OPINION OF THE COURT
BURLINGTON N. & S. F. R. CO. V. UNITED
STATES
556 U. S. ____ (2009)
SUPREME COURT OF THE UNITED STATES
NOS. 07-1601 AND 07-1607
BURLINGTON NORTHERN AND SANTA FE RAILWAY
COMPANY, et al., PETITIONERS
07–1601
v.
UNITED STATES et al.
SHELL OIL COMPANY, PETITIONER
07–1607 v.
UNITED STATES et al.
on writs of certiorari to the united states
court of appeals for the ninth circuit
[May 4, 2009]
Justice Stevens
delivered the opinion of the Court.
In 1980, Congress enacted the
Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA), 94 Stat. 2767, as amended, 42 U. S. C.
§§9601–9675, in response to the serious environmental and health
risks posed by industrial pollution. See
United States v.
Bestfoods,
524 U. S. 51, 55 (1998).
The Act was designed to promote the “ ‘timely cleanup of
hazardous waste sites’ ” and to ensure that the costs of such
cleanup efforts were borne by those responsible for the
contamination.
Consolidated Edison Co. of N. Y. v.
UGI Util., Inc., 423 F. 3d 90, 94 (CA2 2005); see also
Meghrig v.
KFC Western, Inc.,
516 U. S. 479, 483
(1996);
Dedham Water Co. v.
Cumberland Farms Dairy,
Inc., 805 F. 2d 1074, 1081 (CA1 1986). These cases raise the
questions whether and to what extent a party associated with a
contaminated site may be held responsible for the full costs of
remediation.
I
In 1960, Brown & Bryant, Inc.
(B&B), began operating an agricultural chemical distribution
business, purchasing pesticides and other chemical products from
suppliers such as Shell Oil Company (Shell). Using its own
equipment, B&B applied its products to customers’ farms.
B&B opened its business on a 3.8 acre parcel of former farmland
in Arvin, California, and in 1975, expanded operations onto an
adjacent .9 acre parcel of land owned jointly by the Atchison,
Topeka & Santa Fe Railway Company, and the Southern Pacific
Transportation Company (now known respectively as the Burlington
Northern and Santa Fe Railway Company and Union Pacific Railroad
Company) (Railroads). Both parcels of the Arvin facility were
graded toward a sump and drainage pond located on the southeast
corner of the primary parcel. See Appendix,
infra. Neither
the sump nor the drainage pond was lined until 1979, allowing waste
water and chemical runoff from the facility to seep into the ground
water below.
During its years of operation,
B&B stored and distributed various hazardous chemicals on its
property. Among these were the herbicide dinoseb, sold by Dow
Chemicals, and the pesticides D–D and Nemagon, both sold by Shell.
Dinoseb was stored in 55-gallon drums and 5-gallon containers on a
concrete slab outside B&B’s warehouse. Nemagon was stored in
30-gallon drums and 5-gallon containers inside the warehouse.
Originally, B&B purchased D–D in 55-gallon drums; beginning in
the mid-1960’s, however, Shell began requiring its distributors to
maintain bulk storage facilities for D–D. From that time onward,
B&B purchased D–D in bulk.[
Footnote 1]
When B&B purchased D–D, Shell would
arrange for delivery by common carrier, f.o.b.
destination.[
Footnote 2] When
the product arrived, it was transferred from tanker trucks to a
bulk storage tank located on B&B’s primary parcel. From there,
the chemical was transferred to bobtail trucks, nurse tanks, and
pull rigs. During each of these transfers leaks and spills
could—and often did—occur. Although the common carrier and B&B
used buckets to catch spills from hoses and gaskets connecting the
tanker trucks to its bulk storage tank, the buckets sometimes
overflowed or were knocked over, causing D–D to spill onto the
ground during the transfer process.
