Posted on February 12, 2015
When one thinks of New York’s late Governor Mario Cuomo, some remember an eloquent and gifted orator, a complex man of integrity and vision, or the erudite son of Italian immigrants who ran a grocery store in South Jamaica, Queens, NY. Others may remember him for his ideological “Tale of Two Cities” keynote address at the 1984 Democratic Convention, which highlighted his “progressive pragmatism” governing philosophy. Yet others will recall his staunch opposition to the death penalty or his investments in public infrastructure, including convention centers, stadiums, industrial parks and his controversial prison building program. Or perhaps he will be remembered for his aggressive and strategic skills on a basketball court. It was no secret that basketball was the Governor’s great passion and it was widely known that he was ferocious on the basketball court.
But not too many think of Mario Cuomo for his environmental legacy. Upon the Governor’s death on January 1, 2015, however, many memorials, tributes and articles poured in from Buffalo to the Adirondacks to the Hudson Valley to Long Island, from environmentalists and environmental organizations such as the New York League of Conservation Voters, the Adirondack Council and Scenic Hudson, all spotlighting a rather impressive environmental legacy.
Here are some notable examples of Mario Cuomo’s environmental accomplishments during his 12 years as Governor (1983-1994):
- He pressed for the passage of the Hudson River Valley Greenway Act of 1991, which established the Greenway Conservancy for the Hudson River Valley and the beginnings of the Hudson River Greenway Trail System and scenic byways which now exist as a necklace of parks, hiking trails and open space on both sides of the Hudson River running the length of the Hudson Valley. The Greenway trails have expanded from Westchester to Albany.
- He signed the Long Island Pine Barrens Protection Act in 1994, which protected over 100,000 acres of Long Island’s premier ecosystems in the pine barrens of Suffolk County. Many believed that without the Act a large portion of these ecologically diverse pine barrens would have been sold off by the state for industrial or residential development.
- He worked to gain passage of the 1986 Environmental Quality Bond Act, which funded a $1 billion hazardous waste clean-up program to address more than 1,000 sites throughout the State. It also enabled programs such as the Estuary Program to restore the Hudson River and provided $200 million for land acquisition and historic preservation.
- In response to urging by Governor Mario Cuomo’s administration, the U.S. EPA reopened its “no action” determination against GE and commenced a lengthy CERCLA enforcement battle against GE that led to GE’s on-going remediation of the PCB-contaminated Hudson River.
- The Governor is also credited with the establishment of the Environmental Protection Fund (EPF), following a failed effort in 1990 for another bond act. The EPF has provided billions of dollars for farmland conservation, wastewater treatment plant upgrades, parks creation, waterfront revitalization, invasive species controls, development of recycling programs and the restoration of historic sites. Since its 1993 enactment, the EPF has invested more than $2.7 billion to conserve some of the State’s most important scenic and ecological lands and been used to buy development rights on hundreds of thousands of acres of commercial timberland in the Adirondacks.
- Mario Cuomo also signed legislation establishing the Clean Water State Revolving Fund for water and wastewater infrastructure, which provides low interest loans for this critical infrastructure.
The current New York State Department of Environmental Conservation Commissioner, Joe Martens, (who was an environmental adviser to Governor Mario Cuomo in the early 1990s), recently observed that Mario Cuomo “was never comfortable” as a hiker or a canoeist. “He was more comfortable in a suit or in sweat pants than he was in hiking clothes.” Nevertheless, Commissioner Martens noted, Mario Cuomo “regarded protection of the environment as almost a religious belief”, and “he talked about it in spiritual terms all the time.” Mario Cuomo will be missed, but his environmental legacy will live on.
Posted on February 11, 2015
The 2015 Super Bowl between the New England Patriots and Seattle Seahawks is over, but the NFL’s investigation continues into whether the Patriots cheated by deflating footballs during earlier National Football League contests. There are lessons in this experience for those of us who handle environmental trials or advise clients in such matters.
“Deflategate,” as this incident came to be known, tapped into sportswriters’, NFL veterans’, and the public’s distrust for (and maybe even dislike of) the Patriots in general and Bill Belichick, in particular. Many critical comments referred back to the 2007 scandal in which Belichick and the Patriots were caught videotaping an opponent’s game signals.
Similar preconceived attitudes and prejudgments affect juries, and sometimes even judges, that are called on to decide environmental disputes. Polling regularly shows that protecting the environment is a goal approved by a large percentage of the public. Polling also shows that large percentages of potential jurors do not trust big business. Jim Stiff, a jury consultant from Dallas, Texas, has studied comments during many mock jury deliberations and reports that potential jurors expect large corporations to know the regulations to which they are subject. Jurors seldom give credence to a corporation’s arguments that the requirements were unclear, that the company thought it was complying when hindsight shows it was not, or that the company was doing the best it could in a difficult situation. Further, jurors often come to trial with a hindsight bias that leads them to ignore the evolution of environmental information and judge earlier conduct based on today’s knowledge.
With civil trials, if an individual or small business is alleging injury from a large corporation’s environmental activities, jurors may focus on the specific allegations of damage they can see or with which they can identify, in contrast to the more abstract arguments advanced by the defendant.
With environmental criminal trials, such difficulties are compounded by additional factors that can lower the thresholds of liability-creating activity and feed into jurors’ tendencies to reduce complex arguments into core principles they can grasp:
-- Some environmental statutes impose criminal liability on the basis of negligent acts without requiring specific intent to commit a criminal act;
-- Court rulings under other environmental statutes hold a defendant need only have intended to conduct the act at issue and not the resulting consequence of that act;
-- Many environmental criminal cases include at least one count of failing to report an environmental event. Prosecutors try to reduce failures to report to a black-and-white analysis: The defendant did not report an event the statute required.
To counteract these attitudes, corporate defendants facing environmental allegations early on must develop themes that will appeal to juries (and judges, too) such as opponents’ overreaching and lack of harm. They may need to cultivate arguments surrounding the complexity of the issues in dispute, but they must also make their case and themes simple. They may argue that their actions were approved by environmental regulators, and, surprisingly enough, they should be prepared to demonstrate that the regulators have the public’s interest at heart and are not coddling the regulated community. They need to have witnesses who can clearly explain complex technical matters in a way those without technical degrees can understand. They will seek to exclude potentially prejudicial evidence of earlier events. They will want to develop a thoughtful and strategic approach to juror selection.
In the case of the Patriots, Bill Belichick gave a press conference a week before the Super Bowl in which he reported the Patriots had conducted experiments showing changes in weather and temperature could account for deflating the footballs. He did not provide any details. About the same time, physics professors and mechanical engineers reported online that the intrinsic physical properties of gases such as air are governed by a principle known as the Ideal Gas Law. They said that under such principles, when footballs inflated at room temperature are taken to cold, wet, outdoor weather, drops in PSI are inevitable. Most talking heads, however, seemed to brush off these assertions of physics properties and experiments.
All of the evidence in this matter is not in. Nevertheless, in the court of public opinion, a large number of well-informed and probably well-intentioned people have made up their minds. Maybe the Patriots did cheat. Maybe not. But the people who have already made up their minds, either way, might just be demonstrating the challenges corporate defendants face in environmental trials.
Posted on February 9, 2015
On January 5, 2015, the Georgia Supreme Court heard oral argument in the appeal of Ga. River Network v. Turner, a case involving the Georgia Environmental Protection Division’s interpretation of the “stream buffer rule.” Because the Georgia Court of Appeals’ decision reversed EPD’s longstanding interpretation of the rule, the Supreme Court decision will have wide-ranging impacts.
Grady County desired to construct a 960-acre fishing lake. Georgia EPD issued a variance allowing the County to encroach on the mandatory 25-foot stream buffer under Georgia’s Erosion and Sedimentation Control Act. The purpose of the buffer is to protect the natural vegetation that filters contaminants and forms a barrier to sediment flowing toward the waterway. However, the application of the statute to onsite wetlands created controversy. The County requested a variance only for the onsite streams, not the wetlands, and EPD agreed a variance was unnecessary for work that would impact any buffer surrounding the wetlands.
Following a challenge by two environmental groups, the Administrative Law Judge disagreed with EPD’s interpretation of the statute and reversed the variance. In a series of appeals, the Superior Court reversed that decision, the Georgia Court of Appeals reversed the Superior Court, and the Georgia Supreme Court granted certiorari.
O.C.G.A. § 12-7-6 (b) (15) reads, “There is established a 25[-]foot buffer along the banks of all state waters, as measured horizontally from the point where vegetation has been wrested by normal stream flow or wave action” unless one of six exceptions applies, including “[w]here the director determines to allow a variance that is at least as protective of natural resources and the environment.” This wording raises a question of whether a buffer could exist in instances where no wrested vegetation is present.
The court of appeals determined the provision merely provided an instruction as to how to measure the buffer and did not contain an implicit exception to the buffer requirement in locations where the shoreline might be rocky or sandy. The court reasoned that to find otherwise would write large stretches of shoreline out of the rule, and worse, create jagged applicability wherever vegetation is interrupted, which could not be the intention of the legislature. The court found justification in its decision in the statute’s previous wording that required measurement from the stream’s bank, with no indication that the new measurement protocol was intended to narrow the statute’s basic scope.
Two dissenting judges found the court’s resolution of the statute’s inconsistency speculative and overreaching. They argued the legislature might have reasonably concluded that in rocky and sandy areas, no vegetation is present needing protection and so no buffer should exist. Further, in wetland areas where vegetation continues into the heart of the waterbody, a designated buffer may likewise be unnecessary. Georgia EPD’s appeal agrees with the dissent, arguing the Court of Appeals imputed its own policy goals on a clearly worded statute without justification.
