UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460 SEP 2J 2016 Attorney-Client Privilege I For Internal Use Only OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE MEMORANDUM SUBJECT: FROM: TO: Transmittal of Strategy Paper, Enforcement Strategies and Tools to Address Proprietary Controls at Remedial Superfund Sites with Non Participating Landowners, and Mo~el Noticl o Contamination Cynthia L. Mackey, Director rdj'\-tp 4r. Office of Site Remediation Enf~;.;;,;r;f / Regional Counsels, Regions 1-10 Superfund National Program Managers, Regions 1-10 This memorandum is to provide the Regions with the Office of Site Remediation Enforcement's (OSRE) new enforcement strategy paper titled Enforcement Strategies and Tools to Address Proprietary Controls at Remedial Superfund Sites with Non Participating Landowners, along with a Model Notice of Contamination. The paper contains enforcement strategies, practices, and tools for the Regions to consider when they encounter a landowner who is reluctant and/or refuses to implement proprietary controls (PCs) at Superfund remedial sites. The practices and tools identified in the paper are discussed in the context of remedial actions at Superfund sites, but may have wider application at other types of cleanups (e.g., Superfund removals, Resource Conservation and Recovery Act (RCRA) corrective action). Moreover, the Regions should work with their state and/or tribal counterparts as necessary when carrying out certain strategies and tools identified in this document. The use and effectiveness of these practices and tools may vary depending on sitespecific facts. As discussed below, the type of non-participating landowner may inform which strategies, practices, and tools should be considered to encourage such landowner to implement PCs and/or comply with PC requirements. The Regions are encouraged to use their discretion when considering these strategies to implement PCs. Also included is a new model document for providing notice ofcontamination, which, although not an enforceable restriction on property, may serve to notify interested parties that the Agency has determined in a record of decision (ROD) that a PC or specific use restriction is needed for the property. Internet Address (URL) http://www.epa.gov Recycled/Recyclable Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum 50% Postconsumer content)
Both of these documents are available on OSRE s intranet site and are for internal use only. With respect to the model notice in particular, it is to be used as a template for creating actual notices that are to be filed in local land records. Thus, while the ultimate site-specific notice to be filed will indeed be made public, the Regions should refrain from sharing the model outside of the Agency at this point. We may determine, at a later date, to make the model notice available on EPA s Cleanup Enforcement Model Language and Sample Documents Web page. This memorandum, the strategy paper, and the model notice do not substitute for the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or the associated regulations as provided in the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), nor is this document a regulation itself. Thus, these documents do not impose legally binding requirements on Environmental Protection Agency (EPA), states, or the regulated community, and may not apply to a particular situation based upon the circumstances. Further, the recommendations provided in the attached strategy paper and model do not modify or supersede existing EPA guidance, such as those regarding community involvement and/or the remedy selection process. The Regions retain the discretion to adopt approaches on a case-by-case basis that differ from this document where appropriate. For more information about any of the topics discussed in the strategy paper, please contact Anthony Austin, Office of Site Remediation Enforcement (OSRE), at austin.anthony@epa.gov or (202) 564-6943. For more information about the Model Notice of Contamination, please contact Craig Boehr, OSRE, at boehr.craig@epa.gov or (202) 564-5162. Attachments cc: Reggie Cheatham, OLEM/OEM Barnes Johnson, OLEM/ORCR James Woolford, OLEM/OSRTI John Michaud, OGC/SWERLO Tony Guadagno, OGC/CCILO Angelia Talbert-Duarte, OGC/CRFLO Thomas Mariani, DOJ/EES 2
Enforcement Strategies and Tools to Address Proprietary Controls at Remedial Superfund Sites with Non-Participating Landowners September 2016 Office of Site Remediation Enforcement Office of Enforcement and Compliance Assurance
I. Introduction & Background This document is to provide the Regions with enforcement strategies, practices, and tools to consider, in the Regions discretion, when encountering a landowner who is reluctant and/or refuses to implement proprietary controls (PCs) at Superfund remedial sites. The use and effectiveness of these practices and tools may vary depending on site-specific facts. As discussed below, the type of non-participating landowner may inform which strategies, practices, and tools should be considered to encourage such landowner to implement PCs and/or comply with PC requirements. Moreover, the Regions should work with their state and/or tribal counterparts as necessary when carrying out certain strategies and tools identified in this document. 1 Consistent with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund), 2 owners of contaminated property who satisfy liability provisions under CERCLA 107(a) are generally responsible for addressing contamination on their property, including implementing institutional controls (ICs). 3 This is particularly true for one category of ICs PCs because of the role that landowners play in implementing (i.e., recording in the land records) the PCs. The responsibility to implement PCs may even extend to non-source properties implicating landowners who did not cause or contribute to the contamination on their property. 4 Generally, at fund-lead Superfund sites, the United States Environmental Protection Agency (EPA) is responsible for selecting PCs as part of the remedy (where appropriate and following the remedy selection process) and the state is responsible for ensuring that PCs are implemented. At enforcement-lead sites, potentially responsible parties (PRPs) are typically responsible for implementing PCs on their own land and securing PCs from other landowners whose land must be restricted. 