The U.S. Supreme Court issued an opinion today that could potentially limit corporate liability in environmental cleanup cases.  Under Superfund, the Federal Policy that directs the cleanup and cost recovery for abandoned contaminated toxic waste sites, the Federal government undertakes expensive and time-consuming cleanup efforts.   Since there were no Federal environmental laws until the 1970’s, many of these contaminated sites are found after decades of being buried underground. During and after cleanup, the goverment allocates responsibility, and the corresponding share of the costs, to all parties that had a part in the contamination.

In the present case, Burlington Northern and Santa Fe Railroads et al. v. U.S., in the 1960’s and 70’s a chemical distribution company purchased a chemical called D-D from Shell Oil Company.  Much of this chemical was spilled and led to the contamination of the area, but the company is now defunct.  The government attempted to allocate 6% of the cleanup costs to Shell Oil, under a Superfund theory called “arranger liabilty.”  This theory reasons that if a company arranges for the disposal of a hazardous waste, the company should be responsible for contamination cleanup.

In the U.S. Supreme Court’s 8-1 Opinion, written by Justice John Paul Stevens, since CERCLA does not specifically define what it means to “arrang[e] for” disposal of a hazardous substance, the phrase should be given its ordinary meaning.  In common parlance, “arrange” implies action directed to a specific purpose. Thus, to qualify as an arranger, Shell Oil must have entered into D-D sales with the intent that at least a portion of the product be disposed of during the transfer process.  Since there was no evidence of such an agreement, The Supreme Court found that Shell Oil had no liability as an arranger.