CERCLA Investigations That Really Are At Risk

Site owners who conduct environmental investigations of potential releases of hazardous substances in the expectation that they will be able to recover their costs from the party whose operations gave rise to that threatened release may be surprised by the outcome in a recent federal district case in Georgia, Stratford Holding, LLC v. Fog Cap Retail Investors LLC. There, a site owner brought CERCLA and state law claims against a tenant and subtenant for dry cleaning operations after the owner's sampling showed over 2 ppm of tetrachloroethylene (PCE), in soil and 56 ppb in groundwater.

The court granted a motion to dismiss all claims on the ground that the sampling costs were not response costs. According to the court, the investigatory costs were not "necessary" since the site owner reported the releases to the State of Georgia environmental regulators and those regulators did not order any remediation and declined to include the property on the State's Hazardous