Posted on February 6, 2015
A century ago expeditions to Antarctica, “the last unexplored place on earth,” made Amundsen, Scott, Mawson, and Shackleton household names. Today Antarctica’s pristine environment attracts tourists to what is the coldest, windiest, and highest continent on earth. Despite its harsh climate and the massive ice sheet that covers nearly all its land mass, Antarctica is teeming with life, as I discovered on a recent National Geographic expedition there celebrating the centenary of Shackleton’s famous voyage.
Global scientific cooperation during the International Geophysical Year (IGY) of 1957-58 sparked interest in negotiating what became the Antarctic Treaty. Signed in 1959 by the 12 countries that participated in the IGY, the treaty entered into force on June 23, 1961. The treaty, which applies to the area south of 60 degrees south latitude, suspends territorial sovereignty claims made by seven countries. It protects freedom of scientific investigation while subjecting scientific personnel to the jurisdiction of their respective governments. Important protections for Antarctic plants and wildlife were added by the Agreed Measures for the Conservation of Antarctic Fauna and Flora, adopted as an annex to the treaty in 1964, and the Convention for the Conservation of Antarctic Seals, which entered into force in 1978.
When the Antarctic Treaty was negotiated, 60 scientific stations had been established on the continent and surrounding islands. Waste disposal practices at these bases initially were quite haphazard, including at the large U.S. base on McMurdo Sound. The U.S. actually operated a small nuclear power plant at the station between 1962 and 1972, which had to be decommissioned prematurely due to continuing safety issues. A campaign by Greenpeace to expose open dumping of wastes at McMurdo helped spur improved waste disposal practices, particularly after congressmen with oversight authority over the National Science Foundation (NSF) visited the station. In the 1990s, the Environmental Defense Fund won a lawsuit against NSF to block construction of a waste incinerator at McMurdo without an environmental impact statement. The D.C. Circuit held that because Antarctica was not the territory of any sovereign the principle against extraterritorial application of NEPA did not apply.
The most important environmental protections for the continent are embodied in the Protocol on Environmental Protection to the Antarctic Treaty, which was adopted in 1991. The Protocol designates the continent as a “natural reserve devoted to peace and science” and it imposes strict measures to protect the Antarctic environment, including a ban on all mining. Also in 1991, tour operators formed the International Association of Antarctic Tour Operators (IAATO), a private, self-regulating organization that now has more than 100 members. IAATO has developed a strict code of conduct designed to keep Antarctica pristine, to protect Antarctic wildlife, and to require tourists to respect protected areas. This code was observed so strictly on our expedition that we were prohibited from relieving ourselves while on land, a prohibition not applicable to the penguins whose wastes create a pungent smell apparent whenever land is approached. Boots had to be disinfected prior to every landing and clothing was vacuumed to prevent introduction of invasive plants.
The worst environmental disaster in Antarctic history occurred in January 1989 when the Bahia Paraiso, an Argentine naval supply ship hit a submerged rock off DeLace Island, spilling 600,000 liters of oil and creating an oil slick that covered 30 square kilometers. In 2009 the International Maritime Organization banned the use of heavy fuel oils by ships in Antarctic waters. This measure has been widely applauded for reducing pollution in Antarctica. It also caused some cruise lines to stop visiting the continent with huge cruise ships, significantly reducing the number of tourists in Antarctic waters. Enforcement of strict measures to protect the Antarctic environment depends crucially on cooperation by many governments and private companies.
The Antarctic environment continues to face challenges, particularly from climate change which has visibly reduced the size of glaciers. But the ban on commercial exploitation of Antarctic resources has preserved a more pristine environment than in northern polar regions where countries and companies are racing to develop oil resources. Shackleton would be proud.
Posted on February 3, 2015
Lawyers who regularly practice in the realm of the Clean Water Act (the “Act”) well know that the fight causing the most widespread panic in the regulated community for many months has been the joint proposal by EPA and the Corps of Engineers to amend the definition of “Waters of the United States.” Even though the agencies jointly withdrew the proposal on January 29, 2015, water lawyers and their clients shouldn’t let their guards down, because another inevitable regulatory slugfest is coming, and it will be over water use.
In its original form in 1972, the Act contained a concise “savings clause” that was intended to keep EPA from meddling with the authority of the States to determine how water resources will be allocated for beneficial uses. Section 510(2) simply states: “Except as expressly provided in this chapter, nothing in this chapter shall be construed as impairing or in any manner affecting any right or jurisdiction of the States with respect to the waters (including boundary waters) of such States.”
Wyoming Senator Malcolm Wallop became very concerned that the Section 510(2) “shield” wasn’t strong enough to protect the States, so he successfully led to passage in the 1977 amendments to the Act a much more robust policy statement, which was codified as Section 101(g), as follows:
It is the policy of Congress that the authority of each State to allocate quantities of water within its jurisdiction shall not be superseded, abrogated or otherwise impaired by this chapter. It is the further policy of Congress that nothing in this chapter shall be construed to supersede or abrogate rights to quantities of water which have been established by any State. Federal agencies shall co-operate with State and local agencies to develop comprehensive solutions to prevent, reduce and eliminate pollution in concert with programs for managing water resources.
On its face, the Wallop Amendment appears to be “bulletproof,” but at best it’s really just “bullet resistant.” On November 7, 1978, EPA Assistant Administrator for Water and Waste Management Thomas Jorling and General Counsel Joan Burnstein issued to all Regional Administrators an “interpretive memorandum,” which concluded that the Wallop Amendment does not absolutely prohibit legitimate use of the Act for water quality purposes, even if water rights and water usages allowed under State laws are negatively affected. While noting that Section 510(2) remained unchanged in the 1977 amendments, Jorling and Burnstein grounded their legal analysis principally in passages from Senator Wallop’s floor statement in support of his proposed amendment. Specifically, Senator Wallop acknowledged that implementation of water quality standards requirements, among other major features of the Act, might “incidentally” affect individual water rights, and that the purpose of his amendment was “to insure that State allocation systems are not subverted, and that effects on individual rights, if any, are prompted by legitimate and necessary water quality considerations.”
So, thus was born what could loosely be called the “legitimate and necessary” test for determining what is, or is not, an “incidental” effect on State-conferred water rights resulting from implementation of water quality programs arising under the Act. But, without further definition, the scope of this determination brings to mind another (and historic) subjective test – the language in the 1964 Supreme Court decision in the Jacobellis obscenity case, in which Mr. Justice Potter Stewart, in his Concurring Opinion, wrote: “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"], and perhaps I could never succeed in intelligibly doing so. But I know it when I see it….”
In 1994, the Supreme Court essentially applied the Wallop Amendment test in its P.U.D. No. 1 vs. the Washington Department of Ecology decision. There, as a condition for the issuance of a Water Quality Certification under Section 401 of the Act, the State required a proposed hydroelectric dam to pass through certain minimum flows to protect downstream fisheries. In holding for the State, the Court cited Senator Wallop’s floor statement and summarily rejected the argument that Sections 101(g) and 510(2) limit the reach of the Act to water quality issues only.
Considering the legislative history of the Wallop Amendment, the 1978 Jorling-Burnstein interpretive memorandum, and the Supreme Court’s decision in the 1994 P.U.D. No. 1 case, there is understandable angst that EPA (or anybody else, for that matter) will use one or more of the three bedrock water quality factors in Section 101(a) of the Act (i.e. chemical, physical, and biological) as offensive weapons to limit or block State water allocation proposals. Simply put, the scientific premise would be that instream ecosystems can be degraded by depleting flows below the point at which sustainability of these resources is compromised, thus causing or exacerbating a violation of the biological component of the established water quality standards at the proposed point of withdrawal. (Of course, antidegradation requirements would also be in play.)
On January 7, 2015, EPA sent to the Office of Management and Budget for regulatory review the proposed Final Rule in the recent Water Quality Standards Program rulemaking, and EPA projects that the Final Rule will be published in May 2015. To say the very least, these major changes will make even more vexing the already difficult quantity-quality, federal-state tensions over how water use allocation decisions are made at the State level.
To close this review, it must be noted that, as mentioned in the 1978 Jorling-Burnstein interpretive memorandum, some States have water allocation programs in which the impacts on water quality of a proposed withdrawal must be carefully considered. For example, in Mississippi, the statute authorizing the issuance of surface water withdrawal permits explicitly states: “No use of water shall be authorized that will impair the effect of stream standards set under the pollution control laws of this state based upon a minimum stream flow.” An appropriate case in point arose in early 2014, when a permit was sought to withdraw significant volumes of water for row crop irrigation purposes from a major stream in the Mississippi Delta. A citizens group opposed the permit proposal, contending that further withdrawals from that particular stream should not be allowed until a biological sustainability study was performed and then used as the ultimate determinant in considering applications for additional withdrawals. The citizens group and the applicant for the permit struck a compromise, but the fundamental questions about the impacts of such withdrawals on water quality remain.
Given the extended droughts in certain regions of the United States in recent years, the ever tightening laws and regulations governing both water quantity and water quality, and the reality of growing demands for water seemingly everywhere, “water wars” (both intrastate and interstate) will likely erupt more frequently as time goes by. And, in those States that have little or no statutes, regulations, and administrative procedures to work with, the fundamental questions for individuals and organizations (public and private) who want to oppose proposed water withdrawals, regardless of the intended beneficial use, will be what forum to use and what principles of law to assert. One thing is certain – seasoned water lawyers will likely see more business coming their way.
