The decision tightened the reach of the Superfund law, known formally as the Comprehensive Environmental Response, Compensation and Liability Act, by limiting both the kinds of companies subject to liability and the situations in which partly culpable companies can be made to bear the entire cost of cleanups.
The case arose from environmental contamination from a chemical distribution business in Arvin, Calif. The federal government had sought to hold the Shell Oil Company responsible for selling pesticides to the business, where the chemicals routinely leaked and spilled. The distribution business, Brown & Bryant, later became insolvent and ceased operations.
Shell argued that it could not be held responsible for the spills because it did not qualify under the relevant part of the Superfund law, which applies to companies that “arranged for disposal” of hazardous substances. Justice John Paul Stevens, writing for the majority in the 8-to-1 decision, said the statutory language applied only when companies took “intentional steps to dispose of a hazardous substance.”
“Shell’s mere knowledge that spills and leaks continued to occur” with each delivery, Justice Stevens continued, “is insufficient grounds for concluding that Shell ‘arranged for’ the disposal.”
In dissent, Justice Ruth Bader Ginsburg wrote that Shell was “well aware” that its deliveries “directly and routinely” resulted in spills and leaks for more than 20 years. She added that she would have placed the cleanup costs on a company “whose activities contributed to the contamination rather than on the taxpaying public.”
The decision also addressed the liability of two railroad companies that had leased land to the distribution business. There was no dispute that these companies were subject to Superfund liability. The question was whether they could be made to pay all of the cleanup costs or just a portion of them.
The trial judge limited the companies’ liability to 9 percent of the total. He based his calculations on how much land the companies owned, how long they owned it and where the bulk of the discharges happened. The United States Court of Appeals for the Ninth Circuit reversed the judge’s decision, saying those calculations were based on estimates. As a consequence, the appeals court said, the companies could be held liable for the cost of the entire cleanup.
The Supreme Court reversed that decision, saying that apportionment of liability is appropriate so long as there is a reasonable basis for determining the contribution of each wrongdoer.
Justice Ginsburg dissented on that point, too. While she praised the trial judge’s “heroic labor,” she said the railroad companies should have been required to prove their comparative lack of responsibility. Instead, she wrote, the companies simply disclaimed all responsibility.
That is not how the adversary system is supposed to work, Justice
Ginsburg wrote. She said she would have returned the cases, Burlington
Northern and Santa Fe Railway Company v. United States, No. 07-1601, and
Shell Oil Company v. United States, No. 07-1607, to the lower courts to
allow the parties to litigate the apportionment issue.