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AGO Opinion 99001

Is the non-owner of a storage tank liable for filling a fertilizer or pesticide tank with chemicals that is not in compliance with Title 198 regulations or the Environmental Protection Act?
Opinion 99001




DATE: January 5, 1999




SUBJECT: Is the non-owner of a storage tank liable for filling a fertilizer or pesticide tank with chemicals that is not in compliance with Title 198 regulations or the Environmental Protection Act?




REQUESTED BY: Senator W. Owen Elmer, Nebraska State Legislature




WRITTEN BY: Don Stenberg, Attorney General

Jason W. Hayes, Assistant Attorney General




You have made a request for an opinion regarding the

attachment of liability upon suppliers of fertilizers and

pesticides, for their delivery of chemicals into storage tanks that

are not in compliance with Title 198 of the Nebraska Department of

Environmental Quality rules and regulations. Specifically, your

inquiry refers to whether a non-owner of a storage tank (local

fertilizer or chemical retailer, trucker, etc.) would be prohibited

from delivering such chemicals given possible liabilities and

restrictions imposed by Title 198, or other related laws.




Title 198 contains rules and regulations pertaining to

agricultural chemical containment of liquid fertilizers and

pesticides. See Title 198, Nebraska Administrative Code, Chapters

1 through 14. The primary purpose of the regulation is to prevent

contamination from spills and leaks of these chemicals into the

soil and groundwater. The regulations require a secondary

containment facility to be constructed for bulk storage of liquid

fertilizers and pesticides above certain minimum aggregate amounts.

The title also mandates loadout facilities to be built to catch

any spills that may result from the delivery of liquid fertilizers

and pesticides prior to the transfer into storage tanks.




It is our normal practice to provide opinions to members of

the Nebraska Legislature only with respect to questions pertaining

to pending or proposed legislation. Op. Att'y Gen No. 157

(December 24, 1985). Your opinion request letter does not express

any legislative purpose in connection with your liability question.

However, from discussions with your staff we understand that

legislation may be introduced in this area depending upon our

response to your inquiry. Therefore, we will provide you with an

opinion.




DISCUSSION




Enforcement of the regulations included within Title 198 apply

only to the owners and operators of the storage facilities.

Chapters 2 and 3 of Title 198 provide the guidelines under which a

secondary containment and loadout facility, respectively, are

required. These construction requirements apply only to owners and

operators of such facilities and there are no secondary

requirements placed upon the suppliers of agricultural chemicals

mentioned within Title 198. Enforcement, provided for in Chapter

10 of the title, is commenced only upon failure of the facility

owner or operator to comply with the provisions contained within

Title 198. Liability for improper storage does not apply to the

non-owner suppliers and distributors of these chemicals.




Another consideration, is whether tort liability applies to

non-owners of these facilities. The particular tort theory would

involve an action for negligence. Negligence would be established

on the part of a plaintiff against the non-owner defendant, if the

plaintiff could prove the following four elements: (1) a duty was

owed to the plaintiff by the defendant; (2) a breach of that duty;

(3) a legally cognizable causal relationship was established

between the breach and the harm suffered; and (4) damages. See

Storage Tank Pollution, 5 A.L.R.5th 11. The main emphasis of the

action lies with elements (1) and (2) which involve a finding of

fault on the part of the non-owner defendant. Fault would apply if

the non-owner supplier had a duty to refuse delivery of

agricultural chemicals to storage tanks that were noncompliant

under Title 198, but did so anyway in violation of this duty.




Courts are silent as to whether such a duty is present with

regard to suppliers of liquid fertilizers and pesticides. However,

courts have reached a consensus as to the existence of a duty

involving the non-owner suppliers of petroleum products unloading

hazardous products into storage tanks. Generally, no duty rests on

a person who delivers gasoline to inspect the premises on which a

storage tank is located before making delivery to the place

provided for the purpose. See Gas and Oil, 38 Am.Jur.2d 716. The

Nebraska Supreme Court has stated, . . . a gas company which does

not install, own, or control the pipes or appliances in a

customers building is in no way responsible for the condition in

which they are maintained, and consequently is not liable for

injuries caused by a leak therein of which it has no knowledge.

This rule is followed extensively in this country. Clay v. Butane

Gas Corporation, 151 Neb. 876, 889-90, 39 N.W.2d 813, 820 (1949).

This statement leaves open the possibility of liability if

knowledge is in fact present.




In other jurisdictions, a definite duty has been established

if the petroleum supplier has notice that the storage tank is

defective but endeavors to fill the tank despite such warnings.

The Georgia Court of Appeals found that whenever a supplier of gas

has actual knowledge of a defective and dangerous condition of a

customers underground storage tanks but continues to supply gas to

them, the supplier is liable for injuries caused by the gas. See

Citizens & Southern Trust Co. v. Phillips Petroleum Co., 385 S.E.2d

426 (Ga. App. 1989). Also finding a similar duty, the New York

Supreme Court Appellate Division established that liability might

ensue if an oil company had notice, actual or constructive, of the

underground loss of gasoline due to a leakage, but failed to

prevent such resulting injury by continuing to supply the defective

tanks with gasoline. See New York Tel. Co. v. Mobil Oil Corp., 473

N.Y.S.2d 172 (N.Y. App. Div. 1984).




With no previous precedence established, we are unable to

conclude that the courts in Nebraska would choose to follow the

duties imposed by the jurisdictions named. In the instances cited

where liability did attach, the supplier had notice of possible

dangerous defects in the storage facility. Although, a storage

facility may not be in compliance in with Title 198, this may or

may not constitute a defect or immediate dangerous condition, which

would give rise to a duty placed upon the non-owner supplier to

refuse delivery.




In addition, the secondary containment requirements instituted

pursuant to Title 198 are very precise and exacting depending on

the aggregate quantities stored by the owner of the chemicals. It

would be difficult for a firsthand observer to determine if a

storage facility was in compliance, unless a detailed and time

consuming measurement was taken of the capacity of the secondary

containment unit. Given this difficulty, a non-owner supplier

could in good faith--based upon his observations--deliver chemicals

for storage onsite, but later discover that the facility was not in

compliance with Title 198. A supplier would not have notice of

compliance unless a method was instituted to provide proof that the

storage facility was in compliance. Without such notice being

achieved, it would be difficult for a court to conclude that a duty

had been placed upon the supplier that restricted distribution to

a noncompliant storage facility.




CONCLUSION




Under Title 198 of the Nebraska Department of Environmental

Quality rules and regulations for the containment of agricultural

chemicals, there are no provisions which would place penalties upon

a non-owner supplier who delivered chemicals to a storage facility

that was not compliant. Possible tort liability actions may be

instituted against the chemical supplier, which could result in

liability if the chemical supplier knew or should have known that

storage facility was inadequate, although there have, thus far,

been no Nebraska Supreme Court decisions on this issue.




The Legislature could provide for a different result by the

implementation of legislation that placed liability upon a supplier

for depositing chemicals into a noncompliant storage facility. The

legislation could also contain a means of providing notice to the

supplier of the storage facility's compliance under Title 198.




Sincerely,




Don Stenberg

Attorney General






Jason W. Hayes

Assistant Attorney General