Prospective purchaser agreements: EPA's new outlook on landowner liability.

   Brownfields are abandoned, idled, or under-used industrial and commercial
   facilities where expansion or redevelopment is complicated by real or
   perceived environmental contamination. The strict liability scheme imposed
   by Congress in the Comprehensive Environmental Response, Compensation, and
   Liability Act unintentionally resulted in millions of brownfields
   throughout our country. The Environmental Protection Agency (EPA)
   recognized this problem and took significant steps to minimize landowner
   liability in a Prospective Purchase Agreement Guidance, which provides a
   framework for EPA Regions to negotiate agreements with prospective
   purchasers of brownfield sites. Ms. Lifsey thoroughly examines prospective
   purchase agreements (PPAs) negotiated by EPA. Specifically, this Comment
   analyzes the different types of benefits furnished by prospective
   purchasers in exchange for a covenant not to sue and the various liability
   protections provided by EPA to prospective purchasers. The author argues
   that EPA should continue to negotiate PPAs that confer benefits to the
   community where a site is located, but to be effective, EPA should also
   extend greater liability protection to prospective purchasers under certain
   circumstances. Ultimately, Ms. Lifsey concludes that PPAs are a practical
   solution to the brownfields problem and should be employed by EPA as much
   as possible.

I. INTRODUCTION

"It's the nastiest place I've ever been in," said an Environmental Protection Agency (EPA) employee about the Uniroyal Plastics Hill site.(1) The Uniroyal Company has a long history in the City of Mishawaka, Indiana. Uniroyal ran a manufacturing company on a forty-three acre site, fronting the southern bank of the St. Joseph River just off Main Street in the Mishawaka business district.(2) Industrial use of the site began in the 1830s and lasted until 1997.(3) At its peak, the Uniroyal Company employed ten thousand people to make life jackets, bowling balls, and tennis shoes.(4) For the duration, chemicals such as barium, chromium, lead, cadmium, mercury, polychlorinated biphenyls, and methylene chloride were used and disposed of on site.(5) When EPA inspected the abandoned site in 1997,(6) a tunnel running through the property was filled with sludge waist-high.(7) One local journalist described the site as "asbestos-lined pipes containing flammable toxins crisscrossed" above sludge and drums of solvents, oils, and acids.(8) Along with masses of unidentified waste in the ground, the buildings still standing were highly contaminated with asbestos.(9) The deserted Uniroyal property was not only a public health hazard: the stigma attached to the brownfield also caused economic and aesthetic impacts on the surrounding area.(10) The Mayor of Mishawaka, Robert C. Beutter, said of the Uniroyal site, "[I]t's hurting the entire city."(11) Furthermore, Uniroyal is now insolvent; it filed for bankruptcy in December 1977.(12) EPA spent approximately $1.5 million on the cleanup of the site, and the job is still not finished.(13)

Before 1989 any attorney would have advised a client interested in purchasing the Uniroyal site, to walk away--if not run--from the offer. The site would have been simply unmarketable.(14) But today, thanks to a prospective purchaser agreement (PPA) negotiated between EPA Region V and the City of Mishawaka, the site will become a public raceway that creates jobs and revenue for the local community.(15) As part of the settlement, the city agreed to demolish or remove asbestos from the buildings on the site in exchange for EPA's covenant not to sue.(16) The city leased the property with an option to purchase,(17) and as the president of the Mishawaka Business Association stated, the city can now "get together as a community and figure out exactly what we want to happen to that property."(18) Soon, EPA will knock down a dam in downtown Mishawaka, and water from the St. Johns river will flow through the Main Street Tunnel for the first time in fifty years.(19) This is just one example of how prospective purchaser agreements can benefit both a prospective purchaser and a local community.

A company seeking to build a facility on real property often has to choose between building on land that is contaminated from a prior industrial use (known as a brownfield(20)) or new land that is untouched by industry (known as a greenfield(21)). Before EPA published its current policy, a prospective purchaser could not buy a parcel of land known to be contaminated without incurring partial or total liability for hazardous waste damages.(22) Hazardous waste liability created a major disincentive for companies to purchase brownfields or for banks to provide financing,(23) even if the location was more convenient and cost-effective than a greenfield. Thus, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA or "Superfund")(24)--a statute enacted to protect public health and welfare and the environment(25)--acted as a major roadblock to the development of abandoned industrial sites. The unintended effect of the liability scheme under CERCLA is that there are now between 150,000 and 500,000 brownfields in the United States,(26) and greenfields are being destroyed at an extraordinary rate. The U.S. Conference of Mayors (USCM) cited contamination as the number-one obstacle to redevelopment in urban areas.(27)

To combat this problem, EPA published a policy on prospective purchaser agreements in 1989,(28) and revised that policy in 1995,(29) to give interested persons an opportunity to acquire contaminated property without incurring liability for the hazardous waste.(30) To date, EPA has entered into almost one hundred agreements with prospective purchasers,(31) and a large percentage of those were executed in the past two years.(32) Consequently, developers are increasingly finding real estate in urban areas more attractive.(33)

The purpose of this Comment is to examine existing prospective purchaser agreements and to discuss the advantages and disadvantages of entering into a PPA from both the purchasers' and the public's perspective. Part II explains the connection between hazardous waste landowner liability and prospective purchaser agreements. Part III reviews the benefits of prospective purchaser agreements to communities. Part IV analyzes and criticizes the type of covenant not to sue that EPA currently provides prospective purchasers and demonstrates why EPA should expand liability protection in the future. Part V concludes that prospective purchaser agreements are advantageous to all parties involved and that EPA should negotiate agreements whenever the opportunity arises.

II. CERCLA AND THE BROWNFIELDS PROBLEM

A. Landowner Liability

Under the CERCLA liability scheme, when a property is purchased, the new landowner is automatically considered liable as an owner or operator for any release or threat of release of a hazardous substance at the facility.(34) CERCLA is a strict liability statute, and courts, applying common law principles, tend to hold all parties jointly and severally liable(35) for "all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe"(36) or "any other necessary costs of response incurred by any other person."(37) Therefore, a new landowner could be held responsible for the entire cleanup without actually causing the contamination.(38) Given the average costs of hazardous waste removal and remediation in our country,(39) this is an enormous burden for any landowner to bear.

CERCLA provides defenses for innocent owners of brownfields, although these are not available to prospective purchasers who buy sites knowing that they are contaminated. In order to raise a third-party affirmative defense, an owner must demonstrate that the release or threat of release was caused solely by an act or omission of a third party who does not have a contractual relationship, existing directly or indirectly, with the potentially liable party.(40) The term "contractual relationship" includes "deeds" and "other instruments transferring title or possession"(41); thus, a current landowner is precluded from asserting that the release was caused by an act or omission of past owner or operator due to the contractual relationship between the parties created by a deed or lease.(42) Congress also created a defense for innocent landowners who had no reason to know of contamination at the time of purchase and who took all appropriate inquiry into the site before purchasing the property.(43) A prospective purchaser who did not participate in contaminating a site is excluded from using this defense merely by finding out that a release occurred on site.(44) Information obtained through a site inspection, research, hiring a consultant, or by an outside party, is enough to trigger the knowledge rule.(45) Ironically, the diligent prospective purchaser who spends time and money investigating the site in order to secure financing for the purchase is not eligible for the innocent purchaser defense if it finds any contamination.(46) Thus, under the traditional CERCLA approach, a prospective purchaser of a brownfield has limited options--either clean up the site or build a facility somewhere else.

Therefore, before 1989 many prospective purchasers turned away from brownfields because of the difficulty in proving statutory defenses that protect new landowners. Other potential developers in this situation approached EPA seeking assurances that they would not be held liable for preexisting contamination.(47) In response, EPA issued guidance in 1989 (the 1989 Guidance) stating that EPA would now enter into agreements with prospective purchasers giving the purchasers covenants not to sue in exchange for due consideration.(48)

B. A Wave of CERCLA Reform

The 1989 Guidance on prospective purchaser agreements authorized EPA, under certain conditions, to protect prospective purchasers from enforcement actions by EPA in exchange for direct benefits to EPA.(49) Although this was a step in the right direction for the redevelopment of brownfields, the conditions of the 1989 Guidance proved to be too limiting on both EPA and prospective purchasers.(50) For example, EPA originally intended to enter into agreements only at those sites where EPA did not have a realistic chance of securing cleanup financing from potentially responsible parties.(51) Furthermore, EPA was initially reluctant to enter into PPAs because of a number of concerns about the program(52)--primarily the fear that the government would become involved in purely private real estate transactions.(53) Consequently, the PPA program got off to a weak start. Between 1989 and 1995 EPA entered into only sixteen such agreements.(54) EPA was sharply criticized by industry and other commentators for its "failure to utilize PPAs."(55)

Before EPA modified its own PPA program, Congress attempted to change the statutory framework of CERCLA in 1994 with the goal of addressing some of these liability problems.(56) In an effort to reauthorize Superfund, many of the proposed bills included a provision to either codify the EPA PPA program(57) or to eliminate liability for prospective purchasers.(58) The Clinton Administration's proposal, the Superfund Reform Act (SRA), would have excluded "bona fide purchasers" from the liability scheme of CERCLA section 107(a) if they met general requirements.(59) True to form,(60) the 104th Congress failed to reauthorize Superfund.(61) Yet debates in Congress had an indirect effect: many congressional leaders essentially endorsed the existing PPA program by drafting legislation that resembles the existing program. Now the program is receiving more attention from state and federal decision makers.(62) When, and if, Congress passes a Superfund reauthorization bill, it will most likely include a provision that addresses prospective purchaser liability.(63)

The onslaught of legislative proposals spurred administrative change,(64) and a wave of CERCLA reform occurred between 1994 and 1996.(65) The Clinton Administration highlighted the Brownfields Economic Redevelopment Initiative (BERI)(66) which, as an EPA administrator stated, aimed to "remove liability barriers to cleanup and redevelopment of these properties, thereby giving prospective purchasers, lenders, and property owners more assurances."(67) A component of the BERI plan was to revise the 1989 Guidance on prospective purchaser agreements.(68) EPA changed several of the original criteria and altered its approach to PPA negotiations, thereby expanding the availability of PPAs to more purchasers.(69)

Since the new guidance was published in 1995, EPA has signed approximately sixty-five PPAs,(70) and the rate at which EPA negotiates PPAs continues to increase.(71) This trend illustrates that EPA is increasingly backing off on strict liability principles. In March of 1998 the 105th Congress asked EPA Administrator Carol Browner to testify before the House of Representatives Subcommittee on Finance and Hazardous Materials on the current status of the Superfund program.(72) After recommending that Congress endorse EPA's new PPA program, Administrator Browner suggested that EPA is adopting a more causation-based approach: "[A]ny changes made to the liability and enforcement provisions of Superfund must ensure that those who created the problems be held responsible for the cleanup."(73)

C. EPA 's Prospective Purchaser Agreements: The 1995 Guidance

According to the 1995 Prospective Purchaser Guidance, EPA requires prospective purchasers to meet five criteria. Those five criteria are 1) EPA's involvement with the site, 2) the economic benefit provided by the purchaser, 3) possible aggravation of existing contamination, 4) possible health risks, and 5) the financial liability of the purchaser.(74) In practice, the burden is on the purchaser to contact EPA(75) and then demonstrate to the agency that the prospective purchaser and the prospective site meet the 1995 Guidance criteria.(76) When considering a purchaser for a PPA, EPA seems to give the most amount of weight to the first two criteria.(77) This may stem from the fact that the first two criteria reflect the most substantial changes from the 1989 Guidance.

First, EPA requires that action has been taken, is ongoing, or is anticipated to be undertaken by the agency.(78) EPA generally goes through a process to determine the level of involvement EPA will have with the cleanup of a site according to the guidelines set out by CERCLA and the National Contingency Plan (NCP).(79) Initially, the NCP requires EPA or third parties to conduct a preliminary assessment and site investigation (PA/SI of the site.(80) EPA has the authority to take removal actions at any time when a release or a threat presents an imminent and substantial danger.(81) However, if there is not an imminent threat, the next step is to decide whether EPA or the potentially responsible parties, should perform removal actions,(82) or whether more extensive remedial actions are necessary.(83) For releases that compel remedial actions, EPA evaluates each site based on criteria outlined in the NCP to determine the sites that the agency should give the highest priority.(84) The highest-ranking sites are listed on the National Priorities List (NPL),(85) and only those sites on the list are eligible to receive money from the Superfund for remedial actions.(86)

Under the 1989 Guidance, EPA only negotiated PPAs for sites that were on the NPL and that contained facilities where EPA anticipated enforcement action.(87) In contrast, the new guidance simply requires that the site in question meet the following minimum requirements: 1) there is a "substantial likelihood" of the purchaser incurring CERCLA liability,(88) and 2) EPA involvement is essential to remove liability and facilitate the cleanup.(89) This new approach is intended to encourage prospective purchasers to redevelop and reuse a wider range of brownfields, including sites where only limited removal actions occurred.(90) Nevertheless, since the 1995 Guidance was released, the majority of PPAs continue to be negotiated for high-ranking NPL sites.(91)

The level of involvement required by EPA to meet the 1995 Guidance essentially depends on the EPA region. Region V, for example, tends to negotiate PPAs for more non-NPL sites than NPL sites.(92) On the other end of the spectrum, Region I and Region IX entered into PPAs almost exclusively with prospective purchasers buying Superfund sites.(93) Although the "Superfund only" approach is straightforward--simply because prospective purchasers know what EPA in those regions look for--Region V takes a more comprehensive approach to the overall brownfield problem. Most brownfields are not, and will not be in the future, listed on the NPL.(94) Furthermore, brownfields that do not receive a high rank by EPA may nevertheless have a greater potential for reuse than an NPL site.(95) Whether a brownfield is viable for economic redevelopment or for a community project largely depends on both the location of the site and market attributes, not on the extent of contamination.(96) In addition, the stigma associated with a brownfield is not directly related to the amount of contamination on site; a less-contaminated brownfield may cause the same social, economic, and health problems in a community as an NPL site.(97) Regardless of whether EPA or another party cleans up the site, the risk of liability of a prospective purchaser remains the same(98) Region V's comprehensive approach is more practical given the large number of brownfields and the scope of liability.(99)

The second most dramatic change between the 1989 Guidance and the 1995 Guidance is the difference in what EPA asks for in return for providing liability protection. Under the 1995 Guidance, EPA must receive a direct benefit or the purchaser must provide an indirect benefit to the community with a reduced benefit to EPA.(100) It is no longer necessary for EPA to receive a direct monetary benefit that goes toward the cleanup or toward a hazardous waste fund.(101) Instead, the purchaser can opt to give EPA a lesser direct benefit if it gives an indirect benefit to the community. In other words, if the purchaser provides the community with a positive nonmonetary benefit, then EPA does not require the purchaser to complete the cleanup of the site or bear any future liability thereafter.(102) In fact, PPAs are now negotiated for sites where EPA or a third party completes the cleanup process before negotiations begin, and in these types of situations, a purchaser commonly elects to maintain the site through institutional controls or to provide a service to the community.(103)

Although the last three criteria are in theory equally significant to the first two, in practice EPA gives them less consideration.(104) However, from the perspective of the local community where the site is located, these criteria are probably the most significant issues before the agency.(105) The third criterion requires that the continued operation of the facility or new site development, with the exercise of due care, will not aggravate or contribute to the existing contamination or interfere with EPA's response action.(106) Fourth, the continued operation or new development of the property must not pose health risks to the community and those persons likely to be present at the site.(107) Lastly, the prospective purchaser must be financially viable.(108) EPA will consider negotiating a PPA if the prospective purchaser meets all the above criteria and the PPA would be in the public interest.(109)

III. CLEANING UP COMMUNITIES

The principle that EPA must receive either a direct benefit or a combination of a community benefit plus a benefit to EPA goes hand in hand with the legal theory that consideration is an essential element to every contract.(110) The 1995 Guidance states that "[a]s a matter of law, it is necessary for EPA to obtain adequate consideration," and the consideration must be "substantial."(111) Accordingly, prospective purchasers must give EPA consideration that takes the form of a "direct benefit to EPA," such as monetary sums,(112) or an "indirect benefit to the community," such as a community juvenile center,(113) coupled with a lesser benefit to EPA.

A. Defining Substantial Consideration

Not only does a PPA shield a prospective purchaser from certain liabilities,(114) the PPA process reduces transaction costs, such as litigation, associated with most hazardous waste cleanups.(115) Therefore, prospective purchasers are usually more than willing to give EPA, or the local community where the site is located, substantial consideration.

To determine what is adequate, the 1995 Guidance suggests that EPA regions initially consider three factors. First, EPA regions should consider the amount of past and future response costs incurred at the site.(116) EPA enters into PPAs for a spectrum of contaminated sites, from the most severely polluted to those requiring the most simple removal actions.(117) EPA is likely to set a higher bar for sites where the cleanup will obviously be expensive, such as extremely contaminated sites with multimedia contamination or large amounts of unidentified wastes. For example, when compared to other EPA regions, Region IX frequently negotiates PPAs for major industrial sites on the National Priorities List.(118) Some of the most notable Region IX PPAs were negotiated in connection with the San Gabriel Valley, a massive Superfund site in California.(119) As a result of this trend, Region IX has a reputation for requiring more consideration from prospective purchasers than other regions.(120)

The second factor in ascertaining substantial consideration is whether there are PRPs who can perform the work or reimburse EPA's costs.(121) If EPA looks to an innocent purchaser to conduct the entire cleanup, the question becomes whether EPA should use the PPA program to be made whole in situations where the potentially responsible parties are insolvent or nonexistent. In many of the PPAs, the prospective purchasers reimbursed EPA for a part of the cleanup cost, either directly or by other cleanup-related actions.(122) However, reimbursement of EPA expenditures is by no means a determining factor--nor should it be--as long as the purchaser agrees to give EPA or the community substantial consideration.(123) Regardless of who pays for the cleanup--EPA, or a private party--the risk of liability for a prospective purchaser is equally great; thus, the need for the PPA is the same.(124) AS previously discussed, there is no exact formula for EPA regions to follow in deciding whether to enter into a PPA; economic concerns must be weighed along with all of the other factors.

One commentator has indicated that the EPA reimbursement factor limits the number of situations in which a PPA can be used, because EPA will never enter into a PPA where there are other identifiable PRPs.(125) This argument suggests that EPA is only using PPAs as a cost-recovery tool in circumtances where the government is left to pay the entire bill for a cleanup. However, in some circumstances the responsible parties pay for all or the majority of the cleanup costs prior to the acquisition of the property by a prospective purchaser.(126) As consideration, the purchaser redevelops the site and provides a substantial benefit to the community.

For instance, the remedial investigation study at the Woolfolk Chemical Works site in Georgia indicated a high level of arsenic contamination in surface soils.(127) EPA issued a unilateral order to the potentially responsible parties, directing them either to excavate the contaminated soils until cleanup levels are reached or to relocate residents away from the surface soils.(128) After a record of decision was issued by EPA, the Peach County Chamber of Commerce negotiated a purchase with the owner of the site for the purpose of building a public library.(129) As consideration, Peach County agreed with EPA Region IV in a PPA to include restrictive covenants in the deed with the intention that a library be built on the land.(130) The PPA enabled Peach County to convert a local brownfield into a public resource and at the same time shielded the county from CERCLA liability. The Woolfolk PPA illustrates that EPA regions do not always enter into PPAs to recoup cleanup costs; the responsible parties, not the bona fide prospective purchaser, paid for the cleanup. Although Peach County did not directly assist in the funding of the cleanup, the PPA was essential to protect the county from liability risks and to redevelop the community brownfield.

