Superfunds Evolving Liability Landscape: Defeating CERCLA Liability Under the BUILD Act and What the New “Common Element” Requirements Mean to You and Your Clients: Defense Strategies for Owners and Tenants

Description

Before 2018, tenants facing Superfund liability could take advantage only of the bona fide prospective purchaser (BFPP) defense under minimal circumstances. The defense has been available since the 2002 passage of the Small Business Liability Relief and Brownfields Revitalization Act (based on the broad inclusion of "tenant of a person" in the law's definition of a BFPP). Before, CERCLA did not specify how tenants could use the BFPP defense to shield against liability.

The BUILD Act of 2018 amended sections of CERCLA to help tenants of contaminated property avoid strict joint and several liability by asserting the BFPP defense. The Act created three clear paths to establishing the "tenant as BFPP" affirmative defense by showing:

• the landlord is a BFPP by proving their completion of the all appropriate inquiry (AAI) as defined by CERCLA;
• that the landowner completed the AAI, but later failed either with compliance or to complete additional requirements; or,
• the tenant is the BFPP by completing the AAI before entering the lease and then maintaining compliance during the leasehold.

The Common Elements clarifies the requirements for qualifying for and maintaining the primary defenses to CERCLA liability (i.e., Innocent Landowner, Bona Fide Prospective Purchaser, and Contiguous Property Owner). Each of these defenses share certain “common elements.” While the Guidance does not change the fundamental elements, it better clarifies through examples and a review of case law what “reasonable steps” EPA expects owners and tenants to take to maintain protective defense to liability.

Listen as our expert panel of CERCLA practitioners guides counsel on this essential new liability protection for tenants, its impact on Superfund liability for tenants, and its interplay with other CERCLA defenses.