Contaminated Property Consultation (CPC) H a n so n Br i d g et t Environmental & Natural Resources Practice Group
HANSON BRIDGETT LLP 1 Contaminated Property Consultation What Is Contaminated Property Consultation (CPC)? CPC provides certain legal and technical services to owners of contaminated property for specifi c scopes of work and for a fi xed fee. We deliver services to you in a succinct, easy-to-understand format by an established due date usually within three weeks of our engagement. Services include: Assessment of contamination Preliminary identifi cation of other potentially responsible parties Strategies for reporting the contamination Planning for further site characterization Evaluating the potential for vapor intrusion into structures Planning an investigation for vapor intrusion Evaluating statutory disclosure requirements to lessees Analyzing disclosure obligations under lease agreements Evaluating required or precautionary Proposition 65 warnings Analyzing available insurance policies Providing notice and tendering claims to carriers Identifying lost or misplaced insurance policies Advising on tax treatment of investigation and cleanup costs How Is CPC Different From Other Legal Services We Offer? Limited Engagement: CPC is a specifi c suite of services; we only provide the services you select from our Menu of Services. Defined Objectives: The Menu of Services addresses specifi c services you may need after the discovery of contamination on property you own. Combined Services: CPC combines legal and technical services. Fixed Fee Package: All services provided in the CPC are offered for a fi xed fee, inclusive of legal and technical services. Expedited Delivery: We establish a due date with you for delivery of all work product on an expedited basis.
HANSON BRIDGETT LLP 2 What Are The Benefits Of CPC? Convenient and Efficient: We assemble a team of experienced professionals with the specifi c expertise required for your project and provide seamless integration of technical and legal (environmental, insurance, tax) services. Attorney-Client Privilege: You can assert a privilege to attorney-client communications and to the technical reports prepared under our direction. Accessible: We provide succinct reports in bullet point format in a single briefi ng binder. You can master your understanding of the project without reviewing dense legal and technical materials. Prudent: We provide information about risks and legal obligations that may require your immediate attention. You can take prompt steps to manage these risks and comply with applicable laws. Cost-Effective: You decide which services you want and only pay for those services you need. The fi xed-fee rate for all services is lower than otherwise available due to the effi ciencies of the CPC process. How Does The CPC Process Work? You select services from the Menu of Services and complete a brief application form. If CPC is appropriate for your project, we will provide you with information about the team of professionals we have selected based on our assessment of your project, our extensive expertise with contaminated properties, and our experience with leading environmental professionals in California. You can then schedule a meeting or telephone conference with the Legal and Technical Team Leaders before you engage our services. The Team Leaders can answer any questions you have and help you select services that are appropriate for your project. All of our Team Leaders are partners or principals with more than twenty years of relevant experience. We represent private industries, publicly traded companies, and public agencies to help them manage some of the most contaminated properties and sophisticated projects in California and we have an established track record of creative solutions and successful projects. Where appropriate, based on the services you request, Team Leaders work closely with Hanson Bridgett tax and insurance specialists with expertise in environmental matters. After we receive all relevant documents and requested information, we will establish a due date with you and commence the work. We will deliver the CPC work product in a binder and electronically via PDF on or before the due date. We will then contact you to schedule a telephone conference or meeting to discuss any questions you have and any next steps you would like to take. How Can I Get More Information? Please contact Catherine W. Johnson at 415-995-5835 or by email at cjohnson@hansonbridgett.com for a Menu of Services and fees and to discuss whether CPC is appropriate for your project. If CPC is not appropriate for you, we would be pleased to discuss representing you under a conventional engagement for legal services.
