Advice for Owners of Contaminated Land After Meghrig v. KFC Western, Inc.

Jerome M. Organ

Jerome M. Organ received his J.D. from the Vanderbilt University School of Law in 1985. He spent several years practicing environmental law with Foley & Lardner in Milwaukee, Wisconsin, before joining the faculty of the University of Missouri-Columbia School of Law, where he presently is an Associate Professor, teaching courses in property, land use controls, environmental law, and regulation of hazardous substances.

[26 ELR 10582]

In the past few years, owners of contaminated land, seeking to supplement possible causes of action under the Comprehensive Environmental, Response, Compensation, and Liability Act (CERCLA)¹ and under state common law and state statutes,² increasingly have looked to § 7002(a)(1)(B) of the Resource Conservation and Recovery Act (RCRA)³ to shift responsibility for remediation costs to former owners or operators.⁴ Although some owners of contaminated land have used § 7002(a)(1)(B) to request injunctive relief, many have asked courts to decide whether § 7002(a)(1)(B) authorizes courts to award restitution of past costs to a private party.⁵ In March of this year, the U.S. Supreme Court decided, in Meghrig v. KFC Western, Inc.,⁶ that § 7002(a)(1)(B) does not entitle a private party to recover past cleanup costs. As a result of the Court's decision, owners of contaminated land seeking to force former owners or operators to remediate the contamination are limited to pursuing either injunctive relief under § 7002(a)(1)(B) or cost recovery under CERCLA, state common law, or a state statute.

This Dialogue explores the practical consequences of the Meghrig decision in three contexts. First, the Dialogue discusses what parties can and should do to avoid purchasing contaminated land. Second, for those unfortunate enough to have purchased contaminated land, the Dialogue evaluates the causes of action that remain available to force a former owner either to perform or to pay for remediation. Third, the Dialogue discusses how owners of contaminated land should decide on an appropriate course of action. To lay the foundation for these discussions, however, this Dialogue begins with a critical analysis of the Court's decision in Meghrig.

Analysis of the Supreme Court's Decision in Meghrig v. KFC Western, Inc.

Factual Background to the Litigation

KFC Western, Inc. (KFC) purchased a parcel of land from the Meghrigs in 1975.⁷ In 1988, while in the process of making improvements on the land, KFC discovered that the soil was contaminated with lead and benzene, apparently from releases of refined-petroleum products from underground storage tanks sometime before 1975.⁸ Upon learning of the contaminated soil, the city of Los Angeles Department of Building and Safety issued an order forbidding further [26 ELR 10583] construction of the improvements until the Los Angeles County Department of Health Services issued a clearance indicating that the contamination had been remediated adequately.⁹ To obtain the clearance, KFC conducted extensive soil remediation work, incurring costs in excess of $ 211,000.¹⁰ KFC completed cleanup in March 1989. The Department of Health Services issued its formal clearance in May 1989.¹¹

Procedural Background to the Litigation

On December 9, 1991, nearly three years after completing remediation, KFC filed an environmental cost recovery action in state court under § 25363 of the California Health and Safety Code, seeking to recover its cleanup costs.¹² KFC's operative first-amended complaint ultimately contained 10 different state statutory and common-law causes of action.¹³ The trial court sustained the Meghrigs' demurrer without leave to amend, holding that KFC could not sustain an action under § 25363 because of the statute's petroleum exclusion, and that KFC's other causes of action were barred by the statute of limitations and on other grounds.¹⁴ The California Court of Appeals affirmed the dismissal of KFC's statutory cause of action, but reversed and remanded with respect to the trial court's refusal to allow KFC to amend its complaint to assert continuing nuisance and continuing trespass claims.¹⁵ In July 1995, however, the trial court granted summary judgment in favor of the Meghrigs on both the continuing nuisance and continuing trespass claims.¹⁶

In late May 1992, KFC brought suit in federal district court under RCRA § 7002(a)(1)(B) seeking to recover its cleanup costs.¹⁷

KFC claimed that the contaminated soil was a "solid waste" covered by RCRA, that the soil had previously posed an "imminent and substantial endangerment to health or the environment," and that the Meghrigs were responsible for "equitable restitution" of KFC's cleanup costs under § [7002(a)] because, as prior owners of the property, they had contributed to the waste's "past or present handling, storage, treatment, transportation, or disposal."¹⁸

The district court dismissed KFC's complaint, holding that § 7002(a)(1)(B) does not authorize recovery of past cleanup costs and does not authorize a cause of action for contamination that does not pose an imminent and substantial endangerment at the time the suit is filed.¹⁹ In March 1995, the Ninth Circuit reversed, holding that § 7002(a)(1)(B) authorizes district courts to grant restitution of past cleanup costs and allows parties to bring an action based on an allegation that the contamination presented an imminent and substantial endangerment at the time it was remediated.²⁰

The Meghrigs filed a petition for certiorari, which the Supreme Court granted in September 1995.²¹ The Court noted in its opinion in Meghrig that it granted certiorari because "the Ninth Circuit's conclusion regarding the remedies available under RCRA conflicted with the decision of the Court of Appeals for the Eighth Circuit in Furrer v. Brown,"²² and because the Ninth Circuit's "interpretation of the 'imminent and substantial endangerment' requirement represented a novel application of federal statutory law."²³

The Supreme Court's Decision in Meghrig

The Supreme Court began its analysis in Meghrig by distinguishing between Congress' purpose in enacting RCRA and its purposes in enacting the CERCLA. The Court stated that CERCLA's main purposes are the "prompt cleanup of hazardous waste sites and imposition of all cleanup costs on the responsible party."²⁴ RCRA, however, "is not principally designed to effectuate the cleanup of toxic waste sites or to compensate those who have attended to the remediation of environmental hazards…. RCRA's primary purpose, rather, isto reduce the generation of hazardous waste and to ensure the proper treatment, storage and disposal of that waste …."²⁵

[26 ELR 10584]

Although the Court's statement of RCRA's primary purpose would have been accurate before 1984, it completely misses the mark in 1996. The Court apparently disregarded both the corrective-action and underground storage tank provisions of RCRA, which Congress enacted as part of the Hazardous and Solid Waste Amendments of 1984 (HSWA).²⁶ With the enactment of these two programs, Congress evidenced a desire to accomplish within RCRA goals very similar to those encompassed within CERCLA—the prompt cleanup of sites contaminated with solid and hazardous waste and the imposition of responsibility for remediation on private parties rather than the public fisc. By amending RCRA's citizen-suit provision when it enacted HSWA, Congress further manifested its intent to promote the prompt cleanup of contamination by allowing private parties to sue those who contributed to contamination that may present an imminent and substantial endangerment.²⁷

After prefacing its discussion of § 7002 with this narrow description of RCRA's purpose, the Court analyzed whether § 7002 allows a private party to bring an action to recover past cleanup costs, and held that "two requirements of [§ 7002(a)] defeat KFC's suit against the Meghrigs. The first concerns the necessary timing of a citizen suit brought under [§ 7002(a)(1)(B)]…. The second defines the remedies a district court can award in a suit brought under [§ 7002(a)(1)(B)]."²⁸

The Necessary Timing of a Citizen Suit Under § 7002(a)(1)(B)

The Court noted that "section [7002(a)(1)(B)] permits a private party to bring suit only upon a showing that the solid or hazardous waste at issue 'may present an imminent and substantial endangerment to health or the environment.'"²⁹ Taking a textualist approach, the Court stated that because "an endangerment can only be 'imminent' if it 'threaten[s] to occur immediately,'"³⁰ § 7002(a)(1)(B)'s "reference to waste which 'may present' imminent harm quite clearly excludes waste that no longer presents such a danger" at the time a private party files a citizen suit.³¹ Accordingly, the Court concluded that in § 7002(a)(1)(B), Congress intended "to provide a remedy that ameliorates present or obviates the risk of future 'imminent' harms," and did not intend to provide "a remedy that compensates for past clean-up efforts."³² The Court ended its opinion by stating that § 7002(a)(1)(B) authorizes "a private party to bring suit only upon an allegation that the contaminated site presently poses an 'imminent and substantial endangerment to health or the environment,' and not upon an allegation that it posed such an endangerment at some time in the past."³³

Remedies Available Under § 7002(a)(1)(B)

Because the Court could have decided Meghrig solely on the "timing" question, the Court could have left for another day the question of the remedies available under § 7002(a)(1)(B). Nonetheless, presumably out of a desire to resolve the conflict between the Eighth and Ninth Circuits and to promote certainty and predictability, the Court proceeded to address the question of the federal district courts' equitable power to grant restitution of past cleanup costs under § 7002(a)(1)(B).

The Court began its analysis with reference to § 7002(a)(1)(B)'s language. Noting that the statute "authorizes district courts 'to restrain any person who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste …, to order such person to take such other action as may be necessary, or both,'"³⁴ the Court concluded that "it is apparent from the two remedies described … that RCRA's citizen suit provision is not directed at providing compensation for past cleanup efforts."³⁵ The Court supported this conclusion with the following cursory analysis:

Under a plain reading of this remedial scheme, a private citizen suing under § [7002(a)(1)(B)] could seek a mandatory injunction, i.e., one that orders a responsible party to "take action" by attending to the cleanup and proper disposal of toxic waste, or a prohibitory injunction, i.e., [26 ELR 10585] one that "restrains" a responsible party from further violating RCRA. Neither remedy, however, is susceptible of the interpretation adopted by the Ninth Circuit, as neither contemplates the award of past cleanup costs, whether these are denominated "damages" or "equitable restitution."³⁶

The Court further supported its "plain reading" of the statute by comparing the relief available under RCRA's citizen-suit provision with the relief available under CERCLA, noting that although CERCLA "is designed to address many of the same toxic waste problems that inspired the passage of RCRA," CERCLA provides markedly different remedies than RCRA.³⁷ Specifically, the Court noted that CERCLA expressly allows any person to recover "any 'necessary costs of response, … consistent with the national contingency plan,'" and "provides that 'any person may seek contribution from any other person who is liable or potentially liable' for these response costs."³⁸ The Court then stated, "Congress thus demonstrated in CERCLA that it knew how to provide for the recovery of cleanup costs, and that the language used to define the remedies under RCRA does not provide that remedy."³⁹

As further evidence that Congress did not intend for § 7002(a)(1)(B) to provide private parties an opportunity to recover past cleanup costs, the Court noted that unlike CERCLA, RCRA does not contain a statute of limitations,⁴⁰ and does not require a party to show "that the response costs being sought are reasonable."⁴¹ The Court stated that "if Congress had intended § [7002] to function as a cost-recovery mechanism, the absence of these provisions would be striking."⁴² The Court's superficial analysis of these points leaves much to be desired. The fact that RCRA does not contain a statute of limitations has little significance given that courts regularly look to other relevant federal statutes of limitations to fill the void when an environmental statute fails to contain an express statute of limitations.⁴³ Moreover, the Court failed to acknowledge that Congress might have adopted the general language contained in § 7002(a)(1)(B) with the expectation that courts would allow cost recovery only when equity justified doing so (e.g., in those circumstances in which parties would not have a cause of action under CERCLA, such as for petroleum releases) and only in an amount the court deemed reasonable in the exercise of its equitable jurisdiction.⁴⁴

In addition, the Court concluded that because RCRA's citizen-suit provision prohibits parties from bringing suit "without first giving 90 days' notice" to the defendants, the state in which the endangerment exists, and EPA,⁴⁵ and precludes citizens from proceeding with a suit "if either the EPA or the state has commenced, and is diligently prosecuting, a separate enforcement action,"⁴⁶ RCRA "would be a wholly irrational mechanism" for compensating private parties for their past cleanup efforts. According to the Court, "those parties with insubstantial problems, problems that neither the State nor the Federal Government feel compelled to address, could recover their response costs, whereas those parties whose waste problems were sufficiently severe as to attract the attention of Government officials would be left without recovery."⁴⁷