Aware that spills of D–D were commonplace
among its distributors, in the late 1970’s Shell took several steps
to encourage the safe handling of its products. Shell provided
distributors with detailed safety manuals and instituted a
voluntary discount program for distributors that made improvements
in their bulk handling and safety facilities. Later, Shell revised
its program to require distributors to obtain an inspection by a
qualified engineer and provide self-certification of compliance
with applicable laws and regulations. B&B’s Arvin facility was
inspected twice, and in 1981, B&B certified to Shell that it
had made a number of recommended improvements to its
facilities.
Despite these improvements, B&B remained a
“ ‘[s]loppy’ [o]perator.” App. to Pet. for Cert. in No.
07–1601, p. 130a. Over the course of B&B’s 28 years of
operation, delivery spills, equipment failures, and the rinsing of
tanks and trucks allowed Nemagon, D–D and dinoseb to seep into the
soil and upper levels of ground water of the Arvin facility. In
1983, the California Department of Toxic Substances Control (DTSC)
began investigating B&B’s violation of hazardous waste laws,
and the United States Environmental Protection Agency (EPA) soon
followed suit, discovering significant contamination of soil and
ground water. Of particular concern was a plume of contaminated
ground water located under the facility that threatened to leach
into an adjacent supply of potential drinking water.[
Footnote 3]
Although B&B undertook some efforts at
remediation, by 1989 it had become insolvent and ceased all
operations. That same year, the Arvin facility was added to the
National Priority List, see 54 Fed. Reg. 41027, and subsequently,
DTSC and EPA (Governments) exercised their authority under 42 U.
S. C. §9604 to undertake cleanup efforts at the site. By 1998,
the Governments had spent more than $8 million responding to the
site contamination; their costs have continued to accrue.
In 1991, EPA issued an administrative order to
the Railroads directing them, as owners of a portion of the
property on which the Arvin facility was located, to perform
certain remedial tasks in connection with the site. The Railroads
did so, incurring expenses of more than $3 million in the process.
Seeking to recover at least a portion of their response costs, in
1992 the Railroads brought suit against B&B in the United
States District Court for the Eastern District of California. In
1996, that lawsuit was consolidated with two recovery actions
brought by DTSC and EPA against Shell and the Railroads.
The District Court conducted a 6-week bench
trial in 1999 and four years later entered a judgment in favor of
the Governments. In a lengthy order supported by 507 separate
findings of fact and conclusions of law, the court held that both
the Railroads and Shell were potentially responsible parties (PRPs)
under CERCLA—the Railroads because they were owners of a portion of
the facility, see 42 U. S. C. §§9607(a)(1)–(2), and Shell
because it had “arranged for” the disposal of hazardous substances
through its sale and delivery of D–D, see §9607(a)(3).
Although the court found the parties liable,
it did not impose joint and several liability on Shell and the
Railroads for the entire response cost incurred by the Governments.
The court found that the site contamination created a single harm
but concluded that the harm was divisible and therefore capable of
apportionment. Based on three figures—the percentage of the total
area of the facility that was owned by the Railroads, the duration
of B&B’s business divided by the term of the Railroads’ lease,
and the Court’s determination that only two of three polluting
chemicals spilled on the leased parcel required remediation and
that those two chemicals were responsible for roughly two-thirds of
the overall site contamination requiring remediation—the court
apportioned the Railroads’ liability as 9% of the Governments’
total response cost.[
Footnote
4] Based on estimations of chemicals spills of Shell products,
the court held Shell liable for 6% of the total site response
cost.
The Governments appealed the District Court’s
apportionment, and Shell cross-appealed the court’s finding of
liability. The Court of Appeals acknowledged that Shell did not
qualify as a “traditional” arranger under §9607(a)(3), insofar as
it had not contracted with B&B to directly dispose of a
hazardous waste product. 520 F. 3d 918, 948 (CA9 2008).
Nevertheless, the court stated that Shell could still be held
liable under a “ ‘broader’ category of arranger liability” if
the “disposal of hazardous wastes [wa]s a foreseeable byproduct of,
but not the purpose of, the transaction giving rise to” arranger
liability.
