Landlord Liable For NYSDEC Costs Responding to Vapors at Off-Site Properties

A property owner was found liable under the New York Navigation Law for cleanup costs incurred by the New York State Department of Environmental Conservation (NYSDEC)responding to gasoline fumes that had migrated a quarter of a mile from the gas station. While the vast majority of the state’s costs were associated with the cleanup of soil and groundwater, it was the presence of the vapors that drew regulatory attention to this spill.

In State of New York v Slezak Petroleum Products, 947 N.Y.S. 2d 189 (App. Div-3rd Dept 2012), the defendant leased its property in Amsterdam, New York to a gas station operator. In October 2004, gasoline fumes were detected in a warehouse located approximately one quarter mile from the gas station.  The NYSDEC conducted an investigation and determined that that the vapors from a gasoline spill had infiltrated nearby sewer lines and residences. After the USTs at the site failed a tightness test, the he tanks were removed and holes were observed on the bottom. Further sampling confirmed the presence of extensive soil and groundwater contamination.

When the defendant declined to undertake further investigation for financial reasons, NYSDEC retained a contractor to implement response actions. The NYSDEC determined that the groundwater flowed from the gas station towards toward the warehouse and affected residences. In addition, the highest concentrations of contaminated groundwater were consistently found in the monitoring wells at and immediate downgradient from the gas station. The petroleum detected in monitoring wells at the affected residences revealed minimally weathered gasoline and MTBE.

After investigating other potential sources of the contamination, including two nearby gas stations, NYSDEC concluded that the defendant’s property was the source of the petroleum contamination causing the vapors at the warehouse and the affected residences. When the defendant again declined to take further action, NYSDEC implemented extensive remediation measures to remove the contamination at the gas station and mitigate the vapors at the affected business and residences.

DEC filed a cost recovery action pursuant to article 12 of the Navigation Law along with penalties. The trial court granted DEC’s partial summary judgment that the defendant was strictly liable for all cleanup and removal costs and prejudgment interest, and entered a judgment for $937,233.53.

The defendant appealed, arguing that there other discharges who had contributed to the contamination and that as a property owner who did not operate the gas station, it could not be held strictly liable as a discharger under the Navigation Law. The appellate court affirmed, noting that while liability for remediation costs cannot be premised solely on land or ownership of the tank system, owners who have “control over activities occurring on their property” and who had reason to believe that petroleum products were stored there could be liable as dischargers. The court then found it was it is undisputed that defendant was the owner of the contaminated site as well as the petroleum tanks and system from which the spill emanated, had control over the activities on and the use of its property, and was aware that petroleum products were stored in underground tanks and sold from its property. Because the defendant clearly had the “capacity to take action to prevent an oil spill or to clean up contamination resulting from a spill, the court said defendant was strictly liable as a discharger.

In support of its motion for partial summary judgment, the plaintiff had submitted affidavits of two NYSDEC environmental engineer directly involved in the investigation and remediation that concluded the defendant’s property was the principal source of the contamination, and that the plume had migrated downgradient to the other affected properties in the neighborhood. The conclusions were based upon the sampling results from over 100 groundwater monitoring wells, soil borings and soil gas.

The defendant alleged that spills at other nearby locations were the source of the contamination at the residences and warehouse. In opposing plaintiff’s motion, the defendant submitted an affidavit of one of its principals refuting defendant’s liability for the off-site contamination and suggesting that it came from other nearby businesses. The court also found that affidavit submitted by defendant’s geologist contained only conclusory and speculative assumptions and assertions, noting that defendant’s expert affidavit did not conclude that migration from the gas station did not occur but that there were unanswered questions that needed further investigation. Because this affidavit was speculative and unsupported by any evidentiary proof, the court said it could not support a verdict in defendant’s favor. Likewise, the court found that the affidavit of defendant’s counsel was insufficient because the counsel did not have any expertise in applicable scientific disciplines or possess sufficient personal knowledge of relevant matters on the material disputed issues.

In sum, the court said the uncontroverted evidence established that the defendant’s property was the source of the contamination. The key facts noted by the court were that:

  • the gasoline tank excavated from the defendant’s property had holes in the bottom;
  • the petroleum was found in  the tank grave after the excavation;
  • high concentrations of gasoline and MTBE were found in the soil and groundwater at the defendant’s property;
  • the defendant’s property was identified as being at the top edge (highest point) of the contamination plume;
  • groundwater migrated away from defendant’s property toward the impacted sites;
  • vapors detected at the warehouse and affected residences were identified as a petroleum product;
  • a buried stream channel in the bedrock at the defendant’s property provided a migration pathway for the gasoline contamination to travel to the impacted areas;
  • there was a continuous impacted area between the spill site and the downgradient impacted warehouse;
  • forensic analyses of the petroleum in the wells at the affected residences established that it was post-1990 unleaded gasoline; and
  • the defendant’s property were the only nearby retail source of unleaded gasoline produced after 1990.

Besides, the court went on to say, the  plaintiff was not required to exclude other parties as contributing dischargers to establish defendant was strictly liable  under the Navigation Law. The court said the possibility that other dischargers contributed to the off-site contamination was irrelevant to the question of if  the defendant was strictly liable as a discharger under the Navigation Law. The court said that once the plaintiff established defendant was strictly liable as a discharger for all cleanup and remediation costs associated with the contamination, the defendant had the burden of proof to raise a triable issue of fact with regard to its liability and it failed to do so. Accordingly, the appellate court affirmed the granting of the summary judgment in favor of the plaintiff.

Of course, the defendant is not without recourse. It can  proceed with a Navigation Law contribution claim against the other parties that it believes are  dischargers.

This case illustrates the importance of identifying preferential transport pathways when evaluating the potential for vapor intrusion at sites with petroleum releases. EPA’s proposed “Guidance For Addressing Petroleum Vapor Intrusion At Leaking Underground Storage Tank Sites” (PVI Guidance) that was released for public comment last week indicated that lateral distance beyond which buildings and other structures may not be threatened by potential PVI is a site-specific analysis. For the  vertical separation distance which is the thickness of clean, biologically active soil between the highest vertical extent of a contaminant source and the lowest point of an overlying building, EPA recommends vertical separation distances of 6 feet for dissolved and 15 feet for LNAPL sources.

However, EPA also states that preferential pathways can increase the speed  at which contamination moves through the subsurface so that contaminants are not biodegraded by the time they reach receptors. Preferential pathways can be natural (e.g., gravel lenses, buried stream beds, solution channels in karst terrain, bedrock fractures) and human features (utility corridors, trenches, sumps, drainage pits).  Other factors that EPA identified in its pVI Guidance can impact degradability of petroleum contamination and thus may require investigation  include exceptionally dry soils and areas of extensive impervious paving.

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