9835.9
JUN 6 1999
Guidance on Landowner Liability under section
107(a)(i) of CERCLA, Qs til aim is Settlements under
Section 122(gMl MB) of CERCLA, and Settlements witn.
Prospective Purchasers of contaminated Property
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
401 M Street, S.W.
Washington, D.C, 20460 '
-------
A
.SE.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
JUN 6B6Q
MEMORANDUM
SUBJECT:
FRUM :
Guidance on Landowner Liability under section
107(a)(l) °f CERCLA, pe Hinimis Settlements under
section 122(gMU(B) of CERCLA, and Settlements w
Prospective Purchasers of Contaminated Property
Edward E. Reich
Acting Assistant AHministrator "for
Enforcement and Compliance Monitorinr
Jonathan,Z. Cannon
Acting Assistant Ac
Solid Waste arid Em«
CiA
inisi
rgencj
ator
Response
TO;
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 01
landowner liability, and settlement with djj miivlmis landowners
under CERCLA. In addition, there is a brief discussion and
policy statement concerning settlement with prospective
purchasers of contaminated property. The guidance analyzer, the
language in CERCLA_Sections I07(b)(3) and 101 (35 >' which 'provide
landowners certain defenses to CERCLA liability, and CERCLA
Section l22(g)(l)(B) which provides the Agency's authority for
settlements with £s minlmis landowners. The discussion
concerning prospective purchasers of contaminated property is
premised on the Agency's inherent settlement authority, and
recognizes that any settlement with 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 hot
be used. It is worth noting here that pursuant to Agency
delegation 14-14-E and thr Adams/Porter memorandum of June 17,
19RB, waivina certain Headquarte-s' settlement concurrence
authority, the first landowner' dg n i n i mi s administrative unior
-------
' ' ' . 9835.9
- 2 -
or consent_decree negotiated by each Region, (as well as the
tirs.. cig mj.ci.iiii g generator agreement) must receive the
concurrence of the Assistant Administrator for Enforcement and
tofnpiianre Monitoring or his designee {"AA-OECH"5 and the
ASS :-sr.*nt Administrator for nol id Waste and Emergency Response
or PIS d-psiqnee <"AA-OsWER"). After the Region has concluded
one d.e nunjjruj settlement with a landowner, other such
settlements imy be entered Into hy the Regions on behalf of the
Agency upon prior consultation with the AA-OECM and the AA-'
OSWER or their designeer. Tn addition, this guidance confirms
that any settlement involving a covenant not-t^ sue a prospect is
purcliaser .requires the" concurrence of the AA-OECM, the AA-OSWER,
and the Assistant Attorney General. , For, .further in format ion or
follow-up-questions, please ask your sVaff to.contact Helen
KepHnger of OECM-Waste 'at'(FTS) .382-3104.
Attachments " ^ ' ' . . . -\\/- ~ "", ' - " _
cc: Gerald H.. Yamacla ' *,' "'
Donald A. Carr ». . .
-------
< i)
INDEX
9835-9
Guidance on Landowner Liability under Section
107(a)(i) of CERCLA, Dfi Minimis Settlements under
Section i22(g)UHB) of CERCLA, and Settlements with
Prospective Purchasers of Contaminated -Property"
I. PURPOSE ' " 1
II. OVERVIEW ' 2
III. B AC i^ROUWD/LANDOWNER LIABILITY 3
A. Before SARA 3
B. SARA 5
c. SARA'S Dg Mini mi s Settlement Provisions 6
IV. STATEMENT OF SETTLEMENT POLICY 9
.x 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 Qg MinimLs 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
-------
9835.9
(ii)
C. Policy on Prospective Purchasers 25
1. Criteria for entering into cove£4nants
not to sue with prospective purchasers of
contaminated property . 28
a. Enforcement action is anticipated by
the Agency at the facility 28
b. A substantial benefit, not otherwise
available, will be received by the
Agency for cleanup 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 consideration 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. Consideration 31
b. Reservation of rights 33
c. Scope of response actions 34
d. Compliance with applicable laws and
duty to exercise due care 34
e. Disclaimer 34
3. ^ Procedures 35
V. PURPOSE AND USE OF THIS GUIDANCE 35
Attachments
Attachment I; Model CERCLA Section 122(g)(4) Administrative
Order on Consent for Settlements with Landowners
Under Section !22(g)(l)(B)
Attachment II; Model CERCLA Section 122(g)(4) Judicial Consent
Decree for Settlements with Landowners Under
Section 122{g)(l)(B)
»»*-
-------
9835,9
. Guidance on Landowner Liability under Section'" "
107 (a) (1) of CERCLA, De HiiyLmLa Settlements under Section
L22{gHi)(B) of CERCLA, and Set tlements, with Prospective
Purchasers of Contaminated' Property - .
i
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 g_t seq. . and to provide specific guidance on which"
landowners qualify for. de.' minim is settlements under
Section I22(g) Cl ) (B) and on structuring such settlements,1
- n <
Because the nature of a sis m ini m i s settlement wi.th a landowner
will differ substantially from a dg ' aujiiBLLS 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 not to sue, this memorandum
sets forth Agency policy on this issue.
1 Agency guidance regarding de minimis settlements with
waste contributors has been provided"by1separate memorandum
entitled "Interim Guidance on Settlements with De {linimjs Waste
Contributors under Section 122lg) 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. Rea,
43393 (November 12, 1987),
-------
9835-9
- 2 -
1 1 .
In the event of a release or threatened release of a
hazardous substance, owners of property where such substance nas
been "deposited, stored, disposed of, or placed, or otherwise
come to be located" are strictly liable for the costs of
response.2 Under Section I07(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" witn 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 I07(b)(3)
by specifically defining the term "contractual relationship.
