Reopener Alert: The Erosion of Peace of Mind
While covenants not to sue purport to provide some security to settling parties, in CERCLA actions, reopener provisions, which the EPA includes in most consent decrees, allow for future liability for unforeseen and unknown conditions that arise following completion of the remedial actions. As a result of these reopener provisions, which became required in all but a few limited circumstances after the 1986 CERCLA amendments, parties that settle CERCLA claims live with the risk that new claims could be asserted to address new cleanup demands arising from previously unknown site conditions or new scientific information about the risks presented by residual wastes.
The uncertainty of reopener provisions is becoming even more unsettling today because of the identification of new chemicals of concern, which can add up to new potential future CERCLA liabilities.
Recently, there’s been a number of proposals and plans to regulate, for instance, per- and polyfluoroalkyl substances, better known as PFAS. In February 2019, the EPA released a PFAS Action Plan that restated its commitment to designate PFAS as a “hazardous substance” under CERCLA. One month later, a bi-partisan group of senators introduced legislation (SB 638) that would mandate the EPA within one year of enactment, declaring all PFAS compounds as “hazardous substances” under CERCLA. If this bill’s approved, cleanups pertaining to PFAS will be eligible for CERCLA Section 107 cost recovery actions.
Because of the widespread decades use of PFAS (and other prevalent unregulated contaminants like 1,4-dioxane), potential liability, including reopener liability, may be exponential for some parties should these compounds be named as a “hazardous substances” under CERCLA. As more and more new chemicals of concern or emerging contaminants are identified, the risk that settling parties may be brought back together to negotiate over new investigation and cleanup demands resulting from the identification of emerging contaminants is growing and the peace of mind that may have existed with the protection of a covenant not to sue continues to erode.