United States -...-
Environmental Protection
Agency
Office of
Solid Want and
Emergency Response
>>EPA
DIRECTIVE NUMBER: 9835.9
TITLE: Guidance on Landowner Liability Under Section
107 (a) (1) of CERCIA, De Minimis Settlements Under
Section 122 (g) (1) (B) of CERCIA, and Settlements
With Prospective Purchasers of Contaminated Propert
APPROVAL DATE: June 6, 1989
EFFECTIVE DATE: June 6, 1989
ORIGINATING OFFICE: OSWER and OBCM
D FINAL
D DRAFT
LEVEL OF DRAFT
Signed by AA or DAA
D B Signed by Office Director
DC Review & Comment
REFERENCE (other documents):
S WER OS WER OS WER
DIRECTIVE DIRECTIVE Dl
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United
ronmentalroiection Aar
Wuhngton.OC 20460
Directive Initiation Request
1. Directive Number
9835.9
Z Originator Information
Hunt el Contact Person
Helen Keplinger
3. Title
Mail Code
IE 134
Guidance -on Landowner liability Under Section 107 (a) (1) oi r.^.4.1^MT^.c
SrSSi, Settlements Under Section 122(g) (1) (B) of CEROA, and Settlements
With Prospective Purchase of Contaminated Property
4. Summary ol Directive (include bnef statement of purpose) .«-.,»»-» i__a I/M/->c\ , .u-i/-Vi
TheTuidance analyzes the language in CEBOA SEctions 107 (b) (3)abd 101(35) which
provide landownerTcertain defenses to CEROA liability, and CERCIA Section
122(g) (1) (B) which provides the Agency's authority for settlements wxth
de T"ipis landowners.
5. Keywords
De Minimis. Settlements, CERCIA, Section 122 (g)
*. oes s rectve upersed* revous irecuves)
b. Does It Supplement Previous Directive^)?
No
I No
| | Yes What directive (number, title)
[ I Yes What directive (number, tide)
'. Draft Level
A-SignedbyAA/DAA
B- Signed by Ofllee Director | | C - For Review 4 Comment [ [ D - In Development
8. Document to
be distributed to
States by Headquarters?
^^^
X
Yea | [NO
This Request Meets OSWER Directives System Format Standards.
9. SignaturffVof Lead Office Directives Coordinator
A/<&/e*ok. A/^Lixfx^sJ
10. Name and Title of Approving Official
Date .
Date '
EPA Perm 1315-17 (Rev. S-«7) Previous editions are obsolete.
OSWER OSWER OSWER O
VE DIRECTIVE DIRECTIVE DIRECTIVE
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
9835.9
JUN 6889
MEMORANDUM
SUBJECT:
Guidance on Landowner Liability under Section
107(a)(1) of CERCLA, De Minimis Settlements under
Section 122(g)(l)(B) of CERCLA, and Settlements vir.n
Prospective Purchasers of Contaminated Property
FROM:
Edward E. Reich
Acting Assistant Administrator 'for
Enforcement and Compliance Monitoring
Jonathan Z. Cannon
Acting Assistant A
Solid Waste and Ei
TO:
ator for
Response
Regional Administrators , Regions I-X
Regional Counsels, Regions I-X
Waste Management Division Directors
Regions I-X
The attached guidance sets forth EPA's policy on issues or
landowner liability, and settlement with de minimis landowners
under CERCLA. In addition, there is a brief discussion and
policy statement concerning settlement with prospective
purchasers of contaminated property. The guidance analyzes nh«?
language in CERCLA Sections 107(b)(3) and 10.1(35) which provide
landowners certain defenses to CERCLA liability, and CERCLA
Section 122(g)(l)(B) which provides the Agency's authority for
settlements with de minimis landowner^. The discussion
concerning prospective purchasers of contaminated property is
premised on the Agency's inherent settlement authority, and
recognizes that any settlement witfc a prospective purchaser would
be outside the scope of CERCLA Section 122.
Attached to the landowner guidance are two model
agreements for settlements under CERCLA Section 122: a model
administrative order on consent, and a model consent decree.
The model agreements contain suggested provisions for cash
consideration. If the specific settlement under Section 122
does not include cash consideration, those provisions should not
be used. It is worth noting here that pursuant to Agency
delegation 14-14-E and tho Adams/Porter memorandum of June 17,
1988, waivina certain Head--: .-.irters' settlement concurrence
authority, the first landowner £e minimis administrative order
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9835.9
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-r consent decree negotiated by each Region (as well as the
tirst dg mini mis generator .agreement.)., must.reoe.ive the .
coric>:rreince of the' As'sTst'anV Administrator for Enforcement and
Compliance Monitoring or his designee ("AA-OECM") and the
A:jsLst.int Administrator for Solid Waste and Emergency Response
or his d-ssignee ( "AA-O.sWER"). After the Region has concluded
OMO d.e minim i;j settlement with a landowner, other such
settlements may be entered Lnto by the Regions on behalf of the
Agency upon prior consultation with the AA-OECM and the AA-
OSWER or their designeer. In addition, this guidance confirms
that any settlement involving a covenant not to sue a prospective
purchaser requires the concurrence of the AA-OECM, the AA-OSWER,
and the Assistant Attorney General. For further information or
follov-un quer;i:ions. please ask your staff to contact Helen
KepHnger of OECH-Waste at (FTS> 382-3104.
Attachments
cc: Gerald H. Yamada
Donald A. C.irr
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9835.9
JUN 61999
Guidance on Landowner Liability under Section
107(a)(I) of CERCLA. De Minlmis Settlements under
Section l22(g)(l)(B) of CERCLA, and Settlements with
Prospective Purchasers of Contaminated Property
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
401 M Street, S.W.
Washington, D.C. 20460
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(i)
INDEX
9835.9
Guidance on Landowner Liability under Section
107(a)(1) of CERCLA, De Minimis Settlements under
Section 122(g)(l)(B) of CERCLA, and Settlements with
Prospective Purchasers of Contaminated Property
I. PURPOSE 1
II. OVERVIEW 2
III. BACKGROUND/LANDOWNER LIABILITY 3
A. Before SARA 3
B. SARA 5
C. SARA'S De Minimis Settlement Provisions 6
IV. STATEMENT OF SETTLEMENT POLICY 9
A. Threshold Questions for Landowner Eligibility 9
1. Did the landowner acquire the property
without actual or constructive knowledge
of the disposal of hazardous substances? 10
2. Did the governmental landowner acquire the
property involuntarily or through eminent
domain proceedings? 13
3. Did the landowner acquire the property by
inheritance or bequest without knowledge? 14
4. Was the property contaminated by third
parties outside the chain of title? 15
B. Guidelines for Qs. Minimig" Settlements with
Landowners 16
1. Goals of settlement 16
2. Information gathering to aid settlement 17
3. Settlement 19
a. Consideration 20
b. Reopeners 22
c. Type of agreement 23
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9835.9
( ii)
-C-i--.--Pol-=tcy:-am Prospective Purchasers 2T>
1. Criteria for emoring into covenants
not to sue witli prospective purchaser.'; of
contaminated property 28
a. Enforcement .iction is anticipated by
the Agency at the facility 28
b. A substantial benefit, not otherwise
available, will be received by the
Agency for c-leanup 28
c. The Agency believes that continued
operation of the facility or new site
development, with the exercise of due
care, will not aggravate or contribute
to the existing contamination or
interfere with the remedy 29
d. Due conr.ider.it ion has been given to the
effect of continued operations or new
development on health risks to those
persons likely to be present at the
site '30
e. The prospective purchaser is finan-
cially viable 31
2. Content and form of settlement 31.
a. Cons idera.t ion 31
b. Reservation of rights 3.3
c. Scope of response actions 34
d. Compliance with applicable laws and
duty to exercise due care 34
e. Disclaimer 34
3. Procedures 3b
V. PURPOSE AND USE OF THIS GUIDANCE 35
Attachments
*
Attachment I: Model CLRCLA Section I22(g)(4) Administrative
Order on Con.-.ent for Settlements with Landowners
Under Section ir?(g)(l)(B)
Attachment lit Model CERCLA Sec-rion 122(g)(4) Judicial
Consent Decree for Settlements with Landowners
Under Section 12:-:(g) (1) (B)
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9835.9
Guidance oh Landowner Liability under Section
107(a)(1) of CERCLA, De Minimis Settlements under Section
122(g)(l)(B) of CERCLA, and Settlements with Prospective
Purchasers of Contaminated Property
I. PURPOSE
The purpose of this memorandum is to provide general
guidance on landowner liability under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980
("CERCLA"), as amended by the Superfund Amendments and
Reauthorization Act of 1986, Pub.L. No.99-499 ("SARA"), 42
U.S.C. §9601 et seq.. and to provide specific guidance on which
landowners qualify for de minimis settlements under
Section 122(g)(l)(B) and on structuring such settlements.1
Because the nature of a de minimis settlement with a landowner
will differ substantially from a de minimis settlement with
waste contributors, it will usually be more efficient to draft
such agreements separately. In addition, because the Agency has
received numerous requests from prospective purchasers of
contaminated property for covenants mot to sue, this memorandum
sets forth Agency policy on this issue.
1 Agency guidance regarding de minimis settlements with
waste contributors has been provided by separate memorandum
entitled "Interim Guidance on Settlements with De Minimis Waste
Contributors under Section 122(g) of SARA," 52 Fed. Reg. 24333
(June 30, 1987), and by publication of the Agency's "Interim
Model CERCLA Section 122(g)(4) De_ Minimis Waste Contributor
Consent Decree and Administrative Order on Consent," 52 Fed. Reg
43393 (November 12, 1987).
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9835.9
II. OVERVIEW
In the event of.a release or threatened release of a
hazardous substance, owners of property where such substance has
been "deposited, stored, disposed of, or placed, or otherwise
come to be located" are strictly liable for the costs of
response.2 Under Section 107(b)(3), such liability generally
extends to releases which are caused by a third party "in
connection with a contractual relationship, existing directly or
indirectly" with the owner. To address concerns that this strict
liability could cause inequitable results with respect to
landowners who had not been involved in hazardous substance
disposal activities, Congress in SARA clarified the defense to
liability available to certain landowners under Section 107(b)(3)
by specifically defining the term "contractual relationship."
