The useful products doctrine is a principle in environmental law that provides an exception to the liability for hazardous waste disposal by distinguishing between waste and products that have economic value and are used for intended purposes.
Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (42 U.S.C. Chapter 103), parties responsible for release or potential release of hazardous substances can be held liable for the financial responsibility to remedy any harmful conditions the release creates. Such parties are called “arrangers.” The useful products doctrine is mainly used to distinguish parties that contributed to contamination by disposing of waste (arrangers) and those that sold useful products that later became waste (non-arrangers).
To determine whether a party is an arranger, the court will generally look at the purpose and utility of the product to see whether there is a legitimate commercial purpose and utility at the time of sale. The court also looks at whether the seller intended the product to be used for useful purposes. Finally, the court also considers whether the product is valued in the marketplace and generally purchased for its intended use. For example, if a company sells used batteries to a recycler to make a profit, and the recycler uses those batteries for their intended purpose (e.g., extracting valuable metals), the transaction could fall under the useful products doctrine. The batteries, despite containing hazardous substances, are treated as a product rather than waste, and the company is not an arranger.
In RSR Corp. v. Avanti Development, Inc., 68 F.Supp. 1119 (S.D. Ind. 1999), the Court considered the three following factors to determine whether a party is an arranger:
- The type of agreement arranged between the two parties;
- The motive for engaging in the transaction; and
- The benefits reaped by the parties as a result of the transaction.
In examining these factors, the Court also emphasized that it is crucial to distinguish between persons who sell a used product to dispose of it and those whose sale is a part of their profit-making ventures.
Overall, the doctrine is rooted in the idea that CERCLA was designed to address the cleanup of hazardous waste sites, not to penalize the normal use of commercial products that may contain hazardous substances.
[Last updated in August of 2024 by the Wex Definitions Team]