BURLINGTON NORTHERN (PART 2): The 9% Solution
I’ve written about the Shell Oil finding in the case of Burlington Northern and Sante Fe Railroad Co., et al. v. United States, et al. in a prior post. Allow me to turn to a review of the Court’s decision regarding the liability of the railroads for the cleanup of the B&B facility.
Not unexpectedly, the Supreme Court based its finding of liability on the fact that the railroads owned a portion of the site in question. As you can see from the diagram in the Court’s opinion, the portion of the property owned by the railroad (the "Leased Property") was less than 20% of the total land being used by B&B. (My father once told me that in the rare instance where a court decision includes a diagram, do not ignore it. The Court is trying to say that the answer is obvious and to make sure you get it, they are going to draw you a picture. District and circuit courts around the country should take note: the Supreme Court drew them a picture.) Some other relevant facts relating to the property were:
• B&B commenced in 1960 but did not begin leasing the railroad property until 1975;
• All of the property was graded to slope to the pond;
• Only two of the three chemicals were released on the railroad parcel;
• Not all of the releases ended up at the pond; and
• None of the D-D chemical needed to be remediated on the railroad property.
The District Court apportioned to the railroads 9% of the total remediation costs. This was based on three factors. First, the railroad parcel constituted 19% of the surface 
area of the total site. Second, the railroad parcels had been leased to B&B for only 45% of the time B&B operated the facility. Third, the volume of hazardous-substance-releasing activities on the B&B property was at least ten times greater than the releases that occurred on the railroad parcel and that only spills of two chemicals (not D-D) substantially contributed to the contamination that had originated on the railroad parcel and that those two chemicals had contributed to two-thirds of the overall site contamination requiring remediation. The District Court, with calculator in hand, then multiplied .19 x .45 by .66 to get 6% of the remediation costs. It then added 3% for “calculation error.” The Supreme Court spent some time picking through the available facts, but ultimately concluded that there was reasonable support for the 9% apportionment.
I have to tell you, I was shocked (though, to be fair, I shock easily). It isn’t that 9% is a crazy number, it’s that the Court agreed, under these facts, that any apportionment was appropriate. Remember, the Court had eliminated Shell as a PRP and B & B had no money, so the only parties left to help pay the bill were the railroads. By finding an apportionment possible, the Court guaranteed that 91% of the cleanup costs would be left with the government.
Moreover, it’s not as though the facts screamed out for a division. In fact, the Court lamented that the railroads had taken a “scorched earth” all-or-nothing approach to litigating their potential liability. They failed to acknowledge any responsibility for the release of hazardous substances on their parcel during the lease. On the other hand, the Government refused to acknowledge any potential divisibility of harm. Between the two of them, they provided only minimal input to facts that would allow divisibility. Nevertheless, the District Court and the Supreme Court found divisibility. In the words of the Court:
Despite these criticisms, we conclude that the facts contained in the record reasonably supported the apportionment of liability.
In the past, I have been surprised that courts have routinely refused to find divisibility in Superfund cases. I know that it is hard to quantify the factors that justify divisibility, but it seems to me that the fact that divisibility is difficult to do, doesn’t mean it shouldn’t be done. In my own mind, I have rationalized that divisibility has not been “encouraged” in the environmental arena because when divisibility is found, it will often mean that a large portion of the remediation costs will be left with the government (i.e. tax-paying public), which frustrates the concept of "polluter pays."
I would suggest to district courts and circuit courts throughout the country, a new day has dawned. If apportionment was possible under the facts given to the Court in Burlington Northern, there aren’t going to be a lot of cases in which apportionment is not possible. Of course, they all will stand or fall on their own facts and I am sure we are going to have a number of very interesting fact scenarios with some very creative reasons for divisibility. However, the really significant holding of Burlington Northern, it seems to me, is that where there used to be a presumption against apportionment in Superfund cases, there is now a presumption in favor of it. That, for better or worse, is a very big change.
