Comprehensive Environmental Response Cleanup and Liability Act (CERCLA)

LIABILITY

What happens if a business already owns a contaminated site or, despite its best efforts, purchases a site which is later found to have contamination? Under CERCLA, liability for cleanup is difficult to avoid. In legal terms, CERCLA liability is strict, several, and joint. Strict liability does not require intent or negligence or a specified amount of precaution on the part of the potentially responsible party. If the PRP is within one of the categories established by CERCLA, that party can be held strictly liable for all costs associated with an environmental cleanup of the site. Liability for the cleanup is also joint and several. This means, according to Martin McCrory in American Business Law Journal, that all of the PRPs "are liable as a group or that each contributor is individually liable for the entire harm at the site." In layman's terms, a business's responsibility for costs incurred in the site cleanup is not necessarily proportional to those of its actions that lead to the site's contamination.

Once the liability of a PRP is established, escaping the burden of costs is only defensible under a few scenarios. Defensible scenarios include an act of God, an act of war, an act or the lack of action by a third party, or any combination of these. The defense that the release was caused by an act or lack of action by a third party is the most often used defense. It also frequently fails, according to McCrory.

RESPONSE ACTIONS OR SITE CLEANUP

Under CERCLA, there are two types of governmental responses that can take place in regard to contamination. The first is known as a short-term removal or removal action, in which the EPA takes immediate action in order to prevent or eliminate the release of hazardous materials in the case of an environmental emergency. A removal action cannot take more than one year from start to finish, and cannot cost more than $2 million. The second, known as a long-term remedial action, works to "permanently and significantly" lower the dangers connected to releases or threats of releases. This kind of action is meant to be much more comprehensive and therefore can continue over several years and, according to McCrory, can average over $30 million per site. Long-term remedial response actions occur only at sites listed on the EPA's National Priorities List (those sites which rate highest on the Hazards Ranking System).

Prior to the start of the cleanup, a remedial investigation and feasibility study (RI/FS) is done on the site in order to determine the level of contamination and select a method for removal or neutralization of the hazardous materials. The RI portion of the study collects information needed to establish the nature and extent of the contamination at the site. It also characterizes the environmental risks of the contamination and establishes the goals of cleanup. Using this information, the FS develops a number of possible cleanup scenarios for the contaminated site. Finally, the RI/FS forms the basis of the Record of Decision (ROD), which evaluates these scenarios and selects the appropriate one. Frequently, the cleanup proposal will be phased with separate remedies to address different problems on the site.

A PRP may settle with the EPA to handle all of these remedies (known as a global settlement) or some of them. The business may also come to an agreement with the EPA to pay for the RI/FS or the removal of the contamination. In some cases, the business/PRP may actually perform the site cleanup, rather than reimburse the EPA. It should be noted, however, that a settlement with the EPA does not necessarily protect a PRP from future liability.

Given the potential for liability, the best method for avoiding costly litigation and cleanup is prevention. When purchasing real estate, a company should work to avoid previously contaminated properties by engaging professionals to do thorough site evaluations. Companies whose business operations generate or deal with hazardous waste should work to prevent disasters. An environmental plan is crucial for this. A company needs to determine which regulations impact them, develop a comprehensive plan for dealing with hazardous waste, and work closely with local authorities where needed to execute it.

The EPA has established a toll-free number for assistance on hazardous waste issues: the RCRA/Superfund Hotline. Callers can get information on storage and transportation procedures, local contractors and governmental agencies, and other information pertinent to hazardous waste. The RCRA/Superfund Hotline number is (800) 424-9346. Additional information is available on the EPA Web site at http://www.epa.gov/superfund/. If contamination is discovered, the most important action a business can take is to stay involved in the process and take responsibility early in the hopes of a settlement rather than become involved in an EPA-led cleanup.

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