Posted on January 30, 2015
Members of the ACOEL Team that co-authored the earlier white paper on Waters of the US have taken the discussion further by presenting a one-hour audio program which both highlights and updates this important issue.
In this discussion, ACOEL members Rick Glick, Michael Wall and Karen Crawford review the judicial and regulatory history of Waters of the US as well as the proposed rule that is being advanced by USEPA and the Corps of Engineers. In addition, these panelists offer their unique insight into the science report in support of the rule as well as the likelihood of the rule being changed in its final adaption by the agencies or upon review by the US Supreme Court.
ACOEL originally undertook its review of this issue at the request of the Environmental Council of States and as part of its commitment to pro bono service. The white paper on the issue is available at: http://goo.gl/fneJVD
The audio discussion by the ACOEL panel can be found at: http://goo.gl/uv4nJi.
Posted on January 30, 2015
On Monday, January 26, 2015, the New Jersey Supreme Court issued its opinion in Morristown Associates, a closely watched case on the potential applicability of the state’s general 6-year limitations period to actions by contribution plaintiffs under the state’s strict, joint and several liability cleanup law, the Spill Compensation and Control Act (commonly referred to as the “Spill Act”).
The Court found no such applicability, and declined to impose a limitations period for commencement of Spill Act contribution actions.
The Spill Act itself expressly provides private parties with a powerful statutory cause of action to seek recompense from others (known as “contribution defendants”) for costs incurred in cleaning up and removing discharges of hazardous substances. Defenses are statutorily limited to those set forth in the Spill Act, such as acts of war, sabotage and God. The Spill Act does not articulate a limitations period within which aggrieved parties must commence contribution actions.
Lower state courts had differed on the question of imposing a Spill Act limitations period, and decisions of the federal district court in New Jersey had applied New Jersey’s general 6-year statute, noting that this would be consistent with the approach under CERCLA -- the federal Superfund law -- which does impose limitations periods. In the trial court and appeals court decisions in Morristown Associates, both of the lower courts had found the state’s general 6-year period to be applicable. The trial court further held that the 6-year limitation period commenced at the point when the contribution plaintiff should have discovered through investigation that it had the basis for a Spill Act claim, another point that the Appellate Division affirmed.
Focusing on the plain language of the Spill Act, and the legislature’s express statements of intent as set forth in the law, the Supreme Court rejected application of any limitation period. The Court particularly looked to the restricted set of defenses under the law, and the verbiage that contribution defendants are to be afforded “only” those defenses.
The Court found that the plain text of the Spill Act supports the legislature’s intention to include no statute of limitations defense, noting that “the Spill Act is remedial legislation designed to cast a wide net over those responsible for hazardous substances and their discharge on the land and waters of this state.”
The Court also saw “no reason to interpose in these factually complex cases a new requirement to determine when one knew of a discharge in order to afford the remediating party the contribution right that the Spill Act confers as against all other responsible parties. We decline to handicap the Spill Act’s intentionally broad effect in such manner.”
The Appellate Division’s judgment was reversed, and the case remanded.
Posted on January 28, 2015
Caligula was the cruelest and craziest of a string of deranged Roman emperors. Among his meanest and most irrational acts was to have edicts carved at the top of tall columns and then punish unsuspecting violators, who had no way to decipher the obscure laws etched far over their heads. For this and other cruel acts, he was killed by his own Praetorian Guards.
For all its virtues, American environmental law has traces of this same sort of lunacy and unfair lack of certainty and notice to its regulated citizens. Examples include the chronic uncertainty, after over three decades, about what constitutes a “solid” or “hazardous waste” under RCRA, our basic waste management law, and what constitutes a “major modification” that triggers the onerous PSD Program of the Clean Air Act.
Nowhere is this uncertainty more glaring than in the Clean Water Act (CWA). More than 40 years after its passage, what constitutes a vaguely-defined “water of the U.S.” regulated under the Act is now murkier than ever. At this juncture, however, EPA and the Army Corps of Engineers have a unique opportunity to provide clarity, certainty, and consistency to this key concept by taking three critical actions that would (1) properly clarify by rule the nature and scope of CWA-regulated waters; (2) clearly describe the process for making and also tracking “jurisdictional determinations” made under such rule; and (3) provide affected parties the right to seek prompt judicial review of any final approved determination.
EPA and the Corps have undertaken the first key task by an ongoing rulemaking set to be completed in 2015. While aspects of the agencies’ initial proposed rule were problematic, calls by some quarters to ban or “ditch the rule” altogether are misguided. EPA and the Corps already have on the books vague rules defining regulated waters that are inconsistent with the Supreme Court‘s 2006 Rapanos decision and subsequent case law, and it is in no one’s interest simply to maintain the current status quo of uncertainty and inconsistency. As Chief Justice Roberts emphasized in Rapanos, if the agencies had adopted reasonable rules clarifying the scope of regulated waters a decade ago, as originally planned, the confusing result in Rapanos would likely have been avoided.
In finalizing such rule, however, the agencies should recall that their role and legal duty is to identify and implement the intent of Congress under the 1972 Act, not embark on a policy making exercise about what additional areas should be regulated as a matter of public policy. They should also strive to increase, not decrease, the clarity and certainty of what constitutes regulated wetlands and other waters. For example, aspects of the proposed rule properly and helpfully exclude groundwater and minor ephemeral drainages but then elsewhere create confusion and inconsistency by suggesting that subsurface hydrologic connections and overly broadly defined tributaries can still make an area jurisdictional. Overly expansive proposed approaches to determining “adjacency” and aggregating numerous small areas for their cumulative nexus to downstream navigable waters similarly increase, rather than lessen, the current regulatory confusion and uncertainty. Whether the pending rulemaking is a helpful clarification, or just yet another Caligula’s column, depends on how the agencies resolve those and other problematic provisions in the final rule.
The agencies should also use this occasion to develop a specific process and procedures for making approved “jurisdictional determinations (JDs)” under the final rule. That process should include improved procedures for regulated entities to present evidence that an area is not a “jurisdictional water” under the Act, and for the agencies to track and publically post all final approved JDs as they are made, so they can be used to ensure consistency and inform the public about past determinations in an area.
The third critical fix to make this JD process fair and transparent is to provide that final agency jurisdictional determinations are subject to judicial review. The Corps’ rules already provide for an administrative appeal of approved JDs, as well as proffered or denied 404 permits. 33 CFR Part 331. Inconsistent with that appeal process, however, the Corps and EPA have taken the position that their final decisions on JDs, unlike permitting decisions, are not judicially reviewable “final agency actions” under the Administrative Procedure Act (APA). The 5th Circuit agreed with that position in July 2014 in Belle Company, LLC v. U.S. Army Corps of Engineers, which is subject to a pending Petition for Certiorari to the U.S. Supreme Court. In a pending appeal of this issue before the 8th Circuit in Hawkes Co. v. U.S. Army Corps of Engineers, two judges during oral argument on December 11, 2014 indicated disagreement with Belle, suggested the agencies’ position is inconsistent with the Corps’ administrative appeal rules, and described this claimed exemption from judicial review as “government by regulatory tyranny.” An eventual adverse ruling by the 8th Circuit would greatly increase the odds of the Supreme Court granting certiorari in the Belle case or later in the Hawkes case. The agencies could avoid that uncertainty and the cost, effort, and risk of litigating this issue before the Supreme Court by simply confirming by rule that final approved JDs are final agency actions subject to judicial review under the APA. That confirmation would be consistent with the Corps’ administrative appeal rules and the Supreme Court’s 2012 ruling in Sackett v. EPA, which held that EPA compliance orders (that have a parallel practical effect) are subject to judicial review.
EPA and the Corps are at a crossroads. They can decide to make the definition and identification of jurisdictional “waters of the U.S.” subject to the Clean Water Act clear, consistent, based on Congress’ original intent in 1972, and subject to prompt, objective judicial review. Or, they can decide to keep that process complex and ambiguous, expanded beyond Congress’ original intent, determined case-by-case in the varying judgment of agency personnel, and unreviewable by any court – in effect etched on a proverbial Caligula’s column. The choice should be clear. It’s time to knock that column down.
Posted on January 27, 2015
On December 17, 2014, New York State’s Department of Environmental Conservation (DEC) announced that high volume hydraulic fracturing to recover natural gas (a/k/a “fracking”) will be banned on a state-wide basis. Is this good law, good science, good policy (or politics)? Perhaps the most important question is who should decide – states or local governments?
The DEC’s decision to ban fracking is based on the recommendation of the state’s Department of Health (DOH), which just completed a two-year study of the state of the science on the environmental and public health risks posed by fracking. DEC requested this study after it received over 13,000 public comments on its 2009 draft programmatic environmental impact statement (EIS) for a proposed fracking permit program in New York State.
The DOH study concluded that the cumulative body of scientific information demonstrates that there are “significant uncertainties” about the environmental and public health risks of fracking --- including air pollution, drinking water contamination, surface water contamination, earthquakes, and community impacts such as increased vehicle traffic, noise and odor problems. The DOH concluded that “it would be reckless to proceed in New York until more authoritative research is done.”
In accepting DOH’s recommendation, DEC noted that its own review had identified dozens of potentially significant adverse impacts from fracking, and concluded that “the risks substantially outweigh any potential economic benefits” from fracking. The Commissioner of DEC directed staff to complete the final programmatic EIS for fracking early this year, after which the fracking ban will be put into place. (No fracking has been permitted in New York State in the interim.)
