Is United Haulers the Final Word on Local Flow Control?
The most recent Supreme Court examination of the validity of solid waste flow control ordinances under the dormant Commerce Clause occurred in United Haulers Ass’n v. Oneida-Herkimer Solid Waste Management Authority, 550 U.S. 330 (2007). In United Haulers, the Court held that flow control ordinances which favor a state-created solid waste authority, but treat in-state and out-of-state private entities the same, ‘do not “discriminate against interstate commerce” for purposes of the dormant Commerce Clause.’ Id. at 345. In such case, the validity of a nondiscriminatory ordinance with an incidental effect on interstate commerce is analyzed under balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). Id. at 346. However, if the flow control ordinance favors a single private entity over other private entities, the holding in C & A Carbone, Inc. v. Clarkstown, 511 U.S. 383 (1994), controls. Id. at 341.
United Haulers has been the linchpin for local governments to launch flow control ordinances. However, although the United Haulers decision upheld the validity of a flow control ordinance against a commerce clause challenge, the decision was based on an ordinance that was expressly authorized by the New York legislature and which required the disposal of solid waste at a landfill operated by a solid waste authority created by the New York legislature. In United Haulers, the New York legislature enacted specific legislation which allowed Oneida and Herkimer Counties to “impose ‘appropriate and reasonable limitations on competition’ by, for instance, adopting ‘local laws requiring that all solid waste . . . be delivered to a specified solid waste management-resource recovery facility.’” Id. at 335. Additionally, the flow control ordinance in United Haulers directed that all waste in Oneida and Herkimer Counties be disposed of at the Oneida-Herkimer Solid Waste Management Authority (“Oneida-Herkimer Authority”), which was created by the New York legislature and was therefore a political subdivision of the state. Id. at 335. As such, under United Haulers, it is clear that a local flow control ordinance authorized by state legislation and directing solid waste to a public waste authority created by state legislation does not violate the commerce clause if it satisfies the Pike balancing test. It is likewise clear that a flow control ordinance which directs all solid waste generated within the boundaries of a local government to be directed to a privately-owned facility is still controlled by the holding in C & A Carbone, Inc. v. Clarkstown and invalid. 511 U.S. at 391. However, the United Haulers decision does not specifically address the significance of the authorization for the flow control ordinance by the New York legislature.
According to a 1995 EPA report to Congress, state legislatures in 35 states have expressly authorized the enactment of flow control ordinances by local governments. For those states in which flow control is not expressly authorized by the state legislature, it is unclear whether a flow control ordinance enacted by a subdivision of the state would withstand a commerce clause challenge. At the very least, the absence of state authorization for flow control measures may affect the analysis of certain elements under the Pike balancing test. Additionally, in states in which the state legislature has not expressly authorized the enactment of flow control ordinances by local governments, a local flow control ordinance could be preempted by state solid waste laws and therefore invalid even if it does not violate the commerce clause; thus, leaving open the question of whether or not United Haulers has opened the door forever on local flow control.
At least one frontal challenge to local flow control is pending in S.C. In Sandlands, LLC, et al. vs. Horry County, et al., Case No. 4:09-cv-01363-TLW-TER (currently pending in United States District Court in the District of South Carolina), a landfill and affiliated hauling company are challenging a county’s ability to restrict the exportation of waste to out-of-county landfills on commerce clause and preemption claims. The plaintiffs are attempting to distinguish United Haulers as well as arguing that the ordinance is preempted by State law. The impacts of the ordinance are being felt on disposal facilities in the region as the State has implemented a regional planning approach for siting disposal facilities. While the defendants removed the commerce clause question to federal court, the federal court has certified and the State Supreme Court has accepted the preemption question.
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’.
