SUPERFUND: Justices allow companies leeway on liability risk (05/05… Sara Goodman, E&E reporter The Supreme Court’s decision yesterday finding Shell Oil Co. not responsible for cleaning up a contaminated site because it had manufactured the chemicals that spilled there is being broadly hailed as a victory for industry, but some experts caution that the justices’ interpretation is fact-specific. In an 8-1 decision, the court found Shell was not liable for the manufacture of a material that later became hazardous waste under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly known as the Superfund law. “[L]iability may not extend beyond the limits of the statute itself,” Justice John Paul Stevens wrote for the majority. Shell intended for its product to end up in commerce, not as waste, Stevens wrote. Furthermore, the company took steps to prevent spills during transfers, such as creating safety manuals, requiring adequate safety storage facilities once the chemicals were delivered and offering discounts for safety precautions, he noted. The fact that just one justice, Ruth Bader Ginsburg, dissented, shows the court found CERCLA clearly does not intend for manufacturers to be held liable for the disposal of their products, said Gail Suchman, a New York environmental lawyer. “The 8-1 decision says a lot about what the judges think in terms of how far they are not going to go under CERCLA,” Suchman said in an interview. “There are limits. Liability under the law is already extremely broad, but this is one of those bright-line limits the court is not going to cross.” At issue in this case is U.S. EPA’s lawsuit against Shell, which made the two chemicals that contaminated a plant near Bakersfield, Calif.; the now-defunct chemical distributor, Brown & Bryant Inc.; and railroads that leased the land to Brown & Bryant. A district court found the companies liable, but only for a small portion of the costs — Shell at 6 percent and the railroads at 9 percent. The government appealed, and the 9th U.S. Circuit Court of Appeals reversed the decision, ruling that Shell and the railroads could be held liable for the entire cleanup bill. But the Supreme Court found Shell is not responsible for any part of the cleanup because it did not intend for its product to become a hazardous waste. The court also ruled that the district court’s decision to apportion liability and hold the railroads responsible for 9 percent is a valid way of determining liability. The government wanted the companies to be jointly responsible for the entire cleanup. The justices focused heavily on the specifics of the case for this part, which is likely to make it easier for future cases to argue a separate line of reasoning, Suchman said. “I don’t think this decision would necessarily change so much of the law, although it has made it a little easier to apportion harm,” Suchman said. “Still, it’s very fact-based, so I’m sure that lower courts will be able to distinguish from other cases before them.” But Phil Karmel, another environmental lawyer, said this ruling could have major implications for EPA’s ability to get companies to pay for cleanup and is likely to result in more litigation because it reduces the burden of proof on companies to prove they are only partially liable. “The case may reduce the willingness of industry to volunteer to clean up sites because it increases the scope of their defenses,” Karmel said. “To that extent, it shifts the cost to taxpayers that fund cleanup that is not going to be paid for by industry.” But the justices’ decision seems to be more of a validation of the district court judge’s approach than of the idea of apportioning responsibility, Suchman said. Under this interpretation, the success of industry in getting out of full responsibility could depend on the decision by the district court, and not on the actual cleanup details. “It will lead to more potentially responsible parties arguing for apportionment, so there will probably be more litigation, but I’m not sure it will be easier to win,” Suchman said. “It’ll be easy if you have the district court on your side; otherwise, I’m not sure the ultimate decision would be different.” Dissent Ginsburg disagreed with exempting Shell from all responsibility, arguing that the purpose of CERCLA was to hold the private sector responsible for contamination and avoid burdening taxpayers. Under this interpretation of the law, Ginsburg said Shell should be held responsible because it knew its chemicals would spill and could have taken steps to prevent it because of its authority over the railroads and Brown & Bryant. “Relieving Shell of any obligation to pay for the cleanup undertaken by the United States and California is hardly commanded by CERCLA’s text, and is surely at odds with CERCLA’s objective — to place the cost of remediation on persons whose activities contributed to the contamination rather than on the taxpaying public,” Ginsburg wrote. The justices’ focus — and the overwhelming majority — shows the justices were not swayed by outside influences, Suchman said, which means the ruling is a solid analysis of the law. “This is not one of those cases where you could see any kind of political overtones,” Suchman said. “When you see split decisions, it always seems to have political undertones. This was based on law and a good, solid legal analysis.”

Advertisements