Articles Posted in Contaminated Property

contaminationOn September 25, 2014, Governor Brown signed SB 445 (Hill) Underground storage tanks; hazardous substances: petroleum: groundwater and surface water contamination into law (UST Law).  The UST Law was an urgency measure that took effect immediately.

The UST Law makes changes to the Underground Storage Cleanup Fund (UST Fund).  The UST Fund provides a mechanism to reimburse owners and operators of USTs the cost to remediate contaminated sites as the result of leaking USTs.  Most importantly, the UST Law extended the program’s sunset date by ten years to January 1, 2026.  Under the prior law, the UST Fund was set to expire in 2016, leaving many UST sites without access to state funds.

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OLYMPUS DIGITAL CAMERAOn November 6, 2013, ASTM revised its standard for conducting Phase I environmental site assessments, known as Standard E1527-13 (entitled “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process”).  ASTM E1527-13 is the first revision to the ASTM Phase I standard since its 2005 revision of the standard (known as ASTM E1527-05).

The ASTM standards are a helpful tool for parties seeking to avoid, or at least minimize, potential liability pursuant to the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA,” also known as “Superfund”).  CERCLA imposes liability without regard to fault or negligence on present facility owners and certain past owners, as well as certain other parties, for any environmental contamination found on the property.  This means that a purchaser and current owner of land contaminated by the actions of others could be held liable under CERCLA for the cleanup of the property.  Fortunately, CERCLA has a few defenses for these situations for so-called “innocent landowners,” “bona fide prospective purchasers,” and “contiguous property owners.”  However, to qualify for these defenses, CERCLA requires a property owner to conduct “all appropriate inquiries” on or before the date of acquiring the contaminated property, among other requirements.

Prior to November 2005, there was no federally approved statute or regulation defining the procedure that a prospective purchaser must follow in conducting all appropriate inquiries.  However, on November 1, 2005, the United States Environmental Protection Agency (“EPA”), issued a final rule entitled the “Standards and Practices for All Appropriate Inquiries.”  Effective on November 1, 2006, the All Appropriate Inquiries Rule for the first time established federal standards and practices for conducting all appropriate inquiries, as a first step to qualifying for one of the elusive CERCLA defenses.

Settlement plays a fundamental role in the Environmental Protection Agency’s (“EPA”) Superfund enforcement program. Potentially Responsible Parties (“PRPs”) seeking to resolve their liability through the settlement process should take note that EPA recently issued two new guidance memoranda on its settlement procedures.  One memorandum sets forth revised procedures for managing the duration of remedial design/remedial action negotiations and notably encourages the use of orders known as Unilateral Administrative Orders (“UAOs”) in the face of unsuccessful negotiations.

The recent memorandum, entitled Revised Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations, and dated September 21, 2012, is aimed at strengthening EPA’s negotiation practice, shortening the duration of negotiations, and achieving timely settlements.  Of note to PRPs is that EPA’s new guidance strongly endorses use of UAOs, stating: “We encourage use of EPA’s UAO authority in appropriate cases as a key component to expediting the RD/RA negotiation process.”  The Guidance further cautions that “Potentially Responsible Parties (PRPs) should know during negotiations that EPA is willing and ready to issue a UAO if they unreasonably delay settlement.”  The memorandum is available here for further review.

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While we tend to think of a CERCLA “facility” as the real property where environmental contaminants have come to be located, it is important to remember that CERCLA’s definition of “facility” is actually much broader than that and can serve to open the door to “Potentially Responsible Parties” not considered in your initial cost recovery analysis.

Pursuant to CERCLA, the owner of a facility from which hazardous substances have been released is liable for the costs of responding to the release.  Two recent CERCLA cases  involving motor vehicles illustrate how CERCLA’s broad definition of “facility” expands CERCLA “owner” liability beyond ownership of contaminated real property to ownership of equipment and vehicles from which contaminates have been released.  These cases also provide us with an answer to the question:  Is your vehicle a CERCLA facility?  And the answer is:  It depends.

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On May 1, 2012, the California State Water Resources Control Board (SWRCB) adopted via Resolution No. 2012-0016 the Water Quality Control Policy for Low-Threat Underground Storage Tank Case Closure (Low-Threat Closure Policy).  The Low-Threat Closure Policy finally became effective on August 17th.  This should be good news for the thousands of UST sites in California because the Low-Threat Closure Policy will hopefully make it easier to obtain closure.  At a minimum it defines more clearer criteria for obtaining closure.