Alabama Court Dismisses CERCLA Section 107 Claims for Compelled Cleanup Costs
On July 2, 2010, the U.S. District Court for the Northern District of Alabama published a must read opinion regarding cost recovery claims under CERCLA. See Solutia, Inc., et al. v. McWane, Inc., et al., Case No. 03-1345, Document No. 622 (N.D. Ala. July 2, 2010).The case was originally filed by plaintiffs in 2003 as a CERCLA cost recovery and contribution action against several industrial defendants located in Anniston, Alabama related to plaintiffs' cleanup of historic PCB contamination throughout the Anniston area. In June 2008, the Court had previously granted defendants' motion for summary judgment regarding plaintiffs' CERCLA Section 113 claims for contribution but had allowed plaintiffs to proceed with their CERCLA Section 107 cost recovery claims. However upon motion for reconsideration, the Court on July 2 issued a detailed opinion also dismissing with prejudice plaintiffs’ cost recovery claims under Section 107.
Of interest to CERCLA practitioners, the dismissal opinion provides a lengthy analysis, based on recent Circuit Court decisions, as to whether a plaintiff who seeks to recover costs of a cleanup performed pursuant to obligations under a consent decree or administrative settlement (aka “compelled” cleanup costs) can bring a claim under Section 107(a)(4)(B). Notably, the U.S. Supreme Court did not decide the appropriate route for recovering “compelled” costs (under Section 107(a), 113(f), or both) in its most recent opinion addressing CERCLA Sections 107 and 113. United States v. Atlantic Research Corp., 551 U.S. 128 (2007). Nevertheless, the Northern District of Alabama agreed to reconsider defendants' motion to dismiss plaintiffs' Section 107 claims in light of Circuit Court decisions issued subsequent to Atlantic Research as well as new evidence. Indeed, the Court agreed with the defendants' assessment that the majority of Circuit Court decisions decided after the Northern District’s previous denial of defendants’ motions for summary judgment have held that a party who incurred “compelled” cleanup has a viable Section 113 claim for contribution and not a Section 107 claim for cost recovery.
Ultimately the Court concluded that the recent Circuit Court decisions were correct in their assessment that Congress had intended for Section 113(f) to be the exclusive remedy to recover costs incurred pursuant to a judgment, consent decree, or settlement. Because the Court agreed withdefendants' argument that plaintiffs’ costs related to its PCB cleanup were incurred by virtue of a prior consent decree, the plaintiffs only had a potential right to a Section 113 claim for contribution (which was previously dismissed) – not a Section 107 claim for recovery.
Again, the opinion is a helpful summary of evolving jurisprudence under CERCLA regarding Section 107 and Section 113 claims.
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.
Just What We Need: More Community Engagement in Superfund Sites
Last week, EPA’s Office of Solid Waste and Emergency Response announced release of its Community Engagement Implementation Plan. Who could be against community engagement? It’s as American as apple pie. It’s environmental justice. It’s community input into decisions that affect the community. It’s transparency and open decision-making.
Call me a curmudgeon, but I’m against it. Study after study shows that, in terms of the actual risks posed by Superfund sites, we devote too many of our environmental protection dollars to Superfund sites, when we should be focusing on air and water. Why do we keep doing this? Because the community demands it. As Peter Sandman has noted, perceptions of risk are driven only partly by the actual hazard posed. To a significant degree, those perceptions are more driven by outrage over the situation. In some circumstances, what Sandman calls outrage management makes sense, but I’m skeptical that EPA’s community engagement initiative is really about outrage management.
In any case, here’s the public policy question of the day. Does it really make sense to spend scarce environmental protection resources, not to reduce risk, but to reduce outrage?
BNSF No Big Deal, says U. S. District Court
The U. S. District Court for the Eastern District of California has denied reconsideration of its pre-BNSF order finding defendants jointly and severally liable under CERCLA. U. S. v. Iron Mountain Mines. Defendants had argued that the Supreme Court in the BNSF case mandated the district courts to consider grounds for reasonable apportionment. They had earlier argued for apportionment before BNSF and then cited the Supreme Court’s decision as an intervening change of law that entitles it to reconsideration.
