On June 16, Ohio Governor DeWine signed into law H.B. 168, which creates a “bona fide prospective purchaser” (BFPP) affirmative defense to liability for performing investigative or remedial activities that arise out of release or threatened release of hazardous substances.  Ohio follows a number of other states that have similarly enacted a BFPP defense or otherwise exclude BFPPs from liability.  The defense provides that a person is “immune from liability” under Ohio’s environmental laws, including liability under O.R.C. Chapters 3704, 3734, or 6111, for such investigative or remedial activities.  Further, the BFPP defense applies “retroactively” to pending causes of action that were initiated prior to the law’s effective date of September 14, 2020.

The BFPP defense will be familiar to many purchasers of commercial property as it is a primary driver in performing pre-acquisition real estate due diligence in order to avoid potential liability under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  CERCLA imposes strict, joint and several liability on current owners and operators of facilities where a release or threatened release of hazardous substances has occurred, as well as past owners and operators of a facility at the time when disposal of hazardous substances occurred, arrangers for such disposal and certain transporters of hazardous substances to such facilities.  The statute imposes broad liability for response costs associated with the investigation and remediation of such releases or potential releases.  However, the statute also contains a BFPP affirmative defense to liability under CERCLA.