Amicus Curiae Brief — Shell Oil Co. v. United States (Nos. 07-1607, 07-1601)

FILED

NOV 2 1 2008

OFFICE OF THE CLERK

No. 07- 07-1 Consolidated

IN THE

Supreme Court of the Anited States

SHELL OIL COMPANY,

Petitioner,

v.

UNITED STATES OF AMERICA, ET AL.

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF AMICUS CURIAE PRODUCT LIABILITY

ADVISORY COUNCIL, INC. INSUPPORT OF

PETITIONER SHELL OIL COMPANY

HUGH F. YOUNG, JR. CHARLES H. MOELLENBERG, JR.

Product Liability (Counsel of Record)

Advisory Council LEON F. DEJULIUS, JR.

1850 Centennial Park JEAN M. MOSITES

Drive JONES DAY

Reston, VA 20191 500 Grant Street, Suite 4500

Tel.: (703) 264-5300 Pittsburgh, PA 15219-2502

Tel.: (412) 391-3939

Counsel for Amicus Curiae

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

34D

WTS Re aot

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .............cccccccccesceseseeeeeeees ii

INTEREST OF THE AMICUS CURIAE. ......0.00.0000+- 1

BO oc ccscsicrcccscccnceescnececnccsesossonsesecenses 2

ET eer a ce ee 3

EES ace ae 6

I. ARRANGER LIABILITY SHOULD

REQUIRE A PURPOSEFUL INTENT TO

DISPOSE OF A HAZARDOUS

TES 6

A. The Plain Language Of CERCLA

Limits Arranger Liability to

Be ai icantecncoeonsn 6

B. The Common Law Would Not Permit

Manufacturer Liability For The Sale

Of A Useful Product Spilled By

TEER SE Ton vet ner iat a 11

Il. THE COURT SHOULD INTERPRET

CERCLA IN MANNER THAT CREATES

UNIFORMITY AND CONSISTENCY. .......... 17

EINE seciiesntedsnicrtoessiiiiunbuccissinaninslendipiaineniidinpeiicibsns 20

il

TABLE OF AUTHORITIES

Page

Cases

Alvarez v. New Haven Register, Inc.,

735 A.2d 306 (Comm. 1908)...................0....ccccccess. 12

Amcast Indus. Corp. v. Detrex Corp.,

ee & fy Le renee 9,10

Bailey v. United States, 516 U.S. 137 (1995)............ 7

Cooper Indus., Inc. v. Aviall Servs., Inc.,

| IES a 6, 9

Fla. Power & Light Co. v. Allis Chalmers

Corp., 893 F.2d 1313 (11th Cir. 1990)................ 19

Franklin County Cenvention Facilities Auth.

v. Am. Premier Underwriters, Inc., 240

Fe re Ge Gs BE evecccccccecenscccesecscoessccesscees 16

Gen. Motors Corp. v. Romein,

Ss enaiicupenbonuseedinns 15

Illinois v. City of Milwaukee,

a 13

Isbrandtsen Co. v. Johnson,

I i ae sicessbiemiis 12

Jordan v. S. Wood Piedmont Co.,

805 F. Supp. 1575 (S.D. Ga. 1992).................0000 16

Kaiser Aluminum & Chem. Corp. v. Bonjorno,

a aE 14

Key Tronic Corp. v. United States,

I is secession 13

TABLE OF AUTHORITIES

(continued)

Page

Landgraf v. USI Film Prods.,

a ssn carscenencnstonisnnndion ... 14, 15

Matthiessen v. Vanech,

836 A.2d 394 (Conn. 2003)...............0...02cccccc cece ee 12

Morton Int'l, Inc. v. A.E. Staley Mfg. Co.,

343 F.3d 669 (Sd Cir. 2003)................ccceccccccccoesse 18

Oncale v. Sundowner Offshore Servs., Jnc.,

EE 6

Phillips v. Larry’s Drive-In Pharmacy, Inc.,

647 S.E.2d 920 (W. Va. 2007) .............ccccccceceeeeees 12

Pneumo Abex Corp. v. High Point,

Thomasville & Denton R.R. Co.,

142 F.3d 769 (4th Cir. 1998)...........................000. 10

RR. St. & Co. v. Pilgrim Enters., Inc.,

166 S.W.3d 232 (Tex. 2005) 2.0.00... ..ccccccc cece eec cece 17

Rake v. Wade, 508 U.S. 464 (1993)................0ccccccceee ]

State of Rhode Island v. Lead Indus. Ass'n,

Inc., _ A.2d ___, 2008 WL 2605396 (R.I.

Pe RPE a ev ei a 13

United States v. Aceto Agric. Chems. Corp.,

872 F.2d 1373 (@th Cir. 1969)............................. 10

United States v. Atchison, Topeka & Santa Fe

Ry. Co., Nos. CV-F-92-5068, et a/., 2003 WL

25518047 (E.D. Cal. 2003) ...............c cece eee 3, 4, 15

United States v. Atl. Research Corp.,

os Se ee UL, ee 7

United States v. Bestfoods, 524 U.S. 51 (1998)... 7, 13

iv

TABLE OF AUTHORITIES

(continued)

Page

United States v. Burlington N. & Santa Fe Ry.