Unfortunately, in jumping to this conclusion, the Court greatly misperceived the context in which RCRA's citizen-suit provision operates as a cost-shifting mechanism. Landowners frequently pursue actions under § 7002 precisely because a contamination problem on their land has attracted the attention of government officials to them as landowners, rather than to the former owner or operator who caused the problem. Meghrig is a prime example. Landowners provide notice under § 7002 in an effort to redirect the government's attention to the party(ies) that they believe should be responsible for the cleanup. If they succeed in their efforts, they are hardly left without recovery. To the contrary, they have avoided entirely the need to worry about cost recovery by shifting costs in the first instance to the culpable party. It is only when landowners fail in their efforts to redirect the government's attention that they need to pursue a citizen [26 ELR 10586] suit to obtain an injunction to force the culpable parties to perform remediation and/or to obtain restitution of their past cleanup costs. In this context, allowing private parties to obtain restitution of past cleanup costs under the citizen-suit provision hardly appears "wholly irrational." Rather, it appears entirely equitable and consistent with CERCLA, particularly if courts were to limit cost recovery under RCRA to circumstances in which CERCLA actions are unavailable, such as actions to recover costs incurred remediating petroleum contamination.⁴⁸

Finally, implicitly accepting the petitioners' argument that KFC was seeking legal relief, in the form of consequential damages, rather than equitable relief, in the form of restitution, the Court supported its narrow reading of the remedies available under § 7002 by citing Middlesex County Sewerage Authority v. National Sea Clammers Ass'n.⁴⁹ In Middlesex County, the Court held that a party could not seek consequential damages under the Clean Water Act, and the Meghrig Court cited it for the proposition that

where Congress has provided "elaborate enforcement provisions" for remedying the violation of a federal statute, as Congress has done with RCRA and CERCLA, "it cannot be assumed that Congress intended to authorize by implication additional judicial remedies for private citizens suing under" the statute. "'It is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.'"⁵⁰

The Court's narrow interpretation of the remedies available under § 7002 appears to disregard its holdings in the Hecht Co. v. Bowles,⁵¹ and Porter v. Warner Holding Co.,⁵² line of cases, in which the Court held that when Congress invokes the federal courts' equitable powers in a statute, the courts may "award any equitable remedy that is not expressly taken away from them by Congress."⁵³ As the Court stated in California v. American Stores Co.,⁵⁴ "'the essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it.'"⁵⁵ "When Congress endows the federal courts with equitable jurisdiction, Congress acts aware of this longstanding tradition of flexibility. 'Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied.'"⁵⁶

In holding that § 7002 does not authorize restitutionary relief, the Court failed to distinguish expressly its holdings in Porter and in two subsequent cases, United States v. Moore,⁵⁷ and Mitchell v. Robert DeMario Jewelry, Inc.,⁵⁸ in which it awarded restitution even though the statutes in question simply had authorized injunctive relief. The Court's analysis also fails to explain clearly why the Meghrig case more closely resembles Middlesex County rather than the Porter line of cases. Although the Court apparently accepted the petitioners' arguments that the Porter line of cases was not controlling both because Congress had restricted the district courts' equitable authority by "necessary and inescapable inference" given the contrasts between RCRA and CERCLA, and because KFC was seeking a remedy more akin to legal damages than equitable restitution,⁵⁹ the Court could have explained more clearly why it felt that Middlesex County rather than the Porter line of cases represented the controlling principle.

Having dispatched KFC's claims based on both the timing issue and the Court's narrow reading of the federal courts' remedial authority under § 7002, the Court "threw a bone" [26 ELR 10587] to owners of contaminated land by noting that it reached its conclusion that KFC was not entitled to recover its past cleanup costs, "without considering whether a private party could seek to obtain an injunction requiring another party to pay cleanup costs which arise after a RCRA citizen suit has been properly commenced, … or otherwise recover cleanup costs paid out after the invocation of RCRA's statutory process."⁶⁰ This language appears to suggest that because the Court did not consider the issue, those who file their citizen suits promptly while contamination presents an imminent and substantial endangerment may be able to recover cleanup costs incurred after the suit is filed. Parties should be very cautious about reading too much into this language, however, given that it follows immediately after the Court's statement "'that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.'"⁶¹ Having held that § 7002 authorizes solely mandatory or prohibitory injunctive relief, and does not contemplate "the award of past cleanup costs, whether these are denominated 'damages' or 'equitable restitution,'"⁶² it is unlikely that the Court meant to signal that it clearly would reach a different result regarding available remedies for costs incurred after the suit is filed in a timely manner.

Critique of the Supreme Court's Meghrig Decision

Although the Supreme Court's decision in Meghrig can be criticized on many grounds, the result is not entirely surprising. The Court clearly grasped that Meghrig had the potential to be a Pandora's Box. Had the Court found that § 7002(a) authorized an after-the-fact cost recovery action, § 7002 quickly could have become the preferred cause of action among those who had incurred costs to address environmental contamination.⁶³ Such a cause of action would have been attractive for many of the reasons the Court noted in distinguishing between RCRA and CERCLA. First, RCRA does not have a statute of limitations for citizen suits. Second, RCRA does not limit recovery only to those costs that are consistent with the national contingency plan. Third, RCRA's citizen-suit provision allows recovery of attorneys fees,⁶⁴ which are not recoverable under CERCLA.⁶⁵

Many of these concerns, however, could have been addressed through judicious exercise of the federal courts' equitable powers, or through a very specific mandate from the Court regarding the limited circumstances in which recovery should be available under RCRA. For instance, the Court could have held that parties may seek recovery of costs under RCRA's citizen-suit provision only when they do not have a cause of action under CERCLA.⁶⁶ In addition, the Court could have limited recovery to "reasonable remediation costs" using the national contingency plan as a model in evaluating whether a party should receive restitution of its past cleanup costs. Realistically, however, with the amount of money at stake in environmental-remediation disputes, parties would have flocked to RCRA's citizen-suit provision, and the courts likely would have had trouble limiting the circumstances in which cost recovery would be available.

Simply put, the Court had to make a choice. It could respond to the perceived injustice visited on parties in KFC's shoes by authorizing recovery under RCRA's citizen-suit provision, but this would likely have created untold chaos in cost recovery litigation. Alternatively, it could disregard the perceived injustice, recognizing that most parties in KFC's shoes may have possible state common-law and statutory claims, and seek to maintain a clear delineation amongavailable federal statutory cost recovery mechanisms. It basically chose the latter course in a fairly result-oriented opinion that has little to speak for it other than the result.⁶⁷

Evaluating the Practical Consequences of Meghrig by Placing RCRA's Citizen-Suit Provision in Context

Parties generally become concerned about incurring liability associated with contaminated land in one of two contexts—before purchasing land that may be contaminated and after discovering that they have purchased contaminated land. Because the Court's decision in Meghrig effectively negates one possible postpurchase remedy, the decision makes pre-purchase analysis and decisionmaking all the more important. With that in mind, the first part of this section briefly outlines the steps prospective purchasers can and should take to avoid acquiring liabilities associated with contaminated land. This section then goes on to discuss the types of relief available to landowners who discover that they have purchased land contaminated during a former owner's tenure. The section focuses primarily on evaluating the extent to which common-law and statutory remedies provide meaningful mechanisms to shift to the former owner or operator the responsibility for either performing or financing the remediation of the contaminated land.⁶⁸

[26 ELR 10588]

Advising Purchasers so They Can Avoid the Liability Associated With Contaminated Land

A prospective land purchaser has the ability, with appropriate foresight and planning, to avoid acquiring the liabilities associated with contaminated land. When advising a prospective purchaser of commercial or industrial property, most attorneys now provide for an inspection contingency in the sale contract and require the performance of a Phase I Site Assessment to determine whether there is a significant risk that past operations resulted in environmental contamination.⁶⁹ If the Phase I Site Assessment identifies the possibility of contamination, most attorneys likely would advise their clients (assuming the clients remain interested in purchasing the land) to have someone conduct a Phase II Site Assessment to determine whether the land actually is contaminated, and if so, to determine the areal and vertical extent of contamination.⁷⁰ As noted above, some states even require that sellers of certain types of commercial or industrial facilities comply with statutorily defined disclosure obligations before selling such facilities.⁷¹

With the results of the Phase II Site Assessment or the state required disclosure document in hand, the prospective purchaser can make a relatively informed decision about whether it still makes sense to complete the purchase. In addition, if the purchaser decides to proceed with the purchase, the Phase II Site Assessment report or the state required disclosure document can provide the basis for developing an appropriate contractual mechanism for allocating the costs associated with remediating any contamination.⁷²

Advising Current Owners Who Acquired Contaminated Land

What courses of action are available to a landowner when it discovers contamination or when an agency informs it of a remediation obligation under state or federal law? The first course of action most landowners pursue involves pointing a finger at the former owners/operators and telling the agency: "I'm not responsible for the contamination. They did it. Go after them." Unfortunately, more often than not, the agency responds by saying: "We don't have to." Although frustrating to the landowner, this response is understandable in many respects. Because state and federal statutes frequently impose liability on current owners or operators of contaminated land, regardless of whether they caused or contributed to the contamination, the agency generally has jurisdiction to require the current owner to undertake remediation.⁷³ Moreover, from the [26 ELR 10589] standpoint of administrative efficiency, it should not be surprising that the agency staffers would want to deal with just one party, the current owner, rather than the former owner or owners.⁷⁴

When a landowner fails in its efforts to direct the agency's attention to the former owner, the landowner essentially has two choices: try to force the former owner to perform the remedy by seeking an injunction; or proceed with the remedy while seeking to recover the costs of remediation from the former owner under some common-law or statutory remedy.⁷⁵

Obtaining an Injunction Against a Former Owner of Contaminated Land

Injunctive relief is usually only available to an owner of contaminated land under RCRA's citizen-suit provision.⁷⁶ Common-law actions, such as nuisance and trespass, for which injunctive relief serves as a possible remedy, generally are unavailable to a current owner of contaminated land in a suit against a former owner or operator.⁷⁷ RCRA's citizen-suit provision authorizes a civil action in two circumstances. Section 7002(a)(1)(A) provides for an action against any person "who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to" RCRA.⁷⁸ Section 7002(a)(1)(B) provides for an action against those who contributed to contamination that may present an imminent and substantial endangerment.⁷⁹ Section 7002 authorizes a court

to enforce the permit, standard, regulation, condition, requirement, prohibition, or order, referred to in paragraph [(a)](1)(A), or to restrain any person who has contributed to or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste referred to in paragraph [(a)](1)(B), to order such person to take such other action as may be necessary, or both, ….⁸⁰

[26 ELR 10590]

In Meghrig, the Court held that the statute authorizes courts to issue only mandatory or prohibitory injunctions.⁸¹ To obtain an injunction under RCRA's citizen-suit provision, a current owner of contaminated land generally must provide the required notice of intent to sue either 60 or 90 days before commencing suit, depending on whether the suit is brought under § 7002(a)(1)(A) or § 7002(a)(1)(B), respectively.⁸² In addition, as the Court highlighted in Meghrig, under § 7002(a)(1)(B), the current owner of contaminated land must be able to show that the person sued "has contributed or is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste"⁸³ that may present "an imminent and substantial endangerment to health or the environment" at the time of filing suit.⁸⁴ Finally, the current owner must bring the action before the state or federal government commences an enforcement action regarding the land in question.⁸⁵

Although the opportunity to pursue injunctive relief under § 7002(a)(1)(B) probably holds appeal for many owners of contaminated land, it is not a panacea. Owners of contaminated land may not be able to show that the contamination "may present an imminent and substantial endangerment" given the phrase's uncertain meaning.⁸⁶ Also, because owners cannot bring citizen suits if the state or EPA is pursuing enforcement action, owners could be foreclosed from pursuing a citizen suit against everyone if the government "has commenced and is diligently prosecuting" an enforcement action against anyone.⁸⁷ And for owners who desire to address a contamination problem relatively promptly, the availability of injunctive relief may not be of great benefit because it could take years to obtain such relief. In addition, although injunctive relief allows a current owner of contaminated land to shift the cost of remediation to the culpable former owner or operator, the current owner may lose substantial control over the remediation process if the court orders the former owner to remediate the contamination, rather than pay for the remediation. This can significantly impact the owner's use of the land and cause business disruptions. Furthermore, a landowner seeking an injunction must incur transaction costs, although if the landowner prevails, it may recover much of its costs, including attorneys fees, under § 7002(e).⁸⁸

Common-Law and Statutory Claims for Damages or Restitution

Although § 7002 provides a feasible means for obtaining injunctive relief, in many circumstances parties may prefer simply to proceed with cleaning up the contamination and then bring an action to recover the costs of remediation. The common-law causes of action available to owners of contaminated land generally fall into one of four categories: (1) contract actions, such as breach of warranty; (2) tort actions, such as misrepresentation, negligence, strict liability, nuisance, trespass, or waste; (3) property actions, such as claims relating to failure to provide marketable title, including breach of the covenant against encumbrances (when the land is transferred by warranty deed) or claims against title insurers; or (4) equitable actions for restitution or indemnification. Given the Court's decision in Meghrig, the statutory remedies generally are limited to private rights of action to recover costs under CERCLA (to the extent the contamination is caused by a release of a "hazardous substance") or under some state statute.

