The Deck is Still Stacked in the Government's Favor -- Is This A Good Thing?
Last week, in City of Pittsfield v. EPA, the First Circuit Court of Appeals affirmed denial of a petition by the City of Pittsfield seeking review of an NPDES permit issued by EPA. The case makes no new law and, by itself, is not particularly remarkable. Cases on NPDES permit appeals have held for some time that a permittee appealing an NPDES permit must set forth in detail in its petition basically every conceivable claim or argument that they might want to assert. Pretty much no detail is too small. The City of Pittsfield failed to do this, instead relying on their prior comments on the draft permit. Not good enough, said the Court.
For some reason, reading the decision brought to mind another recent appellate decision, General Electric v. Jackson, in which the D.C. Circuit laid to rest arguments that EPA’s unilateral order authority under § 106 of CERCLA is unconstitutional. As I noted in commenting on that decision, it too was unremarkable by itself and fully consistent with prior case law on the subject.
What do these two cases have in common? To me, they are evidence that, while the government can over-reach and does lose some cases, the deck remains stacked overwhelmingly in the government’s favor. The power of the government as regulator is awesome to behold. Looking at the GE case first, does anyone really deny that EPA’s § 106 order authority is extremely coercive? Looking at the Pittsfield case, doesn’t it seem odd that a party appealing a permit has to identify with particularity every single nit that they might want to pick with the permit? Even after the Supreme Court’s recent decisions tightening pleading standards, the pleading burden on a permit appellant remains much more substantial than on any other type of litigant.
Why should this be so? Why is it that the government doesn’t lose when it’s wrong, but only when it’s crazy wrong?
Just askin’.
A Combined Superfund and Stormwater Rant
Sometimes, the practice of environmental law just takes my breath away. A decision issued earlier last month in United States v. Washington DOT was about as stunning as it gets. Ruling on cross-motions for summary judgment, Judge Robert Bryan held that the Washington State Department of Transportation had “arranged” for the disposal of hazardous substances within the meaning of CERCLA by designing state highways with stormwater collection and drainage structures, where those drainage structures ultimately deposited stormwater containing hazardous substances into Commencement Bay -- now, a Superfund site -- in Tacoma, Washington. 
I’m sorry, but if that doesn’t make you sit up and take notice, then you’re just too jaded. Under this logic, isn’t everyone who constructs a parking lot potentially liable for the hazardous substances that run off in stormwater sheet flow?
For those who aren’t aware, phosphorus, the stormwater contaminant du jour, is a listed hazardous substance under Superfund. Maybe EPA doesn’t need to bother with new stormwater regulatory programs. Instead, it can just issue notices of responsibility to everyone whose discharge of phosphorus has contributed to contamination of a river or lake.
The Court denied both parties’ motions for summary judgment regarding whether the discharges of contaminated stormwater were federally permitted releases. Since the Washington DOT had an NPDES permit, it argued that it was not liable under § 107(j) of CERCLA. However, as the Court noted, even if the DOT might otherwise have a defense, if any of the releases occurred before the permit issued – almost certain, except in the case of newer roads – or if any discharges violated the permit, then the Washington DOT would still be liable and would have the burden of establishing a divisibility defense.
If one were a conspiracy theorist, one might wonder if EPA were using this case to gently encourage the regulated community to support its recent efforts to expand its stormwater regulatory program. Certainly, few members of the regulated community would rather defend Superfund litigation than comply with a stormwater permit.
You can’t make this stuff up.
A Bridge Too Far? EPA's War on Lead-Based Paint Takes Aim at Commercial Buildings
No one doubts that EPA’s war on lead-based paint serves the cause of mitigating an established health threat. With children being particularly at risk, the regulations to date have focused on lead-based paint in older homes and other “child-occupied facilities.” On May 6, 2010, however, EPA gave notice of its intent to take the battle to an undefined set of commercial and public buildings. Can a full-scale assault on commercial facilities, which will involve a more complex set of regulatory variables and which will venture farther from the core health risk concerns, succeed in achieving a proper balance of competing factors?
EPA’s May 6, 2010 Advance Notice of Proposed Rulemaking announcing the next step in the lead-based paint campaign was published only days after the April 22, 2010 effective date of the controversial Renovation, Repair and Painting Rule (“RRP Rule”). That rule regulates renovation and repair activities disturbing lead-based paint in older homes and child-occupied facilities. The RRP Rule affects contractors, landlords and others who perform RRP work for compensation.
The RRP Rule includes provisions for the required certification (for a fee) of firms performing covered RRP work, the training and certification (at a significant cost) of “Certified Renovators” through EPA-accredited classes, the required use of detailed RRP work practices when performing covered activities, the retention of compliance records, and the verification of compliance with work practice obligations. Even though the RRP Rule has a relatively narrow focus - residences and other child-occupied facilities - its requirements have generated substantial controversy.