The court disagreed, finding that BNSF did not change the law, rather it simply reaffirmed existing law and applied it to a specific set of facts. It seems strange that the Supreme Court would grant cert in a case where the law is settled just to apply the facts. In fact, the working presumption in CERCLA litigation had been that joint and several liability is the rule and apportionment is rare, even though CERCLA doesn’t say that. Most practitioners saw BNSF as a game changer, reopening the possibility of a hard look given to reasonable bases for apportionment in mediated allocations and in court. But the District Court followed the lead of the Justice Department, which has consistently said BNSF marks no departure from standard CERCLA jurisprudence.
It sure would be great if the Supreme Court would provide some clarity in its environmental decisions. Few would think Rapanos helped much with our understanding of the Clean Water Act, and now we need to muddle through a certain lack of precision in representing clients in Superfund matters. While BNSF opens the window, it remains to be seen whether the opening is just a crack or will really let some fresh air in.
Fighting the Last War: The Relevance (and Irrelevance) of the Exxon Valdez Spill to the Deepwater Horizon Spill
A number of us in the Pacific Northwest can remember the phone call that came in the spring of 1989 telling us to come to Alaska. There had been an oil spill, the caller said, and we had better get up there right away. We packed up and left, sometimes with just a couple of sets of clothes, and ended up staying for months, or years. We were lawyers, not scientists, and we could neither contain the spill nor predict its impacts. What we could do – or thought we could do – was assess blame and assign damages. That turned out to be harder than any of us imagined.
Nearly twenty years of litigation followed the Exxon Valdez spill, and there was not a single case, but many. By understanding some of the history of the Exxon Valdez cases, one can appreciate what the lawyers working on the Deepwater Horizon case have in front of them. At the same time, the many differences between the two spills suggest that history will not repeat itself. The legal response to the Deepwater Horizon case, like the cleanup response being carried out in the Gulf at this time, is likely to be far more complex, involve even more parties, and possibly even more time. By way of example:
- The federal Oil Pollution Act of 1990 ("OPA 90"), one of the principal laws likely to be invoked in response to the Deepwater Horizon, was enacted after (indeed, in response to) the Exxon Valdez. While the elements of the liability case against responsible parties under OPA 90 are similar to those asserted under the Clean Water Act in the Exxon case, OPA 90 allows plaintiffs to potentially recover a broader range of compensatory damages, including: damages to real or personal property; subsistence use; federal, state, and local tax revenues; lost profits and earning capacity; and the cost of providing additional public services resulting from the spill. In that sense, the law is more complex now than it was at the time of the Exxon Valdez spill, involves more parties and more and different potential claims. There is also very little case law decided under it;
- The causation issues in the Exxon Valdez case were far simpler than in the present spill. There was no question as to the cause of the 1989 spill into Prince William Sound – a tanker hit a reef. In the case of the Deepwater Horizon, on the other hand, press reports and briefings by BP point to a chain of events, each of which may have contributed to the explosion and to the still mounting damages;
- Unlike the Clean Water Act, OPA 90 expressly allows for contribution claims among responsible parties that were not available under the Clean Water Act. Therefore, the party that initially responds to the spill (BP) may have statutory claims that they choose to assert against other responsible parties at some future time;
- The Exxon case involved a single state (Alaska) and the federal government (and Alaska Native corporations). By comparison, several states have already become involved in the Deepwater Horizon spill (including Louisiana, Mississippi and Alabama), raising potential jurisdictional questions and possible conflicting claims among the governmental plaintiffs;
- In oil spill cases, one of the potentially largest claims the government can bring is for natural resource damages. In order to do so, however, the government has to establish a "baseline" of pre-spill conditions. This is much more difficult to do in some of the ports and commercial areas along the Gulf Coast that are already impacted by hydrocarbons, as opposed to the relatively pristine waters of Alaska's Prince William Sound.