Co., 520 F.3d 918 (9th Cir. 2008)........ 2, 5, 8, 9, 19

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

100 F.3d 1227 (6th Cir. 1996) .....0000.. ee 10

United States v. Hercules, Inc.,

247 F.3d 706 (Sth Cir. 2001) ...............cccccccccsccsees 19

United States v. Texas, 507 U.S. 529 (1993)........... 12

Viera v. Cohen, 927 A.2d 843 (Conn. 2007)............. 12

In re W.W., 454 N.E.2d 207 (Ill. 1983) ...........0000..... ll

Statutes

CE RTE 15

a il 15

ET Ee EEE 15

42 U.B.C. § DBO TENS).......2.02.0000.ccccececesesesesescoceccceseses 6

Miscellaneous

THE AMERICAN HERITAGE DICTIONARY OF THE

ENGLISH LANGUAGE: FOURTH EDITION

ESR ABR een Renee Re ea 7,8

2 AMERICAN LAW OF PRODUCTS LIABILITY 3D

TIT icteeih litical iain iniadbiannbinapebeeusenteties 13

Roger K. Ferland & Marilyn D. Cage, Using

RCRA to Interpret CERCLA Liability:

What is “Arranging For Disposal”? 23

FR, Heres Cells Gt Ee oreceneccncccenassessccssconsccccesoes 18

v

TABLE OF AUTHORITIES

(continued)

Page

RESTATEMENT (SECOND) OF TORTS (1977 &

Rs TT isinsthiitcshiciniaignanidiiiibaaniddanibtianincnasesaneeerins 14

3 NORMAN J. SINGER, STATUTES AND

STATUTORY CONSTRUCTION (2001) ....................0 11

Sarah E. Stevenson, Casenote, Broadening

Arranger Liability Under Alaska State

Law: The Ninth Circuit’s Interpretation of

Berg v. Popham, 17 VILL. ENVTL. L.J. 477

CTI ictitedniaininanpistiinnaiadidbabennaiiiccimeietembeasudnies 18, 19

WEBSTER’S THIRD NEW INTERNATIONAL

DICTIONARY OF THE ENGLISH LANGUAGE

ERIE consoninesccsonsiantenanincsesionneiosuassiinintiendminmnnennendsiin 8

BRIEF OF

PRODUCT LIABILITY ADVISORY COUNCIL, INC.

AS AMICUS CURIAE IN SUPPORT OF

PETITIONER

INTEREST OF THE AMICUS CURIAP:

Product Liability Advisory Council, Inc. (“PLAC”)

is a non-profit association with 125 corporate

members (including Shell Oil Company, a Petitioner

here) representing a broad cross-section of American

and international product manufacturers. These

companies seek to contribute to the improvement and

reform of the law in the United States and elsewhere,

with emphasis on the law governing the liability of

manufacturers of products. PLAC’s perspective is

derived from the experiences of a_ corporate

membership that spans a diverse group of industries

in various facets of the manufacturing sector. Since

1983, PLAC has filed over 725 briefs as amicus curiae

in both state and federal courts, including this Court,

presenting the broad perspective of product

manufacturers seeking fairness and balance in the

application and development of the law as it affects

product liability. Appendix A lists PLAC’s corporate

members.

! No counsel for a party authored this brief in whole or in part,

and no counsel or party made a monetary contribution intended

to fund the preparation or submission of this brief. No person

other than amicus curiae or its counsel made a monetary

contribution to its preparation or submission. The parties have

consented to the filing of this brief.

INTRODUCTION

The Ninth Circuit held a product manufacturer

liable under the Comprehensive Environmental

Response, Compensation and _ Liability Act

(“CERCLA”) for having “arranged for disposal . . . of

hazardous substances” because a commercial carrier,

after the sale of the product, unintentionally spilled a

minute portion of the product at the buyer’s facility.

Based on this tenuous connection, the Ninth Circuit

held the manufacturer jointly and severally liable for

all contamination at the site—including

contamination from products never manufactured or

sold by the company. As the eight judges who

dissented from the Ninth Circuit’s denial of en banc

review declared, the panel’s decision is “novel and

unprecedented.” United States v. Burlington N. &

Santa Fe Ry. Co., 520 F.3d 918, 952 (9th Cir. 2008)

(Bea, J., dissenting from denial of rehearing en banc).

The Ninth Circuit’s decision should be reversed.

The Ninth Circuit’s interpretation of CERCLA cannot

be squared with the text of the statute. Rather than

interpreting the statute according to its ordinary

meaning, in deference to the common-law and with

disfavor toward retroactive laws, the Ninth Circuit

imposed limitless and uncontrollable liability for

manufacturers, without any indicia of congressional

intent. The Ninth Circuit’s distortion of the meaning

of “arranger liability” is modern alchemy,

transmuting language of limitation into a pot of gold

for the Government.

Moreover, this Court may bring national

uniformity to this important area of law only by

rejecting the case-by-case multi-factor analysis

dictated by the Ninth Circuit’s opinion. The courts of

appeals have struggled to no avail for almost three

3

decades to find a common definition of arranger

liability. The steady, incremental expansion of

liability far beyond the language or purpose of the

statute is likely to continue unless the Court bases its

decision on the statutory language. This Court

should reverse the Ninth Circuit and apply a bright-

line rule that requires purposeful intent to dispose of

hazardous substances.