Section 10K35HA-) 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 See Sections 101(9), 101(32), and 1Q7UH1) 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 . . United States v. Monsanto Co. . 858 F.2d 160J
171-73 (4th Cir. 1988), United states v. Bliss. No. 84-2Q86C-
(1) (E.D. Mo. Sept. 27, 1988), UriAtad States^ v. -HottolQ^ Civ. No.
83-547-D (D. N.H. Aug. 29, 1988), United States V. Tysons, Civ.
No, 84-2663 (E.D. Pa. Jan. 29, 1988), UniteJ Spates y.
Northernayrg. 670 F. Supp 742, 748 (W.D, Mich. 1987),
States v. Ch.em-Dyne Corp. . 572 F, Supp. 802 (S.D. Ohio 1983).
-------
1 ' , . .9835.9
- i - ,.. i
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 .,
v ., ' , ' - ' ''',
certain.landowners prior to or in the early stages of litigation .
through fche application of' the d_e_ miriimis settlement provisions
1 L !>
of Section l22(g)(l)(B) of CERCLA.,/
i v"> ' '
III. BACKGRQUWD/IANDOWNEE_.LIABILITY _ , - , . -
A. Before SARA . * , ».:''
* * . ' »'. .,'-- .
Section 107(a) (1) of CERCLA imposes liability, for response.
costs on owners or operators of "facilities" from which there is.-
, - * . i ,' - "
i u j' ' *
a release or threatened release of a hazardous substance^ A
".facility" is defined under Section 101(9) as,including, among, ;i
other things, any building, structure, equipment, pit, pond, ,,
storage container, motor vehicle, etc., and any "area-where a
i. i. ,.--.»
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
* t ' * ' -' ''' *" " ~
section 107 is strict. ?e,f?, 7e.q, . T^nqH«i?UQOd East ;Hont(Bowhers v.
Charles Thomas. Inc... 849 F.'Zd 1568 (5£h. Cir. 1988) , ffi?" fork v.
" 1
Shore Realty Corporation. 759 F,2d'l032; 1042 (2dCir. 1985),
United States v. Booker Chemrcals anci 'piffytVcs- Corp. . 680 F. Supp
546 (W,D. N.Y. 1988). The government need not prove that the
-------
9835.9
- 4 -
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: (1) an act of God; (2) an act
of war; (3) an act or omission ot a third party; and (4) any
combination of the foregoing.-5 in order to prove the third party
defense set forth in Section 107(bM3), 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
circumstance'sj 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 I07(b)(3).
Before SARA, the"Agency took the position that a real estate
deed represented a contractual relationship within the meaning
3 See United States v. Strinafeilow. 661 F. Supp. 1053
(C.D. Cal. 1987)(holding that these statutory defenses are
exclusive). See ajjjo., United States v. Monsanto Co.. 858 F. 2d
160, (4th Cir. 1988), yQlfcgd States, v, Bliss. NO. 84-2086C-U)
(E.D. Mo. Sept. 27, 1988), United States v. Hooker Chemicals&
Elastics Corp., 680 F. Supp. 546 (W.D. N.Y. 1988), United States
v. Bliss, 667 F. Supp. 1298 (E.D. Mo. 1987), UnitedStates v.
DickersQp, 640 F. Supp. 448 (D. Md. 1986).
-------
9835.9
- 5 -
of section l_07(b)(3), tlius eliminating the availability of the
i f - * '
third party defense for a landowner in the chain of title with a
i
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
i .
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 or condemnation; or
of ettu
(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 I07tb)l3) in order to establish the
4 The gOvernmentfs argument on this issue was upheld in
United states v. Hooker Chemicais & Plastic's Corp. » 680 FI Supp.
546 (W.D.-N.Y. 1988)(decided after passage of SARA, applying pre-
SARA law).
-------
9835,9.
third party defense. Furthermore, section 10K35HD) provides
that:'
Nothing' in this paragraph shall affect the liability
under this Act of a defendant wtio, by any-act or
omission, caused or contributed to the release or
threatened release of a hazardous substance.
C. SAgA's De MLnimJ.s Settlement; Provisions
Under section 122 (gMD of eERCLA, 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
port-ion 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 hazardous substances at the
facility; or (B) the party and (iii)
5 Relinquisrunent of ownership or possession does not
necessarily disqualify a person trom consideration under the
Section 122(g)(l)(B) de mlnimis 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 I07(b). in order to qualify
for a de pinjjnijs settlement, however, the past owner must
demonstrate satisfaction of Section 122(g) (1MB) 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 ma*e. the dfi minimis landowner
-------
9835.9
"did not,contribute to the release or threat ,of release .
through any act or omission." Subparagraph B does riot ,apply if . .
, . . , ' i " , * ! f - *
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
" , \ - .' , « , ."..' ' ' ' *' ' f '
substance." section; i22(g.U 1MB) r*1 *.;>.- ' '''
The requirements which must be satisfied in order for the
Agency to consider, a settlementwith landowners under the dg
minimis settlement provisions^ of Section 122(g) {i"j (B) are
substantFally the same-as the elements which must be proved at
trial i-n_ ordert> for a landowner ;to "establish"' a thircTparty
defense under Section 107 <,bH 3) and-section loi{35>.8 Section
settlement provisions unavailable to essentially .every party, ,-It,
is Clear that Section, 122,(,g) is concerned with a dg mi pirn is .
party's connection to the activities giving rise. to the release
that is the subject of the > response action. Under section
122(g) ( 1) (A) , the generator or transporter is not a de
'
party if it cannot ..establish 'tha'f-.'its 'contribution'1 was minimal.
