PURDUE UNIVERSITY COOPERATIVE EXTENSION SERVICE • WEST LAFAYETTE, IN 47907

PPP-36

PURDUE PESTICIDE PROGRAMSPURDUE PESTICIDE PROGRAMS

Purdue University Cooperative Extension Service

PESTICIDES AND THE LAWA GUIDE TO THE LEGAL SYSTEM

Fred Whitford, Coordinator, Purdue Pesticide ProgramsMichael Olexa, Agricultural Law Specialist, University of Florida

Michael Thornburg, Agricultural and Environmental Specialist, Purdue UniversityDavid A. Gunter, Attorney, Cromer and Eaglesfield

John Ward, Chief, Pesticide Programs Section, U.S. Environmental Protection AgencyLarry LeJuene, Assistant Pesticide Director, Louisiana Department of Agriculture and Forestry

Gerald Harrison, Professor of Agricultural Economics, Purdue UniversityJoe Becovitz, Pesticide Program Specialist, Office of the Indiana State Chemist

Responsibility and Liability Focused on the Pesticide User ........................................................... 3

Recognition, Correction, and Prevention ....................................................................................... 4

Inspection, Investigation, and Reporting ....................................................................................... 5

Civil Liability ................................................................................................................................... 8

Citizen Lawsuit .............................................................................................................................. 11

Labels and Applicator Certification Set Standards of Conduct ...................................................... 14

Environmental Site Assessments .................................................................................................. 19

Liability Insurance .......................................................................................................................... 23

Transfer of Property and Environmental Disclosure Documents .................................................. 24

Summary ........................................................................................................................................ 26

Points to Remember....................................................................................................................... 26

Acknowledgments .......................................................................................................................... 27

Edited by

Arlene Blessing, Purdue Pesticide Programs

TABLE OF CONTENTS PAGE

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Slide I

Both the public and the press have increasinglyfocused on the negative impacts of agricultural, urbanindustrial, and residential chemicals. The benefits areoften overlooked. Pesticides in today’s pest controlpicture are essential components of integrated pestmanagement. In many circumstances, pesticides maybe the only effective means of controlling diseaseorganisms, weeds, or insect pests.

Consumers receive direct benefits from pesticidesthrough wider selections and lower prices for food andclothing. Pesticides protect private, public, and com-mercial dwellings from structural damage associatedwith termite infesta-tions. Pesticides alsocontribute to enhancedhuman health bypreventing diseaseoutbreaks through thecontrol of rodent andinsect populations.Pesticides are used tosanitize our drinkingand recreational waterand to disinfect indoorareas (e.g., kitchens,operating rooms,nursing homes) as wellas dental and surgicalinstruments.

The pesticide industry also provides benefits tosociety. Local communities and state governments aredependent upon the jobs and tax base that pesticidemanufacturers, distributors, dealers, commercialapplicators, and farmers provide. Taxes support publicschools, roads, hospitals, and government infrastruc-ture. The federal government depends on the revenuesgenerated by the pesticide industry to reduce balanceof trade deficits with foreign countries. Many positivecontributions to society can be directly attributed to theuse of pesticides.

While pesticides provide many benefits, there arealso inherent risks, or liabilities, associated with theirproduction and use. It is important to balance thebenefits associated with pesticides with their potentialfor negative impact on human and environmentalsafety. The risks of acute poisoning and concernsabout chronic (long-term) impacts of exposure topesticide residues in food continue to be debated.Natural resources can be degraded when pesticide

RESPONSIBILITY AND LIABILITY FOCUSED

ON THE PESTICIDE USER

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residues in storm water runoff enter streams or leachinto ground water. Pesticides that drift from the site ofapplication to wildlife habitat may harm or kill nontargetplants, birds, fish, or other wildlife. The mishandling ofpesticides in storage facilities and in mixing and loadingareas contributes to soil and water contamination.

Understanding the legal responsibilities of thepesticide applicator is critical in managing pesticiderisks. A heightened awareness of potential risks fromexposure to pesticides compels the applicator to bementally sharp, well trained, and attuned to all of theactivities associated with pesticide use. The applicatormust recognize potential pesticide problems andprevent their occurrence.

The critical message is clear: Mistakes with pesti-cides seldom go unnoticed. Local, state, and federallaws and regulations place the responsibility andliability for correct pesticide use squarely on theshoulders of the pesticide applicator through ‘codes ofconduct’. Companies and individuals cannot afford totake a wait-and-see attitude but must instead shift to asystem which emphasizes loss prevention and qualitycontrol. They can incur significant liability for breach ofthese duties. Increasing regulation of the environmentcoupled with our increasingly litigious society providesthe backdrop for Pesticides and the Law.

‘Liability’ has many legal definitions, but in layterms ‘liability’ is a responsibility to provide compensa-tion or restitution to another person when a wrong hasoccurred.

Today’s competitive work environment requirespesticide-related businesses not only to perform aquality job at a reasonable price but also to accept

responsibilitiesassociated withpesticides, includingrecord-keeping,storage, disposal,transportation, workerhealth, and environ-mental issues such aswater quality andendangered species.

Pesticide riskmanagement requiresthe same level ofintensity and commit-ment generallyassigned to those

RECOGNITION , CORRECTION , AND PREVENTION

SLIDE II

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activities that produce income. Managing pesticiderisks is accomplished by recognizing the potential forproblems and developing prevention strategies. It isessential to recognize that pesticide use—transporta-tion, storage, application, disposal—carries the poten-tial to cause harm to people and degrade the environ-ment. Each phase of pesticide handling has uniqueproblems. Corrective actions are required whenpreventive actions have failed or when a change in lawrequires additional measures. These general con-cepts—recognition, correction, and prevention—will notshelter the pesticide user from liability, but often theyreduce the likelihood of legal actions by regulatoryagencies and citizens.