BACKGROUND

Shell did not own or operate the facility that is now

_ a Superfund Site. It did not dispose of hazardous

substances there. Shell’s only connection to the

contaminated facility was as the manufacturer and

seller over a number of years of the soil fumigant D-

D, which is used to kill microscopic worms that

attack the roots of crops. D-D was not a waste

product, but a valuable and useful commercial

product used safely by farmers for decades. D-D was

transported to the facility by common carrier trucks,

FOB destination. A condition of sale was that the

buyer was responsible for the product when it arrived

at the facility. United States v. Atchison, Topeka &

Santa Fe Ry. Co., Nos. CV-F-92-5068, et al, 2003 WL

25518047, at *5 (E.D. Cal. 2003) (citing Ex. 1199,

Conditions of Sale, at 7, section 3).

The district court found that the only releases

remotely connected to Shell were from occasional

drips and spills of D-D during commercial carriers’

transfer of the product at the buyer’s facility. Shell

was aware that drips could occur and provided

instructions to the buyer for safe handling. While the

district court found that some drips during the

transfer into the buyer's storage tanks were

unavoidable, it concluded that the drips were usually

4

captured as they occurred in five-gallon buckets.

Atchison, 2003 WL 25518047, at *20. The process of

transferring D-D from delivery trucks to the

operator’s tanks resulted in small quantities of D-D

reaching the ground when the carrier or buyer failed

to secure or tipped over the buckets. Jd. at *21, *22.

Moreover, the district court found that, even when D-

D was spilled, the product would harmlessly

evaporate from the soil unless water was present. /d.

at *9, *13. Significantly more spills, leaks and

contamination, however, were due to the operator’s

subsequent transfer and uses of D-D and other

chemicals. Jd. at *5-9. Here, it is undisputed that

99% of the chemical mass in the groundwater was

from the waste pond and sump where the operator

rinsed its equipment. Jd. at *12. Shell had no

connection to this contamination source. The court

found that the facility owner “was a sloppy operator.”

Id. at *26.

Over the course of several years, the EPA

performed both removal and remediation at the site

and sought cost recovery from Shell. Although it is

acknowledged that any contamination created by

spilled buckets during the transfer of D-D into the

buyer’s storage tanks was at most a minor

contribution to the contamination, the EPA sought to

hold Shell jointly and severally liable for the entire

cost of the removal and remediation, including

products never sold by Shell. Expanding the Ninth

Circuit’s already “broad” application of arranger

liability, the district court found Shell hable, but

limited damages to an approximate determination of

Shell’s smal! contribution.

Reversing the district court's apportionment of

liability, the Ninth Circuit imposed joint and several

liability on Shell. Without explaining or adopting a

standard of arranger liability, the court stated that

the seller of a new product can be an arranger under

CERCLA “even if it did not intend to dispose of the

product.” Burlington, 520 F.3d at 949. The court

also held that neither control nor ownership at the

time of disposal is required, but that those factors are

merely “useful indices or clues” for the court to

examine. /d. at 951. Because Shell owned the

product at the time of the sale (although not at the

time of the drips), hired a carrier to deliver the

product, knew that drips could occur, and provided

product instructions for safe handling, the Ninth

Circuit upheld Shell’s liability as an arranger for

disposal. /d.

Judge Bea wrote a vigorous dissent from the

court’s denial of rehearing en bane because “the

panel’s broad definition of arranger liability .. .

impose[s] CERCLA liability where Congress did not

intend.” Jd. at 963 (Bea, J., dissenting from denial of

rehearing en banc). The dissent contended that, “[b]y

imposing arranger liability on a mere seller, the

panel stretches the meaning of arranger liability

beyond any cognizable limit and creates inter-circuit

splits.” Jd. at 961. The dissent recognized that the

panel’s expansive definition of arranger liability will

force product manufacturers to become insurers not

only of their products, but also of the sites through

which the products may travel, long after the seller

has relinquished control. See id. at 963.

6

ARGUMENT

I. ARRANGER LIABILITY SHOULD REQUIRE A

PURPOSEFUL INTENT TO DISPOSE OF A

HAZARDOUS SUBSTANCE.

A. The Plain Language Of CERCLA Limits

Arranger Liability To Intended Disposal.

Although broad, CERCLA is not a limitless statute.

CERCLA creates strict liability for specified classes

of persons and applies retroactive liability only to

those individuals within its reach. CERCLA liability,

however, is not and was not intended to be imposed

indiscriminately. Congress specifically limited the

actors who could be held liable to four classes of

persons, including “any person who by contract,

agreement, or otherwise arranged for disposal. . . of

hazardous substances... .” 42 U.S.C. § 9607(a)(3)

(emphasis added). Without these limitations on

persons potentially liable, CERCLA liability literally

would be unlimited (and unconstitutional).

