EPA Creates Confusion By Promulgating New Standard for CERCLA “Appropriate Inquiry”
On December 30, 2013, the U.S. Environmental Protection Agency issued a final Rule amending the standard and practices for “All Appropriate Inquires under CERCLA”. At the same time, the EPA allowed the current rules to remain in place. The EPA rules adopt the standards established by ASTM, the first proposed in 2005, aka, ASTM-1327-05, the second proposed in 2013, aka ASTM-1327-13. The standards were developed to provide guidance to the purchaser of a “contaminated property” to undertake all appropriate inquiries regarding the condition of the property before completing the acquisition. If a purchaser of “contaminated property” undertakes all of the “appropriate inquiries” regarding the “condition of the property” prior to acquiring the property the purchaser can assert the “bonafide purchaser” defense in any subsequent “CERCLA” action.
The newly approved ASTM-1327-13 standards differs from its predecessor as follows: (1) an updated definition of “Recognized Environmental Condition” (2) an updated definition of “Historical Recognized Environmental Condition” (3) created a new definition identified as “Controlled Recognized Environmental Conditions” (4) clarified the definition of “de minimis condition” (5) revised the definition of “migrate/migration” to include vapor migration and (6) revised the definition of ”release” to mean the same as the CERCLA definition. The new rule and standards are intended to an enhance the purchaser’s knowledge regarding the historical and current conditions of commercially available properties. One major difference, although the EPA discounts that it is a difference, is that “vapor” migration is now a proposed area of inquiry unlike under the prior standard. The EPA suggests that “vapor” migration was a proper area of inquiry under the old standard but was not specifically included in the existing rule.
Although the EPA in its comments indicated it hoped that environmental professionals would use the new standards in their inquiries (assessments) in current and future transactions, it did not mandate the use of the new standards in the rule. In fact the EPA noted that if an environmental professional complied with the existing standards (ASTM-1327-05), the inquiry would be deemed compliant with the existing requirements. Regardless of the EPA’s comments, its continued approval of the previous standard certainly raises a question as to the viability of the “bonafide purchaser” defense in a CERCLA action if the defendant applied the old standard after December 30, 2013 to establish that they made all “appropriate inquiries” prior to the purchase of any commercial property. The EPA comments and new rule can be found at Federal Register Vol. 78, page 79319 et seq., published on December 30, 2013.
If you need additional information regarding the new standards or their application in pending or contemplated transactions, please contact myself, Bill Chambers (S&J Senior Scientist) or any member of the Steptoe & Johnson, PLLC, Environment & Regulatory Team. You will find a listing and contact information for our E&R Team just a click away at our web-page: http://www.steptoe-johnson.com/services/environmental-regulatory