In addition, the 1995 Guidance recommends that EPA regions consider whether EPA will suffer a shortfall in cleanup costs for a particular site.(131) The purpose of this provision is to prevent the scenario in which a landowner pays a reduced price because of the contamination on the property, not taking into account the difference between the present purchase price and the future increase in the value of the property attributable to the cleanup, and the government absorbs the outstanding costs.(132) When the consideration goes directly toward cleanup, EPA engages in a two-step process up front to determine the proper amount of consideration.(133) First, EPA looks at the market value of the land absent the contamination.(134) Second, EPA evaluates the purchase price and considers the value of any lien it may have on the property.(135) If EPA calculates that the prospective purchaser will receive windfall profits, then EPA will add provisions to the PPA to regain cleanup costs.(136)

PPA guidelines are flexible enough so that a prospective purchaser and EPA can tailor a PPA to fit the needs of a particular site in a particular community. EPA takes into account additional factors in determining the amount of consideration. For example, any indirect benefit that may result from the purchase,(137) the size and nature of the prospective purchaser,(138) and the future use of the site are all considered.(139) The scope of contamination at brownfields and the kinds of prospective purchasers who buy brownfields vary widely; hence, there is no set definition for what constitutes substantial consideration. Suppose a major corporation is willing to pay a large monetary sum for cleanup, but the other benefits the corporation brings to the community are minimal. On the other hand, suppose a nonprofit organization is only capable of providing funds to restore a wildlife habitat, but the benefits to the community are tremendous. In the past EPA has determined that the amount of consideration paid by prospective purchasers in those two very different situations was substantial.(140)

B. Remediation, Restoration, and Reuse

During negotiations, a prospective purchaser and EPA stipulate whether the purchaser will give a direct benefit to EPA for cleanup or a combination of an indirect benefit to the community plus a reduced direct benefit to EPA.(141) The option to give an indirect benefit to the community has been available to prospective purchasers since 1995, yet the pure direct benefit option is used more frequently.(142)

Even if a prospective purchaser gives EPA what is labeled a "direct benefit," the redevelopment or restoration of the property usually results in inadvertent indirect benefits to the community. For example, in 1996 a prospective purchaser entered into a classic direct benefits PPA before buying a unit of the Industri-Plex site, which at the time consisted of 110 acres of highly contaminated soil and groundwater.(143) EPA and the State of Massachusetts cleaned up the site and the prospective purchaser agreed to provide institutional controls for the contamination on site.(144) Several PPAs to redevelop the entire site were negotiated, and projects to build a regional transportation center, retail center, hotel, and offices are underway.(145) As a result, EPA estimates that an average of seven hundred short-term jobs, with an estimated total annual income of $23.6 million, will be supported each year.(146) The redevelopment is also expected to produce considerable public revenue in taxes.(147) This is just one example of how cleanup and redevelopment of a brownfield site effects positive economic change in the community, regardless of whether the consideration is labeled a "direct benefit to EPA" or an "indirect benefit to the community."(148)

1. Direct Benefit to EPA

In most cases the consideration is monetary and comes in a lump sum to EPA.(149) EPA considers cash and any institutional control as a direct benefit to EPA because the consideration goes toward overall costs of cleanup for that site.(150) EPA regions will agree to accept installment payments, with the condition that the PPA will not be effective until the installments are paid,(151) or to split the work and payments into two separate phases.(152) Other nonmonetary examples of direct benefits to EPA include deed restrictions,(153) construction of a protective cap,(154) removal actions,(155) property use restrictions,(156) oversight,(157)demolition of buildings,(158) off-site disposal,(159) maintenance,(160) monitoring,(161) and other institutional controls that "may be selected by EPA."(162) The City of Taunton agreed in a PPA to provide EPA with an unusual direct benefit--to allow EPA to dump up to fifteen thousand tons of contaminated soil into the Taunton Landfill in exchange for a covenant not to sue.(163) In addition, most PPAs include provisions that provide EPA with access to the property(164) and require the prospective purchaser to give notice to successors-in-title.(165)

2. Indirect Benefits to the Community and Lesser Benefits to EPA

More recently, prospective purchasers have opted to give an indirect benefit to the community and a lesser benefit to EPA. This option was not available before the 1995 Guidance, and EPA believes that it makes PPAs more effective.(166) The option of indirect benefit to the community is essentially an opportunity for local governments, state agencies, and nonprofit organizations to acquire land, either involuntarily or by donation, without the fear of also acquiring the liability associated with the land. It also encourages local entities to find creative solutions to the difficult problems posed by some brownfields, such as those located entirely in wetlands.(167)

Not surprisingly, most industrial and private prospective purchasers do not provide an indirect benefit to the community as consideration in their PPAs.(168) The Guidance urges EPA regions to consider the size and nature of the purchaser and whether the purchaser will receive a windfall before entering into a PPA.(169) This could explain why the overall majority of PPAs that EPA negotiates are "direct benefits" PPAs.(170) Yet in rare instances, commercial prospective purchasers provide what might be considered indirect benefits to the community, such as setting land aside for conservation and recreational trails.(171) The opposite is also true; occasionally municipalities negotiate PPAs that only give a direct benefit to EPA.(172) Regardless, a fine line exists between what is a benefit to the community and what is a benefit to EPA. (173)

In general, PPAs that provide "indirect benefits to the community and a reduced benefit to EPA" are negotiated with municipalities, state agencies, and nonprofit organizations.(174) One possible explanation for EPA's willingness to accept this type of consideration from municipalities, nonprofits, and state agencies is that the purpose of such organizations is to serve the public; therefore, public entities are in a better position than a private party to decide what constitutes a benefit to the community. In addition, municipalities, nonprofits, and state agencies presumably cannot afford to provide direct benefits, such as large cash sums for cleanup that typically cost private parties hundreds of thousands of dollars.(175) On the other hand, EPA may be making a political move (and trying to promote PPAs) by accepting reduced benefits from public entities and politically popular nonprofit organizations. By gaining public support for PPAs, EPA is fending off any attempts by Congress to destroy the agency's PPA program by exempting prospective purchasers from liability in a Superfund Reauthorization bill.(176) Notwithstanding EPA's motive, EPA should use PPAs as much as possible to meet the dual purpose of remediating brownfields and restoring or reusing them for a community's benefit.

What constitutes an indirect benefit depends on how the purchaser plans to use the property in the future. For example, the Mayflower Mill conducted a milling process on a tract of land from 1929 to 1991, where it crushed ore to extract gold.(177) The extracted gold was put into barrels with mercury, and the waste went to tailings ponds.(178) Although the site was extremely contaminated by the time the state agency and EPA investigated, some of the unique mining buildings on site were eligible for listing in the National Historic Register.(179) The San Juan Historical Society entered into a PPA with Region VIII intending to create an interpretive living-history site where public tours would be conducted.(180) Region VIII determined that the Society was providing an indirect benefit to the community by agreeing to make the property safe for public tours, and was also providing a less direct benefit to EPA by allowing EPA access to the property.

For local and state governments, a PPA usually has several functions--to clean up a local eyesore, to prevent a health hazard, and to furnish public service. In 1997 Clinton County, Indiana was in great need of a juvenile center; the county lacked facilities for treatment of children in trouble and it spent $1.5 million annually to provide juveniles with care and housing in other parts of the state.(182) From 1992 to 1996 EPA incurred $2.789 million for the cleanup of the Ingram-Richardson Superfund site, which encompassed seventeen acres in Clinton County.(183) After the remediation was finished, the county promised EPA Region V that it would pay a portion of the cleanup, demolish old buildings, and develop a residential juvenile center in exchange for an EPA covenant not to sue.(184) Local governments acting as prospective purchasers have also set aside land for a specific public use,(185) such as a public library,(186) through PPAs.

One of the most creative uses of PPAs has been the restoration and conservation of natural resource areas. In an EPA Region IV agreement, the Tennessee Wildlife Resources Agency bought a Superfund site on behalf of the State of Tennessee for the purpose of preserving approximately 355 acres of wetlands and bottomland hardwood forests.(187) In Colorado, the Division of Parks and Outdoor Recreation negotiated a similar PPA with Region VIII to manage parks and wildlife habitat on behalf of the state.(188) Likewise, as part of a state preservation program, Region II negotiated a PPA with the Scenic Hudson Land Trust, a nonprofit organization in New York, for a Superfund site that had been a nickel-cadmium battery manufacturing facility for twenty-six years.(189) The terms of the agreement stated that "no monetary payment shall be required"(190); instead the prospective purchaser made a commitment to preserve the natural, scenic, historic, and potential recreational assets of the property.(191) Another unusual PPA was recently negotiated between the Nature Conservancy, a nonprofit organization, and Region IV, with the aim of restoring approximately 50,757 acres of the Everglades Agricultural Area.(192)

Although restoration projects are not typical redevelopment projects for brownfields, they improve abandoned sites and provide unique benefits to communities. These PPAs also illustrate the various ways in which EPA can use the PPA program to improve the quality of life in local communities.

IV. PROSPECTIVE PURCHASER PROTECTION

Prospective purchaser agreements provide an incentive for prospective purchasers to assist in the cleanup or redevelopment of a brownfield by offering a covenant not to sue. If EPA finalizes a PPA with a purchaser, it may become effective either after the Department of Justice approves the agreement or when consideration is paid in full, whichever occurs later.(193) Occasionally the entire site is cleaned up at the time of purchase.(194) In this type of situation, the obvious question is, "Why would a prospective purchaser need liability protection for past contamination?" The answer is entangled in the complex issue of cleanup standards: EPA often allows a percentage of the "existing contamination" to be left on site and in place.(195) EPA uses institutional controls, such as water monitoring and deed restrictions, to limit exposure to hazardous waste.(196) In addition, EPA or environmental consultants hired by private parties may unknowingly leave contamination on site.(197) For example, hazardous liquids deep in the soft may seep into lower layers of the soil and groundwater.(198) Furthermore, prospective purchaser agreements technically may become effective at any stage of the cleanup process--when EPA is anticipating to take action on the site, during the cleanup, or when institutional controls are being put in place.(199) Before or during the cleanup process a prospective purchaser must be shielded from liability. For these reasons, a covenant not to sue is necessary.

A. EPA's Covenant Not to Sue: Looming Liability

The Model Prospective Purchaser Agreement in the 1995 Guidance acts as a blueprint for EPA regions,(200) recommending that EPA regions provide liability protection from civil and administrative CERCLA claims.(201) Correspondingly, all PPAs negotiated thus far provide protection from EPA administrative and civil enforcement actions regarding "injunctive relief or reimbursement of response costs pursuant to CERCLA Section 106 or 107(a)."(202) Section 106 of CERCLA authorizes EPA to seek judicial relief or issue administrative orders whenever it determines that a site may present an imminent and substantial endangerment to the public health or the environment.(203) Even when a site is cleaned up to EPA's standards, contamination may still be on site, and the contamination could present a substantial endangerment in the future.(204) Courts generally assume that the liability scheme in section 107 applies to section 106(205); thus, any present owner is an automatic potentially responsible party. If a new owner receives an EPA unilateral order to clean up the property, the owner does not have an opportunity to challenge the order before financing the cleanup.(206) Moreover, EPA retains extensive power to issue an injunction(207) and may impose fines of up to $25,000 per day for a person who falls to comply with an order.(208) The other provision, section 107, authorizes EPA to seek reimbursement from potentially responsible parties if EPA determines that the contamination is substantial and remediates the site itself using federal money.(209) Protection from section 107 orders is just as crucial as receiving protection from section 106 because EPA can recover all cleanup costs from any potentially responsible party.(210)

Typically EPA only extends to a prospective purchaser liability protection from section 106 and 107 claims.(211) A prospective purchaser may still be exposed to liability from the government, third parties, and the states.(212) Even though a prospective purchaser negotiated a PPA with EPA, the agency retains its enforcement authority under other environmental statutes and in the "reservation of rights" provisions of the Covenant Not to Sue in the PPAs.(213) Therefore, a prospective purchaser who has a PPA may be found liable to the U.S. government for 1) violations of section 7003 of RCRA,(214) 2) natural resources damages under CERCLA,(215) 3) violations of the Clean Water Act,(216) and 4) CERCLA claims if EPA decides to exercise its rights retained in the PPA.(217) In addition, third parties may bring a claim against a prospective purchaser under CERCLA or RCRA.(218) If a state is not a party to the PPA settlement, then prospective purchasers are exposed to state liability under state and federal statutes.(219)

Even though the 1995 Guidance recommends protection from liability only for CERCLA, the guidance is just a starting point for negotiations; it does not have the force of law.(220) The type of protection a PPA affords the purchaser is negotiated on a case-by-case basis,(221) giving EPA regions flexibility to extend the widest coverage possible.

B. Exposure to the Government

1. RCRA Section 7003

Surprisingly, EPA does not usually protect purchasers from liability under RCRA. While CERCLA applies to facilities after they are contaminated by hazardous substances, RCRA regulates both current and past disposal of solid or hazardous waste.(222) RCRA governs the treatment, storage, and disposal of hazardous waste, and unlike CERCLA, is not principally designed to accomplish the cleanup of hazardous waste.(223) However, section 7003 gives EPA the authority to order a cleanup when the waste at a site poses an imminent hazard.(224) A covenant not to sue for RCRA section 7003 liability was originally included in EPA's 1989 Guidance,(225) but was omitted from the Model Prospective Purchase Agreement in the 1995 Guidance.(226) This is puzzling considering that one of the goals of the 1995 revision was to "allow the Agency greater flexibility to consider agreements with convents not to sue."(227) One might assume that EPA would expand liability coverage in PPAs after 1995, not decrease it. Despite this change, some EPA regions either continued, or began, to provide RCRA protection to individual purchasers. At least twelve prospective purchasers have received covenants not to sue under RCRA section 7003; most of these were negotiated after the 1995 Guidance.(228)

RCRA liability should be addressed in every PPA. First, RCRA section 7003 is analogous to CERCLA section 106 because it gives EPA the authority to issue administrative orders (or seek judicial orders) to abate imminent and substantial endangerment to health or the environment caused by solid or hazardous waste,(229) regardless of whether there is a violation of RCRA's statutory or regulatory requirements.(230) When a prospective purchaser buys a contaminated site without protection from section 7003, EPA may enjoin the new landowner(231) if a "disposal" of solid or hazardous waste that may present an imminent and substantial endangerment occurs on site.(232) RCRA's extensive definition of "disposed" includes "discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or any constituent thereof may enter the environment."(233) Thus, any movement of contaminated soil or debris during redevelopment that may pose a threat could trigger liability.(234) Furthermore, if contained contamination on the site "leaks" after the property is purchased, RCRA liability becomes an issue.(235) In this circumstance, courts are split on whether a "disposal" requires active human conduct to hold an otherwise innocent owner responsible for the cleanup.(236) It is clear that new owners do not have to engage in a specific act or a series of actions in order to trigger a "disposal" that poses a "threat."(237) The mere existence of contamination may be enough for EPA to issue a RCRA section 7003 order.(238) As with CERCLA, the penalties for noncompliance are steep: if a landowner refuses to comply with an administrative order, section 7003 gives EPA the authority to seek fines up to $5000 per day in district court.(239)

Section 7003 is plainly intended to protect human health in threatening situations; therefore, citizens may oppose EPA shielding prospective purchasers from section 7003 actions. On the other hand, the community where the site is located may favor a RCRA covenant not to sue simply because if RCRA is part of the settlement, section 7003(d) requires EPA to hold a public hearing upon request before the PPA is finalized.(240) Therefore, citizens may have a greater opportunity to participate in the settlement if a RCRA covenant not to sue was included than if the PPA addressed only CERCLA claims.(241)

One possible explanation for EPA's ad hoc approach to RCRA in PPAs is the assumption that RCRA protection is not necessary for those sites that are fully remedied because there is no longer active generation, storage, transportation, or disposal on site. However, as mentioned above, the cleanup process rarely removes all contamination from the soil and water.(242) Furthermore, there is a low threshold to trigger RCRA jurisdiction under section 7003, and the scope of this section is potentially broader than CERCLA.(243) For instance, EPA has the authority to regulate petroleum wastes under RCRA, but not under CERCLA.(244) Therefore, EPA should offer RCRA section 7003 protection for the same reason it offers CERCLA section 106 protection: to give innocent purchasers an incentive to buy brownfields while shielding them from liability.

Susan Bromm, the Deputy Director of EPA's Office of Site Remediation Enforcement, has proposed that EPA issue another PPA Guidance to specifically address sites subject to RCRA corrective action.(245) Existing PPAs are evidence that RCRA protection is easily incorporated into the current PPA framework. An EPA workgroup is presently considering whether covenants not to sue or other mechanisms are appropriate to remove RCRA liability for prospective purchasers.(246)

2. Natural Resource Damages

Natural resource damages are also incorporated into CERCLA's liability scheme.(247) On a few occasions, EPA regions have extended prospective purchasers covenants not to sue for such liability.(248) CERCLA provides that, if a new owner becomes a potentially responsible party, it could be liable for "damages to, injury to, destruction of, or loss of natural resources."(249) Most brownfield sites are in industrial-zoned areas or were once used for a commercial purpose; therefore, what most people consider to be "natural resources" do not usually exist on brownfield properties. However, the term has a far-reaching statutory definition that includes land, fish, wildlife, biota, air, water, groundwater, drinking water, and any other resources managed by or entrusted to the federal, state, or tribal governments.(250) Natural resource damages may be particularly relevant to brownfields containing contaminated wetlands, groundwater, or water bodies.(251)

For example, in the Raymark Industries PPA, both EPA and the United States Department of the Interior (DOI) entered into a covenant not to sue for natural resource damages.(252) The prospective purchaser bought the assets of the City of Hatboro, which included Hatboro's municipal water distribution system.(253) At the time of the acquisition, the facility was used to treat and distribute water. This process resulted in severe groundwater contamination.(254) DOI granted a natural resources damages waiver to the purchaser provided that DOI's right to institute a claim for injury to, destruction of, or loss of natural resource resulting from any hazardous substance not present at the site on the effective date of the agreement, or from exacerbation of the contamination, was preserved.(255) Section 122(j) of CERCLA gives federal trustees, such as DOI, the authority to grant a covenant not to sue if the potentially responsible party agrees to undertake appropriate actions necessary to protect and restore damaged natural resources.(256)

In some PPAs, natural resources are not included in the covenant not to sue because the terms of the agreement provide that the prospective purchaser restore natural resources as part of the consideration.(257) If a covenant not to sue for natural resource damages is included in a PPA in this circumstance, EPA would be in the awkward position of having the authority to direct the prospective purchaser to restore natural resources, but not having the authority to obtain damages if the natural resources were destroyed in the process. A PPA probably provides an adequate remedy for natural resource damages; however, if the prospective purchaser gives an unsatisfactory performance, EPA may have to go to court to enforce the provisions of the agreement.

Natural resource damages should be of concern to all prospective purchasers, simply because of the potential costs involved if a claim should arise.(258) Federal agencies are considered "trustees" of the natural resources, even if the natural resources are located on private property.(259) Only designated trustees, which may :include the federal government, states, or tribes, but which may not include private parties, may bring actions against a PRP.(260) Such a trustee may recover for the restoration, replacement, or acquisition of equivalent natural resources.(261) Furthermore, the total amount retained is not limited by the sums that can be used to restore or replace such resources.(262)

3. The Clean Water Act

Soil contamination on brownfields is rarely stagnant. Even if contamination is contained, the possibility that pollution may migrate onto other properties or into bodies of water remains. Section 311 of the Clean Water Act(263) (CWA) prohibits the discharge of oil or hazardous substances in harmful quantities(264) into the navigable waters of the United States.(265) Much like the liability scheme in CERCLA section 107, CWA section 311 imposes liability on an owner or operator for EPA's cleanup costs and for damages to natural resources.(266) Therefore, a landowner that owns property located on a water body may be subject to a CWA liability, as well as CERCLA and RCRA liability.(267) Thus, in some situations PPAs should include a covenant not to sue under section 311.

EPA did not anticipate providing to prospective purchasers a covenant not to sue for section 311 liability; this is evident by EPA's lack of recognition of potential CWA issues in the 1989 and 1995 Guidances.(268) Accordingly, EPA rarely negotiates PPAs containing section 311 liability protection.(269) EPA might hesitate to release prospective purchasers from liability under environmental statutes that do not directly address hazardous waste sites, such as the Clean Water Act; however, the effects of a release into water, and the hazardous waste liability that follows, is essentially no different than a release onto land. Furthermore, CWA section 311(a)(2) expressly excludes persons legally discharging pursuant to a National Pollution Discharge Elimination System permit from incurring liability under CWA section 311.(270)

Clean Water Act liability was a concern for the prospective purchaser of the Hyden Ranch Property, located adjacent to the upper Arkansas River and downstream from the historic California Gulch mining district in Leadville, Colorado.(271) Mining occurred upstream from the property for approximately 130 years, and during that time, mining wastes were washed downstream and deposited at Hyden Ranch.(272) EPA determined that there were at least twenty thousand cubic yards of tailings along the property and the river, with elevated levels of metals.(273) The prospective purchaser, the City of Aurora, entered into a PPA but was not obligated to conduct any response or restoration actions besides the routine long-term maintenance and monitoring of the repositories of tailings.(274) The city also agreed to give EPA and DOI water rights and access to the property to perform remedial action.(275) In exchange, EPA gave the purchaser a covenant not to sue under section 311(b)(3) of the Clean Water Act.(276) Liability protection from section 311 was essential because discharges of high levels of hazardous substances came directly from the property purchased by the city.