MENU OF SERVICES CONTAMINATED PROPERTY CONSULTATION (CPC) HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 4 Contaminated Property Consultation Project Overview (Complimentary) After you have engaged our services and we have had an opportunity to review key documents for your project, our Team Leader (and/or insurance or tax attorneys if applicable) will confer with you in a meeting or by telephone conference to discuss the project and to clarify what communications you would like about the project, if any, while we conduct the services and before we deliver the client binder to you. CPC Core Service (CCS) In collaboration with a pre-qualified environmental consulting firm, we will provide an assessment of the extent of the contamination at your property based on applicable regulatory standards, identify and provide an evaluation of potential source areas of the contamination, the potential for migration onto or off the property, a preliminary evaluation of other potentially responsible parties, recommendations for steps to better evaluate the source and extent of the contamination (if necessary), a strategy for complying with applicable reporting requirements, and a discussion of measures you may want to consider to preserve claims against other responsible parties. This service is often a building block for other services. Vapor Intrusion Plan (VIP) In collaboration with a pre-qualified environmental consulting firm, we will provide a preliminary technical assessment of the potential for migration of vapors from known releases or suspect sources, and a legal and technical evaluation of the pros and cons of various options to investigate for vapor intrusion. Tenant Disclosures We will review your lease agreement and other applicable contracts and advise you about your obligations to disclose the contamination under these contracts and applicable California statutory requirements. We will also suggest additional disclosure language, as appropriate, that you may want to consider to better inform your tenants about the situation, allay unwarranted concerns, and minimize liabilities. We will prepare draft disclosure language for your review and approval. Proposition 65 Warning In some cases particularly where there is vapor intrusion Proposition 65 warnings could be required. Moreover, for risk management purposes, many companies elect to give Proposition 65 warnings about potential exposures even when warnings may not be required. We will advise you about the content and placement of such warnings and steps you may want to take to better inform your tenants about the situation and allay unwarranted concerns about such warnings. Insurance Assessment Third Party Claims Because you may contemplate bringing claims against other responsible parties, you should anticipate the possibility of cross claims that could trigger coverage under applicable policies (commercial/comprehensive general liability (CGL) and/or excess/umbrella coverage). In some cases, the issuance of a regulatory order directing you to remediate the property can also trigger coverage. Our environmental coverage specialist will evaluate your CGL insurance policies and any related excess/umbrella policies to advise you on the scope of coverage, policy requirements for tendering a claim to your carrier, and strategies for preserving your right to coverage and recovering costs from your carrier. Insurance Assessment Pollution Liability Policies If you have a specialty pollution liability policy, it is critical that you evaluate notification requirements as soon as possible. These policies generally require
HANSON BRIDGETT LLP 5 notice when you first discover the contamination and carriers may attempt to deny coverage if notice is not promptly provided. In addition, these policies are usually claims-made and reported policies, so failure to provide notice during the policy period or other applicable reporting period could result in a forfeiture of coverage. Our environmental insurance coverage specialist will evaluate notification requirements and draft a notice to tender to your carrier for your review. Supplemental Service Packages After completion of the CPC, if you have short-term legal needs to follow up on issues identified in the CPC, we offer supplemental service packages with defined scopes of work for limited fees. Service packages are offered for $5,000, $10,000 or $20,000. Lost or Misplaced Insurance Policies We may be able to help even if you cannot find your insurance policies. If we can identify potential carriers or applicable policy language, we will prepare letters tendering claims and demanding copies of your policies. Tax Treatment of Investigation and Cleanup Costs You may be able to realize significant savings if you can deduct your cleanup costs rather than capitalize them. Our environmental and tax attorneys will consult with you to advise how best to position your project for deduction of cleanup costs under state and federal law. Project Wrap-up (Complimentary) Our Team Leaders (and/or insurance and tax attorneys as appropriate) will confer with you in a meeting or by telephone conference after the CPC process is complete to discuss the project, any questions you have, and what next steps, if any, you would like to take. You may want assistance implementing some of the measures suggested in the CPC or you may need more general representation going forward for legal or technical needs or both. If you have fairly limited short-term needs, you may want to purchase a Supplemental Service Package. If you have long-term needs, we can discuss a traditional fee arrangement.
