Alert

Trump’s Second Term and its Potential Impact on the Bona Fide Prospective Purchaser (BFPP) Defense Under CERCLA

November 25, 2024

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) aims to facilitate cleanup and accountability in hazardous waste sites. The Bona Fide Prospective Purchaser (BFPP) defense was introduced to encourage the redevelopment of contaminated properties by limiting liability under specific conditions. Trump’s second term may influence environmental law enforcement, regulation, and judicial interpretation, potentially altering the application and robustness of the BFPP defense. Trump’s policy trends could intersect with CERCLA enforcement and have broader implications for the BFPP defense, stakeholders, and environmental management.

Background of CERCLA

CERCLA, enacted in 1980, primarily seeks to clean up hazardous waste sites and hold responsible parties accountable for contamination. In 2002, the Small Business Liability Relief and Brownfields Revitalization Act amended CERCLA, creating the BFPP defense to foster economic redevelopment while maintaining environmental safeguards. This defense protects prospective property buyers from liability if they adhere to conditions such as performing All Appropriate Inquiries (AAI) and cooperating with remediation efforts.

Under Trump’s first term, environmental policy emphasized deregulation and limited federal oversight, resulting in minimal CERCLA enforcement. His administration’s deregulatory approach, combined with judicial appointments that reflect a more conservative stance, raises critical questions about how Trump’s second term might shape the BFPP defense under CERCLA.

Trump Administration’s Environmental Legacy

Deregulation and CERCLA Enforcement

During Trump’s presidency, the Environmental Protection Agency (EPA) saw budget cuts and shifts in priorities that emphasized cost reduction over strict environmental enforcement. Enforcement actions under CERCLA declined substantially, particularly in cases involving potentially responsible parties (PRPs). This trend raised concerns about reduced oversight and enforcement, which are critical elements for ensuring the efficacy of the BFPP defense.

Judicial Appointments and BFPP Interpretation

Trump appointed three Supreme Court justices and numerous lower court judges, many of whom demonstrated a textualist or pro-business orientation. This ideological shift could lead to narrower interpretations of statutory provisions, including those governing the BFPP defense. For instance, courts may scrutinize compliance with BFPP conditions more stringently or favor PRPs seeking to challenge cleanup orders.

Policy Implications for Brownfields Redevelopment

The Trump administration prioritized economic redevelopment, particularly in rural and industrial areas. However, relaxing environmental oversight risked undermining the balance CERCLA seeks to achieve between redevelopment and environmental protection. This tension may become more pronounced in a second term, with stakeholders potentially exploiting regulatory gaps or ambiguities.

BFPP Defense Under a Second Trump Term

Shift in Enforcement Priorities

Trump’s second term could further de-emphasize CERCLA enforcement. This may reduce the EPA’s capacity to monitor compliance with BFPP conditions, such as AAI and ongoing care obligations. Developers might feel emboldened to bypass stringent compliance, relying on weakened oversight to evade liability.

Judicial Developments and Litigation Trends

With a judiciary increasingly inclined toward textualism, the BFPP defense could face a stricter application. For instance, courts may require rigorous documentation of AAI and continuous site monitoring, placing greater burdens on developers. Conversely, pro-business rulings could weaken PRP accountability, diminishing the deterrent effect of CERCLA.

Evolving Standards for All Appropriate Inquiries (AAI)

The BFPP defense hinges on meeting AAI standards established by the EPA. Under Trump’s deregulatory ethos, these standards may face revision or inconsistent enforcement. A relaxation of AAI requirements could attract developers but may also expose them to unforeseen liabilities if judicial scrutiny increases.

State-Level Implications

States often supplement federal CERCLA enforcement, particularly when federal oversight wanes. A second Trump term could widen disparities between states, with some adopting stricter enforcement while others align with federal deregulatory trends. Such variability could create uncertainty for BFPP applicants operating across jurisdictions.

Challenges and Opportunities for Stakeholders

Developers and Investors

The BFPP defense offers significant incentives for redeveloping contaminated properties. However, diminished federal oversight might increase risks of non-compliance, especially in states with weak enforcement mechanisms. Developers must navigate these uncertainties carefully to avoid unintentional liability.

Environmental Advocacy Groups

Advocacy organizations may face greater challenges in holding PRPs accountable under a weakened CERCLA framework. They could turn to litigation or state-level initiatives to ensure environmental protection remains a priority.

Local Governments

Municipalities often rely on BFPP protections to redevelop blighted areas without assuming liability. Changes in federal policy or enforcement could complicate local redevelopment efforts, particularly for projects requiring federal funding or oversight.

Considerations for Stakeholders

Strengthening State-Level Oversight

In the absence of robust federal enforcement, states may bolster their environmental agencies to ensure consistent application of CERCLA provisions and BFPP criteria.

Enhancing Developer Awareness

Developers remaining informed about evolving AAI standards and compliance requirements is prudent. Partnerships with environmental consultants and legal experts could mitigate risks associated with weakened federal oversight.

Judicial Advocacy and Interpretation

Stakeholders could engage in judicial advocacy to encourage balanced interpretations of CERCLA provisions, ensuring that the BFPP defense remains accessible while maintaining environmental accountability.

The Takeaway

Trump’s second term could significantly alter the regulatory landscape for CERCLA and the BFPP defense. While deregulation may encourage redevelopment in the short term, it risks undermining the environmental safeguards integral to CERCLA’s mission. Stakeholders may adapt to this changing environment through proactive compliance, advocacy, and collaboration to ensure that economic development does not come at the expense of environmental integrity.

References

1. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA).

2. EPA (2020). Enforcement Annual Results.

3. Small Business Liability Relief and Brownfields Revitalization Act (2002).

4. Environmental Law Institute. (2021). “Trump’s Environmental Deregulation Legacy: Impacts on CERCLA.”

5. Congressional Research Service. (2020). “The Bona Fide Prospective Purchaser Defense: Legal Challenges and Opportunities.”