David E. Cranston, chair of the Environmental Law Group, was published in Smart Business Magazine regarding how clients can avoid being stuck with cleanup costs in environmental contamination cases.

A client of ours faced significant costs in cleaning up property contaminated by the operations of its tenants many years earlier. The client’s former counsel who opined the pursuing claims against the tenants, who were mostly out of business, was not worth the time or money. Our investigation indicated otherwise. We learned that a tenant with a small scrap operation in the 1950s had changed names, and its business, through a series of transactions, was acquired by a large publicly traded company. Another tenant who was no longer doing business had significant insurance assets. After prosecuting the claims that our client was about to abandon, we recovered several million dollars to pay for the cleanup.

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In another recent decision on the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §9601 et seq., the Ninth Circuit clarified that the “current” owner is the owner at the time that cleanup costs are incurred for purposes of imposing liability under the act. Enacted thirty years ago, CERCLA is a federal law that creates a scheme for imposing strict liability for the investigation and remediation of contaminated property.

CERCLA imposes cleanup liability on “current” owners of the contaminated property regardless of when the contamination actually occurred. For example, if a person owns a property that is contaminated with a hazardous substance, under CERCLA they are responsible to cleanup the property even if they did not cause the contamination. Past owners are only responsible if the contamination of the property occurred during their ownership.
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