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ALBANY – Future owners of property once used for authorized hazardous waste disposal cannot be compelled to finance future remediation efforts, an appellate panel in Albany has held in a first-impression environmental law decision.

In a unanimous opinion, the court rejected an attempt by state Department of Environmental Conservation to force a Syracuse company to post a bond ensuring the continued progress of a clean-up. Justice Leslie Stein (See Profile) said that while the DEC has broad authority to enact implementing regulations, it cannot expand on the plain reading of a statute.

“In essence, respondents seek to impose strict liability to provide financial assurance, in perpetuity, on all subsequent owners of property on which a former TSD [treatment, storage or disposal facility] was operated,” Stein wrote in Matter of Thompson Corners v. Department of Environmental Conservation, 516042. “Had this been the Legislature’s intent, rather than relegate us to a strained analysis of multiple regulations in order to reach that conclusion, it would have done so expressly.”

The dispute centers on a property formerly owned by Roth Brothers Smelting Corp. and used as a metals recovery facility. Roth obtained a permit in 1987 to operate a hazardous waste storage facility on the site but shut down in 1992 when the permit expired. Under a 1994 consent order, Roth was required to formulate a remedial plan, construct an on-site corrective facility and provide financial assurance.

Roth sold the property in 1999 to Wabash Aluminum Alloys, which sold it to Thompson Corners in 2005. Thompson Corners later sold a portion of the parcel to Metalico Syracuse Realty. In 2007, the DEC brought an enforcement action against Wabash and Thompson, claiming that as former owners they were subject to the state’s hazardous waste management regulations.

At issue before the Third Department was the application of the federal Resource Conservation and Recovery Act (RCRA), as enacted by the state, to a property owner that never held and never needed a waste treatment permit.

Thompson argued that the financial assurance requirement applies only to owners and operators of a facility who were at some point actively involved in the treatment, disposal or storage of hazardous waste. The Third Department unanimously agreed and reversed Acting Supreme Court Justice Roger McDonough (See Profile).

Stein said there was simply nothing in the relevant statutes “that imposes the financial assurance requirement on subsequent owners of a former TSD facility that never had, or were required to have, a TSD permit or were parties to a corrective action order on the property in question.”

She said the state’s attempt to impose that requirement on the petitioners was “based on a faulty premise formed by a complex patchwork of portions of the statutes and regulations, some of which are inapplicable to the circumstances at issue here.”

Joining the opinion were Presiding Justice Karen Peters (See Profile) and justices William McCarthy (See Profile) and John Egan Jr. (See Profile). The appeal was argued Feb. 13 by John Henry, a partner at Whiteman Osterman & Hanna in Albany, for the companies and Assistant Attorney General Denise Hartman for DEC.

“DEC, as reflected in the court’s decision, was trying to correct what they thought was a hole in their regulative scheme, but the statutes didn’t support it,” Henry said.

He said the recovery act, unlike some other environmental statutes, does not impose liability based on ownership.

“RCRA requires a permit for the handling of certain materials,” Henry said. “Our client never had a RCRA permit and was never required to have a RCRA permit. What DEC tried to do is impose the permit conditions on Thompson Corners after the permits had expired and there was no activity going on that would require a permit.”

Lori Severino, spokeswoman for DEC, said the decision is under review.