Federal and state governments regulate pesticideuse to manage pests in urban, industrial, institutional,and agricultural settings. This is accomplished throughproduct registration, applicator certification and licens-ing, and enforcement. The regulatory system controlsall uses of pesticides through laws administered byseveral governmental agencies. It incorporates suchelements as product label registration, restricted-usepesticide dealer licensing, applicator certification andlicensing, rules of conduct, and recordkeeping require-ments. Inspections or investigations by regulatoryagencies may lead to the discovery of acts or omis-sions which are considered improper, questionable, orillegal.

Routine Compliance MonitoringState, federal, and local officials may arrive at a

facility, announced or unannounced, to conduct aroutine compliance audit of pesticide activities. Theseregulatory visits provide officials the opportunity toreview records and evaluate practices to ensurecompliance with current laws and regulations. Theiractivities may include inspecting the facility for goodhousekeeping practices, collecting pesticide samplesfor analysis, and reviewing records for completedness.

Routine inspections may not always occur at themain facility. Collecting tank samples from truckstransporting pesticides and workers applying themenables inspectors to determine whether label direc-tions and other pertinent regulations are being fol-lowed.

Expectations to Meet Deadline ReportingMeeting deadlines imposed by law is more than just

paperwork; failure to meet them is one of the easiest

INSPECTION, INVESTIGATION , AND REPORTING

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ways to incur liability. Deadlines are associated withcommunity right-to-know activities, reporting of statefertilizer volume sales for fee assessment, pesticideproduction and repackaging, reporting pesticide orfertilizer spills, constructing pesticide and fertilizercontainment facilities, and renewing applicator certifica-tions, business or dealer licenses, and product registra-tions.

Complaint Leading to an Investigation

Investigations typically occur when a complaint ismade that a pesticide or fertilizer product is beinghandled in a manner that violates a specific law orpotentially endangers human health or the environ-ment. Most pesticide and fertilizer complaints are filedwith a state’s department of agriculture or environmen-tal agency and/or the U.S. Environmental ProtectionAgency (EPA). Under certain circumstances, otheragencies such as the Federal Food and Drug Adminis-tration, the Department of Agriculture, the Departmentof Transportation, the Occupational Safety and HealthAdministration, or local health departments may becalled to investigate a complaint. Agents representingthese agencies usually have the authority to appear on-site to gather all information pertinent to the complaint.The investigators’ initial goal is to investigate thecomplaint and conduct personal interviews. These ‘factgathering’ investigations may include written state-ments and records, photographs, and the collection ofair, water, soil, and plant samples.

To the extent possible, it is usually beneficial tocooperate with the investigator. However, if there isconcern about the investigation, an attorney may beretained for assistance. It is important to be politeduring the questioning period and provide answers toquestions asked. If you do not know an answer, say so.Never guess or make assumptions. Consider thefollowing points when involved in an investigation.

• Make certain to be alert and well prepared.

• Check the investigators’ credentials. Write downtheir names, positions, agencies, and phone numbers,or obtain a business card from each individual involved.

• If the inspection is conducted under the FederalInsecticide, Fungicide, and Rodenticide Act (FIFRA),the firm or individual must be issued a ‘Notice ofInspection’ identifying the purpose of the inspection orinvestigation and stating whether or not a violation issuspected. Even if the inspection is not under FIFRA,the purpose of the inspection and whether or not aviolation is suspected should be specifically deter-mined.

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• Ask the agents 1) who filed the complaint, 2) whatlaws allegedly have been broken, and 3) what authoritythey have to conduct the investigation. Some statesmay have legal authority to withhold this information if itis based on confidential or privileged information.

• Answer specific questions, but do not answer ifyou believe you need to discuss the question andanswer with legal counsel.

• Never be rude or show a lack of respect for theinvestigators.

• Do not tolerate rudeness or lack of respect foryourself or your property.

• Be cooperative to the extent possible. However,remember that it is the investigators’ responsibility toask questions and to uncover evidence.

• Request a duplicate or split sample of whateverthe investigators collect. Make sure that the investiga-tors record and handle the split sample in a mannersimilar to the way they handle their own. When in-volved with EPA or their agents, ensure that thesamples are sealed according to EPA protocol.

• You will probably be asked to sign a receipt forany physical samples or copies of records that theinvestigators collect. Be sure that the information iscorrect before signing.

• Obtain copies of all completed forms and writteninformation compiled by the agents.

• Ask the agents what you should expect from theagency as the complaint is investigated further.

• Seek legal counsel whenever it appears advisable.The need for representation will be obvious by theproposed penalty. Take your own notes on questionsasked and answers provided. Good notes help provideyour legal counsel with valuable facts pertinent to thecase investigation.

• Depending on the basis of the complaint, notifyyour insurer of the investigation.