Similarly, under Section 122(g) ( i ) (l) (BV 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. Sect ion conditions Uie defense in part on
-------
9835.9
Q _
l2-2(g) (1) (B> of CERCLA authorizes the Agency to enter into
settlements with cje mjjiimis landowners, enabling such landowners
to avoid the transaction costs of 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 I07
-------
9835.9
- q _
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.1! .-»-, .- - -
IV. STATEMENT OF SETTLEMENT; POLIgl . . . ,, / .- - \ '
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 landownert.who satisfies the elements of
Section I07(b),{3) and, who- wishes to obtain legai.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 wri-i "^entertain ah
offer for a. de, minjrtus settlement -under. tlZZ.Og) 11} (B) of CEHCLA;'
A, Threshold .QMfiat.ions f or -landowner Ellglbi l-i ty for : ' .
- . , 1" -' " ,">.''-: ...
Before. the Agency will, approve settlements with owners iof
..,,,.. . ' ''../
contaminated property several questions concerning -landowner
eligibility for settlements must be answered, bearing in 'mind
that Section l22(g)(l)(B> does not extendato any^, party who - "- ,
contributed to the release -or threat of -release' "through- any act
or omission." - - " . v . .-,'' : -
-------
- io -
9835-9
Did the Landowner acquire the property wi thout
knowledge or reason to know of the disposal of
substances?
Section l22(g)(D(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 Ir0l(35) extends the third party defense to defendants
who acquired the property 'after the disposal or placement of the
hazardous substance only if, at r,he 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 1011351 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" wi.il not be
^ The Agency win 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.
-------
., . ., 98.35.9
- j i -
deemed to have constructive knowledge under Section l22(g)(L)(B)
and, therefore", may be eligible for a de minimis settlement.10
Under "Sect ion "101'(35) (B) , the following factors must be
considered when determining whether "all appropriate inquiry"
< . ait..'. w.f .. ^> .->' . '" '
has been made:
. > v , ' -- 'v; »- ' J - - . - -' ' - .-,-'?.-.
any specialized knowledge or experience on the
., part of .the defendant, .the relatipnship of the, .
* "purchase price to the' value of the property if
uncontaminated,.commonly known or reasonably
ascertainabie information about the property,
the-obviousness of the presence, or likely '*. .'' r :'
presence of "contamination at the property,1 and
ttrhe ability to detect such cent ami nation ..by ' ;
appropriate inspection.
These factors clearly indicate that a determination as to what
;-=-. j \-. ->.' '.--,-' ' £ .;. ' x' -' -' -
constitutes "all appropriate inquiry" under all the
' -,'.".,;" « * t ' '
circumstances is to be made on a case-by-case basis. Generally,
«. -. . , v , ,. . ,,. ' ......
when determining whether a landowner has conducted "all
j. ' '- '.-'..'::
appropriate inquiry," the Agency win require a more
- > - - ' "o . - ' (--".'*'
comprehensive inquiry for those involved in commercial
transactions than for those involved in residential transactions
.lO The government -has taken-«the .position that "owner" "
for the purposes of liability includes "lessee." A lessee of a
facility, who is .potentially liabie.-as an "owner,'!,may be .1-
.eligible for a de minimis settlement under Section 122(g) (1) (B) ,
if he conducted "all appropriate inquiry" prior to taking
possession of the property and meets all of the other criteria or
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_l07(b).< 3)
includes, but is not limited to land contracts, deeds or other
instruments"); See .also United States v_; S^g.R.D. I. . 653 F. Supp.
984, 1003 (D. S.C. 1984) (aff'd sub nom. United States v. «- .
Monsanto Co. . 858 F.2d 160 ,(4th'clr. 1988)i) (court, held,lessee an
owner); United States v. Northerryaire'. 670 F. Supp. 742, 748'- '
(W.D. Mich. 1987).
-------
9835,9
for personal use.'1^ 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 cjg 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,
1 The Conference Committee noted that a reasonable
inquiry must have been made "in light of best business and land
transfer principles", and that "[tlhose 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., 2d 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, [jnited states y. .Sera.! jjsi, 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(35MB) seem, at a minimum, to contemplate a visual
inspection, the court in Seyaf...ini 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)(B), 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.
-------
. .. ,, .9835.9
i j -
' - . -- r ,«" '''"-'
therefore, is not- liable".* 'Sect-Ion 101 ( 20") (A) fii) . If, however,
a J;e.l}<3f;r becomes -an owner- by 'Ibre'c losing " and' taking' tTitie to the
f - i " * ' "i ^
property or- by conducting management' activities at "the site, he
1-5 -it , ' ." »"'-,' - - C' ' ' ' . '"" ' '
is potentially liable. ij " -Under these circumstances, the lender
, j v t -, ^,-, j- ': s r .."r - -
^e eligible -for -a de 'miri'imis' settlement f if he meets the
.,,.,,...,,- ;'< . . - J
requirements of -Section 1-22, including that he demonstrates .that
' * * j " * ' "
he conducted "all appropriate inquiry" prior to acquisition- of
the ^facility,, , - -v .. .". ' r: "-' ""'' J ' " '
,. -« ; . .? ( ' . ?' r.. " "" '
- i 2 . .DicL Goyecmnental landowners acquire the property
' i' - ' ' t . _,, .- > J ' r"
..c ' 'involuntari ly ''or ' t^tirougri 'eminent domain
- .' ....... I ,. .. 1 : . .(.'-'.-
proceeding's? ''' - ' ' >:
Section 10-K35-UA') Cit) except s" from trie' definition of ; .