Section 101(35)(A) defines "contractual relationship" to include
deeds and other instruments transferring title or possession
unless the landowner can demonstrate that at the time he acquired
the property, he had no knowledge or reason to know of the
disposal of the hazardous substances at the facility.
2 Sfifi Sections 101(9), 101(32), and 107(a)(l) of CERCLA.
Liability under CERCLA is also joint and several unless the harm
is divisible and there is a reasonable basis for apportioning the
harm. See, e.g.t United States v. Monsanto Co^. 858 F.2d 160,
171-73 (4th Cir. 1988), United States v. Bliss. No. 84-2086C-
(1) (E.D. Mo. Sept. 27, 1988), United States v. Mottolo. Civ. No.
83-547-D (D. N.H. Aug. 29, 1988), United States v. Tvsons. Civ.
Nov 84-2663 (E.D. Pa. Jan. 29, 1988), United States v.
Northernaire. 670 F. Supp 742, 748 (W.D. Mich. 1987), United
States v. Chem-Dvne Corp.. 572 F. Supp. 802 (S.D. Ohio 1983).
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9835.9
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Accordingly, a person who acquires already contaminated property
and who can satisfy the remaining requirements of Section 101(35)
as well as those of Section 107(b)(3) may be able to establish a
defense to liability. Although this is an affirmative defense,
for which the defendant bears the burden of proof. Congress has
provided a settlement mechanism which the Agency may use in its
discretion for settlement purposes to resolve the liability of
certain landowners prior to or in the early stages of litigation
through the application of the de minimis settlement provisions
of Section 122(g)(l)(B) of CERCLA.
III. BACKGROUND/LANDOWNER LIABILITY
A. Before SARA
Section 107(a)(l) of CERCLA imposes liability for response
costs on owners or operators of "facilities" from which there is
a release or threatened release of a hazardous substance. A
"facility" is defined under Section 101(9) as including, among
other things, any building, structure, equipment, pit, pond,
storage container, motor vehicle, etc., and any "area where a
hazardous substance has been deposited, stored, disposed of, or
placed, or otherwise come to be located." Courts have
*
consistently held that the standard of liability imposed by
Section 107 is strict. See, e.g.. Tanolewood East Homeowners v.
Charles Thomas. Inc.. 849 F.2d 1568 (5th Cir. 1988), Mew York v.
Shore Realty Corporation. 759 F.2d 1032, 1042 (2d Cir. 1985),
United States v. Hooker Chemicals and Plastics Corp.. 680 F. Supp
546 (W.D. N.Y. 1988). The government need not prove that the
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9835.9
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owner contributed to the release in any manner in order to
establish a prima 'facie case. However, Section 107(b) provides
the following four affirmative defenses which may be asserted by
a person, including a landowner: (l) an act of God; (2) an act
of war; (3) an act or omission of a third party; and (4) any
combination of the foregoing.3 in order to prove the third party
defense set forth in Section 107(b)(3), the landowner must
establish by a preponderance of the evidence that:
(1) the release or threat of release and . . . damages
resulting therefrom were caused solely by ... an act
or omission of a third party other than an employee or
agent of the defendant, or than one whose act or
omission occurs in connection with a contractual
relationship, existing directly or indirectly with the
defendant . . . ;
(2) he exercised due care with respect to the
hazardous substance concerned, taking into
consideration the characteristics of such hazardous
substance, in light of all relevant facts and
circumstances; and
(3) he took precautions against foreseeable acts or
omissions of any such third party and the consequences
that could foreseeably result from such acts or
omissions.
Section 107(b)(3).
Before SARA, the Agency toon tne position that a real estate
deed represented a contractual relationship within the meaning
3 See United States v. Strinofellow. 661 F. Supp. 1053
(C.D. Cal. 1987)(holding that these statutory defenses are
exclusive). See also t United States v. Monsanto Co.. 858 F. 2d
160, (4th Cir. 1988), United States v. Bliss. No. 84-2086C-U)
(E.D. Mo. Sept. 27, 1988), United States v. Hooker Chemicals &
Plastics Corp.. 680 F. Supp. 546 (W.D. N.Y. 1988), rinited States
v. Bliss. 667 F. Supp. 1298 (E.D. Mo. 1987), United States v.
Dickerson. 640 F. Supp. 448 (D. Md. 1986).
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9835.9
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of Section 107(b)(3), thus eliminating the availability of the
third -party defense" fo;r"a; 'landowner' '"In" the' chain of title with a
party who had caused or contributed to the release. However,
this issue was not addressed by a court before SARA'S enactment.4
B. SARA
Section 101(35)(A) of CERCLA, as amended by SARA, confirms
the Agency's position that a real estate deed represents a
contractual relationship and specifically defines "contractual
relationship" to include "land contracts, deeds, or other
instruments transferring title or possession," (for example,
leases) unless the property was acquired after the disposal or
placement of the hazardous substance which is the subject of the
release or threat of release and the landowner establishes by a
preponderance of the evidence that:
(i) At the time the defendant acquired the facility
the defendant did not know and had no reason to know
that any hazardous substance which is the subject of
the release or threatened release was disposed of on,
in, or at the facility;
(ii) The defendant is a government entity which acquired
the facility by escheat, or through any other involuntary
transfer or acquisition, or through the exercise of eminent
domain authority by purchase or4 condemnation; or
(iii) The defendant acquired the facility by inheritance or
bequest. *
In addition to the foregoing, the landowner must satisfy the due
care requirements of Section 107(b)(3) in order to establish the
4 The government's argument on this issue was upheld in
United States v. Hooker Chemicals & Plastics Corp., 680 F. Supp.
546 (W.D. N.Y. 1988)(decided after passage of SARA, applying pre-
SARA law).
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9835.9
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third party defense. Furthermore, Section 101(35)(D) provides
-that:
Nothing in this paragraph shall affect the liability
under this Act of a defendant who, by any act or
omission, caused or contributed to the release or
threatened release of a hazardous substance.
C. SARA'S De Minimis Settlement Provisions
Under Section 122(g)(l) of CERCLA, as amended by SARA,
when the Agency determines that a settlement is "practicable and
in the public interest," it "shall as promptly as possible reach
a final settlement" if the settlement "involves only a minor
portion of the response costs at the facility concerned" and the
Agency determines that the potentially responsible party
satisfies either of two sets of conditions: (A) the party's
contribution of waste to the site is minimal (by amount and
toxicity) in comparison to other hazarr'-'us substances at the
facility; or (B) the party (i) is an "owner of the real property
on or in which the facility is located;" 5(ii) "did not conduct
or permit the generation, transportation, storage, treatment, or
disposal of any hazardous substance at the facility;" 6and (iii)
5 Relinquishment of ownership or possession does not
necessarily disqualify a person t^om consideration under the
Section 122(g)(l)(B) de minimis settlement provision. This
approach is consistent with the fact that prior owners of
facilities are not precluded from attempting to establish a
defense to liability under Section 107(b). In order to qualify
for a de minimis settlement, however, the past owner must
demonstrate satisfaction of Section 122(g)(l)(B) criteria through
the full term of his ownership.
6 The Agency interprets the phrase "any hazardous
substance" to mean a hazardous substance which is the subject of
the release or threat of release. Interpreting "any hazardous.
substance" more broadly would make the de minimis landowner
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9835.9
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"did not contribute to the release or threat of release . . .
through any act or omission." Subparagraph B does not apply if
the party purchased the property "with actual or constructive
knowledge that the property was used for the generation,
transportation, storage, treatment, or disposal of any hazardous
substance." Section 122(g)(1)(B). 7
The requirements which must be satisfied in order for the
Agency to consider a settlement with landowners under the de
minimis settlement provisions of Section l22(g)(l)(B) are
substantially the same as the elements which must be proved at
trial in order for a landowner to establish a third party
defense under Section 107(b)(3) and Section 10K35).8 Section
settlement provisions unavailable to essentially every party. It
is clear that Section 122(g) is concerned with a de minimis
party's connection to the activities giving rise to the release
that is the subject of the response action. Under Section
122(g)(l)(A), the generator or transporter is not a de minimis
party if it cannot establish that: its contribution was minimal.
Similarly, under Section 122(g)(1)(B) , if the landowner engaged
in activities, specified in the statute as " conductfing] or
permitting] the generation, transportation, storage, treatment,
or disposal of any hazardous substance at the facility,"
involving the substance which is the subject of the response
action, it will not be entitled to de minimis status.
7 For the reasons explained above, the Agency interprets
the phrase "any hazardous substance" in the context of actual or
constructive knowledge to mean a hazardous substance which is the
subject of the release or threat of release.
8 Even though the language in Sections 122(g)(l)(B) and
101(35) is not identical, the scope of the two provisions is
substantially the same. For example, the requirements for a d_£
minimis settlement under Section 122(g)(l)(B) are that the
landowner "did not conduct or permit the generation,
transportation, storage, treatment, or disposal of any hazardous
substance at the facility" and "did not contribute to the
release." Substantially similar requirements are imposed by
Section 101(35). That Section conditions the defense in part on
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122(g)(i)(B) of CERCLA authorizes the Agency to enter into
settlements with 3e minimis landowners, enabling such landowners
to avoid the transaction costs ot attempting to establish the
107(b)(3) defense through litigation and enabling the Agency to
exercise enforcement discretion in appropriate circumstances.
However, inasmuch as Section 122(g)(l)(B) comes into play in the
settlement context, as distinct from Section 107(b)(3) coming
into play in the litigation context, the quality and quantum of
evidence provided by a landowner in support of his eligibility
for a de minimis settlement may differ from that necessary for
him to establish the third party defense at trial. Furthermore,
inasmuch as the Agency's determination as to whether the
landowner has satisfied the criteria for a &e minimis settlement
must be made in advance of trial, the terms of the settlement,
particularly the question of whether cash consideration will be
required, will depend in part on the extent of the litigation
the landowner acquiring the facility "after the disposal or
placement of the hazardous substance..." and not contributing to
the release. Since generation, transportation, storage and
treatment of the substances at the site generally all take place
before disposal and placement (or at the most concurrently, in
the case of "placement" and "storage"), the landowner generally
would not have conducted or permitted the generation,
transportation, storage, treatment, or disposal of the
hazardous substances which are the subject of the release or
threat of release if he had acquired the facility after disposal
or placement of those substances, as required by Section 101(35).
