In a settlement reached in mid-April, CVS Pharmacy Inc. (CVS) agreed to pay almost $14 million to settle claims that it improperly stored and disposed of hazardous waste at its drugstores in California. 

In a suit brought in Ventura County Superior Court, prosecutors representing 45 cities and counties across California, alleged that CVS violated California’s Hazardous Waste Control Law (HWCL) (commencing at Health and Safety Code sections 25100 et seq.) and other laws through its improper storage and disposal of various medical, pharmaceutical and photographic waste.  California’s HWCL is California’s state counterpart to the federal Resource Conservation and Recovery Act (RCRA).  HWCL has a broad impact and regulates hazardous waste from cradle (generation) to grave (disposal).  In addition to the monetary payment, the settlement agreement also requires CVS to properly store, dispose and record hazardous waste in the future and train its employees regarding these requirements.   

While the suit focused on CVS, the complaint acknowledges that CVS in some instances leased the property on which the store was located.  Although the suit did not seek to hold the lessors liable, lessors are routinely held liable under environmental laws and regulations for the actions of their tenants.  This action underscores that lessors need to be aware of all possible environmental liability that could stem from a tenant’s operations on the leased property.  An innocuous drug store like CVS does not immediately bring to mind an entity that regularly stores and disposes of hazardous waste on its leased property.  Therefore, before entering into any lease agreement, a lessor should have a clear understanding of the tenant’s operations and the potential environmental liability that could stem from those operations.