Opinion ID: 1236784
Heading Depth: 4
Heading Rank: 2

Heading: Useful Product Doctrine

Text: While adopting a generally expansive view of arranger liability, we have refused to hold manufacturers liable as arrangers for selling a useful product containing or generating hazardous substances that later were disposed of. See, e.g., 3550 Stevens Creek Assocs. v. Barclays Bank of Cal., 915 F.2d 1355, 1362-65 (9th Cir.1990). As Stevens Creek and other useful product cases recognize, liability cannot extend so far as to include all manufacturers of hazardous substances, on the theory that there will have to be disposal of the substances some time down the line, after it is used as intended. See, e.g., Stevens Creek, 915 F.2d at 1362-65 (refusing to hold manufacturer liable for costs of removing asbestos from building); Fla. Power & Light, 893 F.2d at 1318-19 (refusing to hold manufacturer of transformers liable for subsequent release of chemicals upon disposal of transformers). Also, the asserted liability in useful product cases generally involved only the normal use of those chemicals. See, e.g., Jordan v. S. Wood Piedmont Co., 805 F.Supp. 1575, 1577 (S.D.Ga.1992) (involving the sale of chemicals to treat wood and the contamination from the wood treatment process); Edward Hines Lumber Co. v. Vulcan Materials Co., 685 F.Supp. 651, 653 (N.D.Ill. 1988) (same). The useful product cases have no applicability where, as here, the sale of a useful product necessarily and immediately results in the leakage of hazardous substances. In that circumstance, the leaked portions of the hazardous substances are never used for their intended purpose. See Zands v. Nelson, 779 F.Supp. 1254, 1262 (S.D.Cal.1991) (stating that gasoline is no longer a useful product after it leaks into, and contaminates, the soil); see also Aceto, 872 F.2d at 1381 (rejecting application of the useful product doctrine where waste is generated and disposed of contemporaneously with the process (emphasis added)). Here, although Shell sold B & B a useful product, leakage of some of that product before B & B could use it was both inherent in the transfer process arranged by Shell and contemporaneous with that process. [31] Shell arranged for delivery of the substances to the site by its subcontractors; was aware of, and to some degree dictated, the transfer arrangements; knew that some leakage was likely in the transfer process; and provided advice and supervision concerning safe transfer and storage. Disposal of a hazardous substance was thus a necessary part of the sale and delivery process. Put another way, the district court did not assign arranger liability to Shell for contamination resulting from the application of Shell's useful products to the soil as fertilizers or fumigants, or for disposal of contaminated soil after the products were used. Instead, the district court assigned arranger liability on the portion of product that never made it to the fields for its intended use but was disposed of prior to use. Because Shell's liability here stems from the leaked chemicals rather than the fertilizer that was used as fertilizer, the useful product doctrine is not applicable.