A federal court in New York recently decided that the migration of subterranean contamination onto a neighboring property was not, by itself, a sufficient basis to hold a neighboring landowner jointly liable for remediation costs under the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA").
CERCLA was enacted by Congress to encourage the remediation of contaminated properties, and seeks to achieve its goal through the use of strict liability. Under CERCLA, the government can compel a landowner to pay for the remediation of contamination on his or her property without showing that the landowner was causally responsible for the discharge of the contamination on the property in the first place.
However, as we have discussed in several prior blog posts here at the Periconi, LLC Environmental Law Blog, CERCLA provides a landowner with the opportunity to recover some of the remediation costs he or she has expended, or seek the contribution of remediation costs from a party who is potentially responsible for the contamination-a "potentially responsible party," or "PRP." One way to recover costs from a PRP is to prove that the PRP is the current or former owner of the site or "facility" where the contamination is located. In some cases, a CERCLA "facility" may span several parcels and implicate several landowners for remediation costs.
In Alprof Realty LLC v. Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints, 09-CV-5190 (Sept. 12), property owner Alprof Realty sued the neighboring Church when it discovered that historical contamination had migrated onto its property from the Church's parcel. The Church counterclaimed that the area of contamination encompassed on the two respective parcels constituted a single "facility" under CERCLA, and therefore both parties would be jointly responsible for the remediation costs.
In support of its argument, the Church cited a number of cases where courts have defined CERCLA "facilities" that span property lines. However, the court was not convinced. In its decision, the court pointed out that in each case the Church cited, there was a "specific relationship between the properties, the parties and the contamination [that] was critical to the courts' definition of the facility boundaries" that was absent in Alprof.
For example, the Church cited Tanglewood East Homeowners v. Charles-Thomas, Inc. 849 F.2d 1568, (5th Cir. 1988), where individually owned lots in a suburban subdivision were collectively declared a single facility. However, in Tanglewood, the various lots in the subdivision were carved out of a single larger parcel where a single factory had operated and released hazardous contamination over two decades. In Alprof, there was no such common denominator. Rather, the Church simply purchased the property in 2002 with knowledge that some contamination existed, but failed to test the groundwater for contamination until 2006. It was during this time period that contamination migrated onto the neighboring Alprof parcel.
With the strict liability laws under CERCLA and its state counterparts, and the high cost of many environmental remediation projects, it is unsurprising that landowners like the Church will go to great lengths to pursue contribution from any source. It is important now, more than ever, to retain experienced environmental counsel when considering the purchase a parcel adjacent to actual or suspected contamination so that you can plan for how those liabilities will be allocated between buyer and seller, and whether the buyer will be assigned from seller the right to sue an adjacent property owner under circumstances similar to those presented in Alprof.