Petition for Writ of Certiorari — Shell Oil Co. v. United States (Nos. 07-1607, 07-1601)

Supreme Court of the Anited States

SHELL Or COMPANY,

Petitioner,

v.

UNITED STATES OF AMERICA; DEPARTMENT OF TOXIC

SUBSTANCES CONTROL, STATE OF CALIFORNIA

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

CISSELON NICHOLS HURD KATHLEEN M. SULLIVAN

SHELL OIL COMPANY Counsel of Record

One Shell Plaza QUINN EMANUEL URQUHART

910 Louisiana Street OLIVER & HEDGES, LLP

Houston, Texas 77002 51 Madison Avenue

(713) 241-0979 22d Floor

New York, NY 10010

LEWIS BRISBOIS BISGAARD

& SMITH, LLP

One Sansome Street

14th Floor

San Francisco, CA 94104

(415) 362-2580

Counsel for Petitioner

June 23, 2008

VWALSON-EPES PRINTING Co., Inc. — (202) 789-0096 — WASHINGTON, D.C. 20002

QUESTIONS PRESENTED

1. Whether liability for “arranging” for disposal of

hazardous substances under the Comprehensive

Environmental Response, Compensation and Liability

Act (“CERCLA”), 42 U.S.C. § 9607(a)(3), may be

imposed upon a manufacturer who merely sells and

ships, by common carrier, a commercially useful

product, transferring ownership and control to a

purchaser who then causes contamination involving

that product.

2. Whether joint and several liability may be

imposed upon several potentially responsible parties

under CERCLA, 42 U.S.C. § 9607(a), even where a

district court finds an objectively reasonable basis for

divisibility that would suffice at common law.

(i)

il

PARTIES AND RULE 29.6 STATEMENT

Shell Oil Company is a wholly owned subsidiary of

Shell Petroleum, Inc.

Also petitioning from the decision below, by

separate petition for certiorari, are:

The Burlington Northern and Santa Fe Railway

Company, successor in interest to the Atchison,

Topeka & Santa Fe Railway Co. and now named

BNSF Railway Company, is a wholly owned subsidi-

ary of Burlington Northern Santa Fe Corporation;

and

Union Pacific Railroad Company, formerly Southern

Pacific Transportation Company, is majority owned

by Union Pacific Corporation, which also wholly owns

Southern Pacific Rail Corporation.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .............cccccsccccsceesesscssereees i

PARTIES AND RULE 29.6 STATEMENT................. il

a ca diasie hacia aitemenenednnniaiaiion 1

ET 1

STATUTORY PROVISIONS INVOLVED.................... 2

STATEMENT OF THE CASE ........ccccccccccccsssscscesccoseces 2

a a dsc cnigemeinstinnemnsionstienmusiacen 3

snc ncncisniensn sdnsesobersdodeensionsan 4

i nsic eas cicnciciarcidnmesideiteieiicianseiliiii 6

Be nse caincceensiemanicminenaincinniadlinel 9

iss ccierhcrinienitsipeenintintnaenisiesiioniins 9

Be cs stininissnovicnpicemnnieniuiientntinninaiianie 10

E. The Dissent from Denial of Rehearing

SE I iiidicosdicia eda nig ieiidiiddntiiaiinndiiinennbiedbeessetioneoues 12

REASONS FOR GRANTING THE WRIT................. 13

I. THE NINTH CIRCUIT’S IMPOSITION

OF “ARRANGER” LIABILITY UNDER

CERCLA FOR THE MERE SALE OF A

COMMERCIALLY USEFUL PRODUCT

CONFLICTS WITH THE DECISIONS

GO GE RIPE TTP sccneserssccsnsccsesccccecessrsnsee 15

II. BY MAKING APPORTIONMENT PRO-

HIBITIVELY DIFFICULT TO PROVE,

THE NINTH CIRCUIT'S DECISION

CONFLICTS WITH GOVERNING COM-

MON LAW PRINCIPLES AND WITH

DECISIONS OF OTHER CIRCUITS.. ........... 21

(ili)

lV

TABLE OF CONTENTS—Continued

Ill. THE NINTH CIRCUITS EXPANSION

OF CERCLA LIABILITY RAISES

ISSUES OF NATIONAL IMPORTANCE

REQUIRING GUIDANCE FROM THIS

APPENDICES

APPENDIX A, United States v. Burlington

Northern & Santa Fe Railway Co., 520

F.3d 918 (9th Cir. Mar. 25, 2008) ..................

APPENDIX B, United States v. Atchison,

Topeka & Santa Fe Railway Co., Nos. CV-

F-92-5068 OWW, CV-F-96-6226 OWW,

CV-F-96-6228 OWW, 2003 WL 25518047

of 4 es Seen

APPENDIX C, 42 U.S.C. § 9607(a) ..........0...0....

Page

v

TABLE OF AUTHORITIES

CASES Page

AM Int'l, Inc. v. International Forging

Equipment Corp., 982 F.2d 989 (6th Cir.

Tee insdircinsnnseusniinitienbeniiieniiiigdeidamsiiandadanasiiel 13, 18

Amcast Indus. Corp. v. Detrex Corp., 2

F.3d 746 (7th Cir.1993)..............ccceceeeee 16, 17, 20

Cadillac Fairview/California Inc. v.

United States, 41 F.3d 562 (9th Cir.

RT nee ene eS Rana SE eM. 20

Catellus Devel. Corp. v. United States, 34

ee Se Rs PI ciiicsiceiicieceicesincnniideenbniigttiaines 20

Control Data Corp. v. S.C.S.C. Corp., 53

Fe ee Ce i icdevenrsecsnssnecidaosetenteorsans 24

Florida Power & Light Co. v. Allis

Chalmers Corp., 893 F.2d 1313 (11th

Ce aS 19

Freeman v. Glaxo Wellcome, Inc., 189 F.3d

I aa a et 18

General Elec. Co. v. AAMCO Transmis-

sions, Inc., 962 F.2d 281 (2d Cir. 1992)........... 19

In Re Bell Petroleum Services, 3 F.3d 889

I IG Te secitis cnticsiccsinedimaiendietiantanaln 23, 24, 25

Pneumo Abex Corp. v. High Point,

Thomasville & Denton R.R. Co., 142

fg 4 Lt Reena 18

United States v. Aceto Agr. Chemicals

Corp., 872 F.2d 1373 (8th Cir. 1989)............... 21

United States v. COMG Realty, 96 F.3d

PR cee OY ee a 20

United States v. Cello-Foil Products, Inc.,

100 F.3d 1227 (6th Cir. 1996)..................000.00.. 20

United States v. Chem-Dyne Corp., 572 F.