In interpreting CERCLA, this Court has turned to

the plain meaning of the statutory language. In

Cooper Industries, Inc. v. Aviall Services, Inc., 543

U.S. 157 (2004), the Court interpreted the

contribution provision of the amended statute to

adopt the “natural meaning of th[e] sentence” that

contribution may only be sought subject to the

specified conditions. /d. at 166. When both parties

argued that the purpose of CERCLA bolstered its

reading of the provision, this Court stated that,

“[gliven the clear meaning of the text, there is no

need to resolve this dispute or to consult the purpose

of CERCLA at all.” Jd. at 167 (also quoting Oncale v.

Sundowner Offshore Servs., Inc., 523 U.S. 75, 79

(1998) (“[I]t is ultimately the provisions of our laws

rather than the principal concerns of our legislators

by which we are governed.”).?

Likewise, when faced with the meaning of

“operator” liability under CERCLA, this Court looked

to the “ordinary or natural meaning” of the term.

United States v. Bestfoods, 524 U.S. 51, 66 (1998)

(quoting Bailey v. United States, 516 U.S. 137, 145

(1995)). Consulting the American Heritage and

Webster's New International Dictionaries, the Court

concluded that “an operator is simply someone who

directs the workings of, manages or conducts the

affairs of a facility” and in a CERCLA context, “an

operator must manage, direct, or conduct operations

specifically related .9 pollution.” Jd; see also United

States v. Atl. Research Corp., 551 U.S. , 1275S. Ct.

2331, 2336, 2339 (2007) (holding that under CERCLA

the “plain language . . . authorizes cost recovery

actions by any private party, including [Potentially

Responsible Parties]”).

The ordinary or natural meaning of the statutory

language here precludes a company like Shell from

being held liable as an “arranger.” The operative

phrase—“arranged for disposal”—requires purposeful

action. According to the American Heritage

Dictionary of the English Language, the word

“arrange” means “to plan or prepare for.” THE

AMERICAN HERITAGE DICTIONARY OF THE ENGLISH

2 In fact, one’s view of the “purpose” of CERCLA depends on the

eye of the beholder. It can be used either to support limitless

expansion of liability beyond the terms of the statute itself in

furtherance of broad environmental goals, or to support a

limitation of liability to those situations that prompted the

legislation itself, classic disposal sites like Love Canal.

Consequently, reference to the “purpose” of CERCLA begs the

question.

8

LANGUAGE: FOURTH EDITION 99 (2006); see also

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY OF

THE ENGLISH LANGUAGE 120 (2002) (“arrange” means

“to make preparations” to “plan”). The word “for” is

used to “indicate the object, aim, or purpose of an

action or activity.” AMERICAN HERITAGE DICTIONARY:

FOURTH EDITION 686; see also WEBSTER’S THIRD NEW

INTERNATIONAL DICTIONARY 886 (“For” means “as a

preparation toward.”). In other words, the language

of the statute literally requires the defendant to have

made plans with the purpose of disposal.

The language cannot be read, as the Ninth Circuit

held, to allow liability for a person who sold a

product—not for the purpose of disposal, but for

productive and permitted uses--where the common

carrier or operator accidentally spilled the product at

the buyer’s facility. Although unintentional spills

could be read to constitute “disposal,” Congress

limited liability to those who “ ‘arrange for’ disposal

(not just arranged for the sale).” Burlington, 520

F.3d at 961 (Bea, J., dissenting from denial of

rehearing en banc). To give the words “arrange for”

any meaning, the Court should require a purposeful

intent to dispose, not merely knowledge that some

product may not be used as intended? See, e.g,

3 It is difficult to see how the fact that “disposal” includes

unintentional spillage has any relevance to this case. The drips

from the transfer itself did not cause any contamination, as the

drips were collected in a bucket and were supposed to be

dumped into the storage tanks for use. The “disposal” of the

product occurred only when the carrier or the buyer knocked

over the buckets. Shell, however, had no involvement or

connection with knocking these buckets over and cannot be said

to have “arranged for” these buckets to be knocked over. Shell

also had nothing to do with other “sloppy” practices of the

9

Cooper Indus., 543 U.S. at 166 (rejecting, in CERCLA

context, a “reading [that] would render part of the

statute entirely superfluous, something we are loath

to do”); Rake v. Wade, 508 U.S. 464, 471 (1993) (“To

avoid ‘deny[ing] effect to a part of a statute,’ we

accord ‘significance and effect. . . to every word.”’)

(citation omitted). As the dissent from rehearing en

banc persuasively argued, “[i]t is an oxymoron for an

entity unintentionally to make preparations for

disposal.” Burlington, 520 F.3d at 961 (Bea, J.,

dissenting from denial of rehearing en banc).

The Seventh Circuit addressed “arranger” liability

in an almost identical situation as here, but followed

the statutory language to conclude that a person who

arranged for the sale and transport of a consumer

product did not “arrange for disposal” of that product

when some spilling occurred. Amcast Indus. Corp. v.

Detrex Corp., 2 F.3d 746, 751 (7th Cir. 1993). The

court, in an opinion by Judge Posner, held, “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.” Jd. The court

concluded that, though the defendant manufacturer

arranged for the delivery of the product, it did not

arrange “for spilling the stuff on the ground.”