Contaminated Property Consultation CPC Core Service (CCS) HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 7 Contaminated Property Consultation CPC Core Service (CCS) What It Is A CCS is a service we have developed to provide critical information and advice about managing risks associated with the ownership of contaminated property. We collaborate with a leading Bay Area consulting firm and professional mapping company to provide this service, so you have access to both the technical and legal information you need and a visual reference point for easy comprehension. Why You May Need This Service You may need to understand the source of the contamination and whether it is migrating onto or off the property. You may also need to know what other parties may be liable for cleanup costs, what information you must provide to regulatory agencies about the contamination, and how the information you report could dramatically affect the costs of the cleanup and who is required to conduct the cleanup. Some answers may not be immediately available until site characterization is complete, an iterative sampling process designed by our team to optimize data collection and usually overseen by a regulatory agency. A CCS, nonetheless, will provide you with important preliminary technical and legal information that will help you develop a strategy to manage the remediation, comply with environmental laws, negotiate your responsibilities for cleanup with regulatory agencies, recover your costs, and minimize your liabilities. What This Service Includes Executive Briefing: A brief overview of the factual background, technical conclusions, and legal assessment appropriate for an executive level briefing or Board presentation. Basic Map: A map that identifies known or potential source areas on the property, and, where appropriate, properties in the immediate vicinity with reported releases, and selected sampling data available (as reported in publicly available databases maintained by the State of California) sufficient to identify other potential sources and suggested sampling points for further characterization of the source and extent of the contamination. Supplemental Map: Upon request and for an additional fee, we will provide a comprehensive map(s) that depicts current and historical sampling boring locations and associated data from your property and from potential source areas. Preliminary Technical Assessment (PTA): An environmental report that relies on data collected for the Sampling Data Map to provide preliminary conclusions about the potential sources and nature of the release, data gaps, and where appropriate, options for additional measures that could be taken to better define the source area or identify other potentially responsible parties. The report will include an appendix with a list of references and sources consulted. Preliminary Liability Assessment (PLA): A legal assessment of the information and options provided in the PTA, identification of potentially responsible parties under CERCLA (a federal law that imposes liability on prior owners, operators and others), discussion of applicable reporting requirements, practical suggestions for reporting the contamination to minimize cleanup costs and maximize the possibility that other responsible parties will be included in any regulatory directives, and steps you may want to consider to preserve your rights to make claims against other parties.
HANSON BRIDGETT LLP 8 What This Service Does Not Include This service does not include an evaluation of liabilities based on third party contracts or under tort theories based on the specific facts of the release to your property. If we believe such an assessment would be productive, we will let you know at the completion of the CCS. Is This Service Appropriate For You? The vast majority of properties in the preliminary stages of an investigation will benefit from a CCS, even if supplemental services are needed after the CCS is complete. We will discuss the project with you before you engage our services and let you know if we believe CCS is appropriate for you. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee.
Contaminated Property Consultation Vapor Intrusion Plan (VIP) HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 10 Contaminated Property Consultation Vapor Intrusion Plan (VIP) What It Is This service provides a preliminary evaluation of the potential for vapor intrusion into structures and a plan for the investigation of soil vapor intrusion. Why You May Need This Service Where volatile or semi-volatile compounds are present, you may decide to investigate the potential for vapor intrusion either in anticipation of regulatory requirements or as a general risk management tool. Before you conduct an investigation, however, you may want to better understand the available options and the pros and cons of each option so you can decide how and when you want to conduct the investigation. What This Service Includes Executive Briefing: A brief overview of the factual background, technical conclusions, and legal assessment appropriate for an executive level briefing or Board presentation. Vapor Intrusion Screening Map (VISM): A map that depicts selected sampling data and identifies the potential for off-site migration and on-site vapor intrusion consistent with protocols developed by the American Standards Testing Society for the identification of potential vapor encroachment (i.e., the presence of vapors in subsurface media). This map will assist in determining the scope of the investigation. site. The plan will identify and evaluate the pros and cons of various options available to better define the potential for vapor intrusion, and discuss proactive measures you may want to consider taking to minimize vapor intrusion risks. Legal Vapor Intrusion Plan (Legal): A legal assessment of risks and liabilities associated with the TVIP, and a strategy for implementing specific options identified in the TVIP. What This Service Does Not Include This service does not include implementation of any of the options identified in the TVIP. Is This Service Appropriate For You? If you know there is actual vapor intrusion, this service is not appropriate for you and you should consult an attorney promptly for advice on steps to protect human health, minimize your liability, comply with applicable laws, and preserve the value of your property. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee. Technical Vapor Intrusion Plan (TVIP): An evaluation of whether additional investigation is appropriate, and if so, a plan to investigate for potential vapor intrusion prepared by an environmental consultant based on the VISM and other information you provide about the
Contaminated Property Consultation Tenant Disclosures HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 12 Contaminated Property Consultation Tenant Disclosures What It Is This service provides advice about disclosures to tenants of buildings occupying contaminated property. Why You May Need This Service You may need to disclose the presence of contaminants on the property to your tenants to comply with California law, your lease agreement, or for prudent risk management purposes. In addition, you may want to supplement these disclosures with additional information to allay unwarranted tenant concerns. What This Service Includes What This Service Does Not Include This service does not include a review of your lease agreement for any issues other than disclosure obligations. Any revisions to the draft disclosure letter are not included, but can be handled as part of a Supplemental Service package. Is This Service Appropriate For You? This service is appropriate for most owners of contaminated property. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee. Executive Briefing: A brief overview of the factual background and our legal assessment appropriate for an executive level briefing or Board presentation. Lease Requirements: An evaluation of disclosure requirements in your lease agreement with the tenant. Other Disclosure Requirements: An evaluation of statutory requirements for disclosure to tenants. Disclosure Recommendations: An evaluation of supplemental disclosures and information you may want to include in any disclosure to better inform tenants, provide liability protection, and alleviate unwarranted concerns. Draft Disclosure Letter: A draft letter to tenants.