Availability of Contract Action—Breach of Warranty. An owner of contaminated land may have an action against the seller for damages for breach of contract if the seller breached a covenant or warranty by selling the land in a contaminated state. In light of the attention focused on environmental liabilities in the last several years, many sale and purchase contracts now contain either express warranties regarding environmental compliance and the lack of environmental [26 ELR 10591] contamination, or express disclaimers of liability for any environmental problems.⁸⁹ For many years, however, sale and purchase contracts did not contain any provisions that specifically addressed environmental liabilities because people either could not foresee or simply did not grasp the potential scope of liability associated with environmental contamination. Instead, purchase and sale agreements either provided that the property was being sold "as is," without any warranties, or was being sold subject to some general warranty that the buildings were structurally sound and that the land was in compliance with all laws, rules, and regulations. In addition, in some circumstances the agreement may have contained a general indemnification provision, or a general release of liability, under which the purchaser or seller indemnified the other against any liability or released the other from any liability associated with the land or the business that operated on the land.

Accordingly, a current owner of contaminated land seeking to pursue a breach of contract claim to recover the costs of remediating environmental contamination caused by a former owner first should determine whether the contract contains an "as is" clause that forecloses a breach of contract action.⁹⁰ Assuming the sale agreement does not contain an "as is" clause, the owner of contaminated land then should determine whether the seller has an indemnification obligation or has been released from liability under the contract.⁹¹ If not, the owner should determine whether the facts support an allegation that the seller breached a general warranty, such as a warranty that the land was in compliance with all applicable laws, rules, and regulations at the time of sale, and should determine whether the warranty survives the deed.⁹² Even if an owner has a breach of a general warranty claim, however, succeeding on such a claim could prove to be difficult because the mere existence of historical contamination may not mean that the land was not in compliance with all applicable laws, rules, and regulations at the time of the sale. For instance, CERCLA § 103(a)'s reporting obligation applies only to releases of hazardous substances in excess of the 24-hour threshold quantity.⁹³ It generally is impossible to determine whether the release that caused the contamination occurred before or after the enactment of CERCLA and whether it exceeded the reportable threshold quantity.⁹⁴ Thus, the owner of land contaminated by a release below that threshold may not be in violation of a federal reporting obligation at the time of the land's sale. In addition, not all states impose independent spill reporting obligations. Even in states that do, such as Wisconsin, the statutes do not clearly apply to releases that occurred before their enactment.⁹⁵

Nonetheless, a seller may have been in violation of RCRA's permitting obligations if contamination results from the seller's operation of a de facto treatment, storage, or disposal facility without a RCRA permit.⁹⁶ In addition, contamination may be related to a violation of underground storage tank regulations that require regular monitoring, reporting, and remediation.⁹⁷

Availability of Tort Actions—Fraud/Misrepresentation, Negligence, Nuisance/Trespass, Strict Liability for Ultrahazardous Conduct, and Waste. Although a landowner may bring claims against neighboring landowners based on negligence, nuisance, trespass, and strict liability,⁹⁸ most courts [26 ELR 10592] have refused to allow current owners of contaminated land to bring such claims against former owners. Courts do not want to impose on landowners a common-law duty to protect future landowners from injury associated with the land's contamination.⁹⁹ Accordingly, of the possible tort remedies, fraud/misrepresentation, and waste probably merit the most attention.

Fraud/Misrepresentation. Although the vendor-purchaser relationship largely has been governed by the doctrine of caveat emptor, courts have recognized exceptions to the doctrine when a seller has misrepresented the property's condition. To bring an action for misrepresentation, an owner of contaminated land generally must show (1) that the seller either intentionally or negligently made a false statement regarding a material fact with the intent to induce the owner to act on the false statement; and (2) that the owner suffered injury by purchasing the land in reliance on the misrepresentation.¹⁰⁰ In recent years, courts increasingly have abandoned the doctrine of caveat emptor by imposing on sellers a duty to disclose material facts, so that a seller's failure to reveal material facts gives rise to a misrepresentation claim.¹⁰¹ Nonetheless, courts have been less inclined to impose a duty to disclose in commercial settings than in residential settings, because of the perception that parties in commercial transactions have more equal bargaining power.¹⁰² Consequently, an owner of contaminated commercial land seeking to assert a misrepresentation claim may need to prove that the seller affirmatively misrepresented the condition of the land, which generally is much more difficult than proving simply that the seller failed to disclose the condition of the land. Largely because the common law did not impose a duty to disclose on all sellers of contaminated land, legislatures have enacted the aforementioned property transfer statutes that impose disclosure obligations on sellers in a variety of commercial and/or industrial land transactions. These statutes provide purchasers with an additional basis for bringing suit for failure to disclose.¹⁰³

Waste. Although former owners and former tenants of land generally are not liable to current owners or current tenants for negligence, nuisance, trespass, or strict liability, owners of a present possessory interest in land (such as a life tenant or a lessee) may face liability to the holder of the reversionary interest (such as a holder of a remainder interest or a lessor) for "waste"—conduct that impairs the value of the reversionary interest.¹⁰⁴

Availability of Property Action—Marketable Title and Title Insurance or Warranty Deeds and the Breach of the Covenant Against Encumbrances. Most jurisdictions have not allowed an owner of contaminated land to assert a title defect claim with respect to contamination existing at the time of the conveyance.¹⁰⁵ One jurisdiction, however, has recognized a marketable title claim for contamination that significantly impaired the value of the land at the time of the conveyance.¹⁰⁶ [26 ELR 10593] Notably, these types of actions may be brought against either a grantor who conveyed the property by warranty deed or against a title insurer who insured that title is marketable.¹⁰⁷ One constraint associated with bringing an action against a grantor for a breach of the covenant against encumbrances, or against a title insurer, is that the liability generally is limited to the consideration the grantor received or to the value of the property insured, respectively, which might be significantly less than the cost of remediation.¹⁰⁸

Availability of Equitable Claim for Common-Law Indemnification. An equitable claim for indemnification is an often overlooked common-law claim that could provide innocent current owners of contaminated land with the opportunity to recover some or all of their cleanup costs from a culpable former owner. "Common law indemnity is based on the equitable principle that where the wrongful act of one results in another being held liable, the latter party is entitled to restitution from the wrongdoer.¹⁰⁹ The right can be enforced only when liability arises vicariously or by operation of law from the wrongful act of the party from whom indemnity is sought.Thus, it is only available to a party who can plead and prove freedom from active fault.¹¹⁰ This can present a problem for a current owner of contaminated land in two respects. First, the current owner will not have a claim if it has contributed to the contamination or has accepted contractual liability for the contamination through a release or an indemnification agreement. Second, an innocent current owner who voluntarily cleans up contamination may impair its ability to pursue a common-law indemnification claim by allowing the former owner to assert that the current owner is not vicariously liable or liable or operation of law.¹¹¹

This creates a dilemma if state or federal regulators are involved in the remediation process. On the one hand, the owner likely will want to be as proactive and cooperative as possible to develop a good working relationship with regulators, and to have a voice in minimizing the cost of the investigation and remediation. On the other hand, out of a desire to maintain a possible common-law indemnification claim, the owner probably will be served best by refraining from undertaking investigation and remediation voluntarily. As a result, the owner generally will need to negotiate the parameters for investigation and remediation of contamination as if it intended to perform such actions voluntarily, but then ask the regulators to order it to take the agreed on action so that it preserves a possible common-law indemnification claim.¹¹²

Availability of Cost Recovery Under CERCLA and State Statutes. In addition to common-law actions, owners of contaminated land may pursue express or implied rights of action under federal and state statutes. As the Court noted in Meghrig, however, although CERCLA provides private parties with an express cause of action for the recovery of response costs incurred in cleaning up contamination caused by hazardous substances,¹¹³ CERCLA's "petroleum exclusion" prevents owners of petroleum-contaminated land from recovering remediation costs¹¹⁴ unless the contamination resulted from used oil that contains other hazardous substances or excess concentrations of hazardous substances that trigger CERCLA liability.¹¹⁵ In addition, to succeed in an action to recover response [26 ELR 10594] costs under CERCLA, an owner of contaminated land needs to prove that the response costs were necessary and "consistent with the national contingency plan," which can make both the remediation and the cost recovery litigation more expensive.¹¹⁶ State statutes also may expressly or impliedly provide for a private right of action to recover cleanup costs.¹¹⁷ Some state statutes, however, also contain petroleum exclusions.¹¹⁸

In addition, owners of petroleum-contaminated land should consider their eligibility for reimbursement of investigation and remediation expenses under a state petroleum cleanup insurance fund. Many states have created such funds¹¹⁹ to allow owners of underground storage tanks to meet the financial responsibility requirements Congress enacted as part of the Superfund Amendments and Reauthorization Act.¹²⁰ From these funds, eligible parties generally can obtain reimbursement of investigation and remediation expenses up to $ 1 million after incurring the first $ 10,000 in expenses.¹²¹ State petroleum cleanup insurance funds should not, however, be perceived as a panacea. Eligibility requirements can be tricky and may foreclose reimbursement in some situations.¹²² Nonetheless, in many circumstances, such funds may alleviate some of the perceived injustice that occurs in cases such as Meghrig in which current owners of petroleum-contaminated land are liable for remediating petroleum contamination without having a plausible means of recovering their costs from culpable former owners.¹²³

Making Decisions Among a Variety of Alternatives With a Variety of Consequences

Meghrig Maintains the Status Quo

How does the Court's Meghrig decision change the advice an attorney should offer a client who owns contaminated land that the government has asked it to address and which it believes should be the responsibility of former owners or operators? Not much at all. Before the Court's decision in Meghrig, few attorneys viewed RCRA § 7002 as a viable means of recovering past cleanup costs. Attorneys advising owners of contaminated land still need to think creatively both about possible causes of action that the owners can pursue against former owners and about whether and how to proceed with any investigation and remediation so as to preserve possible claims as much as possible.

Pursuing Injunctive Relief, or Performing Remediation and Pursuing Cost Recovery

The fundamental question owners of contaminated land need to address is whether they want to proceed with remediation themselves or obtain an injunction under § 7002 and force the former owners to perform remediation. This should be the first question an attorney discusses with the owner because the decision significantly impacts how the owner should proceed with investigating and remediating the property. The owner basically has three choices: (1) proceed with an investigation and remediation of the property while pursuing litigation to recover costs under some common-law or statutory cause of action; (2) refrain from investigating and remediating the property and seek an injunction to make the culpable former owner incur the costs of investigating and remediating the contamination; or (3) proceed with an investigation in an effort to define the extent of the problem and the likely cost of remediation so that the owner can make a more informed decision about whether to remediate or to seek an injunction. In many circumstances, the third option will be the most sensible as any decision whether to invest in litigation or remediation should be evaluated on a cost-benefit basis: is the expenditure justified by the likely return (measured either by benefits gained or costs avoided)?¹²⁴ The following five factors likely will inform an owner's decision to seek an injunction in the first instance or to remediate and seek to recover the costs through some common-law or statutory cause of action.

[26 ELR 10595]

1. Impact of the Nature of the Contamination on Federal Statutory Causes of Action

If the land is contaminated by petroleum or other solid wastes that are not CERCLA hazardous substances, then the owner cannot pursue a statutory cost recovery action under CERCLA. If the contamination does not and may not "present an imminent and substantial endangerment," or if the state or EPA already is pursuing an enforcement action related to the contamination, then the owner cannot pursue injunctive relief under § 7002(a)(1)(B). If the owner cannot pursue federal statutory claims, the owner may have little choice but to seek recovery of any investigative and remediation costs through state common-law or statutory claims.