The DEC decision follows a June 2014 ruling by the New York’s highest court affirming local governments’ authority under the state’s constitution and statutes to use zoning laws to ban fracking in their jurisdictions.
There are good policy reasons for leaving the decision of whether to allow fracking up to local communities. After all, they bear most of the environmental and potential public health risks that fracking poses. Local communities may be in the best position to decide whether those risks, or even perceived risks, are worth the economic benefits that fracking development can bring to local economies. The Town of Dryden and Cooperstown cases make it clear that citizens and neighbors do not always agree on the right outcome for their communities.
But many of the local controversies seem to be based, at least in part, on citizens’ differing perceptions of the nature and level of risk that fracking poses to their environment and health. Surely, the scientists in the state departments of health and environmental conservation are in a better position to evaluate that risk than local governments or individual citizens. By making this science-based decision on behalf of all its citizens (whether you agree with it or not), New York State should be given credit for stepping up to perform one of the most basic responsibilities of state government – protecting the public health.
Posted on January 26, 2015
The Fifth Circuit has just weighed in with a significant interpretation of the Supreme Court’s landmark decision in Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009). In a case involving “arranger” liability under CERCLA (the Comprehensive Environmental Response, Compensation and Liability Act), the Fifth Circuit on January 14 overturned a district court judgment that had held BorgWarner liable for leaks of perchloroethylene (PERC) from equipment sold by an affiliate of BorgWarner’s corporate predecessor. Vine Street LLC v. Borg Warner Corp., No. 07-40440 (Jan. 14, 2015).
The Fifth Circuit held there was no “intent” to dispose of PERC even though the dry cleaning equipment was designed with the knowledge that some PERC would inevitably be mixed in with the water that the system was designed to discharge. Because PERC was a useful product and the intent was to reclaim it rather than dispose of it, the Fifth Circuit strictly applied Burlington Northern’s holding that arranger liability requires an intent to dispose and remanded the case to the district court with instructions to enter judgment in favor of BorgWarner.
Vine Street usurps the Fifth Circuit’s earlier “nexus” test (the test in effect when the District Court issued its ruling), which was based on a totality of the circumstances, and gives further ammunition to those defending against CERCLA liability for releases incidental to the sale of a useful product.
Posted on January 9, 2015
While Congress designed CERCLA to enhance EPA’s ability to respond to hazardous contamination, the statute requires a level of cooperation between federal and state authorities for certain CERCLA activities, including the NPL listing process. But like parents forcing middle-schoolers to dance in etiquette class, Congress’s efforts to make EPA coordinate with States often begins with squabbles over who leads and ends with squashed toes.
So how much state involvement is required under CERCLA? More than you might think. For example, CERCLA section 121(f) states that EPA must provide “for substantial and meaningful involvement” by each State in the “initiation, development, and selection of remedial actions to be undertaken in that State.” This includes state involvement in decisions whether to perform preliminary assessments and site inspections, allocation of responsibility for hazardous ranking system scoring, negotiations with potentially responsible parties, and participation in long-term planning processes for sites within the State. CERCLA section 104(c)(3) mandates that before EPA can provide a Superfund remedial action in a particular State, the State must provide EPA with specified assurances in writing. Those assurances include the State’s agreeing to undertake “all future maintenance of the removal and remedial actions provided for the expected life of such actions” and paying “10 per centum of the costs of the remedial action, including all future maintenance.” These statutory provisions are confirmed and enhanced by EPA’s own regulations. See, e.g., 40 C.F.R. 300.500; id. at 300.510. Further, two EPA guidance memoranda outline a process “to include State input in NPL listing decisions” and to resolve disputes “in cases where [an EPA] Regional Office . . . recommends proposing or placing a site on the [NPL], but the State . . . opposes listing the site.” See Memo. from Elliot P. Laws, Asst. Admin. EPA Off. of Solid Waste and Emergency Response (“OSWER”), to EPA Reg. Admins., at 1 (Nov 14, 1996); Memo. from Timothy Fields, Jr., Asst. Admin. OSWER, to EPA Reg. Admins., at 1 (July 5, 1997) (Fields Memo.). This policy requires EPA regional offices to “determine the position of the State on sites that EPA is considering for NPL listing . . . as early in the site assessment process as practical,” to “work closely with the State to try to resolve [any] issue[s],” and to provide the State with “the opportunity to present its opposing position in writing” before EPA Headquarters “decide[s] whether to pursue NPL listing.” Fields Memo. at 2.
EPA has historically taken these laws, rules, and guidance to heart, consciously trying to avoid stepping on state feet in the NPL listing process. Of the over 200 sites that EPA has proposed for listing since 1995, only the Fox River Site in Wisconsin was proposed over state opposition—and that listing was never finalized. EPA’s deference makes sense considering that a failure to obtain state assurances generally means EPA cannot access the Superfund to finance its remedial activities. Unfortunately, there are signs EPA’s cooperative approach may be changing. EPA recently proposed the 35th Avenue site in Birmingham, Alabama, for NPL listing without Alabama’s concurrence. While EPA claims state support for the listing (79 Fed. Reg. 56,538, 56,544 (Sept. 22, 2014)), the rulemaking docket contains letters of opposition from both the Alabama Department of Environmental Management and the Alabama Attorney General. Alabama has made clear that it has no ability to fund any remedial efforts at the site, and has no intention of providing any of the required assurances. Moreover, EPA did not follow its own guidance regarding the “nonconcurrence” dispute. In short, while EPA and Alabama are facing one another, EPA may have shown up to this dance wearing jackboots.
Posted on January 7, 2015
Much of my legal work deals with hazardous material remediations driven by CERCLA or state equivalents. The allocation of these costs among liable parties, in court or out, is generally conceded to be expensive and ultimately unsatisfying to most of them. I never thought I would see it in another area of environmental law but now I have.
Dams are regulated in my state by the New Jersey Department of Environmental Protection. It is a big job. Most of our lakes and ponds are dammed streams or rivers. At one point New Jersey had 196 dams where a failure might result in probable loss of life and/or extensive property damage. 50 of these need repairs at an estimated cost in excess of $33 million. There were also another 396 dams where failure might result in significant property damage. 317 are in need of repair to bring them up to state standards at a cost in excess of $126 million. Who pays for the necessary repairs to these dams and how?
A case decided by our intermediate appellate court on January 2nd of this year answers this question in a most CERCLA-like way. In New Jersey Department of Environmental Protection v. Alloway Township the Appellate Division interpreted provisions of the Safe Dam Act (N.J.S.A. 58:4-1 to 4-14). This Act “casts a ‘broad net’ of liability … so that its remedial purpose … is served” by imposing “significant obligations” on the owner or person having control of a reservoir or dam. At issue in this case was a privately owned lake created by an earthen dam that now has township road on top which is supported by a county bridge and culverts that are part of the dam.
The New Jersey Department of Environmental Protection (“NJDEP”) brought an action against the person owning the property below the lake and the dam, the township that maintained the road on the dam and the county that maintained portions of the dam. The court held “there are four classes of people who are subject to the statute: (1) dam owners; (2) reservoir owners; (3) those who control the dam; and (4) those who control the reservoir. It follows that if a party fits into any one of those categories, the [NJDEP] may seek enforcement of the SDA against that person.” All the parties fell into at least one of those classes.
The Appellate Division also blessed the allocation of liability made below. There, the judge, sitting in the Chancery Division - General Equity Part, made an equitable allocation of the costs of compliance: sixty-five percent to the County, twenty-five percent to the property owner, and ten percent to the Township.
What – equitable allocation in another environmental program? Cheer up CERCLA lawyers. Our skills may be useful in dam regulatory litigation.
Posted on January 5, 2015
If you want a sense of emerging developments likely to impact the business community it is important to keep an eye on pronouncements from EPA’s Office of Enforcement and Compliance (OECA). OECA is the “lead” for EPA’s Next Gen compliance initiative, which will continue to set enforcement priorities as it rolls out through 2015. Next Gen is far from perfect and severely underfunded, but since its principles provide the guideposts for compliance policy, being well informed provides an important edge in compliance situations.
For years EPA has been calling on federal and state enforcement managers to develop approaches that go beyond traditional single facility inspections and enforcement. EPA took the lead in its FY 2014 National Program Manager’s Guidance OECA by announcing the Next Generation Compliance Initiative.
Next Gen focuses on five areas:
1. Designing and drafting regulations and permits that are simpler and easier to implement.
2. Using advanced emissions/pollutant detection technology so that regulated entities, government, and the public have prompt access to monitoring data concerning environmental conditions (as well as potential violations).
3. Electronic submission of permit applications and monitoring data.
4. Prompt web-posting of traditional compliance data, and presenting information obtained from advanced emission monitoring and electronic reporting (so-called big data sets) to the public.
5. Developing data analytics to guide enforcement activities.
EPA kicked off Next Gen in style. A major policy statement appeared in the September-October 2013 issue of ELI’s Environmental Forum. The Next Gen strategy was reaffirmed in OECA’s FY 2015 national program manager’s guidance; in numerous interviews and public statements by senior EPA officials and in a compliance plan announced in October 2014. These efforts are continuing. Indeed, George Washington Law School will convene the latest in a series of events focusing on Next Gen compliance on March 26 and 27, 2015. The symposium will address the role of advanced monitoring in environmental compliance and enforcement. In addition, OECA staff have presented a number of Next Gen workshops to state officials.
