AB 440 Fills Redevelopment Voi...

AB 440 Fills Redevelopment Void and Breathes New Life to Municipal Prosecution of Environmental Claims

By Bret A. Stone and John R. Till

The dissolution of California redevelopment agencies in 2012 had the unforeseen consequence of limiting local enforcement of environmental claims and redevelopment of blighted areas known as Brownfields.  Under the Polanco Redevelopment Act redevelopment agencies could investigate and cleanup contaminated properties in their jurisdiction or sue responsible parties to do so.  With the downfall of redevelopment agencies so went the Polanco Act.

What redevelopment agencies could once do under Polanco will soon by accomplished by the municipalities themselves.  Beginning January 1, 2014, local agencies (defined to include cities, counties, and certain housing authorities) will have a new, user friendly, and arguably more powerful tool to address environmental contamination in areas of urban blight.  Indeed, the Legislature’s purpose in enacting AB 440 is intended to be the “policy successor” to Polanco and interpreted and implemented consistent with case law interpreting it.  Health & Saf. Code § 25403.8.

The parallels between AB 440 and the Polanco Act are obvious.  Many of the definitions are the same, including the definition of “responsible party.”  But the scope of the jurisdiction is far broader.  Rather than the limited jurisdiction of redevelopment districts, a municipality under AB 440 may pursue any “blighted property” within its boundaries.  A blighted property is defined broadly as “one with the presence or perceived presence of a release or releases of hazardous material that contributes to the vacancies, abandonment of property, or reduction or lack of property utilization of property.”  AB 440 includes the power to compel an owner or operator to provide “all existing environmental information pertaining to the site.”  Health & Saf. Code § 25403.1(f)(1).  If the environmental assessment information is not available, the local agency can require the owner of the property to conduct an environmental assessment at the owner’s expense.  Health & Saf. Code § 25403.1(f)(2).  A right of entry is also included should the local agency want to conduct the environmental assessment itself and charge the owner.

AB 440 also provides immunity for any release or releases addressed in the cleanup plan. This immunity protects the municipality performing the cleanup work and extends to any developer of the property, its lenders and subsequent purchasers.  Health & Saf. Code § 25403.2(c).

The local agency can undertake the investigation and cleanup or require responsible parties to do it.  Health & Saf. Code § 25403.5.  Like the Polanco Act, AB 440 includes a 60-day notice requiring an investigation or cleanup plan.   Health & Saf. Code § 25403.1(b).  AB 440, however, gives responsible parties a 30-day window to appeal the 60-day notice.  Health & Saf. Code § 25403.1(c).  The appeal consists of a hearing before the local agency’s governing body.  A claim of failure to include other responsible parties in the 60-day notice is not a defense.

Cities, counties, and housing authorities throughout California are no doubt gearing up to hit the ground running in 2014.  But with budgets still tight as a result of a still recovering economy, local agencies don’t know where to start.  Some are finding solace in the attorneys’ fees and cost recovery provisions of AB 440 as a way to entice experienced environmental law firms to perform all or part of the legal work on a contingency fee basis.  Paladin Law Group is currently meeting with a number of California cities about combining its unique experience in municipal prosecution of environmental claims and insurance archaeology with the newfound tool provided by AB 440 as part of an overall strategy for addressing blighted properties.