Energizing Brownfields
It has always amused me how many people are involved with Brownfields work as compared to how few projects have been completed. It is tough to make the economics work on a Brownfield development in the best of times. Thanks to clean energy rules and incentives this may be changing.
Brownfields and clean energy have several synergies. Brownfields are often in industrial corridors, with great infrastructure and proximity to electrical grids. Biomass projects in particular need access to efficient transportation networks in order to move large volumes of material. Clean energy projects such as solar, wind and biomass plants work well with risk based remediation and institutional controls required for cost effective risk management at a Brownfields sites.
Add to these synergies a vast array of incentives, mandatory quotas and grants for clean energy and we just may have a path to economic viability for some Brownfields projects. EPA has a task force known as ER3 to help facilitate such projects. Keep your eye on a project in Charlotte, North Carolina known as ReVenture Park which seems destined to put wind energy, wastewater treatment and a biomass plant on a large, complex CERCLA/RCRA site.
Nanotechnology - Health and Risk Management Concerns
In June last year insurance giant Zurich issued a report of the work of its Emerging Risks Group study begun in 2006. The report stated that the risks with the greatest potential to affect Zurich and its customers are those associated with nanotechnology.
Similarly, an alphabet soup of regulators—foreign and domestic—is wrestling with largely unknown and largely theoretical risks. The human health and environmental alarms have been sounded by numerous commentators, without yet meaningful, documented empirical observation or controlled studies of human health and safety issues or environmental concerns. Regulation in a factual vacuum is potentially counterproductive and can stifle one of the 21st century’s most promising new technologies. But no one wants “another asbestos” or to have stood by silent in the spring while nanobots consume an ecosystem. This blog will skim the surface of an increasingly deeper and broader pond.
What is Nanotechnology?
Nanotechnology involves the manipulation of matter at the near atomic or nanometer scale--a nanometer is one billionth of a meter; a standard sheet of paper is 100,000 nanometers thick. Materials composed of or including devices and systems with components at the nanometer scale represent fundamentally new molecular organizations with highly different and potentially unpredictable properties and functions compared to their macromolecular cousins. The technology has found uses in a wide variety of commercial products including wound dressings, pregnancy tests, toothpastes, lubricants, paints, nonstick coatings, tennis racquets, air filters and many other products. In each of these products, the nano scale materials exhibit dramatically different characteristics than would be true of those materials at normal scale. For example, gold is an excellent conductor of heat and electricity but simply reflects ordinary light. Properly structured gold nano particles absorb light and can actually convert light into heat (which, in turn, can be used for cutting purposes in thermal scalpels). Nano sized particles of titanium dioxide provide UV protection while remaining transparent. Nano scale materials in thin films applied to eyeglasses, computer displays and cameras make them water repellant, anti-reflective or give them other useful physical characteristics.
Continue Reading...Has the BNSF Case Changed the Superfund Practice?
It has been nearly nine months since the U.S. Supreme Court decided Burlington Northern and Santa Fe Railway Company v. United States (BNSF),[1] a case some called a landmark decision that would change the Superfund practice.[2] In some respects that has turned out to be the case, in others it has not. There have been several reported cases citing BNSF, and all of them confirm that the decision requires both the EPA and potentially responsible parties (“PRPs”) to engage in a more fact-intensive inquiry into “arranger” liability. Less clear, however, is how the apportionment of liability among liable parties in private contribution cases will be affected, given the relatively small number of reported decisions.
Readers will recall that the BNSF decision had two elements: (1) it addressed the scope of arranger liability under CERCLA, and (2) it affirmed the view of several circuit courts that PRPs can avoid joint and several liability if a “reasonable basis” to apportion liability exists. This article reviews how lower court decisions issued subsequent to BNSF have applied those two components.