5 1 The practices and tools identified in this document are discussed in the context of remedial actions at Superfund sites, but may have wider application at other types of cleanups (e.g., Superfund removals, Resource Conservation and Recovery Act (RCRA) corrective action). 2 42 U.S.C. 9601 9675, CERCLA 101 et seq. Throughout this document, citations to CERCLA will be to the public law section (e.g., CERCLA 101). 3 EPA defines ICs as non-engineered instruments, such as administrative and legal controls, that help to minimize the potential for exposure to contamination and/or protect the integrity of a response action. Institutional Controls: A Guide to Planning, Implementing, Maintaining, and Enforcing Institutional Controls at Contaminated Sites 2 (PIME) (OSWER/OECA Dec. 2012), available at https://www.epa.gov/fedfac/institutional-controls-guide-planning-implementing-maintaining-andenforcing-institutional. A good discussion of EPA s current guidance on ICs, including proprietary controls, can be found in the PIME. Please refer to the PIME for additional information on ICs, how they are defined and how they fit within the cleanup process. This document does not modify or supersede the PIME. 4 This scenario could arise, for example: (1) where contamination has migrated from a source property to separately owned neighboring properties; (2) where a PC is needed on a property as part of monitoring; or (3) where a new purchaser acquires property with contamination solely caused by other parties. The tools and strategies suggested in this memorandum are given with the presumption that the PC being implemented was selected as part of the remedy pursuant to the applicable decision document. 5 See Enforcement First to Ensure Effective Institutional Controls at Superfund Sites, OSWER Dir. 9208.2 (OSRE/OSRTI May 17, 2006), available at https://www.epa.gov/enforcement/guidanceenforcement-first-policy-superfund-institutional-controls. 1
As discussed in the guidance, Institutional Controls: A Guide to Planning, Implementing, Maintaining, and Enforcing Institutional Controls at Contaminated Sites, (PIME), PCs generally are written agreements between the property owner (or grantor) and a second party (grantee), where the grantor agrees to refrain from certain actions or to perform certain actions designed to protect the response action or human health and the environment. 6 Through the recording of a properly drafted and executed PC, the restricted uses may run with the land so that future owners of the affected land would be bound by these restrictions. 7 To the extent these types of controls are binding on subsequent purchasers of the property (i.e., enforceable against successors in title) and transferable (i.e., the controls run with the land), PCs may be more reliable in the long term than other types of ICs. At both fund-lead and enforcement-lead sites, EPA may encounter PRPs and/or landowners of non-source properties who refuse to participate in implementing PCs. For purposes of this document, there are generally two types of non-participating landowners (1) those landowners who are PRPs (i.e., PRP-landowners who may be liable as an owner under CERCLA and from whom performance of the cleanup generally is expected); and (2) those landowners whom EPA believes may qualify for a conditional CERCLA landowner liability protection 8 or that likely fall within the parameters of an EPA enforcement discretion policy 9 (non-source landowners). 10 Although a landowner may initially fall within the second category, its failure to cooperate in implementing (or complying with) PC requirements may undermine or jeopardize its liability protection. 6 PIME, supra note 3, at 18. 7 Id. 8 For purposes of this document, the CERCLA landowner liability protections apply to three types of parties: bona fide prospective purchasers, contiguous property owners, and innocent landowners. See Interim Guidance Regarding Criteria Landowners Must Meet in Order to Qualify for Bona Fide Prospective Purchasers, Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability (Common Elements Guidance) (OSRE Mar. 6, 2003), available at https://www.epa.gov/enforcement/interim-guidance-common-elements-landowner-criteria-qualify-bfppcpo-or-ilo-superfund. 9 EPA has issued enforcement discretion policies that apply to certain landowners that did not cause or contribute to contamination located on their property. See Policy Towards Owners of Residential Properties at Superfund Sites (OSWER July 3, 1991), Final Policy Toward Owners of Property Containing Contaminated Aquifers (OSRE May 24, 1995), and Interim Enforcement Discretion Guidance Regarding Contiguous Property Owners (OSRE Jan. 13, 2004), all available at https://cfpub.epa.gov/compliance/resources/policies/cleanup/superfund/index.cfm?action=3&sub_id=1227. These policies provide that EPA generally will not take CERCLA enforcement actions against these classes of landowners to perform response actions or pay response costs provided that the owners (1) did not cause or contribute to the release, (2) cooperate with those taking response actions, (3) comply with ICs, and (4) satisfy other conditions described in the applicable policy. 10 The term non-participating is used in the legislative notes of the Uniform Environmental Covenants Act to refer to those parties who are unwilling to enter into an environmental covenant that affect their property. The term may also refer to unavailable or unidentified property owners. Although this document does not pertain to situations involving unavailable property owners, some of the practices and tools described herein selection and documentation of PCs, acquiring property, and the use of deed notices may lend themselves to such situations. 2
