Shell not liable for US ag-chem clean-up - Supreme Court

04 May 2009 21:00  [Source: ICIS news]

HOUSTON (ICIS news)--The US Supreme Court ruled 8-1 on Monday that Shell was not responsible for the clean-up of an agricultural-chemical waste site in California, reversing a decision of a lower court.

The case arose from a lawsuit that the US government and California regulators filed against Shell and the railroad companies Burlington Northern Santa Fe and Union Pacific.

The government filed the lawsuit to recover clean-up costs - which had exceeded $8m (€6m) by 1998 - at a former agriculture-chemical distribution centre in Arvin, California.  

Shell and the railroads were indirectly connected to the centre. The site was operated by Brown & Bryant, which had violated several hazardous-waste laws before going out of business, according to court documents.

Shell was named in the lawsuit because it delivered the soil fumigants D-D and Nemagon to Brown & Bryant, according to court documents. Shell had known that the chemicals had spilled while they were being transferred to Brown's storage tanks, the Supreme Court said in its ruling.

The railroads were sued because they leased land to Brown, which the company used to store and transfer chemicals.

The 9th Circuit US Court of Appeals found that Shell and the railroads were liable for up to the entire amount of the clean-up costs.

The Supreme Court ruled that Shell was not liable.

Shell's knowledge of the spills was insufficient to make it liable for clean-up costs, the Supreme Court said. If anything, Shell took several steps to encourage Brown to reduce the likelihood of spills.

Regarding the railroads, the Supreme Court upheld an earlier court ruling that they were liable for only 9% of the clean-up costs.

The case had led to several friend-of-the-court briefs by such business groups as the US Chamber of Commerce, the American Chemistry Council (ACC), the American Petroleum Institute (API) and the National Petrochemical & Refiners Association (NPRA).

The trade groups contend that the case could broaden clean-up liabilities for companies that sell chemicals in the everyday course of business.

Since the potential clean-up costs would be enormous, the decision could place significant burdens on chemical producers and suppliers. The brief contends that lawmakers never intended that chemical companies should shoulder such costs.

($1 = €0.75)

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By: Al Greenwood
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