"contractual relationship" acquisitions , by governmental eritities
-,--*.- *«;*,-", r » f '. ~s' , . - *
- > " * " " , , ' « - '
which ; occur :-by condemnation or-" purchase1'4 in connection, wfct'h tne-
" ';.. ' f ; ;" ' " '.."''''. ''.''' '' w. ' *. ' ^ "--.- '
exercise,._ofi-.eminent -domain' -author ity',"' or /involuntarily . through*
escheat o.r any other "such involuntary transfer, or .acquisition. ' *
State and local governments" who acquire .property involuntarrly .
- - ' J- ' '?-. . :". '...,. "-. - '-'
are,-, oyf def.inat.ion riot' owners or operators under Section .-.t
' ^-..- '- - * ' ' -', ./. ' :' . ,'-.- ' J. .. -I-' ^ ' :
101 (20 HD] , < 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).
. **- . The Agency interprets* "purchase!1 in Section ,-. - . :
lZ2(g) (l).(B) to'include involuntary acquisitions, applied,"to
parties acquiring by inheritance;, consistent with the .purposes.
and under-lying policy of Sections 101(20) and,. 101< 35)(A).- . ,. ' , :
-------
9835.9
-14-
release.1-5 However, Section 10 I ( 35 > (AH i i ) is broader than
101(20MD> in that 10K 35) (A) ( i i > extends the defense under
section 107 (bM 3) to the federal government, -as well as to State
and local governments, and also applies to eminent domain
proceedings.^ Governmental entities which fall within this
category and exercise due care win escape liability and,
therefore, a settlement under section i22(g)(i)(B) will not
normally be necessary.17 ,
3. _ Did the Landowner _dcoui re t;he property by
inheritance or bequest without knowledge?
Section ioi(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 ot a commercial or
is ' Section 10K20HD) provides in part: "The'term owner
or operator does not include a unit 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 handle 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(B).
-------
9835*9
private transact ion, and those who acquire. .
property by 'inheritance without knowing of the
inheritance shall no.t - b*» liable, if they .-. . <"'
satisfy the remaining requirements of Section
107 (b) ( 3) . , .,,...- ,,"-- i . -j <'«, - - -
t * * " "" ,
Conference Committee Report,, -pp. 187-188; - ,; , " o - «"
It is recommended that, ,i nquiry by. the heir a't -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. . Mas^ the .property contaminated) bv third parting
. outside the chain of__ti.tle? ., '' ' j "
Even before the enactment of -SARA,vitvwas clear that the
third party defense of- section io?(b) < 3) was-available to a"
landowner vhose property was contaminated as the result of-the ~~
'act or omission of a third party vho-had no contractual '
relationship with the landowner through a deed or^otherwise, as
. * i ( , ' * . ,, '
long--as the landowner" satisfied" p.he other-..requirements' of- the
, ,- - " .' " . "' - .'--'
third party defense. Examples of this situation .include ...
contamination of property by adjacent landowners and ""-midnight
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 d.g minimis provision in Section 122(g) {D (B)..1 *
Footnote 14, infraf provides clarification of the Agency's r>
interpretation of the-exc lusi-or.) t r.om eligibility for a gig mini mis
landowner settlement pursuant '^n -sect ion 122-(gH 1 UBM iliT'of
parties who "purchased" contamin.-ited .property, "with knowledge."
-------
9835.9
- 16 -
demonstrates that he has exercised due care may be eligible for
a Elfi mini mi g settlement under section 122 (g ) (1) (B) .
With respect to landowners described above, the Section
I07{b)(3* defense is "not available to a landowner who learns of a
release or threat of release after acquiring the property and
then transfers the property without disclosing this information.
Section 10K35MC). Any such transfer may contribute to the
threat of release under Section 122(gH 1 MB) (ill) precluding a 4g
mjnJjni-S settlement.
B. Guide 1J, ne § for De M i n i m i s _g e fct 1 emgnt s w j. t h
Landowners
1 - ' Goals of settlement
The general goal of a &£, miqjmig settlement is to allow
parties who meet the criteria set forth in Section l22(g)(l)(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
eligible for settlements under subparagraph A of Section
I22(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
r"
-------
9835.9
-17.- -.. *
may wish to enter, into _a is mllilmls s.et.t lament iin order to T1 1'
obtain .legal repose and avail himself of .the contribution
protection provided in Sections ,L13< f) (2) and. L22(gH 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-gatheringto aid settlement
. ..'... 'i. '- ' , _3-t*u-* -~ -«L..-.iTO.n*u.
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 ,da n^inimis settlement, . The
Agency may then use, its information gathering authority to .
supplement the information produced by the landowner, as7
appropriate, and to check its veracity.
-------
9835,9
- 13 -
Information which should tie provided by the landowner
includes all evidence relevant r.o 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, tne 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 no 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
* f.
posed by such substances, and all measures talten by the landowner
to prevent foreseeable acts of tnird parties which may(haye
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.
-------
3 .
. , . *
Where the potentially responsible party meet" the
criteria for settlement under .sW-r. fort -122(g) ( 1 ) (B) . and in the
context of 1'it'igation "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 minjjtni^ status. In
some irisjiances, a landowner may be able to make a thoroughly
convincing demonstration that each of the elements ot the third
.»;:.-. >.'-.:<-,< . i ' . "*'.J s' ' ; ''
party' defense 'has been satisfied.. In such cases, settlements
/ ,:,'>>->,''- i.-; - '--.' . <'-" "" ' '-.'
requiring only that the landowner provide access and due care
assurances win be appropriate. Although such cases win rarely
be free of all doubt, t:.2 government should be persuaded that
1 1. ' ' . H> '
there is a very high prc:;3iiity chat the landowner would preva;:
.* ' -,*(* ' *
in establishing' a' third party de tense 'at trial.
