Why You Should Care About Due Care

January 01, 2000-By Peter D. Holmes

If you own or operate property in Michigan that you know is a contaminated "facility," you must comply with certain "due care" duties. Under Michigan Department of Environmental Quality (MDEQ) rules that took effect on March 11, 1999, you may have to develop written documentation of your due care compliance by March 11, 2000.

Part 201 of the Natural Resources and Environmental Protection Act defines a contaminated "facility" as any property where any hazardous substance is present at levels above MDEQ's residential cleanup criteria. Your knowledge of those levels typically will be based on analytical data; however, circumstantial information (e.g., information about waste disposal practices) also may provide sufficient "knowledge" that the property is a "facility."

If you first became an owner or an operator (such as a tenant) of a facility after June 5, 1995 (when the legislature revised Part 201), you may be exempt from liability under Part 201 for preexisting contamination by filing a Baseline Environmental Assessment with MDEQ. If you have owned or operated the facility since before June 5, 1995, you are liable under Part 201 only if you were responsible for an activity that caused the contamination. However, even if you have no liability for the contamination, you still must satisfy your due care obligations (with limited exceptions).

There are three due care requirements:

(1) You must not exacerbate the contamination (e.g., by spreading contaminated soil onto uncontaminated portions of the property).

(2) You must reduce exposures to contaminants at the property so that it is safe for its intended use (e.g., by eliminating the use of contaminated groundwater).

(3) You must take reasonable precautions against the acts or omissions of third parties (e.g., by warning construction or utility workers of the contamination).

Your due care duties apply to all conditions of which you have knowledge "after all appropriate inquiry." Thus, you may have an affirmative duty to learn more about the contamination to determine what due care response is required of you.

Your written documentation of due care compliance must identify how and to what contaminant concentrations people might be exposed, describe any measures required to mitigate unacceptable exposures, and record their implementation unless they are evident upon visual inspection. If an MDEQ-approved Remedial Action Plan has been implemented at the property, then additional documentation of compliance with the duty to mitigate unacceptable exposures is not required if exposure conditions remain unchanged.

If you became an owner/operator of a facility before March 11, 1999, the written due care documentation must be developed by March 11, 2000. If you become an owner/operator of a facility after March 11, 1999, the documentation must be developed within eight months of purchase, occupancy or foreclosure (whichever occurs first). After that date, you must make the required documentation available to MDEQ upon request.

While MDEQ's rules allow a period of time to prepare the written due care document, owners/operators of facilities must meet their substantive due care obligations in the interim. The due care rules also require that you submit notice to MDEQ or other parties in circumstances involving discarded or abandoned containers, migration of contaminants off site above residential cleanup criteria, or fire or explosion hazards.

Thus, owners/operators of contaminated facilities are required not only to satisfy their due care obligations, but to document their compliance in writing. In most cases, the cost to prepare due care documentation should be relatively modest (perhaps $1,200-$2,500). Violations of Part 201 requirements are potentially subject to civil penalties of up to $10,000 a day.

Peter D. Holmes is an attorney and Certified Hazardous Materials Manager practicing environmental law at Clark Hill PLC. For more information, call (313) 965-8230.