Question Key words
responsible
strictly, jointly and severally
responsible for
petroleum
not responsible parties
bona fide prospective purchaser
considering a site
settlement agreement
covenant not to sue
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Frequently Asked Questions about
Liability Protection
Rhode Island laws and regulations establish that many parties associated with a release of hazardous materials are responsible for conducting, and paying for, the necessary investigation and clean up activities. However, the law also recognizes that innocent parties may want to conduct investigations and response actions as part of the redevelopment and revitalization of a property. The Rhode Island system is to hold innocent parties harmless and recognize their efforts to help address challenges that they are not otherwise responsible for. This is the crux of our Brownfields program philosophy, and we document this through a covenant not to sue in a settlement agreement.
Who is responsible
for conducting, and funding, investigation and clean up activities?
Section 23-19.14-6
of the Rhode Island General Laws defines the following parties as responsible parties who are strictly, jointly and severally liable for the actual or threatened release of any hazardous material at a site:
(1) The owner or operator of the site;
(2) Any person who at the time of disposal of any hazardous material owned or operated the site;
(3) Any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment of hazardous materials owned or possessed by such person, at any site owned or operated by another party or entity and containing such hazardous materials; and
(4) Any person who accepts or accepted any hazardous materials for transport to disposal or treatment facilities or sites selected by such person, from which there is a release or a threatened release of a hazardous material which causes the incurrence of response costs.
This is the same liability system established under the federal Superfund program [see
CERCLA]. There are really two types of liability established in the statute; strict liability and joint and several liability.
The first, strict liability, is the assessment of legal responsibility without regard to fault or diligence. To be held strictly liable, the party only has to meet the statutory definition of liability, regardless of the party's intent, knowledge, or purpose.
The second type of liability, joint and several liability, means that if the harm at the site is indivisible, such as unmarked, intermingled drums or commingled wastes, any and every party at the site may be liable for the entire cleanup cost, regardless of the amount of waste each party actually contributed to the site. If the harm at the site is divisible, then the burden of apportioning the harm is on the responsible parties themselves.
Section 23-19.14-6
of the Rhode Island General Laws establishes that responsible parties are liable for:
(1) All removal or remedial actions necessary to rectify the effects of a release of hazardous material so that it does not cause a substantial danger to present or future public health or welfare or the environment;
(2) All costs of removal or remedial action incurred by the state including direct costs, indirect costs and the costs of overseeing response actions conducted by private parties;
(3) Any other necessary costs of removal or remedial action incurred by any other person; and,
(4) Damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release.
Who is responsible for releases of
petroleum?
Section 46-12.5.1-3 of the Rhode Island General Laws states that no person shall discharge, cause to be discharged, or permit the discharge of oil into, or upon the waters (including groundwater) or land of the state except by regulation or by permit from the director. Any person who violates any provision of this chapter or any rule or regulation or order of the director issued pursuant to this chapter shall be strictly liable to the state (see above for explanation of strict liability).
Section 23-19.14-7 of the Rhode Island General Laws states that the following parties are not responsible parties and shall not be held liable for costs or damages associated with a release of hazardous material and/or petroleum:
(1) Persons otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting were caused solely by an act of God or an act of war;
(2) Persons who are defined as bona fide prospective purchasers and who enter an enforceable settlement agreement;
(3) Persons are secured creditors and who maintain an indicia of ownership solely to protect a secured interest in land and are not operators; and
(4) Persons who are not operators and who act solely as custodial receivers or who can establish by a preponderance of evidence that they are an innocent landowner and the release or threat of release were caused solely by an act or omission of a third party other than an employer or agent of the defendant, or whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant if the defendant establishes:
(i) He or she exercised due diligence in the acquisition of the site at the time of purchase and exercised due care with respect to the hazardous material and/or petroleum concerned, taking into consideration the characteristics of such hazardous material, in light of the facts and circumstances, and,
(ii) He or she took precautions against foreseeable acts, or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.
A bona fide prospective purchaser is a purchaser of a site who intends to purchase a contaminated property, who had documented their intent to purchase the property in writing, and who has offered to pay fair market value for the property in the contaminated state. Any former owner, former operator, or other person who is otherwise a responsible party or any person who had more than ten percent (10%) equitable or other legal interest in the site or any of the operations related to the contamination cannot be considered as a bona fide prospective purchaser.
What if I'm not a bona fide prospective purchaser but am
considering a site
that I'm not responsible for?
Section 23-19.14-8 of the Rhode Island General Laws states that a person who is not otherwise defined as a responsible party will not become a responsible party if that person voluntarily undertakes and completes an investigation or a response action under a remedial action plan approved by the department of environmental management. However, the voluntary party must complete the investigation or response action and exercise due care in performing the work to maintain their protection. DEM can document the fact that a party is proceeding voluntarily and outline the protection against liability by entering a settlement agreement, including a covenant not to sue.
A settlement agreement is essentially an agreement between interested parties that defines the relationships of the parties to the site, outlines the significant information known about the site, defines the work to be performed, and documents the commitments and protections afforded to the parties if that work is completed as agreed to.
When the state enters into a Brownfields settlement agreement, the liability to the state for the investigation and remediation of the site, or a portion of that liability, for the parties to the agreement is limited as provided in the agreement pursuant to a covenant not to sue. The final covenant not to sue may, at the discretion of the state, be transferred to successors or assigns if the property is sold or transferred in the future..
A written agreement documenting the State's commit not to sue a party to compel them to conduct or pay for work related to contamination at the site. The extent of the covenant is defined in the settlement agreement and is based on existing contamination. Defining existing contamination is critical to the agreement, and the protections afforded by the agreement. Existing contamination means any hazardous substances, pollutants or contaminants, known to be present or existing on or under the Site based upon investigations and assessments provided to the Department as of the effective date of the settlement agreement. Since the extent of protection from liability is based on how existing contamination is defined, the amount of protection is directly proportionate the extent and quality of assessment and investigation that has been done and provided to DEM. The more investigation there is, the stronger the protection afforded in the agreement.
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