Property Owner’s Liability Under CERCLA for Unpaid Remediation Subcontractor

Duane Morris LLP
Stanley A. Martin

March 27, 2014

A federal appeals court ruled that a landowner is not liable under CERCLA1 for amounts due to a subcontractor, when the owner had already paid the prime contractor for cleanup work.  The prime contractor, fully paid, failed to make payment to subs and then went out of business.  Although the sub argued that CERCLA required the property owner to pay for cleanup, the court held (decision available here) that the property owner had discharged its obligations under CERCLA when it fully paid the prime contractor for the cleanup work.

The sub still retained lien rights against the property (which allowed partial recovery), but could not rely on the federal cleanup statute as a mechanism to ensure payment from the property owner in these circumstances.

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. Martin and may not reflect the opinions of Synergy Environmental, Inc., Duane Morris LLP or either of those firms’ clients.

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