Brownfield purchasers often assume that completing pre-acquisition due diligence secures their liability protection. Recent court decisions suggest the analysis does not end there.
A new article by Terradex Vice President Michael Sowinski appears in the Winter 2026 edition of the EBA Journal, examining how the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) can pose significant risks for brownfield purchasers — and how courts have applied CERCLA’s Bona Fide Prospective Purchaser (BFPP) defense in ways that have overwhelmingly disfavored the brownfield purchaser.
In “Learn From the Mistakes of Others: A Review of CERCLA’s Bona Fide Prospective Purchaser Defense to Inform Winning Strategies,” Michael provides a concise, practitioner-focused overview of CERCLA liability defenses for brownfield purchasers, with particular attention to post-purchase continuing obligations and compliance with institutional control requirements.
To assert CERCLA’s BFPP defense, purchasers must conduct “all appropriate inquiries” (often through a Phase I assessment) and satisfy a series of additional elements, most of which remain ongoing indefinitely, which EPA refers to as “continuing obligations.” These include:
- demonstrating that no disposal occurred after acquisition,
- exercising appropriate care by taking reasonable steps to stop ongoing releases and prevent threatened future releases,
- complying with relied-upon land use restrictions and institutional controls,
- cooperating with regulators, and
- providing legally required notices.
Drawing from recent judicial decisions, the article explains that courts have conducted an exacting review of each element of the defense. BFPP claims have failed where due diligence was defective, redevelopment activities exacerbated contamination, or disposal was found to have occurred during ownership. Notably, redevelopment conducted under agency oversight has not, by itself, satisfied the requirements of the BFPP defense.
Michael also examines EPA’s Common Elements Guidance, including its treatment of disposal categories, institutional controls, and appropriate care. While the Guidance provides useful clarification, courts have often applied a more demanding standard than parties anticipate — particularly in cases involving exacerbation during redevelopment or questions surrounding institutional control compliance.
The article concludes with a discussion of ASTM’s Standard Guide for Identifying and Complying with Continuing Obligations (E2790), which provides a structured four-step framework for identifying and complying with both initial and ongoing continuing obligations, helping purchasers better navigate the demanding and nuanced BFPP defense landscape.
The full article is available here.