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    EdG
    Municipalities Strictly Liable: Innocent Landowner Defense...
    Entry posted February 11, 2010 by EdGElite Contributor, last edited January 19, 2012
    817 Views, 4 Comments
    Title:
    Municipalities Strictly Liable: Innocent Landowner Defense Dead
    Entry:

    Consultants that have municipalities as clients - tell them they are strictly liable under CERCLA and more importantly - state and local laws for environmental contamination.

    Adobe Lumber Inc.vs. Hellman et al. (2009) a property owner purchased a shopping center in CA only to find that the "Suite K" which contained a dry cleaner dumped its contamination down a drain connected to the city's sewer pipes (system).  The sewer pipes leaked causing further contamination.  CT: Held City strictly liable.

    The city proclaimed it was an innocent landowner (the so-called panacea of Phase I ASTM AAI).   In denying their status as an innocent landowner, the U.S. Federal District Court (E.District CA) cited intera alia Carson Harbor Village v. Unocal Corp., 270 F.3d 863 (2001) stating, "Commentators have written the obituary for the innocent landowner defense many times since it was created in 1986 - further citing Rosemary J. Beless, "Superfund's Innocent Landowner Defense: Guilty Until Proven Innocent", 17 J, Land Resources & Envtl. 247 (1997); Shane Claonton, Passive Disposal of the Innocent Landowner Defense, 9 J. Nat. Resources Envt. L. 255 (1993-1994); L. Jager Smith, Jr., Note, CERCLA's Innocent Landowner Defense: Oasis or Mirage?", 18 Colum. J. Envtl. L. 155 (1993).

    See also case law U.S. vs. 150 Acres of Land, 240 F.3d 704 (6th Cir.2000).

    Phase Is and CERCAL AAI are not relevant in reality.

    File:
    carson case(2).pdf (331KB)

    Comment

    • LSchnapf
      posted February 12, 2010 by LSchnapfElite Contributor

      The interesting aspect of this case is that the city tried to argue it was not an operator and the court found that the city had knowledge of the leaking sewers but failed to act which could have been construed as failing to exercise due care.

      Remember that the innocent purchaser defense is a part of the third party defense which has four elements: The release must be (1) solely due to the acts or omissions of a third party (2) with whom the defendant has no direct or indirect contractual relationship, (3) the defendant must exercise due care and (4) take steps against the foreseeable acts of third parties.

      The innocent landowner defense is designed to solve the second element. If the party demonstrates it has performed AAI and has no knowledge of releases (or should not have had any such knowledge), then it will be considered not to be in a "contractual relationship". However, to be able to assert the third party defense, it then needs to establish the third and fourth elements. Most defendants get tripped up on these last two elements.

      Of course, the bona fide prospective purchaser defense is its own freestanding defense. The defendant can have knowledge and can be in a contractual relationship with the "polluter" so long as it is not an affiliate or otherwise related in a corporate or entity sense. However, even the BFPP has to exercise "appropriate care" which EPA has said is probably the same as due care.

      Yes, friends, the Wicked Witch is not dead.

      Larry

      www.schnapflaw.com 

       

    • EdG
      posted February 12, 2010 by EdGElite Contributor

      Absolutely true on the elements of ILD.  However, I didn't feel like getting into the crux of the court's decision - which was an ad nausea discussion on whether a sewer pipe was a 'facility' under CERCLA (A) or (B) and the use of conjunctions "or" ... on and on for 15 pages!

      I still stand behind the fact that the Innocent Landowner Defense is 99.99% huey.  I believe it won't be a valid defense in most cases.  The bona fide purchaser is also huey in my opinion.  Some states (MI) don't even recognize it - other practitioners find it a failed extension of the federal Prospective Purchaser Agreements and offer really not much in the way of liability protection.  You have onerous and very EPA discretionary ongoing obligations under the BFPP - like "taking reasonable steps to stabilize or eliminate contamination."  What does that mean?!?

      Not to mention - as always - such "protections" never protect against state and local laws and third party liabilities.  Which appear to be a growing source of claims - namely nuisance and trespass.

      Huey I say.... Huey.

    • LSchnapf
      posted February 12, 2010 by LSchnapfElite Contributor

      I looked up "huey" in CERCLA. Didnt see it in the definitions section. Might it be elsewhere or does it refer to substance that Red Sox pitchers place on the ball before they pitch? :)

    • EdG
      posted February 12, 2010 by EdGElite Contributor

      Only Tim Wakefield.  Can you believe the first game is Sunday night Sox vs. Yanks?