Indiana's Environmental Legal Action Statute Forces Plaintiffs to do their Homework

If you own property that turns out to be contaminated, in Indiana under most circumstances, you will be liable for the cost of cleaning up that property.  Present-day owners are liable for such cleanups because they are the ones who primarily benefit from the property.  The cleanup will de-contaminate their land, which will make it more valuable, and especially if the activity that gave rise to the pollution is still ongoing (the drycleaner is still operating, the gas station is still dispensing, or the factory is still turning out widgets), the present owner gets the economic benefit of whatever activity caused the contamination.  It is better that the owner should bear the cost than all of the rest of us, who get a much more diffuse benefit. 

But what if you didn’t cause the contamination?  What if the contamination occurred 30 years ago, before you even owned the property, and hasn’t been added to since then?  Well, you’re still liable as a present owner.  But you may not be totally out of luck.  Indiana’s Environmental Legal Action (“ELA”) statute, Ind. Code § 13-30-9 et seq., authorizes suits to recover removal and remedial action costs (basically, cleanup costs) from persons who caused or contributed to the release of a hazardous substance or petroleum into the environment.  Yay!  Now all you need to do is find people who “caused or contributed” to the contamination, and go after them!  Unfortunately, recent court decisions interpreting this statute have complicated things.  The same rationale that imposes liability on current owners has not been applied in the context of the ELA.

 

In Neal v. Cure, 937 N.E.2d 1227, 1234 (Ind. Ct. App.2010) the court held that “cause or contribute” in the ELA is intended to impose liability only on those “responsible for creating contaminations.”  In that case, the Cures rented their property to tenants who ran a dry-cleaning business.  The dry-cleaning business allegedly contaminated a neighboring property owned by the Neals with perchloroethylene (“PCE”).  The Neals sued the Cures under the ELA, but the court held that since the Cures hadn’t actually spilled the PCE themselves, and didn’t know it was being spilled, they had not “caused or contributed” to the PCE contamination, and were thus not liable under the ELA.

The reasoning behind imposing liability for clean-up of contamination on present-day property owners is not applied to former owners, even if they owned the property at the time the contamination occurred.  As a practical matter, ELA suits involve a great deal more fact research than they otherwise would.  Finding former owners is relatively easy through simple title searches.  But finding former tenants can be much more challenging, and requires more creativity (and, unfortunately, more expense).  Just because you’ve found the person who owned the property when the contamination occurred doesn’t mean you’ve found a party from whom you can recover.

This article should not be construed as legal advice.  Consult an attorney if you have questions about the ELA or other environmental issues affecting your property.