Entry
, last edited January 19, 2012The new ASTM vapor encroachment standard (E 2600-10) that was published a few months ago indicates that under the REC definition in the ASTM E 1527 Phase I standard, as well as under CERCLA and AAI, contaminant vapor migration on or to a property needs to be considered in property due diligence, analogous to contaminated groundwater migration. The only stipulation in the REC definition is that the contaminant be a hazardous substance or petroleum product.
This may represent a potential problem for the industry because of the millions of Phase Is conducted prior to the E 2600-10 standard when vapor migration was not typically considered under the REC definition. The question now is how might EPs respond to this potential liability problem, i.e., a vapor intrusion issue surfaces today on a property where they conducted the Phase I investigation some time ago and did not consider vapor migration under the REC definition.
In my view, there are a number of possible responses. First of all, I believe a strong case can be made that good commercial practice in the Phase I industry did not typically consider vapor migration and potential intrusion into buildings on a property involved in a real estate transaction. Moreover, a screening methodology to evaluate vapor migration did not really exist until recently. A second point that can be made is that EPA's Hazard Ranking System (HRS) used to identify and rank CERCLIS sites for inclusion on the National Priorities (Superfund) List did not in the past and does not to this date consider the risk presented by vapor intrusion caused by migration of subsurface hazardous substances, although EPA is currently evaluating amending the HRS to include such consideration. A logical argument can therefore be made that vapor intrusion risk is relatively new, and that as our understanding of this risk improves, so does our way of evaluating it. Such clearly was not the case "in the past" when these "old" Phase Is were done. Other points that might be made include the fact that an E 1527 Phase I is only "current" up to the date of the investigation. Certainly, there is the possibility that the event leading to the vapor intrusion problem today may have occurred after the Phase I investigation was conducted. For example, there may not have been a dry cleaner and the associated PCE release in the adjacent shopping center when the Phase I investigation was performed. Finally, it may also be possible, depending on the particular circumstances, to use the fact that an ASTM E 1527 Phase I excludes consideration of indoor air quality, and that vapor intrusion is directly related to a building's indoor air quality. Unfortunately, this exclusion does not address the potential for vapor migration onto a property (an objective of E 2600). Rather, it focuses solely on vapors in the subsurface of a property migrating into a building and causing an indoor air quality problem. As such, the potential for vapor encroachment on a property would not be excluded (under the REC definition), only the evaluation of whether or not the "encroaching" vapor can migrate into a building on the property and cause a health risk.
Is there any other reasoning that might provide a defense to potential Phase I consultant liability associated with not considering vapor migration in "old" Phase I investigations?
Comment
The first key to limiting liability is always to maintain an excellent relationship and thorough communication with one's clients. With that being said, most environmental consultants maintain a contractual responsibility to conduct their services in accordance with the standards and practices commonly used by their contemporaries, at the time the services were provided.
Until 2600-10 came out (and I'll argue even after it came out), vapor related contamination was not clearly viewed by the environmental community as a recognized environmental condition. If the scope of a consultant's services in conducting a Phase I were limited to satisfying AAI through the scope defined in 1527-05, then I see no valid basis for claiming the consultant "should have identified as a REC" a vapor intrusion condition; we're still discussing whether vapor encroachment conditions are or are not RECs. On the other hand, if the consultant had been charged with identifying business environmental risks, such a defense seems less well grounded. Similarly, if the vapor intrusion condition were the result of a contaminated groundwater plume on the Property, that should have been identified by the consultant in most cases. (Remember, though, the weasel-word "likely" in the definition of a REC - and nowhere should we promise that we will find every possible source of contamination without fail when we do a Phase I.)
Obviously, I'm not an attorney; a good lawyer would know how to state this much more clearly and with legal validity. I'm just trying to be logical.
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As to when vapor related contamination was clearly viewed by the environmental community as a recognized environmental condition, probably depends on when federal and/or state environmental regulations addressed the issue, and who conducted the Phase I Assessments.
In October 1993, Massachusetts privatized the environmental cleanup process and Environmental Professionals (EPs) were vetted and required to pass an exam, before becoming Licensed Site Professionals (LSPs). At the same time the Massachusetts Contingency Plan (MCP) 310 CMR 40.000 was redesigned to accommodate these changes, including assessment of the potential for current and future foreseeable completion of the Vapor Intrusion Pathway (read Vapor Encroachment) into buildings. The primary focus was to address a "Critical Exposure Pathway (CEP)” for vapor-phase emissions of measurable concentrations of oil and/or hazardous materials into the living or working space of a pre-school, daycare, school or occupied residential dwellings. However, comprehensive guidance from the Massachusetts Department of Environmental Protection (MassDEP) to support assessment of the CEP and Vapor Intrusion Pathway into commercial and industrial buildings was not introduced until April 2002 (WSC Policy #02-430), followed shortly by guidance to evaluate the intrusion (read Vapor Encroachment) of petroleum vapors into buildings in October 2002 (WSC Policy 02-411).
In 2006, while my company, Risk Management Incorporated, was working for the Northeast Association of Drycleaners to address their Perchloroethylene (PERC) problems, we ran into a divergence of opinions amongst MassDEP regulators in different regional offices on the interpretation of what constitutes a “Critical Exposure Pathway (CEP)” for Vapor Intrusion, what constitutes “Background” for various hazardous Volatile Organic Compounds (VOCs) atmospheric concentrations inside buildings, and the validity of the Cancer Inhalation Unit Risk Factor (UR) derived by MassDEP versus EPA’s value for PERC.
Long story short, in 2008 MassDEP responded to our position on these issues, revising their definition of the CEP and Background and developing a new UR for PERC. However, the release of their revised Guidance for Vapor Intrusion Assessment has still not happened and may not until early next year (2011). Even EPA’s Final Vapor Intrusion Guidance Document is not scheduled for release until November 2012.
