Recovering Costs for Hazardous Spills

A commercial property owner with a tenant using a toxic substance, such as a dry cleaner using PCE, may not become aware of a spill and hazardous waste site until the results are in from a Phase 2 Environmental Site Assessment. At that point, in order to proceed with the sale or finance, the site must be remediated, requiring a certified remediation planner, excavation contractor, or other cleanup expense. Under the federal “CERCLA” statute, the cost of the plan and remediation can be automatically recovered from both the tenant and the tenant’s individuals who operated the business causing the spill. The time limit for suit is six years from initiation of the remediation. The suit generally requires proof of the toxic release, a remediation under governmental supervision, the cleanup costs, and that the tenant or its officers operated the business resulting in the spill. Such a law suit was successfully brought on the usual 25% contingent fee. S&K Commack Dev., LLC v. Hasn Dry Cleaners and Singer, 2015 U.S. Dist. LEXIS 89327. Such a law suit may be the only means of recovery if the only insurance has a pollution exclusion.