H & L Spotlight Brief

Horvitz & Levy LLP is pleased to feature one of its appellate briefs in a pending or recently decided appeal on a rotating quarterly basis. This quarter, we spotlight an amicus brief submitted on behalf of the International Association of Defense Counsel in support of a writ of certiorari presently pending at the merits-stage before the United States Supreme Court, Shell Oil Company v. United States, Case No. 07-1607. (Read the amicus brief.)

In the Shell case, the Supreme Court will address whether a manufacturer, after selling a commercially useful product to a purchaser who then causes contamination involving that product, can be liable as a so-called “arranger” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. sections 9601-9675. CERCLA imposes liability for cleaning up hazardous waste sites on four statutorily-enumerated classes of potentially responsible parties, including those who have arranged for the disposal of hazardous substances under 42 U.S.C. section 9607(a)(3). The U.S. Court of Appeals for the Ninth Circuit broadly interpreted such “arranger” liability to encompass a company that merely manufactured, sold, and shipped via common carrier a new, useful product for use in its original form to a customer who then leaked small portions of that product on its property.

The amicus brief argues that “arranger” liability is not boundless and that, in light of CERCLA’s plain language and legislative history, such liability applies only to those who arrange for the disposal or treatment of “waste.” As the amicus brief explains, new, useful products are not waste, which consists of those materials that have been cast aside because they were deemed useless or worthless. By contrast, new products are inherently useful given that they were created for a specific purpose and derive value from their present form. The brief argues that the Ninth Circuit disregarded CERCLA’s waste requirement by imposing “arranger” liability on the manufacturer and seller of a new, useful product. Finally, the amicus brief points out the severe and far-reaching ramifications that would result if, in contravention of CERCLA’s plain language, the manufacturers and sellers of new, useful products containing hazardous substances were exposed to the staggering financial consequences of CERCLA liability.

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