Virgin Petroleum Product Quandary in Rhode Island

Posted on May 22, 2014 by Richard Sherman

A case working its way through the Rhode Island state court system, Power Test Realty Co. Ltd. Partnership v. Sullivan, No. PC 10-0404 (R.I. Super. Ct. Feb. 19, 2013), poses a dilemma regarding the obligation to remediate releases of virgin petroleum product.

Under the Rhode Island equivalent of CERCLA, virgin petroleum product is exempt from the definition of hazardous substances. R.I.G.L. 23-19.14-3(c), (i). Releases of virgin petroleum product are therefore not subject to the imposition of joint, several, strict and retroactive liability. One would accordingly expect that any obligation to remediate virgin petroleum product releases would be based on causation. Rhode Island oil pollution statutes and regulations appear to impose liability based on causation only.

Nevertheless, the Rhode Island Department of Environmental Management and the Rhode Island Superior Court have taken the position that (1) the obligation of a current landowner to remediate a release of virgin petroleum product that occurred before acquisition of title arises on the theory that the term “discharge” under the state oil pollution statute includes “leaching” and (2) leaching of pre-acquisition petroleum product into the groundwater constitutes a passive and continuing discharge for which the current landowner is liable to remediate.

The Superior Court held that causation is irrelevant under the state oil pollution control statute and regulations. This ruling clearly contradicts the intent of the legislature to carve out virgin petroleum product from a no-fault liability scheme.

This case of first impression is now before the Rhode Island Supreme Court on a writ of certiorari, Docket No. SU-13-0076. Practitioners await with interest how the Court will work its way through this issue. Stand by for some tortured reasoning if the Superior Court ruling is upheld.

Environmental Regulation and the Rhode Island Business Climate: Governor Chaffee Tries To Fix It

Posted on August 15, 2013 by Richard Sherman

The business climate in Rhode Island is viewed by many observers as unpromising at best and dismal at worst. The reasons are too numerous to articulate here, but at least there is an effort now being made that may contribute to an improvement in such climate.

The administration of Governor Chafee is undertaking a significant effort not only to review and revise the myriad of environmental regulations that burden the regulated business community, but also to make efforts to revise the state environmental regulatory scheme to pre-empt conflicting local regulations and ordinances that inhibit the permitting and licensing process and otherwise discourage the growth of businesses of varying sizes.  The initial report includes findings and recommendations across the bureaucracy, but specifically addresses the Department of Environmental Management.  

While budgetary constraints may impact the speed with which such reform is undertaken and implemented, desperate times call for desperate measures. Hopefully, we will see some improvement in the relatively near future.