Accidental Releases into the EnvironmentA pesticide release can be a major source of

liability. When a major release occurs, the scene isoften filled with first responders (firefighters, lawenforcement officers, and medical professionals) whowill attempt to secure the site and prevent furthercontamination of the surrounding area. Officials repre-senting state departments of agriculture and environ-mental agencies often will respond to gather informa-tion about the accidental release if it threatens thehealth of a community (e.g., fire at a pesticide facility)or poses imminent danger to aquatic or human life dueto surface water contamination. In addition to the cost

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SLIDE III

of remediation for theaccident site, finesand penalties may beassessed against theresponsible parties. Itis advisable to seekthe services of anattorney and anenvironmentalconsultant wheninvolved in a majorpesticide accident.

Environmental Site AssessmentsFarmers, commercial applicators, and even some

homeowners may be required to conduct an environ-mental site assessment of real estate prior to transfer(sale) of the property, when borrowing funds againstthe value of the property, or when leasing the property.Environmental assessments may be regulated ormandated by a lender, purchaser, or state statute. Thegoal of an environmental assessment is to identifypossible sources of pollution and to uncover anypotential problems that could impair the value of theproperty or make it risky as collateral in lending situa-tions. In addition, audits also may be required at theend of a lease before the property owners or newtenants assume possession of the property. A thoroughenvironmental site assessment also may assist inestablishing a ‘due diligence’ in forming an ‘innocentpurchaser’ defense if contamination is subsequentlydiscovered.

Information collected by regulatory agencies is oftenused to determine compliance with federal, state, andlocal laws. Information collected during an investigationgenerally is not publicly available until the case iscompleted and an enforcement decision has beenrendered.

In many instances, regulatory agencies will notcontinue the inquiry into alleged wrongdoing when thefacts collected during the investigation do not corrobo-rate the accusations, or when a causal relationshipcannot be proven based upon a preponderance ofevidence. It is advisable to request a written responseconfirming that the investigation of the complaint wasnot substantiated by the evidence collected. This

CIVIL LIABILITY

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written response may be a valuable document to theperson being investigated and often, as part of thepublic record, completes the investigation file.

The information collected may indicate the pesticidecomplaint has validity and that a stronger civil responseis required by the agency. Based on laws passed by alegislative branch and regulations promulgated throughformal and informal rule-making, the appropriateagency has authority to pursue legal remedies (en-forcement actions) when a person has not compliedwith a particular statute or regulation.

The procedures employed by regulatory agencies toofficially charge a person with breaking a law orregulation differs among states and among federalgovernmental units. It is important to understand theprocedures used in determining guilt or liability. Thefollowing discussion on procedures provides a generalguide for someone who has been formally charged withviolating rules and regulations.

Official Charges Against DefendantThe normal regulatory procedure is to send a formal

enforcement letter by certified mail (or other legal

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service) to the person alleged to have violated the law.The enforcement letter typically contains an explana-tion of the agency’s authority under appropriate lawsand administrative code, the facts associated with thecase, and a statement of possible legal penalties. Adocument may be included which allows the recipientto admit or deny the allegations, or which explains themethods of payment available for proposed penalties.Enforcement letters also may provide for an informalsettlement conference or a formal hearing before ajudicial officer to hear the facts of the case and estab-lish or recommend penalty. It is important to respondpromptly to enforcement correspondence. In somecases, failure to respond by a certain deadline willallow an individual’s rights to be waived or a default tobe entered, resulting in an impairment or loss of theright to defend oneself and contest the charges. Thedeadline for response usually will be contained in theletter. An attorney should be contacted if there aredoubts as to admitting or denying a charge, how theresponse should be worded, or the deadline.

Determination of Case byInformal Meeting

When there are mitigating circumstances or otherpertinent facts that might affect the outcome of acomplaint, the respondent may ask for an informalhearing with the regulatory agency. The informalhearing procedure generally affords the person beingcharged an opportunity to present the facts from theirown perspective and to clarify any discrepancies.

Facts should be presented in a calm and profes-sional manner after the case file has been carefullyreviewed for accuracy. Usually this should be handledby an attorney. If there is a plausible explanation for theviolation, the regulatory agency will want to hear it. Theposition of the accused should be presented in a firmbut reasonable manner. The outcomes of informalhearings vary but may include retraction of the enforce-ment letter, renegotiation of civil penalties, or nochange relative to the charge letter. An attorney shouldbe consulted if the accused is unfamiliar with theserules. Certain rights may be relinquished and certainevidence may not be allowed, later, if the rules are notfollowed.

Determination of Case by Formal HearingA formal administrative hearing process is important

because it allows for an independent review of the factsassociated with the case. Administrative hearingsgenerally involve legal counsel for a state or federalagency presenting the evidence and legal counsel

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presenting the facts on behalf of the respondent. Theevidence from both sides is presented to an administra-tive law judge (ALJ) or to a panel of individuals com-prising a commission or review board.

Specific procedures must be followed in formalhearings. If the accused decides to represent himselfand is unfamiliar with the prescribed procedures, anattorney should be consulted for a legal interpretationof protocol. Certain rights may be relinquished andcertain evidence may be disallowed, later, if the rulesare not followed. The ALJ will render a decision regard-ing compliance or noncompliance based on oral and/orwritten testimony and other evidence. The ALJ typicallywill also determine any civil penalty to be levied.

In other federal and state agencies, an ALJ willpreside over a hearing to ensure fairness to all parties,but the outcome of the case is decided on the basis ofa formal public vote by commission or review boardmembers. The vote determines if the alleged chargesare substantiated by facts collected. Many commis-sions and review boards also are responsible forassessing penalties, including revocation or suspen-sion of license or certification, fines, probation, andrestoration to the victim (if any). Usually, the review islimited to the facts as stated in the administrativerecord.

