The U.S. Supreme Court: arranger liability under CERCLA requires intent to dispose of hazardous waste

On May 4, 2009, the United States Supreme Court issued a ruling that may have significant impacts on the scope of liability and the apportionment of damages under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In Burlington Northern v. United States, the Supreme Court examined whether Shell Oil was potentially responsible as an "arranger” under CERCLA where it sold a product and knew that the product would spill or leak during the transfer of the product from buyer to seller. The Court held that because “arrange” implies action directed to a specific purpose, "an entity may qualify as an arranger under [CERCLA] when it take intentional steps to dispose of a hazardous substance.” Based on the facts in the case, the Court held that there was no evidence that Shell intended to dispose of its chemicals. The Court concluded that “Shell’s mere knowledge that spills and leaks [of hazardous substances during the transfer of the product] is insufficient grounds for concluding that Shell ‘arranged for’ the disposal” of a hazardous substance under one of the methods described in the statute.

On the issue of apportionment, the Court upheld as reasonable the trial court’s method for dividing damages among multiple defendants. It held that the evidence supporting apportionment need not be precise and stated that there must simply be “facts contained in the record [that] reasonably support the apportionment of liability." The district court had based its apportionment on the percentages of land area owned by the respective defendants, the time of ownership, and the types of hazardous substances used by the defendants in their relation to the contamination at the site. One of the implications of this decision may turn up in negotiations between potentially responsible parties (PRPs) and the federal government. This outcome creates a good argument that PRPs can only be held responsible for the contamination they caused, and not that which was caused by other parties, assuming a “reasonable basis for apportionment exists.” And remember, the lower court's inexact determination of apportionment was held to be reasonable. As a result, where some of the other parties at a site are defunct, the government may have to pick up the "orphan" share, that is, the defunct parties' share of the costs.