Ibid. Relying on CERCLA’s definition of
“disposal,” which covers acts such as “leaking” and “spilling,” 42
U. S. C. §6903(3), the Ninth Circuit concluded that an entity
could arrange for “disposal” “even if it did not intend to dispose”
of a hazardous substance. 520 F. 3d, at 949.
Applying that theory of arranger liability to
the District Court’s findings of fact, the Ninth Circuit held that
Shell arranged for the disposal of a hazardous substance through
its sale and delivery of D–D:
“Shell arranged for delivery of the substances to
the site by its subcontractors; was aware of, and to some degree
dictated, the transfer arrangements; knew that some leakage was
likely in the transfer process; and provided advice and supervision
concerning safe transfer and storage. Disposal of a hazardous
substance was thus a necessary part of the sale and delivery
process.”
Id., at 950.
Under such circumstances, the court concluded,
arranger liability was not precluded by the fact that the purpose
of Shell’s action had been to transport a useful and previously
unused product to B&B for sale.
On the subject of apportionment, the Court of
Appeals found “no dispute” on the question whether the harm caused
by Shell and the Railroads was capable of apportionment.
Id., at 942. The court observed that a portion of the site
contamination occurred before the Railroad parcel became part of
the facility, only some of the hazardous substances were stored on
the Railroad parcel, and “only some of the water on the facility
washed over the Railroads’ site.”
Ibid. With respect to
Shell, the court noted that not all of the hazardous substances
spilled on the facility had been sold by Shell. Given those facts,
the court readily concluded that “the contamination traceable to
the Railroads and Shell, with adequate information, would be
allocable, as would be the cost of cleaning up that contamination.”
Ibid. Nevertheless, the Court of Appeals held that the
District Court erred in finding that the record established a
reasonable basis for apportionment. Because the burden of proof on
the question of apportionment rested with Shell and the Railroads,
the Court of Appeals reversed the District Court’s apportionment of
liability and held Shell and the Railroads jointly and severally
liable for the Governments’ cost of responding to the contamination
of the Arvin facility.
The Railroads and Shell moved for rehearing en
banc, which the Court of Appeals denied over the dissent of eight
judges. See
id., at 952 (Bea, J., dissenting). We granted
certiorari to determine whether Shell was properly held liable as
an entity that had “arranged for disposal” of hazardous substances
within the meaning of §9607(a)(3), and whether Shell and the
Railroads were properly held liable for all response costs incurred
by EPA and the State of California. See 554 U. S. ___ (2008).
Finding error on both points, we now reverse.
II
CERCLA imposes strict liability for environmental
contamination upon four broad classes of PRPs:
“(1) the owner and operator of a
vessel or a facility,
“(2) any person
[[Footnote 5]] who at the time of disposal of
any hazardous substance owned or operated any facility at which
such hazardous substances were disposed of,
“(3) any person who by
contract, agreement, or otherwise arranged for disposal or
treatment, or arranged with a transporter for transport for
disposal or treatment, of hazardous substances owned or possessed
by such person, by any other party or entity, at any facility or
incineration vessel owned or operated by another party or entity
and containing such hazardous substances, and
“(4) any person who accepts or
accepted any hazardous substances for transport to disposal or
treatment facilities, incineration vessels or sites selected by
such person, from which there is a release, or a threatened release
which causes the incurrence of response costs, of a hazardous
substance… .” 42 U. S. C. §9607(a).
Once an entity is identified as a
PRP, it may be compelled to clean up a contaminated area or
reimburse the Government for its past and future response costs.
See Cooper Industries, Inc. v. Aviall Services,
Inc., 543 U. S.
157, 161 (2004).[Footnote
6]
In these cases, it is
undisputed that the Railroads qualify as PRPs under both
§§9607(a)(1) and 9607(a)(2) because they owned the land leased by
B&B at the time of the contamination and continue to own it
now. The more difficult question is whether Shell also qualifies as
a PRP under §9607(a)(3) by virtue of the circumstances surrounding
its sales to B&B.