Some of the reasons these non-participating landowners cite for their reluctance and/or refusal to cooperate, include: Disagreement with a cleanup that allows for residual contamination to remain on site; Fear that PCs will devalue or stigmatize the property; 11 Fear that PCs will unduly limit the use of the property; and Concern over PC implementation costs. This document discusses two phases of interacting with non-participating landowners in implementing PCs. The first phase (Sections II-IV) involves the early identification and engagement of landowners in an attempt to improve communication and proactively address potential PC implementation problems and avoid delays in finalizing PCs. If the first phase is unsuccessful in obtaining landowner cooperation with EPA (or PRPs), then the second phase (Sections V and VI) discusses a variety of available options and alternatives. II. Early Identification of and Engagement with Landowners Consistent with the National Oil and Hazardous Substances Pollution Contingency Plan (NCP) and existing EPA guidance on the CERCLA remedy selection process and community involvement during that process, 12 the Regions should strive to identify and engage all owners of land located within the boundaries of a Superfund remedial site and the owners of land potentially needed to implement the remedy. Early engagement may help ensure that the landowner: (1) understands the remedy selection process and the opportunities to comment on and participate in that process; (2) understands potential liabilities; (3) is prepared to negotiate with EPA or a PRP to implement PCs in a timely manner (once the remedy has been selected); and (4) is provided adequate notice and opportunity to comment to resolve issues and help avoid possible legal claims. Moreover, early engagement may lead to broader community understanding and support, which may improve the likelihood that PCs will be implemented, maintained, and enforced. Finally, early engagement provides the Regions an opportunity to discuss with a landowner the reasonably anticipated future use of the site. 13 11 Because of this concern, many property owners want to be compensated for the encumbrance posed by the PC, especially in situations where a PRP has to use best efforts to secure the property owner s cooperation. 12 See, e.g., Superfund Community Involvement Handbook (OSRTI Jan. 2016), available at https://www.epa.gov/superfund/community-involvement-tools-and-resources; A Guide to Preparing Superfund Proposed Plans, Records of Decision, and Other Remedy Selection Decision Documents Section 7 (OSWER July 1999), available at https://www.epa.gov/superfund/rod-guidance. 13 For further guidance and discussion about considering current and reasonably anticipated future land use in the CERCLA remedy selection process, see PIME, supra note 3, at 3, 7-8, 12; Considering Reasonably 3
Typically, after EPA has investigated a property and determined that ICs/PCs may be necessary, EPA provides the public with an opportunity to comment on the Proposed Plan for a record of decision (ROD) or ROD Amendment, including the selection of an IC/PC as part of the remedial action. 14 Following submission of the public s comments, EPA may consider such comments and may revise the proposed ICs/PCs as appropriate. Remedial project managers (RPMs) are encouraged to continue to keep the public, including landowners, informed as the cleanup process is implemented. III. Selection and Documentation of PCs in Decision Documents As discussed in the PIME, the decision document(s) for the site s remedy should describe the rationale for using ICs and PCs, specifically in helping to achieve protectiveness. The decision document(s) should also describe how the recommended ICs (1) accomplish the specific land and/or resource use restrictions, (2) provide adequate notice of contamination left in place, or (3) otherwise help minimize the potential for exposure to contamination and/or protect the integrity of the cleanup. 15 If, after a ROD is signed, it becomes apparent that the remedy selected needs to be changed, the Region should consider existing EPA CERCLA guidance when evaluating how to document such post-rod change(s). 16 This may happen when PCs are not feasible, new circumstances arise that prevent the implementation of PCs, or new PCs are being considered to prevent exposure to unacceptable risks. In such situations different ICs may need to be selected, the Region may need to make changes to the engineering component of the original remedy, and/or the original cleanup decision may need to be changed to reflect changing site conditions. If the cleanup objectives in the original ROD can be met using enhanced or additional ICs, the site manager and site attorney should Anticipated Future Land Use and Reducing Barriers to Reuse at EPA-lead Superfund Remedial Sites (OSRTI Mar. 17, 2010), available at https://www.epa.gov/superfund-redevelopment-initiative/policyguidance-and-resources; and Land Use in the CERCLA Remedy Selection Process OSWER Dir. 9355.7-04 (OSWER May 1995), available at https://www.epa.gov/superfund-redevelopment-initiative/policyguidance-and-resources. 14 See Superfund Community Involvement Handbook, supra note 12, and PIME, supra note 3, at 12, 17 for further discussion about identification of and engagement with interested landowners. See also A Guide to Preparing Superfund Proposed Plans, Records of Decision, and Other Remedy Selection Decision Documents, supra note 12, regarding the use of proposed plans, records of decision (ROD), ROD amendments, and explanations of significant difference (ESD) in the remedy selection process. 15 For more guidance on the documentation of ICs in decision documents, see Section 4.1 of the PIME, supra note 3. 16 See, e.g., A Guide to Preparing Superfund Proposed Plans, Records of Decision, and Other Remedy Selection Decision Documents Section, supra note 12, at 7. For a more detailed discussion about modifying existing response action decision documents to clarify or specify IC requirements, see PIME, supra note 3, at 15; and Strategy to Ensure Institutional Control Implementation at Superfund Sites 12-14, OSWER No. 9355.0-106 (Sept. 2004), available at https://www.epa.gov/enforcement/guidance-ensuringimplementation-institutional-controls-superfund-sites. 4