Supp. 602 (Oth Cir. 1963) .............0..00..0c000. 22, 28

vi

TABLE OF AUTHORITIES—Continued

Page

United States v. Hercules, Inc., 247 F.3d

706 (8th Cir. 2001).......... is ainiiialciaiisiaighaniat 11, 23, 24

United States v. Shell Oil Co., 294 F.3d

ne 19

United States v. Township of Brighton, 153

P36 S07 (Gth Cir. 19606)...........0cccccscceee000-- 23, 24

STATUTES

I ie 4

ET 4

seinen 4

el 4

Se 4

LT Re 4

a passim

OTHER AUTHORITIES

Compliance and Enforcement Annual!

Results: FY2007 Numbers at a Glance,

http://epa.gov/compliance/resources/repo

rts/endofyear/eoy2007/2007numbers.html........ 27

NPL Site Totals by Status, http://www.

epa.gov/superfund/sites/query/queryhtm/

EE OO 26

Restatement (Second) of Torts § 433A

ES 7, 10, 13, 22, 23

Senate Consideration and Postponement

of S. 1480 and Amendment and Passage

of H.R. 7020, 126 Cong. Rec. 30897 (Nov.

ee 21

Superfund’s 25th Anniversary: Capturing

the Past, Charting the Future, http://

www.epa.gov/superfund/25anniversary/

EES EL 26

vii

TABLE OF AUTHORITIES—Continued

Page

U.S. D.O.J. Environmental and Natural

Resources Division, Summary of Litiga-

tion Accomplishments, Fiscal Year 2007,

available at http://www.usdoj.gov/enrd/

Electronic_Reading Room/ENRD Litiga

tion Accomplishments Report for Fiscal

EE SRLS Oe ee 27

U.S. D.O.J. Press Release, W.R. Grace

to Pay for Cleanup of Asbestos

Contamination in Libby, Montana,

http://www.usdoj.gov/opa/pr/2008/March/

Ff RAs in 26

IN THE

Supreme Court of the Anited States

No. 07-___

SHELL OIL COMPANY,

Petitioner,

, A

UNITED STATES OF AMERICA; DEPARTMENT OF TOXIC

SUBSTANCES CONTROL, STATE OF CALIFORNIA

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

The amended opinion of the United States Court of

Appeals for the Ninth Circuit and the eight-judge

dissent from the denial of rehearing en banc (Pet.

App. la-76a) are reported at 520 F.3d 918. The

opinion of the district court (Pet. App. 77a-265a) is

available at 2003 WL 25518047.

JURISDICTION

The Ninth Circuit entered its amended judgment

and denied the petitions for rehearing en banc on

March 25, 2008. This Court has jurisdiction under 28

U.S.C. § 1254(1).

2

STATUTORY PROVISIONS INVOLVED

The relevant provisions of the Comprehensive

Environmental Response, Compensation and Liability

Act (“CERCLA”), 42 U.S.C. § 9607, are reproduced in

the Appendix (Pet. App. 266a-267a)

STATEMENT OF THE CASE

The decision below, in conflict with decisions of

other circuits, extends liability under the Compre-

hensive Environmental Response, Compensation and

Liability Act (“CERCLA”), 42 U.S.C. § 9607, to an

unprecedented extent in two respects. First, it imposes

“arranger” liability under CERCLA upon manufac-

turers that merely sell and ship, by common carrier,

useful products (not waste) to customers who acquire

control and ownership of those products upon the

common carrier’s arrival and then cause contamina-

tion with those products through sloppy operations.

_Second, it holds a manufacturer and property owners

with only a remote connection to that contamination

jointly and severally liable under CERCLA for

indivisible harm, even though a district court found

an objectively reasonable basis for calculating

apportionment of fault. The decision below creates or

contributes to splits of authority among the circuit

courts on both issues. In light of the enormous dollar

volume of CERCLA litigation and the frequent

insolvency of the primary polluters of contaminated

sites, the Ninth Circuit’s novel expansion of CERCLA

liability raises issues of national importance both for

property owners and for manufacturers of chemicais

and other routinely shipped commercial products.

The case arises from the contamination of a facility

for the storage, sale and application of agricultural

chemicals in Arvin, California. The now insolvent

3

operator of the facility, Brown & Bryant (“B&B”)

used sloppy processes that allowed leakages of

chemical products to penetrate groundwater beneath

the site. Shell Oil Company (“Shell”) manufactured,

sold and delivered by common carrier to B&B one of

the chemicals that B&B stored, sold and applied at

the facility. Two railroad companies, Burlington

Northern & Santa Fe Railway Co. and Union Pacific

Transportation Co. (collectively, the “Railroads”),

owned a small parcel of land at the site that they

leased to B&B.

Neither Shell nor the Railroads participated in

B&B’s operations or sloppy handling of chemicals.

The sole basis for this CERCLA action against Shell

is the claim that it supposedly “arranged for disposal

or treatment .. . of hazardous substances [it] owned

or possessed.” 42 U.S.C. § 9607(a)(3) (emphasis added).

CERCLA liability against the Railroads here rests on

their status as “the owner/s/ ... ofa... . facility”

where hazardous substances were disposed of. 42

U.S.C. § 9607(a)(1)&(2) (emphasis added). The dis-

trict court found both Shell and the Railroads liable

under CERCLA but apportioned liability, assigning

them 9% and 6% respectively. A panel of the Ninth

Circuit affirmed as to liability but reversed as to

apportionment, holding both Shell and the Railroads

jointly and severally liable for cleanup of the entire

site.

A. Statutory Background

CERCLA provides a cause of action to recover the

costs of responding to the release of hazardous sub-

stances into the environment from a “facility” at

which they have been disposed of. CERCLA specifies

that such recovery is permitted only from four

categories of “potentially responsible parties”:

4

(1) the owner and operator of . . . a facility,

(2) any person who at the time of disposal of any

hazardous substance owned or operated any

facility at which such hazardous substances were

disposed of, (3) any person who by contract,

agreement, or otherwise arranged for disposal or

treatment, or arranged with a transporter for

transport for disposal or treatment, of hazardous

substances owned or possessed by such person

..., and (4) any person who accepts or accepted

any hazardous substances for transport to dis-

posal or treatment facilities.

42 U.S.C. § 9607(a). Manufacturers of useful prod-

ucts are not listed among such potentially responsible

parties. Congress instead chose in CERCLA to deal

with manufacturers of useful products by taxing

them for contributions to the Hazardous Substance

Superfund. See 42 U.S.C. §§ 4611, 4661 & 4662.

