Issue Date: May 18, 2009
Superfund Takes A Hit
ALTHOUGH MUCH of the nation seemed preoccupied with the Supreme Court's decision this month concerning the fine levied on CBS by the Federal Communications Commission for Janet Jackson's "wardrobe malfunction" at the 2004 Super Bowl, another high court decision is potentially much more important—especially for any company that has sold or used chemicals.
In an 8-1 ruling, the high court held that Shell Oil is not liable for any of the chemical contamination at a Superfund site in Arvin, Calif. (C&EN, May 11, page 24). Even though this is not a huge judgment in terms of money, it seems to create a small gap in the tough Superfund law that can benefit companies.
The specific case involves the agricultural chemical distributor Brown & Bryant, which bought and sold a bunch of pesticides, including dinoseb, Nemagon, and a product called D-D, which is a mixture of 1,3-dichloro-1-propene and 1,2-dichloropropane. Over the years, Brown & Bryant was apparently sloppy in handling these compounds, and the ground and water around its operation became heavily contaminated with hazardous chemicals.
The Environmental Protection Agency responded to the problem by declaring the area a Superfund site, doing some cleaning up, and then suing to recover its cleanup costs. Because Brown & Bryant went bankrupt in 1989, EPA did what it does in Superfund cases: It looked for anyone associated with the site that has the money to pay. In this case, it was two railroads and Shell.
The high court agreed with the lower courts that the railroads did have a small liability for the cleanup; they owned part of the contaminated land. But Shell was dragged into the case only because it sold the D-D pesticide in bulk that had to be stored in large containers at the company site. Even though it was these storage containers that apparently leaked the pesticide, creating the contamination, EPA considered Shell liable under the Superfund law.
The Comprehensive Environmental Response, Compensation & Liability Act was passed by Congress hastily in 1980 in response to some spectacular hazardous chemical waste problems. The best remembered of these waste sites is Love Canal, N.Y., because it was in a young community and had a human face (C&EN, Nov. 17, 2008, page 46). But more impressive was the Valley of the Drums, outside of Louisville, Ky., where more than 17,000 waste drums were scattered over 23 acres in 1979. There was also the Chemical Control warehouse waste site in Elizabeth, N.J., with more than 65,000 abandoned waste drums, that was torched by an arsonist in April 1980, sending toxic smoke wafting over New York City.
But the Superfund law is a heavy, blunt instrument for cleaning up hazardous waste sites. Idealistically, the law was supposed to place the cost of remediation on the people whose activities contributed to the contamination, rather than the taxpaying public.
But it quickly became a costly mess that punished the chemical industry in two ways—with "joint and several" liability and feedstock taxes.
Joint and several liability means that any company that contributed to the waste site, no matter how little or in what way, could be held financially liable for the entire cost of cleanup. A consequence of this provision was that EPA seemed to go after the bigger chemical companies with the deepest pockets to pay for as many cleanups as possible. This provision also allowed Shell and the railroads to be dragged into the Brown & Bryant case.
The feedstock tax was levied to create Superfund, a giant source of money that the government used to finance waste cleanups when it could not get companies to pay. It collected about $1.5 billion annually from chemical and oil companies. The tax expired in 1995 but may be revived by the current Congress.
THE SUPERFUND LAW was originally supposed to be used for the cleanup of abandoned hazardous waste sites, but when these became harder to find, EPA began using the law to get companies to pay for any contaminated site, effectively expanding the scope of the law. Many of the sites on the current National Priority List of Superfund sites are just old, contaminated industrial areas.
A major problem with the Superfund law has always been getting these supposedly dangerous waste sites cleaned up in a reasonable time. The Brown & Bryant case is a classic example. First investigated as a contamination problem in 1983, it was put on the Superfund list in 1989. It wasn't until 1996 that the lawsuit involving the railroads and Shell was brought. A judgment was not made on this case until 2003—20 years after a problem was found.
The Supreme Court decision that Shell is not liable in this case may become a way for some companies to escape the net of joint and several liability. This provision has trapped many chemical companies into paying big bucks for cleaning up waste sites they had little to do with and has been used to shield government agencies and municipalities from responsibility for their part in contaminated sites. Even the tiny hole created by the Court could give companies some relief from the Superfund net.
Views expressed on this page are those of the author and not necessarily those of ACS.
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