The U.S. Environmental Protection Agency (EPA) has issued new guidance to assist regional Comprehensive Environmental Response, Compensation and Liability Act (CERCL A) managers in exercising enforcement discretion on a site-specific basis as to the parties who meet bona fide prospective purchaser (BF PP) or contiguous property owner requirements. Under CERCL A’s Brownfield Amendments of 2002, BF PPs and contiguous property owners are protected from liability as long as they meet certain statutory requirements, one of which is that parties who seek either of those defenses must not be “affiliated with any other person that is potentially liable” for contamination at a facility.

The guidance lists four issues that must be analyzed preliminarily to determine if there is a prohibited affiliation: (i) if the party is a potentially responsible party (PRP) at the facility, he or she cannot qualify as a BF PP or contiguous property owner; (ii) if the party is the same as a PRP or is potentially liable under the principles of corporate law, EPA may decide after analysis not to treat the party as a BF PP or contiguous property owner; (iii) if the party is asserting status as a BF PP or contiguous land owner as the result of reorganization in bankruptcy or other corporate restructuring, EPA may determine the party is not eligible for liability protection; and (iv) if the party with whom a person has an affiliation is not a PRP, the person may qualify for protection from liability. The guidance also lists disqualifying affiliations and affiliations that do not disqualify parties from protective status.