evaluate what type of modifications, if any, to existing remedy decision documents and associated enforcement documents may be appropriate. IV. Communication Strategies to Encourage Landowners to Implement PCs A. Inform Landowners about CERCLA s Landowner Liability Protections and EPA s Enforcement Discretion Policies Case teams are encouraged to inform landowners that they must satisfy (1) specific statutory requirements to establish and maintain a CERCLA landowner liability protection, or (2) certain policy criteria to qualify for protection under EPA s enforcement discretion policies (e.g., residential homeowner policy, contaminated aquifer policy). The CERCLA landowner liability protections (e.g., bona fide prospective purchaser (BFPP), contiguous property owner (CPO), innocent landowner (ILO)) have common requirements. 17 For example, in order to successfully maintain a landowner liability protection, a BFPP, CPO, and ILO must: (1) take reasonable steps to stop continuing releases and prevent threatened future releases; (2) provide cooperation, assistance, and access to the acting party; (3) comply with any land use restriction established or relied on in connection with the remedial action; and (4) not impede the effectiveness or integrity of any IC employed in connection with a remedial action. 18 Further, the Agency s policies toward owners of residential property and owners of property containing contaminated aquifers have similar conditions or criteria that guide EPA s exercise of its enforcement discretion. 19 B. Consider Using Third-Party Neutrals Third-party neutrals may be used to help explain why land or other media needs to be restricted, explain why PCs are necessary, and/or resolve concerns the landowner may have. EPA s Conflict Prevention and Resolution Center (CPRC) 20 in the Office of General Counsel (OGC) provides alternative dispute resolution services to the entire Agency. CPRC has a contract to access third-party neutrals in every Region and may be a useful resource in certain circumstances. 17 See CERCLA 101(40), 107(q)(1)(A), and 101(35)(A). 18 Please review the Common Elements Guidance, supra note 8, for a broader discussion regarding liability protection requirements. 19 See Policy Towards Owners of Residential Properties at Superfund Sites and Final Policy Toward Owners of Property Containing Contaminated Aquifers, supra note 9. Under both policies, EPA may consider whether, for example, the landowner provides access when requested, cooperates with the response action, and complies with ICs. 20 EPA Conflict Prevention and Resolution Center Web page, available at https://www.epa.gov/adr. 5
C. Coordinate with Federal, State, Tribal, and Local Government Officials In some cases, it may be useful for the Region to coordinate with federal, state, tribal, or local government officials when communicating with landowners about implementing PCs. For example, due to their proximity to the site, these governmental entities may: (1) be able to reach the landowners more easily; (2) have a closer relationship with them; (3) be able to relate to the landowners concerns and have more success in communicating governmental interests; and (4) have authorities available that may provide leverage when obstacles to PC implementation arise. D. Addressing Stigma and Property Value Concerns A common concern among landowners is that PCs on their property will lower property values and/or affect resale by stigmatizing the property, creating a negative perception about its value or desirability. There are several ways that EPA may be able to address these concerns. One way may be to carefully explain to the landowner the potential benefits of cooperation in implementing the PC. This explanation should focus on the vital role that PCs play in protecting the environment and the health of the community; highlighting the fact that PCs are often used in cleanups conducted pursuant to CERCLA, and even state cleanup programs as well. In addition, the Region may wish to share examples of properties that are in successful reuse and that have PCs in place. It also may be helpful to frame the conversation around the important role PCs can play, including their role in the context of ensuring the long-term effectiveness of the cleanup. Not only can PCs help protect community members from exposure to contamination, but they may provide certainty for current and future property owners about the type of reuse that can be accomplished without undermining the integrity of the selected remedial action. Further, it is important to explain to landowners that any diminution in the value of properties typically stems from the presence of, or threat of, contamination, and not the presence of PCs in the land records that disclose information about the contamination and implement use restrictions for public safety. It also should be stressed that implementation of PCs increases certainty for future users of the property, as well as lenders, because permissible and restricted uses of the property are clarified, thus contributing to the marketability of the property. 21 V. Options When a Landowner Fails to Implement a PC As discussed in Section I, this document focuses on two types of non-participating landowners: (1) PRP-landowners; and (2) those landowners who did not cause or 21 Regions may also want to consider using a Ready for Reuse (RfR) determination as a tool to encourage implementation of the PC. The RfR determination is intended to aid the real estate marketplace by making an affirmative statement that a site identified as ready for reuse will remain protective of human health and the environment, as long as all required response conditions and use limitations identified in the site s response decision documents and land title documents continue to be met. Guidance for Preparing Superfund Ready for Reuse Determinations 2 OSWER 9365.0-33 (OSRTI/OSRE Feb. 2004), available at https://www.epa.gov/superfund-redevelopment-initiative/ready-reuse-rfr-determinations. 6
contribute to the contamination located on their property and would likely fall under an EPA enforcement discretion policy or possess a credible liability protection (non-source landowners). The type of non-participating landowner may inform the Agency as to what enforcement and other IC options might be available and appropriate. Generally, for both types of landowners, the Regions should make repeated, good-faith efforts to convince landowners to implement PCs prior to taking an enforcement action. A negotiated outcome to implement PCs typically is preferable to pursuing an enforcement action or relying on alternative ICs that may be difficult to enforce. If a negotiated outcome is not possible, there are some options for Regions to consider in order to secure the implementation of PCs. Determining the best option will depend, in part, on the circumstances of the case. A. Enforcement Options 1. PRP-Landowners With respect to PCs selected in a ROD, the Regions may consider either a unilateral administrative order (UAO) or a judicial consent decree (CD) as the enforcement mechanism to require the PRP-landowner to limit certain site activities or resource uses 22 and/or to implement PCs selected as part of the remedial action (e.g., to record a PC on the title of the property within a specified period of time). 