On December 30, 2013, the U.S. EPA passed a final rule, effective immediately, amending the standards and practices for conducting “all appropriate inquiries” under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). 78 Fed. Reg. 79319.

Although CERCLA imposes strict liability on parties “responsible” for property contamination, it also provides certain exemptions, including an exemption for “innocent” landowners. Under 42 USC § 9607(b), a defendant can escape liability by showing the contamination was caused by a third party with whom the defendant had no “contractual relationship.” The definition of “contractual relationship” in 42 USC § 9701(35) excludes property transfers where, among other requirements, the defendant had no reason to know the property was contaminated and took “all appropriate inquiries” to discover any contamination prior to the transfer.

EPA has promulgated regulations setting forth certain steps that a party must take to establish it conducted “all appropriate inquiries.” 40 CFR part 312. These regulations also provide that an alternate means of establishing “all appropriate inquiries” is for the party to follow the procedures of an EPA-approved industry standard for Phase I Environmental Site Assessments. Under the prior regulation, this industry standard was ASTM International Standard E1527-05, “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” With its amended regulation, EPA has adopted latest ASTM standard for Phase I assessments:  ASTM E1527-13: “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.”

The new ASTM standard includes more stringent requirements regarding regulatory file reviews, a greater emphasis on assessing impacts from vapor migration, and a number of new or revised definitions. EPA has not yet amended 40 CFR Part 312 to remove reference to ASTM E1527-05. It plans to do so in a subsequent rulemaking.

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