Helsell Insight: Environmental Law
Did you know?
Under the Washington Model Toxics Control Act (MTCA), a former property owner is strictly liable for the release or disposal of hazardous substances that occur during his or her ownership, unless a defense applies. Recently, the Washington State Court of Appeals had the opportunity to interpret two of these defenses: the “innocent purchaser” and “domestic purpose” defenses.
In Grey v. Leach, the purchasers discovered an underground heating oil storage tank had been leaking over time and had released a significant amount of oil into the ground, causing soil contamination well in excess of the levels allowed under the MTCA. The purchasers paid approximately $200,000 to clean up the contamination and sued the sellers under the MTCA for remedial action costs. While the sellers admitted that, without their knowledge or without having reason to know, a release of heating oil occurred on their property while they owned it, they asserted they were “innocent purchasers” and that their use of heating oil was intended for a “domestic purpose.”
The innocent purchaser defense protects a person from MTCA liability if she can establish that, at the time of the purchase, she had no knowledge or reason to know of any hazardous substance release. This defense is not available to a person who, by any act or omission, causes or contributes to a release of a hazardous substance.
The Court of Appeals found the sellers liable because their use of the residential heating oil system “caused or contributed to” releases of oil. The Court held that under the MTCA, an “innocent purchaser” does not include a former property owner who contributed to that property’s contamination, even when that contribution occurred without an intentional or negligent release of the hazardous substance.
The Court also ruled that a release of home heating oil does not fall within the MTCA “domestic purpose” exclusion, which applies to lawful and non-negligent uses of hazardous substances for domestic purposes in or near a residential structure. The Court said the exclusion does not include oil leaking from defective pipes into the ground.
There are very few defenses available to a landowner in the event of a release of hazardous materials, and of those that are available, very rarely do they apply to a landowner’s situation. The Grey v. Leach case provides insight into how the courts will interpret these defenses and how strongly it appears they will adhere to the concept of strict liability for property owners.
The Grey case also highlights the importance of conducting due diligence prior to selling or purchasing property. Parties should use the information from inspections to make specific provisions for allocating risks and obligations in the event an environmental issue arises. Washington State and Federal Courts will generally honor the terms of a contract between buyer and seller, landlord and tenant, or owner and building contractor where the contract apportions the liability for environmental contamination.
If you would like any more information or have any questions or concerns about environmental contamination, how to minimize your risk for environmental contamination, or how to apportion your liability, please contact us. Attorneys at Helsell Fetterman have assisted landowners deal with the risks of liability for environmental contamination in every phase of business including leases, purchase and sale, permitting and land development, construction contracting, and day-to-day business operations.
Helsell Fetterman in the News
Staying out of the news is often the goal of highly sensitive cases. Yet there are times when the work of our attorneys is historic or newsworthy. See All News
Helsell Fetterman Announces Two New Associates
December 2010 / Read More
Helsell Fetterman attorneys Thonn and Linden honored as 50-year members of WSBA
November 2010 / Read More