Information Needed to Advise Owner. To advise an owner properly about its ability to pursue federal statutory causes of action it will be essential to determine the nature of the contamination. Does the contamination include CERCLA hazardous substances? Can the owner prove that the contamination "may present an imminent and substantial endangerment"? Is the state or EPA pursuing an enforcement action? Did the owner agree to indemnify or release the seller from federal statutory liability associated with environmental contamination? Did the owner provide the seller with a general indemnification or release which could be interpreted to encompass environmental liabilities?

2. Availability of State Common-Law and Statutory Claims

If an owner has no apparent common-law or state statutory causes of action that will enable it to recover response costs from a former owner, injunctive relief pursuant to a RCRA citizen suit may be very attractive. If an owner has a great likelihood of recovering remediation costs from a former owner through a common-law or statutory cause of action, injunctive relief may appear less attractive. If an owner has some causes of action through which recovery is possible, but uncertain, the owner and attorney will need to make a calculated gamble regarding whether to pursue injunctive relief or to proceed with any required investigation and remediation of the contamination and pursue cost recovery pursuant to other claims.

Information Needed to Advise Owner. To advise an owner properly it will be essential to determine the owner's likelihood of success in pursuing state common-law or statutory claims. Did the contract contain any specific environmental warranties or representations, any general warranties or representations, or any provisions under which the seller agreed to indemnify the buyer, or under which the buyer agreed to indemnify or release the seller? Did the seller or the seller's agent make any affirmative misrepresentations regarding the condition of the property? Did the seller or the seller's agent fail to comply with any common-law or statutory disclosure obligations? Can the owner assert common-law or statutory claims for contribution or indemnification? Do the facts support any of the common-law or statutory claims? Has the owner engaged in any action that may negate one or more of the state common-law or statutory claims or may subject the owner to liability?

3. Time Pressures

Owners may face legal and practical time pressures. From the legal side, applicable statutes of limitations may preclude statutory or common-law causes of action. From the practical side, if an owner of contaminated land has no immediate need to make use of the property and can afford to wait for remediation to take place, then injunctive relief may be very attractive. If an owner of contaminated land has an immediate need to conduct remediation to allow it to make use of the property (as in Maghrig), however, injunctive relief will not be very attractive and the owner likely will need to remediate and pursue other claims to seek recovery of the cleanup costs. If the owner does not have immediate time pressures, but could have time pressures in the next several months, the owner and attorney will need to make a calculated gamble regarding whether the remediation will be concluded in a timely manner through pursuit of injunctive relief or whether the owner will need to conduct remediation to assure timely remediation.

Information Needed to Advise Owner. To advise an owner properly it will be essential to determine the applicable statutes of limitations. Does a statute of limitations prevent the owner from pursuing a given cause of action? Does a statute of limitations create time pressure to make a decision about whether to pursue a cause of action? In addition, it will be essential to develop an understanding of (1) the timeline in which the owner needs to have remediation completed to put the property to its full use and (2) the value the owner will gain from putting the property to its full use (or the value the owner will lose due to failure to put the property to its full use).

4. Financial Resources and Cost of Investigation and Remediation

If an owner is financially strapped and facing uncertain investigation and remediation costs, injunctive relief may be very attractive as the owner may not be able to afford the carrying costs associated with investigating and remediating the property and waiting for cost recovery, and may appreciate the ability to recover attorneys fees and other transaction costs associated with the litigation. If an owner is financially secure and remediation costs are well-defined, or, in the case of petroleum contamination, if the owner has access to funding for the investigation and remediation under a state petroleum cleanup insurance fund, injunctive relief may appear less attractive. If an owner is generally financially sound, but the investigation and remediation costs are uncertain and could be significant, particularly if the owner needs to prove that such costs are necessary and consistent with the national contingency plan, the owner and attorney will need to make a calculated gamble regarding whether to proceed with investigation and remediation or to pursue injunctive relief.

Information Needed to Advise Owner. To advise an owner properly it will be essential (1) to determine the owner's financial situation and cash-flow situation; (2) to determine the availability of any state or private insurance funding; and (3) to quantify, to the extent possible, the likely costs of both [26 ELR 10596] the investigation and the expected remediation, as well as the transaction costs of litigating a cost recovery action as compared to an action for an injunction. It may well be necessary to invest some money in investigating the areal and vertical extent of contamination so that a remediation cost estimate can be prepared to provide a basis for informed decisionmaking regarding the relative merits of investing in litigation (in pursuit of an injunction) or investing in remediation with coincidental or subsequent investment in litigation.

5. Control of Property

If an owner does not have great concern about maintaining control over the area of contamination because the owner is not using the land or because the area of contamination is isolated from the owner's operations on the property, injunctive relief may be very attractive. If an owner has great concern about control over the area of contamination because it is adjacent to ongoing operations, injunctive relief may appear less attractive. If an owner generally does not have great concern about maintaining control over the area of contamination, but can envision circumstances in which loss of control could present significant problems, the owner and attorney will need to make a calculated gamble regarding whether to pursue injunctive relief or to proceed with any required investigation and remediation of the contamination and seek cost recovery.

Information Needed to Advise Owner. To advise an owner properly it will be essential to understand how investigation and remediation activities in the area of contamination are likely to impact the owner's ongoing operations, if at all, and whether the owner has independent reasons for wishing to maintain control of the property and/or the remediation activities.

Deciding whether to pursue injunctive relief or to proceed with remediation and seek cost recovery becomes all the more complicated given that (1) these factors are interrelated and frequently will not point in the same direction; and (2) an owner frequently will need to decide when there is insufficient information on which to base a decision. For example, an owner may face uncertainty regarding the cost of cleanup, the likelihood of recovery, timing pressures, and control issues. Depending on how things unfold, cost, timing, and/or control each could be a determinative factor, but at a given point in time, none may provide meaningful direction. Alternatively, an owner may be financially strapped and may know that there is no meaningful likelihood of recovery under available common-law and statutory remedies, each of which would suggest that the owner would find injunctive relief attractive, but the owner also may be facing significant time pressures and control issues that make injunctive relief less attractive if not completely impractical. Although the decision is not likely to be easy, using a framework that encompasses these five factors (and others that may be relevant to the specific situation) should provide owners of contaminated land with an understanding of the issues they should be considering when deciding how to proceed.

Conclusion

In many respects, the Court's decision in Meghrig is hardly noteworthy. The Court simply has reiterated what many assumed to be the case all along—that current owners of contaminated land cannot use § 7002(a)(1)(B) as a means of recovering past remediation costs. Nonetheless, the decision serves as an important reminder of the need for circumspect decisionmaking both before acquiring land that may be contaminated and after an owner of land discovers contamination the owner believes was caused by a former owner or operator. In both circumstances lawyers can provide clients with a great deal of "added value." Before the sale, lawyers can help clients avoid purchasing contaminated land or shift the liability for such contamination to the seller. After the sale, lawyers can help clients who discover that they own contaminated land minimize their ultimate liability for such contamination or minimize the impact remediation activities have on their business enterprise by developing an appropriate strategy for shifting some or all of the liability to former owners or operators.

1. 42 U.S.C. §§ 9607(a), 9613(f), ELR STAT. CERCLA §§ 107, 113(f). See infra notes 113-16 and accompanying text discussing CERCLA causes of action.

2. See infra notes 89-112 and accompanying text discussing state common-law and statutory causes of action.

3. 42 U.S.C. § 6972, ELR STAT. RCRA § 7002. Section 7002(a)(1)(B) authorizes a party to bring suit against

any past or present generator, past or present transporter, or past or present owner or operator of a treatment, storage or disposal facility who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.

It gives district courts "jurisdiction … to restrain any person who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste … to order such person to take such other action as may be necessary, or both."

4. See, e.g., 325-343 E. 56th St. Corp. v. Mobil Oil Corp., 906 F. Supp. 669, 684-86, 26 ELR 20742, 20748-50 (D.D.C. 1995); Agricultural Excess & Surplus Co. v. A.B.D. Tank & Pump Co., 875 F. Supp. 1091, 1098, 25 ELR 21091, 21095 (N.D. Ill. 1995); Murray v. Bath Iron Works Corp., 867 F. Supp. 33, 42, 25 ELR 20547, 20551 (D. Me. 1994); Kaufman & Broad-S. Bay v. Unisys Corp., 822 F. Supp. 1468, 1477, 23 ELR 21366, 21369-70 (N.D. Cal. 1993); Commerce Holding Co. v. Buckstone, 749 F. Supp. 441 (E.D.N.Y. 1990).

5. Id. Federal district courts fairly consistently have rejected the argument that § 7002(a)(1)(B) authorizes restitutionary relief. Id.

6. 116 S. Ct. 1251, 1256, 26 ELR 20820, 20822 (1996).

7. KFC W., Inc. v. Meghrig, 28 Cal. Rptr. 2d 676, 679 (Cal. Ct. App. 1994).

8. Id. The Meghrigs acquired the property in 1963 and never operated a gasoline service station on the property. Prior owners and/or their lessees had operated gasoline service stations on the property for 45 years (dating back to 1917) before the Meghrigs purchased the property. Notably, KFC did not sue any of the other prior owners or lessees. Brief for the Petitioners at 4, Meghrig (No. 95-83), 1995 WL 668003 (U.S. Pet. Brief). Although none of the briefs or opinions indicate when or by whom the underground storage tanks were removed, it appears that they were no longer present on the parcel in 1988, as all the descriptions of KFC's remediation activity relate only to contaminated soil and make no mention of the existence of underground storage tanks.

9. KFC, 28 Cal. Rptr. 2d at 679.

10. Id.

11. Brief for the Petitioners at 4-5, Meghrig (No. 95-83), 1995 WL 668003 (U.S. Pet. Brief).

12. KFC, 28 Cal. Rptr. 2d at 679.

13. Reply Brief for the Petitioners at n.6, Meghrig (No. 95-83), 1995 WL 668003 (U.S. Pet. Brief) ("The ten causes of action were for (1) statutory cost recovery; (2) tortious breach of duty; (3) private nuisance; (4) public nuisance; (5) equitable indemnity; (6) implied contract; (7) ultrahazardous activity; (8) negligence; (9) unlawful business practices; and (10) trespass.").

14. KFC, 28 Cal. Rptr. 2d at 679.

15. Id.

16. Appendix to the Brief for the Petitioner at 1, Meghrig (No. 95-83), 1995 WL 668003 (U.S. Pet. Brief).

17. Meghrig v. KFC W., Inc., 116 S. Ct. 1251, 1253, 26 ELR 20820, 20820 (1996). KFC filed its citizen suit approximately five months after the decision in Zands v. Nelson, 779 F. Supp. 1254, 22 ELR 20757 (S.D. Cal. 1991), modified, 797 F. Supp. 805, 23 ELR 20340 (S.D. Cal. 1992), one of the first cases in which a court held that a party could bring a RCRA citizen suit for petroleum contamination because once gasoline leaks into the soil it constitutes a "solid waste." Id. at 1261-64, 22 ELR 20759-61.

18. Meghrig, 116 S. Ct. at 1253, 26 ELR at 20820 (citations omitted).

19. Id.

20. KFC W., Inc. v. Meghrig, 49 F.3d 518, 520-23, 25 ELR 20638, 20640-41 (9th Cir. 1995). A few months after the Ninth Circuit decision in KFC, the Eighth Circuit, in Furrer v. Brown, 62 F.3d 1092, 25 ELR 21450 (8th Cir. 1995), cert. denied, 116 S. Ct. 1567, 26 ELR 10321 (1996), applied an implied cause of action analysis under Cort v. Ash, 422 U.S. 66 (1975) to conclude that § 7002(a)(1)(B) does not authorize restitutionary relief. Furrer, 62 F.3d at 1094-1100, 25 ELR 21451-53.

21. Meghrig v. KFC W., Inc., 116 S. Ct. 41, 25 ELR 20637 (1995).

22. Meghrig, 116 S. Ct. at 1253-54, 26 ELR at 20820. Although the Court's decision in Meghrig affirmed the result the Eighth Circuit reached in Furrer, the Court did not endorse the Eighth Circuit's Cort v. Ash analysis. For criticism of the analysis, see David A. VanDyke, RCRA Citizen Suits and Restitution: The Eighth Circuit's Full Cort Press Strangles Equity's Traditional Remedial Play, 61 MO. L. REV. 48, 504-05 (1996).

