Extricating Membership as a PRP at Hazardous Waste Disposal Sites

Abstract

Corporations often become potentially responsible parties (PRPs) at hazardous waste sites because of their past transportation or disposal of hazardous substances at such sites. Determining a PRP's potential liability for the assessment and cleanup of hazardous waste sites is a challenging effort and often results in disputes among other PRPs regarding appropriate allocation of response action costs to each party. Further, public companies have an obligation to report probable and reasonably estimable costs under Generally Accepted Accounting Principles (GAAP) for environmental liabilities at their current or prior hazardous waste sites. The first step in such an evaluation is to determine whether or not a PRP can extricate themselves from any association with the subject site or, alternatively, demonstrate de minimis status. This article describes the methods by which PRPs can extricate themselves from liability associated with response action costs at contaminated sites, including: evaluating a PRP's prior settlements or indemnifications with other PRPs; identifying insurance coverage or other financial assurance instruments for the disposal facility; and examining applicable statutes of limitations against when a PRP received notification from the regulatory agency. The article also presents a case study discussing how a PRP with a portfolio of 72 hazardous waste disposal sites was able to extricate itself from the majority of these sites, resulting in only four sites where the PRP was determined to be a PRP and where an associated allocable share was assigned. © 2014 Wiley Periodicals, Inc.