EPA Region V negotiated a PPA providing a CWA section 311 covenant not to sue with a prospective purchaser who was purchasing a former oil refinery site near a water body.(277) Federal and state agencies were still conducting response actions in the area when the PPA was negotiated.(278) Correspondingly, EPA, DOI, the United States Coast Guard, and the Illinois Department of Natural Resources were parties to the agreement.(279) Thus, all relevant agencies afforded the purchaser broad liability protection because of the location of the site and the nature of the release.

However, if a prospective purchaser receives a covenant not to sue pursuant to sections 106 and 107 of CERCLA, EPA is unlikely to take actions under section 311, because it is less comprehensive than CERCLA. Section 311 only regulates materials listed in the definition of hazardous substances under section 311, and this list is only a fraction of the amount of substances covered by CERCLA.(280) In addition, section 311 is narrow in scope; a CWA violation does not occur unless there is a direct "discharge" into navigable waters.(281) Despite its weakness, the bottom line is that CWA section 311 gives EPA the power to issue administrative orders to new landowners--power that a prospective purchaser should be shielded from when the site in question is located near surface water or groundwater.

Another statutory provision that may become a source of liability for a brownfield purchaser, but that is not included in PPAs, is section 504 of the Clean Water Act.(282) This is yet another "imminent and substantial endangerment" provision that gives EPA the authority to act in emergency situations.(283) In the situation where contamination is seeping directly from a brownfield into water and is thereby presenting a threat to the health and welfare of persons, EPA has the right to obtain a court order requiring a landowner to stop the pollution, or EPA may take action "as may be necessary."(284)

Realistically, when EPA is presented with a choice of statutes in a brownfield situation, the agency will probably exercise its imminent hazard authority under RCRA section 7003 or CERCLA section 106 rather than CWA section 504, because Congress designed RCRA and CERCLA to address releases from contaminated sites.(285) Additionally, CWA section 504 is similar to CERCLA, but unlike RCRA, in that citizens are not given the power to enforce section 504's emergency provision.(286) The Second Circuit resolved this issue in United States v. Hooker Chemical & Plastics Corp., holding that citizens cannot bring suit under the Clean Water Act's citizen suit provision to enforce section 504.(287) Nevertheless, the difference between the various emergency provisions is minimal, and EPA should consider offering covenants not to sue for CWA section 504 for the same reasons they are offered under other imminent hazard provisions.

4. EPA's Reservation o fRights

Each PPA includes a disclaimer stating that "[t]he United States reserves and the Agreement is without prejudice to all rights against Settling Respondent with respect to all other matters, including but not limited to" an extensive list of reopeners.(288) From EPA's perspective, the agency takes certain risks when it provides comprehensive liability protection to owners of contaminated property(289); therefore, reopeners are absolutely necessary to safeguard against future harm caused by releases of existing contamination remaining on site. EPA reserves power to bring a claim at any time against any prospective purchaser who violates the terms of the agreement.(290) Reopeners are essentially the same in each PPA, mirroring the Model Prospective Purchase Agreement in the 1995 Guidance,(291) and they usually address the future land use on the property. For instance, EPA reserves the right to bring a claim if there is 1) exacerbation of the existing contamination,(292) 2) any release or threatened release at the site not within the definition of "existing contamination" or that occurs after the effective date of the agreement,(293) and 3) destruction of natural resources.(294) Reopeners that are typical of EPA settlements--such as liability resulting from releases, to the extent that the prospective purchaser caused or contributed to the contamination,(295) and criminal liability(296)--are also included.(297) On occasion, EPA regions create an additional deterrence to future violations by including a "stipulated penalties" provision in the PPA, wherein a purchaser can be held liable for thousands of dollars of penalties per day per violation of the terms of the PPA.(298)

Critics of EPA's PPA program have claimed that the reopeners recommended in the 1989 Guidance and 1995 Guidance are too broad to make PPAs effective and that EPA "could threaten the very brownfields policy it seeks to advance."(299) However, in EPA's ten-year history of negotiating PPAs it has never "reopened" a PPA.

The "existing contamination" reopener is a potential source of liability for certain innocent purchasers in the event that the government brings a claim against a purchaser based on an allegation of new contamination.(300) After a PPA goes into effect, the new owner has the burden of proof to demonstrate that the government's claim is actually based on "existing contamination"--any pollution that predates the PPA.(301) This burden may be difficult to meet for a purchaser who is operating a site in the same manner as the past owner.(302) For instance, Benson Eye Care signed a PPA with the purpose of continuing the present operations of the facility--an eyecare center--on the contaminated site.(303) If EPA ever brought a claim for new contamination, Benson Eye Care would be in the difficult position of having to prove that its operation of the eyecare facility, using the same chemicals and the same processes, did not cause new contamination. Federal and state agencies typically would not be able to distinguish chemicals of the two companies in a release. Thus the burden is on the prospective purchaser to prove that the contamination was caused by the previous owner.(304) Prospective purchasers who intend to use property in a similar way, using the same industrial processes as past owners, should take into account the extent of contamination contained on the property they are seeking to buy.

EPA has not and probably will not "reopen" a PPA except under extreme circumstances.(305) First, PPAs take time and money to negotiate.(306) In a situation where EPA has a problem with a prospective purchaser, the agency would probably try to enforce the provisions of the PPA through other devices, rather than bring a claim against it under the reopener provisions. Second, EPA usually retains some type of control over the site even after the PPA is executed.(307) EPA frequently has irrevocable access to the property,(308) and EPA or the state receives regular monitoring reports.(309) Therefore, EPA is more likely to give the prospective purchaser an informal warning about site conditions before issuing an administrative order or seeking a judicial order. Lastly, EPA does not want to be a victim of political backlash.(310) Given the tone of the current Congress, federal and local politicians would not look favorably on EPA for taking enforcement actions against a purchaser who gave EPA substantial consideration in exchange for liability protection. Therefore, a prospective purchaser should perhaps be more concerned about exposure to third parties than about exposure to the government.

C. Exposure to Third Parties

1. Contribution Protection

The most attractive aspect of PPAs to prospective purchasers is contribution protection.(311) As discussed above, a prospective purchaser may become a potentially responsible party under CERCLA's liability scheme the moment the purchaser becomes an owner.(312) Section 113 of CERCLA provides PRPs with a cause of action for contribution against any person who is liable or potentially liable.(313) When a prospective purchaser buys a site where EPA has previously issued administrative orders or obtained judicial orders to PRPs to clean up a release, those PRPs have an economic incentive to bring contribution claims against the prospective purchaser to recover costs.(314) Fortunately for innocent parties, CERCLA section 113's liability scheme is unlike that in section 107 of the statute; liability is not necessarily joint and several under section 113. A court may allocate response costs among the parties using such "equitable factors" as it determines appropriate.(315) An adverse PRP must prove in court that it paid more than its fair share of the cleanup and that the prospective purchaser being sued has not.(316) This would be difficult for a PRP to prove, because the 1995 Guidance recommends that EPA regions not enter into PPAs with prospective purchasers that caused or contributed to the release or threat of release of hazardous substances at the site.(317) On the other hand, because courts are given unbridled discretion to allocate response costs, prospective purchasers should seek contribution protection.

Section 113 provides EPA the authority to give protection to parties that settle with the federal government.(318) In PPAs, EPA gives contribution protection to matters addressed in the settlement and "all response actions taken or to be taken and response costs incurred or to be incurred by the United States or any other person for the Site with respect to the Existing Contamination."(319) This stipulation encourages prospective purchasers to invest in sites where EPA is still negotiating with, or taking enforcement actions against, other potentially responsible parties. Furthermore, contribution protection enhances the appeal of redeveloping brownfields with enormous liability, such as Superfund sites.

Legislative history indicates that when section 113 of CERCLA was enacted Congress never conceived that it would be used to protect prospective purchasers from liability. Yet EPA has legitimately determined that section 113 does in fact give the agency the authority to provide contribution protection to prospective purchasers. First, a literal reading of section 113 gives EPA this authority: "A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement."(320) A prospective purchaser is a person who has "resolved its liability" with EPA, and prospective purchaser agreements undoubtedly fall under the category of "administrative or judicially approved settlements." Second, Congress intended to give EPA broad authority to enter into settlements. The legislative history of the 1986 amendments illustrates that Congress resolved that EPA should have discretion to settle with private parties whenever possible when the agreement is in the public interest.(321)

Unfortunately, a section 113 agreement may not protect a prospective purchaser from all third-party liability. CERCLA provides private parties with two alternative avenues to recoup cleanup costs--a contribution action under section 113 or a cost recovery action under section 107.(322) Section 107(a) allows "any other person" to bring an action for "necessary costs of response incurred" by a release against a potentially liable party.(323) Under a literal reading of the statute, a prospective purchaser who obtains section 113 contribution protection from EPA in a PPA may still be subject to a PRP claim for costs incurred before the purchaser even became interested in the site. However, based on the structure and legislative history of CERCLA and SARA, the majority of courts interpret section 107 to mean that only innocent parties may recover costs in a cost-recovery action.(324) Thus, PRPs are generally limited to a claim for contribution under section 113(g)(3).(325) In addition, an "innocent" third party is unlikely to bring a cost-recovery claim on the same site where a PPA was negotiated because the 1995 Guidance suggests that EPA will not consider negotiating a PPA unless the agency has previously taken action on site.(326) Therefore, contribution protection from section 113 claims in a PPA is sufficient to protect a prospective purchaser from private party claims in most jurisdictions.

2. RCRA Section 7002

Lastly, prospective purchasers may also be vulnerable to citizen suits by PRPs or community members living near the site. The counterpart citizen suit to RCRA section 7003 is section 7002, which allows private parties to bring suit against a person who has "contributed or who is contributing" to a disposal that may present an imminent and substantial endangerment to health or the environment.(327) Because legal requirements to bring an action under section 7002 are the same as under section 7003, citizens have enforcement authority that parallels EPA's authority in emergency situations. This provides citizens with much broader power than that provided under CERCLA section 310. Unlike CERCLA, RCRA does not give EPA the statutory authority to provide contribution protection for this provision.(328)

Yet 7002 bars citizens from bringing a citizen suit on sites where the federal or state has commenced an "action in a court."(329) Therefore, a prospective purchaser may avoid exposure to section 7002 liability if a PPA is negotiated for a site where EPA or a state agency was previously, or is currently, taking enforcement actions against PRPs in connection to that site. However, the PPA itself is probably not a sufficient "government action" to bar a citizen suit.(330) Therefore, it is in the best interests of the prospective purchaser, and also community members, to proactively guard against citizen suits by providing adequate public participation from the outset.(331)

D. Exposure to States

Individual states play several different roles in the cleanup of brownfields. First, the state may be a "settling party" in a PPA by negotiating and signing on to the terms of the agreement.(332) Second, if the state chooses not to be a party to a federal PPA, the state may issue a comfort or promise letter to the prospective purchaser, recognizing that the federal government has released the purchaser from liability. Lastly, the state may choose to stay out of the PPA process completely. Furthermore, most states have their own voluntary cleanup programs (VCPs), which may include state-run prospective purchaser agreement programs.(333)

CERCLA does not preempt states from imposing additional liability with respect to hazardous substances at the site,(334) unless EPA has entered into a consent decree.(335) Most states have enacted Statutes similar to CERCLA, and even if a purchaser is shielded from federal claims, state agencies may have enforcement authority to issue an order demanding that the prospective purchaser clean up the site.(336) State programs usually have a state list of contaminated sites, similar to the NPL, but state hazardous waste laws vary widely as to what degree of contamination triggers a listing.(337) The standard of liability also differs from state to state: some states have a more lenient standard of liability than CERCLA,(338) others mirror CERCLA,(339) and some states lack an independent program that imposes liability,(340) although they have voluntary cleanup programs.(341) Furthermore, states may sue a PRP under federal law, namely CERCLA(342) and RCRA.(343) Regardless of the type of state law, prospective purchasers should seek protection from both federal and state hazardous waste liability.

A prospective purchaser is protected from state law and federal law if the state is a party to the settlement.(344) Thus, a purchaser who is considering entering into a PPA with EPA should attempt to bring the state agency to the negotiating table from the outset. In the 1995 Guidance, EPA envisioned that most PPAs would be negotiated with the both the federal and the state government.(345) Despite EPA's intention, states are rarely involved in federal PPAs.(346) The federal government takes the lead on our nation's most contaminated sites listed in the NPL,(347) and states, generally regulate all of the hazardous waste sites within its boundaries where EPA did not, or anticipates that it will not, take action.(348) State agencies may not be willing to lose their enforcement authority on EPA-lead sites; therefore states avoid becoming involved with EPA agreements. The opposite is also true--EPA is usually not willing to sign off on state prospective purchaser agreements when EPA is not the lead agency.(349)

In the alternative, states sometimes issue "promise letters" in conjunction with federal EPA prospective purchaser agreements, even though they are not parties to the settlement, promising not to take action against the prospective purchaser.(350) This usually occurs in EPA regions where EPA has a good working relationship with the state agency, or when both the state and federal agencies have worked on the site at some point.(351) However, the "promise letters" usually do not have the force of law and do not shield the purchaser from state liability.

Several states also have state prospective purchaser agreement programs for state-lead sites,(352) and some states statutorily exempt prospective purchasers from state liability.(353) State prospective purchaser agreements vary from the federal program depending on the state. Oregon's prospective purchaser agreement program, for example, is similar to the federal PPA program in that it requires the prospective purchaser to provide a "public benefit" in exchange for a covenant not to sue.(354) However, Oregon only protects purchasers from state enforcement of the state cleanup law; it does not afford purchasers contribution protection or other types of protection previously discussed.(355) A few states do provide contribution protection to purchasers, and Pennsylvania extends protection against citizen suits to purchasers.(356) A number of states offer "no further action" or "no further remediation" letters to prospective purchasers.(357) Unfortunately, these types of letters usually do not have the force of law and do not shield owners from state liability.(358) Despite states' tendency not to sign on to federal PPAs, a PPA is most effective if it is negotiated with, and signed by, both EPA and the relevant state agency.

V. CONCLUSION

An expanding corporation seeks an affordable industrial site, preferably centrally located in an urban area. The local community where the contaminated site is located wants the site to be cleaned up to levels that protect human health and to be redeveloped or restored. EPA's prospective purchase agreement policy is a common-sense approach to bringing these two interests together. The PPA program also gives local governments and nonprofit organizations the opportunity to take the brownfield problems into their own hands, giving local decision makers an opportunity to transform brownfields into services that communities need. As Vice President Al Gore stated, "the Clinton Administration recognizes that the federal government alone cannot solve the problems of distressed communities. But we also recognize that the government can be a catalyst in empowering communities with the tools to solve their own problems and in encouraging the private sector to join in those efforts."(359) Examples of existing PPAs demonstrate that the possibilities for the types of benefits that both EPA and prospective purchasers can provide to communities are endless.

Although the 1995 Guidance does not have the force of law, final prospective purchase agreements do. If certain safeguards are included, prospective purchaser agreements are a cost-saving and efficient approach to redeveloping and restoring brownfields. Congress has provided EPA with the devices to grant extensive liability protection to prospective purchasers. Prospective purchase agreements have enormous potential, and EPA should continue to employ them in every way possible.

MARGI LIFSEY (*)

(*) Articles Editor, Environmental Law, 1999-2000; J.D. and Certificate in Environmental Law and Natural Resources expected May 2000, Northwestern School of Law of Lewis and Clark College; B.S., Michigan State University. The author would like to thank Professor Craig N. Johnston for his assistance and "What does the statute say?" remarks. The author would also like to thank Kirk Burkholder for his comments, and Mike Connolly, Orlando Medina, Nathan Baker, and Holly Pettit for their editing.

(1)Deana Csomo McCool, Mishawaka Tackles Uniroyal Site's Contamination, S. BEND TRIB., Aug. 22, 1998, at Al, available in 1998 WL 17157444 (quoting Ken Theisen, EPA Region V).

(2) Uniroyal Plastics/City of Mishawaka Prospective Purchaser Agreement (PPA), Region V, at 2 (1998). For historical background, see Dorothy Wayne, Time for Uniroyal to Pay What Is Due, Michiana Point of View, S. BEND TRIB., July 22, 1998, at A9, available in 1998 WL 13708178.

(3) Uniroyal Plastics/City of Mishawaka PPA, at 7; see also Deanna Csomo McCool, Uniroyal Asbestos Survey at Hand, S. BEND TRIB., June 20, 1998, at A4, available in 1998 WL 12750158 ("[The] 1.7 million-square-foot dinosaur looms over the heart of downtown, an obstacle to the city's plans for other developments along the St. Joseph River.").

(4) McCool, supra note 1, at A1.

(5) Uniroyal Plastics/City of Mishawaka PPA, at 7-8.

(6) The site remained vacant and unused after Uniroyal ceased industrial operations. Id. at 7.

(7) Deanna Csomo McCool, Cleanup of Uniroyal Raceway Nearly Completed, S. BEND TRIB., Aug. 29, 1998, at Al, available in 1998 WL 17157962.

(8) Id.

(9) Approximately 70 to 100 buildings on the site were tainted by asbestos. Darren Waggoner, Mishawaka Seeks Stay on Decay, Uniroyal Project Offers Way to Fight Urban Blight, S. BEND TRIB., Apr. 8, 1998, at A1, available in 1998 WL 17159166.

(10) One analyst described this type of stigma as "the result of an undesirable event that disrupts the balance of an environmental system. This disruption may cause blame to be associated with it. When environmental features are viewed as repellent, upsetting, or disruptive, they are stigmatized as undesirable." Bill Mundy, Valuing Brownfields, in BROWNFIELDS: COMPREHENSIVE GUIDE TO REDEVELOPING CONTAMINATED PROPERTY 76, 80 (Todd S. Davis & Kevin D. Margolis eds., 1997).

(11) McCool, supra note 1, at A1.

(12) At the time the PPA was executed, Uniroyal Plastics Co. held the title to the property, but the assets of the company were being liquidated by the court-appointed trustee pending a bankruptcy proceeding. Uniroyal Plastics/City of Mishawaka PPA, Region V, at 7, 10 (1998). The trustee contended that she had spent all available funds on the cleanup of the site, and therefore she asked the court's approval to sell the property to the city. Id. at 8. The city entered into a lease agreement for the Uniroyal property on April 1, 1998--before the PPA went into effect--to avoid the abandonment of the property. However, the city pledged to EPA that its activities on the site were limited during that three month period and that the lease merely provided security for the site. Id. at 10-11.

(13) McCool, supra note 7, at A1. About 3750 tons of sludge, 14,600 pounds of PCB debris, and 31,255 pounds of PCB liquids were removed. Also, 208 tons of scrap metal and 19 tons of nonhazardous debris were removed. Id. However, asbestos-filled buildings remain standing and need to be cleaned or demolished.

(14) Due to the strict and joint liability associated with state and federal hazardous waste cleanup laws, liability associated with the site would have been prohibitive. For a discussion ofstrict and joint liability, see infra Part II.A.

(15) McCool, supra note 7, at A1; see also McCool, supra note 1, at A1.

(16) The city leased the property for $100 per year with an option to purchase. Waggoner, supra note 9, at A1. Before the PPA was finalized, the city received two grants totaling $49,333 from EPA's Brownfield Site Assessment Program to help pay for the asbestos survey and removal. McCool, supra note 3, at A4.

(17) Uniroyal Plastics/City of Mishawaka PPA, at 10.

(18) Waggoner, supra note 9, at A1.

