• Passive Migration Liability Under CERCLA
  • September 29, 2003 | Author: Robert B. Casarona
  • Law Firm: Roetzel & Andress A Legal Professional Association - Cleveland Office
  • We, as environmental lawyers, are regularly asked to counsel clients on potential environmental liability associated with the transfer of real estate. That counsel is complex and decisions often are made without perfect information. Any analysis of the risk associated with contaminated or potentially contaminated land must include an analysis of CERCLA liability. This will undoubtedly lead to a consideration of active versus passive migration of contaminants. It has been argued that "passive migration," i.e., pre-existing contamination moving through soil or groundwater with no active involvement by anyone, constitutes disposal under CERCLA. Federal Courts of Appeal are split on this significant issue. Recently, the 9th Circuit Court of Appeals in Carson Harbor Village, Ltd. v. Unocal Corp., determined that a current property owner is liable for pre-existing contamination that migrated from the property, and that the preceding parties with an interest in the property did not "dispose" of hazardous substances by virtue of those substances migrating during their leasehold or ownership. At issue is the meaning of the term "disposal" for the purposes of establishing cleanup liability. CERCLA defines a potentially responsible person as a person "who at the time of disposal" owned or operated a facility where hazardous substances were disposed. Four different Circuit Court of Appeals, including the 6th Circuit Court of Appeals which has the jurisdiction for the state of Ohio, have all evaluated whether passive migration was disposal under CERCLA. All of these Circuits have adopted active¿passive migration tests to determine prior owner liability by providing different interpretations of the term "disposal" under the Superfund law. These Circuits have indicated that active human intervention on behalf of the prior "innocent" landowner is needed in order to create a liability. In other words, a gradual passive migration of contamination through the soil was not a disposal under the Superfund law. This issue typically arises in the context of private parties litigating CERCLA liability for cleanup costs. For instance, a current owner could sue previous owners and tenants that were in the chain of title for contributions for the costs of response to the contamination. The previous owners and tenants would argue that there was no disposal during the time that they occupied the property. The current landowner, consistent with the active-passive migration debate, would argue that the contaminants migrated during the time of their ownership or occupancy, and therefore, a disposal occurred making them liable for some portion of the cleanup costs. The facts in the Carson Harbor case are further illustrative with respect to how the issue arises so they are worth mentioning. The current owner of the property cleaned up contamination that was discovered during a survey done to obtain financing. The current owner then sued the prior owners and operators. The actual contamination at the site was attributed to an entity that was controlled by a tenant with a leasehold interest that spanned close to 40 years prior to the defendants that came into the chain of title just before the current owner purchased the property. The current owner sued the preceding owner for contribution. With the recent 9th Circuit decision, this issue is now primed for Supreme Court review as the Circuits are now split. This issue is significant because interpreting disposal to include passive migration would expand an already broad liability net under CERCLA. Regardless, when evaluating risk, the passive-active migration distinction should not be ignored.