An old foe creates a potentially toxic relationship

After 30 years of representing developers and all manner of real estate owners and uses, I have seen environmental issues evolve from deal killer to merely an afterthought. Those concerns and doubts of the past have given way to the innocent purchaser rule and Act 2.  Such issues are also no longer daunting to lenders, now statutorily protected from post-foreclosure liability. Unfortunately, that may all change.
On July 16, 2018, before the Third Circuit Court of Appeals, the Pennsylvania Department of Environmental Protection (DEP) argued that a chemical company should be liable for $900,000 in cleanup costs for a contaminated site if acquired southwest of Philadelphia.  DEP argued that the District Court’s refusal to hold the company liable under federal law posed severe consequences for Pennsylvania taxpayers.  

The District Court found that CERCLA’s (the Comprehensive Environmental Response, Compensation, and Liability Act, a/k/a Superfund) definition of “current owner or operator” did not extend liability to a current property owner for response costs incurred prior to its ownership. 

 

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