Continue Reading...Practical Impacts of Burlington Northern on Multi-Party Superfund Sites
To many Superfund practitioners, United States v. Burlington Northern & Sante Fe Railway Company, __ U.S. __, 129, S. Ct. 1870 (2009) represents the latest in a series of surprises from the Supreme Court. The decision follows Cooper Industries, Inc. v. Aviall Services, Inc, 543 U.S. 157 (2004), from which we learned that the statutory words “during or following” really mean just what they say and contribution claims under the Comprehensive Response Compensation and Liability Act (also referred to as CERCLA or the Superfund statute) are only available in those limited circumstances. A few years later, in United States v. Atlantic Research Corp., 551 U.S. 128 (2007), we learned that “covered persons” (also referred to as potentially responsible parties or PRPs) under the statute may, in certain procedural circumstances, have cost recovery claims in the event they do not meet the criteria for contribution claims. In Burlington Northern, we learned that “arranger” liability may not be as broad as we had thought it was, and that joint and several liability may not be the automatic we thought it was. It is probably fair to say that the outcome in Burlington Northern, like the outcomes in Aviall and Atlantic Research, was not intuitive to Superfund practitioners.
A Superfund practitioner might have expected the Supreme Court decision in Burlington Northern to look more like the Ninth Circuit opinion it reversed (found at 502 F.3d 781), endorsing a broad reading of “arranger” liability under the statute and applying joint and several liability to all the defendants, the latter being the norm for more than 25 years since the seminal decision in United States v. ChemDyne, 572 F. Supp. 802 (S.D. Ohio 1983).
Continue Reading...Ninth Circuit Rejects CERCLA UAO Due Process Challenge
The 9th Circuit affirmed the dismissal, for lack of jurisdiction, over a “pattern and practice” claim by a company that complied with an Environmental Protection Agency (EPA) unilateral administrative order (UAO) to conduct a remedial investigation. City of Rialto v. W. Coast Loading Corp., 581 F.3d 865 (9th Cir. 2009). While acknowledging that CERCLA's judicial review provisions contain "some pitfalls and difficult decisions for a PRP that faces a UAO," the court stated that the pattern and practice claim was not an “automatic shortcut” to federal court jurisdiction.
The case arose as a result of a unilateral administrative order (UAO) issued by EPA in July 2003 directing Goodrich to conduct a remedial investigation at a 160-acre site in Rialto, California. Goodrich elected to comply with the order. However, in late 2006 Goodrich filed a complaint against EPA alleging, inter alia, that the CERCLA review provisions on their face constitute a coercive regime violating due process. The district court held that it lacked jurisdiction over Goodrich’s “as-applied” challenge to the UAO because such pre-enforcement judicial review is foreclosed by §9613(h) of CERCLA. Goodrich then filed an amended “pattern and practice” claim alleging that EPA issues orders where no emergency exists, obstructs judicial review by delaying its discretionary certificates of completion, and controls and manipulates the record of decision. The district court granted EPA’s motion to dismiss, and Goodrich appealed to the Ninth Circuit.
The Ninth Circuit affirmed. The court of appeals concluded that Goodrich’s allegation that EPA routinely issues orders beyond its statutory authority was substantive because it necessarily depended on the facts of the particular UAO, and that meaningful judicial review of Goodrich’s substantive challenge is available under §9613(h). A claim that a UAO is unlawful can be addressed, the court stated, either by not complying with the UAO and defending an enforcement action, or by complying with a UAO and seeking reimbursement from the government. With respect to Goodrich’s claim that EPA routinely delays certifications of completion in order to thwart judicial review, the Ninth Circuit held that Goodrich’s claim is not ripe because the work required by the UAO has not been completed. Once Goodrich completes the work, it may bring a claim for reimbursement under §9606(b)(2). Finally, with respect to Goodrich’s allegation that EPA controls and manipulates the administrative record supporting the selected cleanup plan, the Ninth Circuit concluded that Goodrich allegations were not a “pattern and practice” claim , but rather were a challenge to the judicial review provisions of the statute itself, which were rejected by the District Court and not appealed by Goodrich.
