In the case Fina v. ARCO, 200 F.3d 266 (5th Cir. 2000), the United States Court of Appeals for the Fifth Circuit ruled that two separate indemnification provisions did not cover contribution claims under CERCLA. The Plaintiff was the owner of a refinery in Texas that had previously been owned by BP Oil Company and ARCO. When Fina discovered contamination on the property, it sued both BP and ARCO for contribution under CERCLA. The District Court ruled that indemnification provisions in the contracts of sale covered the CERCLA claims and dismissed the suit. On appeal, however, the Court of Appeals ruled that neither indemnification clause covered CERCLA claims. The first indemnification clause indemnified against "all claims, actions, demands, losses or liabilities arising from the use or the operation of the Assets . . . and accruing from and after closing." Interpreting Delaware law, because the contract stated that Delaware law should apply, the Court found the indemnification clause unenforceable because of Delaware's "clear and unequivocal" test that requires "for a party to be entitled to indemnification for the results of its own negligence, the contract must be crystal clear or sufficiently unequivocal to show that the contracting party intended to indemnify the indemnitee for the indemnitee's own negligence." The Court found this rule was equally applicable to indemnification for strict liability claims, such as those under CERCLA.
The second indemnification clause provided indemnification against "all claims, actions, demands, losses or liabilities arising from the ownership or the operation of the Assets . . . and accruing from and after Closing . . . except to the extent that any such claim, action, demand, loss or liability shall arise from the gross negligence of ARCO." Here the Court of Appeals applied Texas law and found the clause unenforceable because of the Texas "express negligence" standard that holds that "parties seeking to indemnify the indemnitee from the consequences of its own negligence must express that intent in specific terms." The Texas Supreme Court has held that this applies also to strict liability claims. "Indemnification against strict liability is an exception to usual business practices in the same manner as indemnifying against someone else's negligence. . . Fairness dictates against imposing liability on the indemnitor unless the agreement clearly and specifically expresses the intent to encompass strict liability claims."