Public Comment. Volume III - Montana Legislature

Memorandum
TO: Aaron Browning
FROM: Michael Reisner, Attorney at Law
RE: CERCLA liability as related to eminent domain reform legislation.
DATE: January 27, 1999
The following discussion is based on a discussion I had with Grant Parker and some
independent research I conducted. The question is what is a condemned landowner's liability
under CERCLA (Superfhd) if the condemnor is limited to acquiring an easement rather than fee
title.
If a condemnor acquires an easement rather than fee title in the eminent domain
proceeding, the condemned landowner would be a potentially responsible party (PRP) under
Section 107 (a) of CERCLA (potentially responsible parties include "present owners of the site"
and "past owners at the time of disposal of the hazardous substances"). When Congress enacted
CERCLA it created this extremely broad net to capture as many potentially responsible parties as
possible to insure that PRPs paid for the cleanup costs rather than society as a whole.
However, being a potentially responsible party is very different fiom being liable for the
cleanup costs. First, the TRR attorney is using the CERCLA liability issue as a smoke screen.
The condemned landowners will be adjacent to the right-of-way regardless of whether the
condemnor acquires an easement or fee title for the right-of-way. Under CERCLA, adjacent
landowners will likely be PRes because the contamination will in all likelihood spread beyond
the boundaries of the right-of-way onto adjacent property. Consequently, whether the
condemnor has an easement or fee title is irrelevant.
In the event that a landowner is named a PRP under CERCLA, the landowner has several
avenues of recourse and/or defenses available to them under the statute and regulations.
1. Under Section 1 13, PRPs have the right to file a contribution action to recover costs fiom
other PRPs (including the owners of the right-of-way). Under this section, courts must allocate
these costs equitably. If the condemnor dumped all the hazardous wastes, it should pay all the
costs.
2. Under Section 107(b)(3), the landowner can raise the third party defense that provides that a
PRP is not liable if the release of the hazardous substances is caused solely by the act or
omission of a third party. This is the most common defense when an adjacent landowner's
practices cause contamination that seeps onto someone's property or when there is a midnight
dumper.
3. Under Section 122(g), the EPA is required to enter into settlement agreements with de
minimis PRes as promptly as possible and when such settlements are practicable and in the
public interest. Landowners would qualify as a de minimis party because they did not conduct or
permit any activities related to the hazardous substances on the right-of-way, and did not
contribute to the release by any act or omission.
4. Section 107(e), allows parties to contractually limit their CERCLA liability through insurance
agreements or risk allocation devices such as indemnification clauses, releases, and warranties.
-88- Volume Ill: Public Comment