(19) McCool, supra note 7, at A1.

(20) EPA defines "brownfields" as properties that contain abandoned, idled, or under-used industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination. U.S. ENVTL. PROTECTION AGENCY, BROWNFIELDS INFORMATION MANUAL app., at B-3 (1997). Brownfield sites can be divided into the following four categories: 1) sites that need remediation but remain economically viable, 2) sites that have development potential if provided financial assistance, 3) sites that have a limited market potential even after redemption, and 4) currently operating sites that are in danger of becoming brownfields because of historical contamination. See Todd S. Davis & Kevin D. Margolis, Defining the Brownfields Problem, in BROWNFIELDS: A COMPREHENSIVE GUIDE TO REDEVELOPING CONTAMINATED PROPERTY, supra note 10, at 3, 5.

(21) Greenfields are "suburban or exurban sites that have not previously been the site of industrial or commercial use." MICHAEL GERRARD, 1 BROWNFIELDS LAW AND PRACTICE: THE CLEANUP AND REDEVELOPMENT OF CONTAMINATED LAND [sections] 1.02[3], at 1-5 (1998).

(22) Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) imposes liability on present owners and operators, owners or operators at the time hazardous waste is disposed, generators, and transporters who aid in the selection of the site. 42 U.S.C. [sections] 9607(a) (1994). Persons or entities who fit into one of these categories are collectively referred to as "potentially responsible parties" (PRPs). 40 C.F.R. [sections] 310.3(k) (1999).

(23) Lender liability usually arises when financial institutions try to protect their security interest by either 1) participating in the management of a facility, thereby becoming an "operator" or 2) holding title to contaminated property to secure its interest, thereby becoming an "owner." See 42 U.S.C. [sections] 9607(a) (1994). In 1996 Congress provided extensive protection from liability for lenders in the 1996 Asset Conservation, Lender Liability Deposit Insurance Protection Act as part of the 1996 Omnibus Appropriations. Pub. L. No. 104-208, [subsections] 2501-2503 110 Stat. 3009 (codified at 42 U.S.C. [subsections] 9601(20)(E)-(G), 9007(n), 6691(h) (Supp. III 1997)).

(24) 42 U.S.C. [subsections] 9601-9675 (1994 & Supp. III 1997).

(25) Throughout the text of CERCLA, Congress directs EPA to take actions against threats to "public health or welfare" or "the environment." See, e.g., id. [sections] 9604(a)(1) (1994) ("The President is authorized to ... take any ... response measure consistent with the national contingency plan which the President deems necessary to protect the public health or welfare or the environment."); id. [sections] 9606(a) ("[W]hen the President determines that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release, he may require the Attorney General of the United States to secure such relief as may be necessary.... "); id. [sections] 9621(b)(1) ("The President shall select a remedial action that is protective of human health and the environment.... ").

(26) Anne Slaughter Andrew, Brownfield Redevelopment: A State-Led Reform of Superfund Liability, 10 NAT. RESOURCES & ENV'T 27, 27 (1996). The United States General Accounting Office (GAO) has made a conservative estimate for cleanup of brownfields nationwide at $650 Billion. Id; see also U.S. GEN. ACCOUNTING OFFICE, COMMUNITY DEVELOPMENT: REUSE OF URBAN INDUSTRIAL SITES, GAO/RCED-95-172, at 3 (1995).

(27) The brownfields phenomenon adversely affects the economic and social structure in every city in America:

As President of The U.S. Conference of Mayors, I have made the redevelopment of brownfields our top national priority this year. The reasons are simple: brownfields are abandoned or underutilized properties that have become virtual "dead zones" due to the fear of real or perceived environmental contamination. Many brownfields sites were once prosperous industrial and commercial businesses, which are now closed. To locally elected officials, these sites represent missed opportunities to attract new businesses and create additional jobs.

Letter from Paul Helmke, USCM President, in UNITED STATES CONFERENCE OF MAYORS, RECYCLING AMERICA'S LAND: A NATIONAL REPORT ON BROWNFIELDS REDEVELOPMENT (1998).

(28) EPA Guidance on Landowner Liability under Section 107(a)(1) of CERCLA, De Minimis Settlements Under Section 122(g)(1)(B) of CERCLA, and Settlements with Prospective Purchasers of Contaminated Property, 54 Fed. Reg. 34,235 (Aug. 18, 1989) [hereinafter 1989 Guidance].

(29) EPA Guidance on Settlements with Prospective Purchasers of Contaminated Property, 60 Fed. Reg. 34,792 (July 3, 1995) [hereinafter 1995 Guidance].

(30) PPAs not only give prospective purchasers the opportunity to buy the land: owners and operators also may lease the land from the purchaser without incurring liability. For example, EPA Region II provided protection to a prospective lessee of a site in New York. The Rosen Superfund PPA was negotiated with both the prospective purchaser and the prospective lessee, wherein the lessee agreed to install a cap, provide security, and perform other operational and management measures in exchange for contribution protection. Rosen/New York, Susquehanna & Western Railway Corporation & Industrial Development Agency PPA, Region II (1998).

(31) EPA has referred almost 100 PPAs to the Justice Department and almost 90 of those are final EPA Has Completed Majority of Reforms, Settled with 18,000 Small Parties to Date, [29 Current Developments] Env't Rep. (BNA) 1585, 1585 (Dec. 11, 1998). Susan Bromm, Deputy Director of the EPA Office of Site Redemption, reported that preliminary data from an EPA survey of the effectiveness of PPAs show that more than 1500 acres have been purchased under the agreements. State Success with Cleanups Can Be Credited to CERCLA, Official Says, [29 Current Developments] Env't Rep. (BNA) 1638, 1638 (Dec. 18, 1998).

(32) Of the 65 PPAs the author reviewed, 40 were signed in 1997 and 1998. EPA has reported that in 10 years the agency has signed 85 PPAs, and of those, 65 were signed after 1995. Amy Porter, Administration Wants Buyer Liability Relief, Opposes Federal Exemption at State Sites, [29 Current Developments] Env't Rep. (BNA) 2411, 2412 (Apr. 9, 1999).

(33) Dianne K. Dailey & Linda M. Bolduan, Hot Real Estate for the Nineties: Brownfields, CORP. LEGAL TIMES, Nov. 1997, at 56. This magazine for corporate lawyers states that "[u]ntil recently, a prime commercial building site was undeveloped land beyond the urban core. Today, developers may find central city locations more attractive. The reason for this dramatic turnaround is the potential for redevelopment of `brownfields'...." Id.

(34) CERCLA holds liable "the owner and operator of a vessel or facility." 42 U.S.C. [sections] 9607(a)(1) (1994). The term release means "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment." Id. [sections] 9601(22). "Hazardous substance" includes any substance or toxic pollutant regulated under the Federal Water Pollution Control Act (Clean Water Act), 33 U.S.C. [subsections] 1251-1387 (1994 & Supp. III 1997); the Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. 88 6901-6992k (1994 & Supp. Ill 1997) (amending Solid Waste Disposal Act, Pub. L. No. 89-272, 79 Stat. 992); the Clean Air Act, 42 U.S.C. [subsections] 9601-9675 (1994 & Supp. III 1997); section 7 of the Toxic Substances Control Act, 15 U.S.C. [sections] 2606 (1994); and substances that EPA designates as a hazardous substance for the purposes of CERCLA 42 U.S.C. [sections] 9601(14) (1994).

(35) Although the imposition of joint and several liability may result in negative impacts on redevelopment, it also has its benefits (mainly deterrence and accountability). CERCLA does not expressly set out a joint and several liability scheme but refers to section 311 of the Clean Water Act, 33 U.S.C. [sections] 1321 (1994) (creating liability for discharge of oil or hazardous substance into navigable waters). See 42 U.S.C. [sections] 9601(32) (1994). Congress quickly drafted and passed CERCLA, leaving some issues unresolved. New York v. Shore Realty Grp. (Shore Realty), 759 F.2d 1032, 1039 (2d Cir. 1985). Both House and Senate versions of CERCLA contained language imposing strict, joint, and several liability, but "[a]s part of the compromise, [Congress] removed this language, inserted the reference to liability under the Clean Water Act and indicated that the joint and several liability question should be addressed by the courts and interpreted in light of the common law." Id. at 1042 n. 13; see 126 CONG. REC. 30,932 (Nov. 24, 1980), reprinted in 1 LEGISLATIVE HISTORY OF THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,COMPENSATION, AND LIABILITY ACT OF 1980, at 685 (1983). Based on legislative history and common law principles, an Ohio district court provided an early interpretation of CERCLA as imposing strict, joint, and several liability. United States v. Chem-Dyne Corp., 572 F. Supp. 802, 811 (S.D. Ohio 1983). The majority of commas have followed the Chem-Dyne approach. Suzanne S. Dickey, U.S. EPA v. Sequa Corp. (In Re Bell Petroleum Services, Inc.): The Fifth Circuit Limits the Imposition of Joint and Several Liability on CERCLA Defendants, 68 TUL. L. REV. 1663, 1666 (1994).

(36) 42 U.S.C. [sections] 9607(a)(4)(A) (1994).

(37) Id. [sections] 9607(a)(4)(B). Private parties who incur response costs must prove that their actions were consistent with the National Contingency Plan (NCP). The NCP is EPA's guide to removal and remedial actions. See National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. [sections] 300 (1999).

(38) In addition, if a buyer purchases land pursuant to a purchaser agreement with an "assumption of liabilities clause," the buyer may be liable for the entire amount of the seller's CERCLA liability, regardless of CERCLA's joint and several liability scheme. See, e.g., White Consol. Indus. v. Westinghouse Elec. Corp., 179 F.3d 403, 412 (6th Cir. 1999) (upholding assumption of liabilities clause despite vendor's failure to disclose past contamination).

(39) There are between 150,000 and 500,000 brownfields in the United States. Andrew, supra note 26, at 27. The estimated cost of cleanup is $650 billion. U.S. GEN. ACCOUNTING OFFICE, supra note 26, at 3. This makes the average cleanup cost per brownfield between $1.3 million and $4.3 million.

(40) Section 107(b)(3) of CERCLA provides three defenses. There is no liability for a release or threat of release of a hazardous substance that was caused by "an act of God; an act of war, [or] an act or omission of a third party other than ... one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant." 42 U.S.C. [sections] 9607(b) (1994). The first two categories are rarely litigated, and the third party defense has been construed narrowly by courts. See Shore Realty, 759 F.2d at 1042; United States v. Stringfellow, 661 F. Supp. 1053, 1061 (C.D. Cal. 1987); United States v. Maryland Bank & Trust Co., 632 F. Supp. 573, 581-82 (D. Md. 1986). The third-party defense only applies if the owner can establish by a preponderance, of the evidence that he exercised due care and took precaution against foreseeable acts or omissions of a third party. 42 U.S.C. [sections] 9607(b)(3) (1994).

(41) "Contractual relationship" includes, but is not limited to, "land contracts, deeds or other instruments transferring title or possession." 42 U.S.C. [sections] 9601(35)(A) (1994).

(42) See United States v. Hooker Chem. & Plastics Corp., 680 F. Supp. 546, 558 (W.D.N.Y. 1988) (holding that the defendants' contractual relationship with the present landowner precluded the defendants from raising the third party defense).

(43) The innocent purchaser defense was a part of the Superfund Amendments and Reauthorization Act of 1986 (SARA), Pub. L. No. 99-499, 100 Stat. 1613, and is actually a subset of the section 107(b)(3) defense. The innocent purchaser's due diligence negates the "contractual relationship" between it and the past owner. 42 U.S.C. [sections] 9601(35)(A) (1994). An innocent purchaser must establish that it used due diligence before the property was bought and due care after the hazardous waste was detected. Id. [subsections] 9601(35)(B), 9607(b)(3). The defense is intended to be used narrowly for those owners who discover contamination on their land after the property transaction. See 131 CONG. REC. H1159 (Dec. 5, 1985). 44 42 U.S.C. 9601(35)(B) (1994).

(45) See United States v. A & N Cleaners & Launderers, Inc., 788 F. Supp. 1317, 1328-29 (S.D.N.Y. 1992).

(46) To determine if there is contamination on site, a purchaser should conduct an initial environmental assessment. This is time consuming and costly. The initial audit process is known as a Phase I assessment and may cost between $1000 and $5000. U.S. OFFICE or TECH. ASSESSMENT, STATE OF THE STATES ON BROWNFIELDS: PROGRAMS FOR CLEANUP AND REUSE OF CONTAMINATED) SITES 2 (1995). If contamination is discovered, a Phase II assessment, which ranges from $50,000 to $70,000, may be needed to determine the extent of the contamination. Id. at 18. Furthermore, one court recently held on a summary judgment motion that a "potential purchaser" may be liable under CERCLA when the purchaser's environmental consultant installed monitoring wells during a site assessment that may have disturbed the contamination, based on the theory that installing monitoring wells is inherently dangerous and within the scope of the consultant's work. K.C. 1986 Ltd. Partnership v. Reade Mfg., 33 F. Supp. 2d 820, 832-34 (W.D. Mo. 1998).

(47) 1989 Guidance, supra note 28, at 34,241 ("Because of the clear liability which attaches to landowners who acquire property with knowledge of contamination, the Agency has received numerous requests for covenants not to sue from prospective purchasers of contaminated property."); see also 1995 Guidance, supra note 29, at 34,793.

(48) 1989 Guidance, supra note 28, at 34,235.

(49) Id.

(50) See 1995 Guidance, supra note 29, at 34,793.

(51) GERRARD, supra note 21, [sections] 13.01[3], at 13-5; see also 1989 Guidance, supra note 28, at 34,241 (stating that the agency may be able to recoup its response costs through the PPA program). Other examples of provisions that narrowed the circumstances under which EPA could enter into an agreement included the following: 1) EPA would not agree to a PPA on sites where federal Superfund money was not spent, 2) the purchaser was required to give a direct monetary benefit that went toward the cleanup or a commitment to cleanup the site, and 3) EPA would not become involved unless the agency planned to take enforcement action at the property. Id. at 34,241-42.

(52) 1989 Guidance, supra note 28, at 34,241-42. First, the on-site activities of the purchaser may interfere with the remedy selected by EPA where a remedial investigation/feasibility study (RI/FS) has yet to be conducted. Second, EPA may have difficulty in determining if the benefit could otherwise be obtained if the purchaser's interest precedes the identification of PRPs. Third, "[d]evelopment and commercial use of such sites may pose a danger" to the purchaser and persons on the site. Id.

(53) Id. at 34,241.

(54) Howard M. Shanker & Laurent R. Hourcle, Prospective Purchaser Agreements, [25 News & Analysis] Envtl. L. Rep. (Envtl. L. Inst.) 10,035, 10,036 nn. 9-10 (Jan. 1995).

(55) Andrea Lee Rimer, Environmental Liability and the Brownfield Phenomenon: An Analysis of Federal Options for Redevelopment, 10 TUL. ENVTL. L.J. 63, 75-76 (1996) (arguing that EPA only considers entering into PPAs in a limited number of circumstances and that EPA should liberalize its use of PPAs).

(56) In 1993 the Clinton Administration created the National Advisory Committee on Environmental Policy and Technology, and in 1995 the Administration proposed legislation that incorporated many of these recommendations. S. 1834, 104th Cong. (1995); see also MINORITY VIEWS OF SENATORS BAUCUS AND LAUTENBERG, THE SUPERFUND CLEANUP ACCELERATION ACT OF 1998, S. REP. No. 105-192, at 2 (1998). For more discussion of Superfund Reauthorization, see Superfund Legislative Goals on "Brownfields" Outlined by EPA Officials at Coherence, [26 Current Developments] Env't Rep. (BNA) 1096 (Oct. 20, 1995).

(57) Rep. Richard Gephardt (D-Mo.) proposed legislation that would have protected prospective purchasers who act in good faith and carefully investigated the site. 141 CONG. REC. E1622 (Aug. 3, 1995). Sen. Robert Smith (R-N.H.) also introduced a "good faith" prospective purchaser bill in the Senate. 141 CONG. REC. S14,716 (Sept. 29, 1995).

(58) Rep. Robert Borski (D-Pa.) introduced a bill that would have wholly exempted prospective purchasers who have no connection to the waste disposal. 141 CONG. REC. E1623 (Aug. 3, 1995). Rep. Borski also suggested setting aside Superfund monies for development because CERCLA has become such "an obstacle to redevelopment." Id. Rep. Sherrod Brown (D-Ohio) proposed similar legislation. 141 CON. REC. E1625 (Aug. 3, 1995).

(59) S. 1834, 140 CONG. REC. S1058, S1072-73. A "bona fide purchaser" was defined by the proposal as "a person who acquires ownership of a facility after enactment of [the] provision" and who can establish that 1) all active disposal of substances occurred before acquisition, 2) it conducted an audit of the facility, 3) it provided all required notices about discovery or release at the facility, 4) it exercised due care; 5) it cooperated with those responsible for the response actions at the facility, and 6) it is not affiliated with any other liable person. For more discussion, see Shanker & Hourcle, supra note 54, at 10,039.

(60) The 104th Congress failed to reauthorize the Clean Water Act, the Endangered Species Act of 1973, 16 U.S.C. [subsections] 1531-1544 (1994), the Resource and Conservation and Recovery Act, and Superfund. See generally James E. Satterfield, A Funny Thing Happened on the Way to the Revolution: The Environmental Record of the 104th Congress, [27 News & Analysis] Envtl. L. Rep. (Envtl. L. Inst.) 10,019 (Jan. 1997) (discussing budget debate between President Clinton and the newly elected Republican Congress over environmental legislation). The 105th Congress made a repeat performance. See Micheal J. O'Grady, Going Nowhere Fast: The Environmental Record of the 105th Congress, [29 News & Analysis] Envtl. L. Rep. (Envtl. L. Inst.) 10,085 (Feb. 9, 1999). Unfortunately, "hopes for environmental reforms in the 106th Congress are fading." Recent Developments, [29 Current Developments] Env't Rep. (BNA) 10,158, 10,158 (Mar. 1999). The Clinton Administration might be reluctant to aid legislative success in the 106th Congress for fear of Republican gains in the next elections. The narrow margin in the House of Representatives between the Republican majority and Democratic minority may lead to deadlock. Id. "As a result, almost total consensus will be necessary for the movement of any legislation.... [T]he proposed comprehensive and potentially controversial reforms of FWPCA, CERCLA, the ESA, electric utility deregulation, and RCRA are likely to fail." Id.

(61) Although Congress did not pass a Superfund Reauthorization bill with respect to PPAs, it did pass legislation in 1996 to provide liability protection for banks in the Asset Conservation, Lender Liability Deposit Insurance Protection Act of 1996 as part of the 1996 Omnibus Appropriations. Pub. L. No. 104-208, [subsections] 2501-2503, 110 Stat. 3009 (codified at 42 U.S.C. [subsections] 9601(20)(E)-(G), 9607(n), 6991(h) (Supp. III 1997)). The Act amended the lender and fiduciary liability provisions in CERCLA and the secured creditor exemptions in RCRA.

(62) See U.S. GEN. ACCOUNTING OFFICE, HAZARDOUS WASTE SITES: STATE CLEANUP PRACTICES, GAO/RCED-99-39 (1998).

