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Shell Oil, railroads win U.S. ruling on cleanup costs

Reuters UK

Mon May 4, 2009 3:49pm BST

* US top court rules for Shell, railroads on cleanup costs

* At issue California contaminated industrial site

WASHINGTON, May 4 (Reuters) – The U.S. Supreme Court ruled on Monday for Shell Oil Co (SHOI.PK) and units of Burlington Northern Santa Fe Corp (BNI.N) and Union Pacific Corp (UNP.N) in a dispute over environmental cleanup costs at a contaminated industrial site in Arvin, California.

Shell, an affiliate of Royal Dutch Shell Plc (RDSa.L), and the two railroads argued they should not be held liable for the majority of the more than $8 million spent by the government on cleanup costs at the abandoned farm chemical storage facility.

Voting 8-1, the justices overturned a ruling by a U.S. appeals court that Shell and the railroads could be held liable for almost the full cost of the cleanup even though their roles in the soil and groundwater contamination had been relatively minor.

The railroads said the owners of the chemical storage company at the site had leased only a small parcel of their land while Shell said it merely shipped chemicals to the facility.

The Supreme Court ruled that Shell is not liable as an arranger for the contamination at the facility and said Shell took numerous steps to encourage its distributors to reduce the likelihood of spills.

The high court also ruled that a federal judge had reasonably apportioned the railroads’ share of the cleanup costs at just 9 percent.

The ruling was a defeat for the federal government.

(Editing by Maureen Bavdek)

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