Decisions to Appeal to Stateor Federal Court

Generally, any respondent assessed a penalty hasthe right to appeal the state or federal governmentdecision to a court of law when the respondent feelsthat the facts or law do not support either the decisionreached or the punishment administered through aninformal or formal hearing. Often there are limits as towhat can be presented; e.g., if rules of procedure arenot followed in the administrative process, certainaspects of the case may be declared inadmissible.

A tort or civil wrong is a product of common law.Common law represents the customs, ethics, andcodes of conduct that guide society and the Americanjudicial system. Common law—court made law—hasbeen established by the court system and generallyemanates from earlier case decisions to form the legalbasis of subsequent, similar cases. Common lawtheories become the legal precedents that help providethe framework of common law practiced by the judicialcourt system.

CITIZEN LAWSUIT

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A common law theory arises from the generalizedlegal duty individuals in a law abiding society owe toone another. Every adult is obligated to a certain dutyof care for the personal and property rights of otherswhen engaged in daily activities. A violation of thisresponsibility may give rise to a cause of action (law-suit) whereby the injured party may pursue a legal orequitable remedy.

A tort action is brought to the court by a plaintiff whoalleges to have suffered some injury to his person or

property as a result ofthe commission oromission of certainacts by anotherperson—the defen-dant. Common lawtheories, as theypertain to pesticidestorage, transport,application, anddisposal, typically fallinto one or more of thefollowing categories:trespass, nuisance,negligence, or strictliability.

SLIDE IV

Trespass TheoryA trespass is an unauthorized entry onto the

property of another, which causes damage. An injury toanother person’s land, either above or below ground, isa trespass regardless of the condition of the land andregardless of whether or not there is negligence.Trespass to land need not involve the actual entry ofone person upon the land of another. A trespass maybe committed by discharging materials such as pesti-cides onto someone else’s land. The line between thistype of trespass and other types of tort liability issometimes difficult to determine. Generally a plaintiffmust demonstrate 1) an invasion affecting an interest inthe exclusive possession of his property; 2) an inten-tional commitment of the act which results in theinvasion; 3) reasonable foreseeability that the actcommitted could result in an invasion of the plaintiff’spossessory interest; and 4) substantial damages to theproperty.

Nuisance TheoryA nuisance arises whenever a person uses his

property to cause injury or annoyance to a neighbor. Anuisance is an activity which arises from the use by a

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person of their own property that causes an obstructionor injury to the right of another or to the public to thequiet enjoyment of property by producing annoyance,inconvenience, or discomfort. Pesticide use canproduce potentially offensive odors and may alsocause discomfort in certain individuals.

Many states have enacted right-to-farm statutes toprotect farmers and certain agricultural operationswhich follow generally acceptable agricultural practices.Right-to-farm statutes often form the basis of defensein a nuisance suit. The farmer (or industry) must meetcertain conditions to qualify for this defense. Right-to-farm statutes generally will not protect farmers fromacts of negligence. Many activities would fall under thisexclusion. Also, even though those statutes may limitcivil liability, they often do not limit criminal liability (e.g.,it can be a criminal offense to maintain a public nui-sance).

Negligence TheoryNegligence is the legal standard charged to an

individual who has failed to act in a reasonable andprudent manner in a situation where the individual hada duty to another person or to the public. A person whois negligent is responsible for the damages that the actor omission causes—unless some defense is available.

The standard of care imposed by law is that whichwould be exercised by a person exhibiting ordinaryprudence under the same set of circumstances. This isoften referred to as the ‘reasonable person’ standard.

For a pesticide user to be liable, the act or omissionmust be legally related to the cause of injury. Gener-ally, the user’s act would have to have caused a naturaland continuous sequence that produced injury whichotherwise wouldn’t have happened. Any personallegedly harmed by the improper application, transpor-tation, or storage of pesticides can attempt to recoverany losses under a negligence cause of action.

Strict Liability TheoryA few states have imposed a legal concept making

individuals responsible for the consequences of theiractivities regardless of other contributing factors ordefenses they may put forth. In other words, a personis liable if they performed the act, regardless of fault.Strict liability is associated with activities that have aninherently dangerous or ultrahazardous nature. Insome jurisdictions, even though strict liability may notbe directly applicable, a heightened duty may beapplied to pesticide applicators.

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The Label as the Primary Sourceof Liability

Accompanying each pesticide product is a labelwhich provides written instructions for achieving thedesired level of pest management—the benefits. Thelabel also provides detailed statements communicatingthe risks and standards of care associated with the useof the product—the liabilities. The instructions andprecautions become a legal benchmark by which theactions of the user are compared to the expected‘standards of conduct’ outlined by the label.

It is the label that establishes a standard of care.The label statement, It is a violation of federal law touse this product inconsistent with its labeling, obligatesthe user to follow product stewardship instructions. Thislabel statement legally binds the user to follow labeldirections because FIFRA and state pesticide laws

L ABELS AND APPLICATOR CERTIFICATION

SET STANDARDS OF CONDUCT

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mandate that actions contrary to label directions areconsidered unlawful acts.

The words use, inconsistent, and labeling needfurther explanation in the sentence, It is a violation offederal law to use this product in a manner inconsistentwith its labeling. The pesticide label and additionalwritten materials that accompany a product collectivelycomprise the pesticide labeling. Labeling also includesadditional sources of information (e.g., EPA WorkerProtection Standard, EPA Endangered Species Pro-gram Bulletin, state Ground Water Management Plan,company Product Use Bulletins) referenced on thelabel or accompanying materials.

