CERCLA’s Broad Sweep of Liability For Owners

Some decisions are valuable not because they make new law but because they reaffirm well known principles of law.  City of Banning v. Dureau is one such decision.  There, a federal district court in California ruled that an owner of real property was strictly liable under CERCLA for the release of hazardous substances on her property and could not escape CERCLA liability by arguing that she was ignorant of the conditions giving rise to the release.   

Specifically, the owner had leased her property to an automotive shop.  When the tenant left the property, it apparently left drums of waste oil, which were turned over several years later by one of the homeless people who inhabited the property, causing over a million dollar cleanup.  Although the owner claimed to come within the innocent landowner defense in Section 107(b) of CERCLA, the court rejected that defense, holding that the owner had not exercised due care.  According to the court, the owner knew that the property was not secure, rarely visited the property, and had been advised by municipal officials that the automotive tenant had failed to obtained required permits and comply with local ordinances. 

The proposition that a landowner is strictly liable for harm caused by substances released from his property is hardly novel, dating back to the nineteenth century English case Fletcher v. Rylands and beyond.    CERCLA was built upon that proposition and imposes broad liability on owners for any release of hazardous substances from their property.  As in City of Banning, courts have been reluctant to allow the innocent landowner defense to trim back that liability except in clear instances when the owner in the exercise of diligence did not know and could not have known of the environmental risk.

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