Therefore, the manufacturer had no arranger

liability. Jd. As the court held, “[nJo one arranges for

an accident, except in the sinister sense, not involved

(continued...)

operator that largely caused any contamination here. In fact, it

provided information on safe handling of its chemicals.

10

here, of ‘staging’ an accident—that is, causing

deliberate harm but making it seem accidental.” Jd.

Other courts, likewise, have come to. similar

conclusions regarding the statute’s language. See,

e.g., Pneumo Abex Corp. v. High Point, Thomasville

& Denton R.R. Co., 142 F.3d 769, 775 (4th Cir. 1998)

(no arranger liability because “intent” was not for the

“treatment” of hazardous substances); United States

v. Cello-Foil Prods., Inc., 100 F.3d 1227, 1231 (6th

Cir. 1996) (arranger liability requires person to have

“intended to enter into a transaction that included

and ‘arrangement for’ the disposal of hazardous

substances”). But see United States v. Aceto Agric.

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

the manufacturer, who maintained ownership of the

product throughout the processing that resulted in

disposal (unlike Shell) liable regardless of intent to

dispose).

The Ninth Circuit’s opinion contradicts the plain

language of the statute and the reasoned analysis of

the courts that have required purposeful intent in

arranging for disposal. Not only did the Ninth

Circuit disavow any intent requirement for arranger

liability, the court also rejected the notion that

ownership or control of the product at the time of

disposal was required. The Ninth Circuit did not

follow the statutory language; “arranged for

disposal” are words of limitation and definition read

out of the statute by the Ninth Circuit analysis. The

Ninth Circuit merely concluded that owning the

product before the sale (as every manufacturer

necessarily does) and knowing that drips and spills

may occur (which is why Shell advised that

precautions be used) is enough to subject the

manufacturer to lability. CERCLA’s extraordinary

11

liability should not be permitted on such a flimsy,

innocent ground, at odds with the statutory text.

The categories of covered persons under CERCLA

are in fact limitations on liability, and the plain

language of the statute provides at least one bright-

line rule for arranger liability. This Court should

provide much needed predictability and uniformity in

CERCLA jurisprudence by concluding that the sale of

a useful product is beyond the reach of arranger

liability.

B. The Common Law Would Not Permit

Manufacturer Liability For The Sale Of A

Useful Product Spilled By Others.

The Court should not expand arranger liability in a

way that disrupts preexisting law and imposes

retroactive liability without a clear expression of

congressional intent to do so. Where a statute

imposes harsh remedial consequences on persons

within its purview, courts should strictly construe the

individuals covered by the statute and not seek to

expand its coverage beyond the explicit text. See,

e.g., 3 NORMAN J. SINGER, STATUTES AND STATUTORY

CONSTRUCTION § 61.3 (2001) (citing Jn re W.W., 454

N.E.2d 207, 209 (Ill. 1983) (reasoning that a statute

with remedial features should be strictly construed

when determining what persons come within its

operation)). The Ninth Circuit erred in construing

the statute in favor of the Government and toward

more expansive liability, rather than with deference

to pre-existing law and the rights of individuals.

First, the Ninth Circuit erred by failing to

recognize the legal background under which

CERCLA was drafted. As this Court has recognized,

statutes are not drafted in a vacuum, but with

12

knowledge of pre-existing legal principles. United

States v. Texas, 507 U.S. 529, 534 (1993) (“Congress

does not write upon a clean slate”). “Statutes which

invade the common law ... are to be read with a

presumption favoring the retention of long-

established and familiar principles, except when a

statutory purpose to the contrary is evident.” Jd.

(quoting Jsbrandtsen Co. v. Johnson, 343 U.S. 779,

783 (1952)) (ellipsis in original); see also Viera v.

Cohen, 927 A.2d 8438, 853 (Conn. 2007) (“[T}he

operation of a statute in derogation of the common

law is to be limited to matters clearly brought within

its scope.”) (emphasis added) (quoting Matthiessen v.

Vanech, 836 A.2d 394, 405 (Conn. 2003) (quoting

Alvarez v. New Haven Register, Inc., 735 A.2d 306

(Conn. 1999); Phillips v. Larry’s Drive-In Pharmacy, -

Inc., 647 S.E.2d 920, 928 (W. Va. 2007) (“[W]here

there is any doubt about the meaning or intent of a

statute in derogation of the common law, the statute

is to be interpreted in the manner that makes the

least rather than the most change in the common

law.”).

While CERCLA undoubtedly did derogate the

common law in some important aspects, for example,

imposing strict liability on current property owners

regardless of intent or involvement in_ the

contamination, the Court cannot conclude that

Congress cast aside a// common-law principles of

lability. “In order to abrogate a common-law

principle, the statute must ‘speak directly’ to the

question addressed »y the common law.” United

States v. Texas, 507 U.S. at 534. Again, in Bestfoods,

this Court recognized in the context of CERCLA that

Congress still must make clear its intention to

abrogate specific common-law principles. See

13

Bestfoods, 524 U.S. at 62 (“[Njothing in CERCLA

purports to reject this bedrock principle, [that a

parent corporation is not liable for the acts of its

subsidiaries] and against this venerable common-law

backdrop, the congressional silence is audible.”).