23 Failure to abide by the enforcement document may subject a PRP-landowner to statutory or stipulated penalties depending on a variety of factors, including whether the landowner is subject to an enforcement instrument and the instrument s terms. The Agency has experience with issuing UAOs, pursuant to CERCLA 106, to landowners who are PRPs (i.e., PRP-landowners). 24 When a Region determines that the failure to implement the PC, selected as part of the remedy and identified in the ROD, presents an imminent and substantial endangerment to human health or the environment, the Region may consider ordering the landowner to implement the PC, or to abide by specific use restrictions on the property (selected as part of the remedy). Similarly, when a PRP-landowner is using the property in a manner that conflicts with the remedy as 22 In other words, the enforcement instrument itself (e.g., UAO or CD) limits certain site activities or requires the performance of specific activities, where those activities fall within the scope of the remedy selected in the ROD. EPA guidance recognizes this scenario (i.e., issuing a UAO, CD, or other enforcement document, which contain proscribed uses and activity restrictions) as its own category of ICs. See PIME, supra note 3, at 4. Unlike PCs, these use restrictions, which limit certain site activities, are not a property right or interest and they do not run with the land so as to apply to future owners of the affected property. 23 OSRE s model settlements and orders (e.g., Remedial Design/Remedial Action (RD/RA) CD and RD/RA UAO) have model language for securing PCs that have been selected in a ROD. 24 EPA may issue a UAO when it finds there may be an imminent and substantial endangerment to the public health or the environment. CERCLA 106(a). The ROD would provide the basis of the imminent and substantial endangerment, and the findings or facts supporting that basis would be summarized in the Findings of Fact within the UAO. See Enforcement First to Ensure Effective Institutional Controls at Superfund Sites, supra note 5, at 4 for further details on the use of UAOs to implement PCs. See also PIME, supra note 3, at 31-32, 33, 35. 7
selected in the ROD, the Region may consider issuing a UAO that requires the respondent-landowner to cease those activities that might disturb the remedy. The Region should consult with the Office of Site Remediation Enforcement (OSRE) and Department of Justice (DOJ) on the proposed language for the UAO, for case support, and for examples of UAOs requiring implementation of use restrictions or PCs selected in a ROD regarding property owned by UAO respondents. If noncompliance with a UAO is anticipated, a Region should gather its liability evidence and its evidence demonstrating any imminent and substantial endangerment. Liability evidence may consist of a title search or other evidence of property ownership such as probate court records, land trust documents that indicate legal title and beneficial interest, records of foreclosures, mortgages, tax sales, etc. Evidence indicating an imminent and substantial endangerment should be in the administrative record, which supported the site decision document. Enforcement personnel, however, also should consider post-rod evidence, if applicable, in situations where, for example, groundwater monitoring shows contaminant migration and that the need for PCs is more acute. If, after issuance of a UAO, a respondent continues to refuse to implement the PC (or abide by selected use restrictions), the Region may consider referring the matter to DOJ for enforcement of the UAO. Prior to referral, the Region should coordinate with OSRE and DOJ to discuss the merits of the case. Finally, a PRP who has settled with the Region for performance of the remedial action may be obligated to use its best efforts to secure, from other landowners, PCs on other affected property with best efforts defined as including the payment of reasonable sums of money. 25 If the PRP is unable to obtain an agreement with the landowners, then EPA may assist with attempting to secure the PCs, and the PRP would be liable for those associated costs. 2. Non-Source Landowners With respect to non-source landowners described in Section I, the Region may take a different approach in some circumstances. As previously noted in Section IV, case teams are encouraged to inform such landowners that they must implement and comply with PCs (selected as part of a remedy and documented in a ROD) in order to establish and maintain a CERCLA landowner liability protection or to qualify for protection under EPA s enforcement discretion policies. Such informal communication may result in nonsource landowners becoming cooperative. If this communication is unsuccessful, however, the Region may consider shifting treatment of the landowners to that of more traditional liable parties under CERCLA. 26 In such circumstances, the Region may consider utilizing all those enforcement options described above for PRP-landowners. Though the Region may utilize these enforcement options at their discretion, it should consider exercising such strategies in limited 25 PIME, supra note 3, at 18-19. 26 See Common Elements Guidance, supra note 8, at 8. 8
circumstances, such as where the Region has exhausted all non-enforcement efforts to otherwise encourage the landowner s participation, and/or where the landowner has exhibited a pattern of failing to cooperate in the implementation of the remedy and to act in good faith. In such situations, the Region should also consult with OSRE for case support. Additionally, there may be times when a non-source landowner expresses reluctance to implement a PC because of potential liability concerns. In that situation, there are a number of options available to the Region. One option that site attorneys may consider is issuing a comfort letter that communicates key information that EPA has about the property s conditions, the cleanup status, and any potential associated liabilities. 27 Another potential tool is issuing an assurance letter for contiguous property owners. 