The word use carries the usual connotation ofpesticide application, but its legal definition is intendedto include handling, mixing, loading, storage, transpor-tation, and disposal. This all-encompassing definitioncovers every activity that involves a pesticide—fromproduct purchase to container disposal.

Use of a pesticide contrary to its labeling representsinconsistency, and inconsistent use establishes poten-tial liability. For example, label directions that containthe phrases shall not, do not, and must not provideregulatory investigators with ‘enforceable language’.Label terminology such as may, can, and recommendis considered nonenforceable, informational, or ‘advi-sory’ language. It is very important when reading labeldirections to differentiate between enforceable andadvisory language; contact the manufacturer of theproduct, Cooperative Extension Service personnel, orpesticide regulatory agencies for label interpretationswhen there is any doubt.

Certified Pesticide Applicators Held to aHigher Standard of Conduct

Pesticide applicator certification holds an individualto a higher standard of conduct and increased duty ofcare than the non-certified person. Private applica-tors—primarily farmers and ranchers—receive trainingfrom their local Cooperative Extension Service; com-mercial pesticide applicators may elect to attendExtension training programs, or they may opt to studyon their own for state pesticide applicator certificationexams. The exams are administered by the statepesticide regulatory agencies. Laws and regulations,human and environmental safety, formulations, labelcomprehension, pest biology, and integrated pestmanagement are topics that may be covered byeducational programs and written examinations. Inaddition to passing state certification exams, applica-tors in many states are encouraged to meet continuingeducation standards for recertification (in lieu of

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retesting) to ensure that they remain current on pesti-cide issues.

Instructions with Special MeaningPracticing common sense and good judgment in

areas where pesticides are stored, mixed, and appliedoften will prevent situations where human health andenvironmental quality may be jeopardized. The experi-ence of the pesticide applicator may dictate thatadditional (sometimes preventive) steps be taken tosupplement label directions in a given situation. Thefollowing list pinpoints areas of special concern, sinceuse inconsistent with the label may pose a hazard tohuman and environmental safety. Misuse often insti-gates civil or criminal charges filed by regulatoryagencies and lawsuits filed by organized associationsor individual citizens.

Safety Precautions to Avert Liability

• KEEP OUT OF REACH OF CHILDREN is anobvious safeguard for all pesticides.

• Restricted-use pesticides may have special healthor environmental implications that require prudence inmixing, application, and disposal. Read the labelcarefully.

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• Compliance with re-entry statements specifying atime span that must elapse between a pesticideapplication and the admittance of persons or animalsinto the treated area is critical to minimizing pesticideexposure.

• Terminology such as “...until dusts have settled”and “...until sprays have dried” represents the minimumstandard for re-entry. Many pesticide labels nowprohibit entry into treated areas for 12, 24, 48, or even72 hours after application, as mandated by EPA’sWorker Protection Standard.

• Provide any pertinent safety training—required ornot—for both non-certified and certified employees.

Application Precautions to Avert Liability

• Maintain up-to-date certification, licensing, andinsurance.

• Fulfill state and federal pesticide recordkeepingrequirements.

• Comply with manufacturers’ label instructions tomaintain product warranty.

• Use pesticides only on crops and sites specifiedby the label, and only at labeled rates. Failure to do somay result in crops with illegal pesticide residue; andsuch crops are subject to confiscation and destructionby state or federal authorities.

• Follow preharvest guidelines to ensure thatharvested crops will meet federal and state pesticideresidue tolerances.

• Comply with EPA worker protection standardswhich assign responsibility to both employers andemployees.

Environmental Precautions to Avert Liability

• Extreme care at mixing and loading sites is criticalin preventing soil and water contamination.

• Have a plan and the necessary equipment in placeto contain a pesticide spill, and know how to properlymitigate the damage.

• Understand your requirements under the Commu-nity Right-To-Know Act. Some states have posting andnotification regulations for informing the general public.

• Dispose of pesticide containers and rinsate asspecified on the label or as required by local, state, orfederal requirements which may be more restrictive.Burning or burying pesticide containers is illegal inmost states.

• Keep pesticides on the targeted application site;avoid drift which might subject the applicator to liabilityclaims.

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• Never store, mix, load, or wash equipment nearwells, bodies of water, ditches, or drains.

• Make sure that specific buffer zones are main-tained according to label directions, best managementpractices, and watershed restrictions.

• Follow instructions from relevant endangeredspecies bulletins.

• Maintain a controlled inventory to guard againsttheft and the necessity to store old or canceled prod-ucts. Stay current with the industry to receive informa-tion on products due to be phased out; and make aconscious effort to use any such products during theprescribed phaseout period. If in spite of efforts ex-pended the applicator is left holding canceled pesticideproducts, they should be checked frequently to makesure that all containers are secure (i.e., not leaking).The storage, handling, transportation, and disposal ofsuch waste must be conducted under the jurisdiction ofEPA and/or state and/or local operators and facilities.

Failure to do so couldresult in criminalenforcement.

• If using a pesti-cide subject to groundwater protectionregulations, complywith all provisions ofthe specific statemanagement plan forthe product (e.g.,handling provisions,rate reductions,geographic restric-tions).

SLIDE V

Inconsistent Use May ViolateProduct Warranty

Pesticide manufacturers guarantee in the warrantysection of the label that the product conforms to thechemical description described in the ingredientstatement. The warranty also will specify that theproduct will perform as represented on the label whenused according to directions. However, the labellanguage also will indicate that the buyer or user of theproduct assumes all liability when the product is usedin a manner inconsistent with label directions andprecautions; i.e., misuse voids the manufacturer’swarranty.

