The U.S. Supreme Court has made it harder for the government to recover the costs of environmental cleanups from companies with only minor or limited responsibility for toxic spills. The High Court’s decision tightened the reach of the Comprehensive Environmental Response, Compensation and Liability Act, commonly referred to as the Superfund law. 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, were limited by the Court.
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 went out of business.
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.” Justice Stevens wrote that “Shell’s mere knowledge that spills and leaks continued to occur” with each delivery “is insufficient grounds for concluding that Shell ‘arranged for’ the disposal.”
Justice Ruth Bader Ginsburg, the sole dissenter, wrote that Shell was “well aware” that its deliveries “directly and routinely” resulted in spills and leaks for more than 20 years. The Justice, in her dissent, 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. The railroads were subject to Superfund liability. The issue for them was whether they could be made to pay all of the cleanup costs or just a portion of these costs. The trial judge limited the liability of the companies to 9% 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 the Ninth Circuit’s 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 also dissented on that point, saying that the railroad companies, Burlington Northern and Santa Fe Railway Company, should have been required to prove their comparative lack of responsibility. Instead, she wrote, the companies simply disclaimed all responsibility, which is not how the adversary system is supposed to work. Justice Ginsburg would have returned the two cases to the lower courts to allow the parties to litigate the apportionment issue. But since no other Justice agreed with her views, it appears the law on the question of limited liability under the Superfund law is pretty well established.
Source: New York Times
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