It is the policy of the Department of Justice that real property that is contaminated or potentially contaminated with hazardous substances may in the exercise of discretion be subject to forfeiture only upon determination by the U.S. Attorney, in the district where the property is located, in consultation with the seizing agency and the USMS, that such action is fiscally sound or necessary to advance a law enforcement purpose. If the U.S. Attorney chooses to delegate this authority to an AUSA, provision must be made for review by a supervisor. As part of the consultation with the seizing agency and the USMS, due consideration must be given to the disposal alternatives that may be available after forfeiture, and the impact of any cleanup costs to the AFF. Furthermore, such real property that is forfeited will only be transferred or sold with notice of the potential or actual contamination. Notice must be based on information that is available on the basis of a complete search of agency files. This notice will be included in the contract of sale and the deed.

This policy is applicable regardless of the type or source of the hazardous substance(s). This policy is applicable to all cases referred to the Department of Justice by any agency of the United States.

Forfeited real property that is marketable but is contaminated, or potentially contaminated, with hazardous substances due to activities of a prior owner may be transferred or sold as is and an environmental assessment and/or remediation of the contamination need not be undertaken. Whenever possible, the USMS will obtain a commitment from the buyer to clean up the property as a part of the contract of sale.

However, the United States may bear additional responsibility and liability if the real property becomes contaminated with a hazardous substance after the United States becomes the owner. This situation normally will arise when the United States operates a business or activity on the property that results in the storage, release, or disposal of hazardous substances (e.g., gasoline stations, metal plating shops, dry cleaners, printers, etc.) Under this circumstance, the United States is responsible for (1) all costs of hazardous substances removal and/or remedial action, (2) providing notice of the hazardous substance to a subsequent transferee or purchaser, (3) a warranting covenant to a subsequent transferee or purchaser. Because of the potential resulting liability and expense, the USMS's Asset Forfeiture Office shall approve the operation of such a business or activity only in unusual circumstances.

This policy envisions U.S. Attorneys exercising discretion in undertaking forfeiture action against real property that is contaminated where the use of the property indicates contamination or where there is the potential of contamination with hazardous substances. If such circumstances are disclosed within the period of time that the forfeiture action is being pursued, the U.S. Attorney must reevaluate the decision to continue the forfeiture. Such properties must not be forfeited unless the defendant's net equity in the property clearly exceeds the estimated cost of cleanup. Furthermore, such properties are not to be forfeited when there is reason to believe that the property is substantially contaminated with hazardous substances and that such contamination will render the property unmarketable. Cleanup costs can be considerable, particularly when the water table is involved. In making this determination, the USMS may order an environmental assessment that will be paid from the AFF.

If, at any point, the U.S. Attorney elects, in the exercise of discretion, not to proceed because significant contamination renders the property unmarketable, the U.S. Attorney must consider the following alternatives:

(1) the filing of a release of lis pendens (assuming a lis pendens had been filed) containing notice of the reason (significant contamination) for dismissal of the forfeiture action;

(2) the filing of some other document in the county deed records containing notice of the significant contamination (if such filing is permitted under the law);

(3) notification of a federal, state, or local environmental agency of the significant contamination for purposes of appropriate enforcement action (federal, state, or local law may require mandatory notification);

(4) notification of any lien holders of the significant contamination for such action as they may want to take; and

(5) consideration of prosecution, civilly or criminally, for violations of the environmental laws by the private owner—the USAO should contact the Environmental Division (Environmental Crimes Section or Environmental Enforcement Section).

Not all of these alternatives are mandatory. Ultimately, it is within the discretion of the U.S. Attorney to decide how best to proceed when an election not to proceed with forfeiture is made. For additional information on this topic see Chapter 1 of the Asset Forfeiture Policy Manual ("Contaminated Real Property").

[updated May 2010] [cited in JM 9-111.120; 9-119.010]