Despite EPA’s roll-out efforts, Next Gen has had critics who find the initiative too vague to be helpful. The Government Accountability Office found that OECA lacks a strategic plan to implement the initiative. In addition, Next Gen does little to reward good behavior. In fact, Next Gen ignores positive feed-back as a driver of improved compliance.
While increased use of technology and public disclosure sound great, it remains to be seen how OECA will implement Next Gen in practice. Nevertheless, whether Next Gen has staying power or not, there are several themes that need to be considered:
1. OECA’s focus on improved transparency and community participation is here to stay and enhanced community outreach will increasingly find its way into EPA (and state) regulations. To keep pace, the regulated community needs to continuously rethink how to use media (new and old) to inform and engage stakeholders, especially members of vulnerable communities.
2. EPA and delegated states will continue to experiment with ‘innovative enforcement strategies’ using advanced monitoring and data analytics and that rely less upon traditional inspections; self-reporting and tips. Industry should look for opportunities to provide input to these efforts.
3. Monitoring data is now a public resource, easily shared and routinely subjected to new uses. Therefore, rigorous quality assurance and quality control is essential at every step of the data collection and reporting cycle. Use of software that flags inconsistent results or mathematically impossible outcomes (like EPA’s Greenhouse Gas Reporting Tool) should be dramatically expanded.
4. E-reporting cannot be a one-way street based simply on replacing paper reports with electronic submissions. OECA needs to provide guidance and support so that regulators can invest resources and develop policies that ensure that they can use e-reporting to provide relevant compliance assistance in real time.
We’ll need to wait and see whether OECA’s Next Gen Initiative will play a major role in shaping future environmental enforcement. In the meantime, OECA’s framework for achieving more effective compliance can serve as a guide for advanced companies to refine their environmental management systems while helping to focus enforcement efforts on the worst performers.
Posted on December 30, 2014
You’ll have to turn to more traditional holiday reading because EPA’s methane reduction strategy for the oil and gas industry won’t be available until next year. On March 28, 2014, the White House released its Strategy to Reduce Methane Emissions and instructed EPA to develop a comprehensive plan to reduce methane emissions from landfills, coal mines, agricultural operations, and the oil and gas industry. The White House further directed EPA to address oil and gas sector methane emissions by building on the emission reduction successes of existing regulations and voluntary programs.
EPA responded to this directive by publishing five white papers on methane emission sources in the oil and gas sector in April 2014, and requesting peer review and comment on each. The white papers address methane and volatile organic compound (VOC) emission mitigation techniques for: compressors, hydraulically fractured oil well completions and associated gas from ongoing production, equipment fugitive leaks, liquids unloading, and pneumatic devices.
Contemporaneously, EPA proposed enhancements to its long-standing and successful voluntary program for methane emission reductions—the Natural Gas STAR Program. EPA initiated the Natural Gas STAR program in 1993 to encourage voluntary methane emission reductions in the oil and gas sector through the application of cost-effective technologies and improved work practices.
EPA seeks to enhance the existing voluntary program with 17 “Gas STAR Gold” methane reduction protocols and a heightened recognition incentive for participating companies. There is a proposed Gas STAR Gold protocol for each of the source activities addressed by a technical white paper, with the exception of methane emissions from well completions following hydraulic fracturing. Other proposed Gold STAR protocols address methane emissions associated with casinghead gas, flares, glycol dehydrators, hydrocarbon storage tanks, and pipelines.
To achieve Gas STAR Gold status, a participating company must certify that at least one of its facilities has implemented all applicable Gold STAR protocols. Companies with at least 90% of their facilities implementing all applicable Gold STAR protocols achieve “Gas STAR Platinum” status.
While few doubt that EPA will pursue methane emission reductions via a regulatory framework, it is speculation only whether EPA’s approach will consist of methane reductions as: (1) a co-benefit of regulations aimed at VOC emissions; (2) direct regulation of methane emissions; or (3) a combination of these approaches. Regardless of the regulatory direction EPA takes, expanded and enhanced voluntary measures will certainly be part of its comprehensive strategy for reduced methane emissions.
EPA’s next step will be to announce the type of regulatory framework necessary to achieve White House goals, and explain how voluntary efforts fit into that framework. Although EPA aimed to announce that planned strategy by the end of the year, recent reports indicate that a January 2015 announcement is more realistic. It looks like we will have to look elsewhere for our leisure holiday reading. (Thanks are due to Karen Blakemore in our Baton Rouge office for all that is good and useful in this post.)
Posted on December 19, 2014
For decades, environmental lawyers focused on cleaning up the air and water. We made tremendous progress. Today, in most of the country, our air is safer to breathe and our waters more fit for drinking and recreation than at the dawn of the environmental movement.
But while our air and water got cleaner, our food system got dirtier during that same time period. Vast numbers of chemicals started to be used in the production and processing of food, with little thought given to the long-term impacts on human health and the environment.
Safeguards have failed to keep pace with the introduction of new chemicals, and the powerful industries behind these products put tremendous pressure on federal agencies to limit health protections, putting our health and our environment at risk.
Here are three ways to start cleaning up our dirty food system:
1. Close the Giant Food Additive Loophole
Hundreds, if not a thousand or more, chemical food additives used in processed and packaged foods that make up the majority of the American diet are never publicly revealed, much less reviewed for safety by the FDA. A recent report from NRDC explored this loophole in food safety law, known as GRAS, or “generally recognized as safe,” which allows chemical manufacturers to decide for themselves if their product is safe. In many cases, the FDA isn’t even notified when chemical additives enter our food supply.
Some additives which manufacturers claimed to be “generally recognized as safe” have been linked to fetal leukemia, testicular degeneration, and other adverse effects in human cell or animal tests. NRDC found these additives listed as ingredients in at least 20 food products.
The FDA can and should move now to end the conflict of interest in this system; and when the agency does review a manufacturer’s safety claims, their concerns should be made available to the public. Ultimately, Congress needs to close the GRAS loophole and reform outdated food safety law.
2. Stop Risky Herbicide Used on Corn and Soy
The EPA recently approved the herbicide Enlist Duo, which is toxic to many plants, but not to a new strain of genetically modified corn and soy. Enlist Duo is likely to become the replacement for the weed-killer popularly known as Roundup, which became one of the most widely used herbicides in the nation after Monsanto developed genetically modified corn engineered to resist it. According to Monsanto, Roundup and its family of glyphosate-based herbicides are registered for use in more than 130 countries.
But after 20 years of heavy use, Roundup is no longer effective against certain weeds, which have evolved a resistance to it. The industry’s solution is to escalate: develop a new strain of GMO crops that can withstand a new, more potent herbicide.
Enlist Duo is a combination of glyphosate, the active ingredient in Roundup, and another herbicide, 2,4-D. The EPA signed off on Enlist Duo despite ample evidence of the harm caused by 2,4-D, and without taking into account the last two decades of research on glyphosate.
In recent years, glyphosate has emerged as a major contributor to the alarming decline of monarch butterflies, as it has decimated milkweeds across the Midwest, the only plant on which a monarch will lay its eggs. (Milkweeds have not evolved any resistance to glyphosate.) Emerging evidence suggests glyphosate may pose a threat to human health, with possible links to kidney disease, pre-term deliveries, attention deficit hyperactivity disorder, birth defects, and miscarriages.
2,4-D has been associated with decreased fertility, higher rates of birth defects, and other signs of endocrine disruption. It’s been found in drinking water and can drift in the air over great distances, increasing the likelihood of human exposure far from the fields where it’s sprayed.
The approval of Enlist Duo will expand both the geographic area and the length of the season during which 2,4-D would be used, potentially increasing the risk of exposure to 20 million children and women of childbearing age here in the U. S.
NRDC is suing the EPA for its approval of Enlist Duo.
3. Stop Antibiotic Abuse in Livestock Industry
Eighty percent of the antibiotics sold in this country are for use in livestock and poultry, not for humans. And these antibiotics are largely used on animals that aren’t sick.
To keep antibiotics effective, we need to change the way we raise animals for their meat. NRDC has been spearheading a campaign to raise awareness of antibiotic abuse in the livestock industry and pressing the FDA to take action. Recently, a number of major food companies have announced that they have or will transition away from antibiotics, including Perdue Farms, Chik-Fil-A, Panera Bread, Chipotle and others.
These moves are encouraging and welcome but still voluntary, and not yet backed up by any increased transparency into antibiotic practices. And Foster Farms, the biggest chicken producer in the West, whose product was linked to a widespread Salmonella outbreak in 2013 and 2014, has yet to announce any changes in its antibiotics practices.
Meanwhile, the latest FDA statistics show that antibiotic sales to the livestock industry continue to rise. Real change will come when we have truly effective safeguards—not the voluntary measures offered by the FDA, and not the similarly weak proposal recently (and commendably) vetoed by Governor Jerry Brown of California.
Governor Brown has called stakeholders back to the table to find a more effective way for the industry to change its risky practices. It’s possible that California could lead the way forward on antibiotic stewardship.
Posted on December 18, 2014
There has already been significant discussion of the economic impacts of climate change. Damage from catastrophic events, the cost to build adaptation measures such as sea walls; these have all been examined. Now, a National Bureau of Economic Research Working Paper suggests a much more direct measure. Apparently, we’re just not as productive as the planet warms.
Cole Porter knew what he was talking about.