Expressly incorporating definitions from the Solid

Waste Disposal Act, see 42 U.S.C. § 9601(29), CERCLA

defines “disposal” as “the discharge, deposit, injec-

tion, dumping, spilling, leaking, or placing of any...

hazardous waste into or on any land... so that [it]

may enter the environment ... ,” and defines

“treatment” as “any method, technique or process .. .

designed to change . . . hazardous waste so as to

neutralize such waste or so as to render such waste

nonhazardous ... .” 42 U.S.C. §§ 6903(3), 6903(34).

CERCLA does not define the term “arranged,” nor

specify whether or how liability among several

entities at any site mav be apportioned.

B. Factual Background

B&B, now defunct, owned and operated an agricul-

tural chemical storage, sale and application facility in

5

Arvin, California, from 1960 to 1988. Halfway

through this period, in 1975, B&B leased a .9-acre

parcel of land from the Railroads’ predecessors in

interest, using it to store fertilizer rigs. The railroad

parcel together with B&B’s parcel comprised a total

site of 4.7 acres. During its 29 years of operation,

B&B engaged in sloppy handling of chemical prod-

ucts that contaminated its facility, including by

rinsing hazardous chemicals into an unlined sump

that funneled contamination into the underlying

groundwater.

Shell was one of the manufacturers from whom

B&B purchased chemicals. Shell sold B&B a soil

fumigant called D-D—a nematocide that is injected

into soil to protect crop roots from attack by micro-

scopic worms. D-D was sold as a new product in final

form to B&B, which in turn either sold the product to

its customers or applied it to farmland for them.

Shell did not sell D-D to B&B on consignment and

B&B did not have to formulate D-D for use. Shell

delivered D-D to B&B in bulk shipments via common

carrier tank truck, and all sales were “FOB Destina-

tion,” meaning that title, ownership and control

passed to B&B when the common carrier arrived at

the B&B facility. The sales contracts expressly pro-

vided that B&B would provide safe and adequate

“facilities for receiving and storing all Products

delivered” and shall “unload all deliveries promptly

and at |B&B’s} own risk and expense.” Pet. App.

210a.

B&B spilled some small quantities of D-D in the

process of unloading deliveries and transferring the

chemical from the common carrier tank trucks into

B&B’s bulk storage tanks. B&B also spilled D-D

after delivery when it transferred the chemical from

6

its storage tanks to its nurse tanks, rigs and bobtail

trucks, and when it rinsed D-D onto the ground in

the course of washing out this equipment. While D-D

was a volatile chemical that normally vaporized upon

use, B&B’s use of an unlined sump to collect rinse-

water helped act as a conduit for D-D and other

hazardous substances to find their way into the

underlying groundwater.

C. Proceedings Below

In the carly 1980s, the United States Environ-

mental Protection Agency (“EPA”) and California’s

Department of Toxic Substances Control (“DTSC”)

found evidence of soil and groundwater contami-

nation at B&B’s facility. In 1988, the government

agencies issued a remediation order, the costs of

which drove B&B into insolvency. In 1996, EPA and

California filed CERCLA actions against Shell and

the Railroads for reimbursement of the remaining

investigation and clean-up expenses at the Arvin

facility.

The District Court for the Eastern District of Cali-

fornia (Wanger, J.), after a bench trial, issued detailed

findings in a 191l-page opinion. Pet. App. 77a-265a.

The district court found both Shell] and the Railroads

liable under CERCLA but found the harm to the site

divisible and found each of them responsible only for

a portion of that harm. The railroads were found

liable based on the fact that they owned land that

was part of the Arvin facility at the time of disposal

of hazardous chemicals. See 42 U.S.C. § 9607(a)(1)

and (2). The district court held Shell liable as an

entity that supposedly “arranged” for the disposal

of hazardous substances at the facility. See 42 U.S.C.

§ 9607(a\(3).

7

The district court rejected Shell’s argument that it

could not be an “arranger” cf waste disposal under

CERCLA merely because it sold useful products FOB

Destination by common carrier. The district court

conceded that “Shell did not retain ownership of its

products after delivery to B&B,” but suggested that it

was sufficient for arranger liability that “Shell knew

that spills were inherent in the transfer to storage

tank, delivery-unloading process.” Pet. App. 208a,

214a.

Having found Shell and the Railroads liable under

CERCLA, the district court found that there was

a reasonable basis for apportioning responsibility,

applying the test of Restatement (Second) of Torts

§ 433A. As the district court stated, “this is a classic

‘divisible in terms of degree’ case, both as to the time

period in which defendant’s conduct occurred, and

ownership existed, and as to the estimated maximum

contribution of each party’s activities that released

hazardous substances that caused Site contamina-

tion.” Pet. App. 241a.

As to the Railroads, the district court examined the

activities that took place on each portion of the

facility, and found that reieases at the parcel owned

by the Railroads could not have contributed more

than 10% of the overall site contamination. It also

concluded that the primary sources of groundwater

contamination at the facility were all located on

B&B's parcel. The court apportioned the harm by

multiplying the percentage of the overall land that

was owned by the Railroads (19.1%), the percentage

of the 29 years of B&B’s operations during which it

leased land from the Railroads (45%), and a discount

for the fact that only two of the three hazardous

products were ever stored on the Railroads’ land

8

(66%), arriving at an initial figure of 6%. Pet. App.

254a-255a. The court then increased that figure by

half to be conservative, assigning 9% of the total

liability to the Railroads. Pet. App. 255a.

As to Shell, based on extensive direct evidence

presented at trial, the district court calculated the

volume of spillage of Shell’s product D-D during bulk

deliveries and compared it with the total volume of

spillage of chemicals throughout the facility from the

combined activities of delivery, storage, transfer, and

equipment rinsing. Based on these calculations, the

court concluded that Shell’s divisible share was 6%.

Pet. App. 255a-260a.

In an opinion filed March 16, 2007, a panel of the

Ninth Circuit affirmed the district court’s finding

that Shell was liable as an “arranger,” but reversed

the district court’s divisibility determination and

instead imposed joint and several liability on Shell

and the Railroads for the entire cost of cleanup at the

Arvin facility.

On May 7, 2007, both Shell and the Railroads filed

petitions for rehearing and rehearing en banc. On

September 4, 2007, the panel amended its opinion to

make several corrections, including to hold that Shell

was not responsible for contamination caused at the

“Dinoseb hot spot” as Dinoseb was produced by Dow,

not Shell.

