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File This One Under Yikes!

Developers need to take heed of this one. Based on a recent decision in the Federal Court for the Eastern District of Michigan, developers could find themselves involved in lawsuits alleging that they are liable for exacerbating contamination by merely allowing rain to fall on the exposed soil of a property they are developing.

The case is Saline River Properties LLC v. Johnson Controls, Inc. and it all started when Saline (the plaintiff) decided to redevelop property that was previously owned by Johnson Controls and contaminated with vinyl chloride. During the course of Saline’s redevelopment activities, it allowed rainwater to infiltrate soils beneath a concrete building slab. I’ll spare you the details of the convoluted procedural history but, in short, after Saline brought suit against Johnson Controls, Johnson Controls field counterclaims under federal and state law alleging that Saline contributed to the contamination of the site by making the pre-existing contamination worse. All of Saline’s claims were dismissed but the judge denied Saline’s motion to dismiss Johnson Control’s counterclaims. In ruling that Johnson Controls could proceed with its counterclaims, the Court explained that passive migration could constitute a “release” of hazardous substances under state and federal law. Further, the Court added:

“Here, more is alleged than just passive migration. JCI alleges that Saline took the affirmative action of breaking up the concrete slab, which caused hazardous substances beneath that barrier to migrate into additional soils and groundwater. “

Developers redeveloping contaminated property have always been subject to liability for conduct that exacerbates pre-existing contamination. However, most developers would probably tell you that their conduct would have to be really “bad” to be held liable. What’s so startling about this case is that it underscores how low the bar might actually be. The developer simply removed a concrete slab.

How can brownfields be redeveloped if the simple removal of a building foundation makes a developer subject to liability for exacerbating on-site conditions? Should additional precautions be taken? What are they? Limiting work to periods of dry weather only? Placing tents or tarps over exposed soils? What about when large earthworking activities are involved?

Such steps can be very difficult to implement on big projects with multiple contractors and understanding how your actions may or may not impact historical contamination is critical. Obtaining the expertise of an environmental consultant and attorney is highly recommended.

About Brian J. Considine

Brian J. Considine is a Senior Attorney with Dawda, Mann, Mulcahy & Sadler, PLC. He concentrates his practice in the areas of corporate environmental counseling, commercial real estate due diligence and environmental/toxics litigation. His practice also includes counseling clients on Federal Motor Vehicle Safety Standards.

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