§ 9105 — Standard of liability

Delaware § 9105

• Jurisdiction: Delaware
• Title: 7
• Part: Hazardous Substance Cleanups
• Ch. 91: DELAWARE HAZARDOUS SUBSTANCE CLEANUP ACT
• Subch.: General Provisions and Enforcement

Text

(a) The following persons are liable with respect to a facility from which there is or has been a release or imminent threat of release, except as provided in subsection (c) of this section:

(1) Any person who owned or operated the facility at any time.

(2) Any person who owned or possessed a hazardous substance and who by contract, agreement or otherwise arranged for disposal or treatment of a hazardous substance at the facility.

(3) Any person who arranged with a transporter for transport, disposal or treatment of a hazardous substance to the facility.

(4) Any person who generated, disposed of or treated a hazardous substance at the facility.

(5) Any person who accepted any hazardous substance for transport to the facility, when the facility was selected by the transporter.

(6) Any person who is responsible in any other manner for a release or imminent threat of release.

(b) Each person who is liable under this section is strictly liable, jointly and severally, for all costs associated with a release from a facility and for all natural resource damages resulting from the release. The Secretary may recover all costs and damages from all responsible parties. The amounts recoverable in an action under this chapter shall include interest on the amounts recoverable through regulations developed pursuant to §§ 9104 and 9109 of this title. Such interest shall accrue from the date the expenditure was incurred. The rate of interest on the outstanding unpaid balance of the amounts recoverable under this section shall be at the established allowable interest rate.

(c) The following persons are not liable under this section:

(1) Any person who can establish that the release or imminent threat of release for which the person would be otherwise liable was caused solely by:

a. An act of God;

b. An act of war; or

c. An act or omission of a third party other than:

1. An employee or agent of the person asserting the defense; or

2. Any person whose act or omission occurs in connection with a contractual relationship existing, directly or indirectly with the person asserting this defense to liability. This defense applies only when the person asserting the defense has exercised due care with respect to the hazardous substance, the foreseeable acts or omissions of the third party, and the foreseeable consequences of those acts or omissions.

(2) Any person who is an operator, past operator, owner, or past owner of a facility and who can establish that at the time the facility was acquired or operated by the person, the person had no knowledge or reason to know of any release or imminent threat of release. This paragraph (c)(2) is limited as follows:

a.Reason to know. —To establish that the person had no reason to know of the matter described in § 9103(6)a. of this title the person must demonstrate that on or before the date on which the person acquired the facility, the person carried out all appropriate inquiries, as provided in paragraph (c)(2)b. of this section below, into the previous ownership and uses of the facility in accordance with generally accepted good commercial and customary standards and practices.

b. All appropriate inquiry.

1. With respect to property purchased on or after May 31, 1997, the procedures of the American Society for Testing and Materials (“ASTM”), including the documents known as “Standard E1527-97” and “Standards E1527-00,” entitled “Standard Practice for Environmental Site Assessment: Phase 1 Environmental Site Assessment Process,” or any other procedure the Secretary may adopt by regulation, shall satisfy the requirements in paragraph (c)(2)a. of this section.

2. With respect to property purchased before May 31, 1997, in making a determination with respect to a person described in paragraph (c)(2)a. of this section, the following factors shall be taken into account:

A. Any specialized knowledge or experience on the part of the person;

B. The relationship of the purchase price to the value of the property, if the property was not contaminated;

C. Commonly known or reasonably ascertainable information about the property;

D. The obviousness of the presence or likely presence of contamination at the property; and

E. The ability of the person to detect the contamination by appropriate inspection.

3. In the case of property for residential use or other similar use purchased by a nongovernmental or noncommercial entity, a facility inspection and title search that reveal no basis for further investigation shall be considered to satisfy the requirements of paragraph (c)(2)a. of this section.

c. Nothing in this subsection shall diminish the liability of any previous owner or operator of such facility who would otherwise be liable under this chapter.

d. Notwithstanding this subsection, if the person obtained actual knowledge of the release or threatened release of a hazardous substance at such facility when the person owned the real property and then subsequently transferred ownership of the property to another person without disclosing such knowledge, such person shall be treated as liable under subsection (a) of this section and no defense under this subsection shall be available to such person.

e. Nothing in this subsection shall affect the liability under this chapter of a person who, by any act or omission, caused or contributed to the release or threatened release of a hazardous substance which is the subject of the action relating to the facility.