The consequences of the LSP program in MA, started in 1993 and MassDEP’s continuously evolving approach and guidance to assess the potential for Vapor Intrusion into buildings (2002 -present) has markedly impacted the way LSPs address the vapor intrusion pathway for VOCs and is mirrored in Phase I assessments conducted in Massachusetts by EPs, especially LSPs. Hence, the key to limiting EP liability for past Phase Is by not recognizing Vapor Encroachment could rest on the environmental regulations present at the time, either at the federal or state level, and the training and expertise of the EP conducting the Phase I.
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You nailed the legal arguments on the head - state of the art and industry practice defenses. Juries have to be given examples of how knowledge changes over time to understand that just because you had an opinion in the past, doesn't mean it can be held against today's standards. How many of us wore helmets when we were kids riding bicycles or used seatbelts when we were children? Most people will not want to be held to today's standards for actions they took in the past. Juries usually get this if it's explained to them.
The more complicated issue is what do you do when you get that call that someone has your report and asks whether they can rely on it? You might want to write down their name and address and send them a letter by certified mail that the report was written for a particular client, standards have changed over time, they cannot rely on the old report, and you'd be happy to do a new report for them. Many states now allow claims for "negligently supplied information for the guidance of others." That is, a professional may owe a duty to a non-client with whom the professional has no contractual relationship, if the professional knows that the non-client will rely on the professional's opinion and the opinion turns out to be wrong. The Indiana Supreme Court just adopted this principle in U.S. Bank, N.A. v. Integrity Land Title Corp., http://bit.ly/aKPTdK, where it upheld a claim against a title insurance company where the title work was wrong and the title company knew a non-client was relying on its advice.
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The vapor intrusion lawsuit filed in New Jersey against Dupont has some very serious implications for consultants if the plaintiffs are successful. The underpinning of the legal argument is that Dupont (and my implication consultants) should have known about the potential for vapor intrusion as early as the 1980s based on what was known about the behavior of radon gas. The plaintiffs argue that since the scientific community was aware of the propensity for radon gas to infiltrate into homes, that Dupont (and again my implication consultants) should have known that volatile organic compounds in shallow groundwater would exhibit the same behavior.
The fact that regulators were not concerned about vapor intrusion until recently may not necessarily be a defense to a malpractice or negligent misrepresentation claim. While the regulatory approach to vapor intrusion could certainly be advanced as a basis for establishing what was the customary practice at the time, regulatory requirements often serve as the minimal requirements in negligence actions. Indeed, the purpose of Phase 1 ESAs was to help a client establish defenses to liability under CERCLA, not toxic torts, and if regulators were not requiring remediation to address vapor intrusion then why would the consultant have been required to evaluate this non-risk?
However, it is quite possible that a court would say that an EP because of its experience and training had a duty that went beyond the minimalist standards set by regulators and then breached that duty when it failed to properly advise its clients about the potential risk from vapor intrusion.
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Loss Prevention is key to EP’s mitigating their liability against claims for "negligently supplied information for the guidance of others." Especially here in Massachusetts, where an interesting twist to reliance on past LSP opinions on assessments conducted under the Massachusetts Contingency Plan (MCP) has arisen, primarily because MassDEP revised their Cleanup Standards and Inhalation Unit Risk Factor for Perchloroethylene (PERC) and their interpretations of what constitutes a “Critical Exposure Pathway” for Vapor Intrusion (read Vapor Encroachment) and what is “Background” for Volatile Organic Compound (VOC) concentrations inside buildings.
At the time the earlier assessments for PERC vapors were completed and submitted to MassDEP, they addressed the earlier PERC Cleanup Standards. However, MassDEP decided to re-visit these assessments in view of the revised and more conservative Cleanup Standards promulgated under the MCP, skirting the “Grandfather Law,” by issuing Notices of Non-Compliance (NONs) to the LSP for failing to adequately determine the “nature and extent” of the PERC release and the potential for Vapor Intrusion!
Hence, depending on the time and in which state the Phase Is were conducted, the EP could still be at risk, unless they include a comprehensive “Limitations” disclaimer, which requests users of their Phase I report to contact them and allow them to update their opinion, based on either new information or changes in federal or state regulations and environmental practices in their geographical area. This approach may not be “bullet proof,” but should markedly limit the EP’s liability.
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Having defended EPs against malpractice claims, the issue boils down to whether the EP exercised "reasonable and ordinary care" in arriving at their opinion based on the facts and scientific knowledge known at the time that their opinion was rendered. It would be a tough, uphilll climb to find an EP negligent or guilty of malpractice for having failed to identify a vapor intrusion issue before EPs began to recognize vapor intrusion as a potential health issue. We often turn to industry publications, state enforcement personnel, and standards to determine what constituted "reasonable and ordinary care" at a partiicular point in time for an EP practicing in a particular location. The height of the bar for what constitutes reasonable and ordinary care for a particular point in time may be different depending on the state, e.g., Mass v. NJ v. Ind, but it takes time for scientific knowledge to become common knowledge. For example, in the 1950s, industry use of PCBs was widespread because it helped protect workers' lives. Now, we know that PCBs are persistent in the environment. Does that mean industry was wrong for having used PCBs in the 1950s, or did we just become smarter with time to recognize some of the potential downfalls of PCB use? Hindsight is 20/20, but you have to focus on what was reasonable and ordinary knowledge for an EP at the time their opinion was rendered.
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I agree. Nicely stated and underscores the old adage "knowledge is an evolving process."
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Maybe check out section 4.5 of E1527 - the principles have always held that past practice should not be held to current (changed) standards.
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