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Private Parties Told Not to Cry to Courts Over Spills ()

Summer 1995

The Wisconsin Court of Appeals has refused to acknowledge a private right of action for spill statute violations (but, see page 8 on claims under federal law). One of the most powerful weapons in the Wisconsin Department of Natural Resource’s ("DNR") enforcement arsenal is its authority to require responsible parties to conduct investigations and to remediate hazardous substance spills in accordance with Wisconsin’s Spill Statute set forth at Wis. Stats. Section 144.76. The Spill Statute requires any party who possesses or controls a hazardous substance which is discharged or who causes the discharge of a hazardous substance to immediately notify the DNR of the discharge and to restore the environment to the extent practicable. The term "hazardous substance" is defined broadly to include a wide range of substances and is interpreted to include petroleum substances.

The DNR interprets the Spill Statute to authorize it to pursue current owners of contaminated property for investigation and remediation even if the contamination was caused by a former owner and it not attributable to any fault of the current owner. Current owners who are faced with these investigative and remedial obligations are frequently left with a limited number of legal avenues to pursue in attempting to recoup these costs from the former owner who caused the contamination. Recovering these costs can be even more difficult when the property is contaminated with petroleum substances, since these substances are generally excluded from regulation under the Federal Superfund law and hence, the Superfund recovery provisions cannot be employed.

In their efforts to recover petroleum related investigative and remedial costs from former owners, current owners frequently attempt to rely upon the provisions of the Spill Statute. The problem with this approach, however, is that the Spill Statute does not contain a private right of action which would affirmatively authorize private parties to bring a lawsuit to enforce its provisions. Further, the extent to which private parties may rely upon the Spill Statute for any type of recovery has been called into question in the wake of the Wisconsin Court of Appeals decision in Raskin v. Chrysler Realty Corporation.

In Raskin, the Buyer of the property knew at the time of the purchase that underground storage tanks were located at the Property. The purchase agreement obligated the Seller to remove the underground storage tanks prior to closing but further provided that the Buyer was purchasing the property "as is." The Seller removed the tanks but failed to notify the DNR, in accordance with the Spill Statute, of the contamination evident during the tank removal.

The contamination came to light later and the Buyer incurred costs to investigate and remediate the problem. The Buyer sought to recoup a portion of these costs from the Seller on the ground that the Seller’s failure to comply with the Spill Statute was actionable as per se negligence. Despite the Seller’s apparent failure to comply with provisions of the Spill Statute the court refused to allow the Buyer to proceed against the Seller on this ground, concluding that there is no private right of action under the Spill Statute and that its violation does not constitute per se negligence.

The Court’s decision in cases such as Raskin highlight the difficulties current owners of contaminated property may face when attempting to pursue the former owner for cost recovery. The message of Raskin is that prospective purchasers of property must ensure that a thorough environmental assessment is performed prior to the purchase in order to ensure that the risks associated with petroleum and other types of contamination can be taken into account.

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