Supreme Court Absolves Shell of Arvin Pesticide Spills

Seeking reimbursement for remediation activities already done at the contaminated site, the California and U.S. governments had sued Shell and two railroads.

They were using the authority of the Comprehensive Environmental Response, Compensation, and Liability Act, CERCLA, which is designed to promote the cleanup of hazardous waste sites and to ensure that cleanup costs are borne by those responsible for the contamination.

The soil and groundwater on the five-acre site at issue, located 21 miles southeast of Bakersfield, are both contaminated with numerous hazardous chemicals.

Formerly the Brown & Bryant agricultural chemical distribution center, the deserted site now is on the nation's Superfund List of abandoned hazardous waste sites.

City of Arvin, California welcome sign (Photo by Jorizaga)

In 1960, Brown & Bryant, Inc., an agricultural chemical distributor, began operating on the site and later expanded onto an adjacent parcel owned by petitioners Burlington Northern and Santa Fe Railway Company and Union Pacific Railroad Company.

As part of its business, Brown & Bryant purchased and stored various hazardous chemicals, including the pesticide D–D, which it bought from petitioner Shell Oil Company.

Over the course of B&B's 28 years of operation, the court noted, many of these chemicals spilled during transfers and deliveries, and during numerous equipment failures as the corrosive chemical D-D rusted tanks and eroded valves.

Investigations of B&B by the California Department of Toxic Substances Control and the federal Environmental Protection Agency revealed "significant soil and ground water contamination" and in 1989, the governments exercised their CERCLA authority to clean up the Arvin site, spending over $8 million by 1998.

In the lawsuit brought by the governments against Shell and the railroads, the District Court ruled in favor of the governments, finding that both the railroads and Shell were potentially responsible parties under CERCLA.

The railroads were responsible for contaminating the soil and groundwater because they owned part of the facility and Shell because it had "arranged for disposal ... of hazardous substances," through D–D's sale and delivery, the governments claimed.

The District Court apportioned liability, holding the railroads liable for nine percent of the governments' total response costs, and Shell liable for six percent.

On appeal, the Ninth Circuit agreed that Shell could be held liable as an arranger and affirmed the District Court's decision in that respect.

Although the Court of Appeals agreed that the harm in this case was theoretically capable of apportionment, it found the facts present in the record insufficient to support apportionment, and therefore held Shell and the railroads "jointly and severally liable" for the governments' cleanup costs.

But the Supreme Court, in an 8-1 opinion, held that Shell is not liable as an arranger for the contamination at the Arvin facility.

The evidence shows that Shell was aware that minor, accidental spills occurred during D–D's transfer from the common carrier to Brown & Bryant's storage tanks after the product had come under B&B's stewardship.

However, the Supreme Court noted, "it also reveals that Shell took numerous steps to encourage its distributors to reduce the likelihood of spills. Thus, Shell's mere knowledge of continuing spills and leaks is insufficient grounds for concluding that it 'arranged for' D–D's disposal."

The Supreme Court upheld Fresno-based U.S. District Judge Oliver Wanger's determination that the railroads owe a total of nine percent of the total cleanup costs.

EPA and the state are planning additional cleanup actions at the Brown & Bryant Arvin Plant site.

Copyright Environment News Service (ENS) 2009. All rights reserved.