23. Meghrig, 116 S. Ct. at 1254, 26 ELR at 20820.

24. Id. at 1254, 26 ELR at 20820 (quoting General Elec. Co. v. Litton Indus. Automation Sys., 920 F.2d 1415, 1422, 21 ELR 20453, 20456 (8th Cir. 1990)).

25. Id. The Court's terminology evidences its lack of sophistication with regard to RCRA and CERCLA. In discussing CERCLA, the Court focuses on "hazardous waste" sites, even though CERCLA jurisdiction arises from a release of a "hazardous substance." Id; see 42 U.S.C. §§ 9607, 9601(14), ELR STAT. CERCLA §§ 107, 101(14). In discussing RCRA, the Court refers to "toxic waste sites" and "disposal of toxic waste," even though RCRA jurisdiction stems from classification of materials as "solid waste" and "hazardous waste." Meghrig, 116 S. Ct. at 1254, 26 ELR at 20820, 20821; see 42 U.S.C. §§ 6922-6925, ELR STAT. RCRA §§ 3002-3005 (discussing standards applicable to generators of "hazardous waste," transporters of "hazardous waste," and facilities that treat, store, or dispose of "hazardous waste").

Moreover, in drawing specific comparisons between RCRA and CERCLA, the Court erroneously describes CERCLA § 101(14) as the "CERCLA provision incorporating certain 'hazardous substance[s],' but not the hazardous and solid wastes defined in RCRA, and specifically not petroleum." Meghrig, 116 S. Ct. at 1254, 26 ELR at 20821. Although this statement is accurate with respect to CERCLA's exclusion of petroleum from the universe of hazardous substances, it is dead wrong if it suggests that hazardous and solid wastes are excluded from the definition of hazardous substances set forth in § 101(14). The specific language of § 101(14) expressly includes RCRA "hazardous wastes" within the universe of hazardous substances: "The term 'hazardous substance' means … (C) any hazardous waste having the characteristics identified under or listed pursuant to section 3001 of the Solid Waste Disposal Act [42 U.S.C. § 6921, ELR STAT. RCRA § 3001] …." 42 U.S.C. § 9601, ELR STAT. CERCLA § 101.

26. Hazardous and Solid Waste Amendments of 1984, Pub. L. No. 98-616, § 233(a), 98 Stat. 3257 (codified at 42 U.S.C. § 6928(h), ELR STAT. RCRA § 3008(h)) (dealing with corrective action); id. No. 98-616, § 206, 98 Stat. 3236 (codified at 42 U.S.C. § 6924(u), ELR STAT. RCRA § 3004(u)) (also dealing with corrective action); id. tit. VI, § 601(a), 98 Stat. 3277 (codified as amended at 42 U.S.C. §§ 6991-6991i, ELR STAT. RCRA §§ 9001-9001i).

27. Id. tit. IV, § 401, 98 Stat. 3268 (1984) (codified at 42 U.S.C. § 6972, ELR STAT. RCRA § 7002); see supra note 3 for the text of § 7002.

28. Meghrig, 116 S. Ct. at 1254, 26 ELR at 20821.

29. Id. at 1255, 26 ELR at 20821 (quoting 42 U.S.C. § 6972(a)(1)(B), ELR STAT. RCRA § 7002(a)(1)(B)).

30. Id. (quoting WEBSTER'S NEW INTERNATIONAL DICTIONARY OF ENGLISH LANGUAGE 1245 (2d ed. 1934)).

31. Id.

32. Id. In reaching this conclusion the Court again draws on its understanding of the national policy behind RCRA, which "is 'to minimize the present and future threat to human health and the environment.'" Id. (citing 42 U.S.C. § 6902(b), ELR STAT. RCRA § 1003(b)).

33. Meghrig, 116 S. Ct. at 1256, 26 ELR at 20822 (quoting 42 U.S.C. § 6972(a)(1)(B), ELR STAT. RCRA § 7002(a)(1)(B)). The Court's carelessness in construing RCRA is again evident, as this sentence suggest[s] a higher standard—"presently poses"—than the statutory standard—"may present."

34. Id. at 1254, 26 ELR at 20821 (quoting 42 U.S.C. § 6972(a)(1)(B), ELR STAT. RCRA § 7002(a)(1)(B) (emphasis added)).

35. Id.

36. Id. (emphasis added).

37. Id.

38. Id. at 1255, 26 ELR at 20821 (quoting 42 U.S.C. §§9607(a)(4), 9613(f), ELR STAT. CERCLA §§ 107(a)(4), 113(f)).

39. Id. This sentence is a grammarian's nightmare and again demonstrates the Court's carelessness. If you were to "diagram" the sentence, you would discover that the Court stated that Congress accomplished the impossible. Congress could not have demonstrated in CERCLA, which was enacted in 1980, that the language Congress would use to define the remedies under § 7002(a)(1)(B), enacted as part of HSWA in 1984, would fail to provide the same remedies as CERCLA, given that when Congress enacted CERCLA it could not have known what language it ultimately would enact in HSWA in 1984.

40. Id. (citing 42 U.S.C. § 9613(g)(2), ELR STAT. CERCLA § 113(g)(2) (CERCLA's statute of limitations)).

41. Id. (citing 42 U.S.C. § 9607(a)(4)(A), ELR STAT. CERCLA § 107(a)(4) (CERCLA's limitation on recoverable response costs for private parties)).

42. Id.

43. See, e.g., 3M Co. v. Browner, 17 F.3d 1453, 1456-57, 24 ELR 20544, 20547-48 (D.C. Cir. 1994) (applying general five-year limitation period found at 28 U.S.C. § 2462 to a civil penalty action under the Toxic Substances Control Act); United States v. Walsh, 8 F.3d 659, 662, 24 ELR 20030, 20031 (9th Cir. 1993) (applying general five-year limitation period found at 28 U.S.C. § 2462 to a civil penalty action under the Clean Air Act), cert. denied, 114 S. Ct. 1830, 24 ELR 10411 (1994); Public Interest Research Group of N.J. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 74, 20 ELR 21216, 21220 (3d Cir. 1990) (citing with approval Sierra Club v. Chevron U.S.A., Inc., 834 F.2d 1517, 1522, 18 ELR 20237, 20240 (9th Cir. 1987) (holding that 28 U.S.C. § 2462 applies to citizen enforcement actions under the Clean Water Act)), cert. denied, 498 U.S. 1109 (1991). Two district courts have applied § 2462's five-year limitation period to RCRA citizen suits. See, e.g., Glazer v. American Ecology Envtl. Servs., 894 F. Supp. 1029, 1044, 26 ELR 20108, 20115 (E.D. Tex. 1995); Bodne v. Geo A. Rheman Co., 811 F. Supp. 218, 221 (D.S.C. 1993) (citing Sierra Club for the proposition that "28 U.S.C. § 2462 is the relevant federal statute of limitations to citizen actions under environmental statutes"). One district court recently applied CERCLA's three-year statute of limitations to a RCRA citizen suit in which the plaintiff sought restitution. Catellus Dev. Corp. v. L.D. McFarland Co., 910 F. Supp. 1509, 26 ELR 20920 (D. Or. 1995). But see Nixon-Egli Equip. Co. v. John A. Alexander Co., No. CV 95-2269 SVW (JRx) (C.D. Cal. Aug. 13, 1996) (rejecting the decision in Catellus and holding that no statute of limitations applies to RCRA actions that do not seek civil penalties).

44. In concluding that Congress must not have meant to authorize cost recovery because it did not limit possible recovery to "reasonable costs," the Court implicitly suggests that it does not have confidence in the ability of the members of the federal judiciary to use their equitable authority to limit recovery to reasonable amounts.

45. Meghrig, 116 S. Ct. at 1255, 26 ELR at 20821 (citing 42 U.S.C. § 6972(b)(2)(A)(i)-(iii), ELR STAT. RCRA § 7002(b)(2)(A)(i)-(iii)).

46. Id. (citing 42 U.S.C. § 6972(b)(2)(B), (C), ELR STAT. RCRA § 7002(b)(2)(B), (C)).

47. Id.

48. The citizen-suit provision may appear to be somewhat irrational in one circumstance. If the government commences an enforcement action by bringing suit against a landowner, the landowner may be prevented from pursuing a citizen suit against a former owner or operator. See Space Age Fuels, Inc. v. Standard Oil Co. of Cal., No. Civ. 95-1637-JE, 1996 WL 160741 (D. Or. 1996) (holding that under the Burford abstention doctrine, court would not allow RCRA citizen suit by landowner against whom state had commenced enforcement action given that landowner had state statutory cause of action for contribution); see also Supporters to Oppose Pollution, Inc. v. Heritage Group, 973 F.2d 1320, 1324, 23 ELR 20005, 20007 (7th Cir. 1992) (precluding RCRA citizen suit against alleged alter ego of landfill operator given state enforcement action against landfill operator); Hudson Riverkeeper Fund, Inc. v. Harbor at Hastings Assocs., 917 F. Supp. 251, 256-57, 26 ELR 21120, 21121-22 (S.D.N.Y. 1996) (refusing to allow RCRA citizen suit against one party when state enforcement action underway against another party). Were the Space Age Fuels decision followed even when a landowner did not have a state statutory cause of action for contribution, the citizen-suit provision could be viewed as irrational. The owner of land with sufficient contamination to merit government enforcement action would be precluded from shifting liability to culpable former owners through a RCRA citizen suit, while the owner of less contaminated land would be able to bring such a suit and shift liability to culpable former owners.

To provide at least a possibility that an owner of contaminated land will not be foreclosed from bringing a RCRA citizen suit, the owner should try to assure that the agency pursues remediation through administrative orders, rather than through litigation, as administrative orders may not constitute "enforcement action" sufficient to preclude a citizen suit. Compare Washington Pub. Interest Research Group v. Pendleton Woolen Mills, 11 F.3d 883, 24 ELR 20231 (9th Cir. 1993) (citizen suit not precluded by administrative order); Murray v. Bath Iron Works Corp., 867 F. Supp. 33, 41, 25 ELR 20547, 20551 (D. Me. 1994) (citizen suit not precluded because Maine was not pursuing specific types of enforcement action) with Arkansas Wildlife Fed'n v. ICI Ams., Inc., 29 F.3d 376, 24 ELR 21573 (8th Cir. 1994) (administrative consent order precludes citizen suit).

49. 453 U.S. 1, 11 ELR 20684 (1981).

50. Meghrig, 116 S. Ct. at 1256, 26 ELR at 20822 (quoting Middlesex County, 453 U.S. at 14-15, 11 ELR at 20687 (quoting Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979))). The Court specifically rejected the argument raised by both KFC and the United States (as amicus) that a citizen who filed suit while waste presented an imminent and substantial endangerment should be entitled to "seek equitable restitution of money previously spent on cleanup efforts." Id. at 1255-56, 26 ELR at 20821.

51. 321 U.S. 321 (1944).

52. 328 U.S. 395 (1946).

53. Meghrig, 116 S. Ct. at 1256, 26 ELR at 20821-22.

54. 495 U.S. 271 (1990).

55. Id. at 295 (quoting Hecht Co. v. Bowles, 321 U.S. at 329).

56. Id. (quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 313 (1982) (quoting Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946)).

57. 340 U.S. 616, 619 (1951) (interpreting Housing and Rent Act of 1947).

58. 361 U.S. 288, 290-91 (1960) (interpreting Fair Labor Standards Act).

59. Brief for the Petitioners at 18-24, 39-41, Meghrig (No. 95-83), 1995 WL 668003 (U.S. Pet. Brief); Reply Brief for the Petitioners at 9-16, Meghrig (No. 95-83), 1995 WL 763727 (U.S. Reply Brief). The Court failed to emphasize what could perhaps be an even stronger argument in distinguishing between RCRA and CERCLA. Unlike CERCLA § 107(a), which authorizes recovery of response costs by "any person," RCRA § 9003b(6)(A) authorizes only EPA and states to recover costs incurred for undertaking corrective action relating to releases of petroleum from an underground storage tank. 42 U.S.C. § 6991b(6)(A), ELR STAT. RCRA § 9003b(6)(A).

60. Meghrig v. KFC W., Inc., 116 S. Ct. 1256, 26 ELR 20822.

61. Id. (quoting Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1, 14-15, 11 ELR 20684, 20687 (1981) (quoting Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979))).

62. Id. at 1254, 26 ELR at 20821.

63. See J. Martin Robertson, Restitution Under RCRA § 7002(a)(1)(B): The Courts Finally Grant What Congress Authorized, 25 ELR 10486 (Sept. 1995).

