Showing posts with label liability. Show all posts
Showing posts with label liability. Show all posts

Thursday, June 21, 2007

The CERCLA Loop: Who should be liable?

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) has a very strict approach to assigning liability: “the liability of an owner or operator or other responsible person under this section shall be the full and total costs of response and damages” 42 USC §9607(c)(2).

An important policy is forwarded by this Congressional action, namely that environmental contamination is a national problem. In so recognizing the enormity of the problem, Congress apparently sought to clean up sites and preserve the environmental quality of this Nation for future generations. Whether for better or worse, that clean up comes at the expense of “owners or operators” whether or not their direct actions contributed to the contamination.

I can appreciate that Congress sought out the polluters who were causing the degradation of the environment, but I wonder if their vague language was intended. Clearly the courts have read “owner or operator” broad, at times including banks, brokers, and other title holders. We must presume that Congress is “ok” with this approach, since they could easily over rule the courts by changing the statute to reflect their true intent.

What should be the respective liability of parties to a contamination plume? What if someone only “owned” the site, but didn’t contribute directly to contamination? CERCLA does have some built in defenses. Does the strict liability actual change practices? How many people actually know that there is a CERCLA defense? These questions are all necessary parts of shaping our national environmental policy toward more responsible business practices and reasonable liability attachments.

Monday, June 4, 2007

The New Environmental Due Diligence

The world of environmental due diligence has been put in a tizzy by the US EPA. At the end of 2005 the EPA finally put together their guidelines for what constitutes All Appropriate Inquiry (AAI, a term first coined in 1984 in the Superfund Amendment Reauthorization Act, SARA). So this is now the only guideline to use while conducting a Phase I that will allow the new owner of a property to avoid federal liability under CERCLA (Comprehensive Environmental Response Compensation and Liability Act, 1980). So as a potential property owner this will affect you, and you should be aware of the AAI regulations, because it is unlikely that your bank will let you know. You see banks do not have much liability under CERCLA, so they are not really interested in the new regulations. What they are interested in is whether or not the property has environmental contamination that would lessen the real property value. These are separate issues entirely. Of course, AAI is a little more involved that other levels of environmental due diligence and will cost more. Talk to your local environmental consultant about what is right for you or you can email me at nickpatz@ceresassociates.com or phone me at 707 748-3170.