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Indemnity Clauses and CERCLA Liability

Posted on 9/7/2021 by Anthony Cardno, CHMM

The Comprehensive Environmental Response Compensation and Liability Act (CERCLA) requires US EPA to identify Superfund sites and determine who is responsible for paying the clean up costs. 

CERCLA identifies four categories of Potentially Responsible Parties or PRPs:
  • The current owner and operator of the site
  • The owner and operator of the site at the time the substances were disposed of
  • Anyone who arranged for the disposal of the substances at the site
  • Anyone who transported the substances to the site
If we think it terms of EPA’s hazardous waste regulations for a moment, those categories cover generators (arranged for disposal), transporters (get it there), and Treatment, Storage, and Disposal Facilities (the contaminated property).

But often, contracts between generators include language that transfers liability in case of legal claims. So how does that affect liability under CERCLA? Can generators use such “hold harmless” or indemnity clauses to get relief from paying to clean up a Superfund site?

The simple answer is No.

What CERCLA Says About Indemnity Clauses and Contracts

CERCLA says “No indemnification, hold harmless, or similar agreement or conveyance shall be effective to transfer from the owner or operator of any vessel or facility or from any person who may be liable for a release or threat of release under this section, to any other person the liability imposed under this section…”

[42 U.S.C. 9607(e)(1)]

In other words, CERCLA specifically provides that, while you can have such an agreement if you want to, the liability imposed by CERCLA cannot be transferred in this manner. Anyone who meets the definition of “responsible party” will be held liable by EPA.

Responsible Parties can be held liable for the full costs of hazardous substance identification, removal, remediation, health effects studies, environmental effects studies, and any other overhead associated with the Superfund site. There is no “upper limit” on what those costs can be – the sky’s the limit when it comes to Superfund liability.

However…

Even though the EPA will still hold you liable if you are a “responsible party,” that doesn’t mean that you can’t sue to recover costs from someone who contractually offered protection from liability via indemnification or “hold harmless” types of clauses.

The agreement between you and the other party still holds.

If you had a contractual agreement that stipulates your waste management service will assume liability for the clean-up of releases or will cover your court costs if you get sued because of a release, you can still sue them to cover whatever you are expected to pay under CERCLA. CERCLA doesn’t nullify those agreements. The law simply states that you cannot use the language of such an agreement to “get out of” being a responsible party yourself under CERCLA.
 

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Tags: CERCLA, environmental compliance, hazardous waste, Superfund

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