Mitigating Environmental Liability From Construction Debris and Contaminated Soil Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1. TUESDAY, FEBRUARY 12, 2019 Presenting a live 90-minute webinar with interactive Q&A John-Patrick Curran, Principal, Sive Paget & Riesel, New York Polly B. Jessen, Partner, Kaplan Kirsch & Rockwell, Denver
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The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1.
TUESDAY, FEBRUARY 12, 2019
Presenting a live 90-minute webinar with interactive Q&A
John-Patrick Curran, Principal, Sive Paget & Riesel, New York
Polly B. Jessen, Partner, Kaplan Kirsch & Rockwell, Denver
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MITIGATING RISK AND LIABILITY FROM CONSTRUCTION DEBRIS AND
CONTAMINATED SOIL
MITIGATING RISK AND LIABILITY FROM CONSTRUCTION DEBRIS AND
and Liability Act, aka “Superfund”• Joint and several liability regardless of fault• Responsible parties include:
- current and past owners and operators of any facility where a hazardous waste was disposed of (does not include petroleum)
- May include anyone (e.g. corporate officers) who had substantial control over the activities that lead to the release of hazardous substances. US v. Bestfoods, 524 U.S. 51 (1998).
Legal Risk Legal Risk
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CERCLA (cont.)
- generators and those who arrange for disposal or
treatment of hazardous waste
- transporters of hazardous waste who are responsible for
selecting site of disposal Tippins, Inc v. USX Corp., 37 F.3d
87 (3d. Cir. 1994)
• Responsible parties can be made to investigate and to clean up a
site, or to pay for investigation and remediation after that work
has been done by others
Legal Risk Legal Risk
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State and Local Laws
• Different laws from state to state, county to county,
etc.
• NY Navigation Law Article 12 (Oil Spill Law)
- Prohibits unauthorized discharge of petroleum
- Strict liability
- Private right of action
Legal Risk Legal Risk
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Reporting requirements
• Federal – RCRA
- Hazardous waste
• State reporting requirements
- NY petroleum spill reporting requirements
Legal Risk Legal Risk
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Third Party Liability
Offsite migration – obligation to investigate and remediate
• Continuing source
Personal injury
Property damage
• Stigma
Natural resources damage
Legal Risk Legal Risk
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PRACTICAL RISKPRACTICAL RISK
Time is MoneyTime is Money
Determining legal responsibility becomes less important when the clock is running
and you need to get something built
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• Added cost has to be carried in development budget,
regardless of whether recovery may be available later
• Impact to schedule has to be accounted for
Practical Risk Practical Risk
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C&D and CONTAMINATED MEDIAC&D and CONTAMINATED MEDIA
Pre-Acquisition Due Diligence“All Appropriate inquiries”
• CERCLA may protect innocent purchasers of previously- contaminated property, IF they
- carry out “all appropriate inquiries” into the previous ownership and uses of the facility , AND
- take “reasonable steps” to stop any continuing release of a hazardous substance, prevent a future release, and prevent or limit harm to humans or the environment.
Contractual Allocation of Responsibility and RiskBuyer/seller allocation of responsibility
• “As-is” clauses- Not the same thing as a release- Statutory rights must be specifically waived- Release v. indemnity- First party rights v. rights of contribution
Remediation funding sources/escrow• Seller may retain responsibility for increased costs of
- The devil is in the endorsements- Claims made- If not carefully scrutinized, policies can be worthless- Capital improvement exclusion- Historical fill exclusion- “Claim” requirement or governmental trigger- Pre-existing conditions – disclosure- Reopeners - Non-owned disposal sites
NEWLY INTRODUCED CONTAMINATION/ EXACERBATION/VIOLATIONS OF LAW
• Contractors - negligent exacerbation/disposal
• Party responsible for compliance
Owner/operator of facility
Contractors
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WHO IS LIABLE UNDER STATUTORY AND COMMON LAW?
IDENTIFYING RESPONSIBLE PARTIES
• New conditions vs. pre-existing Phase I/Phase II ESA establishes baseline conditions
• Responsibility for pre-existing contamination Phase I ESA historical uses
Chemical “fingerprinting”
Chain of title
Other historical research
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PRE-EXISTING CONTAMINATION
Prior owners/sellers
Are there indemnities in place?
Are there escrows or cost reimbursement provisions?
Federal covenants and indemnities
o BRAC § 330
o CERCLA § 120(h)
Insurance
Pollution legal liability policies
Historical CGL policies
Consultant’s policies
WHO MAY BE CONTRACTUALLY LIABLE?
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NEWLY INTRODUCED CONTAMINATION/ EXACERBATION/VIOLATIONS OF LAW
• Contractors/subcontractors
• Consultants
• Insurers Contractor’s pollution legal liability
WHO MAY BE CONTRACTUALLY LIABLE?
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PRACTICALLY SPEAKING
• Time may not allow recovery at the time costs are incurred
• Time may not allow steps to insure maximum recovery
• Liable parties may not be solvent
• Recovery costs may exceed likely cost recovery
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COST RECOVERY
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SOURCES OF RECOVERY
LEGAL Claims Funding Sources
• CERCLA claims• RCRA/CWA claims• Common law claims• Insurance• Contractual claims
• Tax credits • State cleanup funds
• UST fund• Spill fund• Dry cleaner funds
• Other state and local incentives• e.g., TIF or special
district funding
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CERCLA• Current and past owners and operators, arrangers, transporters
• Recoverable costs under 107(a)(4)(B): are “any . . . necessary costs of response incurred by any other person consistent with the national contingency plan”
• 40 CFR 300.700 defines actions “consistent with the national contingency plan” NCP provisions for private actions
Public comment on remedy selection and community relations
Immaterial or insubstantial deviations do not affect claims
• Segregate recoverable costs Site characterization vs. investigation of nature and extent
Development vs. remediation
Fees for attorneys/consultant: cost recovery vs. regulatory compliance
• Statute of limitations is 3 or 6 years
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RCRA/CLEAN WATER ACT
• Citizen suit provisions can be used to enforce federal and state regulations or to address “imminent and substantial endangerment”
• RCRA provides injunctive relief only, 42 U.S.C. 6972; Meghrig v. KFC Western, 516 U.S. 479 (1996)
• CWA provides injunctive relief, penalties and fee shifting, 33 U.S. 1365
• Notice of intent to sue is required: 42 U.S.C. 6972(b)(1)(A) (60 days to enforce regulations)
42 U.S.C. 6972(b)(2)(A) (90 days for “imminent and substantial endangerment”)
6972(b)(2)(A)(iii), (B)(iii) (prior notice only for RCRA suits involving hazardous wastes)
33 U.S.C 1365(a) (60 days for CWA citizen suits)
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STATE COMMON LAW AND OTHER CLAIMS
• Nuisance and trespass Claims against adjacent property owners/operators
Interference with use and enjoyment = nuisance
Unlawful entry (migration of contaminants) = trespass
Diminution in property value/loss of use
• Negligence Claims against contractors and consultants
Cleanup costs
• Misrepresentation (seller)
• Takings (governmental actor)
• Statutory claims (e.g., mini-CERCLA) vary by state
• Statute of limitations may limit claims
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INSURANCE
• Coverage for “additional named” vs. “additional” insureds varies
• Notice and conditions of coverage must be observed—read the policies
• Beware of tricky exclusions e.g., insured vs. insured exclusions
• Historical coverage may require cooperative efforts to be agreed upon in advance
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CONTRACTUAL CLAIMS
• Sellers, lessors, lessees, contractors, consultants, utility providers, and anyone with permits, licenses, easements, or other contractual access to the site