This is not to suggest, however, that for purposes of
establishing liability under CERCLA, "disposal" will not continue
to include ongoing "leaking." In this manner, the scope of
Section l22(g)(l)(B) and 101(35) is generally the same.
Throughout this guidance, liability will be discussed in the
context of Section 107 of CERCLA, but reference will be made to
Section 122(g)(l)(B) of CERCLA in the context of settlement.
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risks involved in the particular case. The principles which will
*
guide the Agency in evaluating this evidence are discussed below
in Section IV, Paragraph B.3., "Settlement."
IV. STATEMENT OF SETTLEMENT POLICY
The Agency will make an effort in the early stages of a case
to determine whether a landowner satisfies the elements necessary
to establish a third party defense under Section 107(b)(3) of
CERCLA. Such determination may be made from information
available to and under development by the Agency to identify all
potentially responsible parties for that site. Since it serves
no purpose to require a landowner who satisfies the elements of
Section 107(b)(3) and who wishes to obtain legal repose to incur
the litigation costs of establishing the defense at trial, if the
Agency, determines that the landowner has a persuasive case that
each of these elements has been met, the Agency will entertain an
offer for a de minimis settlement under 122(g)(l)(B) of CERCLA.
A. Threshold Questions for Landowner Eligibility for
Settlement ^
Before the Agency will approve settlements with owners of
contaminated property several questions concerning landowner
eligibility for settlements must be answered, bearing in mind
that Section 122(g)(l)(B) does not extend to any party who
contributed to the release or threat of release "through any act
or' omission."
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9835*9
1. Did the Landowner acquire the property without
knowledge or reason to know of the disposal of
hazardous substances?
Section 122(g)(l)(B) applies only to owners who purchased
the property without "actual or constructive knowledge that the
property was used for the generation, transportation, storage,
treatment, or disposal of any hazardous substance." Similarly,
Section 101(35) extends the third party defense to defendants
who acquired the property after the disposal or placement of the
hazardous substance only if, at Che time of acquisition, the
defendant "did not know and had no reason to know that any
hazardous substance which is the subject of the release ... was
disposed of ... at the facility." 9 Section 101(35) expressly
provides that in order for a defendant to prove that he had "no
reason to know" of the disposal of hazardous substances, he must
demonstrate by a preponderance of the evidence that, prior to
acquisition, he conducted all appropriate inquiry into the
previous ownership and uses of the property consistent with good
commercial or customary practice. A landowner who demonstrates
*
that he has conducted "all appropriate inquiry" will not be
9 The Agency will construe as similar the constructive
knowledge requirements of Section 122 and 101(35), taking into
consideration all relevant information available on the issue of
knowledge.
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9835.9
deemed to have constructive knowledge under Section l22(g)(l)(B)
and, therefore, may be eligible for a de minimis settlement.10
Under Section 101(35)(B), the following factors must be
considered when determining whether "all appropriate inquiry"
has been made:
any specialized knowledge or experience on the
part of the defendant, the relationship of the
purchase price to the value of the property if
uncontaminated, commonly known or reasonably
ascertainable information about the property,
the obviousness of the presence or likely
presence of contamination at the property, and
the ability to detect such contamination by
appropriate inspection.
These factors clearly indicate that a determination as to what
constitutes "all appropriate inquiry" under all the
circumstances is to be made on a case-by-case basis. Generally,
when determining whether a landowner has conducted "all
appropriate inquiry," the Agency will require a more
comprehensive inquiry for those involved in commercial
transactions than for those involved in residential transactions
10 The government has taken the position that "owner"
for the purposes of liability includes "lessee." A lessee of a
facility, who is potentially liable as an "owner," may be
eligible for a de minimis settlement under Section 122(g)(l)(B),
if he conducted "all appropriate inquiry" prior to taking
possession of the property and meets all of the other criteria of
Section 122(g)(1)(B). This is also consistent with the approach
taken in Section 101(35). See Section 101(35)(A)("The term
'contractual relationship' for the purpose of Section 107(b)(3)
includes, but is not limited to land contracts, deeds or other
instruments"); See also United States v. S.C.R.D.I.. 653 F. Supp.
9S4, 1003 (D. S.C. 1984) (aff'd sub nom. United States v.
Morisanto Co. . 858 F.2d 160 (4th Cir. 1988)) (court held lessee an
owner); United States v. NorthernaJxe. 670 F. Supp. 742, 748
(W.D. Mich. 1987).
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4
for personal use.11 For example, an investigation along the
lines of a survey for contamination may be recommended in some
commercial transactions, whereas this type of inquiry would not
typically be recommended for the purchaser of personal
residential property.12 In sum, the determination will be made
on the basis of what is reasonable under all of the
circumstances.
Lenders may also be eligible for de. minimis settlements in
some circumstances. A lender who does not participate in the
management of a facility and who only holds "indicia of
ownership primarily to protect his security interest" is
excepted from the definition of "owner or operator" and,
11 The Conference Conunitf.ee noted that a reasonable
inquiry must have been made "in light of best business and land
transfer principles", and that "[tjhose engaged in commercial
transactions should...be held to a higher standard than those
who are engaged in private residential transactions."
Conference Report on SARA, H.R. 2005, 99th Cong., 26 Sess., p.
187. The Committee also noted that the duty to inquire will be
judged as of the time of acquisition, and that as public
awareness of environmental hazards increases, the burden of
inquiry will increase concomitant.ly. id. In a recent decision,
the U.S. District Court for the Middle District of Pennsylvania
held that the United States was not entitled to summary judgment
against a group of landowners without an evidentiary showing
that, as of 1969, it was customary or good commercial practice
among real estate developers to conduct a visual inspection of
property prior to purchase. United States v. Serafini. 28 Env.
Rep. Cas. 1162 (M.D. Pa. Feb. 19, 1988). Although we do not
agree with the decision because the criteria set forth in Section
101(35)(B) seem, at a minimum, to contemplate a visual
inspection, the court in Serafini appears to have recognized the
evolutionary nature of the "all appropriate inquiry" standard.
12 In the course of conducting "all appropriate inquiry"
as-required by Section 101(35 MB), information regarding a
release or threat of release may become available. If so, the
"person in charge of the facility" is required to comply with the
notification requirements under Section 103.
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. 13 - 9835.9
«
therefore, is not liable. Section 101(20)(A)(ii). If, however,
a lender becomes an owner by foreclosing and taking title to the
property or by conducting management activities at the site, he
is potentially liable.13 Under these circumstances, the lender
may be eligible for a de minimis settlement, if he meets the
requirements of Section 122, including that he demonstrates that
he conducted "all appropriate inquiry" prior to acquisition of
the facility.
2. Did Governmental landowners acquire the property
involuntarily or through eminent domain
proceedings?
Section 101(35)(A)(ii) excepts from the definition of
"contractual relationship" acquisitions by governmental entities
which occur by condemnation' or purchase14 in connection with the
exercise of eminent domain authority, or involuntarily through
escheat or any other such involuntary transfer or acquisition.
State and local governments who acquire property involuntarily
are by definition not owners or operators under Section
101(20)(D), as long as they have not caused or contributed to the
*
13 See United States v. Maryland Bank & Trust Co.. 632
F. Supp. 573, (D. Md. 1986); United States v. Mirabile. 15 Envtl
L. Rep. 20992 (E.D. Pa. September 4, 1985).
14 The Agency interprets "purchase" in Section
122(g)(1)(B) to include involuntary acquisitions, applied to
parties acquiring by inheritance, consistent with the purposes
and underlying policy of Sections 101(20) and 101(35)(A).
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9835.9
- 14 -
release.15 However, Section 10L(35)(A)(ii) is broader than
101(20) (D) in' that 101(35)(A)(ii) extends the defense under
Section 107(b)(3) to the federal government, as well as to State
and local governments, and also applies to eminent domain
proceedings.16 Governmental entities which fall within this
category and exercise due care will escape liability and,
therefore, a settlement under Section l22(g)(l)(B) will not
normally be necessary.17
3. Did the Landowner acquire the property bv
inheritance or bequest without knowledge?
Section 101(35)(A){iii) excepts acquisitions by
inheritance or bequest from the definition of "contractual
relationship." However, the Conference Committee report suggests
that the "all appropriate inquiry" requirement is nonetheless
relevant:
[Tjhose who acquire property through
inheritance or bequest without actual
knowledge may rely on this section if they
engage in a reasonable inquiry, but they need
not be held to the same standard as those who
acquire property as part of a commercial or
15 Section 101(20)(D) provides in part: "The term owner
or operator does not include a un*t of State or local government
which acquired ownership or control involuntarily through
bankruptcy, tax delinquency, abandonment, or other circumstances
in which the government involuntarily acquires title by virtue of
its function as sovereign."
16 The legislative history contains useful guidance on
how federal agencies should handJe acquisitions of contaminated
property. See also. CERCLA Section 120(h).
17 If governmental entities within this category seek a
Section 122 settlement for purposes of obtaining legal repose,
the Agency may use Section 122(g)(1)(B).
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9835.9
- 15 -
private transaction, and those who acquire
property by inheritance without knowing of the
inheritance shall not b« liable, if they
satisfy the remaining requirements of Section
107(b)(3).
Conference Committee Report, pp. 187-188.
It is recommended that inquiry by the heir at the time
of acquisition and thereafter be considered, not only for the
purpose of determining the existence of a contractual
relationship, but also for the purpose of determining whether the
due care requirements of the third party defense have been
satisfied.18
4. Was the property contaminated bv third parties .
outside the chain of title?
Even before the enactment of SARA, it was clear that the
third party defense of Section I07(b)(3) was available to a
landowner whose property was contaminated as the result of the
act or omission of a third party who had no contractual
relationship with the landowner through a deed or otherwise, as
long as the landowner satisfied t.he other requirements of the
third party defense. Examples of tfcis situation include
contamination of property by adjacent landowners and "midnight
f
dumping." A landowner who falls within this category and
18 The government may, in appropriate circumstances,
enter into a settlement with heirs to contaminated property
pursuant to the de minimis provision in Section 122(g)(1)(B).
