The United States Supreme Court recently issued its decision in Burlington Northern & Santa Fe Railway Co. et al. v. United States et al. (“Burlington“) a case which has received attention over the years for its potential to shed light on the apportionment of costs among potentially responsible parties (PRPs). Also before the Court were issues relating to arranger liability. On the arranger liability issue, the Court held 8-1 that Shell Oil Company was not liable as a CERCLA PRP because Shell had not “arranged for the disposal…of hazardous substances” within the meaning of Section 107(a)(3) of CERCLA. The Court held that Shell’s mere knowledge of continuing spills and leaks from a useful product that it sold and transported to a customer’s facility was insufficient grounds for concluding that the company had “arranged for” disposal of the product.
More significant, however, was the Court’s decision on apportionment, whereby PRPs may seek to avoid the potentially harsh consequences of joint and several liability for a CERCLA cleanup. The Court upheld the District Court’s central finding that the principal contamination that led to the response costs did not occur on the parcel owned by the railroad, which “contributed to no more than 10% of the total site contamination.” Accordingly, the Court held that joint and several liability was inappropriate in that circumstance. This holding may empower trial courts to render similar rulings in the future on appropriate facts. The Court in effect applied a pragmatic test for apportionment of CERCLA liability based on a reasonable, common sense application of the facts.
- Read SPR’s Client Alert on Burlington Northern
- Read the Full Text of the Supreme Court’s Decision (pdf)