To determine whether Shell may
be held liable as an arranger, we begin with the language of the
statute. As relevant here, §9607(a)(3) applies to an entity that
“arrange[s] for disposal . . . of hazardous substances.” It is
plain from the language of the statute that CERCLA liability would
attach under §9607(a)(3) if an entity were to enter into a
transaction for the sole purpose of discarding a used and no longer
useful hazardous substance. It is similarly clear that an entity
could not be held liable as an arranger merely for selling a new
and useful product if the purchaser of that product later, and
unbeknownst to the seller, disposed of the product in a way that
led to contamination. See Freeman v. Glaxo Wellcome,
Inc., 189 F. 3d 160, 164 (CA2 1999); Florida Power
& Light Co. v. Allis Chalmers Corp., 893 F. 2d
1313, 1318 (CA11 1990). Less clear is the liability attaching to
the many permutations of “arrangements” that fall between these two
extremes—cases in which the seller has some knowledge of the
buyers’ planned disposal or whose motives for the “sale” of a
hazardous substance are less than clear. In such cases, courts have
concluded that the determination whether an entity is an arranger
requires a fact-intensive inquiry that looks beyond the parties’
characterization of the transaction as a “disposal” or a “sale” and
seeks to discern whether the arrangement was one Congress intended
to fall within the scope of CERCLA’s strict-liability provisions.
See Freeman, 189 F. 3d, at 164; Pneumo Abex
Corp. v. High Point, Thomasville & Denton R. Co.,
142 F. 3d 769, 775 (CA4 1998) (“ ‘[T]here is no bright line
between a sale and a disposal under CERCLA. A party’s
responsibility … must by necessity turn on a fact-specific inquiry
into the nature of the transaction’ ” (quoting United
States v. Petersen Sand & Gravel, 806 F. Supp.
1346, 1354 (ND Ill. 1992))); Florida Power & Light
Co., 893 F. 2d, at 1318.
Although we agree that the
question whether §9607(a)(3) liability attaches is fact intensive
and case specific, such liability may not extend beyond the limits
of the statute itself. Because CERCLA does not specifically define
what it means to “arrang[e] for” disposal of a hazardous substance,
see, e.g., United States v. Cello-Foil
Prods., Inc., 100 F. 3d 1227, 1231 (CA6 1996); Amcast
Indus. Corp. v. Detrex Corp., 2 F. 3d 746, 751
(CA7 1993); Florida Power & Light Co., 893 F. 2d, at
1317, we give the phrase its ordinary meaning. Crawford v.
Metropolitan Government of Nashville and Davidson Cty.,
555 U. S. ____ (2009); Perrin v. United States,
444 U. S. 37, 42
(1979). In common parlance, the word “arrange” implies action
directed to a specific purpose. See Merriam-Webster’s Collegiate
Dictionary 64 (10th ed. 1993) (defining “arrange” as “to make
preparations for: plan[;] . . . to bring about an agreement or
understanding concerning”); see also Amcast Indus. Corp.,
2 F. 3d, at 751 (words “ ‘arranged for’ . . . imply
intentional action”). Consequently, under the plain language of the
statute, an entity may qualify as an arranger under §9607(a)(3)
when it takes intentional steps to dispose of a hazardous
substance. See Cello-Foil Prods., Inc., 100 F. 3d, at
1231 (“[I]t would be error for us not to recognize the
indispensable role that state of mind must play in determining
whether a party has ‘otherwise arranged for disposal … of hazardous
substances’ ”).
The Governments do not deny
that the statute requires an entity to “arrang[e] for” disposal;
however, they interpret that phrase by reference to the statutory
term “disposal,” which the Act broadly defines as “the discharge,
deposit, injection, dumping, spilling, leaking, or placing of any
solid waste or hazardous waste into or on any land or water.” 42 U.