There, the Court held that a relaxed CERCLA-

specific rule for derivative liability could not be read

into the statute because it would “banish traditional

standards and expectations from the law of CERCLA

liability . . .. [S]Juch a rule does not rise from

congressional silence, and CERCLA’s silence is

dispositive.” Jd. at 70. Cf Key Tronic Corp. v.

United States, 511 U.S. 809 (1994) (requiring

congressional intent to alter the American rule that

atiorney fees related to litigation under CERCLA are

not recoverable).

The common-law precursors to CERCLA, such as

nuisance,‘ would not have countenanced lability to

product sellers such as Shell. Common-law nuisance

requires control over the product at the time any

harm occurred. See, e.g., State of Rhode Island v.

Lead Indus. Ass'n, Inc., __ A.2d _, 2008 WL

2605396, at *15 (R.I. July 1, 2008) (“As an additional

prerequisite to the imposition of liability for public

nuisance, a defendant must have control over the

instrumentality causing the alleged nuisance at the

time the damage occurs.”) (emphasis omitted); see

also 2 AMERICAN LAW OF PRODUCTS LIABILITY 3D §

27.6 (2007) (“[A] product manufacturer who builds

and sells the product and does not control the

enterprise in which it is used is not in the situation of

one who creates a nuisance... .”).

* See, e.g., Illinois v. City of Milwaukee, 406 U.S. 91, 106-07

(1972) (noting that common-law public nuisance is used to

regulate environmental pollution).

14

In addition, for liability to attach, a defendant’s

conduct must be “intentional and unreasonable” or

“unintentional and otherwise actionable under the

rules controlling liability for negligent or reckless

conduct, or for abnormally dangerous conditions or

activities.” RESTATEMENT (SECOND) OF TORTS § 822

(1977 & Supp. 2008). There was no finding of legal

duty or reckless or dangerous activities by Shell to

justify unintentional liability. Nor could there have

been. Shell merely sold a product and provided

guidance for safe handling. As there is no clear

indication that Congress intended to change the

common law and sweep product sellers like Shell into

CERCLA under arranger liability, the court should

have construed the statute in Shell’s favor and not

with an eye toward filling the Government’s coffers.

Second, the Court should not interpret CERCLA

arranger liability—which would apply retroactively—

to encompass a new category of product sellers or

manufacturers in the absence of _ specific

congressional intent. As this Court has stated,

retroactivity of legislation is disfavored and will not

be applied unless expressly directed by Comszress.

“(T]he presumption against retroactive legislation is

deeply rooted in our jurisprudence. and embodies

legal doctrine centuries older than eur Republic... .

[T]he ‘principle that the legal effect of conduct should

ordinarily be assessed under the law that existed

when the conduct took place has timeless and

universal appeal.” Landgrafv. USI Film Prods., 511

U.S. 244, 265 (1994) (footnote omitted) (quoting

Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494

U.S. 827, 855 (1990) (Scalia, J., concurring)).

Applying a statute retroactively “presents problems

of unfairness .. . because it can deprive citizens of

15

legitimate expectations and upset __ settled

transactions.” Gen. Motors Corp. v. Romein, 503

U.S. 181, 191 (1992). Retroactive laws are

particularly unfair when the government’s actions

“affect|] contractual or property rights, matters in

which predictability and stability are of prime

importance.” Landgraf, 511 U.S. at 271.

Imposing retroactive liability on a manufacturer as

an arranger, where the manufacturer has merely sold

and transferred its product without any intent for

disposal and no longer has ownership, possession,

control, or further interest in the product, defeats the

settled expectations of the seller. Shell shipped the

product in question FOB destination with an

understanding and agreement that the buyer take

responsibility for the product when it arrived at the

facility. Atchison, 2003 WL 25518047, at *5. While

Congress certainly has some power to disrupt the

commercial expectations between the buyer and

seller, courts should not assume that Congress

intended to discard these time-honored commercial

principles and retroactively impose new, staggering

burdens—without saying so.5 See Landgraf 511 U.S.

at 284 (noting that the Court will not read a statute

“substantially increasing the monetary liability of a

6 In fact, Congress imposed specific taxes on chemical

manufacturers, requiring them to make a contribution to

Superfund. See 26 U.S.C. §§ 4611, 4661 & 4662. These

provisions indicate that Congress did not intend to extend

arranger liability to cover past typical sales transactions, but

instead intended to recoup costs of environmental clean-up

through a direct levy. Had Congress intended to hold

companies liable for the mere manufacture or sale of hazardous

substances that were spilled in transit or during storage, it

would have said so. There is no such category of CERCLA

hability.

16

private party to apply to conduct occurring before the

statute’s enactment” when Congress had not clearly

spoken). The Ninth Circuit should have construed

the statutory language to avoid any retroactive, due

process concerns.

Ramifications of the Ninth Circuit’s decision, if

upheld, would extend beyond CERCLA. It could

disrupt commercial transactions, increase prices of

necessary products, and impact insurance premiums.