The Ninth Circuit noted that in General Electric v. Whitman, 360 F.3d 188, 191 (D.C. Cir. 2004), the D.C. Circuit remanded GE’s suit to the district court to address the merits of GE’s facial due process claim, and on remand the district court ruled on merits and rejected GE’s pattern and practice claim. General Electric v. Jackson, 595 F.Supp.2d 8 (D.D.C. 2009). This ruling on the merits contrasts with the Ninth Circuit’s ruling that the district court lacked jurisdiction. The Ninth Circuit, however, commented that its decision was “consistent” with the District Court’s decision in GE, noting that the District Court there held that it had jurisdiction not because of any independent analysis but because of its interpretation of the D.C. Circuit’s decision remanding the case for further proceedings.
Companies receiving a UAO and facing the statutory pitfalls and difficult decisions will likely not find much solace in the Ninth Circuit’s opinion. The district court’s opinion in the GE case is being appealed.
Judge Dismisses Contribution Claims re: Fox River PCB Contamination
“Thus, the Plaintiffs’ present claim that they never knew about the dangers of PCBs until after 1971 rings roughly as hollow as Captain Renault’s feigned outrage upon being ‘shocked, shocked’ to discover gambling at Rick’s Casablanca café.”
Appleton Papers Inc. and NCR Corp. v. George A. Whiting Paper Co., et al. (slip op. at 25, US District Court, Eastern District of WI, Case No. 08-C-16)
With those words, on December 16, 2009 Judge William C. Griesbach, United States District Judge for the Eastern District of Wisconsin dismissed CERCLA §107 contribution claims brought by Plaintiffs Appleton Papers, Inc. (API) and NCR Corp. against all Defendants. NCR and API sought contribution from 23 other paper mills, cities, utilities, and sewerage districts, and industrial dischargers to allocate the multi-million dollar costs of remediating the polychlorinated byphenyl (PCB) contamination in the Lower Fox River in northeastern Wisconsin. Defendants’ Summary Judgment motions asserted that Plaintiffs were not entitled to contribution because the Defendants are “essentially innocent parties who had no knowledge that recycling NCR paper or processing wastewater could lead to environmental damage.” Slip op. at 4. The Judge agreed.
Beginning in 1954, NCR developed a carbonless copy paper that relied on an emulsion based on Aroclor 1242, a PCB solvent manufactured by Monsanto Corporation. NCR created the emulsion and developed and sold the carbonless paper product. API’s predecessor manufactured the paper and coated it with the NCR emulsion. API’s wastewater was discharged to the Fox River, taking the PCBs with it. API also sold its waste paper to other mills to be recycled into paper products, resulting in PCB-containing wastewater discharges from those facilities. The result: significant PCB-contamination in the sediments of the Lower Fox River from the mouth at Green Bay to Lake Winnebago and what has been called the largest contaminated sediment cleanup in the world..
Continue Reading...Tenant Liability Under CERCLA: Is It time To Move Beyond Enforcement Discretion Guidance?
Arguably the most significant moderation of CERCLA’s harsh “owner” liability scheme occurred in 2002 through the enactment of the “Brownfields Amendments.” Included in those amendments was the creation of new liability protection for “Bona Fide Prospective Purchasers” (“BFPP”) who acquire ownership of a facility after January 11, 2002.
A relatively straightforward roadmap for prospective purchasers to achieve BFPP status is set out in the Brownfields Amendments and the subsequently-promulgated All Appropriate Inquiry rule. The extent to which tenants might obtain protection from possible “owner” liability has, however, always been far less certain.
The potential applicability of this liability defense to tenants is currently limited to a short parenthetical in CERCLA §101(40). Specifically, a “tenant of a person” that achieves BFPP status shares the liability protections of the property purchaser. Although this “derivative” BFPP status established by the Brownfields Amendments helped clarify the reach of the liability defense with respect to tenants, a number of questions remained unanswered. For example, what happens if the property owner loses its BFPP status through non-compliance with the statutory requirements? Also, does the language of the amendment as it relates to tenants preclude a tenant from independently achieving BFPP status?