S. C. §6903(3); see also §9601(29) (adopting the definition of
“disposal” contained in the Solid Waste Disposal Act).[Footnote 7] The Governments assert that by
including unintentional acts such as “spilling” and “leaking” in
the definition of disposal, Congress intended to impose liability
on entities not only when they directly dispose of waste products
but also when they engage in legitimate sales of hazardous
substances[Footnote 8] knowing
that some disposal may occur as a collateral consequence of the
sale itself. Applying that reading of the statute, the Governments
contend that Shell arranged for the disposal of D–D within the
meaning of §9607(a)(3) by shipping D–D to B&B under conditions
it knew would result in the spilling of a portion of the hazardous
substance by the purchaser or common carrier. See Brief for United
States 24 (“Although the delivery of a useful product was the
ultimate purpose of the arrangement, Shell’s continued
participation in the delivery, with knowledge that spills and leaks
would result, was sufficient to establish Shell’s intent to dispose
of hazardous substances”). Because these spills resulted in wasted
D–D, a result Shell anticipated, the Governments insist that Shell
was properly found to have arranged for the disposal of
D–D.
While it is true that in some
instances an entity’s knowledge that its product will be leaked,
spilled, dumped, or otherwise discarded may provide evidence of the
entity’s intent to dispose of its hazardous wastes, knowledge alone
is insufficient to prove that an entity “planned for” the disposal,
particularly when the disposal occurs as a peripheral result of the
legitimate sale of an unused, useful product. In order to qualify
as an arranger, Shell must have entered into the sale of D–D with
the intention that at least a portion of the product be disposed of
during the transfer process by one or more of the methods described
in §6903(3). Here, the facts found by the District Court do not
support such a conclusion.
Although the evidence adduced
at trial showed that Shell was aware that minor, accidental spills
occurred during the transfer of D–D from the common carrier to
B&B’s bulk storage tanks after the product had arrived at the
Arvin facility and had come under B&B’s stewardship, the
evidence does not support an inference that Shell intended such
spills to occur. To the contrary, the evidence revealed that Shell
took numerous steps to encourage its distributors to
reduce the likelihood of such spills, providing them with
detailed safety manuals, requiring them to maintain adequate
storage facilities, and providing discounts for those that took
safety precautions. 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 within the meaning of
§9607(a)(3). Accordingly, we conclude that Shell was not liable as
an arranger for the contamination that occurred at B&B’s Arvin
facility.
III
Having concluded
that Shell is not liable as an arranger, we need not decide whether
the Court of Appeals erred in reversing the District Court’s
apportionment of Shell’s liability for the cost of remediation. We
must, however, determine whether the Railroads were properly held
jointly and severally liable for the full cost of the Governments’
response efforts.
The seminal
opinion on the subject of apportionment in CERCLA actions was
written in 1983 by Chief Judge Carl Rubin of the United States
District Court for the Southern District of Ohio. United
States v. Chem-Dyne Corp., 572 F. Supp. 802.
After reviewing CERCLA’s history, Chief Judge Rubin concluded that
although the Act imposed a “strict liability standard,”
id., at 805, it did not mandate “joint and several”
liability in every case. See id., at 807. Rather, Congress
intended the scope of liability to “be determined from traditional
and evolving principles of common law[.]” Id., at 808. The
Chem-Dyne approach has been fully embraced by the Courts
of Appeals. See, e.g., In re Bell Petroleum
Services, Inc., 3 F. 3d 889, 901–902 (CA5 1993); United
States v. Alcan Aluminum Corp., 964 F. 2d 252, 268
(CA3 1992); O’Neil v. Picillo, 883 F. 2d 176, 178
(CA1 1989); United States v. Monsanto Co., 858 F.
2d 160, 171–173 (CA4 1988).
Following Chem-Dyne,
the courts of appeals have acknowledged that “[t]he universal
starting point for divisibility of harm analyses in CERCLA cases”
is §433A of the Restatement (Second) of Torts. United
States v. Hercules, Inc., 247 F. 3d 706, 717 (CA8
2001); Chem-Nuclear Systems, Inc. v. Bush, 292 F.
