Burlington N. & Santa Fe Ry. Co. v. United States

PETITIONER: Burlington Northern and Santa Fe Railway Company
RESPONDENT: United States et al.
LOCATION: The Arvin Site

DOCKET NO.: 07-1601
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 556 US 599 (2009)
GRANTED: Oct 01, 2008
ARGUED: Feb 24, 2009
DECIDED: May 04, 2009

ADVOCATES:
Kathleen M. Sullivan - argued the cause for the petitioner in 07-1607
Maureen E. Mahoney - argued the cause for the petitioners in 07-1601
Malcolm L. Stewart - Deputy Solicitor General, Department of Justice, argued the cause for the respondents

Facts of the case

The United States Environmental Protection Agency (EPA) and the State of California's Department of Toxic Substances Control (DTSC) cleaned a parcel of contaminated land at considerable expense. They sued the responsible parties for recovery. A federal district court held the responsible parties (Burlington Northern Rail Road, Santa Fe Railway Company, and Shell Oil Company) liable for only a minor portion of the cleanup costs. The EPA and DTSC jointly appealed.

The United States Court of Appeals for the Ninth Circuit held that the district court erred in its liability calculations. It reasoned that the recovery statute employed by the EPA and DTSC imposed strict liability on parties merely partly responsible for contamination. It explained that the statute's intention was to prevent taxpayers from bearing the burden of such cleanup costs.

Question

1) Is Shell Oil Company liable for "arranging" the disposal of hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) when it merely sold and shipped a product that only caused contamination while under the control and ownership of the purchaser?

2) Did the United States Court of Appeals for the Ninth Circuit err by reversing the district court's liability calculations under CERCLA?

Media for Burlington N. & Santa Fe Ry. Co. v. United States

Audio Transcription for Oral Argument - February 24, 2009 in Burlington N. & Santa Fe Ry. Co. v. United States

Audio Transcription for Opinion Announcement - May 04, 2009 in Burlington N. & Santa Fe Ry. Co. v. United States

John G. Roberts, Jr.:

Justice Stevens has the opinion of the Court today in 07-1601, Burlington Northern & Santa Fe Railway versus the United States.

John Paul Stevens:

I think this is the announcement you've all been waiting for.

In 1960, a distributor of agricultural chemicals known as B&B began operating on a parcel of land located in Arvin, California.

The business later expanded onto an adjacent parcel owned by the Burlington Northern & Santa Fe Railway Company and the Union Pacific Railroad Company.

During its years of operation, B&B purchased and stored various hazardous chemicals on its property including the pesticide D-D which was sold by Shell Oil Company.

Over time, many of these hazardous substances spilled and leaked into the soil and groundwater at the facility causing significant contamination.

In 1989, the State of California and the United States Environmental Protection Agency exercised their authority under the Comprehensive Environmental Response, Compensation, and Liability Act known as CERCLA to clean up the Arvin ite.

Seeking to recover their cause, the Government initiated a legal action against Shell and the Railroad.

The District Court concluded that both Railroads and Shell were potentially responsible parties under CERCLA and it could be held fully liable for the cost of the Government's response efforts.

The railroads, because they owned the part of the facility, which of course had been leased to B&B and Shell because it had "arranged" for disposal of hazardous substances within the meaning of the statute, by selling and arranging for the delivery of the D-D.

The District Court did not impose joint in several liability however, but instead apportioned liability holding that the Railroads were liable for 9% of the total response cost and Shell was liable for 6%.

The Court of Appeals agreed that Shell could be held liable as an arranger under the statute and affirmed the District Court's decision in that respect.

However, although the Court of Appeals agreed that the harm in the case was theoretically capable of apportionment, it concluded that the facts presented in this long record were insufficient to support apportionment in this case and therefore held Shell and the Railroads jointly and severally liable for the Government's entire response cost which amounted to millions of dollars.

We now hold that Shell does not qualify as an arranger under the plain meaning of the statute and conclude that the District Court's apportionment of liability with respect to the Railroads was adequately supported by the record evidence.

We therefore reversed the judgment of the Court of Appeals and remand for further proceedings consistent with our opinion.

Justice Ginsburg has filed a dissenting opinion.