Contaminated Property Consultation Proposition 65 Warning Assessment HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 14 Contaminated Property Consultation Proposition 65 Warning Assessment What It Is This service provides an assessment of Proposition 65 warning requirements and suggests approaches for compliance. Why You May Need This Service You may be familiar with the California law known as Proposition 65, which requires warnings when persons are exposed to chemicals that have been identified by the State of California as causing reproductive harm or a risk of cancer. You may need to know more about the potential application of Proposition 65 to contaminated properties. Moreover, you may want to provide a precautionary Proposition 65 warning to minimize the possibility of a lawsuit from tenants, employees, or others, even if you have no reason to believe there is any exposure in violation of Proposition 65. The regulations governing Proposition 65 and the nature and placement of the warnings are complex, and in some cases, even dictate the font size of the warnings that must be made. You may want to better understand where and how you should make these warnings. What This Service Includes Executive Briefing: A brief overview of the factual background and our legal assessment appropriate for an executive level briefing or Board presentation. Initial Proposition 65 Evaluation: We will evaluate whether the chemicals at your property are covered under Proposition 65. Most common chemicals found in soil and groundwater are covered, but there are some exceptions. We will provide general advice about the pros and cons of making a Proposition 65 warning, even when such a warning may not be required. Proposition 65 Warning Sign: We will prepare a bullet point summary of the most appropriate placement of warning(s), the content and size of the warning, and we will provide a mockup of the warning itself. We will also provide you with the option of making your warnings consistent with proposed new regulations under Proposition 65 that require more specific information about the chemicals in question. Proposition 65 Warning Letter: Where tenants or employees could be exposed to chemicals, we suggest you consider a letter accompany the warning sign. Although this letter may not be required under Proposition 65, it provides additional security that the warning has been received and may also alleviate some concern about the sudden appearance of a Proposition 65 warning sign elsewhere on the property. This decision is up to you. We will, however, prepare a draft Proposition 65 notice letter for your review. Based on years of experience drafting such letters, we are skilled at providing such warnings without unduly triggering unwarranted concern. General Considerations: We will prepare a summary of other general considerations you may want to consider, including other forms of warnings, and whether modifying existing warnings you may already have (e.g., for diesel emissions at garages) to address the contaminants associated with the property is warranted. What This Service Does Not Include This service does not include an evaluation of any potential or actual exposure or analysis of defenses you may have to Proposition 65.
HANSON BRIDGETT LLP 15 Is This Service Appropriate For You? If you want to know whether you have credible defenses to a Proposition 65 claim, and need assistance in documenting those defenses (e.g., through the preparation of an exposure assessment), we have a robust Proposition 65 practice, including litigation. We can assist you with this outside the CPC Process. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee.
