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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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Following a thorough evaluation process, ASTM International’s Environmental Assessment, Risk Management and Corrective Action Committee has&nbsp;<a href="https://newsroom.astm.org/astm-international-revises-standard-practice-environmental-site-assessments" target="_blank" rel="noopener">revised its standard practice for Phase I environmental site assessments</a> (ESAs) (otherwise known as ASTM E1527) for the first time since 2013. ASTM E1527-21 is now the standard for performing Phase I ESAs, which are crucial to many property transactions, as they facilitate the applicability of U.S. EPA’s all appropriate inquiries (AAI) rule, which, when followed, provides certain innocent purchaser or lessee protections from CERCLA liability. Following ASTM’s Phase I ESA standard is also typical in most commercial transactions or brownfield redevelopment projects.

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With the publication of ASTM E1527-21, it is expected that U.S. EPA will promulgate a new and/or updated AAI rule that will incorporate the revised ASTM standard. U.S. EPA’s current rules apply the 2013 version of the standard, E1527-13. Typically, the agency will allow for a transition period prior to formally adopting the new ASTM E1527-21 version. Those watching this space, however, should now begin to incorporate these new requirements into their Phase I reviews and become familiar with the new standard. Parties should continue to ask their consultants to certify compliance with ASTM-13 in Phase I ESA reports until EPA adopts the ASTM-21 standard and the AAI rule is amended, though a best practice would be to ask that consultants also address the ASTM-21 standard in the report.

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Below are some highlights of the important changes set forth in ASTM E1527-21, including its treatment of emerging contaminants, including per- and polyfluoroalkyl substances (PFAS), and some background on the way these changes may shape future Phase I ESAs and the AAI process.

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With the adoption of the revised standard, ASTM has made several changes to the standard practice for Phase I environmental site assessments, including:

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PFAS are addressed for the first time in the ASTM E1527-21 standard, though not fully incorporated into the scope of a Phase I ESA. The new ASTM standard states that PFAS diligence will be considered a “non-scope consideration” for the time being (i.e., addressing PFAS within a Phase I ESA is not required to meet the AAI standard). However, recent legislative/regulatory trends at the state and federal levels suggest that PFAS may be included within CERCLA’s definition of a “hazardous substance” in the not-too-distant future. (See, e.g., PFAS Action Act of 2021, currently working its way through Congress.) Additionally, this new approach to PFAS in the ASTM standard will likely aid in compliance with state PFAS programs, which appear to be another continuing regulatory trend that is moving quickly across the country. While the likely presence of PFAS at a property is not currently considered a REC, its addition as a non-scope consideration signals a major expansion in cleanup liability when/if PFAS are added to U.S. EPA’s list of hazardous substances. This would follow the trend of other non-scope considerations, like the review of asbestos-containing materials, which has become standard practice over the last decade.

Given the increasing regulatory emphasis on PFAS, purchasers and lessees clearly face a liability risk associated with acquiring or leasing property with PFAS contamination. Those who want to understand the liability risk associated with purchasing or leasing a particular property should consider evaluating whether PFAS contamination may be present on a subject property, regardless of how the revised ASTM Phase I standard addresses PFAS.

The changes to the ASTM standard add additional rigor and formality to the process of generating a Phase I report, likely resulting in a longer timeline to complete due diligence and prepare a Phase I report as environmental professionals get up to speed and implement the revised standard. Parties should allow for additional time in the process to account for these changes and be on the lookout for formal U.S. EPA adoption of ASTM E1527-21 into the AAI rule in the coming months. The risks associated with PFAS contamination, while not formalized as part of the AAI process in the new ASTM standard, should be considered and could likely lead to additional recommendations for Phase II sampling or additional investigation.

The ASTM website offers <a href="https://newsroom.astm.org/astm-international-revises-standard-practice-environmental-site-assessments" target="_blank" rel="noopener">additional details about the new standard</a>, including information about training programs.

We will continue to watch developments related to new ASTM standards and provide updates on U.S. EPA’s adoption of this latest standard.

Heather A. Richardson 212.908.3998 216.566.5927 <a href="mailto:Heather.Richardson@ThompsonHine.com">Heather.Richardson@ThompsonHine.com</a>

Elyse H. Akhbari 614.469.3214 <a href="mailto:Elyse.Akhbari@ThompsonHine.com">Elyse.Akhbari@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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ASTM Issues New Phase I Environmental Standard

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