28 Finally, site attorneys may also consider using certain settlement agreements as a means to address such concerns and secure PCs. For example, for owners of property overlaying contaminated aquifers, the Region may consider using a de minimis settlement agreement under CERCLA 122(g)(1)(B). In exchange for a covenant not to sue from the Agency and contribution protection, the owner would provide full cooperation, provide access when necessary, and implement ICs or any other response actions at the site. 29 Case circumstances will dictate whether a settlement agreement, and what type, would be appropriate to address the situation. When considering the use of a settlement agreement, the Region should consult with OSRE and DOJ. A. Property Interest Acquisition If a landowner is reluctant and/or refuses to implement the necessary PC on the affected property, another available option is the acquisition of a property interest. In certain circumstances, EPA and/or the state may obtain a property interest such as full title or an easement on the affected property in order to implement the PC. 30 CERCLA 104(j) authorizes EPA to acquire a property interest by donation, purchase, lease, or condemnation when needed to conduct a remedial action. 31 The state, however, must 27 See Revised Policy on the Issuance of Superfund Comfort/Status Letters (OECA Aug. 25, 2015), available at https://www.epa.gov/enforcement/guidance-revised-policy-issuance-superfund-comfortstatusletters. 28 See CERCLA 107(q)(3); Memorandum Regarding Model CERCLA Section 107(q)(3) Contiguous Property Owner Assurance Letter (OSRE Nov. 9, 2009) and Model CERCLA Section 107(q)(3) Contiguous Property Owner Assurance Letter, both available at https://www.epa.gov/enforcement/model-contiguousproperty-owner-assurance-letter. 29 Final Policy Toward Owners of Property Containing Contaminated Aquifers (OSRE May 24, 1995), available at https://www.epa.gov/enforcement/guidance-owners-property-containing-contaminatedaquifers. 30 Acquiring the property, in whole or in part, may be necessary when dealing with an unavailable or unwilling property owner and implementing a PC is not possible. Once acquired, the PC can then be entered and recorded by the government owner. 31 40 U.S.C. 3113 further provides for condemnation authority if good faith negotiations with the landowner are not successful, and 40 U.S.C. 3114 sets forth the process for carrying out the taking. But there is no authority equivalent to that of 104(j) for removal actions. For this reason, EPA is not expressly authorized by CERCLA to acquire real property to conduct a removal action. See Section 5.3 of the PIME, supra note 3. 9
agree (through an assurance provided in a Superfund state contract) to accept the transfer of the real estate interest after the remedial action is complete; thus, consultation with and involvement of the state when considering this option will be necessary. Obtaining a voluntary conveyance through donation or negotiation is preferred over initiating a condemnation action. However, if a property owner is unwilling to sell, is willing to sell but agreement cannot be reached on price, or is unable to correct title defects, EPA may, under certain circumstances, initiate condemnation proceedings. 32 Because such an acquisition likely would require the payment of just compensation, a PRP may be required to reimburse EPA and/or the state for all costs incurred in the property acquisition; this scenario could arise where EPA or the state is acquiring property from a non-source landowner (or a landowner who is not identified as a PRP). Once the property right is acquired, EPA could then implement the PC. Moreover, 40 U.S.C. 3111 (approval of sufficiency of title prior to acquisition) requires, as a precondition of acquisition, that the Attorney General review and approve the sufficiency of the title. This means that title evidence 33 must be obtained, the land must be physically inspected, and the conveyance instrument must be prepared. Authority to review and approve the title rests with the Land Acquisition Section in DOJ s Environment and Natural Resources Division. 34 When exercising this authority, EPA must follow the property acquisition process, which includes paying the landowner the fair market value of the real property interest acquired, as well as providing any relocation benefits the landowner may be entitled to pursuant to the Uniform Relocation Assistance and Real Property Acquisition Policies Act (42 U.S.C. 4601 4655) and the implementing regulations at 49 C.F.R. part 24. The Region should contact OSRE when pursuing this option in order to secure a PC; OSRE will work with the Region and coordinate with OGC, the Office of Superfund Remediation and Technology Innovation (OSRTI), and DOJ. VI. Use of Recorded Notices When Implementing PCs is Unsuccessful The focus of this document thus far has been on the discussion of various tools, options, and strategies for Regions to consider when implementing PCs on property owned by non-participating landowners. It is EPA s goal to select ICs in its decision documents that can be implemented and enforced, help ensure long-term protectiveness of human health and the environment, and are effective over their lifecycle. There may be situations, however, when implementing a PC cannot be done. 35 In those situations, different ICs may need to be selected, the Region may need to make changes 32 PIME, supra note 3, at 20. 33 For more on title evidence, see DOJ s Title Standards 2001 (DOJ Dec. 29, 2000), available at https://www.justice.gov/enrd/title-standards-2001-guide-preparations-title-evidence-land-acquisitions-usa. 34 For more information on property acquisition to implement an IC, see Sections 5.2-.4 of the PIME, supra note 3. 35 This section focuses on the use of recorded notices or deed notices in the situation when implementing a PC selected as part of the remedy cannot be done. Although this memorandum does not discuss them, 10
