waste. The McCords have not produced sufficient evidence to permit a jury to infer that Blue Bird intended to dispose of hazardous substances through PMI. The majority of Blue Bird's interactions with PMI involved a simple contract for a useful service, the addition of electroplated finishes to Blue Bird's parts. Admittedly, Blue Bird also provided financial assistance that facilitated PMI's purchase of hazardous substances. Blue Bird's facilitation of the purchase of hazardous substances, however, does not, in the limited circumstances of this case, show that Blue Bird owned, possessed, or even had the ability to control the hazardous substances. 23 Pointing to Eighth Circuit authority, the McCords maintain that Blue Bird's intent to arrange for the disposal of hazardous waste can be inferred from Blue Bird's knowledge of PMI's disposal practices and ability to control PMI. See United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373 (8th Cir.1989). In Aceto, the complaint alleged that the defendants, while retaining ownership of the work-in-progress, contracted to have the polluter dilute technical-grade pesticides into commercial-grade pesticides; hazardous waste inherently resulted. See id. at 1378. The court concluded that these factual allegations were sufficient to state a claim for arranger liability. See id. at 1382. The McCords urge the application of Aceto to the present facts because Blue Bird similarly owned the parts that were electroplated and constructively owned at least some of the hazardous substances used to complete the electroplating; hazardous waste inherently resulted. 24 Aceto is inapposite. The Aceto defendants owned all of the hazardous substances, the hazardous substances were the work-in-progress, and the spillage of this work-in-progress was the hazardous waste. In contrast, here, the McCords' theory is that Blue Bird somehow constructively owned a small portion of the hazardous substances used PMI. The work-in-progress, owned by Blue Bird consisted of useful metal parts. Blue Bird contracted for the addition of electroplated finishes to a product that was not, before or after the electroplating, a hazardous substance. Instead, hazardous waste was an inherent by-product of the electroplating process. 25 We also conclude that the McCords have not shown that Blue Bird had sufficient knowledge or control of PMI's disposal practices to trigger arranger liability. Blue Bird knew that, during the last few years of its existence, PMI was having financial difficulties and operating in a dilapidated facility. This knowledge, however, falls shy of knowledge that PMI was improperly disposing of hazardous waste. Despite the fact that Blue Bird assisted PMI financially with two loans, the McCords have not produced any evidence that Blue Bird used financial leverage to even attempt to control or direct PMI's operation or disposal practices. Finally, we conclude that Blue Bird's requirement that PMI comply with all applicable laws did not imply a duty for Blue Bird to police PMI's compliance. We therefore affirm summary judgment in Blue Bird's favor.