18    H.R. 2878-DEFINING THE SCOPE OF ALL APPROPRIATE
INQUIRY TO ESTABLISH AN INNOCENT PURCHASER
DEFENSE UNDER SUPERFUND
Katherine E. Imbrock, Regulatory Specialist
Burgess & Niple, Limited
Columbus, Ohio 43220
INTRODUCION
Federal bill H.R. 2787, now in the hands of the House Energy and Commerce Committee, is a
proposal to amend the so-called "innocent purchaser" provisions of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund). If enacted, the bill would
establish a rebuttable presumption that by having a "Phase I Environmental Audit" performed by
"environmental professionals" prior to or at the time of acquisition, a property owner will have
satisfied his or her obligation to conduct "all appropriate inquiry" into the past ownership and uses of
the property before claiming an "innocent purchaser" defense against CERCLA liability. H.R. 2787
would also establish minimum federal standards for conducting Phase I Environmental Audits and
define the term "environmental professional." This paper will consider how well H.R. 2787's Phase I
Environmental Audit is likely to function as a national baseline for preacquisition investigations, and
considers its implications for consultants and prospective property purchasers entering into agreements to conduct such investigations.
H.R. 2787 was introduced to the House of Representatives June 28, 1989 by its chief sponsor,
Representative Curt Weldon (R-PA), and assigned to the House Energy and Commerce Committee's
Subcommittee on Transportation and Hazardous Materials, September 25, 1989. H.R. 2787 is now
awaiting a hearing date before the Subcommittee, hopefully to be scheduled for late spring or early
summer of 1990.
EXPLANATION OF KEY TERMS
The Innocent Purchaser Defense
Generally speaking, the liability provisions of CERCLA Section 107 impose strict, joint and several
liability upon all parties bound together in the complex web of "contractual relationships" constituting
responsibility for the generation, storage, transport, treatment, and disposal of hazardous substances.
[Strict liability means fault need not be established. Joint and several liability means more than one
party may be held liable, and that liability may be imposed collectively upon all parties or selectively
upon only one or a few, at the enforcer's discretion.] Liability extends to the costs incurred by
government agencies or private parties in responding to a release or cleaning up contaminated sites,
and to associated natural resource damages. The National Contingency Plan (NCP) is the "blueprint"
for conducting such operations and must be adhered to by those wishing to recover costs.
There are three explicit defenses against CERCLA liability, set out in Section 107(b) of the Act. The
burden of establishing any one of these defenses is upon the defending party or parties. Contamination or a release resulting solely from an Act of God or Act of War are not subject to CERCLA
liability (107[b][l) and [2], respectively). Neither are releases or contamination resulting solely from
the unforeseeable acts or omissions of a third party not bound as an agent, employee, or in another
"contractual relationship" with the party claiming a third party defense (107[b][3]). Property transfers
normally constitute a "contractual relationship" for purposes of establishing such a defense, but there
area number of qualifying exceptions to this presumption set out in CERCLA Section 101(35), one of
which is the innocent purchaser defense.
Section 101(35)(A)(i) provides that a party who ". . . did not know and had no reason to know . . ."
that hazardous substances were released or disposed of on the property at the time he or she acquired
it need not consider himself or herself contractually bound to previous owners for purposes of
45th Purdue Industrial Waste Conference Proceedings, © 1991 Lewis Publishers, Inc., Chelsea, Michigan 48118.
Printed in U.S.A.
155