On March 25, 2008, the Ninth Circuit denied

rehearing en banc, although the panel further

amended some of the language in its opinion and

issued an amended final decision. Pet. App. la-74a.

Fight judges dissented from the denial of rehearing

en banc. Pet. App. 52a-75a.

9

D. The Decision Below

The final decision of the Ninth Circuit panel

(Berzon, J., joined by B. Fletcher, J., and Gibson, J.,

sitting by designation), as twice amended, opened by

expressing concern that the government “agencies

were .. . left holding the bag for a great deal of

money” in the Arvin site cleanup, Pet. App. 3a, and

suggested that CERCLA’s “key purpose” was to shift

environmental cleanup costs away from taxpayers to

available private entities. Pet. App. 9a. The panel

likewise emphasized that “CERCLA seeks to dis-

tribute economic burdens,” not allocate relative fault.

Pet. App. 36a.

1. Arranger Liability

In affirming the district court’s determination that

Shell was liable as an “arranger” under 42 U.S.C.

§ 9607(a)(3), the panel asserted that arranger liability

may be imposed when disposal of hazardous wastes is

merely “a foreseeable byproduct of” a sale of hazard-

ous substances that later will be disposed of. Pet.

App. 42a. Noting that “disposal’ need not be pur-

poseful” because it “includes such unintentional

processes as ‘leaking,” the panel suggested that it

followed that “an entity can be an arranger even if it

did not intend to dispose of the product.” Pet. App.

44a (emphasis added).

The panel acknowledged that prior decisions had

“refused to hold manufacturers liable as arrangers

for selling a useful product containing or generating

hazardous substances that /ater were disposed of.”

Pet. App. 45a (emphasis in original). But the panel

purported to distinguish those cases from this case on

the ground that here, “the sale of a useful product

10

necessarily and immediately results in the leakages

of hazardous substances.” Pet. App. 45a.

The panel likewise acknowledged but declined to

follow decisions in its own and other circuits holding

“that ownership or control at the time of transfer are

the sine qua non of nontraditional arranger liability.”

Pet. App. 48a. To the contrary, the panel concluded,

“(hjere, ownership at the time of disposal is not an

informative consideration,” and it “need not deter-

mine the precise moment when ownership trans-

ferred to B&B.” Pet. App. 49a. Even if B&B owned

the D-D once the common carrier arrived at its

facility, the panel suggested, Shell still could be liable

as an arranger under CERCLA merely because

spills always occurred when deliveries were made,

Shell arranged for transport by common carrier tank

trucks, and Shell gave B&B instructions, checklists

and rebates to encourage safe handling. Pet. App.

47a. It was sufficient, according to the panel, that

“Shell arranged for the sale and transfer of chemicals

under circumstances in which a known, inherent part

of that transfer was the leakage, and so the disposal,

of those chemicals”—even if Shell did not own those

chemicals or control that leakage. Pet. App. 50a.

2. Apportionment

Following the approach of other circuits, the Ninth

Circuit panel accepted that “apportionment is avail-

able at the liability stage in CERCLA cases,” and

agreed that it is appropriate to look “to common law

principles of tort in general, and the Restatement in

particular,” to determine when to impose joint and

several liability and when, and if so, how to apportion

fault. Pet. App. 15a. The panel also agreed with

other circuits, following the Restatement, “that harm

may be apportioned when ‘there exists a reasonable

11

basis for divisibility of a single harm.” Pet. App. 16a

(quoting United States v. Hercules, Inc., 247 F.3d 706,

717 (8th Cir. 2001)). Finally, the panel agreed with

other circuits that divisibility may be established by

volumetric, chronological or geographic criteria. Pet.

App. 16a n.18.

The panel nonetheless proceeded to reject the

district court’s findings based on just such criteria as

legally insufficient, and to reverse the district court’s

apportionment ruling as to both Shell and the Rail-

roads. Pet. App. 40a-4la, 36a-37a. Despite the

district court’s 191-page opinion including 80 pages of

fact findings, the panel held that the district court

had failed to establish a “reasonable estimate” or

“reasonable basis” for connecting Shell or the Rail-

roads to relevant harms. Pet. App. 16a n.18, 37a,

4la.

As to the Railroads’ share of liability, the panel

faulted the district court as a matter of law for using

“a ‘meat-axe’ approach . . . premised on percentages

of land ownership,” and a “simple fraction based on

the time that the Railroads owned the land.” Pet.

App. 34a, 35a. The panel suggested that only much

more detailed records establishing the Railroads’

relative contribution to contamination would suffice.

The panel conceded that a landowner will often have

no such documentation, and thus acknowledged that

the perverse result of its approach “may be that

landowner PRPs, who typically have the least direct

involvement in generating the contamination, will be

the least able to prove divisibility.” Pet. App. 36a.

As to Shell’s share of liability, the panel conceded

that “there is some volumetric basis for comparing its

contribution to the total volume of contamination

on the Arvin site,” but held that a pro rata share of

12

leakage is an insufficient proxy for a pro rata share of

contamination remaining and requiring cleanup on

the site. Pet. App. 37a-38a. The panel faulted the

district court for failing to account for “the possibility

that leakage of one chemical might contribute to

more contamination than leakage of another” or that

“some contaminants are more expensive than others

to extract from the soil.” Pet. App. 38a.

E. The Dissent from Denial of Rehearing En

Banc

Upon the Ninth Circuit's denial of rehearing

en banc, Judge Bea, joined by Chief Judge Kozinski

and Judges O’Scannlain, Kleinfeld, Gould, Tallman,

Callahan and N.R. Smith, wrote a detailed and

vigorous dissent. He began by noting that the panel’s

interpretation of arranger liability “creates . . . inter-

circuit conflicts in an area of the law where uniform-

ity among circuits is of paramount importance,”

and that the panel’s apportionment standard was

“novel and unprecedented” and imposed “impossible-

to-satisfy burdens on CERCLA defendants.” Pet.

App. 52a.

As to arranger liability, the dissent found that,

“(bly imposing arranger liability on a mere seller, the

panel stretches the meaning of arranger liability

beyond any cognizable limit and creates inter-circuit

splits.” Pet. App. 7la. Finding the panei’s inter-

pretation inconsistent with the statutory text, Judge

Bea noted that, even if “disposal” includes uninten-

tional processes like spilling and leaking, “arranger

liability requires the defendant to have ‘arranged for’

such disposal,” and noted further that arrangement

“connotes an intentional action” aimed at disposal

rather than merely at sale. Pet. App. 70a (emphasis

altered). The dissent further noted that the panel’s

13

interpretation of arranger liability conflicts with

decisions of other circuits that have held “that the

mere sale of a product is not ‘arranging for disposal”

under CERCLA. Pet. App. 71a (quoting AM Int’, Inc.

v. International Forging Equipment Corp., 982 F.2d

989, 999 (6th Cir. 1993)). Finally, the dissent rea-

soned that, at a minimum, arranger liability requires

actual control over hazardous waste disposal, and

that here, where “Shell relinquished control over the

D-D once the common carrier arrived at the B&B

site,” no such actual control could be established.