Posted on December 17, 2014
Last spring, as the Washington Post reported, I caught Justice Scalia in an embarrassing blunder that prompted the Justice to revise overnight the version of his dissenting opinion in EPA v. EME Homer City Generation, L.P. posted on the Supreme Court’s website. Scalia’s stumble? In his zeal to condemn EPA for what the Justice plainly considered to be an outrageous construction of Clean Air Act language in EME Homer, he somehow managed to get completely backwards what EPA had argued in Whitman v. American Trucking Ass’n. And as the environmental law blogosphere cheerily trumpeted, what made the mistake especially “cringeworthy” was that Scalia himself had written the Court’s opinion in Whitman, so one was hard-pressed to blame just his law clerk. (On the other hand, here at Harvard Law School, I was very much hoping it was not a Harvard clerk.)
However, what most fascinated me about the entire episode was not Scalia’s initial mistake, but the Court’s procedures for correction. The only reason the public knew about this particular correction was because Justice Scalia’s initial error had been so widely publicized, which was what in turn led me and others to spot the correction and publicize that as well. Otherwise, the correction was made entirely without the Court itself providing any notice. The slip opinion that appeared on the Court’s website was simply different from the one appearing the very next morning.
I was likely more focused on the Court’s process for correction because at that very moment, I had just completed a law review article on the Court’s longstanding, but wholly unappreciated, practice of revising slip opinions in just this kind of clandestine manner. And, not just dissenting opinions as in EME Homer, but also majority opinions of the Court. The Court has literally always done this sort of thing, although no one had ever called them out on it.
I first became aware of the practice as a lawyer for the U.S. Department of Justice in 1987 when, at EPA’s prompting, we urged the Court to correct a “mistake” in its original slip opinion in International Paper Co. v. Ouellette, a significant Clean Water Act case, because of EPA’s concern that certain language in that opinion mischaracterized the role of citizen suits. At our client’s urging, my then-boss, the Solicitor General, formally notified the Court of this “formal error” and the Court changed the language, precisely as we recommended, to eliminate the issue. As a result, the language appearing several years later in the bound volume of the U.S. Reports differed substantively from the original slip opinion language. No notice of this change was given, including to any of the parties in the case. The U.S. had participated as an amicus.
When this happened in 1987, I vowed someday to write on the topic. It took me only about 27 years to do so, and the upshot appeared a few days ago in a lengthy article published in the December 2014 issue of the Harvard Law Review. The article undertakes a full look at the Court’s practice, extending back to its earliest days until the present. (For example, Chief Justice Roger Taney added 18 pages to his opinion for the Court in Dred Scott v. Sandford in 1857, after the original opinion announcement.)
In my partial defense, not only did the necessary archival research require significant work over an extended time period, but the topic invariably took a backseat to other, seemingly more pressing, topics on which I was engaged. In all events, the final article is now available here, and includes discussion of EME Homer, International Paper Company, and other environmental cases.
Posted on December 15, 2014
"A long time ago in a [May 19, 1980 Federal Register] far, far away [or so it seems]", EPA declared its authority to regulate all hazardous secondary material, whether discarded or reused, under the Resource Conservation and Recovery Act (RCRA), and that it would exercise its authority to promote properly conducted waste reclamation. Ever since then, a kind of Empire/Rebellion struggle has played out over the scope and extent of broad based recycling exclusions to the RCRA solid waste definition.
Over the years, recycling exclusions generally focused on particular industries. However, EPA’s last final rule, issued in the October 30, 2008 Federal Register during the Bush administration, contained several much broader exclusions. Those exclusions covered a waste generator’s onsite recycling, offsite recycling in the U.S., and transfers of hazardous secondary materials for recycling conducted outside the U.S.
The 2008 rule prompted litigation from both industry and the Sierra Club. The Sierra Club also filed an administrative petition seeking EPA repeal of the final rule. On September 7, 2010, EPA reached a settlement agreement with the Sierra Club under which EPA agreed to issue a notice of proposed rulemaking and a final rule that addressed the Sierra Club’s concerns. EPA’s final rule announced on December 10 is the latest chapter in the ongoing saga.
The new final rule rolls back many of the Bush era provisions that minimized agency filings and involvement. It contains revisions to the onsite generator recycling exclusion, replaces the exclusion for offsite recycling in the U.S., eliminates the exclusion covering recycling outside the U.S., and introduces a new exclusion for recycling of certain solvents. It also contains some new requirements applicable to all recycling activities, and to new variances and non-waste determinations for recycled materials.
EPA’s new final rule is intended to provide greater safeguards against sloppy and sham recycling. These provisions address accumulation of hazardous secondary materials when there is no near term prospect for recycling, and require an up-front demonstration that the recycling process will generate a valuable product suitable for reuse. They also require offsite recycling by a facility with a Part B permit or interim status under the RCRA regulations, or by facility that has obtained a variance after meeting the same types of requirements imposed upon permitted and interim status facilities.
Offsite recyclers and waste generators engaged in onsite recycling must adopt new procedures that include notification and periodic updates of recycling activity, demonstration that the recycling is legitimate, documentation of when accumulation has commenced for the material being recycled, and compliance with recordkeeping requirements and with emergency response and preparedness procedures like those imposed on hazardous waste generators. In addition, the new rule provides a definition of “contained" that is intended to ensure proper storage of hazardous secondary materials.
Beside adding safeguards to two of the three exclusions instituted in 2008 and eliminating the third one, the new rule introduces an exclusion to cover the recycling of 18 commercial grade solvents. Under that exclusion, such solvents must be used in one of four industrial sectors that do not include waste management, and the remanufactured solvents must be employed for specified uses that do not include cleaning or degreasing.
The solvent exclusion is subject to notification and recordkeeping requirements similar to those contained in the previously described recycling exclusions. In addition, there must be compliance with the tank and container standards covering Part B permitted facilities and with air emission control requirements imposed under the federal Clean Air Act or, where not applicable, to the air emission standards covering Part B permitted facilities.
In its 2011 proposal, EPA sought to impose the new notification and containment requirements on facilities covered by a pre-2008 exclusion or exemption. In the preamble to its new rule, EPA has deferred adoption of those requirements have been deferred in order to more fully consider the comments and concerns that were raised. One pre-2008 exclusion that received particular attention is scrap metal recycling, since scrap metal being recycled may be left on the ground rather than in a receptacle.
This link summarizes the new provisions and identifies a few other items of interest.
Posted on December 12, 2014
Even before the Republican sweep of the mid-term elections in November 2014, working for the Federal Government in general and EPA in particular has not been – shall we say – always “fun” for the typical federal employee. Regardless of the party in power, federal employees always play the whipping boy (or girl) for any politician trying to make a point. When your agency is in the lead on making headline-grabbing news that enflame the core on the right and the left, such as with EPA, the invective target is placed squarely on that Agency, and by extension, its employees.
For many of the last dozen years, EPA has been accused of being a job-killer on one hand and indifferent to the health impacts of pollution on the other. More recently it has become the poster child for supposed incompetence when it comes to the basic tenets of good management by keeping porn-watchers, phony spies, and “healthy-but-still-on-medical leave” personnel on the payroll. It has seen its staffing cut by almost 15%.
Of EPA’s 14 Senate-confirmed positions, six are held by career employees in an “acting” capacity; and two are simply vacant. Senior agency officials point to employee morale as their primary management concern. With expectations of an increase in Washington gridlock and an accompanying increase in oversight hearings likely on the full panoply of Agency programs, the next two years will be particularly hard on EPA.
While some might simply say “oh pity the poor EPA employee”, I believe there will be a practical impact on companies because of this gridlock and “fed-bashing”. In addition to personnel reductions already in place, over 30% of the approximately two million civilian Federal workers are eligible for retirement.
This could result in a severe “brain drain” as employee morale continues to plummet in the face of constant Congressional investigations, criticism and budget cuts. This also will result in seasoned and experienced personnel being replaced by younger and significantly less experienced employees.
Highly regulated companies usually have anywhere from dozens to thousands of weekly contacts with their Federal regulators, usually for routine operating, permitting and approval questions and approvals. As experienced personnel are replaced by those who are less experienced, or in many instances not replaced at all, these routine business activities will increasingly be subject to delays which may ultimately have serious impacts on the company.
Company estimates for a major capital improvement could be off by months and millions of dollars if an experienced Agency permit writer retires and is either not replaced or is replaced by someone totally unfamiliar with either the program under which the permit is written or the company’s operations. In this respect the gridlock between Congress and the President has a more granular and underappreciated impact on such a company than merely being the grist for the Sunday news shows’ debates on Washington DC’s dysfunctional approach to government.
Posted on December 11, 2014
A thought occurred to me recently, and not for the first time, about the decisions of the New Jersey state judiciary, including our Supreme Court, in the area of environmental law generally and site remediation particularly. My realization was that those decisions are driven as much by a desire to facilitate the remediation of contaminated sites as they are by principled interpretation of statutes, regulations, canons of construction and the like.
Such an approach, of course, is understandable on one level, as New Jersey environmental statutes are ameliorative in nature, a cleaner environment is in the interest of everyone, and our fair state has suffered environmentally from its industrial legacy more than most jurisdictions. But on a deeper level, courts are supposed to decide cases in accordance with law, and deciding cases with a particular goal in mind may result in an injustice to the litigants. Moreover, fuzzy reasoning could provide inaccurate guidance to the bar and public.
