CERCLA Defenses and Continuing Obligations

A new standard has been published by the American Society for Testing and Materials (ASTM) entitled "Standard Guide for Identifying and Complying with Continuing Obligations" (standard number E2790-11). The standard provides guidance on identifying and fulfilling continuing obligations, which under the Brownfields Amendments to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), must be satisfied by commercial property owners seeking to maintain landowner liability protections from CERCLA liability, such as the innocent landowner defense, the contiguous property owner defense, and the bona fide prospective purchaser defense. Examples of the types of continuing obligations set forth in the Brownfields Amendments include complying with land use restrictions, not impeding the effectiveness or integrity of institutional controls, and taking reasonable steps with respect to releases of hazardous substances. For interim guidance from EPA on continuing obligations, click here.

ASTM Standard E2790-11 contains a four-step process for identifying and fulfilling continuing obligations. The first step involves reviewing the Phase I Environmental Site Assessment or other all appropriate inquiries determination for the property to evaluate whether continuing obligations exist. If, for example, recognized environmental conditions, land use restrictions, or institutional controls are present at the property, there may be continuing obligations. Next, a review and evaluation of any environmental conditions and activity and use limitations at the property, including land title restrictions and government cleanup records, must be undertaken to determine whether continuing obligations exist. The user either makes a determination that no continuing obligations are required or begins the process of preparing a "continuing obligations plan." The plan would describe how to perform initial continuing obligations shortly after acquiring the property or shortly after learning of a release of hazardous chemicals or petroleum products at the property. The final step involves confirming the performance of specific ongoing continuing obligations, including documenting ongoing monitoring and evaluation efforts. ASTM's Continuing Obligations standard could become a standard that courts would look to for determining whether potentially responsible parties preserved their defenses to CERCLA liability, and thus it may become a part of the basic scope of work in environmental due diligence reviews.