Question

In: Accounting

In 1979, Paul and John Reardon purchased 16 acres of land located next to a manufacturing...

In 1979, Paul and John Reardon purchased 16 acres of land located next to a manufacturing plant in Massachusetts. In 1983, a state environmental agency, responding to a citizen's report, tested soil samples from both properties and discovered extremely high levels of polychlorinated biphenyls (PCBs) on the plant site and on the Reardons' property where it bordered the site. Shortly thereafter, the Environmental Protection Agency (EPA) cleaned up the contaminated areas. In 1985, the EPA notified the Reardons that they might be liable for clean-up costs. An EPA investigation of the property in 1987 revealed that some soil was still contaminated. This time, the Reardons cleaned up the property themselves. In March 1989, the EPA placed a lien for an unspecified amount on all of the Reardons' property to secure payment for any clean-up costs for which the Reardons might be liable. The EPA told the Reardons that they could settle the claims against them for $336,709 but noted that this amount did not limit the Reardon’s potential liability. The Reardons filed a motion for an injunction, arguing that filing a lien against their property without any prior notice or hearing violated their due process rights under the Fifth Amendment, which states that no person can be deprived of life, liberty, or property without due process of law. Superfund (the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, of 1980, as amended in 1986) gives the government several powerful tools to use when attempting to collect clean-up costs from responsible parties. Among those tools is the authority to place a lien on a responsible party's property without providing for a reasonable hearing before placing the lien.

a) Is it difficult for a plaintiff to prove "strict liability?" Explain.

b) Is the power to place a lien on a piece of property without prior opportunity to be heard in a court of law or administrative hearing constitutional? Why or why not

Solutions

Expert Solution

a) Is it difficult for a plaintiff to prove "strict liability?" Explain.

Answer:

In my opinion, it is not difficult to prove “strict liability” because clean-up work is completed in / around 1983 immediately after site survey and testing. In 1985, EPA notified Reardons for potential liability towards clean-up costs and in 1989, placed the lien.   

b) Is the power to place a lien on a piece of property without prior opportunity to be heard in a court of law or administrative hearing constitutional? Why or why not

Answer:

As per the provisions of the Act a lien is constituted at the time, the person is provided (by certified or registered mail) written notice of potential liability. In view of this provision, power to place lien on a piece of property without prior opportunity to be heard, seems to be constitutional.    

Fifth Amendment, which states that no person can be deprived of life, liberty, or property without due process of law may not be invoked in this case. Due process clause acts as a safeguard from arbitrary denial of life, liberty, or property by the government outside the sanction of law, but the lien placed by EPA seems to be in line with legal provisions. Hence, it appears that fifth amendment may not be applicable as notice for potential liability has been given to Reardons by EPA.

In view of above provisions, power to place lien seems to be constitutional in this case.


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