USA – CALIFORNIA Law and Practice Contributed by: Kim Bick, Alan Bick, Corrie Plant and Tyler Alexander, Bick Law LLP
violations warrant harsher sanctions, such as impris- onment and fines of up to USD250,000 per day under Cal. Health & Safety Code § 25189.5. In addition, Cali- fornia may order the violator to clean up or abate the violation, or else tax the cost of cleanup to the violator. For statutes with citizen suit provisions, violators may be further subject to attorney’s fees and costs of suit. Fee awards apply the lodestar calculation, where the prevailing plaintiff’s attorneys receive a reasonable hourly rate for the hours reasonably spent in the liti- gation. Given California’s high fee rates and the com- plexity of environmental litigation, fees and costs are often considerable. Finally, tort law claims by aggrieved parties may result in compensatory damages and, for certain classes of conduct, punitive damages. 5.2 Liability for Historical Environmental Incidents or Damage Present operators or owners of real property are lia- ble for historical pollution on their premises. CERCLA Section 107 (a), RCRA, and California’s Hazardous Substance Account Act define “potentially respon- sible party” to include current property owners and operators. Liability is strict, joint, and several, allow- ing the federal government, California agencies, or private parties to pursue the full cleanup costs against present owners and operators. In addition, potential- ly responsible parties may pursue contribution from each other. Finally, CERCLA liability is retroactive, with current owners and operators liable for contamination that predates CERCLA’s enactment, regardless of any nexus between the current owners and operators and the contamination. Owners who conducted “all appropriate inquiry” before purchasing the property may qualify as an “innocent purchaser” or “bona fide purchaser” under California or federal law, which pro- vides certain protections against liability. 5.3 Key Defences Liability for environmental law violations is often strict and limited to enumerated defences. CERCLA, 42 U.S.C. § 9607 (b), and California’s Hazardous Sub- stances Account Act limit defences to the following:
• acts of God; • acts of war; and • that an act or omission by a third party was the sole cause of the contamination. In addition, both CERCLA and California law recog- nise an “innocent landowner defence”, which applies to acquirers of real property who (i) did not know about the contamination and (ii) who engaged in all appropri- ate inquiries before the acquisition. A Phase I Environ- mental Site Assessment by a licensed environmental professional may qualify a purchaser for the innocent landowner defence, with some limitations, including that the assessment is no more than six months old at the time of purchase and the purchaser has no nexus to any potentially responsible party. Other defences – such as statute of limitations or equitable considerations – may be available depend- ing on the facts of the case. 6. Corporate Liability 6.1 Liability for Environmental Damage or Breaches of Environmental Law California law holds corporations liable for (i) the actions or omissions of the corporation and (ii) tor- tious acts of employees or agents within the scope of employment under the doctrine of respondeat superi- or. Officers and directors may also be personally liable under the Responsible Corporate Officer doctrine if they had the power to prevent or remedy an environ- mental violation but failed to do so. 6.2 Environmental Taxes The California Department of Tax and Fee Administra- tion imposes an annual environmental fee on busi- nesses that use, generate, or store hazardous materi- als. The fee applies to business entities operating in California that employ more than 100 employees, with the fee amount calculated based on the number of employees who worked more than 500 hours in Cali- fornia the prior year. Revenues from the environmental fee are used by the California Department of Toxic Substances Control for site remediation and admin- istration of state cleanup programmes.
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