An earthwork contractor walks on to a job site. A commercial structure will be built upon completion of the site prep work. The earthwork contractor accepts fill material at the site to establish proper elevations. The same material is used throughout the site wherever needed.
Several weeks into the project, it is determined that the supposedly "clean fill" was not so "clean" after all; it contained heavy metals and volatile organic compounds (solvents) that rendered the material hazardous. (Keep in mind that where hazardous waste/material comes in contact with non-hazardous material, all material is subsequently deemed hazardous and must be remediated, treated, or disposed of as such.) The project comes to a halt, and litigation ensues.
Two questions usually follow: "Where did this stuff come from?" and "Who is responsible for placing it?" Unfortunately, those are questions that should have been asked and answered before the fill was ever accepted. Had the contractor had the answers to these questions, they may have prevented a huge headache.
Proper Expectations
It is always important to know what the client's expectations are when it comes to how "clean" the fill must be to avoid litigation and potentially devastating cleanup costs. In Colonial Oil Industries, Inc. v. Underwriters Subscribing to Policy Nos. TO31504670 and TO31504671, No. 95-9603 (11th Cir Feb. 27, 1997), the differing views between the two parties to a contract about what constitutes "clean fill" caused a lot of problems.
In the early 1990s, Colonial contracted to dredge part of a river to make way for construction of a new pier. Colonial also contracted to deposit the dredged materials on a nearby island owned by Charles Gay. Colonial and Gay signed a "Spoilage Disposal Easement" permitting Colonial to deposit "clean fill" on the island. Colonial obtained all necessary permits and started dredging.
The permit described the materials to be deposited as "firm silty to gray sandy clay"; however, the easement never stipulated exactly what was to be deposited. Apparently Mr. Gay had expected "sandbox quality sand" to be dredged and deposited on his island, but when he inspected the site, he found bricks, wire cable, and lumber. Mr. Gay sued to have Colonial remove the deposited materials, alleging, among other things, that Colonial had violated the easement by depositing things other than "clean fill" and that Colonial was liable for dumping hazardous materials onto his property.
The point of this case—when the owner decides he does not like what the contractor has done and/or he discovers something that is not quite as clean as it he thinks it should be—there is the potential for litigation. Whether hazardous material has been brought onto the owner's property by the contractor, or the contractor merely spreads pre-existing contamination around the site, there is a likelihood that the contractor stands to foot a portion, if not all, of the bill for the cleanup.
For purposes of this article, we will not cover the complex web of Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or Superfund) liability associated with the above cases. Rather, we will focus instead on the way to mitigate or prevent such risk. However, the thing about CERCLA liability that must be understood (but many times not accepted) is that, as a potentially responsible party (PRP)—which includes past and present owners of the property, generators or transporters of the waste or materials—you may be held jointly and severally liable. This means you could be held responsible for a portion or the entire necessary cleanup, and this applies retroactively, going back prior to the promulgation of any environmental statutes.
Controlling the Exposure
There's a simple way to avoid the above situation: never accept contaminated material on the job site. Easy! If you need more suggestions, you may want to incorporate some of the tactics below to prevent yourself from getting into such a mess.
Visual inspections. Conduct visual inspections of the material before it is accepted and during the unloading process to ensure the material "looks" acceptable. Simple visual inspections can identify petroleum hydrocarbons and other contaminants that discolor soils, let alone the more obvious such as asphalt, lumber, block, concrete, painted materials, and the like.
Request sample analysis. In the event the material is not coming from a known clean fill site, make a request for the material to be sampled and analyzed for organic and inorganic (heavy metals) compounds, at minimum. In the event the material was analyzed, your decision becomes relatively easy. Accept it or, depending on the type and levels of contaminants, use it for another purpose or site.
Sample the material yourself. In reality, if the owner of the material is not in the practice of analyzing the material, the likelihood that they will do it for you is slim. Therefore, you may want to attempt to analyze or inspect yourself. With a photo-ionizing detector (PID) or organic vapor analyzer (OVA), certain contaminants can be identified. Such tests will not tell you exactly what you have and will not detect heavy metals, but can raise some red flags if there is a real problem. For a few hundred dollars, you can purchase either piece of equipment. Not a bad investment! However, make sure the personnel utilizing these devices are properly trained to operate them.
Audit the facilities from which the material comes. In the event you routinely accept fill material from one or two locations, conduct a simple and brief audit of the facility or site. Ask to look at their environmental management plans, permit status, operations, site security, waste management, on-site tanks and the like. This will give you a good idea of what you are dealing with and can be conducted quite painlessly.