A product manufacturer who had only minimal

contact with a facility would face millions of dollars of

liability for a single clean-up. For example, under

the court’s opinion, a company that sells a storage

tank is potentially liable under CERCLA for

“arranging for disposal” of a hazardous substance if it

knows that the contents of the tank will inevitably

drip and spill onto the ground. Additionally,

imposing CERCLA liability because a manufacturer

provided safety and handling instructions for its

chemical products penalizes, rather than promotes,

good business practices. See Jordan v. S. Wood

Piedmont Co., 805 F. Supp. 1575, 1580 (S.D. Ga.

1992) (“{I]mpos[ing] liability on a manufacturer on

account of its dissemination of safety-related

6 Courts have concluded that CERCLA is within the limits of

Congress's power because the imposed liability is proportionate

and related directly to prior acts of pollution. See Franklin

County Convention Facilities Auth. v. Am. Premier

Underwriters, Inc, 240 F.3d 534, 553 (6th Cir. 2001)

(concluding that CERCLA’s retroactive lability did not violate

the Takings Clause because, as applied, the liability was

“directly proportional to [defendant's] prior acts of pollution”

and the defendant had expressly assumed liability for

environmental harms) (emphasis added). Here, the outer limits

of constitutionally permissible retroactive liability are being

tested, if not trespassed.

17

information is anathematic, even to the broad and

salutary remedial purposes of CERCLA.”). Cf #.R.

St. & Co. v. Pilgrim Enters., Inc., 166 S.W.3d 232,

246 (Tex. 2005) (“Imposing arranger liability on

chemical manufacturers and suppliers for providing

technical services and advice will have the adverse

effect of discouraging these companies from providing

valuable advice to customers regarding the safe use

and handling of their products.”). This extraordinary

liability under CERCLA based on the Ninth Circuit’s

unjustified definition of arranger liability should not

be permitted.

In short, there is no ambiguity in the statutory

language that would allow courts to sweep in product

manufacturers such as Shell under arranger liability.

Such liability was unknown under the common law

and retroactively would foist mammoth and

unexpected legal responsibilities on product

manufacturers. These results should be presumed

not to occur unless Congress specifically and clearly

requires them, and it has not. This Court should

adhere to CERCLA’s categories of liability as written

and restore reason and logic to CERCLA

jurisprudence.

Il. THE COURT SHOULD INTERPRET CERCLA

IN A MANNER THAT CREATES UNIFORMITY

AND CONSISTENCY.

No other circuit has interpreted arranger liability

as expansively as the Ninth Circuit, and no other

would permit arranger liability based on the sale of a

product alone. But even among the courts that would

reject the Ninth Circuit’s expansive application of

arranger liability, the courts of appeals are confused

as to the scope and proper interpretation of arranger

18

liability. Courts and commentators have long

lamented the inconsistent application of arranger

liability based on the multitude of different factors.

See Roger K. Ferland & Marilyn D. Cage, Using

RCRA to Interpret CERCLA Liability: What is

“Arranging For Disposal”?, 23 ARIZ. ST. L.J. 445, 447

(1991) (“[T]he tack of guidance has resulted in a

myriad of interpretations of “arranged for” liability

that has been both inconsistent and confusing.”); see

also Sarah E. Stevenson, Casenote, Broadening

Arranger Liability Under Alaska State Law: The

Ninth Circuit's Interpretation of Berg v. Popham, 17

VILL. ENVTL. L.J. 477, 511 (2006) (“Interpreting

arranger liability provisions has plagued both state

and federal courts for the past twenty-five years.”).

Courts have struggled to interpret arranger

liability consistently since CERCLA was passed

almost three decades ago. Most courts have

promulgated non-exhaustive factors to examine. See,

e.g., Morton Int’, Inc. v. A.E. Staley Mfg. Co., 343

F.3d 669, 676 (8d Cir. 2003) (citing cases from the

Second, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth

and Eleventh Circuits in an attempt to set a

standard). The variety of non-exhaustive, non-

dispositive factors has created a unique, ad hoc

determination so that outcomes differ from case to

case and from circuit to circuit.

The Third Circuit, for example, adopted a standard

that requires the plaintiff to demonstrate (1)

ownership or possession, and (2) either knowledge or

control. /d. at 677. But, the court also conceded that

“fijt is certainly possible that other factors could be

relevant to this analysis in any given case, and we

encourage consideration of those as well.” Jd. at 679;

19

see also United States v. Hercules, Inc., 247 F.3d 706,

721 (8th Cir. 2001) (declining to adopt a “bright-line”

rule and instead examining the totality of the

circumstances to determine whether the facts of a

given case fit within CERCLA’s scheme); Fila. Power

_ & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313,

1319 (11th Cir. 1990) (rejecting a per se rule in

interpreting CERCLA liability); and Stevenson,

supra, at 497 (noting that to determine liability some

courts will examine multiple factors including “strict

liability, specific intent, totality of circumstances,

obligation to control, and actual involvement”). As

the Ninth Circuit's decision demonstrates, these ad

hoc determinations tend to build on one another,

leading the courts far afield from the statutory

language itself.

