SOURCES OF LIABILITY FOR ENVIRONMENTAL CONDITIONS n CERCLA (a/k/a “Superfund”), 42 U.S.C. Section 9601 et seq. n State cleanup requirements n Common law claims from third parties
SOURCES OF LIABILITY FOR REGULATORY NONCOMPLIANCE n Capital expenditures n Fines, penalties, etc., including economic advantage n Primary sources of law: – RCRA, 42 U.S.C. Section 6901 et seq. – Clean Water Act, 33 U.S.C. Section 1251 et seq. – Clean Air Act, 42 U.S.C. Section 7401 et seq.
FOUR ESSENTIAL STEPS TO MEET THE CLIENT’S GOALS I. Understand client’s assets and liabilities II. Identify requirements and options for compliance III. Assess options for compliance IV. Create a plan based on the client’s goals
I.UNDERSTAND THE CLIENT’S ASSETS AND LIABILITIES n Environmental conditions – On-site conditions – Off-site conditions – Past operations n Compliance
DETERMINE THE CONDITION OF THE PROPERTY n Evaluate site history / past uses n Consider retaining environmental counsel and consultants n Maintain ownership / confidentiality of reports n Be aware of reporting obligations that may trigger agency involvement
POTENTIAL REPORTING REQUIREMENTS n Significant Environmental Hazards, C.G.S. Section 22a-6u n Spills, C.G.S. Section 22a-451 n Connecticut Transfer Act, C.G.S. Section 22a-134 et seq. n Termination of Operations, P.A. 99-68 n L.E.P. Code of Ethics, RCSA Section 22a-133v-6
II.IDENTIFY REQUIREMENTS AND OPTIONS FOR COMPLIANCE n Identify and address cleanup obligations n Consider options for other affected property
IDENTIFY CLEANUP OBLIGATIONS n Do the Remediation Standard Regulations (“RSRs”) apply? – Under order? – Subject to the Connecticut Transfer Act? – On the Inventory of Hazardous Waste Sites?
CONNECTICUT TRANSFER ACT n Is the site an “establishment” ? n Will there be a “transfer” ?
“ESTABLISHMENTS” UNDER THE TRANSFER ACT n Generated over 100 kilograms of hazardous waste in any month since November 1980 n Used for treatment, storage or disposal of hazardous waste generated by another person n Operated at any time since May 1967 as: – Dry cleaner – Furniture stripper – Auto body shop
“TRANSFERS” UNDER THE TRANSFER ACT n Include: – Transfers of majority interest in stock – Leases (including all options) for 25 years or more n Do not include: – Transfers to immediate family members – Transfers approved by a Probate Court
CONSIDER OPTIONS FOR OTHER AFFECTED PROPERTY n Sell it n Clean it up n Do nothing
III.ASSESS OPTIONS FOR COMPLIANCE n Understand requirements and opportunities for cleaning up property n Be aware of alternatives – ELURs – Alternative criteria – Exceptions – Groundwater reclassification
PROTECTION FROM ENVIRONMENTAL LIABILITY n Covenant not to sue n Innocent landowner defense n CERCLA - 1996 fiduciary revisions
OPTIONS FOR PROTECTING YOUR CLIENT’S INTERESTS n Covenant not to sue n Potential cost recovery options – Other responsible parties – Insurance – UST funds n Environmental insurance n Favorable contractual provisions
IV.CREATE A PLAN BASED ON THE CLIENT’S GOALS n Consider client’s goals for property disposition n How can these goals be realized based on the condition of the property? n Obtain additional information / expertise as needed
CAVEATS n Retain environmental counsel when appropriate n Periodically revisit environmental issues and options for compliance n Don’t let the environmental tail wag the planning dog