ASTM E1527-13: Applying the New Phase I Site Assessment Standard - - PowerPoint PPT Presentation

ASTM E1527-13: Applying the New Phase I Site Assessment Standard

Navigating the Material Changes to Meet All Appropriate Inquiries Requirements and Limit CERCLA Liability

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WEDNESDAY, FEBRUARY 11, 2015

Presenting a live 90-minute webinar with interactive Q&A Julie Kilgore, President, Wasatch Environmental, Salt Lake City Lawrence P . Schnapf, Principal, Schnapf LLC, New York

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CLE Webinar February 11, 2015

5

La Larr rry y Schnapf hnapf

• Founder, Schnapf LLC
• Larry focuses his practice on environmental issues associated

with corporate, real estate, and brownfields transactions, including asset-based lending, mezzanine loans, and distressed debt.

• Larry@SchnapfLaw.com

Julie ie Ki Kilgore gore

• President, Wasatch Environmental, Inc.
• Julie chairs the national ASTM task force responsible for

revisions to the ASTM E1527 standard practice and was part

• f the EPA Federal Advisory Committee that helped to

develop the “All Appropriate Inquiries” rule.

• JK@wasatch-environmental.com

Introdu duction ions s

6

 Qualify For Cleanup Liability Protections  Negotiate/Allocate Liabilities  Satisfy Lender or Insurance Requirements  Toxic Torts  Brownfield Grantees  Tenants  Ground Lessors  Foreclosing Lenders  Tax Foreclosure/Sale  Eminent Domain

7

 Release

• Includes “disposal”
• Passive migration vs. active disposal

 Hazardous Substance  Facility  Response Costs

• Remedial or Removal
• Consistency with NCP

8

 Current and Former Owners

• Former “at time of disposal”

 Current and Former Operators

• Control
• Former at “time of disposal”

 Generators  Transporters

9

 Third Party  Innocent Landowner (ILO)  Bona Fide Prospective Purchaser (BFPP)  Contiguous Property Owner (CPO)

10

 Release Solely Caused by TP  No direct and indirect contractual relationship

• ILO Exception to this element

 Due care  Precaution against foreseeable acts or omissions

11

 Did not know or have reason to know  Exercise appropriate inquiry into past use and

• wnership

 Due Care  Precautions  Continuing Obligations

12

 Applies to transactions after January 11,2002  Applies to Purchasers and Tenants  Applies to Brownfield and NPL sites

13

 Threshold Criteria

• Conducted AAI
• Not PRP or affiliated with PRP by:

 direct or indirect familial relationship  contractual or corporate relationship  Corporate Reorganization

• Disposal took place prior to acquisition

14

 Continuing Obligations

• Complied with All Applicable Reporting Requirements
• Undertake “Appropriate Care”
• Cooperate and Provide Access to Persons Performing

Response Actions

• Comply With LUCs Provide Access for Persons Maintaining

LUCs

• Comply with EPA CERCLA Information Requests or

Subpoenas

15

 Voggenthaler v Maryland Square LLC, 2013 U.S.

• App. LEXIS 15307 (9th Cir. 7/26/13)

 Ashley II of Charleston V PCS Nitrogen, 2013 U.S.

• App. LEXIS 6815 (4th Cir. 4/4/13)

 3000 E. Imperial, LLC v Robertshaw Controls, 2010

U.S. Dist. LEXIS 138661 (C.D. Cal. 12/29/10)

 Saline River Properties v Johnson Controls, 2011

U.S. Dis. Lexis 119516 (E.D. Mi. 10/17/11)

16

 AMCAL

L Multi ti-Housi Housing ng v Paci cifi fic c Clay Prods ds, 457 F.

• Supp. 2d 1016 (C.D. Ca. 2006)

 U.S. v Honeywe

eywell, 542 F. Supp. 2d 1188 (E.D. Ca. 2008)

 Bonni

niev eview ew Home mes s Assoc c v Woodm dmont

• nt Builder

ders, 655 F. Supp. 2d 473 (D. N.J. 2009)

 Ford Motor

• r Co v Edgewood

wood Props

• ps., 2012 U.S. Dist.

