May 29, 2009

Burlington Northern & Santa Fe Railway Co. v. United States

In Burlington Northern & Santa Fe Railway Co. v. United States, the U.S. Supreme Court held that mere knowledge of continuing spills and leaks is insufficient grounds for holding a company liable as an arranger under CERCLA. Under the plain language of CERCLA §107(a)(3), an entity may qualify as an arranger when it takes intentional steps to dispose of a hazardous substance. Here, the company sold pesticides to an agricultural chemical facility in Arvin, California. To qualify as an arranger, therefore, the company must have entered into the pesticide sales with the intent that at least a portion of the product be disposed of during the transfer process. But the facts found by the lower court do not support such a conclusion. The evidence shows that the company was aware that minor, accidental spills occurred during the pesticide’s transfer from the common carrier to the chemical facility’s storage tanks after the product had come under the chemical facility’s stewardship; however, the evidence also reveals that the company took numerous steps to encourage its distributors to reduce the likelihood of spills. Thus, the company’s mere knowledge of continuing spills and leaks is insufficient grounds for concluding that it “arranged for” the pesticide’s disposal. As for railroad companies who owned property adjacent to the site, however, the lower court reasonably apportioned their share of remediation costs at 9% such that their liability was several and not joint and several. The lower court’s detailed findings show that the primary pollution at the site was on the portion of the facility most distant from the railroad parcel. In addition, the hazardous-chemical spills on the railroad parcel contributed to no more than 10% of the total site contamination, some of which did not require remediation. The Court concluded that the analysis used by the trial court to apportion liability was reasonable.

On May 29, 2009, ELI hosted a panel discussion on the decision and its implications.

Panelists:
Bill Hyatt, Moderator, K & L Gates
John Cruden, U.S. Department of Justice
Amy Edwards, Holland & Knight
Angus Macbeth, Sidley Austin LLP
Daniel Steinway, Baker Botts LLP