Limiting Liabilities at Hazardous Waste Facilities in Georgia
The Hazardous Site Reuse and Redevelopment Act (HSRRA), also known as the Brownfield program, has become increasingly popular in Georgia. HSRRA provides broad liability protection to prospective purchasers of contaminated properties and for the clean up of soil contamination and any source material. Provided that the statutory criteria are satisfied, prospective purchasers of certain "qualifying properties" can avoid liability to the state and third parties for various costs related to the preexisting release.
Recently, the Georgia Environmental Protection Division ("EPD") granted a HSRRA limitation of liability ("LOL") to a prospective purchaser of a former hazardous waste facility in Cobb County. The LOL was issued to a company acquiring the Damar, Inc. ("Damar") property (the "Property" or "Damar Property") in connection with a planned expansion of the adjacent Joseph T. Walker School ("Walker School").
EPD’s willingness to issue an LOL in this case could be good news for owners and prospective purchasers of "hazardous waste facilities" – a term defined under the Georgia Hazardous Waste Management Act ("GHWMA") to mean "any property or facility that is intended or used for storage, treatment or disposal of hazardous waste." O.C.G.A. § 12-8-62(11). The GHWMA is Georgia’s version of the federal Resource Conservation and Recovery Act, 42 U.S.C. §§ 6921 et seq. ("RCRA"). Although hazardous waste facilities are not "qualifying properties" pursuant to HSRRA and therefore are not eligible for the LOL, the EPS appears willing to work with parties to overcome this hurdle.
The Damar Property became eligible for the LOL after going through a process that took approximately eighteen (18) months. First, Damar’s consultant submitted a corrective action plan ("CAP") that proposed, among other things, excavation of soil impacts and aggressive groundwater cleanup. Potassium permanganate injections were proposed in order to remediate a plume of solvent contamination that impacted both the Property and the adjacent Walker School property.
Next, after providing an opportunity for notice and comment, the EPD modified Damar’s RCRA permit for post-closure care, allowing the corrective action to proceed. EPD’s approval of the corrective action paved the way for early termination of the Damar’s RCRA permit and opened the door for the prospective purchaser to obtain an LOL. The corrective action was funded out of the purchase price for the Property, which was held in escrow along with the title to the Property until the corrective action was implemented.
Subsequently, Damar and EPD entered into a consent order that terminated the RCRA permit upon completion of certain corrective actions. The Damar Property basically ceased to be a "hazardous waste facility" after injecting the potassium permanganate (i.e., at the "construction complete" stage of remediation), even though other activities would continue to be required under the consent order, including groundwater monitoring and operation of recovery systems. In this case, EPD terminated Damar’s RCRA permit less that eighteen (18) months after aggressive corrective actions were proposed. The LOL was then issued to the prospective purchaser less than two (2) weeks later, on June 7, 2007.
Thus, prospective purchasers of other hazardous waste facilities may also be able to convince EPD to issue an LOL. To the extent parties are willing to direct a portion of the purchase price toward aggressive cleanup and can convince EPD that state assets will not be risked by issuing the LOL, then there may be a trend toward increased redevelopment of hazardous waste facilities.
Joan Sasine is a partner and M. Lawrence Mattila is an associate in the Tort Litigation and Environmental Practice Group at Powell Goldstein, LLP, where they specialize in Environmental law. The authors welcome comments to the article and can be reached at the following email addresses: jsasine@pogolaw.com; mmattila@pogolaw.com.