The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675, imposes liability for the release of hazardous substances on four categories of parties (referred to as PRPs – “potentially responsible parties”): 1) current owner/operator, 2) owner/operator at time of release, 3) arrangers for disposal/treatment, and 4) selectors of the facility to dispose/treat.

There are different rules and criteria that apply to each category, and the issue before the U.S. Supreme Court in an opinion filed May 4th (Burlington Northern & Santa Fe Railway Co. v. United States, No. 07-1601 (U.S. Supreme Court, May 4, 2009)) was whether “an entity can be an arranger even if it did not intend to dispose of the product.” The Court held that some intentional action to dispose of a hazardous waste was required in order to be held liable as an “arranger” under CERCLA. In the case before it, Shell Oil Co. had sold hazardous substances to another entity and shipped them via a railroad carrier. Shell became aware that some of the substances had spilled (i.e., been “released”) by the railroad, but the Court held that “knowledge alone is insufficient to prove that an entity ‘planned for’ the disposal, particularly when the disposal occurs as a peripheral result of the legitimate sale of an unused, useful product.” (In other words, an arrangement for sale of product is not the same as an arrangement for “disposal.”) The Court therefore found that Shell was not liable as an arranger under CERCLA for those releases.

On the issue of allocation of liability (and therefore, the allocation of costs for remediation and removal), lower courts have used a variety of factors to parcel out the costs to responsible parties, and many have followed the §433A of the Restatement (Second) of Torts; however, until now, the U.S. Supreme Court has not explicitly approved of this approach. The Court’s opinion in Burlington approves this analysis and confirmed that apportionment is proper if there is any “reasonable basis” for determining each party’s contribution to the harm.
 
It is also interesting to note that the District Court judge who made the allocation severely criticized the parties for failing to offer apportionment approaches and for following a “scorched-earth” litigation strategy - failing to acknowledge any degree of responsibility for the harm. The judge, of course, did not state that this had any effect on the apportionment of liability, but the reality is that it most likely did.

The Supreme Court opinion can be found here: Burlington opinion