64. 42 U.S.C. § 6972(e), ELR STAT. RCRA § 7002(e).

65. See Key Tronic Corp. v. United States, 114 S. Ct. 1960, 24 ELR 20955 (1994).

66. This would have generally limited RCRA cost recovery actions to cases involving petroleum contamination. See, e.g., West County Landfill v. Raychem Int'l Corp., No. C-93-3170 SI (N.D. Cal. Feb. 12, 1996) (holding that owners and operators of a hazardous-waste disposal facility are not entitled to restitution of their cleanup costs under RCRA's citizen-suit provision and distinguishing the Ninth Circuit's decision in KFC Western because plaintiffs are "non-innocent" and have a remedy under CERCLA).

67. Although the Court's Meghrig decision focuses on the available remedies under § 7002, it would appear to implicitly overrule the decision in United States v. Valentine, 856 F. Supp. 627, 24 ELR 21555 (D. Wyo. 1994), which held that defendants in an action brought by the United States under RCRA § 7003 had a statutory and federal common-law cause of action for contribution. It would be anomalous to refuse to allow an owner of petroleum-contaminated land a cause of action for restitution under § 7003, but allow such an owner a cause of action for contribution against former owners and operators when the owner of petroleum-contaminated land is a defendant in an enforcement action under § 7003.

68. Congress and some state legislatures have developed many of the statutory remedies, such as CERCLA and property transfer statutes, largely because the common-law doctrine of caveat emptor frequently allowed owners of contaminated land to transfer the land, and the liability for the associated environmental contamination, to unsuspecting purchasers. See Judith G. Tracy, Beyond Caveat Emptor: Disclosure to Buyers of Contaminated Land, 10 STAN. ENVTL. L.J. 169, 169 (1991). New Jersey was the first state to enact a property transfer statute. The Environmental Cleanup Responsibility Act, enacted in 1983 and amended by the 1993 Industrial Site Recovery Act, imposes significant disclosure and remediation obligations on the sellers of contaminated land. N.J. REV. STAT. ANN. § 13:1K-6 to -14 (West 1991 & Supp. 1994), amended by Industrial Site Recovery Act, ch. 139, 1993 N.J. Laws 1. Other states have followed suit, although generally with somewhat less draconian statutes. See, e.g., IND. CODE §§ 13-7-22.5-1 to .5-22 (1994) (requiring transferors of certain commercial and industrial properties to deliver a disclosure document to purchasers and lenders who have the right to rescind the transaction if the disclosure document contains information regarding contamination that the parties previously were unaware of and requiring the disclosure document to be filed with the state); MICH. COMP. LAWS §§ 299.601-.618 (1994) (requiring notice to purchasers if land has experienced a release of a reportable quantity of hazardous substances). For a thorough description of a wide variety of state property transfer statutes see Sarah L. Inderbitzin, Taking the Burden Off the Buyer: A Survey of Hazardous Waste Disclosure Statutes, 1 ENVTL. LAW. 513 (1995); David B. Farer, Transaction-Triggered Environmental Laws, in ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 62-79 (James B. Witkin, ed., ABA 1995).

69. For purposes of this Dialogue, the term Phase I Site Assessment encompasses all nonintrusive information gathering reflected in both the Transaction Screen Process described in AM. SOC'Y FOR TESTING AND MATERIALS, STANDARD PRACTICE FOR ENVIRONMENTAL SITE ASSESSMENTS: TRANSACTION SCREEN PROCESS 1528-93 § 1.1.1 (1993), and the Phase I Environmental Site Assessment Process described in the AM. SOC'Y FOR TESTING AND MATERIALS, STANDARD PRACTICE FOR ENVIRONMENTAL SITE ASSESSMENS: PHASE I ENVIRONMENTAL SITE ASSESSMENT PROCESS 1527-93 § 1.1.1 (1993), as well as other information gathering that relates to a given parcel's degree of environmental compliance or potential environmental liability. For a more detailed discussion of the types of information gathered during a Phase I Site Assessment, see Carol R. Boman, The Due Diligence Dilemma: How Much Is Enough?, in ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 175-93 (James B. Witkin ed. ABA 1995); Paul C. Nightingale, Negotiating Contracts for the Purchase and Sale of Contaminated Property, 10 NAT. RESOURCES & ENV'T 11 (1996); Michael Italiano et al., Environmental Due Diligence During Mergers and Acquisitions, 10 NAT. RESOURCES & ENV'T 17 (1996); Frank B. Cross, Establishing Environmental Innocence, 23 REAL EST. L.J. 332 (1995); Joseph Philip Forte, Environmental Due Diligence: A Guide to Liability Risk Management in Commercial Real Estate Transactions, 5 FORDHAM ENVTL. L.J. 349 (1994).

70. For purposes of this Dialogue, the term Phase II Site Assessment encompasses an intrusive site investigation involving soil borings and possibly groundwater testing, performed by a professional environmental consultant to determine the nature and the areal and vertical extent of the contamination. For information regarding the process for hiring environmental consultants, see Eva M. Fromm, Environmental Consultants, in ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 194-218 (James B. Witkin ed. ABA 1995); Shelley Bookspan, Phasing in the Environmental Site Assessment Business, 21 REAL EST. L.J. 322 (1993).

71. See supra note 68 and accompanying text.

72. Such options might include (1) having the seller retain ownership of a defined portion of the land in question so that the seller retains the associated liability; (2) delaying the closing until the seller has substantially remediated the problem; (3) reducing the purchase price; or (4) creating an escrow containing an agreed-on level of funding to finance the remediation the purchaser will perform subsequent to the closing. For a good discussion of risk-allocation options, see Gerard A. Caron, Structuring the Transaction to Allocate Environmental Liability, in ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 243-67 (James B. Witkin ed. ABA 1995); Nightingale, supra note 69, at 11; Mark Mininberg, Transferring Commercial Real Estate Under Connecticut's Environmental Law, 64 CONN. B.J. 409, 425-30 (Dec. 1990); Fred I. Feinstein & Carolyn S. Hesse, Some Contractual Mechanisms for Dealing With Contaminated Property, C532 ALI-ABA 1403, 1411-23 (June 18, 1990); Paul S. Street & D. Bernard Zaleha, Environmental Risks: Negotiating and Drafting Lease Agreements, 27 IDAHO L. REV. 37 (1990).

73. Section 107(a)(1) of CERCLA imposes liability on "the owner and operator of a vessel or a facility." 42 U.S.C. § 9607(a)(1), ELR Stat. CERCLA § 107(a)(1). Although CERCLA provides an innocent purchaser defense, it is available only to those who have undertaken "all appropriate inquiry into the previous ownership and uses of the property consistent with good commercial or customary practice in an effort to minimize liability." Id. § 9601(35)(A), (B), ELR STAT. CERCLA § 101(35)(A), (B). The ASTM Site Assessment standards described previously supra in notes 69-70 and accompanying text, were developed to provide a baseline against which to evaluate whether a purchaser has undertaken "all appropriate inquiry."

RCRA's underground storage tank regulations generally apply to owners and operators of underground storage tank systems. Id. § 6991b, ELR STAT. RCRA § 9003. Although RCRA's underground storage tank provisions do not contain an "innocent purchaser" defense, RCRA's definition of "owner," under Title IX, id. § 6991(3), ELR STAT. RCRA § 9001(3), may provide owners of contaminated land with an argument that they should only be liable under RCRA in certain circumstances.

Under § 9001(3), an owner of land that presently contains an underground storage tank apparently would have liability as an "owner" if the tank was in use as of November 8, 1984, or was brought into use after November 8, 1984. An owner of land presently contaminated with petroleum from an underground storage tank that was no longer in use as of November 8, 1984, can argue, however, that RCRA imposes "owner" liability only on "any person who owned such tank immediately before the discontinuation of its use." See Dydio v. Hesston Corp., 887 F. Supp. 1037, 26 ELR 20312 (D. Ill. 1995). Unfortunately, § 9001(3) does not indicate whether the current owner of petroleum-contaminated land has liability as an "owner" with respect to tanks that were in use as of November 8, 1984, but were removed before the present owner acquired title to the land. Id. at 1044 n.9, 26 ELR at 20315 n.9.

Even though the definition of owner for purposes of regulation of underground storage tanks gives a current owner of petroleum-contaminated land some possibility of being able to avoid liability in certain circumstances, that does not mean the owner has no liability under RCRA. As noted above, § 7002(a)(1)(B) allows suit against "any past or present owner … of a treatment, storage or disposal facility, who has contributed or is contributing to" contamination that "may present an imminent or substantial endangerment to health or the environment." 42 U.S.C. § 6972(a)(1)(B), ELR STAT. RCRA § 7002(a)(1)(B). Although RCRA does not contain a general definition of "owner," the regulations define an "owner" as "the person who owns a facility or part of a facility." 40 C.F.R. § 260.10 (1994). The regulations define "facility" as "all contiguous land, and structures, other appurtenances, and improvements on the land, used for treating, storing, or disposing of hazardous waste." Id. Nonetheless, at least one court has held that a current owner of contaminated land will not be liable under § 7002(a)(1)(B) to the extent that the current owner can demonstrate that he or she did not contribute to the contamination. First San Diego Properties v. Exxon Co., 859 F. Supp. 1313 (S.D. Cal. 1994), but see United States v. Price, 523 F. Supp. 1055, 11 ELR 21047 (D.N.J. 1981) (holding that in an action by the United States under § 7003, even passive inaction by a subsequent purchaser may give rise to liability for "contributing to" a contamination problem).

Even if a current owner of contaminated land may not have liability under CERCLA or RCRA, the landowner could face liability under state statutes. See, e.g., Space Age Fuels, Inc. v. Standard Oil Co. of Cal., No. Civ. 95-1637-JE, 1996 WL 160741 (D. Or. 1996) (noting that an Oregon statute imposes liability on the current owner of contaminated land, but allows for possible reimbursement from state cleanup fund or for statutory contribution action against other parties); State v. Mauthe, 366 N.W.2d 871 (Wis. 1985) (holding that landowner is liable for "discharge" under WIS. STAT. § 144.76, which imposes liability on persons possessing or controlling hazardous substances that have been discharged into the environment, when previously released substances migrate across property lines); Vanderzee v. Hunt, 503 N.W.2d 21 (Wis. Ct. App. 1993) (holding that § 144.76 does not provide a private right of action for contribution).

74. Based on my experience, agency staffers generally focus attention on the current landowner because they do not want to "adjudicate" claims among multiple parties with potential liability under a statute, they do not want to complicate the investigation/remediation process by having multiple parties with competing interests at the negotiating table, and they would rather deal with the party that has legal access to the site.

75. This Dialogue focuses on the opportunities for injunctive relief and cost recovery because most circumstances in which current owners discover contamination arise after the current owner has made a significant investment in the land in question, making rescission of the sale contract impractical. Nonetheless, in some instances, such as when there has been a mutual mistake of fact or a material misrepresentation, current owners also may be able to seek rescission as a means of shifting responsibility to the former owner. See, e.g., Diamond v. Marcinek, 629 A.2d 350 (Conn. 1993) (allowing rescission when seller failed to comply with statutory disclosure obligation); Scruggs v. Roach, No. 03A01-9209-CH00358, 1993 WL 93362 (Tenn. Ct. App. 1993) (holding that rescission was appropriate due to material misrepresentation); Karoutas v. HomeFed Bank, 283 Cal. Rptr. 809 (Cal. Ct. App. 1991) (noting that breach of the duty to disclose gives rise to a cause of action for rescission or damages); Garb-ko, Inc. v. Lansing-Lewis Servs., Inc., 423 N.W.2d 355 (Mich. Ct. App. 1988) (explaining that mutual mistake gives right to rescind unless adversely affected party agreed to take property "as is").

76. 42 U.S.C. § 6972(a), ELR STAT. RCRA § 7002(a).

