Recommending a Strategy

Report
PLANNING FOR
ENVIRONMENTALLY
CHALLENGED
PROPERTY ©
Richard M. Fil, Esq.
Robinson & Cole LLP
SOURCES OF
LIABILITY FOR
ENVIRONMENTAL
CONDITIONS
CERCLA (a/k/a “Superfund”),
42 U.S.C. Section 9601 et seq.
 State cleanup requirements
 Common law claims from third
parties

SOURCES OF
LIABILITY FOR
REGULATORY
NONCOMPLIANCE
Capital expenditures
 Fines, penalties, etc., including
economic advantage
 Primary sources of law:

–
–
–
RCRA, 42 U.S.C. Section 6901 et
seq.
Clean Water Act, 33 U.S.C.
Section 1251 et seq.
Clean Air Act, 42 U.S.C. Section
7401 et seq.
FOUR ESSENTIAL
STEPS TO MEET THE
CLIENT’S GOALS
I.
II.
III.
IV.
Understand client’s assets
and liabilities
Identify requirements and
options for compliance
Assess options for
compliance
Create a plan based on the
client’s goals
I.

Environmental conditions
–
–
–

UNDERSTAND
THE CLIENT’S
ASSETS AND
LIABILITIES
On-site conditions
Off-site conditions
Past operations
Compliance
DETERMINE THE
CONDITION OF THE
PROPERTY
Evaluate site history / past uses
 Consider retaining
environmental counsel and
consultants
 Maintain ownership /
confidentiality of reports
 Be aware of reporting
obligations that may trigger
agency involvement

POTENTIAL
REPORTING
REQUIREMENTS
Significant Environmental
Hazards, C.G.S. Section 22a-6u
 Spills, C.G.S. Section 22a-451
 Connecticut Transfer Act,
C.G.S. Section 22a-134 et seq.
 Termination of Operations, P.A.
99-68
 L.E.P. Code of Ethics, RCSA
Section 22a-133v-6

II. IDENTIFY
REQUIREMENTS AND
OPTIONS FOR
COMPLIANCE
Identify and address cleanup
obligations
 Consider options for other
affected property

IDENTIFY CLEANUP
OBLIGATIONS

Do the Remediation Standard
Regulations (“RSRs”) apply?
–
–
–
Under order?
Subject to the Connecticut
Transfer Act?
On the Inventory of Hazardous
Waste Sites?
CONNECTICUT
TRANSFER ACT
Is the site an “establishment” ?
 Will there be a “transfer” ?

“ESTABLISHMENTS”
UNDER THE
TRANSFER ACT
Generated over 100 kilograms
of hazardous waste in any
month since November 1980
 Used for treatment, storage or
disposal of hazardous waste
generated by another person
 Operated at any time since May
1967 as:

–
–
–
Dry cleaner
Furniture stripper
Auto body shop
“TRANSFERS”
UNDER THE
TRANSFER ACT

Include:
–
–

Transfers of majority interest in
stock
Leases (including all options) for
25 years or more
Do not include:
–
–
Transfers to immediate family
members
Transfers approved by a Probate
Court
CONSIDER OPTIONS
FOR OTHER
AFFECTED
PROPERTY
Sell it
 Clean it up
 Do nothing

III. ASSESS OPTIONS
FOR COMPLIANCE
Understand requirements and
opportunities for cleaning up
property
 Be aware of alternatives

–
–
–
–
ELURs
Alternative criteria
Exceptions
Groundwater reclassification
PROTECTION FROM
ENVIRONMENTAL
LIABILITY
Covenant not to sue
 Innocent landowner defense
 CERCLA - 1996 fiduciary
revisions

OPTIONS FOR
PROTECTING YOUR
CLIENT’S INTERESTS
Covenant not to sue
 Potential cost recovery options

–
–
–
Other responsible parties
Insurance
UST funds
Environmental insurance
 Favorable contractual
provisions

IV. CREATE A PLAN
BASED ON THE
CLIENT’S GOALS
Consider client’s goals for
property disposition
 How can these goals be realized
based on the condition of the
property?
 Obtain additional information /
expertise as needed

CAVEATS
Retain environmental counsel
when appropriate
 Periodically revisit
environmental issues and
options for compliance
 Don’t let the environmental tail
wag the planning dog


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