(3) A person who acquires, for subsequent disposition, title to, or possession of, a property to protect a security interest held by the person and does not participate in management of the property; or a fiduciary which has a legal title to or manages any property for purposes of administering an estate or trust of which such property is part; provided, however, that this exemption shall not relieve a person from liability under this section where such liability is based on conduct entirely independent from that covered by this exemption. This paragraph (c)(3) is further limited as follows:

a. The term “participate in management” as used in this section:

1. Means actually participating in the management or operational affairs of a facility and does not include merely having the capacity to influence, or the unexercised right to control, facility operations.

2. A person that is a lender or fiduciary that holds indicia of ownership primarily to protect a security interest in a property shall be considered to participate in management only if, while the borrower is still in possession of the property encumbered by the security interest, the person:

A. Exercises decision-making control over the environmental compliance related to the facility, such that the person has undertaken responsibility for the hazardous substance handling or disposal practices related to the facility; or

B. Exercises control at a level comparable to that of a manager of the facility, such that the person has assumed or manifested responsibility:

I. For the overall management of the facility encompassing day-to-day decision-making with respect to environmental compliance; or

II. Over all or substantially all of the operational functions, as distinguished from financial or administrative functions, of the facility other than the function of environmental compliance.

3. The term “participate in management” does not include performing an act or failing to act prior to the time at which a security interest is created in a property; and, provided the actions do not rise to the level of participating in management (within the meaning of paragraphs (c)(3)a.1. and 2. of this section above), does not include:

A. Holding a security interest or abandoning or releasing a security interest;

B. Including in the terms of an extension of credit, or in a contract or security agreement relating to the extension, a covenant, warranty, or other term or condition that relates to environmental compliance;

C. Monitoring or enforcing the terms and conditions of the extension of credit or security interest;

D. Monitoring or undertaking 1 or more inspections of the facility;

E. Requiring a remedy or other lawful means of addressing the release or threatened release of a hazardous substance in connection with the facility prior to, during, or on the expiration of the term of the extension of credit;

F. Providing financial or other advice or counseling in an effort to mitigate, prevent, or cure default or diminution in the value of the facility;

G. Restructuring, renegotiating, or otherwise agreeing to alter the terms and conditions of the extension of credit or security interest, exercising forbearance;

H. Exercising other remedies that may be available under applicable law for the breach of a term or condition of the extension of credit or security agreement; or

I. Conducting a remedy under this chapter or otherwise under the direction of the Department.

4. A person who is a lender that did not otherwise participate in the management of a facility as provided in paragraph (c)(3)a.2. of this section shall not be considered to have participated in management, notwithstanding that the person forecloses on the property and, after foreclosure, sells, re-leases (in the case of a lease finance transaction), or liquidates the property, maintains business activities, winds up operations, or undertakes a remedy under § 9107 of this title with respect to the facility, or takes any other measure to preserve, protect, or prepare the facility prior to sale or disposition, if the person seeks to sell, re-lease (in the case of a lease finance transaction), or otherwise divest the person of the facility at the earliest practicable, commercially reasonable time, on commercially reasonable terms, taking into account market conditions and legal and regulatory requirements.

b. A fiduciary as described in this paragraph (c)(3) shall not be liable in its personal capacity under this chapter for:

1. Undertaking or directing another person to undertake a remedy or any other lawful means of addressing a hazardous substance in connection with the facility;

2. Terminating the fiduciary relationship;

3. Including in the terms of the fiduciary agreement a covenant, warranty, or other term or condition that relates to compliance with an environmental law, or monitoring, modifying or enforcing the term or condition;

4. Monitoring or undertaking 1 or more inspections of the facility;

5. Providing financial or other advice or counseling to other parties to the fiduciary relationship, including the settlor or beneficiary;

6. Restructuring, renegotiating, or otherwise altering the terms and conditions of the fiduciary relationship;

7. Administering, as a fiduciary, a facility that was contaminated before the fiduciary relationship began; or

8. Declining to take any of the actions described in paragraphs (c)(3)b.2.-7. of this section.

c. The liability of a fiduciary under any provision of this chapter for the release or threatened release of a hazardous substance at, from, or in connection with a facility held in a fiduciary capacity shall not exceed the assets held in the fiduciary capacity; provided, however, that this limitation shall not apply to the extent that a person is liable under this chapter independently of the person’s ownership of a facility as a fiduciary or actions taken in a fiduciary capacity.