to the engineering component of the original remedy, and/or the original cleanup decision may need to be changed to reflect changing site conditions. As discussed in the PIME, one kind of IC that the Region may consider using in such a situation is a recorded notice. 36 A recorded notice should not be considered a substitute for a PC; a notice should be used as a last resort when a PC may not be implemented, or as a supplement to other, enforceable ICs (a concept known as layering 37 ). The following discussion does not address whether reliance on recorded notices in lieu of PCs necessitates amending the underlying decision document; if notices become necessary, documenting the post-rod change may need to be carried out. See Section III, and related guidance on remedy selection, for a discussion of that topic. A. General Considerations for the Use of Recorded Notices Recorded notices, also known as deed notices, are contained in deeds conveying real property or an interest therein, or some other written instrument that would be examined during a title search on a particular parcel or parcels. These documents are intended to provide notice to anyone reviewing the chain of title (e.g., lenders, prospective purchasers) about contamination on the property and can help identify potential land and/or resource uses that could result in unacceptable exposures to contamination. 38 Notices of this type generally do not serve as an enforceable instrument that imposes restrictions on the use of properties. However, like PCs, properly recorded notices attach to the property at issue and generally will remain in the local land records even after the property is transferred. If a recorded notice, and not a PC, is used at a site, the protectiveness of such a notice and the absence of a PC should be monitored and periodically evaluated in accordance with CERCLA (such as during five-year reviews) or the site s long-term monitoring plan and institutional control implementation plan. 39 In particular, the Region should consider maintaining communications with the local government office where the notice was recorded to ensure the office remains aware of the notice(s). If the notice is designed to inform the public about a certain recommended land or resource use, the Region should Regions should also be aware that governmental controls (such as local ordinances to restrict land or resource use) are another viable and often successful option to consider in addition to or in lieu of deed notices. Please refer to section 6 of the PIME, supra note 3, for a detailed discussion of these tools. 36 PIME, supra note 3, at 26. 37 See id. at 9, for a discussion of IC layering. 38 Id. at 26. If cleanup is ongoing, the contamination very well may not be residual. For purposes of this document, and considering the use of ICs generally, deed notices (as well as other ICs) typically are used when contamination is left in place and the site cannot be cleaned up to a level that supports unlimited use and unrestricted exposure. 39 Because of the nature of recorded notices, a more stringent level of review and monitoring may be necessary to assure the remedy is and remains protective, depending on the site-specific circumstances. Although a PC may cost more to implement and establish, given its nature, it costs less to review and monitor over time; whereas notices are easier and may cost less to implement, but will cost more over time to review and monitor. See also Institutional Controls: A Guide to Preparing Institutional Control Implementation and Assurance Plans at Contaminated Sites (OSWER/OECA Dec. 2012), available at https://semspub.epa.gov/work/hq/175449.pdf. 11
also consider maintaining communication with the local unit of government that issues building permits or private well drilling permits. If circumstances at the site change, making implementation of a PC more feasible, or if the current landowner becomes amenable to recording a PC on the property, then the Region should consider replacing the notice with a recorded PC. Similarly, if it is determined that the property is being used in a manner that is potentially inconsistent with the remedy, or in a way that could pose a threat to human health or the environment, despite the presence of the notice, then the Region may consider using other tools or taking enforcement action where appropriate. Recorded notices may be used as a permanent IC or as an interim measure. One significant advantage of using recorded notices is they can be drafted and implemented relatively quickly because many jurisdictions do not require the involvement of the property owner. To help maintain the relationship with the landowner, however, the Region should attempt to engage the landowner in the drafting of the notice. Where the recorded notice is used on an interim basis, the notice should be rescinded once a PC is fully executed and recorded, or the PC should indicate that any previously recorded notice is no longer in effect and is being replaced by the PC. Recorded notices are not traditional real estate instruments and their use is not well established. Thus, site attorneys would be well-served to investigate state law and local practice, and consult with OSRE in advance to determine how the notice should be drafted, as well as the likelihood the notice will be discovered in a title search. If necessary, the Region may consider engaging the services of a local title insurance company to assist in evaluating the relevant recording statutes and determining the jurisdictional requirements, limitations, and consequences relating to recording notices on property. For example, state or local statutes may indicate what documents are recordable, the contents of a recordable document, and the procedures for their recordation. B. Providing Notice of Contamination A recorded notice may be appropriate in certain circumstances. For example, a Region may determine that a notice, when layered with other ICs, is sufficiently protective of human health and the environment. Or EPA policy, litigation risk, or other site-specific factors may weigh against taking an enforcement action against the landowner in order to secure a PC. Regardless, a key purpose of a recorded notice is to provide notice of contamination to the public. In carrying out this purpose, the notice should include a description of the contaminants of concern, location of the contamination, concentration of the contamination, any land or resource use recommendations, and a legal description of the property. Where appropriate, the Region should consider including a map or a survey of the property to show the site boundaries and location of other ICs, if any. The notice also should include language to sufficiently caution current and prospective owners, lessees, lenders, abutters, and other land users as to what safety measures should be taken in the use of this property. In addition, the notice can provide stakeholders not only with notice of 12
