The transfer and reuse of contaminated BRAC property—the myth of the CERCLA covenant

Abstract

AbstractThis article warns base closure land reuse authorities (LRAs) and sublessees about the “myth” that the CERCLA covenant indemnification protection under Section 330 of the National Defense Authorization Act, 1993, and EPA “comfort letters” provide open‐ended protection against future liability arising from contamination on base closure property. In fact, each of these mechanisms is based on “risk sharing” between LRAs and the federal government involving the future reuse of base closure property. On the one hand, the federal government will protect LRAs and sublessees against injury arising from contamination from past federal activities. On the other hand, LRAs and sublessees must not contribute to existing contamination and abide by use restrictions designed to protect human health and the environment from residual contamination on base closure property. Accordingly, the LRA needs to understand the legal limitations of the CERCLA Section 120(h) covenant and Section 330 indemnification promise, as well as the significance of the restrictions that attach to the contaminated property they receive. Equally important is that the LRA and its ultimate sublessees understand these risks and take them into account in proposed operations, and address them in their leases.