d. The exclusion from liability contained in this paragraph (c)(3) does not limit liability pertaining to the release or threatened release of a hazardous substance if negligence of a fiduciary causes or contributes to the release or threatened release.

e. Nothing contained in this paragraph (c)(3):

1. Affects the rights or immunities or other defenses that are available under this chapter or other law that is applicable to a person subject to this paragraph; or

2. Creates any liability for a person or a private right of action against a fiduciary or any other person.

f. Nothing in this paragraph (c)(3) applies to a person if the person:

1. Acts in a capacity other than that of a fiduciary or in a beneficiary capacity, and in that capacity, directly or indirectly benefits from a trust or fiduciary relationship; or

2. Is a beneficiary and a fiduciary with respect to the same fiduciary estate and, as a fiduciary, receives benefits that exceed customary or reasonable compensation, and incidental benefits, permitted under other applicable law.

g. This paragraph (c)(3) does not preclude a claim under this chapter against:

1. The assets of the estate or trust administered by the fiduciary; or

2. Nonemployee agent or independent contractor retained by a fiduciary.

(4) Prospective purchaser agreements.

a. Notwithstanding paragraph (c)(5) of this section, a prospective purchaser whose potential liability for a release or threatened release is based solely on the purchaser’s being considered to be an owner or operator of a facility shall not be liable as long as the prospective purchaser, with or without the participation of the seller of the property, enters into a prospective purchaser agreement in which the parties responsible for completing a site investigation and any subsequent remediation are identified and paragraph (c)(4)b. of this section is met. Such prospective purchaser agreements shall:

1. Define the scope of and financial responsibility for the environmental work to be performed pursuant to the agreement;

2. Define the amount, if any, of assistance to be provided by the Department; and

3. Define the scope of any lien to be secured.

b. Requirements for operation under a prospective purchaser agreement.

1. The person shall exercise appropriate care with respect to hazardous substance or substances found at the facility by:

A. As a prospective purchaser (i.e. prior to acquisition of the property):

I. Not causing a new release of hazardous substances; and

II. Not taking any action to exacerbate or contribute to an existing release.

B. As owner after acquisition of the property, unless specifically addressed in a prospective purchaser agreement with the Department, by:

I. Stopping or mitigating any on-going release;

II. Preventing any threatened future release; and

III. Preventing or limiting exposure (human, environmental, or natural resource) to any previously released hazardous substance or substances.

2. The person shall provide cooperation, assistance, and access to persons that are authorized to oversee remedies or natural resource restoration at a facility (including the cooperation and access necessary for the installation, integrity, operation and maintenance of any complete or partial remedies or natural resource restoration at the facility).

3. The person shall:

A. Be in compliance with any land use restrictions established or relied on in connection with the remedy at a facility; and

B. Not impede the effectiveness or integrity of any institutional control employed at the facility in connection with a remedy.

4. The person shall comply with any request for information or administrative subpoena issued by the Secretary under this chapter.

5. The person shall not be affiliated with any other person that is potentially liable pursuant to § 9105(a) of this title, for response costs at a facility through:

A. Any direct or indirect familial relationship, to include spouse, domestic partner, parent, grandparent, brother, sister, son, son-in-law, daughter, daughter-in-law, grandson, granddaughter, step-parent, the parent, son or daughter of a son or daughter of the person’s spouse or domestic partner, nephew, niece, aunt, uncle, brother-in-law, sister-in-law, grandparent-in-law or any relative or friend living in the person’s household; or

B. Any contractual, corporate, or financial relationship (other than a contractual, corporate, or financial relationship that is created by the instruments by which title to the facility is conveyed or financed or by a contract for the sale of goods or services); or

C. The result of a reorganization of a business entity that was potentially liable.

c. Lien.

1. If there are unrecovered remedial costs incurred by the State at a facility for which an owner of the facility is not liable by reason of paragraph (c)(4)a. of this section, the State may by agreement with the owner, obtain from the owner a lien on this or on any other property or other assurance of payment satisfactory to the Secretary, for all or any portion of the unrecovered remedial costs.

2. A lien under this subsection:

A. Shall be in an amount not to exceed the unrecovered remedial costs incurred by the State;

B. Shall be subject to the requirements of paragraph (c)(4)a. of this section; and

C. Shall not exceed the value added to the worth of the property by the remedial action.

(5) Contiguous properties.

a. Not considered to be an owner or operator.

