Mitchell Burack April 6, 2021
As always, nothing in this blog is intended as legal advice for a specific situation or for general application; and it should not be used or relied upon in that manner. Good legal advice can only be provided with respect to a specific situation. My blog is an opportunity to share my views on various generic issues which I have encountered, and as such, are intended solely as “food for thought”.
This blog series features short answers to a number of common questions I have encountered pertaining to scope of Phase I investigations, and potential liabilities for historic UST contamination or other site contamination. For anyone interested in diving into the issues in more detail, we will begin a related 90 minute Zoom Roundtable series, in mid-June ( 2021), covering each of the FAQ areas covered in the blogs. If you would be interested in participating, just send me an email at MitchellBurack@BurackEnvironmentalLaw.com.
1. Question: We are planning facility expansion work in an area where historic USTs were reportedly used by the tenant of an owner, 2 generations previous. The tanks were allegedly all removed just before PA DEP issued their first tank regulations in the early 1990s. Are we liable for any cleanup of releases from those tanks which were not addressed before? Could we have cost recovery claims against previous owner/operators?
Answer-- Both you and past owners may have liability, given the broad provisions of state law. However, a past “operator” may not be as easy a target as a past owner; and the outcome would depend on the facts regarding who did what and when.
· The PA Tank Act has confusing language which sets forth 2 different dates for determining ownership liability-- 1) the effective date of the Tank Act (August 6, 1989) ; and 2) The effective date of the federal UST legislation( November 8, 1984) , regulatory responsibility for which has been delegated to the states. Courts have held that the PA Tank Act can constitutionally impose retroactive liability before its own “effective date”; and also that the inconsistency in the 1984 and 1989 deadlines is not important.
· For any tank proven to have been emptied before November 8, 1984, the historic owner would be considered the “owner” of that tank and liable for subsequent releases. But liability for their prior tenant as a past operator, is a still an unsettled legal issue. If the tank still contained product on November 8, 1984, the more recent previous site owner is considered “owner” even if they never used the tank. In any case, the statute also imposes liability on the current owner or occupant of property where a UST is or was located. That is why good environmental due diligence includes looking for evidence of old USTs that may have been “closed in place” without attention to sampling or excavation of contaminated soils.
· Another question is whether the tank is considered to be a “regulated tank” such that current specific UST corrective action regulation requirements would apply. The 2019 PA Act 2 guidance says that remediation of a “regulated” UST must comply with specific requirements of the UST corrective action regulations, including the requirement to completely remove all free product contamination on groundwater. This rule can be very burdensome—especially when the product thickness is a couple of inches or less and not moving anywhere. Unregulated tanks (e.g. non-commercial heating oil tanks, or tanks closed before August 1989), are covered only by Act 2—which provides for a more flexible evaluation of plume stability, with determination of whether off-site migration is likely.
· Regardless of Tank Act applicability, any claim seeking remediation of release to groundwater will usually also include the Cleans Streams Law, which creates liability for current owner and and occupant of property causing surface or groundwater contamination.
2. Question: A former gas station property, had a release 10 years ago, and has ongoing monitoring and treatment of groundwater by the former owner. Funding is being provided by the PA USTIF fund. Can a Buyer rely on continued USTIF payments until DEP final approval?
Answer--Need to look at several things here:
· USTIF has a number of strict eligibility requirements, relating to proper registration of USTS, payment of registration of fees, and assignment of rights to USTIF paymentsupon sale of a property. All eligibility issues need to be checked off before closingon a purchase.
· The statutory USTIF coverage limit irs $1.5 million per release. However, In many cases, coverage has been significantly reduced by proration based on determining that some of the release occurred before the USTIF statutory start date in 1994. You need to confirm up front, that there is sufficient USTIF coverage funding left for necessary work, including potential future treatment upgrades.
· USTIF and DEP frequently disagree on appropriate extent of necessary remedy; and USTIF will not always cave and cover DEP-required costs as “reasonable”. It is important to assess up front, whether there is risk of a significant differential between DEP expectations and USTIF willingness to cover as reasonable costs.