; , ; i,... .v, !i. - . - - .- ;..-.--...
-If a' landowner does nor. make the thorough and convincing
. . . t **> "
demonstration described above \ but is nevertheless able to
persuade the 'Agency that it "is likely that he would prevail in
establishing' the" third party defense at trial, he may be
-»-- ,- r *-,,« ll '-'"','"
considered for a dq alnitii's, sett lement for cash consideration, as
well as access and due care* assurances. A landowner who cannot
'*"*"**"' )'*' 5
make this'showing is not eligible for a de mj.ninds settlement,
,<';' ' "* ''.;, j ' " ' '- '
but may be eligible for a Section 122 settlement using the same
criteria" as any other potentially responsible party under CERCLA.
. i ' , * i'
the generally applicable guidelines -of "the Interim CERCLA
Settlement Policy, 50 Fed. Req. S034 (February 5, 1985), and tn*-
-------
9835.9
- -20 -
interim guidance on covenants .To-. .To Sue Under SARA, sz Fed. Reg.
28038 (July 27. 1987}.' In any event, the United States
ultimately must be able to show that any dg mjnimis landowner
settlement entered into meets the criteria of .Section
122(g>(1>(B) in order co withstand judicial review.
a. conaidemtipn,
All landowners vho enter into djg 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 win continue to exercise due care with respect to the
hazardous substances at the site. l9 The Agency shall also
require that the purchaser fiie in the local land records a
notice acceptable to EPA, stating that hazardous substances were
19 The Conference commitr.ee 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 neuth or environmental threat.
conference Report on SA*A,'H.R. -oos. 99th Cong., 2d sess., p.
187.
-------
21 9835.9
disposed of on the site and that EPA makes no representation as
to the appropriate use of the property.20 .Settlements under
CERCLA generally^also require that the settlor agree not to l
assert any claims or;causes of'action against the United States
y -
or the Hazardous Substance superfund arising from work performed
or expenses incurred* pursuant to the agreement, or to seek any
other costs, damages, 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
ninimis settlement;-as discussed above. ' -
In exchange forJthis consideration, the landowner will1 -~w
receive statutory contribution protection under Sections*1
I13(-f)(2) and 122 (g) (5) of CERCLA. Subject to the reopeners
s . , ~
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 or RCRA21 or cost recovery under
Section 107 (a) of "CERCLA with 'regard * to the facility when'the'-
Agency determines that such a covenant is in the public f> 1
30 Where the ROD requires that institutional, controls be imposed on the
property, a much more extensive notice may lie required.
*'" 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} handling, storage,
treatment, transportation, or.disposal" of any solid or hazardous wasteI Where
the release or threatened release involves wastes which are not hazardous
substances under CERCLA, Section 7003 of RCRA can be an important supplemental
enforcement mechanism for obtaining cost recovery or injunctive relief.
-------
22 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 agreed 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
qualifications. The settlement agreement should also include a
reservation of rights which would allow the government to seek
further relief form the landowner, including the filing and
enforcement of a federal lien,24 if information not known to the
government at the time of settlement is discovered which
indicates that the landowner does not meet the requirements for a
22 Any covenant provided ehould be drafted to apply only to the individual
landowner and should not run with the property at issue.
21 In accordance with Section 122(j) (!) of CERCLA, where the release or
threatened release of any hazardous substance at the site may have resulted in
damages to natural resources' under the trusteeship of the United states, the
Region ehould notify the Federal natural resource trustee of the negotiations and
encourage the trustee to participate in the negotiations.
M Guidance on federal liens has been provided by separate memorandum
entitled "Guidance on Federal Superfund Liens,'* (issued by AAOECH, September 22,
1987).
-------
23 9835.9
de minimis settlement. ,.The settlement agreement should expressly
reserve the Agency's right to seek further relief from the
landowner, where appropriate, including but,-tiqt- limited to: for
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; for 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 basis. - - . -
- ( « i *
c. . Type of Agreement j . ;
. - * "*"% s-r ' i
Section 122(g)(4) of CERCLA requires "that; de minimis
settlements be entered either through* judicial -consent decrees -.or
~r
administrative orders on consent.25 Generally, a de minimis
settlement with a landowner should be concluded by separate.
agreement, rather than as part .of a la'rger agreement with, other-
potentially responsible.parties. Pursuant- to Agency delegation
34 Model language ia provided in Attachment I, "Model CERCLA Section 122(g)
(4J Administrative Order on Consent for Settlements with Landowners under Section
122(g) (l) (B)" and Attachment II, "Model C1RCIA Section 122{g)(4) Consent Decree
for Settlements with Landowners under Section 122(g)(1)(B)." . .
-------
24 9835,9
14-14-E (September 13, 1987), and waivers of settlement
concurrence in "Revision of CERCIA Civil Judicial Settlement
Authorities under Delegation 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 for
Enforcement and Compliance Monitoring or his designeee ("AA-
OECM") and the Assistant Administrator for solid Haste and
EmergencyjResponae 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 Deparment of
Justice with consultation by the AA-OECM and the AA-OSWER. All
^S minimus 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
roinimis 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
-------
25 . 9835.9
does not act within this time period, the settlement will be .
deemed to have been approved unless he has reached agreement with
the Agency on an extension of time.2* Section'122(i) of CERCLA
requires notice of all administrative de mininis 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). . , 1 -
- C., Policy on Prospective Purcha.sgrs' - .