Pet. App. 73a.

As to apportionment, the dissent stated that the

panel had paid mere “lip-service” to the correct com-

mon law principle, reflected in the Restatement,

that only a reasonable estimate of apportionment is

requirs! in order to impose several rather than joint

and several liability. Pet. App. 53a. The dissent

reasoned that the panel had made that standard

impossible to satisfy as a practical matter. As to the

railroads, the panel had required “perfect information’

sufficient to trace every molecule of pollution to the

landlord’s parcel.” Pet. App. 53a-54a. As to Shell,

the panel had required such stringent proof of

divisible shares that it had imposed joint and several

liability on Shell for spillage of chemicals it had not

even sold. Pet. App. 73a-74a n.32.

REASONS FOR GRANTING THE WRIT

As eight judges of the Ninth Circuit stated in

dissenting from that court’s denial of en banc

rehearing, “The panel decision creates disorder in

CERCLA jurisprudence by causing . . . inter-circuit

conflicts in an area where uniformity over the

interpretation of the federal statutory law, based on

common law principles, is of the utmost importance.”

14

Pet. App.74a. Only review by this Court can dispel

this disorder and restore appropriate uniformity to

CERCLA jurisprudence.

The Ninth Circuit created a split among the

circuits, first, by extending “arranger” liability under

CERCLA to a manufacturer that merely sells a

useful product (not waste), transports it to a pur-

chaser by common carrier, and transfers ownership

and control of that product to the purchaser once the

common carrier arrives. This decision both contra-

dicts the plain language of the statute and poses the

threat of startling new CERCLA liability for the

thousands of companies that ship chemicals and

other products routinely in commerce by common

carrier.

The Ninth Circuit also deepened an inter-circuit

split on the interpretation of CERCLA apportion-

ment. Under the leading approach favored in other

circuits, a reasonable estimate of relative fault based

on objective evidence is sufficient, as it would be

under common law. Under the Ninth Circuit’s

approach, by contrast, a property owner or manufac-

turer must offer virtually perfect information before

relative fault may be apportioned. The Ninth Circuit

thus imposes a practically insurmountable burden

upon CERCLA defendants seeking to show that harm

should be prorated among severai entities with

different degrees of relationship to a contaminated

site. This approach transforms CERCLA, against

the intent of Congress, into a regime of de facto

mandatory joint and several liability.

The combined effect of these two erroneous depar-

tures from the settled law of other circuits is

especially devastating for sellers of chemical and

other products that may be mishandled by pur-

15

chasers after sale: as the en banc dissent noted,

“under the panel’s novel definition of ‘arranger’

liability,” and without any realistic chance of appor-

tionment based on reasonable estimates of relative

fault, “sellers of chemical products will be saddled

with the entire clean-up cost of a facility contami-

nated in part with their products, even if they lacked

control over the products spilled following the sale.”

Pet. App. 75a (emphasis added). Whatever the merit

of driving actual polluters into bankruptcy under the

Superfund statute, there is no evidence that Con-

gress intended such a result for companies that

merely sell useful products to those polluters and

ship them by common carrier.

This Court should grant this petition as well as the

separate petition for certiorari filed by the Railroads,

and consolidate both petitions for argument.

1. THE NINTH CIRCUIT’S IMPOSITION

OF “ARRANGER” LIABILITY UNDER

CERCLA FOR THE MERE SALE OF A

COMMERCIALLY USEFUL PRODUCT

CONFLICTS WITH THE DECISIONS OF

OTHER CIRCUITS.

The decision below for the first time allows a

chemical manufacturer to be found liable as an

“arranger” under 42 U.S.C. § 9607(a)(3) merely for

shipping commercially useful products, by common

carrier, to a purchaser that in turn allowed that

product to leak or spill upon the ground after acquir-

ing ownership and actual control. No other circuit

has given such broad scope to arranger liability. To

the contrary, the decision below conflicts with the

decision of every other circuit that has considered the

16

scope of arranger liability for manufacturers of com-

mercially useful products.

Specifically, no other circuit has found a manu-

facturer liable under CERCLA as an arranger of

hazardous substance disposal where, as here, that

manufacturer sells (1) a new useful product manu-

factured for sale (2) that is shipped by common

carrier with delivery FOB destination, so that

(3) title, possession and ownership are transferred to

the purchaser when the common carrier arrives, and

thus (4) the manufacturer lacks ownership or actual

control of the product that is spilled or leaked

into the environment. To the contrary, every circuit

that has addressed arranger liability claims against

manufacturers of useful products has rejected those

claims unless the manufacturer, unlike here, had

ownership or actual control of those products when

disposed of as waste.

A decision by the Seventh Circuit rejecting ar-

ranger liability under 42 U.S.C. § 9607(a)(3) on facts

very similar to those here vividly illustrates this

circuit conflict. In Amcast Indus. Corp. v. Detrex

Corp., 2 F.3d 746 (7th Cir. 1993) (Posner, J.), the

Seventh Circuit held that a chemical manufacturer

may not be held liable as an arranger where it ships

chemicals by common carrier to a purchaser that

spills them while transferring them into storage

tanks, causing the underlying groundwater to become

contaminated. Writing for the court, Judge Posner

concluded that, “when the shipper is not trying to

arrange for the disposal of hazardous wastes, but is

arranging for the delivery of a useful product, he is

not a responsible person within the meaning of the

statute.” Jd. at 751. The decision below is squarely

17

in conflict with this holding, which it does not men-

tion or attempt to distinguish.

In reaching this conclusion, the Seventh Circuit

construed the text of the statute in virtually the

opposite manner from the Ninth Circuit. The Ninth

Circuit panel held that, because “disposal” may

“include[] such unintentional processes as ‘leaking,”

it follows that “an entity can be an arranger even if it

did not intend to dispose of the product” as waste.