Footnote 14, infra, provides clarification of the Agency's
interpretation of the exclusion from eligibility for a djg minimis
landowner settlement pursuant to Section 122(g)(1)(B)(iii) of
parties who "purchased" contaminated property "with knowledge."
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- 16 -
demonstrates that he has exercised due care may be eligible for
a de minimis settlement under Section 122(g)(1)(B).
With respect to landowners described above, the Section
107(b)(3) defense is not available to a landowner vho learns of a
release or threat of release after acquiring the property and
then transfers the property without disclosing this information.
Section 101(35)(C). Any .such transfer may contribute to the
threat of release under Section 122(g)(1)(B)(iii) precluding a de
minimis settlement.
B. Guidelines for De Minimis Settlements with
Landowners
1. Goals of settlement
The general goal of a £& minimis settlement is to allow
parties who meet the criteria set forth in Section 122(.g) (1) (A)
or (B) to resolve their potential liability as quickly as
possible, thus minimizing litigation costs and allowing the
government to focus its resources on negotiations or litigation
with the major parties. However, there is a fundamental
difference between contributors of hazardous substances who are
t
eligible for settlements under Subparagraph A of Section
122(g)(l) and landowners who are eligible for settlements under
Subparagraph B. The waste contributor under Subparagraph A will
typically have no viable defense to liability, whereas a
landowner who qualifies for settlement under Subparagraph B may
ultimately be able to prove a third party defense.
Nevertheless, the landowner who may have a third party defense
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- 17 -
«
may wish to enter into a dg minimis settlement in order to
obtain legal repose and avail himself of the contribution
protection provided in Sections H3(f}(2) and 122(g)(5) of
CERCLA. As discussed below, the government will entertain offers
for such settlements in exchange for, at a minimum, access and
due care assurances.
2. Information-gatherina to aid settlement
Section 122(g)(3) of CERCLA provides that de minimis
settlements shall be concluded as soon as possible after the
necessary information is available. SARA contemplates that a de
minimis settlement will be reached in the early stages of a
case. The Agency has substantial information-gathering authority
under Sections 104(e) and I22(e) of CERCLA which may be used to
aid in the determination of whether a landowner is eligible for a
£e minimis settlement. Generally, however, the information
bearing on a landowner's status as a £e. minimis party is most
readily available to the landowner, unlike the information
regarding the waste contributor's status as a d^ minimis party,
which is most readily available to the government through its
«
compilation of information regarding the waste contributions to a
site by all parties. Therefore, the Agency will place on the
landowner the burden of coming forward with information
establishing his eligibility for a d£ minimis settlement. The
Agency may then use its information gathering authority to
supplement the information produced by the landowner, as
appropriate, and to check its veracity.
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- 18 -
Information which should be provided by the landowner
includes all evidence relevant to the actual or constructive
knowledge of the landowner at the time of acquisition including
all affirmative steps taken by the landowner to determine the
previous ownership and uses of the. property, information
regarding the condition of the property at the time of purchase,
all documentation and evidence of representations made at the
time of sale regarding prior uses of the property, the purchase
price of the property and the fair market value of comparable
property at the time of acquisition, and information regarding
any specialized knowledge on the part of the landowner which may
be relevant.
Additionally, the landowner should provide all
information relevant to the issues of whether he exercised due
care and whether he contributed to the release or threat of
release through any act or omission. This information should
include the circumstances under which the hazardous substances
were discovered, the extent of the landowner's knowledge
regarding the substances, all measures taken by the landowner to
abate the threats of harm to human health and the environment
*
posed by such substances, and all measures taken by the landowner
to prevent foreseeable acts of third parties which may have
contributed to the release. The information is to be included in
the order or decree, and any settlement agreement is to be made
contingent on its accuracy.
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- 19 - 9835. S
3. Settlement
Where the potentially responsible party meets the
criteria for settlement under Section 122(g)(1)(B), and in the
context of litigation or potential litigation, when the Agency is
evaluating its settlement options and its litigation risks, the
terms of an acceptable settlement, may vary with the strength of
the evidence relating to the landowner's de minimis status. In
some instances, a landowner may be able to make a thoroughly
convincing demonstration that each of the elements ot the third
party defense has been satisfied- In such cases, settlements
requiring only that the landowner provide access and due care
assurances will be appropriate. Although such cases will rarely
be free of all doubt, the government should be persuaded that
there is a very high probability that the landowner would prevail
in establishing a third party defense at trial.
If a landowner does not make the thorough and convincing
demonstration described above, but is nevertheless able to
persuade the Agency that it is Jikely that he would prevail in
establishing the third party defense* at trial, he may be
considered for a de minimis sett lement for cash consideration, as
f
well as access and due care assurances. A landowner who cannot
make this showing is not eligible for a de minimis settlement,
but may be eligible for a Section 122 settlement.using the same
criteria as any other potentially responsible party under CERCLA,
the generally applicable guidelines of the Interim CERCLA
Settlement Policy, 50 Fed. Reg. S034 (February 5, 1985), and the
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- 20 -
interim guidance on Covenants Not To Sue Under SARA, 52 Fed. Reg.
28038 (July 27, 1987). In any event, the United States
ultimately must be able to show that any de minimis landowner
settlement entered into meets the criteria of Section
122(g)(l)(B) in order to withstand judicial review.
a. Consideration
All landowners who enter into de minimis settlements
should be required to provide access to the property and
cooperation in the Agency's response activities. In specific
cases, it may be appropriate to obtain cash payments for the
response activities at the site. Site access and cooperation
should also extend to the Agency's response action contractors
and to any other parties performing response activities under the
Agency's oversight pursuant to court order, administrative order,
or consent agreement under Section 106 or 122 of CERCLA. The
Agency should also require the landowner to provide assurances
that he will continue to exercise due care with respect to the
hazardous substances at the site.19 The Agency shall also
require that the purchaser file in the local land records a
*
notice acceptable to EPA, stating that hazardous substances were
^ The Conference committee made the following statement
regarding 107(b)(3)'s due care requirement:
[Tjhe due care requirement embodied in section 107(b)(3)
only requires, such person to exercise that degree of care
which is reasonable under the circumstances. The
requirement would include those steps necessary to
protect the public from a health or environmental threat.
Conference Report on SARA, H.R.' 2005, 99th Cong., 2d Sess., p.
187.
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9835.9
- -i -
disposed of on the site and that EPA makes no representation as
to :the appropriate use of the property.-0 Settlements under
CERCLA generally also require that, the settlor agree not to
assert any claims or causes of action against the United States
or the Hazardous Substance Super fund arising from work performed
or expenses incurred pursuant to the agreement, or to seek any
other costs, dajp ?es, or attorney's fees from the United States
arising out of response activities at the facility. These
requirements are in addition to any cash component of the de
minimis settlement, as discussed above.
In exchange for this consideration, the landowner will
receive statutory contribution protection under Sections
113(f)(2) and 122(g)(5) of CERCLA. Subject to the reopeners
discussed below, the landowner may also receive a covenant not to
sue for civil claims seeking injunctive relief under Section 106
of CERCLA and Section 7003 of RCRA21 or cost recovery under
Section 107(a) of CERCLA with reqard to the facility when the
Agency determines that such a covenant is in the public
20 Where the ROD require.'; that institutional controls be
imposed on the property, a much more extensive notice may be
required. *
21 Section 7003 of RCRA may provide an additional basis
for compelling cleanup or obtaining cost recovery in appropriate
circumstances where a party "has contributed or is contributing
to [the past or present] handlinq, storage, treatment,
transportation, or disposal" of any solid or hazardous waste.
Where the release or threatened release involves wastes which are
hat hazardous substances under CERCLA, Section 7003 of RCRA.can
be an important supplemental enforcement mechanism for obtaining
cost recovery or injunctive relief.
-------
9835.9
interest.22 However, natural resource damage claims may not be
released and should.be expressly reserved unless the Federal
natural resource trustee has ayroed in writing to such a covenant
not to sue pursuant to the terms of Section 122(j)(2) of
CERCLA.23
b. Reopeners
In order to protect the Agency against the possibility
that the information supplied by the landowner regarding his
eligibility for a de minimis settlement is inaccurate or
incomplete, the settlement agreement generally should include a
certification by the landowner that he has fully and accurately
disclosed all information in his possession regarding those
*t *
qualifications. The settlement agreement should also include a
reservation of rights which would allow the government to seek
further relief from the landowner, including the filing and
enforcement of a federal lien,^4 if information not known to the
government at the time of settlement is discovered which
indicates that the landowner does not meet the requirements tor a
22 Any covenant provided should be drafted to apply only
to the individual landowner and should not run with the property
at issue.
23 In accordance with section 122(j)(l) of CERCLA, where
the release or threatened releasp of any hazardous substance at
the site may have resulted in damages to natural resources under
the trusteeship of the United States, the Region should notify
the Federal natural resource trustee of the negotiations and
encourage the trustee to participate in the negotiations.
24 Guidance on federal liens has been provided by
separate memorandum entitled "Guidance on Federal Super fund
Liens," (issued by AA-OECM, September 22, 1987).
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9835.9
- :".3 -
*
minimis settlement. The settlement agreement should expressly
reserve the Agency's right..to se^Jc-. .further relief from the
landowner, where appropriate, i IK.-Hiding but not limited to: tor
claims arising from the introduction of any hazardous substance,
pollutant, or contaminants at the facility by any person after
the effective date of the settlement agreement; for failure of
the landowner to exercise due care with respect to any
contamination at the facility; lor exacerbation by the landowner
of the existing release or threat of release of hazardous
substances; or for failure to cooperate and/or for interference
with the Agency, its response action contractors, or other
parties or their contractors conducting response activities under
Agency oversight in the implementation of response actions at the
facility. In addition, other reopeners may need to be
incorporated on a case by case b.isis.
c. Type of .igreement
Section 122(g)(4) of i.'ERCLA requires that de minimis
settlements be entered either through judicial consent decrees or
administrative orders on consent.25 Generally, a de minimis
«
settlement with a landowner should be concluded by separate
agreement, rather than as part oL, a larger agreement with other
potentially responsible parties. Pursuant to Agency delegation
14-14-E (September 13, 1987), and waivers of settlement
25 Model language is provided in Attachment I, "Model
CERCLA Section 122(g)(4) Administrative Order on Consent for
Settlements with Landowners undor Section 122(g)(1)(B)" and
Attachment II, "Model CERCLA section 122(g)(4) Consent Decree for
Settlements with Landowners under Section 122(g)(1)(B)."
