Manuel Fernandez. The plaintiff has been a principal in the Long & Foster companies since their founding in 1968, and the President and majority stockholder since 1979. Long & Foster handles both residential and commercial real estate; in 1988, its commercial division alone did $ 394 million in business. In addition, the plaintiff is a partner in at least 15 commercial real estate partnerships besides Riverside. Mariani is a former Vice-President of the American Institute of Architects, and has served as Chair of the District of Columbia Zoning Commission. He has been involved as an investor in a number of real estate transactions, some of which involved industrial and/or commercial or mixed-use property. Fernandez developed and operated a hotel and restaurant in Southwest Washington, D.C., and has made investments in other real estate projects. It cannot be said that this is a group unknowledgeable or inexperienced in commercial real estate transactions.
Furthermore, the disparity in price between the purchase price of the Site and its appraised value (as well as those of comparable properties) supports the conclusion that the plaintiff had reason to know or at least cause to investigate the reasons for such disparity. As noted, the United States sold the Site to Riverside in mid-1985 for $ 3.5 million. Yet shortly before purchase, the plaintiff's partner, Mariani, estimated that the Site was worth two to three times the purchase price. Indeed, at the time of the sale, Riverside obtained an appraisal of the Site at $ 5,200,000 as is, and at $ 10.5 million with mixed-use zoning. And it was the plaintiff's understanding, at the time of purchase, that comparable properties in the area were selling for greater than five times the purchase price of the Site.
The plaintiff argues that neither the United States nor Riverside were unaware of any contamination at the time of the purchase, and that the valuation of the Site was therefore a function of zoning, not contamination. However, it is the relevant market, and not the seller's (or the buyer's) knowledge alone, that underlies the valuation of property. There may well have been other parties who knew or suspected that the Site was contaminated; that knowledge or suspicion, in turn, may well have driven the price of the Site down to account for the contamination. The disparity between the price paid by Riverside and the price comparable properties were fetching suggests as much.
In any event, the plaintiff's argument contravenes the nature of the CERCLA's liability scheme, which was intended to not only ensure that those who were responsible for, and who profited from, activities leading to property contamination, rather than the public at large, should be responsible for the costs of the problems that they had caused, see United States v. Alcan Aluminum Corp., 990 F.2d 711, 716 (2d Cir. 1993); B.F. Goodrich Co., 958 F.2d at 1198; Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir. 1986) ("Congress intended [through passage of CERCLA] that those responsible for problems caused by the disposal of chemical poisons bear the costs and responsibility for remedying the harmful conditions they created."); United States v. Chem-Dyne Corp., 572 F. Supp. 802, 805-06 (S.D. Ohio 1983); but also to provide incentives for private parties to investigate potential sources of contamination and to initiate remediation efforts, see Carlyle Piermont Corp. v. Federal Paper Bd. Co., 742 F. Supp. 814, 817 (S.D.N.Y. 1990) (quoting City of New York v. Exxon Corp., 633 F. Supp. 609, 617 (S.D.N.Y. 1986)) ("One of the major objectives of the private recovery provisions of CERCLA is to 'assure an incentive for private parties, including those who may themselves be subject to liability under the statute, to take a leading role in cleaning up hazardous waste facilities as rapidly and completely as possible.'"); Cadillac Fairview/California, Inc. v. Dow Chem. Co., 840 F.2d 691, 694 (9th Cir. 1988) (one of CERCLA's purposes is to promote private enforcement actions independent of government actions funded by Superfund); Solid State Circuits, Inc. v. EPA, 812 F.2d 383, 386 (8th Cir. 1987) ("Since superfund money is limited, Congress clearly intended private parties to assume clean-up responsibility."); Chem-Dyne Corp., 572 F. Supp. at 805 (CERCLA passed, in part, to induce voluntary private responses at contaminated sites).
" The imposition of strict liability solely on the basis of property ownership . . . . transfers the costs of the national problem of remediating abandoned contaminated sites onto the shoulders of individuals involved in real estate transactions, many of whom had never violated any environmental regulation, thereby negating Congress' intention of making those responsible for causing contamination pay for its remediation." A & N Cleaners, 854 F. Supp. at 240 (citing Jerry L. Anderson, The Hazardous Waste Land, 13 VA. ENVT'L L.J. 1, 6 (1993) ("CERCLA cleanup costs are often borne by those who are not responsible for the problem at all and . . . many other parties are held liable to an extent far exceeding their actual responsibility.")). Accordingly, it was incumbent upon the plaintiff and his partners to investigate the condition of the Site prior to purchasing it.
Riverside had "an affirmative duty" under section 42 U.S.C. § 9601(35)(B) to inquire into the past uses of the Site. Atlantic Richfield Co. v. Blosenski, 847 F. Supp. 1261, 1287 (E.D. Pa. 1994). To "assume the land was clean . . . just based on looking at it," see Mariani Dep. at 113-14, did not satisfy that affirmative duty, particularly in a commercial transaction. See H.R. Rep. No. 962, 99th Cong., 2d Sess. 187 (1986) ("Those engaged in commercial transactions should . . . be held to a higher standard of inquiry that those who are engaged in private residential transactions.").
b. Following the discovery of contamination at the Site, the plaintiff failed to take appropriate precautions with respect thereto.
For the plaintiff to establish that he took all appropriate precautions with respect to the contamination at the Site, the legislative history of the CERCLA suggests that "he must demonstrate that he took all precautions with respect to the particular waste that a similarly situated reasonable and prudent person would have taken in light of all relevant facts and circumstances." H. Rep. No. 1016, 96th Cong., 2d Sess., pt.I, at 34 (1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6137. For example, the Second Circuit found that a defendant failed to take appropriate precautions when it did nothing to forestall the readily foreseeable hazards posed by wastes others had dumped on its land. New York v. Shore Realty, 759 F.2d 1032, 1049 (2d Cir. 1985).
In the instant case, Riverside and its partners did nothing--apart from conducting some additional tests--to remediate the conditions at the Site, even after concededly becoming aware of the presence of hazardous substances. Riverside did not effectively assess the status of the Site, nor did it restrict access to the Site until 1995. See Joint Statement P 130. Indeed, notwithstanding that it was aware of PCB contamination as early as 1986, and mercury and lead contamination as early as 1990, Riverside failed to notify the United States or the District or to raise a claim regarding the contamination prior to 1994. Apparently, this was due, at least in part, to Riverside's concern that raising a claim might result in the District not approving the closing of R Street, thereby frustrating its attempt to lease the Site to GSA. The contamination remains and Riverside has no current cleanup plans nor can it point to any attempt to ameliorate the conditions at the Site. To avail himself of the third party defense, more is required of the plaintiff than this. See H.R. Rep. No. 253, 99th Cong., 2d Sess. 187 (1986) (due care "would include those steps necessary to protect the public from a health or environmental threat"); cf. Lincoln Props. v. Higgins, 823 F. Supp. 1528, 1543 (E.D. Cal. 1992) (defendant exercised due care by taking contaminated wells out of service and destroying them in manner intended to prevent further contamination); In re Sterling, 94 Bankr. at 930 (defendant exercised due care after discovering hazardous waste on property when it took immediate steps to properly dispose thereof). "In no circumstances can 'no care' be considered 'due care.'" DiBiase, 1993 U.S. Dist. LEXIS 20031, *22, 1993 WL 729662, at *7. Therefore, the Court concludes that the plaintiff is not entitled to assert the third party defense.
2. Because the defendants fail to establish that the contamination at the Site was caused solely by the actions of a third party, neither is entitled to assert the third party defense.