What Contractors Should Know About USTs
Jany K. Jacob
(Reprinted from Seattle Daily Journal of Commerce)

        It is not an uncommon occurrence in construction projects for contractors to uncover underground storage tanks (USTs) containing hazardous substances. If these USTs leak and contaminate the property, the Washington State Department of Ecology (“DOE”) will look for someone to pay the bill for the necessary cleanup. Under Washington’s Model Toxic Control Act (MTCA), codified at RCW 70.105D, that someone includes “the owner or operator of the facility.” Because of the plethora of regulatory requirements that the owner/ operator will then have to meet to comply with MTCA, the discovery of USTs may bring a construction project to a standstill.

        The current property owner of the land containing a leaking UST is “strictly liable” for any contamination caused by the leak. “Strict liability” is a legal term of art that means that the owner is liable for the contamination even though the leak was not his fault. This means that even if the owner just purchased the property and was unaware of the existence of the UST, he is still on the hook to clean up the contamination. The current owner is also “jointly and severally” liable with any other “potentially liable parties” (“PLPs”). Joint and several liability means that any one of the responsible parties may have to pay the entire remediation cost, and then sue the other PLPs for contribution (assuming they are identifiable and solvent).

        An “operator” is anyone who had enough control of the site to have prevented the spread of the contamination. MTCA defines an operator as “any person. . . who exercises any control over the facility.” RCW 70.105D.020(12)(a)(emphasis supplied). For example, if one of the prime contractor’s subcontractors uncovers petroleum hydrocarbon contaminated soil while doing earthwork or grading and the prime contractor directs him to keep digging in it (so that a UST may be disturbed and release additional contaminants into the environment), that prime contractor becomes an “operator” who is strictly (and jointly and severally) liable for all remediation costs at that site, along with the owner of the site and any other PLPs. Cf: Kaiser Aluminium v. Catellus Development Corp., 976 F.2d 1338 (9th Cir.1992); Edward Hines Lumber Co. v. Vulcan Materials Co., 861 F.2d 155 (7th Cir.1998); Tanglewood East Homeowners v. Charles-Thomas, Inc, 849 F.2d 1568 (5th Cir.1988).

        The term “facility” is defined in RCW 70.150D.020(4) to include almost anything that could contain hazardous substances, and models the federal Comprehensive Environmental Response Compensation &Liability Act (CERCLA) in this regard. However, “facility” may also refer to only the particular portion of the project site that is contaminated. Nurad v. William E. Hooper & Sons Co., 966 F.2d 837 (4th Cir. 1992). Thus, if the contractor (or subcontractor) is deemed to be the person in charge of the contaminated portion of the property when the contamination occurred (or worsened), then he may be held liable under MTCA.

        The ambit of MTCA is also greater than CERCLA because the former specifically identifies petroleum and petroleum products as “hazardous substances” subject to MTCA’s remedial action requirements, while the latter does not. RCW 70.105.020(7)(d). Given this potential for unbridled liability, contractors should train their employees to recognize USTs and petroleum hydrocarbon contaminated soils and stop all work immediately upon discovery of the same. Any work done thereafter by the contractor should be, at the very least, pursuant to a carefully drafted indemnification agreement with the owner and a waiver/ release agreement with any subcontractors whose work may be implicated. Only hazardous waste management contractors should attempt to actually remediate the site. Contractors should also notify the owner/ architect of the presence of USTs (i.e. a changed condition), send out a Notice of Potential Claim letter, and report the contamination to the regulatory agency that has jurisdiction of the project site.

What to do about a leaking UST:


        MTCA rules, found at WAC 173-340-450(2), require that once the property owner (or general contractor who incurs liability as an “operator”) has discovered a leaking UST, he must within 24 hours do the following:
  1. Report the underground storage tank release to DOE. The phone number to report is: 1-800-258-5990.
  2. Remove the hazardous substances from the UST to prevent further contamination and minimize the threat of fire, explosion, or harmful vapors.
  3. Visually inspect aboveground contamination or exposed underground contamination and ensure that the hazardous substances have not spread to surrounding soils, surface waters or ground water.
WAC 173-340-450(3,4) further requires that, within 20 days of the leak, the owner/ operator do the following:
  1. Continue to monitor the contaminated area and mitigate fire or other safety hazards from vapors that may have migrated from the UST.
  2. Test for hazardous substances using the DOE’s sampling and analysis guidelines.
  3. Submit a written status report to the DOE. This report should include: documents indicating the types, amounts, and locations of the hazardous substance contamination; an explanation of how the leak occurred; evidence confirming that there was a leak; and any planned remedial actions or the results of any cleanup already performed.
According to WAC 173-340-450(4)(a), an owner/ operator must, within 90 days of the contamination submit a Site Characterization Report to DOE. This should include:
  1. The contents of the status report (i.e.: documents indicating the types, amounts, and locations of the hazardous substance contamination; an explanation of how the leak occurred; evidence confirming that there was a leak; and any planned remedial actions or the results of any cleanup already performed);
  2. An explanation of how the release occurred;
  3. Evidence confirming that there was a release; and
  4. Any planned remedial actions and/ or any results of work done up to the date of the report.
Finally, DOE may require a state remedial investigation and feasibility study (RI/FS), the submittal of engineering documents, lab reports and other evidence of compliance with DOE’s cleanup standards (either Method A or B depending on whether the contaminated property falls within commercial or residential zoning) found at WAC 173-340-700 to 750, notification of DOE regarding the date that cleanup is to begin and the submittal of the results of all studies 90 days after the completion of cleanup under WAC 173-340-450.

What to do about a non-leaking UST:

Liability for a non-leaking UST usually applies to the owner of the property. The owner has two options if a contractor unearths a non-leaking UST: certification of the UST or removal of the UST.

Certification:

In order to obtain DOE certification that the non-leaking UST does not pose a threat to humans or the environment, the owner must show that the UST meets the “UST Performance Standards” found at WAC 173-360-310(1). This requires the owner set in place leak detection systems, corrosion protection systems, and spill/ overfill prevention systems. The penalty for non-compliance is $5000 per violation.

Removal:

To remove a UST, the property owner must meet the closure and corrective action requirements found at WAC 173-360. These include the following:
  1. Provide DOE with written notification at least 30 days prior to beginning closure using the standard DOE form entitled “Underground Storage Tank 30 Day Notice.”
  2. Use licensed/ certified contractors to accomplish the removal of the UST.
  3. Submit the “Temporary/ Permanent Closure and Site Assessment Notice” form within 30 days of completion of closure of the UST system.
  4. Complete permanent closure within 60 days.
  5. Conduct a site assessment.
  6. Report any releases that occur or are discovered in the process of removing the UST.
  7. Document “dangerous wastes” such as leaded petroleum using “Ecology Form 2.” However, the type of gasoline used in motor vehicles is not deemed to be a “dangerous waste.”