Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

تمرين 12

Burlington Northern Railway/Shell Oil Co. v. U.S. 556 U.S. 599 (2009)
Am I My Customer's Keeper? I'm Only the Arranger
Facts
In 1960, Brown Bryant, Inc. (B B) began operating an agricultural chemical distribution business (the Arvin facility). B B opened its business on a 3.8-acre parcel of former farmland, and then expanded operations onto an adjacent 0.9-acre parcel of land owned jointly by the Atchison, Topeka Santa Fe Railway Company and the Southern Pacific Transportation Company (Railroads). Wastewater and chemical runoff from B B's operations seeped into the groundwater.
B B purchased its chemicals from Shell. Shell would arrange for delivery and when the product arrived, it was transferred from tanker trucks to B B's bulk storage tank. During each of these transfers leaks and spills could-and often did-occur.
In the late 1970s, Shell took steps to encourage customers to handle its products safely. Shell provided distributors with safety manuals and offered a voluntary discount program for customers that improved their bulk handling and safety facilities. Later, Shell required customers to obtain inspections for self-certification of compliance with laws and regulations. Despite improvements to its facilities under these Shell programs, B B remained a "'[s]loppy' [o]perator."
In 1989, the EPA designated B B's land as a Superfund site. However, B B went bankrupt that year. By 1998, the federal, state, and local governments (Governments) had spent more than $8 million in cleanup costs at the B B site.
In 1991, the EPA ordered the Railroads to conduct cleanup processes. The Railroads did so, incurring expenses of more than $3 million in the process. The parties ended up in court seeking a determination of their share of cleanup liability. The U.S. District Court held that both the Railroads and Shell were potentially responsible parties (PRPs) under CERCLA: the Railroads because they were owners and Shell because it had "arranged for" the disposal of hazardous substances through its sale and delivery of chemicals. The court apportioned the Railroads' liability as 9 percent of the Governments' total response cost. The court held Shell liable for 6 percent of the total site response cost.
Shell and the Governments appealed. The Ninth Circuit held that Shell, as an arranger, was involved in the disposal of a hazardous substance and held Shell and the Railroads jointly and severally liable for the Governments' clean-up costs.
The Railroads and Shell appealed.
Judicial Opinion
STEVENS, Justice
… [A]n entity could not be held liable as an arranger merely for selling a new and useful product if the purchaser of that product later, and unbeknownst to the seller, disposed of the product in a way that led to contamination. Less clear is the liability attaching to the many permutations of "arrangements" that fall between these two extremes-cases in which the seller has some knowledge of the buyers' planned disposal or whose motives for the "sale" of a hazardous substance are less than clear.
The Governments assert that by including unintentional acts such as "spilling" and "leaking" in the definition of disposal, Congress intended to impose liability on entities not only when they directly dispose of waste products but also when they engage in legitimate sales of hazardous substances knowing that some disposal may occur as a collateral consequence of the sale itself. Shell was properly found to have arranged for the disposal. Shell was aware that minor, accidental spills occurred during transfer …
[T]he evidence does not support an inference that Shell intended such spills to occur. To the contrary, the evidence revealed that Shell took numerous steps to encourage its distributors to reduce the likelihood of such spills.
Although Shell's efforts were less than wholly successful, given these facts, Shell's mere knowledge that spills and leaks continued to occur is insufficient grounds for concluding that Shell "arranged for" the disposal. Accordingly, we conclude that Shell was not liable.
[T]he [district] court found that the volume of hazardous-substance-releasing activities on the B B property was at least 10 times greater than the releases that occurred on the Railroad parcel. The Railroad parcel contributed to no more than 10% of the total site contamination, some of which did not require remediation.
The fact that no spills on the Railroad parcel required remediation lends strength to the District Court's conclusion … any miscalculation on that point is harmless.
For the foregoing reasons, we conclude that the Court of Appeals erred by holding Shell liable as an arranger under CERCLA. Furthermore, we conclude that the District Court reasonably apportioned the Railroads' share of the site remediation costs at 9%. The judgment is reversed.
Case Questions
1. Where do you think the term arranger fits in the categories of those who are responsible for cleanup costs under CERCLA?
2. What do you think the practical effect of this decision will be on companies that own Superfund sites? Does the complexity of analysis for liability help companies in cleanup cases?
3. What do you think will happen to government agencies in their efforts to seek reimbursement for their cleanup efforts?