Because of- the -clear liability which attaches' to landowners -
who acquire property with knowledge of contamination, the Agency
has received numerous requests for covenants not to- sue from '
prospective purchasers of contaminated property.27 ' .. -
It is the Agency's policy not to become-involved.in private
real estate transactions. However, a covenant not to sue a
prospective purchaser might appropriately be considered if an
enforcement action is anticipated and if performance>of or
payment for cleanup would not otherwise be available except from
the Superfund and if. the prospective purchaser participates in a :
* More detailed procedures for the referral of de minimlg consent orders
to Headquarters and the Department of Justice are being developed.
: '. ..' ' '
27 Since settlements with typical prospective purchasers (i.e. 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 restrictions in that section, such as those
relating to covenants not to sue, will not apply.
-------
26 9835.9
clean-up. A prospective purchaser may participate in cleanup
either through the payment of a substantial sum of money28 to be
applied towards a clean-up of the site or through a commitment to
perform substantial response actions.
There are a number of concerns, however, associated with
entering into such covenants which may, in a given case, outweigh
any benefit which the Agency may receive. Given the number of
sites on the National Priorities List ("NFL"), most have not been
the subject of a remedial investigation/feasibility study
("RI/FS"), nor have responsible party searches been conducted.
Therefore, in most instances, the extent of contamination and
necessary remedy will be unknown and it may be impossible to
determine whether the proposed activities of the prospective
purchaser at the site (for example, operating a manufacturing
facility'or'developing the property) will interfere with any
remedy ultimately selected by the Agency. Secondly, unless the
universe of potentially responsible parties and their financial
viability is known, it will be impossible to determine with any
certainty that the Agency is receiving a benefit which otherwise
could not be obtained. If there are other viable responsible
parties, by entering into an agreement with a prospective
purchaser for future 'response costs, the Agency will
m Such monies could be paid directly to the Superfund {in the event the
Agency is undertaking the cleanup) or in appropriate circumstances and with
proper controls could be paid to the seller of the property if the seller has
agreed to perform substantial" response action puxeuant to an administrative order
or consent decree.
-------
27 .v - -: 9835.9
have merely, succeeded in providing those other parties with a.
set-off against .future cost recovery,. Furthermore, r in some.--.
instances, the Agency may ultimately be able to recoup its
response costs, or at least an amount equivalent to the , '
consideration 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 the 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 a
risk that, unknown future uses are inconsistent with-,the remedy.-.or
may interfere with an ongoing cleanup. ,,\ - .,;. r *.
The Agency, recognizes, however, that in an appropriate case, .
entering into a covenant not to sue with a prospective purchaser.
of contaminated property, given appropriate environmental.
safeguards, may result in an environmental benefit through a
payment to be applied to 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
-------
28 9835.9
entering into a covenant with a prospective purchaser is
sufficiently in the public interest to warrant expending the
resources necessary to reach such an agreement in light 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
*pp»""" A. 1 «n HB^d, . nmmmj,,,,,,,,,,,, IIB| m gl ii_i_u4aja_uu.i» I un«,m m LiiiMin*miiin«ii» uiifti rn « nil 11,911 ^
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
will be received by 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 would not, be available.- , This criterion
-------
- . 29-, 9835.9
may be met if the Agency projects that its anticipated response
costs are not recoverable form other ;sources. However, if the
Agency determines that its anticipated response costs can be
recouped through other means, such as the filing and enforcement
of a'federal lien, such covenants will-not be entertained. '*
.. '-A ' ~
c» The Agency believes that the^continued;operation
t of the tacijj,tv or." new__ sitejaave^opmei^t. with the
exercise'of due'care, will not aggravate or
contribute to_._theexisting contamination of - " '
..... 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 includes the remedial investigation/feasibility study,
if completed, and all other information relevant to the condition
of the facility. If the prospective purchaser is to,continue the
operations of an existing facility, the Agency will 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 the* remedy. If the
prospective purchaser plans to undertake new operations or "
development of the facility, comprehensive '.information regarding
these plans will be
-------
30 9835.9
required. If the available information indicate that the planned
activities of the prospective purchaser are likely to aggravate.
or contribute to the existing contamination, the agreement will
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 with 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. CIf the available information is
insufficient for purposes of evaluating the impact of the
proposed activities, the agreement will not be entered into.
d. Pue_consideration has_Joeengiven tothe effect of
continued operations or new development on health
risks to those persons likely 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. - '
-------
" 9835.9
e. The prospective purchaser is financially viable.
The prospective purchaser must demonstrate that he is
financially viable and capable of fulfilling his obligations
under the agre'ement. "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
' ..'S
obligations under the agreement.
" *
' ' 2. contentandform of settlement
If the- foregoing criteria are met, an4 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-QSWERJ and the Attorney General), and, where
appropriate, the current owner of the facility.29
a. Considegation
r- ^ ( ' *
Generally, the consideration required of the prospective
purchaser will be a cash payment. * In specific cases, it may be
-. - i
possible to dedicate the payments to response activities at the
site through an appropriate mechanism.30 However, the
- * . "!>
consideration may take the form of a removal, or if a Eecord of
19 In the past, this has arisen most often in the bankruptcy context. '
30 Note, however, that at present, the federal. Super fund accounting system
does not provide for the establishment of site specific accounts to receive
dedicate payments.
-------
32 9835.9
Decision (ROD) had 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 fees
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
31 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 under Section 107(1)(E).
-------
33 9835.9
civil liability under Sections 106 and 107(a) of CERCLA and
Section, 7003 ,of RCRA arising from contamination of the facility
which exists as of the date of acquisition of the facility. The
covenant should provide that, with respect to any claim or cause
of action asserted by the Agency against the prospective
purchase, the purchaser shall bear the burden of proving that the
claim or cause of action, or any part thereof, is attributable
* - . "
solely to contamination which 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 the facility; or
(vi) any and all criminal liability.