Because the RRP Rule applies to numerous trades and contractors, as well as to certain landlords and other persons, issues related to obtaining the required training, safe implementation of the work practice requirements, costs of compliance and the possibility of a $37,500 per day, per violation penalty are only now being confronted by the regulated community as well as the regulators. Small contractors may be forced out of business, impacting competition. Needed RRP work may not be performed due to cost. Lead-contaminated waste disposal will create new environmental/health problems partially offsetting the benefits of the RRP Rule. Suffice it to say, EPA has not yet solved the numerous problems and complexities of implementing even these regulations focused on older homes and child-occupied facilities.
With this background, and setting aside for the moment legal mandates, one can reasonably question whether EPA is prepared to set its sights on a significantly more complex regulatory challenge- the renovation and repair of an estimated two to three million commercial and public facilities constructed prior to 1980. The ANPR includes no proposed language. Rather, the public is invited to respond to over 100 detailed questions and data requests.
At this time, the scope of EPA’s assault on the renovation and repair of commercial and public buildings is unknown. No current limitations on covered “commercial” and “public” buildings exist and both exterior and interior renovation and repair work are included in the ANPR. Unresolved questions include: What renovation and repair work should be covered? What activities create the most risk? Should exposure pathways be broadened to include nearby properties? How should the substantial amount of lead-contaminated waste be handled to avoid creating a different health and environmental hazard?
This much is known. The regulatory variables associated with extending the war on lead-based paint to commercial and public buildings are more numerous and the targeted health risks have expanded. I suggest that there is a real possibility that the regulations could fail to appropriately balance the legitimate interests of contractors, building owners and the public with the known and perceived health risks. Let us hope that the regulated community weighs-in on these issues and that the EPA gives careful thought to this next step in its campaign against lead-based paint.
The public comment period for this proposal ends July 6, 2010.
EPA Issues a New Policy on Superfund Negotiations: Time For Another Rant?
Late last week, Elliott Gilberg, Acting Director of EPA’s Office of Site Remediation Enforcement (OSRE) issued an Interim Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations. Members of the regulated community may not be surprised by the contents of the memo, but they certainly will not be pleased. In brief, the memorandum fundamentally makes two points:
EPA wants to shorten the duration of RD/RA negotiation
EPA is going to use the heavy hammer of unilateral administrative orders, or UAOs, to keep PRPs’ feet to the fire and ensure that negotiations move quickly.
PRPs will likely agree that shortening the duration of negotiations would be a good outcome in the abstract – but achieving it by greater use of UAOs? I don’t think so.
I can only wonder if EPA has even considered the impact of the Burlington Northern decision here. Is this a perverse reaction from EPA? A metaphorical throwing down the gauntlet to PRPs? It certainly feels that way.
I have a different suggestion, if EPA truly wants to shorten negotiations. First, acknowledge Burlington Northern and compromise on the merits in those great majority of cases where there are legitimate divisibility arguments. Second, stop acting like the last bastion of command and control regulation. Set cleanup standards and then, to the maximum extent permitted by existing law, let PRPs clean up to those standards, without micromanaging every detail of the cleanup process.
A Rant Against Superfund
As some of my clients know all too well, I’ve been spending a lot of time on some Superfund matters recently. Although I can’t remember a period when I didn’t have at least one moderately active Superfund case, significant immersion in complex remedial decision-making and negotiations provides an unwelcome reminder just how flawed CERCLA is. Almost 20 years after the acid rain provisions of the Clean Air Act ushered in wide-spread acceptance of the use of market mechanisms to achieve environmental protection goals and the state of Massachusetts successfully privatized its state Superfund program, the federal Superfund program, like some obscure former Russian republic which remains devoted to Stalinism, is one of the last bastions of pure command and control regulation.
Continue Reading...Environmental Site Assessment Flexibility or Further Complexity? EPA Adopts Forestland and Rural Property Phase I Standard Practice
On December 23, 2008, EPA issued a direct final rule amending the “All Appropriate Inquiries Rule” [Standards for Conducting All Appropriate Inquiry]by adopting ASTM International’s “Standard Practice for Environmental Site Assessment Process for Forestland or Rural Property” (ASTM E2247-08) [EPA Amendment to AAI Rule]. ASTM E2247-08 was published after EPA promulgated the All Appropriate Inquires (AAI) rule and is specifically tailored to conducting Phase I environmental site assessments of large tracts of rural and forestland property. EPA’s action incorporates the ASTM E2247-08 forestland and rural property assessment practices as a federal standard for establishing the AAI component of the bona fide prospective purchaser, contiguous property owner and innocent landowner defenses to CERCLA owner/operator liability.