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9835,9
concurrence in "Revision of CERCLA Civil Judicial Settlement
. Authorities, under-Del-ega-tioris 14 13-B and 14-14-E" (Adams/Porter
June 17, 1988), the first landowner de minimis consent decree
negotiated by each Region must be referred to Headquarters and
must receive the concurrence of the Assistant Administrator tor
Enforcement and Compliance Monitoring or his designee ("AA-OECM")
and the Assistant Administrator for Solid Waste and Emergency
Response or his designee ("AA-OSWER") prior to referral to the
Department of Justice for filing. After the Region has concluded
one de minimis consent decree with a landowner, other consent
decrees may then be referred directly to the Department of
Justice with consultation by the AA-OECM and the AA-OSWER. All
de minimis consent decrees will be subject to a thirty-day
comment period after lodging.
If the de minimis settlement is entered through an
administrative order on consent, it must receive the concurrence
of the AA-OECM and the AA-OSWER prior to signature by the
Regional Administrator if it is the first administrative
settlement with a de minimis landowner. Additionally, if the
%
total past and projected response costs for the site, excluding
interest, exceed $500,000, Section 122(g)(4) requires that the
de minimis administrative order on consent receive the prior
written approval of the Attorney General or his designee.
Section 122(g)(4) of CERCLA gives the Attorney General thirty
days from referral by EPA to approve or disapprove the
settlement. If he does not act within this time period, the
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9835.9
- .-b -
settlement will be deemed to have been approved unless he has
reached agreement with the Agency on an extension of time.-6
Section 122(i) of CERCLA require-; notice of all administrative de
minimis settlements to be published in the Federal Register for a
thirty day comment period. The Region must consider all
comments received and "may withdraw or withhold consent to the
proposed settlement if such comments disclose facts or
considerations which indicate the proposed settlement is
inappropriate, improper, or inadequate." Section 122(i)(3).
C. Policy on Prospective Purchasers
Because of the .clear liability which attaches to
landowners who acquire property vit.h knowledge of contamination,
the Agency has received numerous requests for covenants not to
sue from prospective purchaser?; of contaminated property.27
Tt is the Agency's policy not to become involved in
private real estate transaction.'-. However, a covenant not to sue
a prospective purchaser might appropriately be considered if an
enforcement action is anticipat.f?-! and if performance of or
payment for cleanup would not otherwise be available except from
*
the Superfund and if the prospect ive purchaser participates in a
26 More detailed procedures tor the referral of de.
minimis consent orders to Headquarters and the Department of
Justice are being developed.
27 Since settlements with typical prospective purchasers
(i. g. those who do not currently own the property, are not
otherwise involved with the site, and are, therefore, not yet
liable under Section 107) will not be reached under Section 122,
the procedures and restriction;; in that section, such as those
relating to covenants not t.o sue, will not apply.
-------
9835,9
- ;:& -
clean-up. A prospective purchaser may participate in cleanup
either through the payment of a .substantial sum of money^8 to be
applied towards a clean-up of t;h
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- :*7 -
have merely succeeded in providing those other parties with a
set-off against future cost recovery.. Furthermore, in some
instances, the Agency may ult im.-u.ely be able to recoup its
response costs, or at least an amount equivalent to the
consider,.: ion offered by a prospective purchaser, through
enforcement of the federal lien established pursuant to Section
107(1) Of CERCLA.
Moreover, the listing of any site on the NPL means that
there is a release or threatened release of hazardous substances
from the site. Development and commercial use of such sites may
pose a danger to those persons present at such sites, and the
activities to be carried out by t.he purchaser, even with the
exercise of due care, may aggravate or contribute to the
contamination. Where the remedy calls for other than destruction
of all contaminants below health based levels, there may be n
risk that unknown future uses are inconsistent with the remedy or
may interfere with an ongoing cJeanup.
The Agency recognizes, however, that in an appropriate
case, entering into a covenant not to sue with a prospective
«
purchaser of contaminated properry, given appropriate
environmental safeguards, may result in an environmental benefit
through a payment to be applied r.o clean-up of the site or a
commitment to perform response action. This guidance sets forth
criteria which should be met before the Agency will enter into
such covenants. These criteria are minimal standards, however,
and the Agency will reject any offer unless it determines that
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9835. 9
entering into a covenant with a prospective purchaser is
sufficiently in the public interest to warrant expending the
resources necessary to reach sticM an agreement in liqht of
competing priorities for the use of limited Agency resources.
1. Criteria for entering into covenants not to sue
with prospective purchasers of contaminated
property
a. Enforcement action is anticipated by the
Agency at the facility
It is the policy of the Agency not to become involved in
purely private commercial transactions. The Agency will not
entertain requests for covenants not to sue from prospective
purchasers unless an enforcement action is contemplated with
respect to the facility. Therefore, such covenants generally
will be considered only with regard to those facilities listed
or proposed for listing on the NPL, those facilities at which
Fund monies have been expended, or those facilities which are
the subject of a pending enforcement action.
b. A substantial benefit, not otherwise
available, wiLI be received bv the Agency for
Cleanup
The Agency will not entertain requests for covenants not
to sue unless entering into such a covenant will produce a
substantial monetary benefit to be applied to response
activities at the facility, or an agreement to conduct response
actions, which otherwise won id not be available. This criterion
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9835. 9
may be met if the Agency projects that its anticipated response
costs are hot recoverablei fromother sources. However, if the
Aqency determines that its anticipated response costs can be
recouped through other means, su-.-h as the filing and enforcement
of .1 federal lien, such covenant..-; wii-l . ot be entertained.
c. The Agency believes that the continued
operation of the facility or new site
development, with the exercise of due
care, viLI not aggravate or contribute to
the existing contamination or interfere
with the remedy
Unless the Agency believes, based on available
Information, that the continued operation of the facility or new
development of the site will not. aggravate or contribute to the
existing contamination or interfere with the remedy, such
agreements will not be entertained. Information which should be
considered by the Agency include.1; the remedial
investigation/feasibility study, if completed, and all other
information relevant to the condition ot the facility. if the
<
prospective purchaser is to com inue the operations ol an
existing facility, the Agency wi 1*1 require the purchaser to
submit information sufficient to determine whether the continued
operations are likely to aggravate or contribute to the existing
contamination or interfere with Uie remedy. If the prospective
purchaser plans to undertake new operations or development of the
facility, comprehensive information regarding these plans will be
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- 30 -
required. If the available information indicates that the
planned activities of the prospective purchaser are likely to
aggravate or contribute to the existing contamination, the
agreement win not be entered into or will include restrictions
which prohibit those operations or portions of those operations
which are likely to aggravate or contribute to the existing
contamination or interfere wi- the remedy.
The Agency's determination as to whether the available
information is sufficient for purposes of this evaluation will
be made on a case by case basis; however, one key factor which
will necessarily be considered is whether the remedial
investigation has been completed and the extent of information
which has been generated in that process. If the available
information is insufficient for purposes of evaluating the
impact of the proposed activities, the agreement will not be
. entered into.
d. Due consideration has been given to the
effect of continued operations or new
development on health risks to those persons
*
likelv to be present at the site
The Agency will not entertain requests for covenants not
to sue unless due consideration has been given to the effect
which continued operations at the facility or new development is
likely to have on the health risks to those persons likely to be
present at the site.
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9835,9
- .u -
e. The prospective purchaser is financially
v i ab1 e.
The prospective purchaser must demonstrate t-.hat he is
financially viable and capable ot fulfilling his obligations
under the agreement. The Agency will not entertain requests for
covenants not to sue if it appears that the Agency could not
recoup its costs in the event that the purchaser breaches his
obligations under the agreement.
2. Content and form or settlement
If the foregoing criteria are met, and the Agency
determines that entering into the covenant not to sue is in the
public interest, the covenant will be embodied in an agreement to
be executed by the authorized representative of the prospective
purchaser, the Regional Administrator (with the concurrence of
the AA-OECM, the AA-OSWER, and Hie Attorney General), and, where
appropriate, the current ownor ot the facility. "^
a. Cons ULer. uJLQ n
Generally, the consideration required of the prospective
purchaser will be a cash payment. In specific cases, it may be
possible to dedicate the payments t.o response activities at the
site through an appropriate mechanism.30 However, the
consideration may take the form ot a removal, or if a Record of
29 In the past, this has arisen most often in the
bankruptcy context.
30 Note, however, that at. present, the federal Superfund
account ing system does not provide for the ost-.abl ishmenf. of site-
specific accounts to receive doUicat.ed payments.
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9835.9
- .12 -
Decision (ROD) has been signed, remedial activities. In
addition, the prospective purchaser must agree not to assert any
claims or causes of action against the United States or the
Hazardous Substance Superfund arising from contamination of the
facility which exists as of the date of acquisition of the
facility, or.to seek any other costs, damages, or attorney's feer,
from the United States arising out of response activities at the
facility.31 The Agency shall also require that the purchaser
file in the local land records a notice acceptable to EPA,
stating that hazardous substances were disposed of on the site
and that EPA makes no representation as to the appropriate use of
the property.
The agreement should contain a provision under which the
purchaser grants an irrevocable right of entry to the Agency,
its response action contractors, and other persons performing
response actions under Agency oversight for the purpose of taking
response actions at the facility and for monitoring compliance
with the agreement.
In exchange for this consideration, the Agency will
grant a covenant not to sue to the prospective purchaser for
3 In evaluating what is appropriate consideration, the
Agency should consider the value of any lien which may be or has
been placed on the property pursuant to CERCLA Section 107(1),
since, in entering into an agreement with a prospective
purchaser, the government is relinquishing its right to recover
its cleanup costs when the property is subsequently sold to the
prospective purchaser. This is because an agreement with a
prospective purchaser would effectively constitute a satisfaction
of the prospective purchaser's liability for cleanup work at the
site, thus terminating any lien unrlor Section 107(1) (E).
