Environmental Law Practice Exam Questions

1. 1.CERCLA liability as current owner: Under CERCLA Section 107(a)(1), current owners of contaminated property are strictly liable for cleanup costs regardless of fault. The manufacturing company is a PRP as current owner.
2. 2.Innocent landowner defense: Under CERCLA Section 101(35), the buyer may qualify if it conducted appropriate inquiry (due diligence) before purchase and did not know or have reason to know of contamination. If the company failed to conduct a Phase I environmental assessment, the defense likely fails.
3. 3.Contribution: Under CERCLA Section 113(f), PRPs may seek contribution from other PRPs, including the previous owner who actually buried the chemicals. Allocation factors include degree of involvement, toxicity, and cooperation with cleanup.
4. 4.Bona fide prospective purchaser defense: If the company knew of contamination but purchased after January 2002, it may qualify under CERCLA Section 107(r) if it took reasonable steps to prevent future releases.

1. 1.NEPA requirements: Federal agencies must prepare an EIS for major federal actions significantly affecting the environment. If uncertain, the agency may first prepare an EA, which leads to either a FONSI or a requirement for a full EIS.
2. 2.Standard of review: Courts review the agency's decision not to prepare an EIS under the arbitrary and capricious standard. The agency must take a 'hard look' at environmental consequences.
3. 3.Significance factors: 40 CFR Section 1508.27 lists factors for determining significance, including effects on public health, proximity to sensitive areas, degree of controversy, and cumulative impacts.
4. 4.If the court finds the FONSI was arbitrary, it will remand to the agency to prepare a full EIS. NEPA is procedural -- it does not dictate outcomes but requires informed decision-making.

Correct Answer: B

The Clean Water Act Section 301(a) prohibits the discharge of any pollutant into navigable waters without a permit. Liability is strict -- the government need not prove intent, negligence, or knowledge of the waterway's jurisdictional status. The company's lack of knowledge about federal jurisdiction is not a defense to civil liability under the CWA.

Correct Answer: C

Under CERCLA's secured creditor exemption (Section 101(20)(E)), a lender that holds a security interest but does not participate in the management of the facility is not liable as an owner or operator. The other parties -- current owners, generators, and transporters who selected the disposal site -- are all categories of potentially responsible parties under CERCLA Section 107(a).

Correct Answer: B

Under NEPA regulations (40 CFR Section 1502.14), the EIS must analyze a 'no action' alternative as a baseline for comparison with the proposed action and other alternatives. Failure to include the no-action alternative renders the EIS inadequate. The alternatives analysis is considered the 'heart' of the EIS.