contamination at the property and of any cautions on use, but also of any judicial settlements or administrative orders regarding performance of response actions at that property. The notice should not include words of prohibition that may be construed as restricting use of the property or imposing duties on the property owner. Further, the Region should not attempt to utilize these notices as quasi-pcs (i.e., mischaracterize the purpose and scope of the instrument) or to draft notices in a way that suggests that they are enforceable, impose restrictions on property use, or legally bind current and future landowners. Site attorneys and RPMs should ensure that the information in the notice is correct, specific, and factual, and should provide the property owner with a copy of the notice prior to recording. Finally, the Region should offer the property owner another opportunity to negotiate a PC before recording the notice. A model Notice of Contamination is provided as an attachment to the transmittal memorandum. C. Providing Notice of Administrative Action As discussed above in Section V, EPA may issue a UAO under CERCLA 106 ordering a non-participating landowner to implement a PC or comply with use restrictions selected in a ROD and identified in the UAO. If it is anticipated that full compliance with the UAO will take several months or longer (as may be the case when negotiating a PC) or it is determined that the UAO does not sufficiently notify the public (as may be the case where the UAO only requires use restrictions) the Region may consider recording a notice to provide the public with information about the UAO. 40 Such a notice should be recorded after the issuance of the UAO and after the deadline for landowner to confer with the Region has passed. This notice should include all of the information discussed in Section VI.B (see also the Model Notice of Contamination), but should briefly describe the basis for issuing the UAO and the requirements of the UAO, as well. The Region may attach a copy of the UAO as an exhibit to the notice. This notice may alert anyone searching the title that the property contains residual contamination and that the Region has determined, in a ROD, that a PC or certain use restrictions are necessary to protect human health and the environment. If the Region requests that DOJ enforce the UAO, it may be appropriate for the Region to record an amended notice or, if the local jurisdiction allows, a lis pendens. 41 Again, this notice, while not an enforceable restriction on the property, may serve to notify interested parties that the Agency has determined in a ROD that a PC or specific use restrictions are needed on the property. While the restrictions spelled out in the UAO would not be enforceable against subsequent owners, the notice and UAO may 40 Because the UAO allows the respondent an opportunity to confer on the Order and the determinations on which it is based, Regions may want to consider filing the notice of administrative action after this conference has taken place and/or after receipt of respondent s notice of intent to comply with the UAO. 41 Lis pendens is Latin for suit pending. Black s Law Dictionary 950 (10th ed. 2014). In current practice, a lis pendens is a written notice that a lawsuit has been filed concerning real estate. 13
inform any potential purchasers or lenders of what may be expected of them if they acquire an interest in the property. D. Due Process Consideration Although EPA is not depriving the landowner of a property right, 42 nor is it obtaining a property interest, when it records a notice, a recorded notice may have the potential to cloud title, diminish property value, impair the ability to sell or otherwise alienate the property, and reduce the chance of obtaining a loan or mortgage. 43 Thus, to help protect against any potential due process claims when recording a notice without the landowner s participation, the Region should provide the landowner with notice of the intent to record a notice, along with a copy of the proposed notice. In addition, the Region should provide the landowner with the opportunity to request a conference with EPA to discuss the proposed notice, including its applicability, the findings and determinations upon which it is based, or any other relevant and material issues or contentions that the landowner may have regarding the proposed notice. 44 E. Takings Consideration Historically, there have been concerns regarding the risk of potential takings claims associated with the Agency recording notices in local land records without obtaining the consent of property owners. 45 If the Region has takings concerns, it should consult with OSRE, OGC, and DOJ. In a regulatory takings claim, a property owner asserts that, although the Agency has not physically occupied the property, use restrictions imposed by the Agency are sufficiently severe to constitute a compensable taking of an interest in the property. Generally, there are two types of regulatory actions that can give rise to a valid regulatory takings claim 42 The Fifth Amendment to the U.S. Constitution provides that no person shall be deprived of... property, without due process of law. 43 Connecticut v. Doehr, 501 U.S. 1, 11 (1991) (holding that a state attachment statute that had the effect of clouding title, diminishing property value, impairing the ability to sell or otherwise alienate the property, and reducing the chance of obtaining a home equity loan or additional mortgage albeit temporarily and partially merited due process protection); see also Reardon v. United States, 947 F.2d 1509, 1517 (1st Cir. 1991) (holding that due process procedural safeguards are required before EPA records liens under CERCLA 107(l), which gives EPA a right of action against property (called an in rem action) subject to a response action to recover the response costs secured by the lien). EPA Region 1 has prepared an internal memorandum titled Use of Unilateral Deed Notices as Institutional Controls at Region I Superfund Sites, and is a good source for additional information on such notices. 44 This opportunity to confer is similar to recommended language in the Model Unilateral Administrative Order for Remedial Design and Remedial Action, available at https://cfpub.epa.gov/compliance/models/view.cfm?model_id=752. 45 The Fifth Amendment to the U.S. Constitution provides that private property shall not be taken for public use, without just compensation. The Fifth Amendment does not require that compensation precede the taking. Ruckelshaus v. Monsanto, 467 U.S. 986, 1016 (1984). Further, although a UAO may be issued to implement a PC or to otherwise restrict certain uses of the property, such ICs must have been selected as part of the final remedy through a decision document and the appropriate remedy selection process. 14