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SLIDE VI

Loans on Environmentally DamagedProperties

Lending institutions usually require that environmen-tal assessments be conducted when real estateassociated with the storage, use, and application ofpesticides is being sold or used as collateral againstloans. Environmentalassessment hasbecome a valuablescreening tool forbuyers, sellers, andlending institutions toassess the possibilityof environmental con-tamination (e.g., soiland water). Theseassessments often aresupported by statelaws that requiredisclosure of knowncontamination.

ENVIRONMENTAL SITE ASSESSMENTS

Lender Liability for ContaminationLenders are very cautious about making loans on

‘environmentally damaged’ properties: first, becausethe situation may reduce the property’s value ascollateral; second, because under ‘super lien’ provi-sions the property may be subject to liens to satisfyenvironmental liability ahead of a lender’s mortgage;also, because the borrower’s operating funds may bediverted from meeting loan obligations to the funding ofremediation of the environmental contamination. Thecosts of ‘fixing’ environmentally polluted property canexceed the amount of the loan and/or the appraisedvalue of the property. Lenders sometimes can even beforced to fund correctional procedures necessitated byan environmental situation if they have become activelyinvolved in management of the property. Thus, environ-mental assessments typically are deemed necessary toprotect the assets of the buyer and the collateral of themortgage holder.

Assessments Reduce Liability by ProvidingValuable Information

Presale or preloan environmental assessments—whether administered by a loan officer, an environmen-tal consultant, or an environmental attorney—usually

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involve a line of questioning aimed to (1) disclosehistorical uses of and pest management practicesemployed on the property and (2) determine whether ornot the property is in compliance with current environ-mental regulations.

Phase 1 Environmental Site Assessments—the Investigation Stage

Phase 1 includes a search for and a review ofprivate and public documents related to the history ofthe property, a visual inspection of the site, and map-ping of the physical characteristics of the property. Thisin-depth research provides crucial details about thehistory of pesticide use on the property. Documentsthat piece together the history of the property mayinclude title transfers for the preceding fifty years, siteplans, old and new photographs of the site, andtopographic maps. Public records from municipal firedepartments, utility companies, county health depart-ments, and environmental regulatory agencies mayprovide details of compliance with environmental lawsand regulations. Interviews with past and presentlandowners, tenants, and neighbors may renderadditional information.

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A visual inspection of the property is a crucialcomponent of Phase 1 Environmental Site Assess-ments. Evidence suggestive of potential pollutionproblems might include signs of improper disposal suchas bare earth, ditches barren of vegetation, distressedvegetation in field margins, burn piles containingpesticide containers, or discarded pesticide containers;soil or concrete staining from spills or leaks at thechemical production or storage facility; records whichdisclose costly disposal of stored pesticides that havebeen cancelled from further use; water contaminationfrom uncapped wells or storage of chemicals nearwells; strong chemical odors at the mixing and loadingsite; abandoned pesticide container dumps; and old,underground tanks (either active or abandoned).

A favorable Phase 1 assessment does not guaran-tee contamination-free property but, rather, that theretrieved records and the on-site visual inspection didnot reveal either the potential for or the presence ofcontamination. The assessment demonstrates that thebuyer has exercised due diligence to make discoveryand, if the audit findings are noted with the transfer,serves to distance the buyer from liability for pastactions on the property. Normally, a lender or buyer willnot ask for additional testing or investigation when thePhase 1 environmental assessment reveals no credibleevidence of environmental abuse of the property. Ifcontamination is suspected, a more detailed, Phase 2assessment (e.g., soil and water sampling) may benecessary to verify the contamination and determine itsextent. However, it is also conceivable that the lenderwill simply deny the loan or that the buyer will loseinterest in purchasing the property when an environ-mental audit indicates contamination problems—oreven a potential for them.

Phase 2 Environmental Assessment—the Sampling Stage

In a Phase 2 Environmental Assessment, visualcharacterization of and background information on thesite are supplemented by the collection and analyses ofair, soil, and/or water samples. Sampling methods usedto determine the presence and level of contaminantsoften are federally or state prescribed. A Phase 2environmental assessment may be very expensive andrequires a greater level of technical expertise than doesthe Phase 1 assessment.

Soil samples at the surface or subsurface may becollected across the property or at a specific site ofconcern. Samples are collected at various depths andsent to laboratories equipped for analyses of environ-mental contamination. The analytical results often arepresented on a map indicating where each sample was

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taken and what levels of contamination exist across thesurface and at certain soil depth intervals (e.g., 0-1foot, 1-2 feet). When the deepest samples indicatecontamination, a second round of soil sampling maytake place to determine the level at which contamina-tion is no longer detected.

Surface water samples may be collected fromditches, ponds, creeks, and even reservoirs. Environ-mental auditors often will focus on wells. Ground watermay be sampled from wells already on-site, or fromshallow monitoring wells drilled into the water table.

A thorough review of environmental sampling datawill reveal the identity of any contamination and ‘hotspots’ of pesticide concentrations; it will facilitate ageneral assessment of the property. Care must beexercised to request laboratory analyses (in addition toscheduled regulatory analyses) for all pesticides knownto have been present on the property at any time.Combining the Phase 1 and Phase 2 information into aSite Assessment Document provides a benchmark thatenables consultants, environmental engineers, andregulatory authorities to determine what actions mightbe necessary under Phase 3.