Contaminated Property Consultation Insurance Assessment Third Party Claims HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 17 Contaminated Property Consultation Insurance Assessment Third Party Claims What It Is This service provides an initial evaluation of the potential for coverage under insurance policies covering third party claims, including commercial/ comprehensive general liability coverage and/or associated excess and umbrella coverage. Why You May Need This Service You may want to assess whether insurance could cover your cleanup and defense costs if, for example, you assert a claim for contribution of cleanup costs against other responsible parties and they cross claim against you. This assessment may inform whether you decide to assert claims against other parties, and if so, under what theories of liability. Is This Service Appropriate For You? This service is appropriate if you are an insured (whether the first named insured or otherwise) under any CGL policies, associated excess/umbrella policies. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee on a per policy basis. If you have excess or umbrella coverage, you may also want to evaluate the possibility that your cleanup costs are covered if a regulatory agency requires that you conduct a cleanup. What This Service Includes Executive Briefing: A brief overview of the factual background and our legal assessment appropriate for an executive level briefing or Board presentation. Insurance Assessment: An assessment of potential coverage available under applicable policies, identification of limitations to coverage, and proposed strategies for maximizing coverage.
Contaminated Property Consultation Insurance Assessment Pollution Liability Policies HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 19 Contaminated Property Consultation Insurance Assessment Pollution Liability Policies What It Is This service provides an initial evaluation of the potential for coverage under specialty pollution liability policies and a draft tender letter for any immediate notices required. Why You May Need This Service You may want to assess whether your pollution liability policy may cover cleanup costs or other pollution-related claims, and if so, whether you need to provide timely notice to the carrier of the discovery of the contamination and/or claim. Is This Service Appropriate For You? This service is appropriate if you are an insured (whether the first named or otherwise) under any pollution liability policies. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee on a per policy basis. What This Service Includes Executive Briefing: A brief overview of our conclusions. Insurance Assessment: An assessment of the potential for coverage, identification of potential limitations to coverage, and proposed strategies for maximizing coverage. Draft Tender Letter to Carrier: If notice is required, a draft tender letter to your carrier providing notice.
Contaminated Property Consultation Insurance Lost or Misplaced Policies HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 21 Contaminated Property Consultation Insurance Lost or Misplaced Policies What It Is We will evaluate whether we can assist you in locating missing or lost insurance policies. Why You May Need This Service If you have been unable to locate your insurance policies, you may need help identifying possible approaches to locating and pursuing coverage under these policies. Is This Service Appropriate For You? This service is appropriate for any property owner who is unable to locate insurance policies that may provide coverage related to contaminated property. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee. What This Service Includes Executive Briefing: A brief overview of steps we have taken to identify policies. Draft Tender Letters to Potential Carriers: If we have been able to identify potential carriers, we will provide draft tender letters to these carriers for your review. Recommendations for Next Steps: If we have been unable to locate potential carriers, we will identify next steps you may want to take, including contacting potential vendors and possible range of costs for doing so. What This Service Does Not Include This service does not include use of third party vendors to locate policies nor can we guarantee we can locate any policies or carriers.
Contaminated Property Consultation Tax Treatment of Investigation and Cleanup Costs HANSON BRIDGETT LLP 2015
HANSON BRIDGETT LLP 23 Contaminated Property Consultation Tax Treatment of Investigation and Cleanup Costs What It Is This service provides a preliminary evaluation of the state and federal tax treatment of categories of environmental investigation and remediation costs associated with the ownership, the acquisition, and/ or development of a contaminated property. Why You May Need This Service You may want to plan for potential investigation and cleanup costs by factoring in which categories of costs are more likely to be categorized as deductible expenses versus those that must be capitalized. What This Service Does Not Include This service does not include a legal opinion of the tax treatment of any specific investigation or cleanup costs at the property. Is This Service Appropriate For You? This services is appropriate for most owners or prospective purchasers of a contaminated property. Fees For This Service Please contact us for a quotation for an all-inclusive fixed-fee. What This Service Includes Executive Briefing: A brief overview of the tax treatment of costs associated with the environmental investigation and remediation of contaminated properties. Tax Planning Overview: An overview of the state and federal tax treatment of costs associated with the investigation and cleanup of contaminated properties, including those costs that can be immediately deducted as ordinary and necessary business expenses, and those that must be capitalized and treated as inventory cost. This planning document may assist you in planning for the cleanup itself and can be provided to your tax accountant, who may not be familiar with the tax treatment of contaminated properties by the IRS and the California Franchise Tax Board.
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