Continue Reading...EPA Attempts to Increase Recycling by Redefining Solid Waste
73 Fed. Reg. 64668 (Oct. 30, 2008) to be codified at 40 C.F.R. 260-261
On October 30, 2008, the EPA revised the definition of solid waste to exclude certain recycled materials under RCRA. The purpose behind this change is twofold: first is to respond to a series of decisions by the U.S. Court of Appeals for the DC Circuit and second is to clarify the RCRA concept of "legitimate recycling." The EPA estimates that 5600 facilities in 280 industries in 21 economic sectors may be affected by this revision and expects that the revision will encourage recycling of additional hazardous secondary materials. Exclusion of certain hazardous secondary materials from the definition based on how they are reclaimed should result in resource conservation, as well as cost savings to those who engage in beneficial recycling/reclamation in accord with the new rules.
Continue Reading...ALABAMA JOINS OTHER STATES IN ENACTING UNIFORM ENVIRONMENTAL COVENANTS ACT
Alabama joined a number of other states dealing with environmental covenants when it enacted the Alabama Uniform Environmental Covenants Act, effective January 1, 2008. Ala. Code§35-19-1 et seq. (“Act”).The Alabama Department of Environmental Management (“ADEM”) has been working on implementing regulations, which are expected to mimic the Act and be released in the next few months. ADEM will also charge a fee for implementation and oversight of the program and covenants.
For those not familiar with the concept, in many situations environmental contamination cannot be completely addressed by total removal (clean closure) of the offending soil or remediation of the groundwater to a level allowed for unrestricted use. Some amount or concentration of contamination must be left behind. In those situations, EPA and ADEM will require additional measures, such as land use controls or continuing monitoring and maintenance. The idea is that if property has contamination on it unsuitable for a residential housing development or the construction of a school, those interested in buying or developing the property are put on notice of the limit of the property to commercial or industrial use. These controls and obligations are often embodied in deed restrictions or recorded declarations which could be terminated by various common law mechanisms; therefore, the Uniform Environmental Covenants Act was created to provide a mechanism by which environmental covenants and land use restrictions survive the potential fatal operations of the common law. States were encouraged to adopt the uniform act, and Alabama has now done so.
An “Environmental Covenant” is defined as “[a] servitude arising under an environmental response project that imposes activity and use limitations.” Ala. Code § 35-19-2(5). Such “environmental response projects” can arise under state or federal hazardous waste cleanup laws, such as CERCLA, RCRA, or Alabama’s version of brownfields.
Before the Act was passed, ADEM still required a restrictive covenant or deed of some kind when contaminants were being left behind, but it was never sure what might happen to the restriction upon a subsequent sale of the property because it had no enforcement authority. If the property changed hands several times, there was no manner by which ADEM could require the Seller and the Buyer to maintain that restriction as a part of the sale. With the Act, there is a “holder” of the covenant which can enforce the covenant, and ADEM has enforcement power even if it is not a holder. A holder can be any person, a governmental agency (such as ADEM), an environmental group, or a unit of local government. The interest of a holder is considered to be an interest in real property; however, the Department’s interest in a covenant, unless it becomes a holder, will not be considered to be an interest in real property. There are certain elements that each covenant must meet in order to be effective, and those are clearly set out in the Act. Importantly, each environmental covenant requires at least one holder, and a holder can be the fee simple owner and/or the grantor of the covenant.
If, at the time an environmental covenant is recorded or registered, the Act does not abrogate the common-law doctrine of “first in time, first in right” as it relates to prior and valid property interests. If there are other interests in the subject real property with priority over the covenant, unless the prior interest in the property is made subordinate to the covenant by the owner of such interest, then the prior interest is not affected.
The grantor of an environmental covenant has a statutory responsibility to notify certain persons or entities of the covenant. Specifically, the grantor must provide a copy of the covenant to (i) each person signing the covenant; (ii) each person with a “recorded interest” in the subject property; (iii) each tenant or person in possession of the subject property; and (iv) each county or municipality in which the real property is located (normally the county or municipal office where deeds are recorded, such as the probate office). You also have the option of filing the covenant with ADEM (it keeps a registry), and then filing a notice with the county probate office in lieu of the entire covenant.
Environmental covenants are perpetual although there are exceptions set out in the Act, such as if the covenant itself has a specified length of time, a condition allowing termination is satisfied, or a court is petitioned for its modification. Of course, one always has the option of conducting additional remediation of the property to reach unrestricted use standards, which would then allow for termination of the covenant.
The author wishes to acknowledge the contributions made to this article by Bryan Nichols of Maynard, Cooper & Gale, P.C.
