Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) - Chapter 5 - Managing Environmental Liability

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Managing Environmental Liability - Business Transactions and Brownfield Redevelopment - Looseleaf

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5
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Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA)
(42 U.S.C. 9601 et seq.)
§ 5.01 Introduction
In the late 1970s, the federal government was forced to stand by helplessly as
thousands of abandoned dump sites across the country leaked hazardous wastes
into the environment because the owners of these sites could not be found and the
EPA lacked the authority under RCRA to clean up these inactive sites. With
public pressure mounting, Congress enacted the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA or Superfund).1 It
was enacted to provide a federal mechanism for expeditiously cleaning up these
hazardous waste sites.
Unlike other federal environmental laws, CERCLA does not provide for
delegation to authorized states. However, states have effective veto power over
cleanups as the EPA must consult a state before a remedy may be selected.
Indeed, EPA has entered into cooperative arrangements with states that allow
state environmental authorities to take the lead role in supervising the cleanups.2
In addition, many states have enacted their own superfund laws, known as “minisuperfunds,”
which generally parallel the federal law, but may contain
significantly different liability provisions.
CERCLA imposes strict and retroactive liability of four classes of responsible
parties known as potentially responsible parties (PRPs) for the cleanup of releases
of hazardous substances. The law authorizes EPA to clean up contaminated sites
and seek reimbursement from PRPs or issue administrative orders requiring PRPs
to clean up sites. In addition, private persons and PRPs who incur cleanup costs
can seek reimbursement from other PRPs.
The passage of CERCLA transformed environmental law. It is not possible to
understate the impact the law has had on business transactions. Shortly after its
enactment, it became clear that the law was passed to provide a federal
mechanism for expeditiously cleaning up these hazardous waste sites.

Chapter 5: Comprehensive Environmental Response, Compensation and Liability Act of 1980

5.01 Introduction
5.02 CERCLA Site Identification, Ranking, and Remediation Process
5.03 Site Identification Process
5.04 Site Ranking Process
5.05 Site Remediation Process
5.05A Five-Year Reviews
5.06 Reporting Releases of Hazardous Substances
5.07 Information-Gathering Authority
5.08 Elements of CERCLA Liability
5.09 Definition of Release or Threatened Release
5.10 Definition of Hazardous Substances

    A. The Petroleum Exclusion

        1. Petroleum Fuel Cases
        2. Used or Waste Oil Cases
        3. Petroleum Sludge Cases
        4. Re-Refined Oil

    B.Mining Wastes

5.11 Definition of Facility
5.12 Definition of Response Actions and Recoverable Response Costs 5-25

    A. Classification of Response Actions

        1. Removal Actions
        2. Remedial Actions

    B. Tactical Considerations for Classifying Response Actions
    C. Recoverable Response Costs

        1. Medical Monitoring
        2. Attorney Fees
        3. Phase 1 Due Diligence Costs

    D. Consistency with the NCP

5.13 — CERCLA Liable Parties

    A. Joint and Strict Liability
    B. Categories of PRPs

        1. Owners
        2. Operators
        3. Generators and Other Arrangers

            a. Kinds of Arrangers

                i Sales of Products Containing Hazardous Substances
                i Suppliers of Raw Materials
                ii Formulation Agreements
                i Sale of Real Estate Contaminated with Hazardous Substances Service Station Relationships
                v Municipalities as Arrangers
                vi De Micromis PRP Exemption
                vii Output Agreements

        4. Transporters

    C. Required Nexus to Site

5.14 Defenses to CERCLA Liability in Cost Recovery and Contribution Actions
5.15 Section 107(B) Defenses
5.16 Innocent Purchaser’s Defense
5.16 Bona Fide Prospective Purchaser’s Defense
5.16A Contiguous Property Owner Defense
5.17 Intervening Passive Landowner Defense
5.18 Superfund Recycling Equity Act (‘‘SREA’’)
5.19 Equitable Defenses
5.20 Consistency with the NCP
5.21 Contractual Defense
5.22 Private Cost Recovery, Contribution Actions and the Supreme Court’s Aviall Decision

