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The Effect of Joint and Several Liability Under Superfund on Brownfields


Howard F. Chang


University of Pennsylvania Law School

Hilary Sigman


Rutgers University - Department of Economics; National Bureau of Economic Research (NBER)


U of Penn, Inst for Law & Econ Research Paper No. 05-21
U of Penn Law School, Public Law Working Paper No. 06-18
International Review of Law and Economics, Vol. 27, 2007

Abstract:     
In response to claims that the threat of environmental liability under the Superfund law deters the acquisition of potentially contaminated sites (or brownfields) for redevelopment, the federal government has adopted programs to protect purchasers from liability. This protection may be unwarranted, however, if sellers can simply adjust property prices downward to compensate buyers for this liability. We present a model of joint and several liability under Superfund that allows us to distinguish four different reasons that this liability may discourage the purchase of brownfields. The previous literature has overlooked the effects that we identify, which all arise because a sale may increase the number of defendants in a suit to recover cleanup costs. Our analysis suggests that the brownfields problem may be more widespread than one might infer from the prior literature. Furthermore, the effects that we identify may distort not only the incentives to sell property subject to Superfund liability but also any decision of any party subject to any joint and several liability if that decision could affect the number of other defendants liable for the same harm.

Number of Pages in PDF File: 45

Keywords: environmental law and policy, environmental economics, Superfund liability, torts, real estate

JEL Classification: K32, Q5, R3

Accepted Paper Series


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Date posted: September 20, 2005  

Suggested Citation

Chang, Howard F. and Sigman, Hilary A., The Effect of Joint and Several Liability Under Superfund on Brownfields. U of Penn, Inst for Law & Econ Research Paper No. 05-21; U of Penn Law School, Public Law Working Paper No. 06-18; International Review of Law and Economics, Vol. 27, 2007. Available at SSRN: http://ssrn.com/abstract=804464

Contact Information

Howard F. Chang (Contact Author)
University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
215-573-8296 (Phone)
215-573-2025 (Fax)
Hilary A. Sigman
Rutgers University - Department of Economics ( email )
75 Hamilton Street
New Brunswick, NJ 08901
United States
HOME PAGE: http://econweb.rutgers.edu/sigman
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN (Beta)


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