1. A person that owns real property that is contiguous to or otherwise similarly situated with respect to, and that is or may be contaminated by a release or threatened release of a hazardous substance from, real property that is not owned by that person shall not be considered to be an owner or operator of a facility under this paragraph (c)(5)a.1. or paragraph (c)(5)a.2. of this section solely by reason of said release if:

A. The person did not cause, contribute or consent to the release or threatened release;

B. The person is not:

I. Potentially liable, or affiliated with any other person that is potentially liable, for costs at a facility through any direct or indirect familial relationship or any contractual, corporate, or financial relationship (other than a contractual, corporate, or financial relationship that is created by a contract for the sale of goods or services); or

II. The result of a reorganization of a business entity that was potentially liable;

C. The person takes reasonable steps to:

I. Not cause a release of hazardous substances on their property; and

II. Not take any action to exacerbate or contribute to contamination migrating onto their property.

D. The person provides reasonable cooperation, assistance and access to persons that are authorized to conduct a remedy or natural resource restoration at the facility from which there has been a release or threatened release (including the cooperation and access necessary for the installation, integrity, operation and maintenance of any complete or partial remedy or natural resource restoration at the facility);

E. The person:

I. Is in compliance with any land use restrictions established or relied on in connection with the remedy at the facility; and

II. Does not impede the effectiveness or integrity of any institutional control employed in connection with a remedy;

F. The person is in compliance with any written request for information related to the property or contamination or administrative subpoena issued by the Secretary or a court pursuant to this chapter;

G. The person provides all legally required notices with respect to the discovery or release of any hazardous substances at the facility; and

H. At the time at which the person acquired the property, the person conducted all appropriate inquiry within the meaning of paragraph (c)(2)b. of this section with respect to the property.

2. To qualify as a person described in paragraph (c)(5)a.1. of this section, a person must establish by a preponderance of the evidence that the conditions in paragraph (c)(5)a.1.A. through H. of this section have been met.

3. Any person that does not qualify as a person described in this paragraph because the person had, or had reason to have, knowledge specified in paragraph (c)(5)a.1.H. of this section at the time of acquisition of the real property may qualify as a prospective purchaser under § 9103 of this title if the person is otherwise described in that section.

b. With respect to a person described in this paragraph, nothing in this subsection:

1. Limits any defense to liability that may be available to the person under any other provision of law; or

2. Imposes liability on the person that is not otherwise imposed by paragraph (c)(5)a. of this section.

c. The Secretary shall, upon written request:

1. Issue an assurance in writing that no enforcement action under this chapter will be initiated against a person described in paragraph (c)(5)a. of this section; and

2. Grant a person described in paragraph (c)(5)a. of this section protection against a cost recovery or contribution action under § 9107(c) of this title.

(d) A person who expends moneys performing a remedy or any remedial action under this chapter or reimbursing the State for any remedial action may bring an action against any responsible party as defined in subsection (a) of this section who has not entered into a settlement agreement with the Secretary. In an action authorized by this section, the person bringing the action shall be entitled to reimbursement for the costs incurred which are consistent with this chapter and contribution for moneys expended to reimburse the State for its expenses.

(e) Where the Secretary has issued a certification of completion of remedy pursuant to § 9108 of this title with respect to a remedy performed at a facility, any person who owns, operates or otherwise controls activities at the facility after the date of issuance of the certification shall not, by virtue of that later ownership, operation or control, be liable for the release or imminent threat of release addressed in the certification, or for any future release or imminent threat of release attributable to conditions existing prior to the issuance of the certification, provided such person does not interfere or permit any interference with any aspect of the remedy addressed by the certification of completion of remedy.

(f) The exemption contained in subsection (e) of this section shall also apply to any person who, in connection with the sale, lease, acquisition or transfer of a facility, enters into a settlement agreement with the Secretary for a remedy at the facility; provided, that the remedy is satisfactorily conducted and the Department issues a certification of completion of remedy. The Secretary, in the settlement agreement, may place conditions or limitations on the scope of the exemption granted under this subsection.

Legislative History

67 Del. Laws, c. 326, § 1 ; 70 Del. Laws, c. 218, §§ 14, 15 ; 74 Del. Laws, c. 185, §§ 4-6 ; 79 Del. Laws, c. 441, § 1