In one recent case, for example, the Supreme Court of New Jersey was called upon to determine the degree of causation that the New Jersey Department of Environmental Protection (“NJDEP”) needed to establish in order to impose liability on a discharger of hazardous materials. Rather than simply requiring proximate cause, the court hemmed and hawed its way along, formulating the appropriate standard at various points as a “real, not hypothetical” connection, and as a “reasonable nexus or connection” between the alleged discharger and the discharge.
The Court ultimately held that the standard of causation needed to establish liability varies with the form of relief requested. Unfortunately, the Court provided no support for this approach, which conflates the proof needed to establish liability with what is necessary to impose damages. This leads to the conclusion that the Court was reluctant to impose a difficult burden of proof on the state and, presumably, private litigants which could result in judgments for defendants and hence, in the Court’s view, deter remediation of contaminated sites.
In another recent case, the Supreme Court had to determine the interplay between the jurisdiction of a state agency and state trial courts in adjudicating liability for site remediation. The Court reversed the trial and appellate courts and held that a litigant could seek relief in court before the contours of the remediation had been firmly established.
Undergirding the Court’s reasoning was pragmatism – the earlier we allow a contribution plaintiff to pursue other responsible parties, the more the defendants will be encouraged to participate in the remediation process, thereby facilitating more and faster cleanups. While the result was correct as a matter of existing law, the reasoning was weighted far too heavily with an eye towards the result.
Finally, in a case that recently was argued and awaits adjudication, the Supreme Court was asked to determine whether a statute of limitations exists under the New Jersey Spill Compensation and Control Act, our state’s CERCLA analog, and, if so, how long it is and when it begins to run. Implicit in many of the questions the Court asked the advocates was which resolution would facilitate the faster remediation of more sites – no statute of limitations at all, which would allow remedial claims to be brought at any time and not foreclose an action, or a limitations period which would incentivize the plaintiff and defendants to move forward more quickly to clean up sites.
Remediating the environment, and making sure responsible parties are held to their obligations, are plainly laudable goals. But a little less focus on the ultimate environmental outcome and greater adherence to the principles of adjudication, statutory interpretation and the like would improve the quality of justice without sacrificing environmental protection.
Posted on December 10, 2014
On December 2, 2014 the United States District Court for the Eastern District of Arkansas enjoined the Small Business Administration (SBA) and the Farm Service Agency (FSA) (together the “Agencies”) from making any payments on their loan guaranties to Farm Credit Services of Western Arkansas (Bank), pending the Agencies’ compliance with the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). The Bank had loaned nearly $5 million to C&H Hog Farms, Inc. (C&H) in 2012 for the construction of a confined animal feeding operation (CAFO), collateralized by a guaranty from the United States.
The court’s decision paves the way for potential alteration of the collateral agreement terms, over two years after the non-party Bank had closed and funded the loan. Such court action could jeopardize the farm loan guaranty program.
In its decision the court found that the SBA failed to conduct any environmental review of its loan guaranty or to consider the impact of that loan on the endangered Gray Bat that resides in an area near the CAFO, and that the FSA’s environmental impact and endangered species reviews were inadequate; the Agencies’ actions thereby violated both NEPA and ESA. The court’s injunction precludes the Agencies from making any payment on their loan guaranties to the Bank until they have complied with their obligations under NEPA and ESA, giving them a year to do so.
In August of 2012, and as provided under state regulation, C&H received a General No Discharge Permit (Permit) from the Arkansas Department of Environmental Quality (ADEQ) that addresses the management of manure, litter, and process wastewater generated from the CAFO. The Permit authorizes up to 6503 swine, at a location along a creek that discharges to the Buffalo National River, the nation’s first national river.
Upon completion of FSA’s review process and issuance of a Finding of No Significant Impact in August 2012, C&H obtained an initial construction loan of $3.6 million, 75% of which was guaranteed by SBA. C&H later received a $1.3 million loan, with 90% of that loan guaranteed by FSA. Both loan guaranties were required by the Bank. The loans were funded, construction was completed, CAFO operations commenced, and C&H has been making timely loan payments.
In August of 2013 the Buffalo River Watershed Alliance and several other organizations sued the Agencies, alleging that the CAFO permit contemplated at least occasional discharges of waste into surface waters that could pollute the Buffalo National River, and that the Agencies had violated NEPA, ESA, and certain other federal requirements. The plaintiffs requested that the loan guaranties be enjoined, pending a further environmental review. On December 2, 2014 an injunction was issued. C&H and the Bank were not parties to the litigation.
The significance of this decision is not the finding of a NEPA or ESA violation. What is surprising, and noteworthy, is the Court’s conclusion that such agency action was sufficiently related to a loan arrangement between two entities that were not party to the suit, leading to possible rewriting of that loan two or more years after it was negotiated and closed, and the funds dispersed.
The court concluded there was a sufficient causation nexus because “[w]ithout the guaranties, there would’ve been no loans. Without the loans, no farm.” In addition, the Court concluded that requiring further NEPA and ESA review would in fact redress the plaintiffs’ injuries for the loans already made since the Agencies have an “ongoing role in monitoring any conditions placed on their guaranties,” thereby suggesting that further restrictions could well be placed on C&H’s operation of the CAFO.
The Agencies have now agreed to undertake the additional review within the mandated 12 month time period. That review may result in no additional restrictions, or in restrictions that C&H can carry out without difficulty. With C&H being current on its loan payments, this decision may ultimately have no practical impact on C&H or its Bank. However, the “oh my” scenario is equally possible, because the court’s decision has no limits on the scope of additional restrictions that may be imposed.
As noted by the court, “[t]he federal agencies, through guaranty conditions, have control over C&H’s case-relevant behavior” and “it’s likely that more environmental review will change how C&H operates its farm.” If C&H is unable to meet those restrictions, resulting in a loan default, the Bank will lack the guaranty it required to fund the loan in the first place. Thus, the court has authorized the guarantor to re-write the terms if its guaranty, post hoc, to the severe detriment of the non-party Bank.
With a six year statute of limitations on filing a NEPA claim, what farm loan guaranty is safe from being altered or eliminated as a result of judicial action? Will Old MacDonald be prohibited from obtaining next year’s crop loan until the Agencies complete an EIS, a process that will take a year to complete and likely cause him to miss the planting season?
And what about other endangered species that could implicate the validity of other farm loan guaranties? EPA’s proposed habitat designation for two newly listed endangered mussels will encompass over 40% of the area of the state of Arkansas, impacting one third of all property owners in the state, most of which are farmers.
In addition, the broader implications of this decision on security interests cannot be overlooked. There were no parties in the litigation to argue that relieving the United States from its debt/collateral obligation would unfairly reward the Agencies for their failure to comply with NEPA and ESA. The Agencies certainly did not advance that argument. In fact, the injunction is what the Agencies requested, the court noting that its “Order will follow generally the terms [of the injunction] suggested by [the Agencies].” The Court even ordered the Agencies to “modify or void the loan guaranties as they deem appropriate in light of their revised and supplemented NEPA and ESA analysis.” The impact upon the agricultural loan program is clear, since these loans are routinely traded as federally insured securities.
The Arkansas Farm Bureau has succinctly identified the potential implications of this decision: “[The opinion] probably just made it a whole lot harder for the next guy who’s trying to get a farm loan, regardless of where they are.” You can take that to the bank—or not!
Posted on December 5, 2014
The 468 megawatt Cape Wind project, slated for construction in federal waters off the coast of Massachusetts in Nantucket Sound, is the first offshore wind project to be proposed and approved in the United States. The project has strong support from the Commonwealth of Massachusetts, many national, state and local environmental groups, organized labor and many others.
But being the first in an innovative venture is always difficult, and unsuccessful litigation by project opponents – some funded in large part by billionaire Bill Koch – has slowed the pace of the project. By Cape Wind’s count, thirty-two cases have been filed by project opponents. Cape Wind has ultimately prevailed in all of these actions.
A recently issued but unheralded district court decision now signals yet another legal victory for Cape Wind.
In April 2010, after a lengthy and comprehensive environmental review and permitting process which included preparation of two environmental impact statements, the U.S. Department of Interior approved the Cape Wind project. Project opponents then filed three complaints in the United States District Court for the District of Columbia.
The complaints, which were ultimately consolidated, challenged approval of the project by various federal agencies and alleged violations of the National Environmental Policy Act (NEPA), the Endangered Species Act, the Migratory Birds Treaty Act, the National Historic Preservation Act, the Outer Continental Shelf Lands Act, and the Coast Guard and Maritime Transportation Act of 2006.
Cape Wind intervened in the actions as a defendant-intervenor. Because of the project’s clean energy significance, NRDC attorneys (including me), joined by the New England-based Conservation Law Foundation and Mass Audubon, the state’s leading wildlife protection organization, filed two “friend of the court” briefs in support of the project.
In March 2014, U.S. District Court Judge Reggie Walton issued an 88-page decision granting summary judgment to the defendants, rejecting the bulk of opponents’ challenges to the federal government’s 2010 approval of the project. The court dismissed outright a host of claims that related to the government’s environmental review of the project under the National Environmental Policy Act and to the Coast Guard’s review of navigation issues under the Outer Continental Shelf Lands Act.
The court remanded two limited issues back to the federal agencies. First, it directed the U.S. Fish & Wildlife Service (FWS) to make an independent determination about whether a potential operational adjustment for the project was a “reasonable and prudent measure”. The court explained that it was unable to tell, based on the record, whether the Fish & Wildlife Service had made an independent determination or had adopted a position taken by a sister agency.