Pet. App. 44a (emphasis added). By contrast, Judge

Posner reasoned that the chemical manufacturer in

Amcast (Detrex) could not have arranged for disposal

of the chemical (TCE) that was spilled by the com-

mon carrier (Transport Services) unless it had hired

trucks to “carry the stuff” to the customer (Elkhart)

with the intent that those chemicals would be spilled

upon the ground—a hypothesis he deemed absurd:

Detrex hired a transporter, all right, but it did

not hire it to spill TCE on Elkhart’s premises.

Although the statute defines disposal to include

spilling, the critical words for present purposes

are “arranged for.” The words imply intentional

action. The only thing that Detrex arranged for

Transport Services to do was to deliver TCE to

Elkhart’s storage tanks. It did not arrange for

spilling the stuff on the ground. No one arranges

for an accident. ...

Amcast, 2 F.3d at 751 (emphasis added). Judge

Posner’s opinion further noted that “[i]t would be an

extraordinary thing to make shippers strictly liable

under the Superfund statute for the consequences of

accidents to common carriers . . . that the shippers

had hired in good faith to ship their products.” Jd.

18

Like the Seventh Circuit, the Second, Fourth, Sixth

and Eleventh Circuits have ruled, in conflict with the

decision below, that arranger liability may not be

imposed upon the sale of useful products in the

absence of ownership or actual control:

In Freeman v. Glaxo Wellcome, Inc., 189 F.3d 160

(2d Cir. 1999), the Second Circuit held that a defen-

dant manufacturer was not liable as an arranger for

the clean-up of chemicals sold to a purchaser who had

opened some of them in its laboratory while relocat-

ing, id. at 162, concluding that “[t]here is no evidence

in the record before us to support an inference that

the transaction at issue was anything more than a

sale,” id. at 164.

In Pneumo Abex Corp. v. High Point, Thomasville

& Denton R.R. Co., 142 F.3d 769 (4th Cir. 1998),

the Fourth Circuit held that railroads selling used

journal bearings to a foundry for processing into new

journal bearings were not liable as arrangers for

contamination at the foundry because “the conversion

agreements between the [floundry and the [railroads]

were not transactions for disposal,” and “the removal

of contaminants was not the purpose of the trans-

action.” Jd. at 775. The court there noted the impor-

tance of distinguishing “whether a transaction was

for the discard of hazardous substances or for the sale

of valuable materials.” /d.

In AM Int'l, Inc. v. International Forging Equip-

ment Corp., 982 F.2d 989 (6th Cir. 1993), the Sixth

Circuit held that the seller of a manufacturing

facility, including chemicals used in manufacturing

on an “as is, where is” basis, was not liable as an

arranger, noting that “courts . . . have consistently

held that the mere sale of a product is not ‘arranging

for disposal’ under the statute.” Jd. at 992, 999.

19

And in Florida Power & Light Co. v. Allis Chalmers

Corp., 893 F.2d 1313 (11th Cir. 1990), the Eleventh

Circuit held that sellers of transformers containing a

hazardous substance were not arrangers. The court

noted that, “[i/f a party merely sells a product,

without additional evidence that the transaction

includes an ‘arrangement’ for the ultimate disposal of

a hazardous substance, CERCLA liability would not

be imposed.” Jd. at 1317. The Court concluded as

a matter of law that “the transactions involved

(nothing] more than a mere sale.” Jd. at 1319. In

particular, the court held that “[njothing in the

record supports an inference that the manufacturers

arranged for the disposal of hazardous waste by

selling the transformers.” Id.

The Ninth Circuit panel’s definition of arranger

liability conflicts with each of these decisions by other

circuits; indeed it conflicts even with prior authority

in the Ninth Circuit itself, which had held, in a case

involving the potential “arranger” liability of the

United States government, that “control is a crucial

element of the determination of whether a party is an

arranger.” United States v. Shell Oil Co., 294 F.3d

1045, 1055 (9th Cir. 2002) (W. Fletcher, J.); see id. at

1058 (noting that it is “the obligation to exercise

control over hazardous waste disposal, and not the

mere ability or opportunity to control the disposal

of hazardous substances, that makes an entity

an arranger under CERCLA’s liability provision”)

(quoting General Elec. Co. v. AAMCO Transmissions,

Inc., 962 F.2d 281, 286 (2d Cir. 1992) (emphasis

omitted)).’

mg

‘The panel sought to distinguish the Sheil decision on the

ground that the federal government there was a buyer rather

than a seller, see Pet. App. 43a n.33, but it is difficult to see why

20

The panel decision likewise conflicts with the

rulings of other circuits in holding that a seller may

be liable as an arranger for “unintentional processes”

that “need not be purposeful,” regardless of the

seller’s intent and regardless of who is responsible for

causing the leakage. Pet. App. 44a. Like the Seventh

Circuit in Amcast as discussed above, the Sixth

Circuit has held that intent to dispose of hazardous

substances is the touchstone of arranger liability. In

United States v. Cello-Foil Products, Inc., 100 F.3d

1227 (6th Cir. 1996), the court considered whether

parties returning 55-gallon drums to their solvent

supplier intended, by return of the drums, to enter

into an arrangement for disposal of residual solvent

in the drums. The court held that a person subject to

arranger liability must have “intended to enter into

a transaction that included an ‘arrangement for’

the disposal of hazardous substances,” and that no

such intent was present there. Jd. at 1231. See also

United States v. COMG Realty, 96 F.3d 706, 714 (3d

Cir. 1996) (noting that, when read alongside the term

“disposing,” the terms “leaking’ and ‘spilling’ should

be read to require affirmative human action.”). The

Ninth Circuit’s novel interpretation of CERCLA can-

not be reconciled with these decisions.°

that makes any difference to the holding that actual “control,” at

a minimum, is a prerequisite to statutory arranger status.

*To be sure, arranger liability under 42 U.S.C. § 9607(a)(3)

may extend beyond traditional “direct arranger” liability for

transactions entered into solely for the purpose of disposing of

hazardous waste. So-called “broader arranger” liability has

been imposed upon sales of waste thinly disguised by a marginal

beneficial purpose. See Cadillac Fairview/California Inc. v.

United States, 41 F.3d 562, 565-66 (9th Cir. 1994) (contami-

nated styrene returned by rubber manufacturers for re-distilla-

tion in exchange for account credits); Catellus Devel. Corp. v.

21

Against this backdrop, the panel decision repre-

sents a sharp departure from previous interpretation

of CERCLA arranger liability as applied to the sale of

useful products. Never before has arranger liability

been imposed merely because spillage is a “foresee-

able byproduct” of, or supposedly “inherent in,” the

process of delivering bulk chemicals or other prod-

ucts, as the panel held below. Certiorari is war-

ranted in this case to resolve the resulting split

among the federal circuits.

