Pennsylvania Prospective Purchasers of Contaminated Property and Their Administrative Records

Greenberg Traurig LLP
David G. Mandelbaum

May 1, 2019

On April 26, 2019, the Pennsylvania Environmental Hearing Board (EHB) voided two amendments to a prospective purchaser agreement (PPA) for the Bishop Tube Site entered into in 2007 and 2010. Del. Riverkeeper Network v. Dep’t of Envt’l Prot’n, EHB Dkt. No. 2018-020-L (Constitution Drive Partners). The underlying PPA was dated 2005. The Department of Environmental Protection (DEP) failed to issue public notices of the amendments until 2017, and did not respond to comments received until 2018, by which point conditions had changed. DEP failed to make an administrative record that took adequate account of the delay and the changed circumstances.

Prospective purchaser agreements are tools used under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund), 42 U.S.C. §§ 9601-75, and the Pennsylvania Hazardous Sites Cleanup Act (HSCA), 35 Pa. Code §§ 6020.101 to .1305, to enable parties looking to acquire a contaminated site to do so with known cleanup obligations. The EPA website addresses PPAs and other tools generally here.

In Constitution Drive Partners, the EHB reaffirmed the rule that a PPA under HSCA is a settlement agreement subject to the public notice requirements of section 1113. That section calls for the creation of an administrative record to support the PPA consisting of the agreement, the public notice, any comments received, and DEP’s responses to those comments. The PPA (or any other settlement) is not final until DEP has filed those responses to comments.

Section 1113 goes on to make the final PPA – that is, the agreement as supported by the administrative record – appealable to the EHB. That is conventional. All final actions of DEP are appealable to the EHB under the Environmental Hearing Board Act. However, unlike virtually all other actions by DEP, actions under HSCA are not reviewed after a de novo hearing. Instead, the EHB determines whether DEP acted arbitrarily or capriciously based on the administrative record only.

Constitution Drive Partners emphasizes that record review. The record presented on appeal in that case was deficient in that it did not address the delay either procedurally or substantively. For example, the PPA called for installation of a soil vapor extraction system that, apparently, had been installed but had not worked. The record did not deal with those changed conditions to the satisfaction of the EHB.

Constitution Drive Partners presented an extreme and an odd case. The lesson for more ordinary situations, however, is that parties entering into PPAs or subject to any other decision under HSCA must attend to the administrative record. Supplementation is hard. If one anticipates a favorable decision from DEP and opposition from a third party, one should attend to the quality of support in the record. If one anticipates an adverse decision from DEP, then one should get what one can in the record for a later EHB appeal. This is a deviation from conventional Pennsylvania practice, and a potential trap for the unwary.

This article is being provided for informational purposes only and not for the purposes of providing legal advice or creating an attorney-client relationship. You should contact an attorney to obtain advice with respect to any particular issue or problem you may have. In addition, the opinions expressed herein are the opinions of Mr. Mandelbaum and may not reflect the opinions of Synergy Environmental, Inc., Greenberg Traurig LLP or either of those firms’ clients.

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