Owners and contractors seldom consider themselves responsible for hazardous waste they did not create, do not use, and about which they have no knowledge. However, the federal government has cast a broad net over both when enacting CERCLA or the Comprehensive Environmental Response Compensation Act of 1980. CERCLA identifies four categories of potentially responsible parties or “PRP’s” responsible for the actual or threatened “release” of “hazardous substances” from a “hazardous waste facility”, whether active or inactive. PRP’s performing routine construction activities fitting within these four requirements face strict liability, meaning fault is automatic, as well as joint and several liability for all remediation costs, past, present and future.
A basic understanding of these requirements is essential to fully appreciate the severity of the risks imposed upon owners and contractors by CERCLA. First, PRP’s” include 1.) current owners/operators, and/or 2.) former owners/operators of the “hazardous waste facility”, along with any 3.) entities arranging for disposal/treatment and/or 4.) transporters of the “hazardous substance”. Owners become PRP’s simply by reason of ownership, while contractors typically become PRP’s as “operators” or “transporters”.
Second, a “hazardous waste facility” includes any site or area where a “hazardous substance” has been deposited, stored, disposed of, or placed, or otherwise come to be located”. It matters not whether the “hazardous substance” was deposited at the site 100 years ago, or simply migrated onto the site through groundwater. Once “hazardous waste” is located upon a site, it becomes a “hazardous waste facility” under CERCLA.
Third, a “release” is any handling of a “hazardous substance” including “spilling, leaking, pumping, pouring, emitting, emptying, injecting, escaping, leaching, dumping, or disposing into the environment”. Simply put, if you touch “hazardous waste”, you generally own it, without regard to any fault or negligence.
Fourth, a “hazardous substance” is defined by reference to other Federal Laws, and includes, “elements, compounds, mixtures, solutions, and substances, which when released into the environment may present substantial danger to the public health or welfare or the environment”. Many common materials and substances used in routine construction activities are “hazardous substances”, including paints, solvents and glues.
Applying these four requirements to routine construction activities shows how easily owners and contractors can run amuck of CERCLA. In Kaiser Aluminum and Chemical Corp, v. Catellus Development Corp, the owner of a “hazardous waste facility” sought to hold its contractor jointly responsible for remediation costs imposed under CERCLA. The unfortunate contractor had unknowingly moved existing "contaminated" soils during excavation and grading operations from one area of the site and deposited them over "uncontaminated" soils upon another area of the site. The contractor was found strictly liable as a “operator” and “transporter” of the “hazardous substance” within the existing "contaminated" soils that were then “released” at the “hazardous waste facility” while performing excavation and grading activities.
In Danella Southwest, Inc. v. Southwestern Bell Telephone Co., a contractor and owner were jointly responsible for removing "contaminated" soils from a site neither knew to be a “hazardous waste facility”. Once again, the unfortunate contractor had simply excavated a trench in which to lay cable and moved the excess soils to an off-site location. The telephone company and contractor were strictly liable as “operators” and “transporters” of “hazardous substances” removed from a “hazardous waste facility” and “released” at an off-site location.
Designers are not exempt from exposure under CERCLA. In Ganton Techs., Inc. v. Quadion Corp, a civil engineer was deemed an “operator” of a “hazardous waste facility” simply because daily reports indicated the engineer “actively supervised and directed” the excavation and transportation of contaminated soils.
While the handling of contaminated soils is the most common construction activity subjecting owners and contractors to liability under CERCLA it is not the only form of prohibited “release”. Other examples include the handling of transformers containing PCB’s, dewatering activities during construction operations, disposal of building materials, the handling of asbestos, and the removal of underground storage tanks. Regardless of how the “hazardous substance” found its way onto a construction site, owners and contractors are more often than not held liable as PRP's for the resulting remediation costs.
In order to avoid the imposition of liability arising from CERCLA, every owner PRP should perform, and every contractor PRP should request a copy of the environmental site assessment or ESA. There are two types of ESA's over which every owner and contractor should have at least a working knowledge. A Phase I ESA consists of researching the current and historical uses of the property (and adjacent properties) to identify possible contamination of the soils and groundwater prior to the start of purchase and/or construction activities. The purpose of a Phase I ESA is to identify and recommend further action in the event a recognized environmental condition or REC indicates contamination of the subsurface by on-site or off-site sources. A proper Phase I ESA can be used to satisfy the requirements of CERCLA's innocent land owner defense.
If a REC is identified, the PRP, should proceed with a Phase II ESA to evaluate the presence of petroleum products or hazardous waste within the subsurface of the property. A Phase II ESA consists of drilling, sampling, and testing the soils and groundwater at the property, based upon the potential "hazardous wastes" identified in the REC as well as the local geology and site issues. In some instances, a purchaser may conduct a Limited Phase II ESA in order to identify the nature and extent of contamination prior to investing in a full Phase II ESA.
In the end, every stakeholder should have an opportunity to review the Phase I ESA and if needed, the Phase II ESA, for any property to be developed having a current and/or historical exposure to "hazardous waste".