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?
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
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
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.
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.
Jason W. Hayes
Assistant Attorney General