Never accept material from unknown origin. This is by far the most important and least expensive tactic. If there is one thing that should certainly be a part of any company's practice, it is finding out where the material came from. Knowing the location and the organization providing the material can tell you much about the stuff without ever setting eyes on it. This also applies to sites where soil/dirt is already stockpiled. Identify the source!
Contractual indemnity. You can always attempt to have the supplier of the material indemnify you for any resulting liability arising out of contaminated fill. As with every indemnity, there are positives and negatives. The biggest drawback is that the indemnity is only as strong as the financial condition of the indemnitor! Therefore, ensure the supplier has the financial wherewithal to support such a contract before entering into it.
Do Something!
Too many times, costly headaches could have been prevented with simple, inexpensive tactics executed properly. Don't practice "knock-on-wood risk management." You know, close your eyes and hope and pray that nothing goes wrong! We all do it, and sometimes it works. Sometimes!
As I end many of articles such as this one, my simple recommendation is—do something! There are a few tactics outlined above that can help. If you have already instituted some or all, great! If not, it is definitely something you should consider.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
An earthwork contractor walks on to a job site. A commercial structure will be built upon completion of the site prep work. The earthwork contractor accepts fill material at the site to establish proper elevations. The same material is used throughout the site wherever needed.
Several weeks into the project, it is determined that the supposedly "clean fill" was not so "clean" after all; it contained heavy metals and volatile organic compounds (solvents) that rendered the material hazardous. (Keep in mind that where hazardous waste/material comes in contact with non-hazardous material, all material is subsequently deemed hazardous and must be remediated, treated, or disposed of as such.) The project comes to a halt, and litigation ensues.
Two questions usually follow: "Where did this stuff come from?" and "Who is responsible for placing it?" Unfortunately, those are questions that should have been asked and answered before the fill was ever accepted. Had the contractor had the answers to these questions, they may have prevented a huge headache.
Proper Expectations
It is always important to know what the client's expectations are when it comes to how "clean" the fill must be to avoid litigation and potentially devastating cleanup costs. In Colonial Oil Industries, Inc. v. Underwriters Subscribing to Policy Nos. TO31504670 and TO31504671, No. 95-9603 (11th Cir Feb. 27, 1997), the differing views between the two parties to a contract about what constitutes "clean fill" caused a lot of problems.
In the early 1990s, Colonial contracted to dredge part of a river to make way for construction of a new pier. Colonial also contracted to deposit the dredged materials on a nearby island owned by Charles Gay. Colonial and Gay signed a "Spoilage Disposal Easement" permitting Colonial to deposit "clean fill" on the island. Colonial obtained all necessary permits and started dredging.
The permit described the materials to be deposited as "firm silty to gray sandy clay"; however, the easement never stipulated exactly what was to be deposited. Apparently Mr. Gay had expected "sandbox quality sand" to be dredged and deposited on his island, but when he inspected the site, he found bricks, wire cable, and lumber. Mr. Gay sued to have Colonial remove the deposited materials, alleging, among other things, that Colonial had violated the easement by depositing things other than "clean fill" and that Colonial was liable for dumping hazardous materials onto his property.
The point of this case—when the owner decides he does not like what the contractor has done and/or he discovers something that is not quite as clean as it he thinks it should be—there is the potential for litigation. Whether hazardous material has been brought onto the owner's property by the contractor, or the contractor merely spreads pre-existing contamination around the site, there is a likelihood that the contractor stands to foot a portion, if not all, of the bill for the cleanup.
For purposes of this article, we will not cover the complex web of Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or Superfund) liability associated with the above cases. Rather, we will focus instead on the way to mitigate or prevent such risk. However, the thing about CERCLA liability that must be understood (but many times not accepted) is that, as a potentially responsible party (PRP)—which includes past and present owners of the property, generators or transporters of the waste or materials—you may be held jointly and severally liable. This means you could be held responsible for a portion or the entire necessary cleanup, and this applies retroactively, going back prior to the promulgation of any environmental statutes.
Controlling the Exposure
There's a simple way to avoid the above situation: never accept contaminated material on the job site. Easy! If you need more suggestions, you may want to incorporate some of the tactics below to prevent yourself from getting into such a mess.
Do Something!
Too many times, costly headaches could have been prevented with simple, inexpensive tactics executed properly. Don't practice "knock-on-wood risk management." You know, close your eyes and hope and pray that nothing goes wrong! We all do it, and sometimes it works. Sometimes!
As I end many of articles such as this one, my simple recommendation is—do something! There are a few tactics outlined above that can help. If you have already instituted some or all, great! If not, it is definitely something you should consider.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.