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- 33 -
civil liability under Sections L<)6 and 107(a) of CERCLA and
.Section 7003. of. RCRA arising from contamination of the facility
which exists as of the date of cirqui.'ution of the facility. The
covenant should provide that, v/irh respect to any claim or cause
of action asserted by the Agency against the prospective
purchaser, the purchaser shall boar the burden of proving that
the claim or cause of action, or any part thereof, is
attributable solely to contamination vhich existed prior to the
date of acquisition.
b. Reservation of rights
The agreement should expressly reserve the Agency's
rights to assert all claims against the prospective purchaser,
except for those set forth in the covenant not to sue, including,
but not limited to, those claims arising from:
(i) the release or threat of release of any hazardous
substance, pollutant or contaminant resulting from
the purchaser's operation of the facility;
(ii) the release or threat of release of any hazardous
substance, pollutant, or contaminant resulting from
the introduction of any hazardous substance,
pollutant, or contaminant at the facility by any
person after the date of acquisition by the
purchaser; «
(iii) exacerbation of contamination existing prior to
the date of acquisition;
(iv) failure to cooperate and/or interference with the
Agency, its response action contractors, or other
persons conducting response activities under Agency
oversight in the implementation of response actions
at the facility;
(v) failure to exercise due care with respect to any
contamination at t fie facility; or
(vi) any and all crimin.il liability.
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-34-
The agreement should also expressly reserve t-.he Agency's
rights to assert all claims and causes of action against all
persons other than the purclia-ser. Unless the Federal natural
resource trustee has agreed in writing to the covenant not to
sue, the agreement should also expressly reserve natural resource
damage claims.
c. Scope of response actions
The agreement should provide that none of its terms is to be
construed as limiting or restrict ing the nature or scope of
response actions which may be undertaken by the Agency in
exercising its authority under tederal law. In most
circumstances, the agreement, should also state that the
purchaser recognizes that the implementation of response actions
may interfere with its operations, including closure of the
facility or a part thereof.
d. Compliance with applicable laws and duty to
exercise due care
The agreement should provide that the purchaser is subject
to the requirements of all federal ^nd state laws and
regulations, including the duty to exercise due care with
*>
respect to hazardous substances .it the facility.
e. Disclaimer
The agreement should contain a statement that the execution
of the agreement in no way constitutes an Agency finding as to
the risks to human health and tho environment which may be posed
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- .<5 -
«
by contamination at the facility or an Agency representation that
the property is fit for any part.icuT.Tf use.
3. Procedures
Any agreement entered with a prospective purchaser of
contaminated property must receive the concurrence of the AA-
OECM and the AA-OSWER. AUdi t. ionn 1 ly, such agreement must be
approved by the Attorney General. Procedurally, the Regions
should handle requests for such -covenants in accordance with
forthcoming Agency guidance on rhe referral of administrative
settlements under Section 122(g) ( 4) .-^ The settlement analysis
required by that guidance should specifically address the
criteria set forth in this memorandum for entering into
covenants not to sue with prospective purchasers of contaminated
property.
V. PURPOSE AND USE OF THIS GUIDANCE
This guidance and any intern.il procedures adopted for its
implementation are intended solely as guidance for employees of
the U.S. Environmental Protection Agency. They do not
constitute rulemaking by the Aapncy and may not be relied upon
to create a right or benefit, substantive or procedural,
enforceable at law or in equit.y, t>y any person. The Agency may
take action at variance with this guidance or its internal
implementing procedures.
Attachments
See supra note 2fa.
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9835.9
Attachment I
MODEL CERCLA SECTION 122(a)(4) ADMINISTRATIVE ORDER ON CONSENT
FOR SETTLEMENTS WITH LANDOWNERS UNDER SECTION 122(a)(1)(B)
IN THE MATTER OF: ) U. S. EPA Docket
) No.
[Insert Site Name and Location] )
)
Proceeding under Section 122(g)(4) )
of the Comprehensive Environmental ) ADMINISTRATIVE ORDER
Response, Compensation, and Lia- ) ON CONSENT
bility Act of 1980, as amended, )
42 U.S.C. 9622(g)(4) )
I. JURISDICTION
This Administrative Order on Consent ("Consent Order")
is issued pursuant to the authority vested in the President
of the United States by Section 122(g)(4) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("CERCLA"), Pub.
L. No. 99-499, 42 U.S.C. 9622(g)(4), to reach settlements in
actions under Section 106 or 107(a) of CERCLA, 42 U.S.C.
9606 or 9607(a). The authority vested in the President has
been delegated to the Administrator of the United States
Environmental Protection Agency ("EPA") by Executive Order
12580, 52 Fed. Reg. 2923 (Jan. 29, 1987) and further
delegated to the Regional Administrators of the EPA by EPA
Delegation No. 14-14-E (Sept. 13, 1987).
This Administrative Order on Consent is issued to
[insert name] ("Respondent"). Respondent agrees to
undertake all actions required by the terms and conditions
of this Consent Order. Respondent further consents to and
will not contest EPA's jurisdiction to issue this Consent
Order or to implement or enforce its terms.
II. DEFINITIONS
"Site" shall mean that parcel of property located at
[insert address and general description], more particularly
described as [insert legal description of the property owned
by Respondent]. [NOTE: Additional definitions may be
required.]
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- 2 -
9835.9
III. STATEMENT OF FACTS
1. [In one or more paragraphs, describe the NPL status
of the site and briefly describe the historical hazardous
substance activity at the site, including the date on which
the hazardous substance activities were terminated.]
2. Hazardous substances within the definition of
Section 101(14) of CERCLA, 42 U.S.C. 9601(14), have been or
are threatened to be released into the environment at or
from the Site. [NOTE: Additional information about
specific hazardous substances present on- or off-site may be
included.]
3. As a result of the release or threatened release of
hazardous substances into the environment, EPA has
undertaken response action at the Site under Section 104 of
CERCLA, 42 U.S.C. 9604, and will undertake response action
in the future. [NOTE: A brief recitation of the specific
response action undertaken or planned for the site,
e.g. f whether an RI/FS and ROD have been completed, should
be included.]
4. In performing this response action, EPA has
incurred and will continue to incur response costs at or in
connection with the Site. [NOTE: The dollar amount and
costs incurred as of a specific date should be included.]
5. [Identify the Respondent, the nature of his
ownership interest in the site, the manner in which he
acquired the site, e.g.. by purchase, bequest, eminent
domain proceedings, etc.. and the date of acquisition. Add
any other facts relevant to the*requirements of Section
122(g).J
6. Respondent represents, and for the purposes of this
order EPA accepts, that respondent's involvement with the
site is limited to the following: [State each fact. Make
sure to address the elements of Section 122(g)(1)(B), and if
no cash consideration is involved, Sections 107(B) and
101(35) . ]
7. Payments required to be made by Respondent pursuant
to this Consent Order are a minor portion of the total
response costs at the Site which EPA, based upon currently
available information, estimates to be between $ and $ .
[NOTE: This statement need not be included if EPA is
-------
settling only for access and due care.assurances. The
dollar figure inserted should include the total response
costs incurred to date as well as EPA's projection of the
total response costs to be incurred during completion of the
remedial action at the site.]
IV. DETERMINATIONS
Based upon the Findings of Fact set forth above and on
the administrative record for this Site, EPA has determined
that:
. 1. The Site as described in Section II of this Consent
Order is a "facility" as that term is defined in Section
101(9) Of CERCLA, 42 U.S.C. 9601(9).
2. Respondent is a "person" as that term is defined in
Section 101(21) Of CERCLA, 42 U.S.C. 9601(21).
3. Respondent is an "owner" of a facility within the
meaning of Section 107(a)(l) of CERCLA, 42 U.S.C.
9607(a)(l), and a "potentially responsible party" within the
meaning of Section 122(g)(l) of CERCLA, 42 U.S.C.
9622(g)(1).
4. The past, present or future migration of hazardous
substances from the Site constitutes an actual or threatened
"release" as that term is defined in Section 101(22) of
CERCLA, 42 U.S.C. 9601(22).
5. Prompt settlement with the Respondent is
practicable and in the public interest within the meaning of
Section 122(g)(l) of CERCLA, 42 U.S.C. 9622(g)(l).
6. This Consent Order involves at most only a minor
portion of the response costs at the Site pursuant to
Section 122(g)(l) of CERCLA, 42 U.S.C. 9622(g)(l). [NOTE:
This statement need not be included if the Agency is
settling only for access and Sue care assurances.]
7. Respondent is eligible for a de minimis settlement
pursuant to Section 122(g)(l)(B) of CERCLA, 42 U.S.C.
9622(g)(l)(B).
V. ORDER
Based upon the administrative record for this Site and
the Findings of Fact and Determinations set forth above, and
in consideration of the promises and covenants set forth
herein, it is hereby AGREED TO AND ORDERED:
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9835.9
VI. ACCESS AND NOTICE
1. Respondent hereby grants to EPA, its
representatives, contractors, agents, and all other persons
performing response actions under EPA's oversight, an
irrevocable right of access to the Site for the purposes of
monitoring the terms of this Consent Order and performing
response actions at the Site. Respondent shall file in the
land records of County a notice, approved
by EPA, to subsequent purchasers of the land, that hazardous
substances were disposed of on the site and that EPA makes
no representations as to the appropriate use of the .
property. Nothing herein shall limit EPA's right of access
under applicable law.
2. Nothing in this Consent Order shall in any manner
restrict or limit the nature or scope of response actions
which may be taken by EPA in fulfilling its responsibilities
under federal law. Respondent recognizes that the
implementation of response actions at the Site may interfere
with the use of his property. Respondent agrees to
cooperate with EPA in the implementation of response actions
at the Site and further agrees not to interfere with such
response actions.
VII. DUE CARE
3. Nothing in this Consent Order shall be construed to
relieve Respondent of his duty to excercise due care with
respect to the hazardous substances at the Site or his duty
to comply with all applicable laws and regulations.
