Supreme Court Rules on CERCLA Apportionment

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SandBar 8:2, July, 2009 Recommended citation: Proctor, Jonathan, Supreme Court Rules on CERCLA Apportionment , 8:2 SandBar 16 (2009). Supreme Court Rules on CERCLA Apportionment Burlington Northern and Sante Fe Ry. Co. v. U.S., 129 S. Ct. 1870 (May 4, 2009). *Jonathan Proctor, 3L, University of Mississippi School of Law* Designed to prevent the irresponsible disposal of hazardous substances, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)1 forces those who improperly dispose of hazardous waste to pay for the cleanup of those substances. Recently, the U.S. Supreme Court decided a case regarding CERCLA compensation, specifically addressing whether cleanup costs may be apportioned among multiple parties and whether a seller of hazardous materials should be liable for contamination. In this instance, the federal government sought compensation for cleaning up hazardous agricultural chemicals on contaminated land. Background Shell Oil sold pesticide and other hazardous materials to an agricultural chemical distributor, Brown & Bryant (B&B),2 which operated on land leased from Burlington Northern and Santa Fe Railway Company and Union Pacific Railroad Company.3 Shell would deliver the materials to B&B and took steps to ensure their safe handling; however, spills were common, and, in 1983, the state of California and the Environmental Protection Agency (EPA) found “significant contamination of soil and ground water.”4 A few years later, B&B became insolvent and went out of business. Eventually, the government cleaned up the site at a cost of more than $8 million.5 Under CERCLA, the government was entitled to recoup its expenses from those responsible. Compensation The Court found that Shell is not required to compensate the government for any cleanup costs relating to the site because, though it delivered the materials and knew that B&B improperly handled them, Shell did not “arrange for” their disposal as defined by CERCLA.6 In its ruling, the Court stated that mere knowledge of contamination does not make a party an “arranger.” This holding could potentially limit the government’s ability to seek CERCLA compensation from suppliers in the future. However, the railroads, as owners of the property, were required by CERCLA to pay the government a portion of the cleanup costs. In its opinion, the Court discussed whether CERCLA liability could be apportioned based on an entity’s contribution to the harm, as opposed to making each party equally liable for the entire harm.7 Ultimately deciding that apportionment is appropriate in this case, the Court found that the trial court’s calculation of the railroads’ liability (9% of cleanup costs) was appropriate, leaving the government responsible for the remainder.8 Endnotes 1. 42 U.S.C. A7A7 9601-9675. 2. Burlington Northern and Santa Fe Ry. Co. v. U.S., 129 S. Ct. 1870, 1874 (May 4, 2009). 3. Id. 4. Id. at 1875. 5. Id. at 1876. 6. Id. at 1880. 7. Id. at 1881. 8. Id. at 1884.
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SandBar 8:2, July, 2009
Recommended citation: Proctor, Jonathan, Supreme Court Rules on CERCLA Apportionment , 8:2 SandBar 16 (2009).

Burlington Northern and Sante Fe Ry. Co. v. U.S., 129 S. Ct. 1870 (May 4, 2009).

Jonathan Proctor, 3L, University of Mississippi School of Law

Designed to prevent the irresponsible disposal of hazardous substances, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)1 forces those who improperly dispose of hazardous waste to pay for the cleanup of those substances. Recently, the U.S. Supreme Court decided a case regarding CERCLA compensation, specifically addressing whether cleanup costs may be apportioned among multiple parties and whether a seller of hazardous materials should be liable for contamination. In this instance, the federal government sought compensation for cleaning up hazardous agricultural chemicals on contaminated land.

Background
Shell Oil sold pesticide and other hazardous materials to an agricultural chemical distributor, Brown & Bryant (B&B),2 which operated on land leased from Burlington Northern and Santa Fe Railway Company and Union Pacific Railroad Company.3 Shell would deliver the materials to B&B and took steps to ensure their safe handling; however, spills were common, and, in 1983, the state of California and the Environmental Protection Agency (EPA) found “significant contamination of soil and ground water.”4 A few years later, B&B became insolvent and went out of business. Eventually, the government cleaned up the site at a cost of more than $8 million.5 Under CERCLA, the government was entitled to recoup its expenses from those responsible.

Compensation
The Court found that Shell is not required to compensate the government for any cleanup costs relating to the site because, though it delivered the materials and knew that B&B improperly handled them, Shell did not “arrange for” their disposal as defined by CERCLA.6 In its ruling, the Court stated that mere knowledge of contamination does not make a party an “arranger.” This holding could potentially limit the government’s ability to seek CERCLA compensation from suppliers in the future.
However, the railroads, as owners of the property, were required by CERCLA to pay the government a portion of the cleanup costs. In its opinion, the Court discussed whether CERCLA liability could be apportioned based on an entity’s contribution to the harm, as opposed to making each party equally liable for the entire harm.7 Ultimately deciding that apportionment is appropriate in this case, the Court found that the trial court’s calculation of the railroads’ liability (9% of cleanup costs) was appropriate, leaving the government responsible for the remainder.8

Endnotes
1. 42 U.S.C. A7A7 9601-9675.
2. Burlington Northern and Santa Fe Ry. Co. v. U.S., 129 S. Ct. 1870, 1874 (May 4, 2009).
3. Id.
4. Id. at 1875.
5. Id. at 1876.
6. Id. at 1880.
7. Id. at 1881.
8. Id. at 1884.