On November 1, 2005, EPA published the "All Appropriate Inquiries" rule (70 Fed. Reg. 66,070), which clarifies when prospective purchasers of contaminated property can take advantage of a defense to Superfund’s strict liability standard.

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA" or "Superfund"), 42 USC 9601, et seq, established a strict liability framework for response costs at facilities from which there is a "release" of a "hazardous substance." Owners, operators and transporters of hazardous substances can be held liable under CERCLA. In 1986, Congress amended CERCLA and added a defense to strict liability for so-called "innocent landowners." Innocent landowners are persons who can demonstrate that they did not know and had no reason to know prior to purchase of the property that any hazardous substance was disposed of there. In order to show that they had no reason to know, the landowner claiming the defense must prove that he undertook "all appropriate inquiries" with respect to the property. The 1986 statute did not define "all appropriate inquiries."

In 2002, Congress again amended CERCLA, this time through the Small Business Relief and Revitalization Act, also known as the Brownfields Amendments. In this bill, Congress added two other defenses to CERCLA's strict liability provision: the contiguous property owners’ defense and the bona fide prospective purchasers defense. For contiguous property owners and prospective purchasers to claim the defense from liability, they must demonstrate they have undertaken all appropriate inquiries, just as innocent landowners must. EPA published interim standards (ASTM E1527-00) to provide guidance on all appropriate inquiries. The All Appropriate Inquiries rule ("AAI") was promulgated by EPA in November to clarify what degree of due diligence must be undertaken in order to qualify for the three statutory defenses to CERCLA liability. The AAI rule will be effective one year after the date it was published (11/1/06). Between now and then, individuals seeking to demonstrate that they have undertaken all appropriate inquiries can choose to comply with the new rule or the existing interim guidance.

The AAI rule outlines a number of specific elements that must be included in an environmental site assessment, in order to meet the criteria for one of the statutory defenses to liability. The assessment must be done by an "environmental professional" who has certain professional credentials. The rule requires that the assessment include interviews with past and present owners, operators, and occupants of the property, review of historical sources of information about the property, review of historical information about surrounding properties, review of federal, state, local, and tribal records, an on-site visual inspection, and other things. The assessment must be conducted prior to and within one year of acquisition of the property in order to be considered timely.

Compliance with the AAI rule alone does not guarantee that a prospective purchaser of property, or an adjacent landowner, will be able to use the CERCLA defense to liability. The statute also requires that persons claiming the defense comply with a number of other requirements. For example, to be considered a "bona fide purchaser" for purposes of CERCLA, a person must have bought the property after 1/11/02 (date of the Brownfields Amendments), complied with AAI, acquired the property after disposal of hazardous substances ceased, used reasonable care to prevent any further releases, and provided required notices to EPA and/or the state and local governmental agencies. The person must also comply with all applicable land use restrictions, and demonstrate that he is not affiliated with any person potentially responsible for any release of a hazardous substance. If the prospective purchaser can make all of these showings, he/she will be protected from liability for clean-up costs, even if he/she knew that the site was contaminated when he acquired it. The statute includes a list of requirements applicable to contiguous landowners and innocent landowners, too.