EPA reversal on continued acceptance of ASTM E1527-05 modifies rules for CERCLA defenses and redefines baseline for environmental diligence.

On December 30, 2013, the US Environmental Protection Agency (EPA) published a final rule (Final Rule) adopting ASTM E1527-13 as a standard satisfying the “all appropriate inquiries” (AAI) requirement for landowner liability defenses under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).1 In contrast to its August 2013 direct final rule, which EPA subsequently withdrew, EPA affirmatively recommends that Phase I environmental assessments follow the standards set forth in ASTM E1527-13 and has announced its intention to publish a proposed rule to replace the regulatory reference to ASTM E1527-05 with ASTM E1527-13, rather than referencing both as acceptable standards for Phase I assessments.

Background -

AAI is a critical element in establishing certain landowner liability defenses available under CERCLA. While CERCLA imposes strict liability for current owners of contaminated property, the Act also establishes statutory defenses for current owners who acquire contaminated property but are not responsible for the contamination and do not impede the remediation process. One element common to each such defense is AAI, a showing that, prior to acquiring the property, the landowner made reasonable inquiries to determine whether the property had existing contamination. The requirements for AAI have been set forth as part of the All-Appropriate Inquiries Rule (AAI Rule) promulgated by EPA.2 Once EPA adopts a standard developed by ASTM International3 as AAI-compliant, prospective landowners may satisfy the AAI element of the CERCLA landowner liability defenses by obtaining an assessment that meets the ASTM standard. Generally, the ASTM E1527 standard establishes requirements for conducting environmental site assessments, commonly known as Phase I assessments.