In Celanese Corporation v. Martin K. Eby Construction Company Inc., the Fifth Circuit Court of Appeals addressed the scope of "arranger" liability under CERCLA and affirmed the ruling of the district court that Defendant-Appellee Martin K. Eby Construction Company, Inc. was not liable as an "arranger" under CERCLA for the remediation costs Celanese Corporation had incurred. In 1979, Eby Construction was installing an underground water pipeline for the Coastal Water Authority of Texas. A backhoe operator for Eby Construction, while excavating in an area that contained a Celanese pipeline that transported methanol, unknowingly struck and damaged the Celanese pipeline. Over the years, the damaged pipeline deteriorated and began to leak methanol. In 2001, Celanese discovered the leak and over the next seven years removed and disposed of over 230,000 gallons of methanol.
Celanese sought to recover its remedial costs from Eby by contending that Eby was an "arranger" under CERCLA. The facts were not in dispute. Eby did not intentionally damage the Celanese pipeline. Indeed, the evidence established that the Eby backhoe operator did not even know he had stuck a pipeline; he only knew that his backhoe had hit something. This convinced the district court to rule that Eby could not be liable as an arranger because it "did not know that it damaged the Celanese pipeline."
In its decision, the Fifth Circuit reviewed the Supreme Court's opinion in Burlington Northern & Santa Fe Ry. Co. v. United States, __U.S.__, 129 S. Ct. 1870 (2009). The Court noted that under the Burlington Northern decision, Celanese, to establish that Eby was an arranger under CERCLA, would have to prove that Eby took "intentional steps" or planned "for the disposal of the hazardous substance." However, at most, Celanese could only show that Eby consciously disregarded the obligation to investigate the backhoe incident and backfilled the area where the incident occurred. The Fifth Circuit held that such a showing did not come close to demonstrating that Eby had the requisite intent or had taken the intentional steps to dispose of the methanol to qualify as an "arranger" under CERCLA. Accordingly, it affirmed the ruling of the district court. The Fifth Circuit issued its decision on September 20, 2010.