Environmental Liability

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Environmental liability

Environmental liability refers primarily to the civil and criminal responsibility in the environmental issues of hazardous substances that threaten to endanger public health. Compliance with the standards issued by the U.S. Environmental Protection Agency (EPA) became a major issue following the December 11, 1980 enactment by Congress of the original Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In 1986, the Superfund Amendments and Reauthorization Act (SARA) provided an amendment to CERCLA. The initial legislation created a tax on chemical and petroleum companies, and gave the federal government authority to handle the releases or threatened releases of the hazardous waste . That tax created $1.6 billion over the first five years of the act, put into a trust fund that would cover the costs of cleaning up abandoned or uncontrolled hazardous waste sites. When "Superfund" was created, changes to the original legislation, as well as additions, were made that reflected the experience gained from the first years of administering the program. It also raised the trust fund to $8.5 billion.

The complex issue of liability was made more complex following 1986 when regulations increased state involvement, and encouraged greater citizen participation in the decisions of site cleanup. In addition to the civil liability of claims due to federal, state, and local governments, a possibility of criminal liability emerged as a matter of particular concern. As those who might be responsible, CERCLA defines four categories of individuals and corporations against whom judgment could be rendered, referred to as potentially responsible parties (PRPs):

  • current owners or operators of a specific piece of real estate
  • past owners if they owned or operated the property at the time of the hazardous contamination
  • generators and possessors of hazardous substances who arranged for disposal, treatment, or transport
  • certain transporters of hazardous substances

In acting under EPA-expanded powers, some states have provided exemptions from liability in certain cases. For example, the state of Wisconsin has provided that the person responsible for the discharge of a hazardous substance is the one who is required to report it, investigate, it and clean up the contamination. According to Wisconsin Department of Natural Resources information, the state defines the responsible person as the one who "causes, possesses, or controls" the contaminationthe one who owns the property with a contaminant discharge or owns a container that has ruptured. Other Wisconsin exemptions include limiting liability for parties who voluntarily remediate contaminated property; limiting liability for lenders and representatives, such as banks, credit unions, mortgage bankers, and similar financial institutions, or insurance companies, pension funds or government agencies engaged in secured lending; limiting liability for local government units; and, limiting liability for property affected by off-site discharge.

Courts have also acted in finding persons responsible not specifically listed as PRPs:

  • lessees of contaminated property
  • lessors of the contaminated property for contamination caused by their lessees
  • Landlords and lessees for the contamination cause by their sub-lessees
  • corporate officers in their personal capacity
  • shareholders
  • parent corporations liable for their subsidiaries
  • trustees and personal representatives personally liable for contaminated property owned by a trust or estate
  • successor corporation
  • donees
  • lenders who foreclose on and subsequently manage contaminated property

In an environmentally aware, health-conscious society, both in America and throughout the world, environmental liability continues into the early twenty-first century to be a matter of grave concern not only with land, but also in maritime issues.

[Jane E. Spear ]



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Amos, Bruce. "A Free Market for Environmental Liability." Pollution Engineering Online 1998 [June 2002]. <http://www.pollutionengineering.com>.

Battelle. Managing Corporate Environmental Liability. 2001 [June 2002]. <http://www.battelle.org/Environment>.

Environmental Liability. 1993 [cited July 2002]. <http://www.lawtext.com>.

Goldstein, Michael R., and Howard D. Rosen. "Environmental Liability in the 90s." Asset Protection News 2, no. 3 (April/May 1993).

Wisconsin Department of Natural Resources. Environmental Liability Exemptions. April 12, 2002 [June 2002]. <http://www.dnr.state.wi.us/org>.


U.S. Environmental Protection Agency, 1200Pennsylvania Avenue, NW, Washington, DC USA 20460 202-260-2090, , <http://www.epa.gov>

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Environmental Liability

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Environmental Liability