Il. BY MAKING APPORTIONMENT PRO-

HIBITIVELY DIFFICULT TO PROVE,

THE NINTH CIRCUIT’S DECISION

CONFLICTS WITH GOVERNING COM-

MON LAW PRINCIPLES AND WITH

DECISIONS OF OTHER CIRCUITS.

It is well-settled that CERCLA allows apportion-

ment of fault at the liability stage among potentially

responsible parties. Congress considered making all

CERCLA liability joint and several, but declined to

do so out of concern that this might “impose financial

responsibility for massive costs and damages awards

on persons who contributed minimally (if at all) to

a release or injury.” 126 Cong. Rec. 30897, 30972

United States, 34 F.3d 748, 750-52 (9th Cir. 1994) (sale of spent

batteries for extraction of lead plates). Broader arranger liabil-

ity likewise has been upheld where a manufacturer sends a

product to a formulation process that creates hazardous waste,

but retains ownership and control throughout the process. See

United States v. Aceto Agr. Chemicals Corp., 872 F.2d 1373,

1381-82 (8th Cir. 1989) (pesticide manufacturers used formula-

tor to create commercial-grade pesticides that were then shipped

back to them for sale or shipment to their customers). But the

facts here, involving a sale wholly of a useful product, and the

transfer of ownership at the facility gate, are entirely different.

22

(Nov. 24, 1980) (statement of Sen. Helms). As the

leading early decision on this issue observed,

Congress chose “to avoid a mandatory legislative

standard applicable in all situations which might

produce inequitable results in some cases.” United

States v. Chem-Dyne Corp., 572 F. Supp. 802, 808

(S.D. Ohio 1983).

Thus, while CERCLA as enacted is silent on appor-

tionment, it is well accepted that Congress intended

relative shares of liability to be governed by “tra-

ditional and evolving principles of common law,”

following the lead of § 433A of the Restatement

(Second) of Torts. Chem-Dyne, 572 F. Supp. at 808.

The Restatement provides that “[djamages for harm

are to be apportioned among two or more causes

where (a) there are distinct harms, or (b) there is a

reasonable basis for determining the contribution of

each cause to a single harm.” Restatement (Second)

of Torts § 438A. Commentary to the Restatement

makes clear that a “reasonable basis” for apportion-

ment may rest upon a practical approximation or

estimate grounded in objective evidence and reason-

able assumptions; it does not depend upon absolute

precision, certainty or documentation. Jd. “|W\jhere

cattle of two or more owners trespass upon the

plaintiffs land and destroy his crop,” for example, the

damage should “be apportioned among the owners of

the cattle, on the basis of the number owned by each,

and the reasonable assumption that the respective

harm done is proportionate to that number.” Jd. at

Comment d.

The Fifth, Sixth and Eighth Circuits have applied

these Restatement principles faithfully to CERCLA

apportionment, allowing division of fault at the liabil-

ity stage to be guided by reasonable estimates and

23

assumptions and rejecting arguments that absolute

certainty is required. In Jn Re Bell Petroleum Services,

3 F.3d 889, 904 n.19. (5th Cir. 1993), for example, the

Fifth Circuit held that “a rough approximation is all

that is required under the Restatement [(Second) of

Torts].” As Bell Petroleum explains:

Essentially, the question whether there is a

reasonable basis for apportionment depends on

whether there is sufficient evidence from which

the court can determine the amount of harm

caused by each defendant. If the expert testi-

mony and other evidence establishes a factual

basis for making a reasonable estimate that will

fairly apportion liability, joint and several liabil-

ity should not be imposed in the absence of

exceptional circumstances. The fact that appor-

tionment may be difficult, because each defen-

dant’s exact contribution to the harm cannot be

proved to an absolute certainty, or the fact that it

will require weighing the evidence and making

credibility determinations, are inadequate grounds

upon which to impose joint and several liability.

Id. at 903 (emphasis added).

On this point, the Sixth and Eighth Circuits are in

accord with the Fifth. See United States v. Hercules,

247 F.3d at 719 (following Bell Petroleum and stating

that “la] defendant need not prove that its ‘waste did

not, or could not, contribute’ to any of the harm at a

CERCLA site”); United States v. Township of Brighton,

153 F.3d 307, 320 (6th Cir. 1998) (holding sufficient

any “reasonably ascertainable” basis for apportion-

ment). Those circuits specifically endorsed the very

bases for approximation used by the district court in

its detailed findings below. See Hercules, 247 F.3d at

719 (noting that it is “possible to prove divisibility of

24

single harms based on volumetric, chronological, or

other types of evidence”); Township of Brighton, 153

F.3d at 320 (noting that “time seems the most

obvious and probable way that an operator can show

divisibility”).

The Ninth Circuit panel below purported to apply

these Restatement principles, but found “no reason-

able basis for apportioning the defendants’ harm”

here despite the district court’s meticulous calcula-

tions. Pet. App. 25a n.27. Observing “something of

a circuit split on the degree of specificity of proof

necessary to establish the amount of liability appor-

tioned to each PRP,” Pet. App. 40a n.32, the panel

acknowledged that decisions like Bell Petroleum and

Hercules “have permitted informal estimates or data

rather than more exact calculations,” while asserting

that other decisions have been more demanding,

citing, for example, Control Data Corp. v. S.C.S.C.

Corp., 53 F.3d 930, 934 n.4 (8th Cir. 1995) (requiring

“concrete and specific evidence” to support apportion-

ment). The panel simply asserted that it “need not

weigh in on this dispute,” as in its view, “the district

court’s extrapolations could not be upheld under even

a forgiving standard.” Pet. App. 40a n.32.

This assertion, however, cannot be squared with

the panel’s actual ruling. In jettisoning the district

court’s Getailed temporal, spatial and volumetric

comparisons as insufficiently precise as a matter of

law, the panel in effect placed itself on the strict side

of the circuit split it identified, and exacerbated any

existing circuit conflict with Bell Petroleum and its

kin. Under the standard that governs in the Fifth,

Sixth or Eighth Circuits, the district court’s findings

surely would have been upheld. As the dissent from

denial of en banc rehearing put the point, the panel

25

paid mere “lip-service to the Restatement test” before

proceeding “effectively to disregard it.” Pet. App.

53a.

For example, the panel rejected as too simple the

district court’s careful volumetric comparison of the

D-D spillage upon delivery with the spillage at the

site overall as a reasonable basis for apportionment.