    A. Key Issues Left Unresolved by Aviall

        1. What Is a Civil Action?
        2. What Are §113(f)(3)(B) Administrative Settlements?
        3. Is There an Implied Right of Contribution Under §107?
        4. Federal Enforcement Bar
        5. Prospective Purchaser Agreements
        6. RCRA §7002 Citizen Suits
        7. State Contribution Rights

    B. Impact of Aviall on Transactions and Due Diligence
    C. Apportionment Factors for Contribution Actions

5.23 Contribution Protection
5.24 Section 106 Administrative Orders and Injunctive Relief
5.25 Claims Against the Superfund
5.26 Reimbursement of Local Governments for Emergency Response Actions
5.27 CERCLA Non-Priority Lien
5.27A Windfall Lien

    A. Perfecting the Windfall Lien
    B. Calculating the Windfall Lien
    C. Resolving Windfall Liens

5.28 Statute of Limitations
5.29 Judicial Review
5.30 Citizen Suits
5.31 Enforcement
5.31A Federal Enforcement Bar
5.32 Emergency Planning and Community Right to Know Act of 1986 (EPCRA)
5.33 Emergency Planning
5.34 Emergency Notification
5.35 Hazardous Chemicals Reporting Requirements
5.36 Inventory Reporting Requirements
5.37 Toxic Chemical Release Reporting
5.38 Trade Secret Protection
5.39 EPCRA Enforcement
5.40 EPCRA Citizen Suits

Lawrence P. Schnapf is Principal of Schnapf LLC. He has 25 years of national environmental experience with Fortune 500 corporations and a number of major New York-based law firms. Mr. Schnapf primarily concentrates on environmental issues associated with corporate, real estate and brownfield transactions, commercial lending, distressed debt, bankruptcy and workouts. He has extensive experience with brownfield redevelopment and financing, negotiating environmental insurance policies for business and real estate transactions, performing environmental due diligence for complex business transactions.

He has also written numerous articles on environmental law, is a contributing author for several chapters of "Brownfield Practice and Law: The Cleanup and Redevelopment of Contaminated Properties" published by Matthew Bender. He was also a contributing author for "The Law Of Environmental Justice" published by the American Bar Association and the Matthew Bender "Environmental Law Practice Guide".

Mr. Schnapf is the co-chair of the New York State Bar Association's Hazardous Site Remediation Committee, co-chair of the NYSBA Brownfield Task Force and a board member of the Board of the NYC Partnership of Brownfield Practitioners. He is also the chair of the Brownfield Committee Force of the Environmental Business Association of New York.

He is Chair of the ABA Section of Business Law Committee on Environmental, Energy and Natural Resources Law. He is a vice chair of the Environmental Transactions, Audits and Brownfield Committee: and Special Committee on Disclosure of the ABA's Section of Environment, Energy and Resources. He is also a member of the board of BNA's Environmental Due Diligence Guide.

Mr. Schnapf is also a member of the ASTM 1527 Task Group, Phase II Legal Work Group, Co-Chair of the legal sub-committee for the ASTM Vapor Intrusion Task Group, a member of the ASTM Appropriate Care/Continuing Obligations Task Group and Building Energy Performance Disclosure Task Group.

Mr. Schnapf is an adjunct professor of environmental law at New York Law School where he teaches "Environmental Issues in Business Transactions" and "Environmental Law and Policy". He is also on the faculty of the Center for Christian Studies at Fifth Avenue Presbyterian Church where he teaches "The Bible and the Environment."

He is listed in the International Who's Who of Business Lawyers 2008 and 2009, the 2009 Madison's Who's Who of Executives and Professionals, and The International Who's Who of Environmental Lawyers 2008 and 2009, and Chambers USA 2009 Client Guide of America's Leading Lawyers for Business.