The Plight of the Passive Past Owner: Defining the Limits of Superfund Liability

Abstract

These days, if you want to stir up high emotions in Congress, statehouses, corporate boardrooms or citizen group meetings, mention the word Superfund. That alias for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) evokes strong reactions from industry, environmentalists, bankers, politicians, and just about everyone else. CERCLA, a relative latecomer to the present-day body of federal environmental law, was enacted in 1980 to fill a gap in then existing law by creating the authority and liability for cleanup of abandoned facilities contaminated with hazardous substances. In the short time it has been with us, CERCLA has thrust the previously arcane subject matter of environmental law into the day-to-day experience of the American economy more than any other environmental statute. One reason CERCLA gets so much attention is that its reach is so pervasive and its effect so drastic. Only a small club of statutes of any sort could match the strength of CERCLA's liability provisions. The liability to governments and private entities for cleanup of contaminated facilities is retroactive, strict, joint and several, subject to extremely narrow defenses, and potentially very expensive. Past activities which were perfectly legal at the time they occurred can lead to present-day CERCLA liability. Present activities which never before were thought to raise concern can lead to CERCLA liability. Indeed, by the end of its first decade, CERCLA liability had been interpreted by the Statute's principal implementing agency, the United States Environmental Protection Agency (EPA), and the courts in ways so broad and so evolving as to make most environmental attorneys loathe to suggest that CERCLA liability could not attach in any particular set of cirumstances... One issue which has not been widely publicized yet, possibly because it is so misunderstood, involves what could be called the passive past owner (PPO).