The Low-Threat Closure Policy recognizes that many petroleum release cases pose a low-threat to human health and the environment. The policy’s purpose is to establish consistent California statewide case closure criteria for low-threat petroleum UST sites. To potentially qualify for closure, the site must satisfy eight general criteria (applicable to all sites), as well as media-specific criteria as it pertains to groundwater, vapor intrusion to indoor air and direct contact, and outdoor air exposure.  Below is a brief description of each of these criteria.

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This week, in the case of Solutia, Inc. and Pharmacia Corp. v. McWane, Inc. (Solutia), the Eleventh Circuit held that a party that performs a cleanup in compliance with a consent decree has no right under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) section 107(a) to recover its cleanup costs.  This case represents a continuance of the courts’ clarification of when claims can be brought under CERCLA sections 107(a) and 113(f).  To understand the significance of this case, it is best to start by examining the United States Supreme Court cases that proceeded it, beginning with the Supreme Court’s decision in Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004).

In Cooper v. Aviall, the Supreme Court turned decades of CERCLA jurisprudence on its head.  Relying on the plain language of CERCLA section 113(f), the court held that a potentially responsible party (“PRP”) can only seek contribution under section 113(f) from other parties “during or following” a civil action under CERCLA section 106 or 107.  Therefore, a party that had not been sued and had not entered into a settlement could not seek contribution under CERCLA section 113(f).  The court did not address when a party could bring an action under section 107. 

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Okay, so it will probably come as no surprise to those readers that know anything about perc (also known as PCE, short for perchloroethylene, another name for tetrachloroethylene – whew!) that, when the U.S. Environmental Protection Agency (EPA) released it’s final health assessment for the chemical this week, EPA essentially concluded “yep, it’s still bad stuff.”  More specifically (and much more scientifically), the assessment characterized it as a “likely human carcinogen.”  In addition, the assessment cited non-cancer long-term health effects including harm to the nervous system, kidney, liver, immune and hematologic systems. 

Perc is best known for being the chemical solvent widely used in the dry-cleaning industry.  Discharges of perc (mainly from dry-cleaning facilities) have contributed to contamination at many properties.  According to EPA, hundreds of Superfund sites in the country have perc as a contaminant. 

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Last week, the California State Water Resources Control Board (SWRCB) gave notice of public opportunity to comment on its proposed April adoption of the Water Quality Control Policy for Low-Threat Underground Storage Tank Case Closure (Low-Threat Closure Policy). This should come as welcome news for the thousands of underground storage tank (UST) sites in California because the Low-Threat Closure Policy will hopefully make it easier to obtain closure. 

The Low-Threat Closure Policy recognizes that many petroleum release cases pose a low-threat to human health and the environment. The policy’s purpose is to establish consistent California statewide case closure criteria for low-threat petroleum UST sites. To potentially qualify for closure, the site must satisfy eight general criteria (applicable to all sites), as well as media-specific criteria as it pertains to groundwater, vapor intrusion to indoor air and direct contact, and outdoor air exposure. Below is a brief description of each of these criteria.

The general criteria are as follows:

  • Site must be in a service area of a public water system:  The policy recognizes that while new water supply wells are unlikely to be installed in the shallow groundwater near former UST release sites, it is difficult to predict whether this will always be the case, particularly in rural areas that are undergoing new development. Therefore, the policy is limited to areas with available public drinking water supplies. Continue reading

Contaminated Land30 years ago tomorrow, Congress passed the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which is commonly known as the Superfund law. CERCLA, which Congress amended in 1986, was created to address the most contaminated properties in the United States and to provide federal authority to respond to releases or threatened releases of hazardous substances. Congress passed CERCLA in response to public outcry from a series of environmental disasters such as Love Canal – where in 1978, carcinogens from long-ago abandoned chemical operations began percolating from the ground, causing residents of the New York town to experience miscarriages, birth defects and countless other health problems.

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Gas StationSince 1989, one bright spot for owners of property in California contaminated by petroleum releases from underground storage tanks has been monies available from the State of California Petroleum Underground Storage Tank (“UST”) Cleanup Fund (the “Fund”). Monies in the Fund are provided by a storage fee paid by petroleum UST owners through the permit process based upon the volume of throughput.

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