Lenders and prospective purchasers usually gloss over environmental compliance of retailers during environmental due diligence. However, two recent California enforcement actions illustrate how businesses that are viewed as environmentally benign can have significant environmental issues.
Last year, K-Mart Corporation agreed to pay the State of California $8.6MM in fines to resolve allegations of improper hazardous waste management. This was followed by the filing of a complaint by California Attorney General Jerry Brown against Target Corporation.
The violations alleged in the Target complaint are quite illuminating both in terms of the nature of the violations and the volume of waste involved. The state charged that approximately 180 locations mishandled "enormous volumes of hazardous materials, including but not limited to bleaches, pool chlorine and acids, pesticides, fertilizers, paints and varnishes, lamp oil and other ignitable liquids, aerosol products, oven cleaners and various cleaning agents, automoticve products and solvents, and other flammable and corrosive materials."
Most of the violations involved disposing these wastes into compactors so that they were disposed at facilities not licensed to receive such wastes. In one instance, the State alleged that 2300 pounds of flammable, toxic or corrosive wastes abd 2250 poubds of aerosol wastes were transported to a regional food bank. Other violations involved failing to comply with hazardous waste housekeeping requirements.
Most of the hazardous materials were meant to be sold to the public in the ordinary course of business. However, they became hazardous waste when they were either rendered unsalable or unusable for their intended use as a result of spillage, expiration of sell-by dates, contamination from other products, damage to containers or labels. Once rendered unsalable or unusable, these products fell within the definition of hazardous waste by being "discarded". The State is seeking injunctive relief and will no doubt demand significant penalties along the lines of the K-Mart settlement.
The violations alleged in the Target complaint are quite illuminating both in terms of the nature of the violations and the volume of waste involved. The state charged that approximately 180 locations mishandled "enormous volumes of hazardous materials, including but not limited to bleaches, pool chlorine and acids, pesticides, fertilizers, paints and varnishes, lamp oil and other ignitable liquids, aerosol products, oven cleaners and various cleaning agents, automoticve products and solvents, and other flammable and corrosive materials."
Most of the violations involved disposing these wastes into compactors so that they were disposed at facilities not licensed to receive such wastes. In one instance, the State alleged that 2300 pounds of flammable, toxic or corrosive wastes abd 2250 poubds of aerosol wastes were transported to a regional food bank. Other violations involved failing to comply with hazardous waste housekeeping requirements.
Most of the hazardous materials were meant to be sold to the public in the ordinary course of business. However, they became hazardous waste when they were either rendered unsalable or unusable for their intended use as a result of spillage, expiration of sell-by dates, contamination from other products, damage to containers or labels. Once rendered unsalable or unusable, these products fell within the definition of hazardous waste by being "discarded". The State is seeking injunctive relief and will no doubt demand significant penalties along the lines of the K-Mart settlement.
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