LEXIS 125197 (D. N.J. 8/31/12)

17

 Owner did not cause, contribute, or consent to

release

 Conduct “Appropriate Inquiry”  Exercise “Appropriate Care”  Cooperate and Provide Access To Persons

Performing Cleanups

 Comply With LUCs  Provide Access To Persons Maintaining LUCs

18

 Comply with all release reporting requirements  Comply with EPA CERCLA Information Requests and

Subpoenas

 Owner not a PRP or affiliated with PRP

19

 Became Effective after November 1, 2006  ASTM E1527-13 satisfies AAI  ASTM E1528 Transaction Screen Not AAI  Non-Governmental or Non-Commercial Purchasers

• f Residential Property
• Site Inspection
• Title Search

20

 inquiry by EP (§312.21);  interviews with past and present owners, operators,

and occupants (§312.23);

 reviews of historical sources since first developed

(§312.24);

 searches for recorded environmental cleanup liens

(§312.25—User);

 reviews of governmental records (§312.26);  visual inspections of the site and of adjoining

properties (§312.27);

21

 specialized knowledge or experience of defendant

(§312.28-user);

 relationship of the purchase price to the value of

the property if not contaminated(§312.29-user);

 Commonly known or reasonably ascertainable

information(§312.30-user); and

 obviousness of the presence or likely presence of

contamination (§312.21);

22

 AAI completed when release identified

• No further investigation required
• Sampling may be conducted to obtain address/explain data gaps
• May valuable for determining how a landowner may best fulfill his
• r her post-acquisition Continuing Obligations.

 Caution: Preamble states:

• “the fact that the all appropriate inquiry standards do not require

sampling and analysis does not prevent a court from concluding that, under the circumstances of a particular case, sampling and analysis should have been conducted to meet ‘‘the degree of

• bviousness of the presence or likely presence of contamination

at the property, and the ability to detect the contamination by appropriate investigation’ (70 FR 66101)

23

 “In certain instances, depending upon site-specific

circumstances and the totality of the information collected during the all appropriate inquiries prior to the property acquisition, it may be nece cessar ssary y to to co conduct duct sampli pling ng and analysis ysis, either pre-or post- acquisition, to fully understand the conditions at a property, and fully comply with the statutory requirements for the CERCLA liability protections” Id.

24

 Third Party Defense  Secured Credit Exemption  UST Sites (unless Brownfield Site)  RCRA 7002 Actions  RCRA Corrective Actions  State Superfund Programs Unless Specifically

Incorporated

 Common Law

25

 ASTM Standards have 8-Year shelf life

• Prior E1527 publications:

1993, 1994, 1997, 2000, 2005

26

 ASTM Standards have 8-Year shelf life

• Prior E1527 publications:

1993, 1994, 1997, 2000, 2005

 Action Options

• No Action – let standard sunset upon expiration
• Ballot to re-approve with no change
• Reconvene Task Group, draft revision language, ballot

revisions

27

 More closely aligned with the EPA’s All Appropriate Inquiries

“objective”

 The presence

ce or li likely y presence nce of any hazardous substances

• r petroleum products in, on, or at a property (1) due to a

release to the environment; (2) under conditions indicative of a release to the environment,

• r

(3) under conditions that pose a material threat of a future release to the environment

 de minimis now a stand-alone definition, but unchanged

28

 More closely aligned with the EPA’s All Appropriate Inquiries

“objective”

 The presence

ce or li likely y presence nce of any hazardous substances

• r petroleum products in, on, or at a property (1) due to a

release to the environment; (2) under conditions indicative of a release to the environment,

• r

(3) under conditions that pose a material threat of a future release to the environment

 de minimis now a stand-alone definition, but unchanged

29

 Historical Recognized Environmental Condition

definition originally developed pre-2002

• before the Bona Fide Prospective Purchaser landowner liability

protection/continuing obligations requirements

• Confusing and commonly misused

 Conditionally-closed sites were handled at least four

different ways

 Consistency needed

30

 Redefined Historical Recognized Environmental Condition

• Past releases addressed to unrestricted residential use
• Must consider current regulatory framework (rules change) – this is not

new, but worded more clearly now

• HRECs are not RECs

 Created new Controlled Recognized Environmental Condition term

• Past releases addressed to non-residential standard, subject to some

type of control

• CRECs are RECs and must be included

ed in t the conclusi sion

• ns

s section

• n of the

report rt

31

Petroleum tank removed in 1997 with NFA letter. No express controls. Residual contamination is known but property use is commercial. Agency files document that approximately 100 cubic yards of contaminated soil remains in place; located 10 to 15 feet deep. Consultant concludes: “Based on removal of the UST, analytical results, the regulatory closure, and partial removal of petroleum- impacted soils, the presence of onsite contaminated soils is considered an HREC”

32

Petroleum tank removed in 1997 with NFA letter. No express controls. Residual contamination is known but property use is commercial. Agency files document that approximately 100 cubic yards of contaminated soil remains in place; located 10 to 15 feet deep. Consultant concludes: “Based on removal of the UST, analytical results, the regulatory closure, and partial removal of petroleum- impacted soils, the presence of onsite contaminated soils is considered an HREC” Consultant states “If the subject property is redeveloped for residential purposes, a limited subsurface investigation may be warranted to determine the location and handling of contaminated soil that has been left in place at the subject property.”

