July 23, 2015 Articles

The Latest Development in Arranger Liability Law

The Fourth Circuit held that an electric utility lacked the requisite intent to "arrange for disposal" of hazardous substances.

By John J. DiChello – July 23, 2015

The U.S. Court of Appeals for the Fourth Circuit is the most recent federal appellate court to address the element of intent necessary to establish a claim for arranger liability under section 107(a)(3) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607(a)(3). On March 20, 2015, in Consolidation Coal Co. v. Georgia Power Co., 781 F.3d 129 (4th Cir. 2015), a 2–1 opinion, the Fourth Circuit held that an electric utility lacked the requisite intent to “arrange for disposal” of hazardous substances to qualify as an arranger under section 107(a)(3) when it sold used, but functional, electrical transformers lined with oil containing polychlorinated biphenyls (PCBs) at competitive auctions to a purchaser who subsequently repaired, rebuilt, and resold the transformers to third parties for a profit. This ruling is consistent with a seeming trend toward limiting arranger liability since the United States Supreme Court issued its landmark decision in 2009 in Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009). The ruling in Georgia Power also evidences the highly factual, case-specific analysis required to evaluate a putative arranger’s liability.


Premium Content For:
  • Litigation Section
Join - Now