May 19, 2014
Two weeks ago the United States Court of Appeals, Federal Circuit re-opened the door to recovery of Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) cleanup costs under contractual provisions that predate Superfund liability by decades. Companies faced with responsibility for cleaning up waste generated by the production, manufacture, sale, or delivery of commodities under a contract with a governmental agency should evaluate their ability to recover under contract theories if CERCLA contribution has proven frustrating.

Despite previously being held not liable as an “arranger” under CERCLA for cleanup costs incurred from the disposal of waste by-products from World War II aviation gas production, the United States government was found liable last week for the same clean-up costs in a breach of contract action. In Shell Oil Co. v. United States, No. 2013-5051 (Fed. Cir. Apr. 28, 2014), the court granted four oil companies summary judgment on their breach of contract claims against the United States, holding the government liable for CERCLA clean-up costs attributable to waste produced as a by-product of the manufacture of aviation gas during WWII.

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