This document summarizes a presentation on vapor intrusion and environmental liability. It discusses vapor intrusion as the migration of volatile chemicals into structures from contaminated soil or groundwater. It outlines the process for assessing vapor intrusion risk, including preliminary screening, subsurface soil vapor sampling, and indoor air sampling. It also discusses liability concerns for various stakeholders, including neighbors, tenants, lenders, and land owners. Finally, it provides an overview of vapor intrusion mitigation options such as source removal, sub-slab depressurization systems, and vapor barriers.
8. Migratory Pathways of VOCs into Buildings
Dry Cleaners From Groundwater
Through Soil
Into Buildings
Vapor Intrusion
Through Soil
Soil Contamination Migration of Contamination
Leaching Through Soil
Groundwater Contamination
10. Soil and Groundwater Contamination
Soil gas sampling results adjacent to building can underestimate risk
Sub-slab sampling required
Groundwater plume serves as separate source for vapors
11. How Do You Know If There Is
A Vapor Intrusion Problem?
Tier 1: Preliminary Vapor Screening
(Historical Review, Receptor Survey,
Source Area Sampling)
Tier 2: Subsurface Soil Vapor Sampling
Tier 3: Indoor Air Sampling
Need to Compare Results to Applicable
Regulatory Standards
[Residential and Commercial/Industrial and
groundwater]
12. Vapor a Concern to Federal and State Authorities
U.S. Environmental Protection Agency (EPA)
State Environmental Agencies
Occupational Safety and Health
State or Local Health Authorities
14. Vapor Intrusion Fixes
Mitigation Alternatives
Source Removal
Sealing Points of Entry
HVAC Modifications
Sub-slab Depressurization Systems
Vapor Barrier
Venting Systems (Active or Passive)
Possible Long-Term Monitoring,
Operations & Maintenance and
Institutional Controls
15. Joseph G. Maternowski
Hessian & McKasy, P.A.
jmaternowski@hessianmckasy.com
www.EnviroAttorney.net
(612) 746-5754
Thanks!
16. Vapor Intrusion and Environmental Liability
for EPs and Lenders—
Learning from Past Mistakes
William C. Wagner
Taft Stettinius & Hollister LLP
One Indiana Square, Suite 3500
Indianapolis, Indiana 46204
(317) 713-3500
wwagner@taftlaw.com
(Bill Wagner Environmental Lawyer Blog)
17. Today’s Goals
• Learn from the mistakes of others, rather than your own
• Identify the threats to EPs and Lenders
• Provide a real life example of due diligence gone wrong
• Provide recommendations to EPs and Lenders
18. Legal Theories Against EPs for Phase I’s
• Breach of contract & breach of warranty
• Negligence / professional malpractice
– All Appropriate Inquiries, ASTM E 1527, ASTM E 2600
– ASTM 1527, Section 1.6 – “This ASTM standard is not intended to
represent or replace the standard of care by which the adequacy of a
given professional service must be judged, nor should this document
be applied without consideration of a project’s many unique aspects.”
• Negligent misrepresentation (duties to unknown third parties
who are not your clients)
• Constructive fraud
• Statutory claims (some states incorporate ASTM E 1527)
26. Indianapolis Star Newspaper
Lawsuits
• Three separate class actions lawsuits:
– Personal injuries, emotional distress, and
medical monitoring damages from vapor
intrusion
– Property damages (costs to investigate
and remediate contamination), stigma
damages, and holding costs
– Claimed $50+ million in total damages
• We defeated motion for class certification
• 140+ plaintiffs filed consolidated lawsuit
• Defendants included developer, builder,
manufacturer/polluter, and realtors
• Nonparties – Builder’s EP and Lender
• Builder filed separate lawsuit against the
manufacturer / polluter, developer, and
the EP
27. Lawsuits
• Site specific evidence
– No groundwater / soil exposure
– Vapor intrusion investigation
– Impermeable clay layer over
contaminated groundwater
– Indoor air testing eliminated
vapor intrusion pathway
• Cases settled years later very
favorably to the defendants
28. Key Take Aways for EPs – Protect Yourself
• Keep your continuing education up to date
– Read the relevant federal and state guidance documents*
– Read the ASTM standards (E 1527, E 2600) and learn the nuances
• Develop and implement:
– Standard Operating Procedures
– Training Protocols
– Quality Control Procedures
• Work with your lawyer, insurance broker, and malpractice insurer to:
– Review your malpractice and CGL policies for coverages, exclusions, etc.
– Review your Phase I proposals – what are you promising to do or not do, e.g.
meet AAI, E 1527, etc.; vapor intrusion; recommendations; non-scope items?
– Review your contract language, especially your warranty language, to defend
negligent misrepresentation claims by third parties / non-clients
*http://www.envirogroup.com/links.php; Assessing Protectiveness at Sites for Vapor Intrusion, Supplement to the
“Comprehensive Five-Year Review Guidance” (US EPA, OSWER Nov.14, 2012); Proposed Rule to Add a Subsurface
Intrusion Component to the Hazard Ranking System, sent to OMB Feb. 3, 2012, to be published ~ May 2013.
29. Key Take Aways for Lenders – Protect Yourself
• Don’t make Phase I’s decisions based simply on the amount of the loan
• Make sure your EPs carry malpractice insurance
• Learn to identify red flags in Phase I’s
– Review the federal/state guidance, SBA guidance*, ASTM standards
• Review your quality control procedures for Phase I’s
• Use your lawyer to direct EPs’ work and to maintain the attorney-client
and work product privileges
• Have your lawyer review the EP’s contract language, warranties, and
disclaimers
• Always consider cost recovery – forensic analysis and liability analysis
• Don’t be too afraid of the risks for revitalizing industrial sites –
consultants are able to mitigate VI risks, and funding opportunities exist
through federal and state Brownfield grants and tax incentive financing
*SBA SOP 50 57, 7(a) Loan Servicing and Liquidation, Ch. 5 - Environmental Risk Management, effective March 1,
2013; SOP 50 10 5(E), Lender and Development Company Loan Programs, Ch. 4 - Environmental Policies, effective
June 1, 2012.
36. Phase 1 Environmental Site
Assessment
• The purpose of a Phase 1
Environmental Site Assessment is to
reduce uncertainty regarding the
potential for environmental
conditions…vapor analysis is a must!
37. Due Diligence Auditor
Specialized knowledge of the user must be
given to an environmental due diligence
auditor, i.e. chemical processing
companies, platters, dry cleaners.
38. Site Assessments
• Site Assessments – looking for signs
of vapor
• Exterior and Interior: you cant
have one eye closed
39. Uses of Property
• Need to take into account:
• Current property uses
• Past property uses
• Current uses of adjoining property
• Past uses of adjoining property
• Hydrogeological Conditions
40. Phase 1 Reports
Phase 1 reports should summarize all
recognized environmental conditions and
in certain instances recommend additional
environmental testing when required