(63) Sen. John Chafee (R-R.I.) on the Senate Committee on Environment and Public Works, proposed a Superfund reauthorization bill in 1998 that contained a "Prospective Purchasers and Windfall Liens" provision. S.8, 105th Cong. (1998). The bill would entirely exempt any "bona fide prospective purchaser" from Superfund liability if the purchaser exercises "appropriate inquiry" and "appropriate care." SENATE COMM. ON ENVTL. AND PUBLIC WORKS, THE SUPERFUND CLEANUP ACCELERATION ACT OF 1998, S. REP. NO. 105-192, at 23 (1998). The Senate report was somewhat critical of EPA's current approach: "EPA has attempted to address this problem on a case-by-case basis with so-called prospective purchase agreements. The process of negotiating these agreements, however, is cumbersome and resource-intensive.' Id. Although Sen. Max Baucus (D-Mont.) and Sen. Frank Lautenberg (D-N.J.) contested many of the provisions in S.8, their substitute bill also contained a provision to wholly exempt prospective purchasers. MINORITY VIEWS OF SENATORS BAUCUS AND LAUTENBERG, supra note 56, at 2. Several other bills were proposed in the Senate and House to provide liability relief to innocent and prospective purchasers. See, e.g., Brownfields and Environmental Cleanup Act of 1997, S. 18, 105th Cong., 143 CONG. REC. S234-01 (Jan. 21, 1997) (introduced by Sen. Lautenberg); Land Recycling Act of 1997, H.R. 873, 143 CONG. REC. E349-02 (Feb. 27, 1997) (introduced by Rep. James Greenwood (R-Penn.)); Community Revitalization and Brownfield Cleanup Act of 1997, H.R. 1120, 105th Cong., 143 CONG. REC. H1185-03 (Mar. 19, 1997) (introduced by Rep. John Dingell (D-Mich.)); Brownfields and Environmental Cleanup Act of 1997, H.R. 1395, 105th Cong., 143 CONG. REC. H1703-03 (Apr. 17, 1997) (introduced by Rep. Steve Rothman (D-N.J.)); Brownfields Reclamation Act of 1997, H.R. 3020, 105th Cong., 143 CONG. REC. H10481-03 (Nov. 9, 1997) (introduced by Rep. Louis Stokes (D-Ohio)).

(64)Karen M. Wardzinski, Prospective Purchaser Agreements Under EPA's New Guidance, 10 NAT. RESOURCES & ENV'T, 24, 25 (1996) ("The change in the political climate in Washington caused by the 1994 elections has resulted in a corresponding change in EPA's flexibility in implementing CERCLA.").

(65) "After S. 1834 was not enacted, EPA Administrator Browner and others in the Clinton Administration aggressively undertook a series of major administrative reforms." S. REP. No. 105-192, at 2. Since 1993, there have been three rounds of reforms. The first reform effort, the Superfund Administrative Improvements of June 1993, focused on enhancing the elements of the existing program. See U.S. ENVTI,. PROTECTION AGENCY, SUPERFUND ADMINISTRATIVE IMPROVEMENTS, FINAL REPORT (1993); Steven A. Herman, A Fundamentally Different Superfund Program, 12 NAT. RESOURCES & ENV'T 196, 196 (1998). The second round of reform, announced in February 1995, included pilot programs and the Brownfields Economic Redevelopment Initiative. In October 1995 the Administration and EPA addressed enforcement concerns and tried to increase fairness in the settlement process while lowering transaction costs. Id. at 197.

(66) BERI has the following six-part scheme to facilitate redevelopment: 1) award pilot grants; 2) provide technical assistance to local communities; 3) offer job training and development activities; 4) provide technical guidance; 5) bring together industry, public interest groups, and regulators as part of a Common Sense Initiative; and 6) coordinate resources and define roles of local, state, and federal ; agencies. See Herman; supra note 65, at 196. Besides revision of the PPA Guidance, another major reform of CERCLA was EPA's policy to issue "comfort/status letters" to prospective purchasers with a statement of EPA's enforcement position in regard to contamination on the site. EPA Policy on the Issuance of Comfort/Status Letters, 62 Fed. Reg. 4624, 4624 (Jan. 30, 1997). However, these comfort letters are not enforceable and do not protect purchasers from liability. See id. at 4626.

(67) Herman, supra note 65, at 198-99. Steven A. Herman is the Assistant Administrator for Enforcement and Compliance Assurance at the United States EPA. Id. at 196 n.1.

(68) Id. at 199; see also 1995 Guidance, supra note 29, at 34,793.

(69) See 1995 Guidance, supra note 29, at 34,793-94.

(70) Porter, supra note 32, at 2412.

(71) Id. ("In the last 10 years, the federal government has signed 85 such agreements, 65 of them since 1995.").

(72) See Hearings Before the Subcomm. on Finance and Hazardous Materials of the Comm. on Commerce House of Representatives, 105th Cong., 2d Sess. (1998) (statement of Carol M. Browner, EPA Administrator).

(73) Id.

(74) 1995 Guidance, supra note 29, at 34,793-94.

(75) Persons interested in negotiating a PPA should contact the Office of Regional Counsel for the EPA region where the site is located.

(76) EPA has absolute discretion in deciding whether the prospective purchaser criteria are met. See GERRARD, supra note 21, [sections] 13.0212], at 13-7 (noting that there is no administrative or judicial appeal available for a refusal by EPA to enter into an agreement).

(77) This is evident in the "statement of facts" portion of most PPAs. In general, the statement of facts section of the agreement focuses on EPA's past involvement with the site and the economic benefits the purchaser brings to the site or to the community. See, e.g., San Fernando Valley/Howard L.L.C., PPA, Region IX (1998).

(78) 1995 Guidance, supra note 29, at 34,793.

(79) The NCP sets out a framework for both the procedural and the substantive aspects of the CERCLA cleanup process. See 42 U.S.C. [sections] 9604(a)(1)(1994); 40 C.F.R. pt. 300 (1999).

(80) The purpose of the PA/SI is to determine if and what type of removal action is needed. 40 C.F.R. [sections] 300.410 (1999). Another function of the PA/SI is to gather information to assess whether the site should be listed on the National Priorities List (NPL). Id.

(81) Section 104 of CERCLA gives EPA the authority to remove or arrange the removal of hazardous substances when there is a "release or substantial threat of release into the environment of any pollutant or contamination which may present an imminent and substantial danger to public health." 42 U.S.C. [sections] 9604(a)(1)(1994). EPA often takes removal actions at sites where it later performs remediation.

(82) "Removal actions" are defined broadly as "the cleanup or removal of released hazardous substances; such actions as may be necessary." Id. [sections] 9601(23); 40 C.F.R. [sections] 300.5 (1999). EPA interprets removal actions as short-term steps to stabilize the release or abate the harm. National Oil and Hazardous Substances Pollution Contingency Plan, 53 Fed. Reg. 51,394, 51,411 (Dec. 21, 1988).

(83) "Remedial actions" are "those actions consistent with permanent remedy ... to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare of the environment." 42 U.S.C. [sections] 9601(24) (1994). If EPA determines alter a PA/SI that neither removal nor remedial action is necessary, EPA designates that site as "no further response action planned." 40 C.F.R. [sections] 300.5 (1999).

(84) 40 C.F.R. [sections] 300.425(c)(1999).

(85) To rank each site, EPA uses the Hazard Ranking System (HRS) and, based on information that EPA entered, the HRS gives each site a numeric score. Id. [sections] 300.425(c). Currently, a site that receives a score higher than 28.5 qualifies for listing on the NPL. Hazardous Ranking System, 55 Fed. Reg. 51,532, 51,569 (Dec. 14, 1990).

(86) The NPL is "the list of priority releases for long-term remedial evaluation and response." 40 C.F.R. [sections] 300.425(b)) (1999). The federal government usually oversees the cleanup of NPL sites, and states oversee other sites as part of state cleanup programs. However, the mere listing of the site on the NPL does not mean that EPA itself will clean up the site or that the cleanup will be funded by the Superfund. Nor is listing a site on the NPL a prerequisite for EPA or other parties to perform cleanup activities. Id. [sections] 300.425(b)(4).

(87) 1989 Guidance, supra note 28, at 34,241. The 1989 Guidance states: The Agency will not entertain requests for covenants not to sue from prospective purchasers unless an enforcement action is contemplated with respect to the facility. Therefore, such covenants generally will be considered only with regard to those facilities listed or proposed for listing on the NPL, those facilities at which Fund monies have been expended, or those facilities which are the subject of a pending enforcement action. Id.

(88) 1995 Guidance, supra note 29, at 34,793. To determine whether there is a "substantial likelihood" of a federal response enforcement action at the site, EPA may "consider information that is available through EPA's data systems, a state agency, or through submissions from the prospective purchaser, such as ... an environmental audit." Id.

(89) Id. at 34,793-94. This requirement reflects a concern that EPA will become involved in purely private real estate transactions or expend limited agency resources on negotiations that do not result in a public benefit.

(90) Id. at 34,792-93.

(91) Of the 65 PPAs reviewed by the author, 41 of the brownfield sites were either listed on the NPL or designated as Superfund sites. Superfund sites are sites that are listed on the NPL and that have money from the Superfund going towards the cleanup of the site. See 40 C.F.R. [sections] 300.425 (1999).

(92) EPA Region V has negotiated PPAs for at least nine sites that are not listed on the NPL. See Schafer/Village of Union City PPA, Region V (1999); C & M Plating/REDO, Inc. PPA, Region V (1998); American Western Refining/AWR Acquisition PPA, Region V (1998); Jomarc/R. Walker Co. PPA, Region V (1998); Uniroyal Plastics/City of Mishawaka PPA, Region V (1998); City Bumper/Metal Trading & Burns Street PPA, Region V (1997); Solar Usage Now/Hopewell Township PPA, Region V (1997); D.C. Franche/Wabansia Corp. PPA, Region V (1996); Auto Deposition/Greenfields Partners PPA, Region V (1993).

(93) For examples of PPAs for Superfund sites in Region I, see Gaynord Stafford Industries/Massachusetts PPA, Region I (1998); Cohen/City of Taunton PPA, Region I (1997); Bridgewater/Osterman Propane PPA, Region I (1997); Norwood PCB Disposal/Laham & 921 Inc. PPA, Region I (1997). For examples of PPAs for Superfund sites in Region IX, see San Fernando Valley/Cinnabar, Inc. PPA, Region IX (1999); San Gabriel Valley/Trammel Crow PPA, Region IX (1998); San Fernando Valley/Howard L.L.C. PPA, Region IX (1998); San Gabriel Valley/Ekstrom Cardinal Industrial Finishes PPA, Region IX (1997); South Bay Asbestos/Lincoln PPA, Region IX (1997); San Gabriel Valley/Benson Eyecare PPA, Region IX (1996); San Gabriel Valley/Sargeant Fletcher PPA, Region IX (1995).

(94) As of March of 1998, EPA has determined that federal actions are not warranted on 30,917 sites. Currently there are only 1197 sites listed on the NPL, and only 162 sites have been deleted off the list since 1980. Additionally, EPA has proposed to list an additional 54 sites, and it estimates that 150 to 250 will be added over the next five years. S. COMM. ON ENV'T AND PUBLIC WORKS, THE SUPERFUND CLEANUP ACCELERATION ACT OF 1998, S. REP. No. 105-192, at 5 (1998). In comparison, there are an estimated 130,000 to 450,000 contaminated commercial and industrial sites around the country. U.S. GEN. ACCOUNTING OFFICE, supra note 26, at 3.

(95) For example, Region V commenced a relatively simple removal action on a small two-acre site in Cincinnati, Ohio and then negotiated a prospective purchaser agreement with a company that agreed to compensate EPA with a cash sum at the time of the property acquisition. See City Bumper/Metal Trading & Burns PPA, at 4-5.

(96)Davis & Margolis, supra note 20, at 12 (indicating that factors "such as poor location, high crime, decaying infrastructure, and similar matters" limit demand for redeveloped sites).

(97) EPA's definition of a brownfield is a site where there is actual or perceived contamination, because perceived contamination may cause the same effects as real contamination. See supra note 20 and accompanying text.

(98) See infra Part IV.

(99) But see 1989 Guidance, supra note 28, at 34,241 (stating that EPA does not want to become involved in purely private real estate transactions). If an EPA region's decision to enter into a PPA is not based solely on the extent of the contamination and cost of cleanup, then what should be the determining factor? The agency does not have the resources to negotiate PPAs for every contaminated site in the United States, nor does it want to interject itself into private real estate transactions. Because the 1995 Guidance gives EPA regions broad discretion, the regional offices are in the difficult position of weighing all the relevant factors, including assessments of existing contamination and potential cleanup costs, before entering into a PPA.

(100) 1995 Guidance, supra note 29, at 34,794.

(101) See 1989 Guidance, supra note 28, at 34,241 n.28.

(102) See infra Part III.

(103) See infra Part III.A. See, e.g., Bridgewater/Osterman Propane PPA, Region I (1997); Gaynord Stafford Industries/C & C Industrial PPA, Region I (1997).

(104) The three criteria, aggravation of existing contamination, health risk, and the financial viability of the purchaser, are rarely discussed in PPAs. See Solar Usage Now/Hopewell Township PPA, Region V (1997). Out of the 65 PPAs reviewed by the author, every PPA lacked a comprehensive analysis of whether the continued operation or new development would pose a health risk to the community.

(105) All three factors relate to the likelihood of another release, or a threat of release, of hazardous waste at the same facility in the future. EPA expressed a general concern regarding the impact of possible future releases on public health in its 1989 Guidance, which stated that "where the remedy calls for other than destruction of all contaminant below health based levels, there may be a risk that unknown future uses are inconsistent with the remedy or may interfere with an ongoing cleanup." 1989 Guidance, supra note 28, at 34,241. One study that examined community participation in three brownfield redevelopment projects found that community members were concerned about redevelopment and the health of the community: "Again, an important improvement for the communities was cleanup of environmental contaminants. Community group leaders and members voiced concern about pollutants on the basis of both human health and environmental criteria, and felt that remediation greatly benefited the community." Lincoln L. Davies, Working Toward A Common Goal? Three Case Studies of Brownfields Redevelopment in Environmental Justice Communities, 18 STAN. ENVTL. L.J. 285, 319 (1999).

(106) 1995 Guidance, supra note 29, at 34,793. This factor is especially relevant to sites where a large amount of contamination is contained on site or where the contamination is capped. EPA considers site assessment data, the remedial investigation/feasibility study (RI/FS), if available, and all other relevant information. Id.

(107) Id. Interestingly, EPA does not require an RI/FS to be conducted before a PPA is negotiated, although EPA gives preference to sites with an RI/FS. Id. One of the purposes of an RI/FS is to "assess site conditions" and gather sufficient data to characterize the condition at the site. 40 C.F.R. [sections] 300.430(a)(2)(1999). It would be difficult for both EPA and the purchaser to evaluate the health risks to the community without knowing the extent of the contamination on site; common sense dictates that an RI/FS should be required before EPA considers negotiating a PPA.

(108) 1995 Guidance, supra note 29, at 34,794. EPA checks the financial background of a prospective purchaser for two reasons: to determine whether the prospective purchaser has the finances to pay for the consideration and to determine whether the purchaser has the finances to implement its redevelopment plans. EPA does not try to determine whether the purchaser has the funds to pay for the cleanup of the existing contamination. Interview with Helen Keplinger, United States Environmental Protection Agency, Office of Enforcement and Compliance Monitoring, Waste Enforcement Division (Oct. 30, 1998). Any of the financial assurance mechanisms provided by the regulations for RCRA, in 40 C.F.R. [sections] 264 subpt. H (1999), are likely to be satisfactory. GERRARD, supra note 21, [sections] 13.0217], at 13-11.

(109) 1995 Guidance, supra note 29, at 34,793.

(110) See RESTATEMENT (SECOND) OF CONTRACTS [sections] 17 (1973).

(111) 1995 Guidance, supra note 29, at 34,794.

(112) Id. The majority of PPAs include cash payments. See, e.g., Gaynor Stafford Industries/C & C Industrial PPA, Region I (1998); H. Brown/DBV Partners PPA, Region V (1998); Kane & Lombard/Double Eagle Enterprises PPA, Region III (1997); Prier Brass/CST & Short PPA, Region VII (1997); San Gabriel Valley/Benson Eyecare PPA, Region IX (1996); IndustriPlex/Massachusetts PPA, Region I (1996).

(113) 1995 Guidance, supra note 29, at 34,784; see Ingram-Richardson/Clinton County & Frankfort Market Place & Strange PPA, Region V (1998).

(114) See infra Part IV.A.

(115) Transaction costs, which include legal expenses and any other costs not directly associated with the cleanup, have constituted 30 to 36% of the total Superfund spending by private parties involved with Superfund sites. SENATE COMM. ON ENVT. AND PUB. WORKS, THE SUPERFUND CLEANUP ACCELERATION ACT OF 1998, S. RFP. NO. 105-192, at 8 (1998) (statement of John Chafee, citing a 1994 study by the RAND Corporation). The same study found that 88% of Superfund-related expenses of insurers went to transactional costs. Id.

(116) 1995 Guidance, supra note 29, at 34,794.

(117) Compare San Gabriel Valley/Sargent Fletcher PPA, Region IX (1995) (severely polluted site), with City Bumper/Metal Trading & Burns Street PPA, Region V (1997) (simple removal action required).

(118) See, e.g., San Femando Valley/Cinnabar, Inc. PPA, Region IX (1999); San Gabriel Valley/Trammel Crow PPA (1998); San Fernando Valley/Howard L.L.C. PPA, Region IX (1998); San Gabriel Valley/Ekstrom & Cardinal Industrial Finishes PPA, Region IX (1997); South Bay Asbestos/Lincoln PPA, Region IX (1997); San Gabriel Valley/Benson Eyecare PPA, Region IX (1996); San Gabriel Valley/Sargent Fletcher PPA, Region IX (1995).

(119) One prospective purchaser who bought land in the San Gabriel Valley agreed to an unusually high price for consideration--a $500,000 one-time cash payment, $300,000 for monitoring and redemption activities, and possible future costs incurred by state-led response activities. San Gabriel Valley/Sargent Fletcher PPA, at 6-7. Other PPAs associated with San Gabriel Valley include San Gabriel Valley/Trammel Crow PPA, Region IX (1998); San Gabriel Valley/Ekstrom & Cardinal Industrial Finishes PPA, Region IX (1997); San Gabriel Valley/Benson Eyecare PPA, Region IX (1996). Region IX was criticized by local politicians in California who claim that EPA's "mediation" approach--as opposed to a litigation approach-has failed to actually clean up the contamination in San Gabriel Valley. Richard Winton, Lawmaker Denounces Pace of Water Cleanup Effort Resources, L.A. TIMES, July 29, 1999, at B1.

(120) Telephone Interview with Brett Moffett, Office of General Counsel, United States Envtl. Protection Agency, Region IX (Nov. 6, 1998).

(121) 1995 Guidance, supra note 29, at 34,794.

(122) Of the 65 PPAs reviewed by the author, 36 PPAS involved consideration in the form of cash or cleanup actions. 123 1995 Guidance, supra note 29, at 34,794.

(124) See infra Part IV.

(125) Rimer, supra note 55, at 76.

(126) See, e.g., Marathon Battery/Scenic Hudson Land Trust PPA, Region II (1997).

(127) Woolfolk Chemical Works/Peach County PPA, Region IV, at 3 (1995).

(128) Id. at 4.

(129) Id. at 4-5.

(130) Id. at5-6.

(131) 1995 Guidance, supra note 29, at 34,794.

(132) Id. at 34,795.

(133) Interview with Andrey Zuckernum, Office of Regional Counsel, Region I, United States Envtl. Protection Agency (Nov. 2, 1998)

(134) Id.

(135) Id. Section 107(l) of CERCLA provides that "[a]ll costs or damages for which a person is liable to the United States ... shall constitute a lien in favor of the United States" on all real property owned by a person that is subject to any removal or remedial action. 42 U.S.C. [sections] 9607 (l) (1994). A lien does not automatically perfect when liability arises; EPA must perfect an interest by affirmatively filing a notice of the lien. Id. However, the First Circuit has questioned whether section 107(l) is constitutional on its face. Reardon v. United States, 947 F.2d 1509, 1517-23 (1st Cir. 1991) (holding that a CERCLA lien is a deprivation of a "significant property interest" within the meaning of the Due Process Clause).

(136) Interview with Audrey Zuckerman, supra note 133.

(137) 1995 Guidance, supra note 29, at 34,795.

(138) Id. ("whether the purchaser is a large commercial or industrial venture, a small business, a non-profit or community-based activity").

(139) Id. If the site is undergoing cleanup or has yet to be cleaned up while EPA is negotiating a PPA, future use of the site may influence the extent of the cleanup. For example, EPA Region VIII negotiated a PPA with Roger D. Leclerc to redevelop a unit of the Clear Creek Superfund site. Clear Creek/Leclerc PPA, Region VIII (1998). At the time the PPA was negotiated, Leclerc was still undecided as to how he was going to redevelop the land. EPA is currently working with Leclerc to ensure that the levels of cleanup are protective enough for the land use he ultimately chooses. Id. The future land use of a site is a potentially contentious issue; developers want flexibility in cleanup standards, and environmentalists aim for comprehensive remediation. Katherine X. Vasiliades, Encouraging Industry In Order to Preserve NonCommercial Property, 9 VILL ENVTL. L.J. 29, 41 (1998).

