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Shell Oil Co. v. United States

Citation: 43 ELR 20023
No. 06-141C, -1411C, (Fed. Cl., 01/14/2013)

The Court of Federal Claims held that the U.S. government need not reimburse oil companies for costs they incurred cleaning up contamination stemming from the production of aviation fuel during World War II. During the 1940s, at the urging of the U.S. government, the companies entered into contracts to manufacture vast quantities of aviation fuel (called "avgas") to help assure that the United States would prevail in World War II. The contracts expired at the end of the war. The companies claim that in the "taxes" clause of each contract, the government accepted full responsibility for all "charges" resulting from the production of avgas. But the taxes clause deals only with taxes; it is not a broad indemnification clause promising that the companies will never have to pay for later-imposed liabilities such as CERCLA environmental cleanup costs. Moreover, the parties stipulated that the avgas contracts in question were terminated in 1945, and that all issues relating to these contracts were settled in the late 1940s. And there is nothing in the contracts to suggest that the United States would remain liable for any of the claimed costs after the contracts were terminated.