Second, the court directed the National Marine Fisheries Service (NMFS) to issue an incidental take permit covering right whales. While the NMFS biological opinion stated that the project “was not likely to adversely affect right whales” and that “incidental take was not likely to occur,” the court found that the opinion did not state that an incidental take would not occur or determine the volume of any potential take.
After the court’s decision, the two federal agencies complied with the district court’s instructions. FWS issued its independent determination with respect to the potential operational adjustment. NMFS amended the incidental take opinion to state that no take of right whales was anticipated, and thus the incidental take amount for this species could be set at zero.
However, that did not end the matter. As the district court noted in its September 12, 2014 order, “history should have forewarned that any attempt to bring this [protracted] litigation to an expeditious conclusion would prove difficult.” And as expected, the plaintiffs filed a supplemental complaint challenging the two agencies’ actions on remand.
On November 18, 2014, the district court dismissed the plaintiffs’ supplemental complaint. The court made short work of the claims, finding them all to be barred – some because they had been previously waived or abandoned and some because the Court had previously considered and rejected them. Indeed, the court noted that some of the claims were “difficult to understand.” With that decision, this chapter in the long string of legal challenges was concluded, at the district court level at least. The plaintiffs filed a notice of appeal yesterday.
Meanwhile, the Cape Wind project continues to move forward. In July, the U.S. Department of Energy issued a conditional loan guarantee commitment for the project, the first step toward securing a $150 million loan guarantee. In August, the project selected its lead construction contractors. Construction is expected to proceed in 2015.
And Cape Wind’s example has spurred forward movement in the U.S. offshore wind industry. Currently, there are some fourteen offshore wind projects in an advanced stage of development along the East Coast and elsewhere, representing 4.9 gigawatts of potential renewable electricity capacity. Despite the protracted litigation, it’s my hope that Cape Wind, buoyed by its legal victories, will herald the start of a new renewable energy industry that will fully and sustainably tap into the United States’ huge offshore wind resource.
Posted on December 4, 2014
In December 1952, John W. Davis, the senior name partner in one of the nation’s most prominent law firms and the Democratic candidate for President in 1924, appeared before the Supreme Court. He was defending the long-established Constitutional doctrine of “separate but equal” in public education and urged “judicial restraint” in any effort to overturn the Court’s 1896 decision in Plessy v. Ferguson which had blessed that practice as a socially and legally acceptable way of reconciling the competing claims of human equality and social stability in the United States.
In May 1954, in Brown v. Board of Education, the Supreme Court unanimously reversed Plessy, finding that segregated schools were ‘inherently unequal”. The decision made possible a new America that, while still staggeringly unequal, is no longer premised on officially-sanctioned segregation of people by race.
Suppose John W. Davis had won his argument? What if the legions of respected and highly competent lawyers who represented southern states, towns and school districts had succeeded in their efforts to undermine the Brown decision by dragging out the Court’s injunction to dismantle segregation “with all deliberate speed” not simply for 20 years but for 50?
What kind of society would we be living in today if those efforts, supported by many years of precedent, deeply-held social beliefs and substantial economic interests, had succeeded? What role could the United States play in today’s world if we still sanctioned “separate but equal” treatment of our own citizens? How proud would those lawyers now be of their efforts to preserve a status quo that, as many of them must have known, had to fall for our nation to free itself of the legacy of slavery?
Climate change is not slavery or de jure racial segregation, though in truth it will affect the lives of hundreds of millions, perhaps billions, of people throughout the world for decades and quite likely centuries. But the failure of the United States to address its GHG emissions since the 1992 U.N. Framework Convention on Climate Change and the prospects for continuing litigation over even the modest EPA efforts now under way to restrict coal plant emissions can be viewed as a similar refusal to recognize the need for fundamental changes.
I believe that lawyers must at least consider whether they wish to be part of a scorched-earth litigation strategy to defer, for as long as possible, our nation’s efforts (and the efforts of other nations) to break free of reliance on coal, which has represented the single greatest source of the Earth’s increased GHG emissions since 2000.
John W. Davis surely believed he was behaving as lawyers should in defending his clients’ actions under then-prevailing law. However, I wonder whether, in retrospect, he would have preferred to be part of the solution instead of the continuing problem that still challenges our society.
If our nation today fails to confront climate change and the other nations of the world follow our dubious lead, how will future generations look at our profession’s role in that tragedy? How will we look at ourselves?
Posted on December 3, 2014
As my three prior blogs have discussed (see parts I, II, and III), the State of New Jersey has responded to Hurricane Sandy’s devastation in 2012 by escalating its efforts to construct sand dunes on its beaches to protect the shore communities beach front properties from repetitive coastal flooding. These cases have attacked the failure of the ensuing takings awards as not giving adequate compensation for the resulting partial loss of ocean view by the impacted homeowners or, by failing to reduce such awards to reflect the benefit the dunes would provide against future flooding in the future.
Now comes along a shore community, the City of Margate (in which this author owns a 10th floor vacation condominium), which filed a 16 page complaint (with 149 pages of exhibits) and asked the U.S. District Court of New Jersey to enjoin the NJ Department of Environmental Protection (NJDEP) and the U.S. Army Corps of Engineers (Corps) from trespassing on its residents properties by constructing dunes on Margate’s beaches. Despite the proposed takings being grounded in the Government’s power to protect the public health, safety and welfare, the Court issued a temporary restraining order (TRO) on November 24 in response to Margate’s Complaint alleging an “unlawful taking of Margate’s beachfront property”, required a bond of [only] $10,000.00 and scheduled a December 4, 2014 hearing to determine whether a preliminary injunction should be issued.
Stay tuned for further updates on this litigation which constitutes a challenge to the propriety of using sand dunes as an appropriate storm protection strategy for Margate, acknowledging that some preventive measures are necessary to deal with what will probably be recurring coastal flooding.
Posted on December 2, 2014
Back in September 2008, TransCanada Keystone Pipeline LP (TransCanada) filed what it probably thought at the time was a straightforward, routine application for a Presidential permit to build its Keystone XL pipeline. As almost everyone knows now, that pipeline would deliver thousands of barrels of Canadian crude oil to refineries on the U.S. gulf coast. The project appeared to be straightforward because the environmental review process required by the National Environmental Policy Act (NEPA) has been honed over many years. If not exactly expeditious, the NEPA process is well known and often used. And the project appeared to be routine because there are many pipelines that already cross U.S. territory.
Yet, six years later, there still is no final decision on a permit. The review process has ballooned into an intricate one, attracting legislative and judicial attention and intervention at both the state and federal levels, not to mention increased public awareness. Normally, one would expect increased public attention and awareness to lead to better decision-making and hopefully that will be the case here. My question, though, is whether this public participation could have been integrated into the NEPA process earlier. A follow-up question might be whether it would have mattered once politics took over.
The delay in completing this project review is undoubtedly frustrating for many and has created a “moving target” conundrum with many other decision-makers now involved. Even with a decision by the Nebraska Supreme Court and a final Presidential decision on the permit, the congressional and federal legal challenges are unlikely to end. Has this project become so politicized that there can be no public confidence in the eventual outcome? Would there have been a better way to encourage public participation earlier?
Nebraska could have gotten involved sooner. The federal NEPA regulations allow a State or local agency “which has jurisdiction by law or special expertise with respect to any environmental impact involved in a [proposed project]” to become a cooperating agency, with the federal lead agency conducting the federal NEPA review. In 2009, the Department of State invited local governments to weigh in on the permitting process for the Keystone XL pipeline under NEPA by becoming a cooperating agency.
At that time, the pipeline route debate had not yet arisen and Nebraska could still participate in the NEPA process by providing comments. In addition, the federal NEPA regulations normally require a cooperating agency to use its own funds. Nebraska’s ability to fund its own NEPA-like review of the project was severely limited since the state had no similar NEPA-like requirement or source of funding at that time. Given the lack of controversy early on, the extra expense of becoming a cooperating agency seemed unnecessary when the opportunity to offer comment was an option.
Would Nebraska involvement at that earlier time have made a difference? It’s hard to say. Opposition to the pipeline route in Nebraska only started to come together when the Final Environmental Impact Statement (EIS) came out in August of 2011 and TransCanada began contacting local landowners to obtain easements. The growing opposition led to Nebraska legislation essentially creating a cooperating role for Nebraska by providing adequate funding for preparation of a report to supplement the federal EIS. That report was published in January 2013.
In addition to Nebraska’s actions, the U.S. Department of State determined that more information was needed about alternative routes to avoid the environmentally sensitive Sand Hills region of Nebraska. This prompted Congress to adopt a provision forcing Presidential action on the 2011 EIS within 60 days.
The President then denied the permit for the reason that it didn’t allow sufficient time to review the proposed alternative route through Nebraska. TransCanada re-applied in May 2012 with a proposed new route through Nebraska. This led to more state legislation, state legal challenges, a supplemental report issued by Nebraska in 2013, and a Final Supplemental EIS issued by the U.S. Department of State. But, there’s still no permit decision, as most parties are awaiting a final decision by the Nebraska Supreme Court on the constitutionality of the state legislation.
This looks more like a schizophrenic chess match than responsible government. Is it just government avoiding a difficult and controversial decision? But, with so many wrenches thrown into this particular NEPA review, how could we expect the process to reach a final resolution in a timely manner? It is rare these days to find any public policy being made in a forthright and timely manner without competing vested interests impeding the administrative process in any number of “legitimate” ways. Unfortunately, environmental issues are no different in this respect than immigration or health care. The Keystone XL pipeline is only one example where our Constitutional construct has given us lots of “checks” without much balance.