I. COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT (CERCLA)
A. Background: CERCLA was enacted in 1980 in response to highly publicized, abandoned hazardous waste sites, such as Love Canal.
B. Definition of hazardous waste: as defined in the Solid waste Disposal Act (SWDA) with modifications including the exclusion of petroleum.
C. CERCLA has three mandatory components:
1. Mandatory reporting of hazardous substance releases to the National Response Center (established under the Clean Water Act)
2. Response and remediation authorized, with recovery of the government's response costs from responsible parties
3. National Priorities List: a list of the worst abandoned hazardous waste sites that EPA is committed to resolving
D. CERCLA liability scheme:
1. Key components:
a. Strict liability defined as liability without fault. Although CERCLA liability can arise from improper waste handling, such improper handling, or even any waste handling at all, is not a prerequisite to CERCLA liability. Liability may exist under CERCLA even though the waste disposal activities giving rise to liability complied with all laws and used the best available technology at the time the disposal occurred.
b. Joint and several liability defined as the right of the plaintiff to choose among potential defendants when seeking recovery for response and remediation costs. Any defendant forced to pay more than its equitable share may either in the same action or in a separate action may seek contribution from the other defendants. (However, they may be restricted to several liability which is hard to prove.) The solvency of the other defendants is the major limitation on this type of action.
c. Retroactive liability defined to include waste that was discarded prior to the 1980 enactment of CERCLA. This is a controversial provision of CERCLA that has been questioned in several recent court decisions.
2. Potentially responsible parties (PRPs)
- owner and operator of a vessel or facility
- any person who owned or operated the facility at the time the waste was disposed of in that facility
- any person who arranged for disposal, treatment or transport
- any person who accepted waste for transport
3. Definition of a covered person - individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State, or any interstate body.
4. Defenses
a. Can prove that release was the result of an act of God.
b. Can prove that release was the result of an of war.
c. Can prove that release was the result of an act or omission of a third party with whom there is no direct or indirect relationship.
d. Exercise of due diligence prior to purchase of the property -
innocent landowner defense. For this defense to be available to purchasers of commercial property the purchasers must conduct a preliminary environmental site assessment (PESA) that shows no hazardous waste on the property. If hazardous waste is found as a result of the PESA, then the purchase cannot proceed to closing without subjecting the buyer to cleanup liability.
e. Lender exemption for normal lending activities.
f. Fiduciary exemption/heirs/governmental (forced) sales.
g. Exemption for recyclers (effective 11-29-99)
5. de minimus settlements: available to parties that made only minor contributions of hazardous waste to a site.
6. Hazardous Substance Superfund
7. Citizen suits permitted:
a. Notice must be given 60 days prior to commencement of the suit to: (1) the EPA; (2) the state where the site is located; and (3) the alleged violators.
b. No suit may be commenced if the EPA has already brought suit.
c. The court may award costs, including attorney fees and expert witness fees to the prevailing party.
E. Review of CERCLA regulations by the Circuit Court of Appeals of the United States for the District of Columbia
II. CERCLA SECURITY INTEREST EXEMPTION
A. Section 42 U.S.C. § 9601(20)(A) - excludes lenders engaged in normal lending activities from liability under CERCLA.
B. United States v. Fleet Factors Corp., Z&Z Leasing, Inc. v. Graying Reel, Inc
C. 40 C.F.R. § 300.1100 Security interest exemption
D. Impact of Kelley - found that 40 C.F.R. section 300.1100 exceeded EPA's statutory authority under CERCLA.
F. Correction by legislation, Section 42 U.S.C. § 9601(20)(E)
III. Brownfields initiative - this is a federal and state effort designed to return contaminated sites to productive uses.
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