Are Soil & Groundwater Environmental Investigations privileged?

Abstract

Often, we encounter inquiries from colleagues, asking whether they can engage a consulting firm for an environmental site investigation, expecting to receive a confidential report. While this request may seem straightforward, it is based on the erroneous assumption that the data and information generated by the consultant’s efforts will, in all instances, be legally privileged, especially if the consultant is retained through by an attorney.

Full text


AreSoil&GroundwaterEnvironmentalInvestigations
privileged?
Often,weencounterinquiriesfromcolleaguesorclients,askingwhethertheycanengagea
consultingfirmorlawyerforanenvironmentalsiteinvestigation,expectingtoreceivea
confidentialreport.Whilethisrequestmayseemstraightforward,itisbasedontheerroneous
assumptionthatthedataandinformationgeneratedbytheconsultant’seffortswill,inall
instances,belegallyprivileged,especiallyiftheconsultantisretainedthroughbyanattorney.
Asenvironmentallawyersorconsultants,inmanysituationswecannavigateandexploit
certainlegalprotectionssuchastheattorney‐clientprivilegeandtheattorneyworkproduct
privilegewheninterpretingdata.However,it'sessentialtonotethatthedataitselfrevealing
actionablesoiland/orgroundwatercontaminationlevelsmaynotbeshielded.Please
rememberthepublicpolicyconcernthatgovernstheprivilegeanalysisisprotectingthepublic’s
healthandsafetyfrompotentialchemicalcontaminantexposure,notprotectingthefinancial
interestsofindividuals.Thishigherstandardmustguideouractions.
HistoricReleases‐Exempt?

PleasereviewCaliforniaHealth&SafetyCodeSection25359.4.Onthesurface,itwouldappear
thatonlyownersoroperatorswouldhaveadutytoreportareleaseofa“reportablequantity”
ofahazardoussubstanceintotheenvironment.
Thepenaltyprovisionofthestatuteprovidesthattheownerofpropertyonwhichareportable
releasehasoccurred,andanypersonwhoreleasesorcausesareportablerelease,shallbe
liable.Thepenaltyis$25,000foreachviolationandforeachdaythataviolationcontinuesif
theyfailtosubmitawrittenreporttotheCaliforniaDepartmentofToxicSubstancesControl
(“DTSC”)within30daysofdiscoveryoftherelease.
ReportingObligations
However,theCodereportingobligationisabroadone.Itcoversallsales,leasesandrentalsof
contaminatedpropertyoncethecontaminationisdiscovered.PleasealsoreviewCalifornia
Health&SafetyCodeSection25359.7.Thissectionprovides,inpertinentpart:
“(a)Anyownerofnonresidentialrealpropertywhoknows,orhasreasonablecausetobelieve,
thatanyreleaseofhazardoussubstancehascometobelocatedonorbeneaththatreal
propertyshall,priortothesale,lease,orrentaloftherealpropertybythatowner,givewritten
noticeofthatconditiontothebuyer,lessee,orrenteroftherealproperty.”
Section25359.7oftheCaliforniaHealth&SafetyCodeappliesequallytotenants,suchthat
“anylesseeorrenterofrealpropertywhoknowsorhasreasonablecausetobelievethatany
releaseofahazardoussubstancehascomeorwillcometobelocatedonorbeneaththatreal
propertyshall,withinareasonableperiodoftime...followingthediscoverybythelesseeor
renterofthepresenceorbelievedpresenceofthehazardoussubstancerelease,givewritten
noticeofthatconditiontotheowneroftherealpropertyortothelessorunderthelessee’sor
renter’sleaseorrentalagreement.”
DTSC’sFactSheetUpdate&Timing
Whatisa“reportablequantity”asthetermisreferencedinSection25359.4?It’seitherthe
quantityofahazardoussubstanceestablishedinPart302ofTitle40oftheCodeofFederal
Regulations,or“anyquantityofahazardoussubstancethatisnotreportable“butthatmay
poseasignificantthreattopublichealthandsafetyortotheenvironment.”
Obviously,thisdefinitionisverybroad.Andyoumayhavequestions.Ifso,werecommend
referringtoDTSC’sFactSheetUpdate,January2008,entitled“ReportingNonemergency
HazardousSubstancesReleases,”includingtheguidancesection“CommonlyAskedQuestions.”
Thereyouwilllearnthatifyoureceiveareportthatindicatesthatgroundwateris
contaminatedwithhazardoussubstanceswhichmayhavebeenreleasedatthesitedueto
operationspreviouslyconductedatafacilitythere,a“writtenreportisrequiredwithin30days
ofdiscoverybecausegroundwaterhasbeenimpacted.”

TheDTSCFactSheetprovidesseveralpertinentrealworld“whatif”scenariosforyouto
consider.It’simportanttoreviewthesescenariosandthentalkwithsomeonemore
knowledgeablethanyourself…toclarifyyourlegalposition.
IntheDTSC’sFactSheet,youwillalsolearnitisDTSC’spositionthat“consultingfirmsare
requiredtoreportnon‐emergencyreleases.”Assuch,iftheclienthasadutytoreport,the
client’sconsultantusuallydoesalso.Assuch,whethertheconsultantwasworkingthrougha
lawyerbecomesirrelevantifthehazardousreleaseatissue“pose[s]asignificantthreattopublic
healthandsafetyortotheenvironment.”
IsThereaWayAroundThisStuff?
Acolleaguehaspointedoutatleastonepotentialloophole.Itwouldappearthataprospective
purchaser,pursuanttoapurchaseagreement,couldagreetonottodisclosetheresultsofany
investigationto:a)thesellerorb)anyregulatoryagencyaspartofthecontracttoallowtheir
investigationtooccurtodetermineifthebuyerwantstomoveforwardwiththepurchase.In
thatinstance,thebuyer’sconsultantwouldhavethesamereportingdutiesastheparty
retainingtheconsultant.Sincethebuyerwon’thaveanyreportingduties,neitherwillthe
buyer’sconsultant.Ifthebuyerretainstheconsultant,noreportingdutywillexistiftheresults
arenotdisclosedtotheseller.Inactualtruth,wearenotcompletelycertainthatthisloophole
reallywouldworkinasituationwhereitisclearthatanactualhazardousreleasepresentsan
imminentandsubstantialthreattohealthortheenvironment.
AnotherConsideration
Oneruleofthumb:Ifthegeographicfootprintyouareconcernedwithhasalreadybeen
reportedtotheCaliforniaOfficeofEmergencyServices(OES)orthelocalemergencyresponse
agencies,youareprobablynotrequiredtoreportthepropertyagain.Wesayprobably–each
situationisdifferent–thereisnoblanketamnestyfromregulatoryreportingrequirements.
Keepinmindthattheoperativeissueisprotectionofthepublichealthandsafetyfrom
unknowncontaminantexposure–notprotectionofyourpocketbook,oryourclient’s;thereis
clearlyahigherstandard.
Whenindoubt,reporttheincident–it’sdefensible.Thereisnopenaltyforreportingtwice.
MurraySinclairisfounderandprincipalofMurrayM.Sinclair&Associates,wherehehas
practicedenvironmentallawformorethan30years.Co‐authorBartB.Sokolow,D.Env.,P.E.,
PresidentofEnvironmentalAdvisors,Inc.,hasadvisedvariousindustrieswithrespectto
environmentalmattersfornearly30years.SinclairandSokolowarealsoco‐authorsof“HowTo
AvoidEnvironmentalLitigation‐SecondEdition”Thebasictextofthisarticleisexcerptedfrom
ChapterIVofthebook.