3d 254, 259 (CADC 2002); United States v. R. W. Meyer,
Inc., 889 F. 2d 1497, 1507 (CA6 1989). Under the
Restatement,
“when two or more persons acting
independently caus[e] a distinct or single harm for which there is
a reasonable basis for division according to the contribution of
each, each is subject to liability only for the portion of the
total harm that he has himself caused. Restatement (Second) of
Torts, §§433A, 881 (1976); Prosser, Law of Torts, pp. 313–314 (4th
ed. 1971) … . But where two or more persons cause a single and
indivisible harm, each is subject to liability for the entire harm.
Restatement (Second) of Torts, §875; Prosser, at 315–316.”
Chem-Dyne Corp., 572 F. Supp., at 810.
In other words, apportionment is
proper when “there is a reasonable basis for determining the
contribution of each cause to a single harm.” Restatement (Second)
of Torts §433A(1)(b), p. 434 (1963–1964).
Not all harms are capable of
apportionment, however, and CERCLA defendants seeking to avoid
joint and several liability bear the burden of proving that a
reasonable basis for apportionment exists. See Chem-Dyne
Corp., 572 F. Supp., at 810 (citing Restatement (Second) of
Torts §433B (1976)) (placing burden of proof on party seeking
apportionment). When two or more causes produce a single,
indivisible harm, “courts have refused to make an arbitrary
apportionment for its own sake, and each of the causes is charged
with responsibility for the entire harm.” Restatement (Second) of
Torts §433A, Comment i, p. 440 (1963–1964).
Neither the parties nor the
lower courts dispute the principles that govern apportionment in
CERCLA cases, and both the District Court and Court of Appeals
agreed that the harm created by the contamination of the Arvin
site, although singular, was theoretically capable of
apportionment. The question then is whether the record provided a
reasonable basis for the District Court’s conclusion that the
Railroads were liable for only 9% of the harm caused by
contamination at the Arvin facility.
The District Court criticized
the Railroads for taking a “ ‘scorched earth,’ all-or-nothing
approach to liability,” failing to acknowledge any responsibility
for the release of hazardous substances that occurred on their
parcel throughout the 13-year period of B&B’s lease. According
to the District Court, the Railroads’ position on liability,
combined with the Governments’ refusal to acknowledge the potential
divisibility of the harm, complicated the apportioning of
liability. See App. to Pet. for Cert. in No. 07–1601, at 236a–237a
(“All parties … effectively abdicated providing any helpful
arguments to the court and have left the court to independently
perform the equitable apportionment analysis demanded by the
circumstances of the case”).[Footnote 9] Yet despite the parties’
failure to assist the court in linking the evidence supporting
apportionment to the proper allocation of liability, the District
Court ultimately concluded that this was “a classic ‘divisible in
terms of degree’ case, both as to the time period in which
defendants’ conduct occurred, and ownership existed, and as to the
estimated maximum contribution of each party’s activities that
released hazardous substances that caused Site contamination.”
Id., at 239a. Consequently, the District Court apportioned
liability, assigning the Railroads 9% of the total remediation
costs.
The District Court calculated
the Railroads’ liability based on three figures. First, the court
noted that the Railroad parcel constituted only 19% of the surface
area of the Arvin site. Second, the court observed that the
Railroads had leased their parcel to B&B for 13 years, which
was only 45% of the time B&B operated the Arvin facility.
Finally, the court found that the volume of
hazardous-substance-releasing activities on the B&B property
was at least 10 times greater than the releases that occurred on
the Railroad parcel, and it concluded that only spills of two
chemicals, Nemagon and dinoseb (not D–D), substantially contributed
to the contamination that had originated on the Railroad parcel and
that those two chemicals had contributed to two-thirds of the
overall site contamination requiring remediation. The court then
multiplied .19 by .45 by .66 (two-thirds) and rounded up to
determine that the Railroads were responsible for approximately 6%
of the remediation costs. “Allowing for calculation errors up to
50%,” the court concluded that the Railroads could be held
responsible for 9% of the total CERCLA response cost for the Arvin
site. Id., at 252a.