VIII. PAYMENT
«
4. Respondent shall pay the sum of $ to the
Hazardous Substance Superfund within days [insert short
time period, e.g.r 10, 30 or 45 days) of the effective date
of this Consent Order. [NOTE: If EPA is settling only for
access, notice and due care assurances, then this section
may be omitted. If EPA is settling for an agreement by the
owner to perform response activities [removalsince a
consent decree is required for remedial activities] rather
than a cash payment, then the following section should be
substituted: "WORK TO BE PERFORMED; Respondent agrees to
perform [insert general description of activities to be
performed], as more fully described in the Scope of Work and
schedules attached hereto as Exhibit A and incorporated
herein, and in accordance with the schedules and standards
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9835.9
set forth therein. Based on information provided by
Respondent, EPA estimates the present value of this work to
be approximately $ . " ]
5. The payment specified in Paragraph 4 shall be made
by certified or cashier's check payable to "EPA Hazardous
Substance Superfund." Each check shall reference the site
name, the name and address of the Respondent, and the EPA
docket number for this action, and shall be sent to:
[Insert address for Regional lock box]
6. Respondent shall simultaneously send a copy of its
check to:
[Insert name and address of Regional Attorney
or Remedial Project Manager]
IX. CIVIL PENALTIES
7. In addition to any other remedies or sanctions
available to EPA, the Respondent shall be subject to a civil
penalty of up to $25,000 per day for each failure or refusal
to comply with any term or condition of this Consent Order
pursuant to Section 122(1) of CERCLA, 42 U.S.C. 9622(1).
[NOTE: If the Respondent is to perform the removal action
under the Consent Order, stipulated penalties should be
considered. ]
X. CERTIFICATION OF RESPONDENT
8. The Respondent certifies that to the best of his
knowledge and belief he has fully and accurately disclosed
to EPA and stated in Paragraph 6, Section III, all
information currently in his [its] possession and in the
possession of his agents, [or in the possession of its
officers, directors, employees, contractors or agents] which
relates in any way to his [its] qualifications for a de
minimis settlement under Section 122(g)(l)(B) of CERCLA.
[NOTE: In very limited circumstances this language may be
omitted if EPA determines that the risk of discovering
information which would disqualify the Respondent from a d.e
minimis settlement is negligible.]
XI. COVENANT NOT TO SUE
9. Subject to the reservation of rights in Paragraphs
11 and 12, Section XII, ofthis Consent Order, upon payment
of the amounts specified in Paragraph 4, Section VIII, of
this Consent Order [NOTE: If work is to be performed instead
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- 6 -
9835. 9
of a cash payment, this sentence should read: "upon
satisfactory completion of the work specified in the Scope
of Work." If EPA is settling only for access and due care
assurances, this sentence should read: "upon the effective
date of this Consent Order."], EPA covenants not to sue or
take any other civil or administrative action against the
Respondent for any and all civil'liability for injunctive
relief or reimbursement of response costs pursuant to
Sections 106 or 107(a) of CERCLA, 42 U.S.C. 9606 or 9607(a),
or Section 7003 of the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6973, with regard to the Site.
10. In consideration of EPA's covenant not to sue in
Paragraph 9, Section XI, of this Consent Order, the
Respondent agrees not to assert any claims or causes of
action against the United States or its contractors or its
employees or the Hazardous Substance Superfund arising out
of expenses incurred or payments made [or work performed]
pursuant to this Consent Order, or to seek any other costs,
damages, or attorney's fees from the United States or its
contractors or employees arising out of response activities
at the Site.
XII. RESERVATION OF RIGHTS
11. Nothing in this Consent Order is intended to be
nor shall it be construed as a release or covenant not to
sue for any claim or cause of action, administrative or
judicial, at law or in equity, which the United States,
including EPA, may have against Respondent for:
a) any liability as a result of failure to provide
access, notice, or otherwise comply with Paragraphs 1 and 2,
Section VI, of this Consent Order;
b) any liability as a result of failure to exercise due
care with respect to hazardous substances at the Site;
c) any liability as a result of failure to make the
payments [or perform the work] required by Paragraph 4,
Section VIII, of this Consent Order;
d) any liability resulting from exacerbation by
Respondent of the release or threat of release of hazardous
substances from the Site;
e) any and all criminal liability; or
f) any matters not expressly included in the covenant
not to sue set forth in Paragraph 9, Section XI, of this
Consent Order, including, without limitation, any liability
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9835.9
- 7 -
for damages to natural resources. (NOTE: This natural
resource damage reservation must be included unless the
Federal natural resource trustee has agreed to a covenant
not to sue pursuant to Section 122(j)(2) of CERCLA. In
accordance with Section 122(j)(l) of CERCLA, where the
release or threatened release of any hazardous substances at
the site may have resulted in damages to natural resources
under the trusteeship of the United States, the Region
should notify the Federal natural resource trustee of the
negotiations and encourage the trustee to participate in the
negotiations.]
12. Nothing in this Consent Order constitutes a
covenant not to sue or to take action or otherwise limits
the ability of the United States, including EPA, to seek or
obtain further relief from the Respondent, and the covenant
not to sue in Paragraph 9, Section XI, of this Consent Order
is null and void, if information different from that
specified in Paragraph 6, Section III, is discovered which
indicates that Respondent fails to meet any of the criteria
specified in Section 122(g)(l)(B) of CERCLA.
13. Nothing in this Consent Order is intended as a
release or covenant not to sue for any claim or cause of
action, administrative or judicial, civil or criminal, past
or future, in law or in equity, which the United States,
including EPA, may have against any person, firm,
corporation or other entity not a signatory to this Consent
Order.
14. EPA and Respondent agree that the actions
undertaken by the Respondent in accordance with this Consent
Order do not constitute an admission of any liability by the
Respondent. The Respondent does not admit and retains the
right to controvert in any subsequent proceedings, other
than proceedings to implement or enforce this Consent Order,
the validity of the Findings of Vact or Determinations
contained in this Consent Order.
XIII. CONTRIBUTION PROTECTION
15. Subject to the reservation of rights in Paragraphs
11 and 12, Section XII, of this Consent Order, EPA agrees
that by entering into and upon carrying out the terms of
this Consent Order, Respondent will have resolved his
liability to the United States for those matters set forth
in the covenant not to sue, Paragraph 9, Section XI, as
provided by Section 122(g)(5) of CERCLA, 42 U.S.C.
9622(g)(5), and shall have satisfied his liability for those
matters within the meaning of Section 107(a) of CERCLA, 42
U.S.C. 9607(a).
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- 8 -
9835.9
XIV. PARTIES BOUND
16. This Consent Order shall apply to and be binding
upon the Respondent and his heirs, agents, and assigns [its
officers, directors, employees, agents, successors and
assigns]. The signatory represents that he is fully
authorized to enter into the terms and conditions of this
Consent Order and to legally bind the Respondent. [NOTE:
The preceding sentence and the bracketed phrase in the first
sentence should be used if the respondent is a corporation
or entity other than a natural person.] In the event that
the Respondent transfers title or possession of the Site, he
shall notify the United States EPA (at the address included
in Paragraph 6, Section VIII) prior to any such transfer and
shall continue to be bound by all of the terms and
conditions of this Consent Order unless EPA agrees otherwise
and modifies this Consent Order accordingly.
XV. PUBLIC COMMENT
17. This Consent Order shall be subject to a thirty-
day public comment period pursuant to Section 122(i) of
CERCLA, 42 U.S.C. 9622 (i)-. In ..accordance with Section
122(1)(3) of CERCLA, 42 U.S.C. 9622(1)(3), EPA may withdraw
or modify consent to this Consent Order if comments received
disclose facts or considerations which indicate that this
Consent Order is inappropriate, improper, or inadequate.
XVI. ATTORNEY GENERAL APPROVAL
18. The Attorney General or his designee has issued
prior written approval of the settlement embodied in this
Consent Order in accordance with Section 122(g)(4) of
CERCLA. [NOTE: Attorney General approval usually will be
required for de minimis consent orders because the total
past and projected response costs at the site will exceed
$500,000, excluding interest.' In the event that Attorney
General approval is not required, the order should not
include this Paragraph 18, but should include the following
as a separate numbered paragraph in the Determinations
section (Section IV) above: "The Regional Administrator of
EPA, Region , has determined that the total response
costs incurred to date at or in connection with the Site do
not exceed $500,000, excluding interest, and that, based
upon information currently known to EPA, total response
costs at or in connection with the Site are not anticipated
to exceed $500,000, excluding interest, in the future." Use
of this determination requires changes to the model
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9835,9
- 9 -
Statement of Facts in Section III above; specifically,
Paragraph 3 of the Facts should delete "and will undertake
response actions in the future." Paragraph 4 of the Facts
should delete "and will continue to incur response costs at
or in connection with the site."]
XVII. EFFECTIVE DATE
i
19. The effective date of this Consent Order shall be
the date upon which EPA issues written notice to the
Respondent that the public comment period pursuant to
Paragraph 17, Section XV, of this Consent Order has closed
and that comments received, if any, do not require
modification of or EPA withdrawal from this Consent Order.
IT IS SO AGREED AND ORDERED:
[Respondent(s)]
By:
[Name] [Date]
U.S. Environmental Protection Agency
By:
[Name] [Date]
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9835.9
Attachment II
MODEL CERCIA SECTION 122(a)f4) CONSENT DECREE
FOR SETTLEMENTS WITH LANDOWNERS UNDEILSECTION 122(a)(l)(B)
UNITED STATES OF AMERICA, )
)
Plaintiff ) Civil Action No.
)
v. ) Judge
)
[INSERT NAME(S) OF DEFENDANT(S),] )
)
Defendant(s) )
CONSENT DECREE
[NOTE: If the complaint concerns causes of action
which are not resolved by this document or names defendants
who are not signatories to this document, the title should
be "Partial Consent Decree."]
WHEREAS, the United States of America, on behalf of the
Administrator of the United States Environmental Protection
Agency ("Plaintiff" or "United States") filed a complaint on
[insert date] against [insert defendant's name]
("Defendant") pursuant to [insert causes of action and
relief sought, e.g. f Sections 106 and 107(a) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("CERCLA"), Pub.
