Legal Memorandum: Liability of Beneficiaries for Clean-up Costs

Issue: When the settlor of a trust, who was legally responsible for payment of costs relating to hazardous-waste clean up on the trust property, dies before paying for such clean up, is the estate or the trust beneficiary responsible for the clean-up costs?

Area of Law: Environmental Law, Estate Planning & Probate
Keywords: Hazardous-waste clean up; CERCLA liability; Beneficiary
Jurisdiction: California, Federal
Cited Cases: 47 P. 363; 822 F. Supp. 322; 1 F. Supp. 2d 553; 138 F.3d 772; 814 F. Supp. 1285; 773 F. Supp. 984; 38 F.3d 682
Cited Statutes: 42 U.S.C. § 9601 et seq.; 42 U.S.C. § 9607(b)(3); Restatement (Second) of Trusts § 232 cmt. B; California Probate Code § 11420; Cal. Probate Code § 11420(a) (2005); California Probate Code § 19001
Date: 08/01/2006


The prevailing federal authority in environmental contamination cases is the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.  CERCLA, commonly known as Superfund, created a tax on the chemical and petroleum industries and provides broad authority to directly respond to releases or threatened releases of hazardous substances that could endanger public health or the environment.  See http://www.epa.gov/superfund/action/law/cercla.htm.  CERCLA also provides for the liability of persons responsible for releases of hazardous waste, and an avenue of relief to both governmental entities and aggrieved private landowners.  Id. 

Courts throughout the United States applying and interpreting CERCLA have often refused to hold beneficiaries liable for clean-up costs if the beneficiary was not involved in the activities giving rise to CERCLA liability.  These beneficiaries were not, the courts reason, “owners or operators” at the time of contamination, as required under the federal statute in order to find liability, and their only connection with the property was to inherit it from the deceased responsible party.   See, e.g., Chesapeake & Potomac Tel. v. Peck Iron & Metal Co., 814 F. Supp. 1285, 1292, opinion clarified on other grounds, 822 F. Supp. 322 (E.D. Va. 1993); Snediker Developers Ltd. P’ship v. Evans, 773 F. Supp. 984, 987 (E.D. Mich. 1991).  

In the Chesapeake & Potomac case (which, it should be noted, unlike the present matter, involved a closed estate), […]

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