Summer 2009-#1. Burlington Northern and Santa Fe Railway Co. v. United States: The Supreme Court Provides Guidance on Arranger Liability and Apportionment.

Author:By Gregory A. Weimer, Esq.
 
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Vermont Bar Journal

2009.

Summer 2009-#1.

Burlington Northern and Santa Fe Railway Co. v. United States: The Supreme Court Provides Guidance on Arranger Liability and Apportionment

THE VERMONT BAR JOURNALVolume 35, No. 2Summer 2009 Burlington Northern and Santa Fe Railway Co. v. United States: The Supreme Court Provides Guidance on Arranger Liability and ApportionmentBy Gregory A. Weimer, Esq.On May 4, 2009, the U.S. Supreme Court issued its decision in Burlington Northern and Santa Fe Railway Co. v. United States.(fn1) In its 8-1 decision the Court clarified the elements of arranger liability and apportionment of remediation costs. The decision provides both opportunity and possible pitfalls for CERCLA litigants.

Background and Procedural History

The circumstances giving rise to this case are fairly typical for CERCLA cases. Starting in 1960, Brown and Bryant Inc. ("BandB") operated an agricultural chemical distribution business on a 3.8 acre parcel of land in Arvin, California. BandB purchased various chemicals and pesticides from suppliers such as Shell Oil Company and Dow Chemical. By 1975 BandB expanded its operations on to an adjacent 0.9 acre parcel of land owned by Burlington Northern and Santa Fe Railway Company and the Union Pacific Railroad Company (the "Railroads"). These parcels both were sloped towards an unlined drainage pond located on the main parcel, which allowed chemical runoff to seep into the groundwater.(fn2)

By the mid-1960s Shell began to require its distributors to store D-D, a highly corrosive chemical, in bulk storage facilities. Inevitably spills of the product occurred when being transferred from the tanker trucks to the bulk tanks or from the bulk tanks to smaller delivery vehicles.(fn3) When Shell became aware that spills of D-D were a common event at its distributors, it took a number of steps to promote the safe handling of its products. As part of this effort Shell provided detailed safe handling manuals and a discount program for distributors that improved their bulk handling procedures, and required distributors to be inspected by qualified engineers.(fn4)

In spite of these improvements, BandB continued to suffer delivery spills and other failures that led to D-D and other chemicals seeping into the soil and groundwater at the facility. BandB undertook some remediation efforts, but by 1989 it had become insolvent and ceased business operations. California and the EPA then stepped in to take over remediation efforts and...

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