77. In most jurisdictions, courts do not recognize a cause of action in nuisance or trespass by a current owner of contaminated land against a former owner. See, e.g., Lyden Co. v. Citgo Petroleum Corp., No. 91-CV-1967, 1991 WL 325786, at *6 (N.D. Ohio Dec. 15, 1991); Wilson Auto Enters., Inc. v. Mobil Oil Corp., 778 F. Supp. 101, 106 (D.R.I. 1991); Wellesley Hills Realty Trust v. Mobil Oil Corp., 747 F. Supp. 93, 98-99 (D. Mass. 1990); Rosenblatt v. Exxon Co., U.S.A., 642 A.2d 180 (Md. 1994). But see KFC W., Inc. v. Meghrig, 28 Cal. Rptr. 2d 676 (Cal. Ct. App. 1994) (recognizing causes of action for continuing negligence and continuing trespass); Wilshire Westwood Assocs. v. Atlantic Richfield Co., 24 Cal. Rptr. 2d 562 (Cal. Ct. App. 1993) (recognizing cause of action for continuing nuisance). See infra notes 98-99 and accompanying text (discussing possible tort claims).

78. 42 U.S.C. § 6972(a)(1)(A), ELR STAT. RCRA § 7002(a)(1)(A). See Dydio v. Hesston Corp., 887 F. Supp. 1037, 26 ELR 20312 (N.D. Ill. 1995).

79. 42 U.S.C. § 6972(a)(1)(B), ELR STAT. RCRA § 7002(a)(1)(B); see supra note 3 for the section's full text.

80. 42 U.S.C. § 6972(a), ELR STAT. RCRA § 7002(a).

81. Meghrig v. KFC W., Inc., 116 S. Ct. 1251, 1254, 26 ELR 20820, 20821 (1996).

82. Section § 7002(b)(1)(A) provides that actions under § 7002(a)(1)(A) cannot be commenced "prior to 60 days after the plaintiff has given notice of the violation to—(i) the Administrator [of the EPA]; (ii) the State in which the alleged violation occurs; and (iii) … any alleged violator of [a] permit, standard, regulation, condition, requirement, prohibition, or order." 42 U.S.C. § 6972(b)(1)(A), ELR STAT. RCRA § 7002(b)(1)(A). Section 7002(B)(2)(A) provides for 90-day notice for actions under § 7002(a)(1)(B). Id. § 6972(b)(2)(A), ELR STAT. RCRA § 7002(b)(2)(A). Under either section, an action can be commenced immediately after notice with respect to "a violation of subchapter III" of RCRA.

83. Although RCRA's regulatory definitions of solid and hazardous waste can be murky and impenetrable, in the last several years, federal district courts consistently have held that petroleum that has leaked into the ground no longer is a product (which is not subject to RCRA jurisdiction) but has been discharged and become a solid waste (which is subject to RCRA jurisdiction), thereby triggering potential liability under § 7002(a)(1)(B). See Waldschmidt v. Amoco Oil Co., 924 F. Supp. 88, 26 ELR 21368 (C.D. Ill. 1996); Dydio v. Hesston Corp., 887 F. Supp. 1037, 26 ELR 20312 (N.D. Ill. 1995); Agricultural Excess & Surplus Ins. Co. v. A.B.D. Tank & Pump Co., 878 F. Supp. 1091, 25 ELR 21091 (N.D. Ill. 1995); Craig Lyle Ltd. Partnership v. Land O'Lakes, Inc., 877 F. Supp. 476, 25 ELR 21115 (D. Minn. 1995); Dominick's Finer Foods, Inc. v. Amoco Oil Co., No. 93-C-4210, 1993 WL 524808 (N.D. Ill. Dec. 15, 1993); Zands v. Nelson, 779 F. Supp. 1254, 22 ELR 20757 (S.D. Cal. 1991), modified, 797 F. Supp. 805, 23 ELR 20340 (S.D. Cal. 1992).

84. Although some courts have interpreted the "imminent and substantial endangerment" requirement expansively in allowing citizen suits, others have applied a narrower, more restrictive interpretation. Compare, e.g., Dague v. City of Burlington, 935 F.2d 1343, 1355, 21 ELR 21133, 21139 (2d Cir. 1991) (explaining that RCRA's language "is intended to confer upon the courts the authority to grant affirmative equitable relief to the extent necessary to eliminate any risk posed by toxic wastes"); Lincoln Properties,Ltd. v. Higgins, 23 ELR 20665, 20671 (E.D. Cal. 1993) (holding that "endangerment" means a "threatened or potential harm" which "does not require proof of actual harm" and that "imminence" does not require evidence of immediate actual harm, but rather requires only a "risk of threatened harm … even though the harm may not be realized for years"); Kaufman & Broad-S. Bay v. Unisys Corp., 822 F. Supp. 1468, 1475-76, 23 ELR 21366, 21369 (N.D. Cal. 1993) (holding that a requirement of continued monitoring demonstrated imminent and substantial endangerment); with Price v. U.S. Navy, 818 F. Supp. 1323, 1325 (S.D. Cal. 1992), aff'd, 39 F.3d 1011, 25 ELR 20177 (9th Cir. 1994) (finding no imminent and substantial endangerment even though soil remained contaminated because no meaningful exposure pathway existed); Davies v. National Coop. Refinery Ass'n, No. 96-1124-WEB (D. Kan. July 12, 1996) (holding that an "imminent" threat means harm to the health of individuals that are unaware of the danger posed by petroleum contamination of local well water); Acme Printing Ink Co. v. Menard, Inc., 870 F. Supp. 1465, 1478, 25 ELR 20784, 20788 (E.D. Wis. 1994) (holding that Superfund site at which hazardous waste was present did not present "imminent and substantial endangerment").

85. See supra notes 46-48 and accompanying text.

86. See supra note 84.

87. See supra notes 46-48 and accompanying text.

88. 42 U.S.C. § 6972(e), ELR STAT. RCRA § 7002(e).

89. Even with express contractual language, disputes may arise regarding whether a seller is liable under an express warranty or whether an express disclaimer insulates a seller from liability. See, e.g., Bond Drug Co. of Ill. v. Amoco Oil Co., 654 N.E.2d 540 (Ill. Ct. App. 1995); Wright Motors, Inc. v. Marathon Oil Co., 631 N.E.2d 923 (Ind. Ct. App. 1994); Douglas A. Henderson, Environmental Liability and the Law of Contracts, 50 BUS. LAW. 183 (1994) (discussing various court interpretations regarding extent to which parties' contractual language succeeded in allocating CERCLA liability).

90. Although an "as is" clause may foreclose a breach of contract action, it does not generally foreclose a CERCLA action. See, e.g., Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 15 ELR 20370 (D. Ariz. 1984), aff'd, 804 F.2d 1454, 17 ELR 20209 (9th Cir. 1986); Channel Master Satellite Sys. v. JFD Elec. Corp., 702 F. Supp. 1229, 19 ELR 20839 (E.D.N.C. 1988) (both holding that "as is" clause in sales agreement simply negated any warranties and did not release seller from CERCLA liability). But see Niecko v. Emro Mktg. Co., 973 F.2d 1296, 23 ELR 20183 (6th Cir. 1992) (holding "as is" clause sufficient to preclude a former owner's CERCLA liability). See infra notes 113-16 (discussing CERCLA liability). Moreover, it does not necessarily foreclose an action in tort, given the growing number of circumstances in which legislatures and courts are eroding caveat emptor by imposing disclosure obligations on sellers. Compare, e.g., Scruggs v. Roach, No. 03A01-9209-CH00358, 1993 WL 93362 (Tenn. Ct. App. 1993) (allowing rescission due to material misrepresentation despite "as is" clause); with Raskin v. Chrysler Realty Corp., 527 N.W.2d 398 (Wis. Ct. App. 1994) (finding no cause of action for misrepresentation because of detailed "as is" clause); Holly Hill Holdings v. Lowman, 628 A.2d 1298 (Conn. 1993) (holding that "as is" clause, together with buyer's awareness of the existence of underground storage tanks, defeats any possible claim for failure to comply with state disclosure statute).

91. See supra note 89 and accompanying text.

92. In those states that still abide by the "merger" doctrine, under which provisions of the sale agreement are merged into the deed, breach of warranty claims based on express contractual warranties may be lost if the warranties are not restated in the deed. ROGER A. CUNNINGHAM ET AL., THE LAW OF PROPERTY § 11.13, at 862 (2d ed. 1993).

93. 42 U.S.C. § 9603(a), ELR STAT. CERCLA § 103(a). The list of hazardous substances and their associated reportable quantities are set forth at 40 C.F.R. § 302.4 (1994).

94. See James H. Andreasen, Reporting Emergency Environmental Releases in Missouri, 63 U.M.K.C. L. REV. 615, 625 (1995); Mark Mininberg, Hazardous Substance Spills: What and When to Tell the Government (and Others), 63 CONN. B.J. 69, 75-76 (1989). Moreover, CERCLA's reporting obligation under § 103(c) does not clearly encompass a continuing obligation to report releases of hazardous wastes. Id. at 78. See generally David A. Freeman, Environmental Reporting Obligations, in ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 131-48 (James B. Witkin ed. ABA 1995).

95. See State v. Mauthe, 366 N.W.2d 871 (Wis. 1985) (holding that migration across property boundary of contamination that resulted from releases predating enactment of Wisconsin spill statute constituted present release triggering obligation under the statute).

96. See 42 U.S.C. §§ 6924-6925, ELR STAT. RCRA §§ 3004-3005; 40 C.F.R. pts. 264-65 (1994).

97. See 42 U.S.C. §§ 6991b, 6991d, ELR STAT. RCRA §§ 9003, 9005; 40 C.F.R. pt. 280 (1994).

98. See, e.g., Walker Drug Co. v. La Sal Oil Co., 902 P.2d 1229 (Utah 1995); Exxon Corp. v. Yarema, 516 A.2d 990 (Md. Ct. Sp. App. 1986). These cases further evidence a split in authority regarding whether the storage of gasoline in underground storage tanks constitutes an abnormally dangerous activity such that the neighboring landowner can bring an action in strict liability. Walker holds that storage of gasoline does not constitute an abnormally dangerous activity, 902 P.2d at 1233, while Yarema holds that the storage of gasoline in underground storage tanks can constitute an abnormally dangerous activity depending on the location. 516 A.2d at 1005 (citing Yommer v. McKenzie, 257 A.2d 138 (Md. 1969)). For a discussion of common-law causes of action relating to environmental contamination, see James B. Witkin, Common-Law Causes of Action for Environmental Claims, in ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 31-61 (James B. Witkin ed. ABA 1995); Sheldon D. Korlin, Private Cost Recovery Actions, Insurance Claims and the Missouri Underground Storage Tanks Fund, 2 MO. ENVTL. L. & POL'Y REV. 5 (1994); Allison Rittenhouse Hayward, Common Law Remedies and the UST Regulations, 21 B.C. ENVTL. AFF. L. REV. 619 (1994).

99. See, e.g., Metal Processing Co. v. Amoco Oil Co., 926 F. Supp. 828, 832 (D. Wis. 1996) (discussing negligence, strict liability, continuing nuisance, and continuing trespass claims because Wisconsin law "does not permit a tort cause of action for economic injury alone where the parties have a contractual relationship and the injury is based on that relationship"); Rosenblatt v. Exxon Co., U.S.A., 642 A.2d 180, 185-91 (Md. 1994); Wellesley Hills Realty Trust v. Mobil Oil Corp., 747 F. Supp 93, 98-102 (D. Mass. 1990) (both holding that subsequent owners of contaminated land, in the absence of fraud or contract, do not have a common-law action against their predecessors in title because negligence, nuisance, trespass, and strict liability actions only lie when the interference is with the property of another); Futura Realty v. Lone Star Bldg. Ctrs. (E.), Inc., 578 So. 2d 363 (Fla. Ct. App. 1991) (holding that landowner is not liable to future landowners in strict liability).

It appears that only three states have allowed current owners of land to assert common-law tort claims such as nuisance or strict liability against former owners of land. See KFC W., Inc. v. Meghrig, 28 Cal. Rptr. 2d 676 (Cal. Ct. App. 1994); Wilshire Westwood Assoc. v. Atlantic Richfield Co., 24 Cal. Rptr. 2d 562 (Cal. Ct. App. 1993) (both recognizing a cause of action under California law for continuing nuisance); T & E Indus. v. Safety Light Corp., 587 A.2d 1249 (N.J. 1991); Hanlin Group v. International Minerals & Chem. Corp., 759 F. Supp. 925 (D. Me. 1990) (both holding that a former owner of land is subject to a current owner's strict liability claim because disposal of hazardous substances constitutes an abnormally dangerous activity).