The Court of Appeals
criticized the evidence on which the District Court’s conclusions
rested, finding a lack of sufficient data to establish the precise
proportion of contamination that occurred on the relative portions
of the Arvin facility and the rate of contamination in the years
prior to B&B’s addition of the Railroad parcel. The court noted
that neither the duration of the lease nor the size of the leased
area alone was a reliable measure of the harm caused by activities
on the property owned by the Railroads, and—as the court’s upward
adjustment confirmed—the court had relied on estimates rather than
specific and detailed records as a basis for its
conclusions.
Despite these criticisms, we
conclude that the facts contained in the record reasonably
supported the apportionment of liability. The District Court’s
detailed findings make it abundantly clear that the primary
pollution at the Arvin facility was contained in an unlined sump
and an unlined pond in the southeastern portion of the facility
most distant from the Railroads’ parcel and that the spills of
hazardous chemicals that occurred on the Railroad parcel
contributed to no more than 10% of the total site contamination,
see id., at 247a–248a, some of which did not require
remediation. With those background facts in mind, we are persuaded
that it was reasonable for the court to use the size of the leased
parcel and the duration of the lease as the starting point for its
analysis. Although the Court of Appeals faulted the District Court
for relying on the “simplest of considerations: percentages of land
area, time of ownership, and types of hazardous products,” 520 F.
3d, at 943, these were the same factors the court had earlier
acknowledged were relevant to the apportionment analysis.
See id., at 936, n.18 (“We of course agree with our sister
circuits that, if adequate information is available, divisibility
may be established by ‘volumetric, chronological, or other types of
evidence,’ including appropriate geographic considerations”
(citations omitted)).
The Court of Appeals also
criticized the District Court’s assumption that spills of Nemagon
and dinoseb were responsible for only two-thirds of the chemical
spills requiring remediation, observing that each PRP’s share of
the total harm was not necessarily equal to the quantity of
pollutants that were deposited on its portion of the total
facility. Although the evidence adduced by the parties did not
allow the court to calculate precisely the amount of hazardous
chemicals contributed by the Railroad parcel to the total site
contamination or the exact percentage of harm caused by each
chemical, the evidence did show that fewer spills occurred on the
Railroad parcel and that of those spills that occurred, not all
were carried across the Railroad parcel to the B&B sump and
pond from which most of the contamination originated. The fact that
no D–D spills on the Railroad parcel required remediation lends
strength to the District Court’s conclusion that the Railroad
parcel contributed only Nemagon and dinoseb in quantities requiring
remediation.
The District Court’s
conclusion that those two chemicals accounted for only two-thirds
of the contamination requiring remediation finds less support in
the record; however, any miscalculation on that point is harmless
in light of the District Court’s ultimate allocation of liability,
which included a 50% margin of error equal to the 3% reduction in
liability the District Court provided based on its assessment of
the effect of the Nemagon and dinoseb spills. Had the District
Court limited its apportionment calculations to the amount of time
the Railroad parcel was in use and the percentage of the facility
located on that parcel, it would have assigned the Railroads 9% of
the response cost. By including a two-thirds reduction in liability
for the Nemagon and dinoseb with a 50% “margin of error,” the
District Court reached the same result. Because the District
Court’s ultimate allocation of liability is supported by the
evidence and comports with the apportionment principles outlined
above, we reverse the Court of Appeals’ conclusion that the
Railroads are subject to joint and several liability for all
response costs arising out of the contamination of the Arvin
facility.
IV
For the foregoing
reasons, we conclude that the Court of Appeals erred by holding
Shell liable as an arranger under CERCLA for the costs of
remediating environmental contamination at the Arvin, California
facility. Furthermore, we conclude that the District Court
reasonably apportioned the Railroads’ share of the site remediation
costs at 9%. The judgment is reversed, and the cases are remanded
for further proceedings consistent with this opinion.
It is so ordered.
APPENDIX
Footnote
1
Because D–D is corrosive,
bulk storage of the chemical led to numerous tank failures and
spills as the chemical rusted tanks and eroded valves.
Footnote
2
F.o.b. destination means “the
seller must at his own expense and risk transport the goods to [the
destination] and there tender delivery of them . . . .” U. C. C.