-------
34 9835.9
The agreement should also expressly reserve the Agency's
rights to assert all claims and causes of action against all
persons other than the purchaser. 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 restricting the nature or scope of
response actions which may be undertaken by the Agency in
exercising its authority under federal 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 and state laws and regulations,
including the duty to exercise due care with respect to hazardous
substances at 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
risks to human health and the environmental which may be posed
-------
3s 9835.9
by contamination at the facility or an Agency representation that
* * !* » *
the property is"fit of any particular use.*
. - - , ' t * * _ ^ j, , * - "a
3, ' Procedures
Any agreement entered with a prospective purchaser of
*
contaminated property must receive the concurrence of the AA-OECM
and the AA-OSWER. Additionally, such agreement must be approved
by the Attorney General. Procedurally, the Regions should handle
requests for such covenants*in accordance with forthcoming Agency
guidance pjn the referral of administrate settlements under
Section 122(g>(4),32 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.
j '
V. PURPOSg AND USE Of* THIS GOIPAIfCE
" This guidance and any internal 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 Agency and may not be relied upon to create a
right or benefit, substantive or procedural, enforceable at law
or in eojuity, by any person. The Agency may take action at
variance with this guidance or its"internal implementing
procedures.
~n
Attachments
See aupra note 26,
-------
9835.9
Attachment I
MODEL CERCLA SECTION 122f a) (4J. ADMINISTRATIVE ORDER ON
WITH LANDOWNERS UMPER SECTION 122(a)(H(B>
IN THE ?ATT£R OF:
., /"'
[Insert Site Name and Location]
Proceeding under Section. I22(g)(4)
of the Comprehensive Environmental
Response, Compensation, and Lia-,
bility Act of 1980, as amended,
42 U.S.C. 9622(g) U).
u. s. EPA Docket
NO.
ADMINISTRATIVE ORDER
ON CONSENT
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 I22(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.] -
-------
- -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.]
' i - * ' '
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. . whether an'Rl/FS'and ROD have been completed, should
be. included. }.,..'. . .
. * >
... u . ' -
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.]
' . . - v , ...-.'.
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, bequesti eminent
domain proceedings, etc. . and the date of acquisition. Add
any other,»facts-relevant to the requirements of section
!22 . ) ' .'.-''.
, ' ' . f, * -*.
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 S .
[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. pETERMINATIONS
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 ioi<21),-Of CERCLA, 42 U.S.C. 9601(21)-.
3.- Respondent is an "owner" of a facility within the
meaning of Sect.ion. l07(a)Cl) 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) U>. ' . ,
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. 9G22(g)(l>. [NOTE:
This statement need not be included if the Agency is
settling only for access and due care assurances.]
7. Respondent is eligible for a j|fi minimis settlement
pursuant to Section 122(g»(lHB) Of CERCLA, 42 U.S.C.
9622(g)(l).(B).
I 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:
-------
9835.9
* '. . '.: . ' >;VI. ACCESS AMD NOTICj; -. ' ' ' -. ,
._,. '.,_.:-'."*..'.-. -/ ,1 7.- -' .
1. Respondent thereby .--grants to > EPA, l'-ts " ;- "
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 > ' _ - ->' eounty 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
unde inapplicable 'law.. ' . ;j :>.,:. ,.. «» * .: . . ~o
* * ' -4 ' -,, -^ * .
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 fulf- llling^its -resporisibilitfes
under federal law. Respondent recognizes that the
implementation of response^ ^actions at the Site 'may "Interfere
with the use of his property.' Respondent1 -agrees -to -' r
cooperate with EPA in the implementation of response actions -
at the Site and furtfher agrees not to ' interfere -with 'such '
response actions. .<...'
' C ARE r" ''- ' ,".*:-, :.
3 .J -Nothing in '-this-* Consent Order shall :be 'construed to '
relieve Respondent of his duty to excerci-se due -care with ' '
respect to the hazardous substances at the Site or his duty
to comply with all applicable laws' and regulations. L
» - - "i '. .-* ;.. " . . . ., ' r: f > '' : , .-1 ' , : ^ .--
' ' '" ''- VIIlV PAYMEMT *' ;' ' " ' ..'''>''.. " ..-/.
4. Respondent shall pay 'the sum "of '$; _ jj. to 'the r
Hazardous' SuJbstance, Super fund "within; _ -days [insert short ~';
time period .* e.g. :. 'I'd . 30 or '45 daysj of the effective 'date
of this Consent Order.- -'[NOTE:- If EPA is settling' only for"
access, notice and due 'care assurances, then this -^-sect ion '--«
may be omitted.. If EPA is settling for an agreement by ^ the
owner to perform ['response; activities (removal -'-si nee a
consent decree fs required for remedial activities] -rather
than a cash payment, then the following section shouldhbe
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 fas Exhibit- A- and 'incorporated
he'rein, and in accordance with"1 the schedules and standards
-------
. 9835*9
- 5 -
set forth therein. Based on information provided by
Respondent," EPA estimates the present value of this work to
be approximately S ."] "
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, Re'spondent certifies that to the best of his
knowledge and belief he has fully and accurately disclosed
to EPA and stated in Paragraph 6, Section lit, all
information currently in his [its] possession arid 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 £fi
mj.nimia settlement under section 122(g) (1MB) 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 de
m|nimig settlement, is negligible.]
XI.' COVENANT flQT 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
-------
9835, 9
of a cash payment, this <-sentericershould
satisfactory,-completion of-the work 'specified in the .Scope
of work." - If EPA is settling only f or--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-'injune't'ive
relief or reimbursement of response costs pursuant to , '.