100. See Smith v. Weaver, 665 A.2d 1215, 1217-18 (Pa. Super. Ct. 1995); Manning v. Hamamey, No. CV-182284, 1995 WL 444440, at *3-*4 (Ohio Ct. App. 1995); Baskin v. Collins, 806 S.W.2d 3, 5 (Ark. 1991).

101. See Alan M. Weinberger, Let the Buyer Be Well Informed?—Doubting the Demise of Caveat Emptor, 55 MD. L. REV. 387, 389-90 (1996).

102. See id. at 389-90, 412-13; see also Foss v. Madison Twentieth Century Theaters, Inc., 551 N.W.2d 862 (Wis. Ct. App. 1996) (granting summary judgment against plaintiff on misrepresentation claim because plaintiff purchased property "as is" with knowledge of the existence of underground storage tanks on the property); Vandervort v. Higginbotham, 634 N.Y.S.2d 800, 801 (N.Y. App. Div. 1995) (finding no misrepresentation when commercial buyer knew of existence of underground storage tanks and could have discovered information through reasonable investigation); Futura Realty, 578 So. 2d at 363 (finding that in commercial-sale transaction, seller had no duty to disclose known facts materially affecting value of property that were not readily observable and were not known to purchaser, because commercial purchaser, unlike residential purchaser, can be expected to investigate the condition of the land more thoroughly). But see Scruggs v. Roach, No. 03A01-9209-CH00358, 1993 WL 93362 (Tenn. Ct. App. 1993) (allowing rescission due to material misrepresentation in spite of "as is" clause in the sale of a gasoline station and service repair business).

103. See supra note 68 and accompanying text. See, e.g., Diamond v. Marcinek, 629 A.2d 350 (Conn. 1993) (allowing rescission when seller failed to comply with statutory disclosure obligation).

104. See, e.g., Wright Motors, Inc. v. Marathon Oil Co., 631 N.E.2d 923 (Ind. Ct. App. 1994) (holding that signed release did not relieve lessee of statutory or common-law liability for contribution or waste associated with contamination from underground storage tanks). But see Griffith v. New England Telephone & Telegraph Co., 649 N.E.2d 766 (Mass. 1995) (holding that tenant's failure to prevent leaks from underground storage tanks did not subject it to statutory liability for having "caused" contamination, because express clause in lease obligating it to maintain the premises did not impose liability on it to prevent releases of contamination from the tanks); Sullivan v. Booker, 877 S.W.2d 370 (Tex. Ct. App. 1994) (holding that the existence of contamination was insufficient to demonstrate that tenant's failure to test for or protect against releases was wrongful). Notably, some jurisdictions allow double or treble damages for waste. See, e.g., MICH. COMP. LAWS ANN. § 600.2919(2)(a) (West 1986); MO. REV. STAT. ANN. § 537.420 (Michie 1995).

105. See, e.g., South Shore Bank v. Stewart Title Guar. Co., 688 F. Supp. 803, 805 (D. Mass.), aff'd, 867 F.2d 607 (1st Cir. 1988) (holding that a title insurance policy is not triggered when state funds are not expended to clean up site) (citing Chicago Title Ins. Co. v. Kumar, 506 N.E.2d 154, 156 (Mass. Ct. App. 1987) (holding that landowner does not have a cause of action against title insurer because possibility of future state lien relating to state cleanup expenditures does not render title unmarketable)); Lick Mill Creek Apartments v. Chicago Title Ins. Co., 283 Cal. Rptr. 231, 235-36 (Cal. Ct. App. 1991) (holding that owner had no claim against title insurer because contamination constituted a physical defect, not a title defect and did not constitute an encumbrance on title); Holly Hill Holdings v. Lowman, 619 A.2d 853 (Conn. Ct. App. 1993) (holding that although existence of contamination may impair value, it does not impair title so as to give rise to a claim for breach of covenants in warranty deed); Vandervort v. Higginbotham, 634 N.Y.S.2d 800, 801 (N.Y. App. Div. 1995) (holding that although cost of cleanup may impair value it does not encumber title so as to render title unmarketable).

106. See Oechsle v. Pickus, No. 94-C-9536, 1995 WL 430946 (N.D. Ill. 1995) (holding that existence of petroleum contamination requiring remediation at a cost equal to 50 percent of purchase price renders title unmarketable) (citing Jones v. Melrose Park Nat'l Bank, 592 N.E.2d 562, 568 (Ill. Ct. App. 1992) (holding that mere presence of contamination rendered title unmarketable when EPA ordered remediation, and cleanup costs and fines totalled nearly one-half of the purchase price)).

107. See supra notes 105-06.

108. ROGER A. CUNNINGHAM ET AL., THE LAW OF PROPERTY 816, 825 (1984).

109. Hill v. Sullivan Equip. Co., 273 N.W.2d 527, 529 (Mich. Ct. App. 1978).

110. Home Ins. Co. v. Jones & Lamson, 373 N.W.2d 249, 252 (Mich. Ct. App. 1985).

111. Because an innocent current owner of petroleum-contaminated land could argue in certain circumstances, discussed supra at note 73, that RCRA's definition of "owner" subjects only the former owner of underground storage tanks to RCRA's regulatory jurisdiction, the former owner could argue that a current owner who voluntarily cleaned up the contamination was not obligated to do so by operation of law and therefore is foreclosed from pursuing common-law indemnification. A different manifestation of this problem is presented in Foss v. Madison Twentieth Century Theaters, Inc., 551 N.W.2d 862 (Wis. Ct. App. 1996). In Foss, the court held that plaintiffs could seek neither contribution nor indemnification from the seller of property that was contaminated as a result of leaking underground storage tanks. Plaintiffs could not seek contribution because such a cause of action requires a common liability to a third party and the Wisconsin spill statute, WIS. STAT. § 144.76, "imposes no liability on a landowner to third persons." Id. at 867 (noting that the "statute imposes a duty to clean up, but imposes no liability on anyone to anyone"). In addition, because plaintiffs, as owners of the contaminated property, had a duty to clean up the contamination under § 144.76, they had no claim for indemnification because "they have not been compelled to pay damages for which they had no liability." Id.

112. Notably, mere administrative orders may not be sufficient to prove that the innocent current owner was forced to incur liability by operation of law that rightly should have been borne by someone else. The innocent current owner may need to be sued by EPA or the state and held liable before the owner can assert that the owner has incurred liability by operation of law that rightly should have been borne by another. This may mean that an owner will need to elect to pursue either a RCRA citizen suit or a common-law indemnification claim because the agency's "diligent prosecution" of an "enforcement action," which is necessary to create the basis for a common-law indemnification claim, likely would negate the owner's ability to commence a citizen suit against other culpable parties. See supra notes 46-48 and accompanying text.

113. For a general discussion of cost recovery actions by private parties under CERCLA, see Arnold W. Rietze Jr. et al., Cost Recovery by Private Parties Under CERCLA: Planning a Response Action for Maximum Recovery, 27 TULSA L.J. 365 (1992). For a general discussion of whether such cost recovery actions arise under CERCLA § 107 or § 113, see Jerome M. Organ, Superfund and the Settlement Decision: Reflections on the Relationship Between Equity and Efficiency, 62 GEO. WASH. L. REV. 1043, 1069-99 (1994).

114. See supra note 25.

115. See, e.g., Cose v. Getty Oil, 4 F.3d 700, 704, 23 ELR 21335, 21338 (9th Cir. 1993); Ekotek Site PRP Comm. v. Self, 881 F. Supp. 1516, 1524-25, 25 ELR 21331, 21336 (D. Utah 1995); Mid Valley Bank v. North Valley Bank, 764 F. Supp. 1377, 1383-84, 22 ELR 20614, 20617 (E.D. Cal. 1991); Washington v. Time Oil, 687 F. Supp. 529, 532, 18 ELR 21376, 21377 (W.D. Wash. 1988) (all concluding that petroleum exclusion in inapplicable when, as a result of the use of oil in some capacity, it contains hazardous substances not normally found in refined petroleum or found "in excess of the amounts that would have occurred in petroleum during the oil refining process"). Commentators generally agree that oil contaminated through use does not fall within the petroleum exclusion. See Robert N. Aguiluz, Refining CERCLA's Petroleum Exclusion, 7 TUL. ENVTL. L.J. 41 (1993); Christopher D. Knopf, What's Included in the Exclusion: Understanding Superfund's Petroleum Exclusion, 5 FORDHAM ENVTL. L.J. 3 (1993); Leo O. Bacher Jr., When Oil Is Not Oil: An Analysis of CERCLA's Petroleum Exclusion in the Context of a Mixed Oil Spill, 45 BAYLOR L. REV. 233, 239 (1993).

116. 42 U.S.C. § 9607(a)(4)(B); see Rietze supra note 113.

117. Compare, e.g., Smith v. Weaver, 665 A.2d 1215, 1217-18 (Pa. Super. Ct. 1995) (holding that a private right of action to recover response costs exists under Pennsylvania's Hazardous Sites Cleanup Act), with Raskin v. Chrysler Realty Corp., 527 N.W.2d 398 (Wis. Ct. App. 1994) (finding no private right of action to recover response costs under Wisconsin's spill statute).

118. See KFC W., Inc. v. Meghrig, 28 Cal. Rptr. 2d 676, 680-83 (Cal. Ct. App. 1994).

119. See, e.g., ALA. CODE §§ 22-35-1 to -13 (1994) (Alabama Underground Storage Tank Trust Fund Act); OHIO REV. CODE ANN. § 3737.91 (Anderson 1994) (Ohio Petroleum Underground Storage Tank Release Finance Assurance Fund).

120. Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, tit. II, § 205(c), (d), 100 Stat. 1697, 1698 (codified at 42 U.S.C. § 6991b, ELR STAT. RCRA § 9003).

121. See, e.g., Sheldon D. Korlin, Private Cost Recovery Actions, Insurance Claims and the Missouri Underground Storage Tanks Fund, 2 MO. ENVTL. L. & POL'Y REV. 5 (1994) (discussing coverage and deductibles under Missouri's Underground Storage Tanks Fund).

122. See, e.g., City of St. Louis v. Michigan Underground Storage Tank Financial Assurance, 544 N.W.2d 705 (Mich. Ct. App. 1996) (denying eligibility because of failure to provide timely notice of release); Christian v. Tennessee Petroleum Underground Storage Tank Board, No. 01A01-9410-CH000489, 1995 WL 241331 (Tenn. Ct. App. 1995) (denying eligibility because of failure to pay registration fee in timely manner); Kronon Motor Sales, Inc. v. Illinois Pollution Control Board, 609 N.E.2d 678 (Ill. Ct. App. 1992) (denying reimbursement for costs incurred before notification that release had occurred).

123. Although the issue of private insurance coverage is beyond the scope of this Dialogue, owners of contaminated lands should also consider pursuing potential claims under their own insurance policies or under the policies maintained by former owners and operators. A multitude of cases address insurance coverage for environmental contamination. See, e.g., Southern Solvents Co., 91 F.3d 102 (11th Cir. 1996) (interpreting "sudden and accidental" exception to pollution exclusion in liability insurance policy); Chemical Leaman Tank Lines v. Aetna Casualty & Surety Co., 89 F.3d 976 (3d Cir. 1996) (addressing numerous issues including effect of delay in notifying insurers of claims, and definition of "occurrence" and "damage").

124. Given the Meghrig Court's suggestion that an owner may be able to recover costs incurred after commencement of a citizen suit, see supra notes 60-61 and accompanying text, an owner of contaminated land may want to consider providing notice of intent to sue and filing the RCRA citizen suit as soon as possible to create at least the possibility of obtaining recovery under RCRA of any investigative or remediation costs it incurs following commencement of the suit. Commencement of the RCRA citizen suit does not foreclose an owner from asserting separate state-law claims in state court or as supplemental claims in federal court. See 42 U.S.C. § 6972(f), ELR STAT. RCRA § 7002(f). Federal courts, however, may not allow such claims as supplemental claims in a RCRA citizen suit if such claims "substantially predominate" in terms of proof, scope of issues, or comprehensiveness of remedy. See, e.g., Craig Lyle Ltd. Partnership v. Land O'Lakes, 877 F. Supp. 476, 484, 25 ELR 21115, 21119 (D. Minn. 1995) (citing 28 U.S.C. § 1367(c)).