(140) Compare H. Brown/DBV Partners PPA, Region V (1998) (company entered into PPA to use property for industrial uses, including a warehouse, and agreed to pay $290,000 in consideration), with Marathon Battery/Scenic Hudson Land Trust PPA, Region II (1997) (nonprofit organization entered into PPA to preserve the natural, scenic, historic, and potential recreational assets of property).

(141) 1995 Guidance, supra note 29, at 34,794.

(142) Of the 65 PPAs reviewed by the author, 53 of the prospective purchasers gave EPA what could be classified as "direct benefits," and the other 9 gave EPA what could be considered "indirect benefits to the community and a reduced benefit to EPA."

(143) See Industri-Plex/Massachusetts PPA, Region I (1996). From 1853 to 1969 a succession of manufacturers at the site produced chemicals, insecticides, and glue products from raw and chrome-tainted animal hides. The soil was contaminated with benzene, toluene, arsenic, and chromium. U.S. Envtl. Protection Agency, Industri-Plex Site 2 (last modified Oct. 8, 1998) <http://www.epa.gov/superfund/accomp/redevel/iplex.htm>.

(144) Industri-Plex/Massachusetts PPA, Region I, at 8 (1996). The prospective purchaser agreedto put a protective cover over one portion of the site and to monitor and maintain the site. Id.

(145) Id.

(146) U.S. Envtl. Protection Agency, suprra note 143, at 5. The federal agencies, state agencies, and private parties created the "Industri-Plex Site Custodial Trust" to facilitate the managingand selling of the 120 acres of undeveloped property. Id. at 3.

(147) Id. at 5. Income associated with the predicted permanent jobs will result in over $8.7 million in state income tax and $4.7 million in state sales taxes. Id.

(148) The brownfield redevelopment process is essential to urban communities that are attempting to achieve greater economic self-sufficiency:

   One of the ways communities can reap economic benefits from the Brownfield
   Initiative is through jobs, skills training, and career development. Much
   of the work that accompanies a brownfields project is contract driven. The
   initial work is orientated toward environmental assessment. The later work
   is orientated toward planning, surveying, and construction. Communities
   want to ensure they get first priority at receiving these jobs.

John C. Chambers & Michelle A. Meertens, Community Participation in Brownfields Redevelopment, in BROWNFIELDS: A COMPREHENSIVE GUIDE TO REDEVELOPING CONTAMINATED PROPERTY, supra note 10, at 183, 186. In addition, the actual sale of contaminated land may allow greater self-sufficiency for poor urban areas. For example, a PPA negotiated with a state agency in EPA Region IV will indirectly benefit the City of Charleston, South Carolina, because the PPA allowed for the city's housing authority to "use the proceeds of the sale for the acquisition of low income housing in the Charleston area." Calhoun Park/South Carolina State Ports Authority PPA, Region IV, at 5 (1996).

(149) Cash payments to EPA as consideration have ranged from $2500 to $15 million. See GERRARD, supra note 21, [sections] 13.0312], at 13-13. In the 65 PPAs the author reviewed, approximately half of the prospective purchasers gave EPA cash as consideration.

(150) See 1995 Guidance, supra note 29, at 34,792. The 1989 Guidance stated that

   [s]uch monies could be paid directly to the Superfund [in the event the
   Agency is undertaking the cleanup] or in appropriate circumstances and with
   proper controls could be paid to the seller of the property if the seller
   has agreed to perform substantial response action pursuant to an
   administrative order or consent decree. 1989 Guidance, supra note 28, at
   34,241 n.28.

(151) See, e.g., Gaynor Stafford Industries/C & C Industrial PPA, Region I (1997). The 1995 Guidance recommends that the covenant not to sue should not become effective until the entire monetary sum is paid. 1995 Guidance, supra note 29, at 34,798. EPA has adhered to this recommendation in negotiating PPAs. Therefore, a prospective purchaser may not receive the benefit of a PPA until the last installment is made. See Carey S. Rosemarin, Federal Brownfields Policy in 1997: Negotiating Prospective Purchase Agreements with U.S. EPA (June 1997) (visited Nov. 15, 1999) <http://wwwjenner.com/practice/enxiron/articles/csr9701.html>.

(152) See Uniroyal Plastics/City of Mishawaka PPA, Region V (1998) (stating that in Phase I the purchaser will pay $2500 and remove asbestos, and then in Phase II, when the option to purchase is exercised, the purchaser will remove buildings from property).

(153) Most PPAs include deed restrictions. See, e.g., Denver Radium/Home Depot PPA, Region VIII, at 8 (1995) (requiring settling respondent to assure that any deed of the owner of the property include deed restrictions or refer to covenants restricting the owner's use and development in conformance with institutional controls). See also Woolfolk Chemical Works/Peach County PPA, Region IV (1995); Peterson-Puritan/Alpha Realty PPA, Region I (1994); South East Rockford/Superior Toy PPA, Region IV (1993); National Mine Tailings Pile/Airtech PPA, Region VII (1996); Bunker Hill/Von Roll PPA, Region X (1989).

(154) See, e.g., Rosen/NYSWRC & IDA PPA, Region II (1998); Torch Lake/Lakeshore Estates & Quincy Development PPA, Region V (1997); Raymark Industries/Leach Family PPA, Region III (1996).

(155) See, e.g., National Mine Tailings Pile/Airtech PPA, Region VII (1996); Jasper County/Rogers Iron & Metal Corp. PPA, Region VII (1995). EPA Region VIII required a prospective purchaser to sign a "pre-certification inspection" after completing the removal action and to submit a written report verifying the completion. Chemical Sales Co./G.I, Bryan Inv. PPA, Region VIII, at 9 (1995).

(156) Property restrictions may be strict depending on the extent of on-site contamination. See, e.g., Kane & Lombard/Double Eagle Enterprises PPA, Region III, at 11 (1997) ("SettlingRespondent shall not excavate or regrade the Property or any portion of the Property without prior written approval by EPA or the Department."); Kansas City Structural Steel/ECI Development PPA, Region VII, at 7 (1996) ("Settling respondent shall not use or allow others to use the 'fill area' of the premises, nor shall the settling respondent excavate or in any way disturb any fill material deeper than four feet below existing grade.").

(157) Oversight responsibilities may be vested in EPA or any other party conducting the response actions. A prospective purchaser in Region III agreed to pay EPA for "all costs of such action including, but not limited to, costs of attorney time." Merit Products/Henshell & City of Philadelphia PPA, Region III, at 10 (1995).

(158) See, e.g., O'Brien Machinery/Serena PPA, Region III (1999); Ingram-Richardson/Clinton County & Frankfort Market Place PPA, Region V (1998); Prestolite Battery/Alton PPA, Region V (1996).

(159) See, e.g., Clear Creek/Leclerc PPA, Region VIII (1998); Calhoun Park/South Carolina StatePorts Authority, Region IV (1996).

(160) See, e.g., Denver Radium/Home Depot PPA, Region VIII (1995); San Gabriel Valley/Sargent Fletcher PPA, Region IX, at 8 (1995) (defining purchaser's consideration for investigation and monitoring as "state lead response costs").

(161) See, e.g., Hyden Ranch/City of Aurora PPA, Region VIII (1998); Indiana Bend Wash/Texas Development Inc. PPA, Region IX (1996).

(162) National Mine Tailings Site/Airtech PPA, Region VII, at 6 (1996). In this PPA, EPA retained a large amount of discretion; the prospective purchaser agreed to "comply with all institutional controls that may be selected by EPA and embodied in a Record of Decision or Action Memorandum for this Site or any portion thereof which includes the property.' Id.

(163) See Cohen/City of Taunton PPA, Region I, at 6 (1997):

   Settling Respondent has agreed to allow EPA to dispose of up to fifteen
   thousand (15,000) tons of stabilized, contaminated soils excavated from the
   Site at the Taunton Landfill (provided such soils pass EPA's Toxicity
   Characteristic Leaching Procedure or `TLCP'). EPA estimates that use of the
   Taunton Landfill will save EPA up to one million dollars ($1 million) in
   response costs.

Id.

(164) The Kansas City PPA states that "[o]n the day that it acquires title to the Property, Settling Respondent shall grant to EPA, its authorized officers, employees, representatives, and all other persons performing response actions under EPA oversight, an irrevocable right of access at all reasonable times." Kansas City Steel/ECI PPA, Region VII, at 9 (1996).

(165) The Bridgewater PPA provides that "[t]he Settling Respondent shall require that assignees, successors-in-title, lessees, and sublessees, of the Property agree in writing (a) to provide access and cooperation ... [and] ... (b) that EPA, as well as the Settling Respondents, shall have a right to enforce such agreement." Bridgewater/Osterman Propane PPA, Region I, at 10 (1997). Unlike most PPAs, attached to the Bridgewater PPA is a prepared document for successors-in-interest--a "Signature Page For Subsequent Settling Respondents." Id. ex. 5.

(166) 1995 Guidance, supra note 29, at 34,795.

(167) See National Mine Tailings Site/Airtech PPA, Region VII, at 4 (1996).

(168) All but one of the prospective purchasers that the author classified as either "commercial" or "private" provided what could be considered a "direct benefit to EPA." But see Torch Lake/Lake Estates PPA, Region V (1997) (easement for recreation trail, preservation of wetlands, and other indirect benefits provided by private prospective purchaser).

(169) 1995 Guidance, supra note 29, at 34,795. EPA's tendency to enter into a direct benefit type of PPA--as opposed to an indirect benefit to the community type of PPA--with commercial purchasers is evidently driven by economics; private entities simply have the financial resources to contribute to expensive cleanup costs.

(170) Of the 65 PPAs reviewed by the author, only 9 prospective purchasers provide what could be considered an "indirect benefit to the community and a reduced benefit to EPA." See, e.g., Arkansas River/CO Division of Parks & Recreation PPA, Region VIII (1998); Talisman/The Nature Conservancy PPA, Region IV (1998); Cohen/City of Taunton PPA, Region I (1997); Marathon Battery/Scenic Hudson Land Trust PPA, Region II (1997); Solar Usage Now/Hopewell Township PPA, Region V (1997); Torch Lake/Lake Estates PPA, Region V (1997); ICG Iselin Railroad Yard/Tennessee Wildlife Resource Agency PPA, Region IV (1997); Mayflower Mill/San Juan Historical Society PPA, Region VIII (1996).

(171) See Torch Lake/Lake Estates PPA, at 6-10. EPA Region V entered into a PPA with Lake Estates Associates whereby the prospective purchaser acquired 1109 acres of environmentally sensitive land along a lake that had been a site of copper milling and smelting operations for 100 years. As consideration, the prospective purchaser agreed to grant an easement to the government for a recreation trail, preserve a wetlands for wildlife habitat, and perform remedial actions (i.e., maintenance of soil and a vegetative cover). Id.

(172) See, e.g., Schafer Manufacturing/Village of Union City PPA, Region V (1999); Uniroyal Plastics/City of Mishawaka PPA, Region V (1998); Hastings/City of Hastings PPA, Region VII (1997).

(173) See supra notes 143-48.

(174) Among the PPAs reviewed by the author, prospective purchasers who provided what could be considered an indirect benefit to the community consist of three municipalities, two nonprofit organizations, three state agencies, and one commercial developer. See supra note 170.

(175) MINORITY VIEWS OF SENATORS BAUCUS AND LAUTENBERG, supra note 56.

(176) In fact, Louis Schiffer, Assistant Attorney General for Environment and Natural Resources, recently gave a speech in Washington, D.C. noting the success of EPA prospective purchaser agreements. She also stated that the administration opposes proposals in Congress that would grant total relief from federal liability to prospective owners of contaminated properties. ```The argument is the potential for federal liability and threat of federal interference discourages people to clean up,' she said. 'We don't agree.'" Porter, supra note 32, at 2412 (quoting Louis J. Schiffer).

(177) Mayflower Mill/San Juan Historical Society PPA, Region VIII, at 5 (1996).

(178) Id.

(179) Id. at3.

(180) Id. at 6.

(181) Id. at 7.

(182) Ingrain-Richardson/Clinton County & Frankfort Market Place & Strange PPA, Region V, at 2-3 (1998).

(183) Id. at 7.

(184) Id. at 8-9.

(185) See, e.g., Hastings Ground Water/City of Hastings, Region VII (1997) (setting aside property for the installation of public water lines).

(186) See Woolfolk Chemical Works/Peach County PPA, Region IV, at 1 (1995).

(187) ICG Iselin Railroad Yard/Tennessee Wildlife Resources Agency PPA, Region IV (1997). The Tennessee Department of Environment and Conservation and EPA were parties to the settlement, in which EPA agreed to let the state be the lead agency. The state agreed to preserve and manage the land, allowing complementary educational and recreational uses that are passive and noncommercial, in exchange for an EPA covenant not to sue under sections 106 and 107 of CERCLA. Id. at 5-6.

(188) Arkansas River Ranch/Colorado PPA, Region VIII, at 2 (1999). The agency received an EPA and United States Department of the Interior covenant not to sue under section 107 of CERCLA and section 311(b)(3) of the Clean Water Act in exchange for maintaining the property as parks, wildlife habitat, and open and recreational spaces. Id. at 11, 13-14.

(189) Marathon Battery/Scenic Hudson Land Trust PPA, Region II, at 3 (1998).

(190) Id. at 4.

(191) Id.

(192) Talisman Sugar Corp./The Nature Conservancy PPA, Region IV (1996). The Nature Conservancy agreed to manage the property in accordance with the Everglades Restoration Program in exchange for CERCLA and RCRA protection. Id. at 8. The Nature Conservancy is also a party to a Cooperative Agreement with the U.S. Department of the Interior and the South Florida Water Management District, according to which portions of the property will be donated to the district.

(193) 1995 Guidance, supra note 29, at 34,798. "The effective date of this Agreement shall be the date upon which EPA issues written notice to the Settling Respondent that EPA [and the state have] fully executed the Agreement after review of and response to any public comments," and in addition, "[t]he Attorney General of the United States or her designee has issued prior written approval of the settlement embodied in this Agreement." Id.

(194) See, e.g., Bridgewater/Osterman Propane PPA, Region I (1997).

(195) See 1995 Guidance, supra note 29, at 34,795; 1989 Guidance supra note 28, at 34,235. How clean is clean, or what constitutes a "cleanup," is a controversial issue. In the 1986 reauthorization, Congress established cleanup standards and guiding principles in 42 U.S.C. [sections] 121 (1994). EPA has interpreted this section in its own regulations. See 40 C.F.R. [sections] 300.430 (1999). EPA expects to use treatment to address major threats whenever practicable, but it expects to use "engineering controls, such as containment, for waste that poses a relatively low long-term threat or where treatment is impracticable." Id. [sections] 300.430(a)(1)(iii)(B); see also NAT'L GOVERNORS' ASS'N'S NATURAL RESOURCE POLICY STUDIES DIV., STATE INITIATIVES IN BROWNFIELD REDEVELOPMENT (1997) (stating that the lack of a straightforward process for establishing cleanup levels at a site can be a major barrier to brownfield redevelopment). Grassroots activists and national environmental organizations have argued that differential cleanup standards at brownfield sites could lead to a concentration of redeveloped sites in the inner cities where contamination has not been removed but rather contained on site. Kris Wernstedt & Robert Hersh, "Through a Lens Darkly"--Superfund Spectacles on Public Participation at Brownfield Sites, 9 RISK: HEALTH SAFETY & ENV'T 153, 160 (1998).

(196) See 40 C.F.R. [sections] 300.430(a)(1)(iii)(B) (1999). Institutional controls vary from site to site. Region VII defined institutional controls as "rules, regulations, laws, ordinances, dedicated developments, restrictive covenants, easements, historic preservation and groundwater controls/restrictions that address land use and access for a particular area. Such controls may take the form of covenants, licenses, access agreements, deed restrictions, zoning controls, and other use or access restrictions." Kansas City Structural Steel/ECI Development PPA, Region VII, at 3 (1996). For a comprehensive analysis of institutional controls used by EPA and state agencies, see John Pendergrass, Sustainable Redevelopment of Brownfields: Using Institutional Controls to Protect Public Health, [29 News & Analysis] Envtl. L. Rep. (Envtl. L. Inst.) 10,243 (May 1999).

(197) 1995 Guidance, supra note 29, at 34,797.

(198) Groundwater contamination is a common occurrence at brownfields.

(199) 1995 Guidance, supra note 29, at 34,793.

(200) The Model Prospective Purchase Agreement suggests the following language for the Covenant Not To Sue:

Subject to the Reservation of Rights in Section IX of this Agreement, upon payment of the amount specified in Section IV (Payment), of this Agreement [if work to be performed, insert, as appropriate, "and upon completion of the work specified in Section -- (Work to Be Performed) to the satisfaction of EPA"], the United States [and the state] covenants not to sue or take any other civil or administrative action against Settling Respondent for any and all civil liability for injunctive relief or reimbursement of response costs pursuant to Sections 106 or 107(a) of CERCLA, 42 U.S.C. 9606 or 9607(a) [and state law cite] with respect to the Existing Contamination.

Id. at 34,797 (alterations in original).

(201) Id. CERCLA claims are brought pursuant to sections 106 or 107(a). 42 U.S.C. [subsections] 9606, 9607(a) (1994).

(202) 1995 Guidance, supra note 29, at 34,797.

(203) 42 U.S.C. [sections] 9606(a) (1994) states that "when the President determines that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility, he may ... secure such relief as may be necessary to abate such danger or threat." The section authorizes a court to grant "such relief as the public interest and the equities of the case may require," or, in the alternative, to issue "such orders as may be necessary." Id.

(204) Courts have interpreted section 106 broadly. In United States v. Conservation Chemical Co., the court held that a substantial endangerment may exist if "there is reasonable cause of concern that someone or something may be exposed to a risk of harm." 619 F. Supp. 162, 194 (W.D. Mo. 1985). EPA need not quantify the harm to establish endangerment. Id.

(205) See United States v. Price, 577 F. Supp. 1103, 1113 (D.N.J. 1983) (stating that "[sections] 106(a) is dependent upon the substantive provisions explaining liability outlined in [sections] 107"). Section 106 is silent on the issue. See 42 U.S.C. [sections] 9606 (1994).

(206) Courts generally deny any type of pre-enforcement review. See Solid State Circuits, Inc. v. United States Envtl. Protection Agency, 812 F.2d 383 (8th Cir. 1987); Wagner Seed Co. v. Daggett, 800 F.2d 310 (2d Cir. 1986).

(207) See Conservation Chem. Co., 619 F. Supp. at 193 (finding that the government need not quantify the risk of harm in order to establish an endangerment to human health or the environment).

(208) 42 U.S.C. [sections] 9606(b)(1) (1994) reads, "Any person who, without sufficient cause, willfully violates, or fails or refuses to comply with, any order ... may ... be fined not more than $25,000 for each day in which such violation occurs or such failure to comply continues."

(209) EPA may recover for "all costs of removal or remedial action" that are "not inconsistent with the national contingency plan." Id. [sections] 9607(a)(4)(A) (1994).

(210) EPA has broad discretion to determine the reasonableness of costs of a cleanup. See United States v. Bell Petroleum Serv. Inc., 734 F. Supp. 771 (W.D. Tex. 1990), rev'd on other grounds, 3 F.3d 889 (5th Cir. 1993).

(211) See 1995 Guidance, supra note 29, at 34,797.

(212) Id.

(213) Id.

(214) 42 U.S.C. [sections] 6973 (1994).

(215) 42 U.S.C. [sections] 9607(a)(4)(C) (1994).

(216) See generally Federal Water Pollution Control Act, 33 U.S.C. [subsections] 1251-1387 (1994 & Supp. III 1997).

(217) See 1995 Guidance, supra note 29, at 34,797.

(218) A PPA is merely a promise from the government that it will not sue; it does not limit a third party's ability to bring suit. See id.

(219) See id.

(220) Id. at 34,792.

(221) See id.

(222) RCRA gives EPA the authority to issue corrective action orders for past disposal, and it also regulates facilities' waste management in the present. See United States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 741 (8th Cir. 1986).

