Joint and Several Liability Found Against Shell Oil

8 08 2008

A panel of the Ninth Circuit imposed joint and several liability upon Shell Oil Company, which sold chemicals to the defunct facility owner, and two railroad companies that owned part of the land that was contaminated. United States v. Burlington Northern, 2008 WL 763257 (9th Cir. Mar. 25, 2008). Rejecting a district court’s 191-page opinion apportioning liability based on years of ownership and the percentage of the facility owned by the railroads, the panel stated that the proper time to focus on such factors is at the contribution phase, not the liability phase. The panel affirmed the finding of joint and several arranger liability of Shell for chemicals that were spilled on the site by the buyer of Shell’s product, which was shipped by a common carrier F.O.B. delivery point. Eight circuit judges dissented from the order denying rehearing en banc, stating that the district court’s reliance on percentage and time of ownership finds support in the Restatement and other circuits, and that the panel’s interpretation of CERCLA arranger liability creates intra and inter circuit conflicts and imposes liability on a defendant that lacked control over products spilled following sale.

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