Continue Reading...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.
Statute of Limitations: Don't Miss Your CERCLA Deadline
Overview
There are three avenues of recovery under CERCLA - a contribution action and two types of cost recovery actions. These cost recovery actions are based on either the plaintiff’s “removal” of the hazardous substances or “remediation” efforts at the site. Each of these avenues has an independent statute of limitations provision. Thus, whether the statute of limitations period has been triggered will depend on how an action is characterized, i.e. whether the action constitutes a contribution action, a cost recovery removal action, or a cost recovery remedial action. While there are various state-specific causes of action related to environmental contamination in Connecticut, this article is confined to the statute of limitations for CERCLA cost recovery and contribution claims.
Continue Reading...Eleventh Circuit Wades into the Everglades on ESA Issues, Miccosukee Tribe v. United States, No. 08-10799
The Eleventh Circuit has waded, again, into the ongoing debates over restoration of the Everglades. In addressing yet another lawsuit filed by the Miccosukee Tribe, the Court largely upheld the Fish & Wildlife Service’s delicate balance between the competing and inconsistent habitat needs of the Cape Sable seaside sparrow and the Everglade Snail kite, both endangered species. The seaside sparrow needs stable low water levels below a certain water control structure; the kite’s habitat is destroyed by the resulting rising water levels in the impoundment. The FWS issued a biological opinion allowing the Corps of Engineers to operate the structure to avoid extinction of the sparrow and to conduct an incidental take of the kite. While largely affirming the agency, the Eleventh Circuit reversed on the issue of the trigger that would require initiation of consultation under Section 7 and, along the way, made new law in this circuit on several important issues.
First, the court rejected the tribe’s argument, often advanced by conservation groups in ESA litigation, that the ESA requires that FWS “give the benefit of the doubt to the species.” The court held that this language, taken from a conference committee report, does not mean that the FWS is required to issue a jeopardy opinion if the evidence is evenly balanced between likely jeopardy and likely no jeopardy. Rather, the Eleventh Circuit explained, the language was intended to prevent FWS from shirking its consultation duties by relying on scientific uncertainty, but did not require any substantive result. The court held that “the need to give a species the benefit of the doubt cannot stand alone as a challenge to a biological opinion.”
Continue Reading...The Burlington Northern Decision
The Supreme Court’s decision in Burlington Northern was not unexpected from my vantage point especially given the literal interpretation of CERCLA by the Court in Aviall and Atlantic Research and the flow of the oral argument.
I was a little surprised that Justice Stevens was assigned the task of writing the opinion since Justice Thomas wrote Aviall and Atlantic Research. But with 7-2 (Justices Ginsburg and Stevens dissented in Aviall because the Court would not decide the issue of entitlement to sue under Section 107), 9-0 (Atlantic Research decided the Section 107 private of action question left unresolved in Aviall), and 8-1 (Justice Ginsburg was the lone dissenter in Burlington Northern) votes in these three opinions, the Court is not going out of its way to fix CERCLA’s language. Section 113(f)(1) means what it says. Section 107 means what it says. An arranger must have an intent to dispose. And joint and several…
Continue Reading...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...PENNSYLVANIA CLEAN WATER AND BROWNFIELDS INVESTMENT OF STIMULUS FUNDS
Among the priorities under the $787.5 billion American Recovery and Reinvestment Act of 2009 is repairing, rebuilding, and constructing the nation’s water infrastructure. Approximately $6 billion will augment the EPA’s clean water and drinking water state revolving funds, of which approximately $221 million will be disbursed to the Commonwealth of Pennsylvania’s Infrastructure Investment Authority (PennVest). The governing board of PennVest is appointed by Governor Rendell, and I have been serving as its chair for the past six years.
