Beware Superfund Liability

Article excerpt

BEWARE SUPERFUND LIABILITY

Earth Day this year was more than a 24-hour celebration; it was a sign of the times. Consumers, businesspeople, educators, public officials -- all segments of society are on the environmental bandwagon. This worldwide call to preserve our planet's natural resources has significant implication for manufacturers.

Legal liability for environmental damage caused by all manner of products is becoming an increasingly important issue for product manufacturers and distributors. More and more often, they'll have to defend themselves in court on issues of alleged environmental damages. Once in court, extremely liberal standards for establishing fault, coupled with absolute liability provisions, make environmental cases very difficult to defend successfully. Furthermore, awards and settlements can easily dwarf even the most liberal personal injury awards.

As a result, manufacturers and distributors must understand the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), more commonly known as Superfund, the environmental statute that has brought on the most litigation.

While CERCLA was enacted in 1980 to address the problem of cleaning up abandoned and inactive hazardous waste sites spread across the American countryside, the statute addresses "every conceivable area where hazardous substances come to be located..."

The government can either order a "responsible person" to perform clean up work, or it can do the work itself and then file a cost recovery action. In addition, private parties may file civil actions or contribution claims to recover costs involved in cleaning up facilities.

Though CERCLA liability involves the release or threatened release of

hazardous substances or waste from facilities, hazardous substances encompass more than wastes and can include primary products used in manufacturing.

As a result, chemicals or products sold for use in a manufacturing process can be considered hazardous substances. Even trace amounts of hazardous substances in primary products can create a CERCLA liability.

CERCLA provisions apply even if parties only contribute a minimal amount of hazardous substances to sites. If materials were taken to a site and hazardous substances of the type found in these materials were also found at the site, cause is established. It is not necessary to "fingerprint" a particular company's substances. Companies are also liable even if they did not direct or even know where their substances were eventually deposited.

Who is Responsible

CERCLA establishes four classes of potentially responsible parties (PRPs). …