33

34

Rural mountain community/former mining town Widespread lead and arsenic impacts in soil, entire town subject to “soil ordnance” Sampling data must demonstrate that impacted soils have been removed and concentrations of lead and arsenic meet unrestricted use levels OR Documentation that at least 18-inches of clean fill is present. HREC, CREC, or REC

35

Rural mountain community/former mining town Widespread lead and arsenic impacts in soil, entire town subject to “soil ordnance” Sampling data must demonstrate that impacted soils have been removed and concentrations of lead and arsenic meet unrestricted use levels OR Documentation that at least 18-inches of clean fill is present. HREC, CREC, or REC

36

Rural mountain community/former mining town Widespread lead and arsenic impacts in soil, entire town subject to “soil ordnance” Sampling data must demonstrate that impacted soils have been removed and concentrations of lead and arsenic meet unrestricted use levels OR Documentation that at least 18-inches of clean fill is present. HREC, CREC, or REC

Rural mountain community/former mining town Widespread lead and arsenic impacts in soil, entire town subject to “soil ordnance” Sampling data must demonstrate that impacted soils have been removed and concentrations of lead and arsenic meet unrestricted use levels OR Documentation that at least 18-inches of clean fill is present. HREC, CREC, or REC Again, no deed restriction. Compliance is tracked by address and registered with local agency.

37

38

TCE release identified, site investigation conducted to delineate extent

• f impacts, agency notified that release occurred (reporting obligation

met). Owner undertakes self-directed cleanup (where allowed) Consultant documents remedial activities and collects confirmatory soil and groundwater samples; residual impacts meet state-accepted commercial/industrial Regional Screening Levels CREC EP must be very clear regarding agency view/regulatory requirements for self-directed cleanups

TCE release identified, site investigation conducted to delineate extent

• f impacts, agency notified that release occurred (reporting obligation

met). Owner undertakes self-directed cleanup (where allowed) Consultant documents remedial activities and collects confirmatory soil and groundwater samples; residual impacts meet state-accepted commercial/industrial Regional Screening Levels CREC EP must be very clear regarding agency view/regulatory requirements for self-directed cleanups

39

40

NFA letter was issued in 1999 for a 500-gallon UST removed from the subject property in 1990. Residual petroleum impacts allowed to remain in place given the property use as a warehouse. Current use of property is mostly office and warehouse, but part of the warehouse has since been converted to small apartments. HREC, CREC, or REC?

41

NFA letter was issued in 1999 for a 500-gallon UST removed from the subject property in 1990. Residual petroleum impacts allowed to remain in place given the property use as a warehouse. Current use of property is mostly office and warehouse, but part of the warehouse has since been converted to small apartments. HREC, CREC, or REC?

42

NFA letter was issued in 1999 for a 500-gallon UST removed from the subject property in 1990. Residual petroleum impacts allowed to remain in place given the property use as a warehouse. Current use of property is mostly office and warehouse, but part of the warehouse has since been converted to small apartments. HREC, CREC, or REC?

NFA letter was issued in 1999 for a 500-gallon UST removed from the subject property in 1990. Residual petroleum impacts allowed to remain in place given the property use as a warehouse. Current use of property is mostly office and warehouse, but part of the warehouse has since been converted to small apartments. HREC, CREC, or REC?

 There is no deed restriction, no formal AUL, no “legally enforceable

restriction”

 There is an agency closure letter and supporting data appropriate

for commercial use.

43

44

Past oil/gas well sites previously sampled for the parameters required under the oil/gas state program Also sampled for other constituents set by the state's DEQ Results meet the requirements of one program but not the other Neither agency willing to issue a letter saying the results are below human health risk based standards REC or CREC?

Past oil/gas well sites previously sampled for the parameters required under the oil/gas state program Also sampled for other constituents set by the state's DEQ Results meet the requirements of one program but not the other Neither agency willing to issue a letter saying the results are below human health risk based standards REC or CREC? If a CREC is a subset of a REC, does it Matter?