(223) Meghrig v. KFC Western, Inc., 516 U.S. 479, 483 (1996).

(224) 42 U.S.C. [sections] 6973(a) (1994).

(225) See 1989 Guidance, supra note 28, at 34,242.

(226) See 1995 Guidance, supra note 29. EPA gave no explanation for this divergence in the 1995 Guidance.

(227) Id. at 34,793.

(228) See American Western Refining/AWR Acquisition PPA, Region V (1998); San Gabriel Valley/Trammel Crow PPA, Region IX (1998); San Gabriel Valley/Ekstrom & Cardinal Industrial Finishes PPA, Region IX (1997); South Bay Asbestos East/Lincoln Property Co. No. 2233 PPA, Region IX (1997); South Bay Asbestos West/Lincoln 237 Associates PPA, Region IX (1997); San Gabriel Valley/Monsanto Co. PPA, Region IX (1996); Indiana Bend Wash/JPI Texas Development, Inc. PPA, Region IX (1996); Talisman Sugar Corp./The Nature Conservancy PPA, Region IV (1996); Merit Products/Henshell & City of Philadelphia PPA, Region III (1995); Raymark/Philadelphia Suburban Water Corp. PPA, Region Ill (1995); Denver Radium/Hope Depot PPA, Region VIII (1995); San Gabriel Valley/Sargent Fletcher PPA, Region IX (1995). When EPA Region V provided AWR Refinery with RCRA contribution protection, the PPA included an emergency response provision requiring the purchaser to "immediately take all appropriate action to prevent, abate, remediate, remove and minimize" releases or threat of releases of waste material or oil that posed an "an endangerment to the public health or welfare." American Western Refining/AWR Acquisition PPA, at 17.

(229) 42 U.S.C. [sections] 6973(a) (1994) gives EPA broad authority so that "upon receipt of evidence that the past or present handling, storage, treatment, transportation or disposal of any solid waste or hazardous waste may present an imminent and substantial endangerment to health or the environment, the Administrator may bring suit ... against any person ... to order such person to take such other action as may be necessary." A hazardous waste is a solid waste that exhibits a hazardous waste characteristic or is specifically listed by EPA. See 40 C.F.R. [subsections] 261.20-24, 261.3 (1999).

(230) This section was created to give EPA complete authority to clean up sites in emergency situations. See, e.g., United States v. Hooker Chem. & Plastics Corp., 749 F.2d 968, 988 (2d Cir. 1984) ("[T]he emergency powers provisions confer broad authority on the Administrator to provide him with substantial flexibility needed to prevent imminent hazards."). Past generators, transporters, owners, and operators of waste material that present an imminent and substantial endangerment may be held liable under section 7003. United States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 738-42 (8th Cir. 1986).

(231) EPA has compelled a variety of different cleanup steps under section 7003. See, e.g., United States v. Vertac Chem. Corp., 489 F. Supp. 870, 888-89 (E.D. Ark. 1980) (barriers to prevent leakage of waste, coverage of contaminated waste); United States v. Midwest Solvent Recovery Inc., 484 F. Supp. 138, 145 (N.I). Ind. 1980) (construction of fences).

(232) See 42 U.S.C. [sections] 6973(a) (1994).

(233) Id. [sections] 6903(3).

(234) Id. [sections] 6973(a). In 1984 Congress changed the word "present" to "past or present" in order to clarify that RCRA does in fact apply to inactive and abandoned sites. Hazardous and Solid Waste Amendments of 1984, Pub. L. No. 98-616, 402, 98 Stat. 3221, 3271.

(235) Even before the amendments in 1984, one court held that a present owner who did not cause the contamination was liable for "leaking" hazardous waste. United States v. Price, 523 F. Supp. 1055, 1073 (D.N.J. 1981) (holding present owners liable for disposal "merely by virtue of their studied indifference to the hazardous condition that now exists").

(236) The term "disposal" in RCRA and the term "release" in CERCLA both include "leaking" and raise similar questions as to whether affirmative human action is a prerequisite to finding liability for interim owners under CERCLA and present owners under RCRA. 42 U.S.C. [sections] 6903(3) (1994); 42 U.S.C. [sections] 9601(22) (1994). Compare Nurad, Inc. v. William E. Hooper & Sons Co., 966 F.2d 837, 846 (4th Cir. 1992) (finding that hazardous waste may leak or spill without active participation of liable party), with United States v. CDMG Realty Co., 96 F.3d 706, 713-15 (3d Cir. 1996) (finding that passive migration of soil contaminants was not "disposal" under CERCLA).

(237) See United States v. Waste Indus., Inc., 734 F.2d 159, 165 (4th Cir. 1984) (holding that section 7003 is not limited to emergency situations).

(238) See United States v. Reilly Tar & Chem. Corp., 546 F. Supp. 1100, 1108 (D. Minn. 1982).

(239) 42 U.S.C. [sections] 6973(h) (1994).

(240) Whenever EPA proposes a covenant not to sue or settles any claim under section 7003, "notice, and opportunity for a public meeting in the affected area, and a reasonable opportunity to comment on the proposed settlement prior to its final entry shall be afforded to the public." Id. [sections] 6973(d).

(241) The 1995 Guidance does not require public notice and comment for covenants not to sue for CERCLA. EPA has determined that PPAs are outside the scope of CERCLA section 122(i), which requires notice and a public 30-day comment period before any settlement becomes final. 42 U.S.C. [sections] 96220) (1994). However, the 1995 Guidance recommends that EPA regions afford the community where the site is located an opportunity to comment on the proposed agreement, and whenever feasible, publish a notice in the Federal Register. 1995 Guidance, supra note 29, at 34,795. In practice, EPA regions frequently give notice in the Federal Register and allow for a 15- or 30-day comment period. See, e.g., Cohen/City of Taunton PPA, Region I, at 17 (1997). Some citizens criticize EPA's PPA program for not giving them a real role in the PPA decision-making process. As a member of the Concerned Citizens of South Central Los Angeles stated, "we feel the prospective purchaser agreements must have more teeth and accountability [to communities]. We feel strongly that community participation must be involved." Robin Canon, Sidebar to NATIONAL ENVTL. JUSTICE ACTION COMM., REPORT ON THE NEJAC PUBLIC DIALOGUES ON URBAN REVITALIZATION AND BROWNFIELDS (1996), (available at <http://www.epa.gov/brownfields/html-doc/pub04.htm>). In addition, the NCP requires EPA to have a notice and comment period at the remedy-selection stage of the cleanup process for sites where EPA performs remedial actions. 40 C.F.R.

300.430(f)(3)(i) (1999). However, this does not apply to all brownfields eligible for the PPA program, and public comments on the remedial actions of EPA and the PRP(s) may be irrelevant to the PPA negotiations with the prospective purchaser. For a discussion on public participation, see Wernstedt & Hersh, supra note 195.

(242) See supra note 195 and accompanying text

(243) GERRARD, supra note 21, [sections]5.01[1][a], at 54.

(244) CERCLA excludes from its definition of "hazardous substance" "petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance." 42 U.S.C. [sections] 9601(14) (1994). See 42 U.S.C. [sections] 6903(27) (1994) for the definition of "solid waste" under RCRA.

(245) Susan E. Bromm, Life After RCRA--It's More Than a Brownfields Dream, [28 News & Analysis] Envtl. L. Rep. (Envtl. L. Inst.) 10,031, 10,031 (Jan. 1998).

(246) Id. In October 1998 EPA announced in a final agency rulemaking regarding RCRA closure and postclosure standards that it is currently considering whether to incorporate RCRA protection in all PPAs: "In implementing the [1995 Brownfields National Partnership] Agenda, EPA, to date, has focused primarily on issues associated with CERCLA. Representatives from cities, industries, and other stakeholders, however, have recently begun emphasizing the importance of looking beyond CERCLA and addressing issues at brownfield sites in a more comprehensive manner." Standards Applicable to Owners and Operators of Closed and Closing Hazardous Waste Management Facilities; Post-Closure Permit Requirement; Closure Process, 63 Fed. Reg. 56,710, 56,732 (Oct. 22, 1998).

(247) See 42 U.S.C. [sections] 9607(a)(4)(C)(1994).

(248) See, e.g., Arkansas River Ranch/State of Colorado PPA, Region VIII (1999); Hyden Ranch/City of Aurora PPA, Region VIII (1998); Bridgewater/Osterman Propane PPA, Region I (1997); Raymark/Philadelphia Suburban Water Corp. PPA, Region III (1996); Chemical Sales Co./G.L. Bryan Inv. PPA, Region VIII (1995).

(249) 42 U.S.C. [sections] 9607(a)(4)(C)(1994). "In case of an injury to, destruction of, or loss of natural resources ... liability shall be to the United States Government and to any state for natural resources within the State or belonging to, managed by, controlled by, or appertaining to" such trustee. Id.

(250) Id. [sections] 9601(16). In accordance with CERCLA section 301(c)(1), id. [sections] 9651(c)(1), the United States Department of Interior has promulgated regulations for assessing natural resource damages at 43 C.F.R. pt. 11 (1999).

(251) See Bridgewater/Osterman Propane PPA, Region I (1997) (including protection from natural resource damages liability where portions of the four-acre site are wetlands); Raymark/Philadelphia Suburban Water Corp. PPA, Region HI (1997) (addressing groundwater contamination).

(252) See Raymark/Philadelphia Suburban Water Corp. PPA, at 24.

(253) Id. at 4.

(254) See id.

(255) Id. at 24.

(256) See 42 U.S.C. [sections] 9607(t)(1) (1994).

(257) See, e.g., Marathon Battery/Scenic Hudson Land Trust PPA, Region II (1997) (agreeing to preserve natural area); ICG Iselin Railroad Yard/Tennessee Wildlife Resource Agency PPA, Region IV (1997) (agreeing to restore wetlands). A prospective purchaser in Region V agreed to directly pay the United States Fish and Wildlife Service $20,000 in order to "restore, replace, [or] acquire natural resources or assess natural resource damages at or near the Property." AWR Refinery/AWR & Clark Oil & Blastco PPA, Region V, at 21 (1998).

(258) Most natural resource damages claims settle for less than $500,000. However, damages may be in the range of hundreds of millions, and even billions of dollars. S. COMM. ON ENV'T AND PUB. WORKS, THE SUPERFUND CLEANUP ACCELERATION ACT OF 1998, S. REP. NO. 105-192, at 11 (1998). One of the largest natural resource damages claims involves the Coeur d'Alene Basin, where the Tribal trustee filed a claim seeking $1 billion in damages, and the United States Justice Department filed a separate claim seeking $600 million on behalf of the federal agencies. Id.

(259) See 42 U.S.C. [sections] 9622 (j)(2) (1994) But see National Ass'n of Mfrs. v. Department of Interior, 134 F.3d 1095, 1113 (D.C. Cir. 1998) (holding that CERCLA does not permit trustees to recover for damages to private property).

(260) See 42 U.S.C. [sections] 9607(1)(2)(a) (1994); see also Exec. Order No. 12,580, 52 Fed. Reg. 2923, 2923 (Jan. 23, 1987).

(261) 42 U.S.C. [sections] 9607(1)(1) (1994); see 43 C.F.R. [sections] 11.10 (1999) (United States Department of the Interior regulations). The goverrment's method of evaluating natural resources is extensively discussed in Ohio v. Department of Interior, 880 F.2d 432 (D.C. Cir. 1989).

(262) 42 U.S.C. [sections] 9607(f)(1) (1994).

(263) 33 U.S.C. [sections] 1321 (1994). Congress amended section 311 in 1990 as part of the Oil Pollution Act, Pub. L. No. 101-380, 104 Stat. 484 (1990).

(264) Harmful quantities is defined as an amount of oil or hazardous substance that either 1) violates water quality standards, or 2) causes a film or sheen upon, or discoloration of, the surface water. 40 C.F.R. [sections] 110.3 (1999).

(265) Navigable waters are defined in EPA regulations to include interstate and intrastate waters that could affect interstate commerce. See id. [subsections] 110.1, 116.3(1); see also 33 U.S.C. [sections] 1362 (7) (1994).

(266) 33 U.S.C. [sections] 1321(b)(5), (b)(6)(A), (f) (1994). Congress borrowed the liability scheme in CWA section 311 when it enacted CERCLA. Why Congress chose section 311 is unclear. Equally unclear is how section 311 liability scheme even works; as with CERCLA, courts interpret it as imposing strict liability and, in certain circumstances, imposing joint and several liability. See, e.g., United States v. M/V Big Sam, 681 F.2d 432, 439 (5th Cir. 1982) (imposing joint and several liability); In Re Oriental Republic of Uruguay, 821 F. Supp. 928, 933 (D. Del. 1992) (imposing strict liability). Section 311 imposes liability to the government for cleanup costs and natural resources damage; however, it does not impose liability for property damages or personal injuries. See 33 U.S.C. [sections] 1321(f)-(i) (1994).

(267) The NCP contains procedural and substantive guidelines for the cleanup of hazardous waste under section 311. See generally 40 C.F.R. [sections] 401.10-14 (1999) (regulating effluent-producing entities).

(268) See generally 1995 Guidance, supra note 29; 1989 Guidance, supra note 28.

(269) But see, e.g., Arkansas River Ranch/State of Colorado PPA, Region VIII (1999); Hayden Ranch/City of Aurora PPA, Region VIII (1998); AWR Refinery/AWR & Clark Oil & Blastco PPA, Region V (1998).

(270) 33 U.S.C. [sections] 1321(a)(2) (1994).

(271) Hayden Ranh/City of Aurora, Region VIII, at 4 (1998).

(272) Id.

(273) Id.

(274) Id. at 5.

(275) Id. at 5-8. The PPA stated that [i]n consideration of and in exchange for the United States' Covenant Not to Sue ... Settling Respondent agrees that it shall make available for use by the United States in performing removal or restoration actions at the Upper Arkansas Fluvial Tailings Site a repository for disposal of fluvial tailings that EPA or DOI may determine should be excavated and removed from their present locations.

Id. at4-5.

(276) Id. at 10. The covenant not to sue was for

any and all civil liability for natural resource damages pursuant to Section 311(b)(3) of the Clean Water Act, 42 U.S.C. [sections] 1321(b)(3) [sic], with respect to: (a) the Existing Contamination; and (b) any hazardous substances, pollutants or contaminants which EPA or DOI remove, or direct be removed, from the Upper Arkansas Fluvial Tailings Site.

Id. at 10-11.

(277) AWR Refinery/AWR & Clark Oil & Blastco PPA, Region V (1998).

(278) Id. at 7.

(279) Id. at 1.

(280) Compare 33 U.S.C. [sections] 1321(a)-(b) (1994), with 42 U.S.C. [sections] 9601(14) (1994).

(281) Section 311(b)(5) requires an oil spill to be reported when there is a "discharge" of a "harmful quantity," which EPA has interpreted as a violation of water quality standards or a "film or sheen upon or discoloration of the surface of the water." 33 U.S.C. [sections] 1321(b)(5) (1994); 40 C.F.R. [sections] 110.3 (1999). "Discharge" includes "any spilling, leaking, pumping, pouring, emitting, emptying," but excludes any discharges that are in compliance with a permit. See 33 U.S.C. [sections] 1321(a)(2) (1994). Like CERCLA and RCRA, the CWA does not distinguish between "leaking" and leaching; therefore, prospective purchasers may run into the same liability problems if there is contained pollution on site.

(282) 33 U.S.C. [sections] 1364(a) (1994). EPA, "upon receipt of evidence that a pollution source or combination of sources is presenting an imminent and substantial endangerment to the health of persons or to the welfare of persons," may abate the pollution by restraining any person causing such activity or by "tak[ing] such other action as may be necessary." Id.

(283) See id.

(284) Id.

(285) Section 504 of the Clean Water Act is rarely litigated and rarely enforced by EPA. Congress created CERCLA in 1980, after the CWA was passed, keeping in mind the inadequacies of section 504 to clean up hazardous waste spills. As Professor Craig Johnston has noted, section 311 "encompassed only releases to navigable waters," and "the 'imminent hazard' provisions were of little value in situations where the persons responsible for the contamination could not be identified." CRAIG N. JOHNSTON & JEFFREY G. MILLER, THE LAW OF HAZARDOUS WASTE DISPOSAL AND REMEDIATION 53 (1996) (citing H.R. REP. No. 96-1016, at 22 (1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6125).

(286) See United States v. Hooker Chem. & Plastics Corp., 749 F.2d 968, 979 (2d Cir. 1984).

(287) Id. The CWA's citizen suit provision provides that citizens may bring suit against a person "who is alleged to be in violation of an effluent standard or limitation" or to enforce "an order issued by the Administrator or a State with respect to a standard or limitation." 33 U.S.C. [sections] 1365(a) (1994). This does not give citizens the statutory authority to bring a lawsuit for an imminent and substantial endangerment from a pollution source.

(288) 1995 Guidance, supra note 29, at 34,797.

(289) When contamination is contained on site, or when the extent of the contamination is not fully disclosed (i.e., an RI/FS is not complete) before the PPA is finalized, EPA is taking both a financial and a public health risk thai contamination will not spread to adjacent land or groundwater at some point in the future. For example, once a PPA is negotiated, EPA loses its ability to put a lien on or foreclose on the site, because the site is no longer owned by a liable party. See, e.g., Commodore Semiconductor/GMT Microelectronics PPA, Region III (1994) ("EPA shall release and waive all liens currently imposed on the property."); American Western Refining/AWR Acquisition PPA, Region V (1998) ("EPA shall, at its sole expense ... release all liens it has placed on the Site pursuant to 42 U.S.C. [sections] 9607(1).").

(290) 1995 Guidance, supra note 29, at 34,797.

(291) See id.

(292) Id.

(293) Id.

(294) Id.

(295) Id. EPA commonly includes this reopener in major party settlements with PRPs.

(296) Id.

(297) See generally 42 U.S.C. [sections] 9622(f)(6)(A) (1994) (allowing covenants not to sue for de minimis settlements); see also 1989 Guidance, supra note 28, at 34,239.

(298) See, e.g., Commodore Semiconductor/GMT Microelectronics PPA, Region III, at 13 (1994) (stipulating penalties of $25,000 per day per violation of institutional controls, $1000 per day per violation for failure to make payments within 120 days of due date, and $5000 per day per violation for failure to make payments within 120 days of EPA's demand); Merit Products/Henshell & City of Philadelphia PPA, Region III, at 16 (1995) (providing that failure to comply with any requirement in the PPA results in stipulated penalties of $750 per day for the first 14 days and $1500 per day thereafter).

(299) Rosemarin, supra note 151, at 4. "[T]he Model Agreement seems to manifest EPA's rigid protection of its enforcement authority." Id.

(300) See id. at 3.

(301) 1995 Guidance, supra note 29, at 34,797.

(302) Rosemarin, supra note 151, at 4 ("This burden can be very difficult to carry under any circumstances, and may be impossible to carry without some accommodation for potential migration of contamination.").

(303) See San Gabriel Valley/Benson Eyecare PPA, Region IX (1996).

(304) See 1995 Guidance, supra note 29, at 34,797.

(305) Of course, if the prospective purchaser causes a serious release or threat of release, such as disturbing a cap and thereby exacerbating existing contamination, EPA will take enforcement action against the purchaser.

(306) However, the average time it takes EPA to clean up and redevelop a site in the PPA program is considerably less than the average site. When the PPA program first started, EPA stated in the preamble to the NCP that restoration period for a federal cleanup site could take "perhaps several decades." 55 Fed. Reg. 8732 (March 8, 1990). But Tim Fields, Acting Assistant Administrator, EPA Office of Solid Waste and Emergency Response announced in 1997 that EPA now takes an average of eight years to clean up a site and named PPAs as one reason for the time difference. Wastes and Hazardous Substances Superfund: Browner Touts 500th Site to Come Off List, Greenwire (Dec. 11, 1997).

(307) EPA uses different types of institutional controls to maintain jurisdiction over contaminated properties after a cleanup is complete. One commentator has argued that EPA should use existing and new institutional controls as the primary tool to prevent public exposure to health risks posed by brownfields. Pendergrass, supra note 196, at 10,244.

