The Fifth Circuit Court of Appeals has ruled that a construction company that was unaware in 1979 that it had damaged a pipeline, which subsequently began leaking, was not liable as an “arranger” under CERCLA. Celanese Corp. v. Martin K. Eby Constr. Co., Inc., No. 09-20487 (5th Cir. 9/20/10). In 2002, the plaintiff pipeline owner discovered that the pipeline was leaking and began a removal operation, working with state and federal agencies.
In 2009, plaintiff sued the construction company alleging that defendant actually knew that it had damaged the pipeline and then attempted to cover it up. The complaint alleged that defendant was therefore liable as an “arranger for disposal” under CERCLA and the state superfund statute. The district court dismissed the lawsuit finding that defendant was not an “arranger” because it did not know it had damaged the pipeline.
Citing Burlington Northern & Santa Fe Railway Co. v. U.S., 129 S. Ct. 1870 (2009), the appeals court held, “ . . . an entity’s knowledge that its action will result in a spill or leak is insufficient, by itself to establish arranger liability; instead, the entity must ‘take intentional steps’ or ‘plan for’ the disposal of the hazardous substance.” According to the court, defendant is therefore liable as an “arranger” only if it took intentional steps or planned to release hazardous substance from the pipeline. The record, the court said, did not support such a finding.