Notwithstanding the courts’ inability to agree on

how to interpret arranger liability, the courts do

agree that national uniformity in this area is

absolutely necessary. Surlington, 520 F.3d at 935

(citing cases regarding the need for uniformity in the

application of joint and several liability under

CERCLA). Uniformity is required to allow

corporations and individuals plan for and protect

against unintended arranger liability. Indeed,

uncertainty and inconsistency breed only unfair

settlements and costly litigation.

Under the status quo, it is impossible to determine

the circumstances under which selling a product

could lead to arranger _ iiability—no small

inconvenience considering CERCLA’s harsh

consequences—and impossible to tailor one's

prospective behavior to accord with the law. The only

way to achieve consistency and uniformity is to reject

20

the application of multi-factor, non-exclusive

analyses and interpret the statute according to its

plain meaning. The Court should apply a bright-line

rule that arranger liability attaches only when the

defendant has the purposeful intent to dispose of

hazardous substances.

CONCLUSION

The Court should reverse the judgment of the

Ninth Circuit.

Respectfully submitted,

HUGH F. YOUNG, JR. CHARLES H. MOELLENBERG, JR.

Product Liability (Counsel of Record)

Advisory Council LEON F. DEJULIUS, JR.

1850 Centennial] Park JEAN M. MOSITES

Drive JONES DAY

Reston, VA 20191 500 Grant Street, Suite 4500

Tel.: (703) 264-5300 Pittsburgh, PA 15219-2502

Tel.: (412) 391-3939

Counsel for Amicus Curiae

November 21, 2008

APPENDIX

la

APPENDIX A

PLAC CORPORATE MEMBERS

3M

Altec Industries

Altria Corporate Services, Inc.

American Suzuki Motor Corporation

Andersen Corporation

Anheuser-Busch Companies

Appleton Papers, Inc.

Arai Helmet, Ltd.

Astec Industries

BASF Corporation

Bayer Corporation

Beretta U.S.A. Corp.

BIC Corporation

Biro Manufacturing Company, Inc.

Black & Decker (U.S.) Inc.

BMW of North America, LLC

Boeing Company

Bombardier Recreational Products

BP America Inc.

Bridgestone Americas Holding, Inc.

Briggs & Stratton Holding, Inc.

Brown-Forman Corporation

CARQUEST Corporation

Caterpillar Inc.

Chrysler LLC

Continental Tire North America, Inc.

Cooper Tire and Rubber Company

Coors Brewing Company

Crown Equipment Corporation

Daimler Trucks North America LLC

2a

The Dow Chemical Company

E.1. DuPont De Nemours and Company

Easton-Bell Sports, Inc.

Eaton Corporation

Eli Lilly and Company

Emerson Electric Co.

Engineered Controls International, Inc.

Estee Lauder Companies

Exxon Mobil Corporation

Ford Motor Company

Genentech, Inc.

General Electric Company

General Motors Corporation

GlaxoSmithKline

The Goodyear Tire & Rubber Company

Great Dane Limited Partnership

Harley-Davidson Motor Company

Hawker Beechcraft Corporation

The Heil Company

Honda North America, Inc.

Hyundai Motor America

Illinois Tool Works, Inc.

International Truck and Engine Corporation

Isuzu Motors America, Inc.

Jarden Corporation

Johnson & Johnson

Johnson Controls, Inc.

Joy Global Inc., Joy Mining Machinery

Kawasaki Motors Corp., U.S.A.

Kia Motors America, Inc.

Koch Industries

Kolcraft Enterprises, Inc.

Komatsu America Corp.

Kraft Foods North America, Inc.

3a

Leviton Manufacturing Co., Inc.

Lincoln Electric Company

Magna International Inc.

Mazda (North America), Inc.

Medtronic, Inc.

Merck & Co., Inc.

Michelin North America, Inc.

Microsoft Corporation

Mine Safety Appliances Company

Mitsubishi Motors North America, Inc.

Mueller Water Products

Nintendo of America, Inc.

Niro Inc.

Nissan North America, Inc.

Nokia Inc.

Novartis Consumer Health, Inc.

Novartis Pharmaceuticals Corporation

Occidental Petroleum Corporation

PACCAR Inc.

Panasonic

Pfizer Inc.

Porsche Cars North America, Inc.

PPG Industries, Inc.

Purdue Pharma L.P.

Putsch GmbH & Co. KG

The Raymond Corporation

Remington Arms Company, Inc.

Rheem Manufacturing

RJ Reynolds Tobacco Company

Sanofi-Aventis

Schindler Elevator Corporation .

SCM Group USA Inc.

Shell Oil Company

The Sherwin-Williams Company

4a

Smith & Nephew, Inc.

St. Jude Medical, Inc.

Subaru of America, Inc.

Synthes (U.S.A.)

Terex Corporation

Textron, Inc.

TK Holdings Inc.

The Toro Company

Toshiba America Incorporated

Toyota Motor Sales, USA, Inc.

TRW Automotive

UST (U.S. Tobacco)

Vermeer Manufacturing Company

The Viking Corporation

Volkswagen of America, Inc.

Volvo Cars of North America, Inc.

Vulcan Materials Company

Watts Water Technologies, Inc.

Whirlpool Corporation

Wyeth

Yamaha Motor Corporation, U.S.A.

Yokohama Tire Corporation

Zimmer, Inc.