L. No. 99-499, 42 U.S.C. 9606 and 9607(a), and Section 7003
of the Resource Conservation and Recovery Act, as amended
("RCRA"), 42 U.S.C. 6973, seekirfg injunctive relief
regarding the cleanup of the [insert site name] ("Site") and
recovery of costs incurred and to be incurred in responding
to the release or threat of r§lease of hazardous substances
at or in connection with the Site];
WHEREAS, the United States has incurred and continues
to incur response costs in responding to the release or
threat of release of hazardous substances at or in
connection with the Site;
WHEREAS, the Regional Administrator of the United
States Environmental Protection Agency, Region
("Regional Administrator"), has determined that prompt
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- 2 -
9835-9
settlement of this case is practicable and in the public
interest ;'". :-i-.-~ : --- . --.-.
WHEREAS, this settlement does not involve the payment
of response costs [delete this clause if cash consideration
is included pursuant to Section V];
WHEREAS, based on information currently available to
the Environmental Protection Agency ("EPA"), the Regional
Administrator has determined that Defendant qualifies for a
de minimis settlement pursuant to Section 122(g)(1MB) of
CERCLA;
WHEREAS, the United States and the Defendant agree that
settlement of this case without further litigation and
without the admission or adjudication of any issue of fact
or law is the most appropriate means of resolving this
action;
NOW, THEREFORE, it is ORDERED, ADJUDGED and
DECREED as follows:
I. JURISDICTION
This Court has jurisdiction over the subject matter and
the parties to this action. The parties agree to be bound
by the terms of this Consent Decree and not to contest its
validity in any subsequent proceeding to implement or
enforce its terms.
II. PARTIES BOUND
This Consent Decree shall apply to and be binding upon
the United states and the Defendant, his heirs, agents, and
assigns [its officers, directors, employees, agents,
successors and assigns]. The signatory represents that he
is fully authorized to enter into the terms and conditions
of this Consent Decree and to^ legally bind the Defendant.
[NOTE: The preceding bracketed language should be used if
the Defendant is a corporation or entity other than a
natural person.]
III. DEFINITIONS
"Site" shall mean that parcel of property located at
[insert address and general description], more particularly
described as [insert legal description of the property owned
by Defendant]. [NOTE: It may be necessary to include
additional definitions.]
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IV. ACCESS AND NOTICE
9835,9
1." Defendant hereby grants to EPA, its
representatives, contractors, agents, and all other persons
performing response actions under EPA's oversight, an
irrevocable right of access to the Site for the purposes of
monitoring the terms of this Consent Decree and performing
or monitoring performance of response actions at the Site.
Defendant shall file in the land records of
County a notice, approved by EPA, to subsequent purchasers
of the land that hazardous substances were disposed of on
the site and -hat EPA makes no representation as to the
appropriate use of the property. Nothing herein shall limit
EPA's right of access under applicable law. In the event
that defendant transfers title or possession of the Site, he
shall continue to be bound by all of the terms and
conditions of this Consent Decree and shall notify the
United States EPA prior to any such transfer.
2. Nothing in this Consent Decree shall in any manner
restrict or limit the nature or scope of response actions
which may be taken by EPA in exercising its authority under
federal law. Defendant recognizes that the implementation
of response actions at the Site may interfere with the use
of his property. Defendant agrees to cooperate with EPA in
the implementation of response actions at the Site and
further agrees not to interfere with such response actions.
V. PAYMENT
1. Respondent shall pay the sum of $ to the
Hazardous Substance Superfund within days [insert short
time period, e.g. . 10, 30 or 45 days] of the effective date
of this Consent Order. [NOTE: If EPA is settling only for
access, notice and due care assurances, then this section
may be omitted. If EPA is settling for an agreement by the
owner to perform response activities, rather than a cash
payment, then the following section should be substituted:
"WORK TO BE PERFORMED; Respondent agrees to perform [insert
general description of activities to be performed], as more
fully described in the Scope of Work and schedules attached
hereto as Exhibit A and incorporated herein, and in
accordance with the schedules and standards set forth
therein. Based on information provided by Respondent, EPA
estimates the present value of this work to be approximately
$ ."]
2. The payment specified in Paragraph 1 of this
Section, shall be made by certified or cashier's check
payable to "EPA Hazardous Substance Superfund." Each check
shall reference the site name, the name and address of the
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9835.9
- 4 -
Respondent, and the EPA docket number for this action, and
shall'be sent to-: -.--.'...-.-
[Insert address for Regional lock box]
3. Defendant shall simultaneously send a copy of its
check to:
[Insert name and address of Regional Attorney or Remedial
Project Manager]
VI. DUE CARE
Nothing in this Consent Decree shall be construed to
relieve Defendant of his duty to exercise due care with
respect to hazardous substances at the Site or his duty to
comply with all applicable laws and regulations.
VII. CIVIL PENALTIES
In addition to any other remedies or sanctions
available to the United States, Defendant shall be subject
to a civil penalty of up to $25,000 per day for each failure
or refusal to comply with any term or condition of this
Consent Decree pursuant to Section 122(1) of CERCLA, 42
U.S.C. 9622(1). [Note: If the defendant is to perform
remedial action under the Consent Decree, stipulated
penalties, pursuant to Section 121(e)(2) must be included.]
VIII. CERTIFICATION OF DEFENDANT
The Defendant certifies that, to the best of his [its]
knowledge and belief, he [it] has fully and accurately
disclosed to EPA .all information currently in his [its]
possession and in the possession of his agents [and in the
possession of its officers, directors, employees,
contractors or agents] which relates in any way to his [its]
qualifications for a de minimis settlement under Section
122(g)(l)(B) of CERCLA. [NOTE: In very limited
circumstances this language may be omitted if EPA determines
that the risk of discovering information which would
disqualify the Defendant from a de minimis settlement is
negligible. The bracketed language in this paragraph should
be used if the Defendant is a corporation or entity other
than a natural person.]
IX. COVENANT NOT TO SUE
1. Subject to the reservation of rights in Section X,
Paragraphs 1 and 2, of this Consent Decree, upon entry of
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9835.9
- 5 -
this Consent Decree, the United States covenants not to sue
or take any other civil or administrative action against the
Defendant for any and all civil liability for reimbursement
of response costs or for injunctive relief pursuant to
Sections 106 or 107(a) of CERCLA, 42 U.S.C. 9606 or 9607(a),
or Section 7003 of RCRA, 42 U.S.C. 6973, arising from
conditions existing at the Site as of the date of entry of
this Consent Decree.
2. In consideration of the United States' covenant not
to sue in Paragraph 1 of this Section, the Defendant agrees
not to assert any claims or causes of action against the
United States or its contractors or its employees or the
Hazardous Substance Superfund arising out of expenses
incurred or payments made [or work performed] pursuant to
this Consent Decree, or to seek any other costs, damages, or
attorney's fees from the United States arising out of
response activities at the Site.
X. RESERVATION OF RIGHTS
1. Nothing in this Consent Decree is intended to be
nor shall it be construed as a release or covenant not to
sue for any claim or cause of action, administrative or
judicial, at law or in equity, which the United States,
including EPA, may have against Defendant for:
a) failure to provide access, notice or otherwise
comply with Section IV, Paragraphs 1 and 2, of this Consent
Decree;
b) failure to exercise due care with respect to
hazardous substances at the Site;
c) exacerbation of the release or threat of release of
hazardous substances from the site;
«
d) any liability resulting from the introduction of any
hazardous substance, pollutant, or contaminant by any person
at the Site after the entry of this Consent Decree;
e) any and all criminal liability; or
f) any matters not expressly included in the covenant
not to sue set forth in Section IX, Paragraph 1, of this
Consent Decree, including, without limitation, any liability
for damages to natural resources. [NOTE: This natural
resource damage reservation must be included unless the
Federal natural resource trustee has agreed to a covenant
not to sue pursuant to Section 122(j)(2) of CERCLA. In
accordance with Section 122(j)(l) of CERCLA, where the
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- 6 - 9835,9
release or threatened release of any hazardous substances at
the: site may have resulted in damages to natural resources
under the trusteeship of the United States, the Region
should notify the Federal natural resource trustee of the
negotiations and encourage the trustee to participate in the
negotiations.]
2. In the event that the United States asserts any
claim or cause of action against the Defendant pursuant to
Section X, Paragraph l, of this Consent Decree, the
Defendant shall bear the burden of proving that any release
or threat of release which is the subject of the claim or
cause of action is attributable solely to conditions
existing at the Site as of the date of entry of this Consent
Decree.
3. Nothing in this Consent Decree constitutes a
covenant not to sue or to take action or otherwise limits
the ability of the United States, including EPA, to seek or
obtain further relief from the Defendant, and the covenant
not to sue in Section IX, Paragraph 1, of this Consent
Decree is null and void, if information not currently known
to the United States is discovered which indicates that
Defendant fails to meet any of "the criteria specified in
Section 122(g)(l)(B) of CERCLA.
4. Nothing in this Consent Decree is intended as a
release from or covenant not to sue for any claim or cause
of action, administrative or judicial, civil or criminal,
past or future, in law or in equity, which the United
States, including EPA, may have against any person, firm,
corporation or other entity not a signatory to this Consent
Decree.
5. United States and Defendant agree that the actions
undertaken by the Defendant in accordance with this Consent
Decree do not constitute an admission of any liability by
Defendant.
XI. CONTRIBUTION PROTECTION AND LIENS
Subject to the reservation of rights in Section X,
Paragraphs 1 and 3, of this Consent Decree, the United
States agrees that by entering into and carrying out the
terms of this Consent Decree, Defendant will have resolved
his liability to the United States for those matters set
forth in the covenant not to sue, Section IX, Paragraph 1,
as provided in Section 122(g)(5) of CERCLA, 42 U.S.C.
9622(g)(5), and shall have, satisfied his liability for those
matters within the meaning'of Section 107(a) of CERCLA, 42
U.S.C. 9607(a).
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. 7. 9835.9
XII... . PUBLIC "COMMENT
This Consent Decree shall be subject to a thirty-day
public comment period. The United States may withdraw
consent to this Consent Decree if comments received disclose
facts or considerations which indicate that this Consent
Decree is inappropriate, improper, or inadequate.
XIII. EFFECTIVE DATE
The effective date of this Consent Decree shall be the
date of entry by this Court, following public comment
pursuant to Section XII of this Consent Decree.
The United States of America [Defendant]
By: By:
SO ORDERED this day of , 19 .
[Name] . [DateJ
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