How Well Are You Protecting Yourself from Phase I ESA Liability?

One of the most significant challenges that environmental professionals face in the field is how to protect themselves from liability in their Phase I practice. On January 31, 2012, EDR Insight was fortunate to host a webinar by Nick Albergo, the founder, President and CEO of HSA Engineers & Scientists, titled “Phase I ESA Liability Protection: Beyond AAI”. Albergo’s core theme revolved around helping environmental professionals avoid some of the most common pitfalls he has seen in his extensive experience being called as an expert witness in Phase I ESA litigation.

Below is an EDR Insight Tip Sheet on avoiding Phase I ESA liability based on webinar content:

  1. DON’T DEFAULT TO CALLING IT A REC
    Environmental professionals often identify something as a recognized environmental condition because they believe it is a safer bet than not calling it a REC. In reality, it could actually be worse.
  2. DOCUMENT YOUR ROLE ON THE PROJECT
    With today’s intense pricing pressure, it is not unusual for a senior level EP to delegate parts of a Phase I ESA to junior level staff. If you delegate work to someone who does not meet the strict definition of an EP in E 1527-05, there are a number of steps you can take to demonstrate that you met the bar that has been set in the standard for “responsible charge:” (1) Your timesheet should reflect an adequate number of hours on the project from start to finish, and (2) Your report should include declarations that clearly state who was involved in the project and what their specific roles were.
  3. NEVER PROVIDE A RECOMMENDATION IN A PHASE I REPORT
    The gratuitous offering of unsolicited recommendations may not only be completely inappropriate in the context of a user’s business risk or future intended use of the property, but could also represent your greatest exposure to Phase I liability. Under no circumstances should you ever provide a recommendation in a Phase I ESA report. If you have a client who seeks your counsel, by all means, provide a recommendation, but do so under separate cover. Don’t taint your Phase I report with something that is not part of the standard.
  4. BE CAUTIOUS ABOUT RECOMMENDING ADDITIONAL INVESTIGATION
    The AAI rule leaves us with some rather confusing language regarding additional investigation. Get familiar with E 1527-05’s language about providing an opinion regarding additional appropriate investigation only “in the unusual circumstance when greater certainty is required.” And, be aware that providing this type of opinion does not mean that your Phase I ESA is incomplete.
  5. TELL YOUR CLIENT WHEN CONTINUING OBLIGATIONS KICK IN
    Continuing obligations have opened up one area where EPs will see more scrutiny of their reports. Brownfield redevelopment is already changing the game to some degree. As soon as you have a release, continuing obligations kick in. The challenge is that the owner then has to take steps to prevent any ongoing release. Yet, at the Phase I level, all you get are “yes” and “no” answers. Not knowing the severity of the contamination makes it difficult to define what reasonable steps should be taken. On these sites, absent any additional investigation, you should inform the property purchaser/owner that the Phase I report may not be sufficient to meet their needs.
  6. STICK TO WHAT YOU KNOW
    If you have a situation where there is contamination, but it is not specific or tied to a specific industry or event, look to CERCLA terms like “commonly known,” “reasonably ascertainable” and “the obviousness of contamination.” When all else fails and you are still just not sure, this is the language that you would have to rely on to defend yourself in making a REC determination. Also, be careful about making judgment calls regarding threats to public health since EPs generally do not have the expertise to make these types of determinations.
  7. STICK TO YOUR SCOPE OF WORK
    No good deed goes unpunished in our business. Any efforts to venture into the area of compliance in a Phase I by drawing attention to, for example, secondary containment issues on a site can lead to you being sued for missing other compliance issues. The problem that arises is: How are they to know where you drew the line? Protect yourself by never straying outside the scope of work.
  8. FOCUS ON POTENTIAL MISUSE OF HAZARDOUS SUBSTANCES
    When conducting Phase I ESAs on properties like golf courses or agricultural land, don’t focus so much on whether fertilizers or pesticides were used. Instead, focus on those areas where the products may have been misused (e.g., mixing or storage areas outside of ‘normal operations’ that could represent a REC).
  9. UNDERSTAND VAPOR MIGRATION
    Vapor migration and vapor intrusion are different. Vapor intrusion was not even on anyone’s radar when the first E 1527 standard was written back in the early 90s. Today, vapor migration from, for example, a dry cleaner on an adjoining property may constitute a REC due to gas in the subsurface migrating across a property line onto your site. In these cases, you may in fact have a REC.
  10. BUILD YOUR OWN DEFENSE
    Develop your own defense by showing how you used the information available to you to make a determination on the presence or likely presence of a REC. And if you are unsure about which way to go, get a second opinion. Bounce your ideas off someone else and see if they understand how you connected the dots. Can you make a defensible argument that a release is likely? What are the conditions that make it threatening?

In addition to extensively covering the ins and outs of avoiding Phase I ESA liability, Albergo also included a discussion in his presentation on the ASTM Phase II ESA standard and its recent changes. Listen to the webinar replay to find out why he thinks this standard has finally come into its own, and why you are likely to see more ASTM Phase II ESAs being conducted in practice.