Continue Reading...Superfund Liability and Apportionment - Burlington Northern v. United States
Although the Superfund statute is now 28 years old, basic issues of liability and apportionment of liability remain unresolved. This term, the U.S. Supreme Court will decide a case with broad implications for CERCLA liability, Nos. 07-1601 and 07-1607, Burlington Northern v. United States. These consolidated cases, which will be argued early in 2009, raise important issues concerning the circumstances under liability is divisible and the scope of “arranger” liability under CERCLA. If the Ninth Circuit’s approach is upheld, the heightened evidentiary standards may impose a difficult hurdle on parties to prove reasonable apportionment of liability. The Ninth Circuit’s approach to “arranger” liability is of concern to entities that sell chemicals or other products in the ordinary course of business. The allocation of risk and provisions for insurance and best practices to avoid spills in contracts between suppliers and common carriers may need to be reviewed in light of the Supreme Court’s opinion in this case.
Continue Reading...SALMON WARS IN THE PACIFIC NORTHWEST
Each year thousands of salmon and steelhead protected under the Endangered Species Act (“ESA”) migrate up and down the Columbia River and its tributaries and into the Pacific Ocean as part of the species’ cycle of life. Seemingly, each year armies of lawyers migrate to federal court to argue whether the federal government is carrying out its obligations to protect these species under the ESA. “As part of the modern cycle of life in the Columbia River system, each year brings litigation to the federal courts of the Northwest over the operation of the Federal Columbia River System (“FRCPS”) and, in particular, the effects of system operation on the anadromous salmon and steelhead protected by the Endangered Species Act.” National Wildlife Federation v. National Marine Fisheries Service, 422 F.3d 782 (9th Cir. 2005).
2008 is no exception as the National Wildlife Federation, the state of Oregon and the Nez Perce Tribe have again filed a lawsuit in the United States District Court of Oregon against the federal government for allegedly failing to carry out their obligations under the ESA in the operation of the FRCPS. The precipitating event for the 2008 lawsuit, is a 2008 Biological Opinion authored by NOAA Fisheries pursuant to Section 7 of the ESA opining that if the action agencies, the U.S. Army Corps of Engineers (“COE”) and U.S. Bureau of Reclamation (“BOR”) carry out a comprehensive reasonable and prudent alternative (“RPA”) then jeopardy to the listed species and adverse modification to critical habitat will be avoided.
Continue Reading...Evans v. Walter Industries, Inc. - The Heightened Pleading Standards Announced In Bell Atlantic v. Twombly Apply To Toxic Tort Cases
I. Introduction
On May 21, 2007, the U.S. Supreme Court, in Bell Atlantic Corporation v. Twombly, 127 S.Ct. 1955; 167 L.Ed. 2d 929, announced a new standard for testing the sufficiency of pleadings in the face of a motion to dismiss. The Court set aside the rule in Conley v. Gibson, 355 US 41; 78 S.Ct. 99; 2 L.Ed. 80 (1957), which held that a complaint should not be dismissed unless it could be shown that it was not possible, pursuant to the pleadings, to demonstrate any set of facts which would support recovery; instead, the Court said that the appropriate test was whether the allegations of the complaint, if taken as true, would support the conclusion that recovery was “plausible.” In overruling Conley, the Court said, of the “possible” standard, “*** after puzzling the profession for 50 years, this famous observation has earned its retirement. The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard ****.”
Bell Atlantic was an anti-trust case based on the Sherman Anti-Trust Act. Many commentators suggested that the Bell Atlantic standard would only apply to matters (such as anti-trust) where the requirements of a statute dictated specific pleading requirements, that the Court had not intended to completely change the standards for testing the sufficiency of complaints.
Shortly after the Bell Atlantic decision, the U.S. District Court for the Northern District of Alabama was faced with the question in Evans v. Walter Industries, case no. 1:05-CV-01017-KOB. The Alabama court held the “plausible” standard applicable to a putative class action toxic tort case and it dismissed the case, with prejudice, against one of the Defendants.
As noted below, this decision could have significant implications in other Superfund cases if the federal courts, generally, reach the same conclusion.
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