Phase 3 Environmental Assessment—the Cleanup Stage

Phase 3 requires the property owner and any otherpotentially responsible parties, along with the consult-ant firms, to meet and discuss with the regulatoryagencies a plan outlining specific objectives for siteremediation. The details are very much driven by site-specific information, cost, and technologies available toaid the procedure.

Federal and state guidelines generally dictate toenvironmental firms how they must handle, remove,transport, and dispose of soil, water, concrete, andother contaminated items. These standards, along withsite expertise developed by environmental engineers,are used to draft a Site Remediation Document whichhas as its core one or more methods that will achieveremediation of the site: soil excavation; placement ofground water monitoring systems or extraction wells;on-site treatment of contaminated soil and water;construction of subsurface barriers or retaining walls;bioremediation; incineration. In addition, a site-specificcleanup standard is listed for approval by regulatoryagencies. The Site Remediation Document alsodescribes in some detail what health and safetypractices must be followed: the monitoring of surround-ing areas for potential impact during remediation;transportation routes to be followed when contaminatedmaterials are removed from the site; the name of the

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disposal company that will be accepting the pesticidewaste; and the time frame for filing reports with regula-tory agencies.

Selecting Environmental ExpertsRequires Homework

Proven experience, a documented track record, alist of references, and good rapport with regulatoryagencies are important characteristics to identify whenengaging an individual or firm to conduct environmentalassessment. It may be necessary to organize a team tohandle serious environmental problems. The environ-mental team may consist of individuals with specificexpertise as environmental consultants, environmentalengineers, environmental chemists, and/or environ-mental attorneys: The key word is environmental.

The remediation of environmental problems oftennecessitates guidance from very specific kinds ofexperts in addressing corresponding technical andregulatory issues; i.e., environmental consultants areable to coordinate projects associated with environ-mental audits and should represent the client byinterfacing with the technical scientists and state andfederal agencies. Environmental engineering firms areresponsible for site assessments, soil and waterremediation, and transportation of hazardous waste.Environmental chemists are crucial where analyticalfindings set in motion a series of related events.Environmental attorneys specialize in environmentallaw and protect the client’s interest relevant to regula-tory compliance. These experts’ collective knowledgecan protect the client’s interest.

Insurance policies must be read carefully—andunderstood. Written clarification of unfamiliar or vagueterminology should be requested. The following list isrepresentative of the variables which might affectcoverage.

• Limitations. Policies can provide coverage on aper occurrence basis, or they can limit coverage todamage resulting from certain specific activities (e.g.,drift).

• Exclusions. Almost all liability insurance policiesstate certain situations which are not covered; theyshould be spelled out clearly.

• Pollution. Many comprehensive general liabilityinsurance policies limit (or totally exclude) pollutioncoverage; the corresponding phraseology should beclearly understood, leaving no room for interpretation.

L IABILITY INSURANCE

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• Level of Coverage. The maximum amount thepolicy will pay—and the specific circumstances whichwould qualify for payment—should be stated clearly.

• Sources of Liability. Pesticide ‘use’ encompassespurchase, transportation, storage, mixing, loading,application, and disposal of containers and leftoverchemicals. Therefore, the policy should specificallystate coverage for all of these elements. If the word useis applied within the policy as a collective term for allsuch elements, the policy should likewise contain aprecise definition of the collective term.

Old insurance policies should not be discarded. Thepolicy in effect at the time of an incident usually isconsidered the source of monetary compensation,even if evidence surfaces and/or litigation occurs manyyears hence; so it is important that the insured partymaintain accurate and complete records of pastinsurance coverage.

If it is believed that insurance coverage exists in agiven situation, it is important to file a claim promptlyand also to have the policy reviewed by an attorneywith experience in insurance analysis. Environmentallaw, in particular, is a very active area; courts ruleevery day on issues relevant to the applicability ofexisting or previous insurance coverage to environmen-tal situations. Oftentimes the insurance underwriter isheld financially responsible for the policyholder’s legaldefense fees, damages, and cost of remediation.

Many states have property transfer laws that requirea seller or transferor to prepare and deliver an environ-mental disclosure document prior to the completion of atransaction. Failure to disclose an environmentaldefect, such as a leaking storage tank, in an environ-mental disclosure document may excuse a purchaserfrom an agreement or expose the seller to damages orpenalties. Increasingly, buyers and lenders are requir-ing disclosure documents even when there is no statelaw compelling the seller or transferor to supply them.

The Indiana Responsible Property Transfer Act(IRPTA), is an example that may mark a new era forthe transfer of real estate. This law requires a seller/transferor of certain categories of property to deliver anEnvironmental Disclosure Document (EDD) to otherparties to the transfer—the transferee/buyer and thebuyer’s lender (if identified)—30 days before thetransfer occurs. If an environmental defect previouslyunknown to the buyer or lender is disclosed in the

TRANSFER OF PROPERTY AND ENVIRONMENTAL

DISCLOSURE DOCUMENTS

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EDD, the buyer and lender may be excused from theagreement to purchase or finance, respectively.Environmental defects are conditions that 1) constitutea material violation of an environmental statute, regula-tion, or ordinance; 2) require remedial activity under anenvironmental statute, regulation, or ordinance; 3)present a substantial endangerment to public health,public welfare, or the environment; 4) have a materialor adverse effect on the market value of the property orof an abutting property; or 5) prevent or materiallyinterfere with another party’s ability to obtain a permitor license required under an environmental statute,regulation, or ordinance.