45

It is a different thought process for some. Prior Phase I ESAs may have identified a condition as an HREC that would now be a CREC under the new standard. EPs often didn't get it right under the OLD definitions. Consider: Is there anything left behind that requires awareness and management if you dig, repair a sewer line, add on to the building, put in a day care for employees, whatever

 If not, probably HREC  If so, probably CREC  If you can’t tell, probably a REC until someone finds or collects the

data

46

 New E1527-13 language:

• Should be conducted for property and adjoining properties

identified on one of the ASTM-specified standard government lists

• If not conducted, explain why
• Alternate sources ok

 A major challenge regarding records review is how to factor

in the cost for these reviews

 Industry conflict between a technical standard that relies on

“professional judgment” and a marketplace that demands “low bid”

 Critical issue for the task group to address because . . .

47

All “closures” are not created equal CERCLA NFRAP = LUST NFA = VCP COC = NFRAR = No Constituents of Concern Remain

48

 An evaluation of Vapor Intru

rusion is not not part of E1527

 Vapor Migrati

tion

• n is part of the E1527: a pathway that can

result in the “presence or likely presence” of contaminants

• n the property from on offsite source
• Not New: E1527-13 and previous versions: . . . physical setting

sources beyond topographic maps shall be sought when bad stuff is likely to migrate to the property . . .

• New: E1527-13: “migration” defined: refers to the movement
• f hazardous substances or petroleum products in any form,

including, for example, solid and liquid at the surface or subsurface, and vapor in the subsurface.

49

A Phase I has already been done for this property I want to buy. Why must I do another Phase I?

50



A Phase I ESA <180 days presumed valid



Between 180 days & 1 year update certain components must be updated

 > One year

• All Phase I components to be completed
• Prior report can be used as a reference



A Buyer must also satisfy specific “user” or “defendant” responsibilities

51

52

53

Phase I ESA conducted in 2013 Historical research of property and adjoining properties included a review of “Polk” city directories Dry cleaner located next door (and upgradient) from the 1930s through the 1960s Environmental professional concluded no historical activities of concern were identified on or adjoining the subject property

54

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

55

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

56

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

57

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

58

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

59

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

60

Phase I ESA from the 1990s: No RECs identified. Historical research consisted of chain of title report and interview with historical society. Phase I ESA from mid 2000s. No RECs identified. Historical research consisted of high-flight aerials and fire insurance maps.

61

Historical research included review of aerial photographs dated 1984, 1993, 1998, and 2006. “The photographs show the site essentially as it currently exists.”

62

Historical research included review of aerial photographs dated 1984, 1993, 1998, and 2006. “The photographs show the site essentially as it currently exists.” 1984

63

Historical research included review of aerial photographs dated 1984, 1993, 1998, and 2006. “The photographs show the site essentially as it currently exists.” 1984 1993

64

Historical research included review of aerial photographs dated 1984, 1993, 1998, and 2006. “The photographs show the site essentially as it currently exists.” 1984 1993 1998

65

Historical research included review of aerial photographs dated 1984, 1993, 1998, and 2006. “The photographs show the site essentially as it currently exists.” 1984 1993 1998 2006

66

67

 EP only required to identify RECs, CRECs, HRECs and DMCs

(“Findings).

 EP expresses opinion of impact of conditions on Property

• opinion regarding additional appropriate investigation to detect

the presence of hazardous substances or petroleum products

• nly “unusual circumstance” when greater certainty is required

 Identify Data Gaps and their significance  Not required to provide recommendations  Make sure recommendations are implemented

68

 Questionnaire is optional.

• If user does not provide information, EP must determine

significance (e.g. significant data gap?)

 If environmental liens or AULs are only recorded or

filed in judicial records, the judicial records must be searched.

 User should retain title professional.

69

 Legal Appendix Clarifies scope of indoor air exclusion

• New definition of “migration” refers to movement of

hazardous substances or petroleum products in any form, including…vapor in the subsurface.

• References that vapor migration in the subsurface is

described in Guide E2600

• nothing in this practice should be construed to require use
• f E2600 standard to achieve AAI

 Vapor migration just like any other pathway

 EPA preamble jeopardizes AAI compliance of E1527-05 reports that

did not consider VI

70

 “all appropriate inquires and phase I environmental site assessments

must include, within the scope of the investigation, an assessment

• f the real or potential occurrence of vapor migration and vapor

releases on, at, in or to the subject property.”

 “EPA notes that both [AAI and E1527-05] already call for the

identification of potential vapor releases or vapor migration at a property, to the extent they are indicative of a release or threatened release of hazardous substances.”

 “…EPA wishes to be clear that, in its view, vapor migration has

always been a relevant potential source of release or threatened release that, depending on site-specific conditions, may warrant identification when conducting all appropriate inquiries.…”

 “Neither the All Appropriate Inquiries Rule nor the ASTM E 1527-05

standard excludes the identification of vapor releases as a possible type of release.”

71