REMEDIAL COST ALLOCATION DISPUTES
The cost of site investigation and remediation at an industrial or leaking fuel tank site can easily reach several hundred thousand dollars, and can escalate further if extensive groundwater monitoring or remediation are required. Thus, resolution of site remediation issues often requires the efforts of Environmental counsel to secure cost reimbursement or “contribution” from other potentially liable parties such as prior owners and current or prior tenants. Parties on the receiving end of such claims can likewise benefit from representation by Environmental counsel. Criteria for such “cost allocation” may include extent of causation or relative period of facility operation, relative economic benefit going forward, or interpretation of the terms of a prior lease or sale agreement.
For parties on both sides, the value-added by Environmental counsel is not just getting through tedious litigation with a favorable court verdict. It is often more about strategic advice and claim resolution based on evaluating: 1) The legal costs necessary to complete pre-trial discovery and motions (and thereby reach the juncture where most parties are willing to settle); 2) The range of tolerable potential settlement options; and 3) Range and probability of outcome at a trial. In most cases, timely cost allocation settlements can provide important legal finality to all involved while minimizing legal costs and facilitating commencement of timely remediation.
Settlement of landlord/tenant dispute over costs incurred to address infiltration of contaminated groundwater from a neighboring property.
Advice to long-term industrial tenants in performance of exit evaluation to determine contractual remedial obligations and liabilities. Cost allocation complicated by apparent historic impacts of previous tenants and owners, and limited availability of historic
Representation of estate holding title to an active auto service station found to have groundwater contamination; Cost allocation issues complicated by lengthy site operational history and attempts to sell the property to the current tenant/site operator..
- Represented buyer of former industrial property showing significant residual contamination in Phase II investigation. Negotiated pre-closing cost sharing agreement including previous owner responsible for site conditions.