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Pesticide users are obligated to store, handle, anddispose of pesticides in a responsible manner toprotect nontarget areas, public safety, and the environ-ment. Improper pesticide use leaves the user vulner-able to a myriad of liabilities. Pesticide labels providethe user not only with specific instructions for using theproduct to its greatest advantage, but also with amechanism to minimize liabilities by following labelinformation.

It is a violation of both federal and state law to use apesticide in a manner inconsistent with its labeling. Thelabel is the key element in determining whether or notthe user is in compliance with the law. The pesticideuser should be aware of state laws and regulationspertaining not only to pesticide use, recordkeeping, andcontainment, but also to real estate transfer; with thisknowledge, the user can evaluate and minimize thepotential for liability. Environmental assessment is aneffective method for evaluating liability probabilities andfor establishing ‘innocent landowner’ status to protectthe buyer from being held liable for situations whichoriginated prior to purchase. Assessment should beperformed by reputable expert environmental consult-ants with financial security against errors and omis-sions. Records of past liability insurance policiesshould be maintained, complete with specific dates ofinception and expiration. Current policies should bereviewed regularly to assure adequate coverage.

SUMMARY

• Reduction of the potential for being held liable insituations involving pesticide use can be accomplishedby recognizing the problem, identifying correctivemeasures, and following through with correctiveactions.

• Liability issues generally do not focus on thebenefits to individuals, communities, or society ingeneral but, instead, on the health and environmentalrisks associated with improper transportation, storage,application, and disposal of pesticides.

• Local, state, and federal laws and regulations areintended to reduce or eliminate pesticide risks andplace the primary responsibility and liability for pesti-cides on the user and persons under the supervision ofthe user.

POINTS TO REMEMBER

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• Managing liability requires the same level ofintensity and commitment generally assigned to thoseactivities which are revenue-producing.

• The label provides the user with written instruc-tions for achieving the desired level of pest manage-ment and associated benefits. It also provides detailedstatements used to communicate the risks—thepotential liabilities—along with mandatory applicator orhandler requirements intended to protect both humanhealth and the environment.

• The label is the law. The label statement “it is aviolation of federal law to use this product inconsistentwith its labeling” requires the user to follow all labelinstructions; failure to do so can result in liability forthose actions contrary to label directions. This samestatement is written into FIFRA and state laws underunlawful acts.

• Pesticide certification and legal obligations ex-pressly created by the label establish a set of stan-dards for the pesticide user; these standards must bemet in order to limit liability actions by citizens and civilor criminal actions by regulatory agencies.

• Lending institutions are increasingly requiring thatenvironmental assessments be performed when realestate associated with the storage, transfer, andapplication of pesticides is being sold or used ascollateral against loans. The costs of cleaning upproperty contaminated by pesticides can easily exceedthe value of the loan on—or even the appraised valueof—the property. Thus, environmental audits arenecessary to protect the assets of the buyer, seller, andlender.

The authors are very grateful to the followingreviewers for their constructive comments and sugges-tions that improved the accuracy of Pesticides and theLaw:

• David Horning, Countrymark Cooperative, Inc.

• Thomas Keefer, E. I. du Pont de Nemours andCompany.

• Richard Kramer, National Pest ControlAssociation.

• Charles Rock, Ciba-Geigy Corporation.

The senior author is extremely grateful to StephenAducci for his original illustrations.

ACKNOWLEDGMENTS

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REVIEWED: 5/01

The information given herein is supplied with the understanding that no discrimination is intended and no endorsement by the Purdue University Cooperative Extension Service is implied.

It is the policy of the Purdue University Cooperative Extension Service, David C. Petritz, Director, that all persons shall have equal opportunity and access to the programs and facilities without regardto race, color, sex, religion, national origin, age, marital status, parental status, sexual orientation, or disability. Purdue University is an Affirmative Action employer.

HIRING AN ATTORNEY

If you need the services of an attorney—whether to provide legal adviceregarding your potential liabilities, to review your insurance policies, or todefend you in a lawsuit or administrative hearing—keep the following inmind:

• Today it is common for lawyers, like physicians, to develop special-ties. Therefore, not all lawyers will be equally competent to handle yourproblem. Seek out those with specialized experience or training in handlingsituations like or similar to your own.

• Be certain to discuss rates to be charged, the nature of the serviceswhich the attorney expects to perform, and the estimated total cost for theservices. Also, it is important to understand what costs or expenses are yourresponsibility. Written fee agreements are recommended.

• If the services are to be billed on a hourly basis, the lowest rate quotedwill not always result in the lowest total bill. Attorneys with more experi-ence and training may charge higher rates (on an hourly basis) but handlethe matter more efficiently and effectively.

• Make certain that you are comfortable with your attorney’s goodjudgment; you’ll often have to rely on it when making tactical and strategicdecisions.

• It is critical that you candidly discuss your legal problems with yourattorney. If you do not disclose everything you know, your attorney may behindered in representing you; and you’ll run the risk that you and/or yourattorney will be surprised at an inopportune time. Remember, the attorney-client privilege will protect you from damaging disclosures.

• Hiring an attorney at the first sign of a problem will often save youmoney, since prevention may still be possible.

• Don’t fall into the trap of thinking that you can defend yourself,cheaper. Rules of procedure and evidence have been established at mostlevels of administrative hearing and at all court levels, and they must befollowed. If you do not know these, the facts of your case most favorable toyou may never be heard.