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Supreme Court Limits Companies' Responsibility for Cleanup of Superfund Sites

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By David Goguen on May 05, 2009 12:17 PM

Companies who have only limited links to environmentally contaminated property will have an easier time escaping liability for huge cleanup costs associated with the contamination, under a decision handed down Monday by the U.S. Supreme Court.

The case involves the cleanup of contaminated property at Brown & Bryant's chemical distribution facility in Arvin, California, and the responsibility of Shell Oil Company to pay for cleanup of the property. Shell had sold the pesticide D-D to Brown & Bryant over a number of years, and that chemical played a role in the contamination of the property.

The Court on Monday was charged with examining Shell's liability as a company that "arranged for disposal" of hazardous materials under the Comprehensive Environmental Response, Compensation, and Liability Act (called "CERCLA" or the "Superfund Law" informally).

CERLCA is a federal law that is intended to facilitate the cleanup of contaminated properties and make sure that remediation efforts are undertaken and paid for by the companies and individuals responsible for the environmental harm.

In an 8-1 decision, the nation's top court ruled that Shell cannot be considered an "arranger" under the Superfund law because, although evidence showed that Shell knew that minor chemical spills occurred at the Arvin facility, there was no proof that Shell intended that such spills would occur. Instead, evidence showed that Shell took steps to reduce the likelihood of spills, the Court found.

The Court concluded that "Although Shell's efforts were less than wholly successful, given these facts, Shell's mere knowledge that spills and leaks continued to occur is insufficient grounds for concluding that Shell "arranged for" the disposal of D-D" under CERCLA.

The New York Times reports that Monday's decision "tightened the reach of the Superfund law. . .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."