The panel thus transformed the 6% pro rata liability

imposed upon Shell by the district court into joint

and several liability on Shell’s part for 100% of

the harm at the site—simply for having shipped

chemicals to a purchaser by common carrier, FOB

Destination. The panel held that percentages of

leaks are an inadequate proxy for percentages of

contamination, ana suggested that the district court

would have had to account for “the possibility that

leakage of one chemical might contribute to more

contamination than leakage of another” or that “some

contaminants are more expensive than others to

extract from the soil,” in order to apportion Shell’s

share of liability at the Arvin site. Pet. App. 38a.

But as Judge Bea and the other dissenters from

denial of rehearing en banc observed, this is like

saying that, in the Restatement cattle illustration, a

court should have taken account of the fact that “one

owner's cattle might have idly stood by while the rest

destroyed the crops; one owner's cattle might have

more heavy-footed bulls, and less lightfooted heifers.”

Pet. App. 64a.

In other words, the panel’s standard for the speci-

ficity of proof required for CERCLA apportionment

necessarily departs from the reasonable estimate

standard set forth in the Restatement and followed in

cases like Bell Petroleum. As further explained in the

separate petition filed by the Railroads, this newly

26

strict Ninth Circuit proof standard for apportionment

is virtually impossible for any CERCLA defendant to

meet as a practical matter. It thus would transform

CERCLA, under which Congress declined to impose

mandatory joint and several liability, into a regime

that virtually requires such indivisible fault. Be-

cause the Ninth Circuit decision departs from govern-

ing common law principles, contravenes Congress’s

intent, and splits from the decisions of other circuits,

it warrants this court’s review.

Ill. THE NINTH CIRCUIT’S EXPANSION OF

CERCLA LIABILITY RAISES ISSUES OF

NATIONAL IMPORTANCE REQUIRING

GUIDANCE FROM THIS COURT.

The sheer magnitude of compliance costs under

CERCLA underscores the importance of properly

determining who potentially responsible parties are

under CERCLA and properly apportioning liability

among them. As of June 18, 2008, the EPA lists

1,255 Superfund sites and 60 proposed sites on its

“National Priorities List,” and an additional 326 sites

have already been deleted from the list. See NPL

Site Totals by Status, http://www.epa.gov/superfund/

sites/query/queryhtm/npltotal.htm. Private party

liability has recently been assessed as high as $250

million for a single site. See U.S. D.O.J. Press

Release, W.R. Grace to Pay for Cleanup of Asbestos

Contamination in Libby, Montana, http://www.usdoj.

gov/opa/pr/2008/March/08_enrd_194.html.

In the first twenty-five years of the Superfund,

EPA enforcement to clean up Superfund sites has

resulted in aggregate private party funding commit-

ments of nearly $24 billion. See Superfund’s 25th

Anniversary: Capturing the Past, Charting the

27

Future, http://www.epa.gov/superfund/25anniversary/

index.htm. In 2007 alone, EPA enforcement of

CERCLA resulted in agreements for responsible

private parties to pay over $1 billion in remediation

costs, including $314 million in costs tc reimburse the

EPA for past response and oversight. See Compli-

ance and Enforcement Annual Results: FY2007

Numbers at a Glance, http://epa.gov/compliance/re

sources/reports/endofyear/eoy2007/2007numbers.html.

In the same year, the Department of Justice recov-

ered approximately $200 million for the Superfund to

finance future cleanups and secured commitments for

responsible parties to clean up sites at estimated

costs in excess of $270 million. See U.S. D.OW.

Environmental and Natural Resources Division,

Summary of Litigation Accomplishments, Fiscal Year

2007 at 6, available at http://www.usdoj.gov/enrd/

Electronic_Reading Room/ENRD_Litigation_Accomp

lishments_Report_for_Fiscal_Year_2007.PDF.

Given these levels of potential exposure, it is

critical that private parties know when they may be

engaged in activities that could result in CERCLA

liability and the extent to which they could be held

responsible for remediation costs. This is especially

so because CERCLA liability drives many primary

polluters into bankruptcy, leaving other solvent par-

ties vulnerable to government attempts to reallocate

the orphaned shares. The existence of different stan-

dards in different jurisdictions generates a situation

in which potentially responsible parties cannot rea-

sonably predict the consequences of their actions and

thus cannot tailor their behavior accordingly. Recog-

nizing the dangers of such uncertainty, all courts

that have addressed the issue of CERCLA liability,

including the Ninth Circuit, have identified the im-

portance of national uniformity in the construction

28

of CERCLA. See United States v. Chem-Dyne Corp..,

572 F. Supp. 802, 809 (observing, in the CERCLA

liability context, that “[flederal programs that by

their nature are and must be uniform in character

throughout the nation necessitate the formulation of

federal rules of decision” (citation omitted)).

Even the panel below recognized as much, purport-

ing to “follow Chem-Dyne and all the courts of

appeals that have .. . [held] that the resulting

standard must be a uniform federal rule,” Pet. App.

15a (citing cases), and noting that “the legislative

history of CERCLA supports such an approach, as

does its policy of favoring national uniformity so as to

discourage ‘illegal dumping in states with lax liability

laws.” Pet. App. 15a (quoting Chem-Dyne, 572 F.

Supp. at 809).

The decision below, however, in fact thwarts this

objective of national uniformity. It creates a unique

CERCLA liability scheme for the Ninth Circuit.

In this regime, “arranger” liability is extended far

beyond its reach in other jurisdictions, so that even

manufacturers who merely ship useful products by

common carrier can be held responsible for fully

remediating contaminated sites. And in this regime,

apportionment is so difficult to prove that CERCLA

imposes virtually certain joint and several liability on

even minor players with the most attenuated

connection to any contamination. The Ninth Circuit

should not be permitted to carve itself out of the

CERCLA jurisprudence applicable to the rest of the

Nation without this Court’s review.

)

29

CONCLUSION

This Court should grant this petition as well as the

separate petition for certiorari filed by the Railroads,

and consolidate both petitions for argument.

Respectfully submitted,

CISSELON NICHOLS HURD KATHLEEN M. SULLIVAN

SHELL OIL COMPANY Counsel of Record

One Shell Plaza QUINN EMANUEL URQUHART

910 Louisiana Street OLIVER & HEDGES, LLP

Houston, Texas 77002 51 Madison Avenue

(713) 241-0979 22d Floor

MICHAEL K. JOHNSON pont eed 10010

LEWIS BRISBOIS BISGAARD

& SMITH, LLP

One Sansome Street

14th Floor

San Francisco, CA 94104

(415) 362-2580

Counsel for Petitioner

June 23, 2008