Issue Date: May 11, 2009
Shell is Not Liable For Cleanup Costs
The Supreme Court ruled last week that Shell Oil cannot be held responsible for cleaning up a toxic waste site in California merely because it manufactured and supplied the chemicals that caused the pollution. The justices, voting 8-1, overturned a decision by an appellate court that had found Shell and two railroads financially liable for a Superfund site in Arvin, Calif., that had once housed a chemical distribution facility owned by now-defunct Brown & Bryant (B&B). Shell made and sold the pesticide D-D (a mixture of 1,3-dichloro-1-propene and 1,2-dichloropropane) that contaminated the site, and Burlington Northern Santa Fe and Union Pacific leased some of the land to B&B. The U.S. Court of Appeals for the 9th Circuit held Shell liable as an entity that had "arranged for disposal" of a hazardous substance under the Superfund law. But in the majority opinion, Justice John Paul Stevens wrote that even though B&B was a "sloppy operator" and had spilled the pesticide repeatedly, Shell had taken numerous steps to encourage the safe handling of its product. "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,' " Stevens wrote.
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