(308) Many PPAs contain a provision that gives EPA or other agencies access to the property. See supra note 164 and accompanying text.

(309) Telephone Interview with Brett Moffett, supra note 120.

(310) As discussed in Part II.B, supra, Capitol Hill is paying close attention to the EPA Prospective Purchaser Agreement program. Assuming that EPA wants to keep the existing program, it will avoid taking any major actions that proponents of absolving all liability could publicly criticize.

(311) An EPA attorney has referred to contribution protection as "a big plus" for prospective purchasers over what the 1989 Guidance provided. Steven D. Shell, EPA Continues Administrative Reform of Superfund with New Guidance on Prospective Purchaser Agreements, 2 ENVTL. LAW. 445, 462 (1996) (quoting Helen Keplinger, Office of Site Remediation Enforcement). The 1989 Guidance did not give prospective purchasers contribution protection. See generally 1989 Guidance, supra note 28.

(312) See OHM Remediation Sere. v. Evans Cooperage Co., 116 F.3d 1574, 1582 (5th Cir. 1997)

("[A] party may be 'potentially liable' simply by being sued under the statute."); Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746, 748-49 (7th Cir. 1993) (stating that a party becomes a potentially liable party without admitting liability).

(313) 42 U.S.C. [sections] 9613(f)(1) (1994). "Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title." Id. Generally, courts construe this provision to mean that non-PRPs are barred from bringing a section 113 contribution action against PRPs. OHMRemediation Serv., 116 F.3d at 1582.

(314) Prospective purchasers automatically become "present owners" when they buy the site; therefore, they are also considered PRPs, as discussed in Part II.A, supra.

(315) 42 U.S.C. [sections] 9613(f)(1) (1994).

(316) Some courts use what are known as the "Gore factors" to determine liability among parties in contribution actions, considering 1) the ability of parties to demonstrate that their contribution to the discharge can be distinguished; 2) the amount of hazardous waste involved; 3) the degree of toxicity of the hazardous waste involved; 4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of hazardous waste; 5) the degree of care exercised; and 6) the degree of cooperation by the parties with the government. See United States v. R.W. Meyer, Inc., 932 F.2d 569, 571 (6th Cir. 1991). Applying the Gore factors, a prospective purchaser is unlikely to be found liable, because the purchaser was not involved with the contamination and is cooperating with the government.

(317) The Model Prospective Purchaser Agreement in the 1995 Guidance includes a "certification" provision whereby the prospective purchaser certifies "to the best of its knowledge and belief it has not caused or contributed to a release or threat of release of hazardous substances or pollutants or contaminants at the Site." 1995 Guidance, supra note 29, at 34,797.

(318) 42 U.S.C. [sections] 9613 (1994).

(319) 1995 Guidance, supra note 29, at 34,798. If a private cost recovery action or contribution claim is brought against a prospective purchaser, most PPAs require the prospective purchaser to notify EPA and other state or federal agencies that are a party to the settlement within 10 days of service of the complaint. Id.

(320) 42 [sections] U.S.C. 9613(f)(2) (1994). A settlement does not discharge any of the other potentially responsible parties from liability, but it does reduce the potential liability of the others by the amount of the settlement. Id. Therefore, if a prospective purchaser pays a monetary sum for consideration, then the payment may be subtracted from the PRP liability pool for that site. One PRP has argued that nonmonetary consideration, such as restoration of natural resources, should also be subtracted. Telephone Interview with Helen Keplinger, EPA Office of Enforcement and Compliance (Nov. 30, 1998).

(321) In discussing the SARA amendments, Rep. John Dingell (D-Mich.) made the following statement on the floor of the House:

The legislation encourages the Administrator to enter into agreements with potentially responsible parties, but only where it is in the public interest to do so. In this respect, the legislation endorses the EPA settlement policy, which gives the Administrator the discretion he needs to ensure that all settlements are in the public interest. There/s no intent to codify the entire EPA settlement policy, however, since the terms needed in particular settlement agreements will vary from case to case and the Administrator may include in each agreement, whatever terms are needed, to ensure that CERCLA goals are met. (131) CONG. REC. 34,632, 34,632 (Dec. 5, 1985) (emphasis added).

(322) Section 107 gives private parties the authority to use the CERCLA liability scheme for cost-recovery actions. But, unlike the government, a private party has the burden of showing that the costs incurred were not inconsistent with the NCP. 42 U.S.C. [sections] 9607(a)(4)(A) (1994).

(323) Id. [sections] 9607(a)(4)(B).

(324) See United Techns. v. Browning-Ferris Indus., 33 F.3d 96, 100-02 (1st Cir. 1994) (holding that a liable party cannot circumvent the statute of limitations of section 113 by bringing a claim under section 107); see also Bedford Affiliates v. Sills, 156 F.3d 416, 424 (2d Cir. 1998); New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1120 (3d Cir. 1997); Pheumo Abex Corp. v. High Point, Thomasville & Denton R.R. Co., 142 F.3d 769, 776 (4th Cir. 1998); Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 352 (6th Cir. 1998); Akzo Coatings, Inc v. Aigner Corp., 30 F.3d 761, 764 (7th Cir. 1994); United States v. Colorado & Eastern R. Co., 50 F.3d 1530, 1536 (10th Cir. 1994). In contrast, other courts have held that PRPs could bring an action under section 107, based on the broad scope of CERCLA and the "any other person" terminology. See, e.g., Companies for Fair Allocation v. Axil Corp, 853 F. Supp. 575, 580 (D. Conn. 1994) (holding that a PRP can bring a claim under both sections 107 and 113).

(325) 42 U.S.C. [sections] 9613(0 (1994).

(326) 1995 Guidance, supra note 29, at 34,793.

(327) 42 U.S.C. [sections] 6972 (1994). Citizens may file suit in district court to 1) restrain a person from violating RCRA, and 2) to order such person to take other action as may be necessary to clean up the site. However, citizens are precluded from bringing actions if EPA or the state is taking enforcement action under RCRA section 7003 or CERCLA sections 104 or 106. See id. [sections] 6972Co)(2)(B). A prospective purchaser who finds contamination caused by a previous owner would probably not be able to use section 6972(a)(1)(B) to recover costs from a cleanup from past owners who caused the contamination. See Meghrig v. KFC Western, Inc., 516 U.S. 479, 485 (1995) (holding that a private party cannot recover cleanup costs incurred after properly invoking RCRA's statutory process).

(328) However, contribution protection under section 113 of CERCLA may protect a purchaser from RCRA claims. In United States v. Cannons Engineering, the First Circuit Court of Appeals indicated that Congress intended for section 113 to extend to all claims between parties regarding matters contained in the covenant not to sue. 899 F.2d 79, 93 (1st Cir. 1990). Although CERCLA is silent with respect to indemnification between PRPs, the court took a functional approach and held that section 113 bars indemnification claims. Id. To read the statute otherwise would allow "non-settlors to make an end run around the statutory scheme." Id. Thus, a prospective purchaser with a PPA could argue that a PRP is barred by CERCLA section 113 from bringing a RCRA section 7003 action because to allow otherwise would encourage PRPs to avert EPA's covenant not to sue by litigating under RCRA.

(329) Section 7002(b)(2) states that no citizen suit claim can be brought "if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in court of the United States or a State to require compliance with such permit, standard, regulation, condition, requirement, prohibition, or order." 42 U.S.C. [sections] 6972(b) (1994).

(330) RCRA requires the government action to be taken "in court," and courts are split regarding whether an administrative hearing satisfies the statutory requirement. Compare Baughman v. Bradford Coal Co., 592 F.2d 215, 219 (3d Cir. 1979) (stating that administrative tribunals could preclude citizen suits under some circumstances), with Friends of the Earth v. Consolidated Rail Corp., 768 F.2d 57, 63 (2d Cir. 1985) (holding that administrative enforcement actions do not preclude citizen suits).

(331) "There is general agreement that early involvement of affected communities and stakeholders in the Superfund decision-making process may reduce conflicts and delays." S. COMM. ON ENV'T AND PUB. WORKS, THE SUPERFUND CLEANUP ACCELERATION ACT OF 1998, S. REP. NO. 105-192, at 10 (1998) (Rep. John Chafee (R-R.I.) (commenting on proposed amendments to CERCLA). A comparison of three brownfield redevelopment projects found a correlation between the extent of the local community's satisfaction with the redevelopment and the level of community participation during redevelopment. Davies, supra note 105, at 321.

(332) See, e.g., Arkansas River Rancid/State of Colorado PPA, Region VIII (1999); American Western Refinery/AWR Acquisition PPA, Region V (1998); H. Brown/DBV Partners PPA, Region V (1998); Tailsman/The Nature Conservancy PPA, Region IV (1998); Uniroyal Plastics/City of Mishawaka PPA, Region V (1998); Kane & Lombard/Double Eagle Enterprises PPA, Region III (1997); Raymark/Philadelphia Suburban Water Corp. PPA, Region III (1997); IndustriPlex/Massachusetts PPA, Region I (1996); Calhoun Park/South Carolina State Ports Authority, Region IV (1996); D.C. Franche/Wabansia Corp. PPA, Region V (1996); Denver Radium/Home Depot PPA, Region VIII (1995); Chemical Sales/G.L. Bryan Investments PPA, Region VIII (1995); South East Rockford/Superior Toy PPA, Region IV (1993).

(333) ENVRONMENTAL LAW INSTITUTE, AN ANALYSIS OF STATE SUPERFUND PROGRAMS: 50 STATE STUDY, 1998 UPDATE 39 (1998).

(334) Unlike other areas of environmental law, state hazardous waste laws--enacted by state statute or state agency regulations--operate and are enforced independently from federal law.

(335) 42 U.S.C. [sections] 9614 (1994). CERCLA requires a level of state involvement at federal sites. Before EPA takes remedial action, the state must 1) assume responsibility for future maintenance of a site, 2) assure compliance with RCRA in the future, and 3) contribute to the costs of the cleanup. Id. [sections] 9604(c)(3).

(336) CERCLA section 106 does not provide state governments with injunctive enforcement authority. New York v. Shore Realty Corp., 759 F.2d 1032, 1049 (2d Cir. 1985). However, many state's legislatures have enacted their own hazardous waste statutes, giving the state agencies similar injunctive authority. For example, the California Department of Toxic Controls has the authority to issue an order containing a compliance schedule and administrative penalties if a person violates the Hazardous Waste Control Law or any permit, regulation, or standard under that statute. CAL. HEALTH & SAFETY CODE [sections] 25187(a)(1) (1999).

(337) Some state laws are broader in scope than CERCLA or RCRA. For example, roughly a dozen states include petroleum within the definition of hazardous waste subject to the state statute. See, e.g., CAL. HEALTH & SAFETY CODE [subsections] 25117, 25141 (1999); CAL. CODE REGS. tit. 22, [sections] 66261.1 (1999). The cleanup standards may also vary from state to state, and from program to program within each state. See ENVIRONMENTAL LAW INSTITUTE, supra note 333, at 26-28. One study found that standards for voluntary cleanup sites are typically the same as standards applied at state-led or state enforcement sites. Id. at 40.

(338) Some states impose liability on a fault basis. See, e.g., ARIZ. REV. STAT. 8 49-285(A) (1994); CAL. HEALTH & SAFETY CODE [sections] 25363 (1999); 415 ILL. COMP. STAT. 5/58.9(a)(1) (West 1999); LA. REV. STAT. ANN. [sections] 30:2276(C) (West 1999). Other statutes allow for apportionment of liability in certain circumstances. See, e.g., HAW. REV. STAT. [sections] 128D-18 (1998); MASS. GEN. LAWS. ch. 21E, [sections] 5(a) (1999); VT. STAT. ANN. tit. 10, [sections] 6615 (1998).

(339) Of the states that mirror CERCLA, some have adopted their own strict, joint, and several liability schemes or have incorporated CERCLA by reference. See, e.g., DEL. CODE ANN. tit. 7 [sections] 9105(c) (Supp. 1998); FLA. STAT. ANN. [sections] 403.727 (4) (West 1998); GA. CODE ANN. [sections] 12-8-96.1(a) (1998); MICH. STAT ANN. [sections] 13A.20126 (Law Co-op 1997); MONT. CODE ANN. [sections] 75-10-715(1) (1997); N.J. STAT. ANN. [sections] 58:10-23.11g(c) (West 1992 & Supp. 1998); PA. STAT. ANN. tit. 35, [sections] 6020.701(a) (West Supp. 1999-2000); WASH. REV. CODE ANN. [sections] 701.105D.070 (West 1992).

(340) These states primarily rely on the federal CERCLA program to impose liability on PRPs within their states. See, e.g., IDAHO CODE [sections] 39-4417 (1998); NEY. REV. STAT. [sections] 459.535 (1999), N.M. STAT. ANN. [sections] 74-4-8 (Michie Supp. 1998).

(341) Voluntary cleanup programs are generally defined as "state-sponsored programs that encourage private parties to conduct cleanups of contaminated properties in the absence of state enforcement measures." Linda K. Breggin & John Pendergrass, Voluntary and Brownfield Remediation Programs: An Overview of the Environmental Law Institute's 1998 Research, [29 News & Analysis] Envtl. L. Rep. (Envtl. L. Inst.) 10,339, 10,339-40 (June 1999). Forty-four states have established voluntary cleanup programs. ENVIRONMENTAL LAW INSTITUTE, supra note 333, at 39. State voluntary cleanup programs are sometimes distinguished from state "brownfields programs." Voluntary programs generally focus on cleaning up less contaminated sites, regardless of the site's future use, while brownfield programs usually focus on redeveloping sites or improving urban areas. Breggin & Pendergrass, supra, at 10,340.

(342) A settlement with the federal government generally does not bar a state from bringing a contribution action against a PRP to recover a state's cleanup costs if the state is not a party to the settlement. 42 U.S.C. [sections] 9613(f)(3) (1994). Nevertheless, a state, like a PRP, may be barred from bringing an action against a purchaser who receives contribution protection in a covenant not to sue. As discussed in note 328, supra, the First Circuit has indicated that section 113 protects a purchaser from all liability with respect to matters in an EPA covenant not to sue. United States v. Cannons Eng'g, 899 F.2d 79, 93 (1st Cir. 1990).

(343) The threat of concurrent federal and state enforcement is commonly an issue under RCRA, because, unlike CERCLA, states assume a state program under the federal statute. "Overfiling" occurs when a state commences enforcement proceedings under an EPA approved program, and then EPA files a complaint against the same party alleging similar violations. See generally OFFICE OF ENFORCEMENT, U.S. ENVIRONMENTAL PROTECTION AGENCY, GUIDANCE ON RCRA OVERFILING (EPA No. 9939.0) (1986). However, the Eighth Circuit recently held that EPA may not overfile after a state concludes an action in the same manner for the same violation. Harmon Industries, Inc. v. Browner, 191 F.3d 894, 902 (8th Cir. 1999) (finding that EPA overstepped its authority under RCRA by overfiling the enforcement efforts of the Missouri Department of Natural Resources). See generally Bryan S. Miller, Harmonizing RCRA's Enforcement Provisions: RCRA Overfiling in Light of Harmon Industries v. Browner, 5 ENVTL. LAW. 585 (1999) (discussing district court decision); Amy Porter, National, State Groups Argue RCRA Bars EPA Enforcement When State Act, [29 Current Developments] Env't Rep. (BNA) 2045, 2045 (Feb. 12, 1999).

(344) 1995 Guidance, supra note 29, at 34,797.

(345) The words "and the state" are inserted after "United States Environmental Protection Agency" throughout the Model Prospective Purchase Agreement in the 1995 Guidance, indicating that EPA intended states to be settling parties. See id. at 34, 792-97.

(346) Of the 65 PPAs reviewed, states were a party to the settlement in a mere five PPAs.

(347) Sites listed or proposed for listing are not eligible for the states' voluntary programs.

(348) Id. A vast number of brownfields do not meet the federal criteria for NPL listing; therefore, the states are responsible for the enforcement, overnight, and funding of cleanups at the majority of brownfields. Breggin & Pendergrass, supra note 341, at 10,340.

(349) Interview with Karin Kaslo, Former Oregon Department of Environmental Quality Employee (Nov. 5, 1998).

(350) The State of California frequently issues a "comfort letter" to prospective purchasers who negotiate an agreement with EPA Region IX. Interview with Brett Moffett, supra note 120. See generally CAL. HEALTH & SAFETY CODE [sections] 25395 (1999).

(351) Interview with Brett Moffett, supra note 120.

(352) See, e.g., ARIZ. REV. STAT. [sections] 49-285.01(C) (West Supp. 1998-1999) (providing for a covenant not to sue and contribution protection from state claims); ARK. CODE ANN. [sections] 8-7-1104 (Michie 1997) (allowing state to enter into a "consent administrative order" with purchaser requiring purchaser to clean up existing hazardous waste); CAL. HEALTH & SAFETY CODE [sections] 101480 (1999) (providing for a covenant not to sue and contribution protection from state claims); CONN. GEN. STAT. [sections] 22a-133aa (Supp. 1999) (providing for a covenant not to sue for new or current owners not associated with contamination); MASS. GEN. LAWS ANN. ch 21E [sections] 3A(j) (West Supp. 1999); N.H. REV. STAT. ANN. [sections] 147-F:4-6 (1996 & Supp. 1997) (providing for a covenant not to sue if purchaser is not responsible for contamination); N.J. STAT. ANN. [sections] 58:10B-13.1 (West Supp. 1999) (providing for a covenant not to sue issued to all parties who complete remediation in the VCP); PA. STAT. ANN. tit. 35 [sections] 6026. 501 (West Supp. 1999) (providing for a covenant not to sue); WASH. REV. CODE [sections] 70.105D.040 (West Supp. 1999) (establishing a prospective purchaser agreement program that offers a consent decree if PPA will result in public benefit and expedite cleanup); DELAWARE DIV. OF AIR & WASTE MANAGEMENT, SIRB, DELAWARE VOLUNTARY CLEANUP PROGRAM GUIDANCE (1995) (describing covenant not to sue).

(353) See, e.g., MICH. STAT. ANN. [sections] 13A.20126(1) (West 1999) (exempting new site owners who conduct a baseline environmental assessment and disclose the results). A state official reported that the causation approach in Michigan reduces transaction costs, and a Michigan survey said that 33 municipalities claim the causation standard facilitates redevelopment. U.S. GEN. ACCOUNTING OFFICE, supra note 62, at 11. However, not everyone in Michigan embraces the new program. A representative of the Michigan Environmental Council has stated that it will increase public expense for cleanup. Id. at 15.

(354) In Oregon, a prospective purchaser must prove that the PPA will result in a substantial public benefit that furthers the public interest. If the party meets the terms of the PPA, then the prospective purchaser receives protection from state law. This liability shield runs with the land, but can only be invoked by nonliable successors. OR. REv. STAT. [sections] 465.327 (1999). As of November 5, 1998, the Oregon Department of Environmental Quality had executed 30 PPAs. Interview with Karin Kaslo, supra note 349.

(355) OR. REV. STAT. [sections] 465.327(4) (1999).

(356) PA STAT. ANN. tit. 35, [sections] 6026.501(a) (West Supp. 1999).

(357) These letters are also known as "certificates of completion." Commonly these letters are issued by the state, verifying that the site has been cleaned up to site standards. GERRARD, supra note 21, [sections] 17.0113], at 17-5.

(358) "At a minimum, a No Further Action letter includes the state's assurance that, based on currently known facts, the state is unlikely to require the volunteer to take further action with respect to contamination addressed by the voluntary cleanup." Breggin & Pendergrass, supra note 341, at 10,343. However, a few states provide that a state certificate of completion shields parties from liability who have undertaken voluntary cleanup. See, e.g., FLA. STAT. [sections] 376.82(2) (West Supp. 1999) (providing that a "no further remediation" or "site rehabilitation letter" protects the purchaser from Florida state enforcement actions and from third party contribution claims); MINN. STAT. ANN. [sections] 115B.175(5)-(6) (West 1997 & Supp. 1999); WIS. STAT. ANN. [sections] 292.15(2)(a)(3) (West 1999).

(359) Al Gore, Introduction to BROWNFIELDS: A COMPREHENSIVE GUIDE TO REDEVELOPING CONTAMINATED PROPERTY, supra note 10, at xix.