Two related cases recently filed in the District of South Carolina federal court exemplify an upcoming area of potential liability related to Per- and Polyfluoroalkyl Substances, commonly known as “PFAS”. The City of Zephyrhills v. The 3M Company, D.S.C. No. 2:20-cv-02933, 8/13/20 and Dist. Board Of Trustees of Hillsborough Community. College v. The 3M Company, D.S.C, No. 2:20-cv-02934, 8/13/20. The plaintiffs allege that PFAS chemicals from firefighting foam have been found in the soils, surface water and groundwater exceeding safe levels. Although these lawsuits were filed against the companies that created or distributed the firefighting foam, the crux of the complaints is that the presence of these dangerous chemicals on real property constitutes recoverable damage. Once courts agree that the release of PFAS from fire suppression material is a legitimate basis for a civil lawsuit, lawsuits against owners and operators of properties contaminated with PFAS after a fire are likely to follow.
PFAS have been getting a lot of publicity in the last few years as “forever chemicals”, chemicals that do not degrade, are easily mobile and are highly toxic to human health and the environment at certain levels. PFAS are used extensively in numerous consumer and commercial products such as Teflon cookware, furniture, paints and sealants, and firefighting foam. These suits in South Carolina, based on general common law theories of negligence, trespass and nuisance, are just the latest filed against many companies related to PFAS contamination. Under federal and state environmental laws, property owners and operators are strictly liable for hazardous materials on, or from, their real estate regardless of fault or even if they acquired the real property after the contamination occurred, unless the owner/operator qualifies under specific and limited affirmative defenses. PFAS are not currently regulated under the federal Superfund law (the Comprehensive Environmental Response, Compensation and Lability Act, or “CERCLA”)1, but there may be liability under state or other federal environmental laws such as the Clean Water Act. Prospective purchasers and tenants routinely ask about prior uses of property during due diligence, but may not specifically investigate whether there have been any fires at the property.
For example, assume a neighborhood fire department responded to an alarm and used firefighting foam containing PFAS (which most foams do); the foam would have seeped into the soil and groundwater and run off the parking lot onto an adjacent property. Under environmental laws, the current and future property owner, operator or tenant could be subject to liability to each other, to the adjacent property owner or user, to construction workers, to an environmental group or to the applicable governmental environmental agency. Damages and the costs to clean up PFAS are likely to be extremely high. Current property owner/operators may have some difficulty establishing an affirmative defense to such liability, but a prospective purchaser/tenant can limit its risk by being pro-active prior to an acquisition: (1) broaden the scope of due diligence to include any previous history of fires; (2) consider including PFAS in the scope of any sampling analysis; (3) assess if the state brownfield or other voluntary cleanup programs might provide liability protection; and (4) address the risk directly in the purchase agreement or lease to allocate responsibility. As the science related to PFAS is emerging, so are the legal consequences; such potential consequences are better addressed in advance.
[1] There are numerous efforts in Congress to add PFAS to the list of “hazardous substances” that are regulated under CERCLA. If they are added, a property owner could be held liable, even if it purchased the property after the release of PFAS, if the owner/operator cannot avail itself of an affirmative defense such as having performed “all appropriate inquiry” through reasonable due diligence. See further in the article for suggestions on due diligence.
