08 May 2009 23:59 [Source: ICIS news]
By Al Greenwood
HOUSTON (ICIS news)--An American Chemical Council (ACC) official said a recent Supreme Court ruling gave chemical companies confidence that the products they sell will not entangle them in future clean-up costs at US Superfund chemical waste sites, which a government agency said on Friday numbered 1,264.
The court ruled 8-1 that Shell was not liable for the clean-up costs of a former agrochemical distribution centre in Arvin, California. The ruling reversed a lower court decision, which found that Shell could pay up to the full amount of the clean-up costs.
Shell became involved in the lawsuit because it had sold the agrochemicals to the former operator of the distribution centre, Brown & Bryant.
Brown had spilled the chemicals as they were transferred from trucks to an on-site tank. Because Shell sold the chemicals, regulators argued that the company had effectively arranged for their disposal.
Such a designation would make Shell liable for the clean-up costs.
Regulators have designated the Arvin centre as a Superfund site, meaning it falls under the US Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
The Environmental Protection Agency (EPA) does not maintain a clean-up cost estimate for the nation's 1,264 Superfund sites.
The lower court ruled that Shell had had arranged to dispose the chemicals, and it had to pay up to the entire amount of the clean-up costs. By 1998, those costs exceeded $8m.
Had the lower court's ruling stayed in place, it could have affected chemical sales throughout the US, said Leslie Hulse, assistant general counsel for the American Chemistry Council (ACC). The council filed a friend-of-the-court brief supporting Shell.
With such a ruling, chemical producers would have had little confidence in selling any product to a customer, she said. Such a sale could make the producers liable for massive clean-up costs years later.
"It becomes ludicrous for the seller of a useful product to be liable all the way down the chain of commerce," she said. "It would have been very, very troubling had the court been the other way."
By rejecting the regulators' argument, the Supreme Court put in place parameters, establishing when a company is selling a useful product and when it is arranging the disposal of hazardous waste.
"I think that what the court did was rightly look at the facts of the case," Hulse said.
Indeed, the ruling establishes a precedent for future Superfund lawsuits, according to a statement by Bill Holbrook, spokesman for the National Petrochemical & Refiners Association (NPRA). The NPRA also filed a friend-of-the-court brief supporting Shell.
The company said the ruling will help remove exposure to what it called crippling liability of cleaning up former industrial sites.
"The Supreme Court’s decision therefore provides much-needed clarity for businesses and property owners in all sectors of the economy regarding their potential liability," Shell said in a statement.
($1 = €0.75)
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