ELR Citation: ELR 21140
No(s). C-88-4817 FMS (N.D. Cal. Apr 19, 1990)

The courts holds that an "as is" clause in a deed conveying contaminated property prior to enactment of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not release the seller from CERCLA liability. The court finds that the buyers of the contaminated property had no knowledge, actual or constructive, of the presence of hazardous waste and that the "as is" language in the deed was standard, boiler-plate language routinely included in every contract and deed for the transfer of property owned by seller. The court holds that inclusion of the "as is" clause in the deed only protected the seller from claims for breach of warranty, not from statutory causes of action arising out of its contamination of the property. Moreover, the court holds that since federal law always governs the validity of releases of federal causes of action, applying state law to determine if the "as is" clause operated as a release of liability under CERCLA would frustrate specific objectives of a federal statute. Congress intended former owners of contaminated property to be liable to current owners for any contamination that occurred during the time they owned the property, and allowing an otherwise responsible party to avoid liability under §107(a), based on an "as is" clause in the deed, would clearly circumvent both the intent and the language of CERCLA. The defenses to liability in §107(b) do not include a sale of property subject to an "as is" provision, and §107(e) states that no general hold harmless agreement is effective to transfer CERCLA liability.

Counsel for Plaintiff
Robert D. Wyatt, Lawrence S. Bazel
Brobeck, Phleger & Harrison
Spear St. Tower, One Market Plaza, San Francisco CA 94105
(415) 442-0900

Counsel for Defendants
Dirk M. Schenkkan
Howard, Rice, Nemerovski, Canady, Robertson & Falk
Three Embarcadero Ctr., 7th Fl., San Francisco CA 94111
(415) 434-1600

Michael A. Kahn, Margaret R. Dollbaum, Gregory D. Call
Folger & Levin
Embarcadero Ctr. W., 23rd Fl., 275 Battery St., San Francisco CA 94111
(415) 986-2800