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UPDATE: Property Damage Claims Even After Cleanup Under Massachusetts General Laws Chap. 21E

By David Mandelbaum on March 18, 2022
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Lowell City Hall and downtown aerial view in downtown Lowell, Massachusetts, USA-shutterstock_1036455079

In 2018 I commented on this blog about an opinion of the Massachusetts Supreme Judicial Court concerning a claim by the developer of a condominium development against the City of Lowell whose operation of a landfill on the property had caused contamination. Grand Manor Condominium Ass’n v. City of Lowell, 88 N.E.3d 1154 (Mass. 2018). The Court reiterated the rule that the Massachusetts Oil and Hazardous Material Release Prevention Act, commonly known as “Chapter 21E,” authorizes a private claim for diminution in a property’s value as the result of a release of a hazardous material, but only if a cleanup under Chapter 21E will not restore the property’s value.

Grand Manor was remanded for a new trial. This week, the Massachusetts Appeals Court decided an appeal from that second trial. Grand Manor Condominium Ass’n v. City of Lowell, No. 20-P-622 (Mass. App. Ct. Mar. 17, 2022). The defendant had capped the landfill, which constituted an adequate cleanup, and had imposed an Activity and Use Limitation, essentially a restrictive covenant to preserve the cap and to protect against further exposure. The condominium had 36 units, of which 12 had been sold by the plaintiff; accordingly, damages for each unit differed between the retained and sold units.

Plaintiff’s expert estimated permanent loss in value of about $2.7 million. Defendant’s expert opined that the property experienced a loss of about $3.1 million, but that the condominium would recover its full value within two years; were he believed, the plaintiff would not have been entitled to damages at all. The jury awarded about $1.4 million. To that the court added prejudgment interest at 12% and attorneys’ fees of about $1.1 million.

The Appeals Court affirmed on a variety of issues. Of particular interest, it held that plaintiff’s valuation expert could properly testify that no comparable sales existed because he could not locate any comparable condominium development originally constructed on contaminated property. Defendant’s valuation expert used comparables that were contaminated after construction. The Appeals Court also affirmed the attorneys’ fees and prejudgment interest.

This claim in Massachusetts was statutory. So too was the state restoration claim allowed in Atlantic Richfield Co. v. Christian, 140 S. Ct. 1335 (2020), discussed in April 2020 on this blog. But note that in W. Va. State Univ. v. Dow Chem. Co., No. 20-1712 (4th Cir. Jan. 10, 2022), discussed here, the plaintiff university asserted a common law state tort claim to recover damages from contamination and imposition of a restrictive covenant. We have had relatively recent experience with a property damage recovery by an underflowed property owner even though the contamination was addressed by a voluntary response under state law. Tri-Realty Co. v. Ursinus College, No. 11-05885-GP (E.D. Pa. consent decree entered Sept. 25, 2017, arbitration award Apr. 24, 2018). The possibility of these kinds of claims should not be ignored by either potential plaintiffs or remediators.

Photo of David Mandelbaum David Mandelbaum

David G. Mandelbaum represents clients facing problems under environmental laws. He regularly represents clients in lawsuits and also has helped clients achieve satisfactory outcomes through regulatory negotiation or private transactions. A Fellow of the American College of Environmental Lawyers, David teaches Superfund, and…

David G. Mandelbaum represents clients facing problems under environmental laws. He regularly represents clients in lawsuits and also has helped clients achieve satisfactory outcomes through regulatory negotiation or private transactions. A Fellow of the American College of Environmental Lawyers, David teaches Superfund, and Oil and Gas Law in rotation at the Temple University Beasley School of Law as well as an environmental litigation course at Suffolk (Boston) Law School.

Since United States v. Atlas Minerals, the first multi-generator Superfund contribution case to go to trial in 1993, Mr. Mandelbaum has been engaged in matters involving allocation of costs among responsible parties, especially under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).  He has tried large cases and resolved others as lead counsel.  He has written, spoken, and taught extensively on the subject.  More recently he also has been engaged to assist lead counsel from this firm and others:

  • to develop cost allocation methodologies;
  • to craft expert testimony in support of a favored methodology (given a definition of “fairness,” why one methodology better tracks it than another);
  • to develop efficient case management approaches; and to assist private allocation as part of the neutral team.

Concentrations

  • Air, water and waste regulation
  • Superfund and contamination
  • Climate change
  • Oil and gas development
  • Water rights
Read more about David MandelbaumEmailDavid's Twitter Profile
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  • Posted in:
    Environmental and Climate
  • Blog:
    E2 Law Blog
  • Organization:
    Greenberg Traurig, LLP
  • Article: View Original Source

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