Sections 106 or 107(a)'of CERCLA, 4'2'U. S'.C. "96061 or 96Q7'(a}'.
or Section 7003 of the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6973,' with-rregard lto' 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'^>f "
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: .-''. "' J " -;> >Vj "'J ' .';' ' ,',.,'
, ..-.-:.-.* - , .- c -. ^ < . '''"'..,
*XII. RESERVATION OF RIGHTS' "^ .' . ' \ ' ' , ' /'
- ' -'-,' <-<- - - '. ' ' ^
11'.. Nothing "in this'Consent Order, is intended !tb be , '
nor shall i,t. 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:
r, » . ''.*..
a) any liability as a rerj.it of failure tq,,provide,,
access,,-notice/ or otherwise - comply-witli Paragraphs l,and .2,
Section VI,'Of"this. Consent Order;;* - *' . " '' ....*,",-..,
..... -, - -s r
b)'any liability- as .a resulst of failure;to'exercise due
care with respect to Hazardous substances"at(the Sitej
4*~ - - " * *'"'',.*. . '
cTany liability as a':resuIt of faiiure, 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; ,v .,
e) any and all criminal liability; or ., .
. - * * " , - t ' * , * - J ' - - * ' * '
: .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
-------
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(JH1> 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. t'o 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)(1)
-------
8_ 9835.9
PARTIES BOUND - / .
, ' ,: f . ....- ': '" "''' '"'
. 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 i
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^ - ._
» "i v
XV. PUBLIC COt^jENT
17. This Consent.Order shall be-subject to a thirty- !
day .public comment, period pursuant to Section 122(1) of-
CERCLA, 42 U.S.C. 9622(1). -In.accordance.with Section
122(iM"3> of.CERCLA, 42 U.S.C. 9622{i)(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 I22{g){4) of .
CERCLA. -.-[NOTE! Attorney General approval usually will be
required for ifi mtMmis 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 '
-------
9835,9
_ 9 -
Statement of Facts in Section III aJbove; specifically,
Paragraph 3 of the Facts should delete "arid 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]
-------
983S.9
Attachment II
MODEL CERCLA SECTION 122(o)(4> CONSENT DECREE
FOR SETTLEMENTS WITH LMJDOKMERS\UNPER SECTION 122(aHl)(B)
UNITED STATES OF AMERICA,, " . '. ) '" . " "*
) .
Plaintiff C - . )« "Civil Action No.
)
V. > ., ' " .:'....)' 'Judge ... .' . "
. - - ''' ) . '' " . :: '
[ INSERT, NAME (S) OF DEFENDANTSS),] . )' ' ' ''"-
. . . , v .) . f«' .: '. ..>
Defendant(s) - ')'" '"''
' . . . ' r -.: .
CONSENT DECREE, l"
[NOTE: If the complaint concerns causes of action x
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 Environmentai .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_r , Sections 106 and 107 (a) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorizatio., 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, seeking 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 release 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. .
-------
- 2 -
?835. 9
settlement of this case is practicable and in the public
interest;
s
WHEREAS, this settlement does not involve the payment
of response costs [delete this clause if cash consideration
is included pursuant to Section VJ;
WHEREAS, based on information currently available to
the Environmental Protection Agency ("EPA"), the Regional
Administrator has determined that Defendant qualifies for a
d£ minimus settlement pursuant to section l22(g)(lMB> of
CERCLA; "
WHEREAS, the-United statesvand 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 3S 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. PRgLT_jES BOUND
This Consent Decree shall apply to and be binding upon
the United States and the Defendant, his heirs, agents, and
assigns I 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.J
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.]
-------
9835.9
.IV. ACCESS AND NOTICE
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 arid -.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 thisr 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 is _.__'. .."_' 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 P^SFORMED: -j Respondent agrees to perform [insert
general description of 'activities to be performed], as more
fully described in the Scoipe 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.lli -Each check
shall reference the site name, the name and address of the
-------
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 w^.th
respect to hazardous substances at the site or his .duty to
comply with all applicable laws and regulations
VII. CIVIL PENALTIES
his di
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. CERTIFICATIONQ£ 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 fle m^jnimis settlement under Section
!22(gJ(lHB) 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 fle m.inimis 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 TQ_SUE
1. Subject to the reservation of rights in Section X,
Paragraphs l and 2, of this Consent Decree, upon entry of
-------
9835,
this consent Decree, the United .States covenants not to sue
or take any other civil or administrative action against the
Defendant for'any and a 1-1 civil liability for reimbursement
of response costs or for injunctive relief pursuant to
Sect-iohs^ioe or 107 (a) 'of CERCLA, 42 U.S.C. 9606 or "96d7.(: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. " ; " >
t ' .
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 ; * ' '*'"'' " ^ -
'*',,* j* ;- . ' t-"
('*"*"'" .-., i1 , ' x *
- 1. Nothing-'in this-Consent Decree is^intended to be", i
nor shall it be construed as a release or .covenant .riot 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-STte; .- . ,
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 .
fj any matters not expressly included in the covenant
not to sue set forth in section IX, Paragraph l, 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 I22(j)(l) of CERCLA, where the
-------
- * -'. , 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 1, 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 l, 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.
-------
78.35.?
XII. PUBLIC 'COMMENT ,- '
- , i -'... - . ' - ' ' ^ ' ,",
This Consent'Decree.;shaii .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."' EEfjEf.GTI.VE QftTS - "
: The effective.date of this Consent Decree shall be the"
date oftentry by this Court, following public-comment
pursuant to'Section XII of this-Consent Decree. ;.
The United States of America, ; '[Defendant]
By: : -; ' -' , . By,: - '
SO ORDERED this1 _ day of
[Name] " . {Date]
------- |