National Clothesline

The International Fabricare Institute and the Southwest Drycleaners Association filed a “friend of the court” brief in a Texas Supreme Court Case, hoping to head off a court ruling that IFI said could have “perverse consequences” for the drycleaning industry.

The case dates back to 1997 when the then-owner of Pilgrim Enterprises, a chain of Texas drycleaning stores, sued a number of equipment manufacturers and suppliers seeking $12 million to cleanup 17 drycleaning sites in Houston and San Antonio. Pilgrim alleged that the equipment and services provided by the defendant companies were contributors to contamination of the sites.

The case has taken several twists and turns since then and now has landed on appeal before the Texas Supreme Court. According to IFI, an argument being advanced by Pilgrim in its appeal could subject Texas drycleaners “to new and significant regulatory burdens.”

IFI and SDA are asking the court to reject Pilgrim’s assertion that solvent filtration and distillation units are ”waste processing equipment” within the meaning of the Texas Solid Waste Act.

“Although not specifically spelled out in the Pilgrim brief, solvent filtration and distillation units within a drycleaning machine could only be ‘waste processing equipment’ if the perc itself in a drycleaning machine is officially hazardous waste under the Texas Solid Waste Disposal Act,” IFI said.

“If the Texas Supreme Court accepts the argument that perc in a machine is hazardous waste — contrary to EPA and Texas regulations — the consequences would be devastating, as every gallon of filtered or distilled solvent would be classified as hazardous waste,” IFI CEO Bill Fisher said.

“The immediate result would be that every drycleaner in the state using perc — and possibly Stoddard solvent — would be generating approximately 160,000 to 320,000 pounds of hazardous waste for every eight hours they ran their machine. Additionally, each plant would therefore become a ‘treatment, storage or disposal’ facility under hazardous waste laws — and those regulations are so severe that every plant using perc in Texas would have to shut down,” Fisher said.

In the friend of the court brief, IFI and SDA urged the court to reject Pilgrim’s argument as not legally supportable. If adopted, it would have perverse consequences, they advised the court.

IFI and SDA said they are taking no position on any other issue presented in this appeal.

“Our decision to file this ‘friend of the court’ brief has nothing to with Pilgrim Cleaners or R. R. Street, but has everything to do with all other drycleaners in the state,” Fisher said. “We are not intervening on one side or the other, but acting as a neutral party trying to help the Texas Supreme Court understand the issues and ramifications of the case before them.”

An EPA regulation in effect since 1986, which occurred as a result of IFI’s work with the EPA during the 1986 rule-making process, exempts from the definition of “solid waste” any material processed through “closed loop recycling.” IFI’s work with EPA resulted in drycleaning being specifically discussed by EPA as an example of “closed loop” systems where the solvent is not a waste until discarded.

The case now before the Texas Supreme Court has been working its way through the system for nearly six years and, according to a petition filed with the court, actually began in 1994 when the Robertson family, which had owned the company for 40 years discovered environmental contamination at their facilities as part of an investigation in connection with the sale of their drycleaning assets.

Pilgrim Cleaners was purchased from the Robertson family of Houston, TX, by Hugh Morrison and a group of investors calling themselves Clean Acquisition. The Houston Chronicle, reporting on the deal at the time, described Pilgrim as the biggest drycleaning business in Houston with 105 company-owned and 77 franchise locations in Houston and San Antonio.

The initial suit named R. R. Street & Co. Inc. along with other drycleaning companies — Dow Chemical Co., Hoyt Corp., Harkrider Distributing Co. and Vic Manufacturing Co., to name a few. Pilgrim said the defendants should be held liable for sharing in the cleanup costs because they failed to inform cleaners on the proper use of perc and had “designed their equipment in a manner that was inherently defective and which would result in spills, leaks and/or discharges of perc during normal operations.”

The former owners also charged that the defendants failed to “provide appropriate mechanisms to prevent and/or catch releases or spills of perc and its by-products from such equipment.”

All defendants other than Street’s settled out of court. Street’s said it had chosen not to settle because it wanted to “maintain its practice of defending itself against claims that it knows to be without merit.”

Reversals and appeals

Following a trial that began in April, 1998, the District Court jury ruled in favor of Street’s by a verdict of 11-1 on July 20, 1998.

However, three months later District Court Judge Dwight Jefferson issued a verdict separate from the jury, ruling that Pilgrim Cleaners should be rewarded $1.5 million from R.R. Street.

Street’s appealed the ruling and on Aug. 31, 2001 the Court of Appeals overturned Judge Jefferson. In overturning Judge Jefferson’s judgment, the court ordered Pilgrim to pay the costs incurred by reason of the appeal.

At the time of that ruling, Street’s said it was “pleased” with the Court of Appeals decision to uphold the original jury verdict and to reverse Judge Jefferson’s judgment.

At the 1998 trial, Street’s had declared that “it did not arrange for the processing of waste” and that federal, state and local regulations “clearly state that it is the generator of the waste, i.e. the drycleaner, who remains responsible for the proper disposal of waste and in fact under these laws, the generator of the waste retains responsibility for that waste from ‘cradle to grave,’ no matter what other parties they use to transport and ultimately dispose of that waste.”

Pilgrim Cleaners’ contention was that “any party responsible for contamination was strictly liable for cleanup costs whether or not their product was defective.”