§2–319(1)(b) (2001). The District Court found that B&B assumed
“stewardship” over the D–D as soon as the common carrier entered
the Arvin facility. App. to Pet. for Cert. in No. 07–1601, p.
124a.
Footnote
3
The ground water at the Arvin
site is divided into three zones. The A-zone is located 60–80 feet
below the ground. It has been tested and found to have high levels
of contamination. The B-zone is located 150 feet below ground.
Although the B-zone is not currently used as a source of drinking
water, it has the potential to serve as such a source. No
contamination has yet been found in that zone. The C-zone is an
aquifer located 200 feet below ground. It is the sole current
source of drinking water and, thus far, has suffered no
contamination from the Arvin site.
Footnote
4
Although the Railroads did
not produce precise figures regarding the exact quantity of
chemical spills on each parcel in each year of the facility’s
operation, the District Court found it “indisputable that the
overwhelming majority of hazardous substances were released from
the B&B parcel.” Id., at 248a. The court explained
that “the predominant activities conducted on the Railroad parcel
through the years were storage and some washing and rinsing of
tanks, other receptacles, and chemical application vehicles.
Mixing, formulating, loading, and unloading of ag-chemical
hazardous substances, which contributed most of the liability
causing releases, were predominantly carried out by B&B on the
B&B parcel.” Id., at 247a–248a.
Footnote
5
For purposes of the statute,
a “person” is defined as “an individual, firm, corporation,
association, partnership, consortium, joint venture, commercial
entity, United States Government, State, municipality, commission,
political subdivision of a State, or any interstate body.” 42 U.
S. C. §9601(21).
Footnote
6
Under CERCLA, PRPs are liable
for: “(A) all costs of removal or remedial action
incurred by the United States Government or a State or an Indian
tribe not inconsistent with the national contingency
plan;
“(B) any other necessary costs of response
incurred by any other person consistent with the national
contingency plan;
“(C) damages for injury to, destruction of, or
loss of natural resources, including the reasonable costs of
assessing such injury, destruction, or loss resulting from such a
release; and
“(D) the costs of any health assessment or
health effects study carried out under section 9604(i) of this
title.” §9607(a)(4).
Footnote
7
“Hazardous waste” is defined
as “a solid waste, or combination of solid wastes, which … may . .
. pose a substantial present or potential hazard to human health or
the environment when improperly treated, stored, transported, or
disposed of, or otherwise managed.” §6903(5)(B);
§9601(29).
Footnote
8
CERCLA defines “hazardous
substance” to include a variety of chemicals and toxins including
those designated by EPA as air pollutants, water pollutants, and
solid wastes. §9601(14).
Footnote
9
As the Governments point out,
insofar as the District Court made reference to equitable
considerations favoring apportionment, it erred. Equitable
considerations play no role in the apportionment analysis; rather,
apportionment is proper only when the evidence supports the
divisibility of the damages jointly caused by the PRPs. See
generally United States v. Hercules, Inc., 247 F.
3d 706, 718–719 (CA8 2001); United States v.
Brighton, 153 F. 3d 307, 318–319 (CA6 1998); Redwing
Carriers, Inc. v. Saraland Apartments, 94 F. 3d 1489,
1513 (CA11 1996). As the Court of Appeals explained,
“[a]pportionment . . . looks to whether defendants may avoid joint
and several liability by establishing a fixed amount of damage for
which they are liable,” while contribution actions allow jointly
and severally liable PRPs to recover from each other on the basis
of equitable considerations. 520 F. 3d 918, 939–940 (CA9
2008); see also 42 U. S. C. §9613(f)(1) (providing that, “[i]n
resolving contribution claims, the court may allocate response
costs among liable parties using such equitable factors as the
court determines are appropriate”). The error is of no consequence,
however, because despite the District Court’s reference to equity,
its actual apportionment decision was properly rooted in evidence
that provided a reasonable basis for identifying the portion of the
harm attributable to the Railroads.
Comments
Be the first to comment
Leave a Comment