Becker's Iowa Environmental Law Update

EPA's Hit List For 2011-2013

Chuck Becker — Mon, 01 Mar 2010 17:26:22 -0600

In an earlier post, I noted that EPA was in the process of setting its enforcement priorities for the years 2011 through 2013. At the time, the Agency had fifteen areas of possible consideration. EPA has finalized its list and out of the fifteen areas under consideration, they chose five and added a sixth area not previously considered.

The areas that have been chosen for the final cut are:

Keeping Raw Sewage and Contaminated Storm Water Out of our Nations’ Water – This enforcement initiative will focus on reducing discharges from combined sewer overflows, sanitary overflows and municipal separate storm sewer system. EPA will be requiring various commitments from cities to implement solutions to the problems caused by aging urban infrastructure. For many municipalities, this means huge and expensive construction projects will need to be undertaken in the very near future;
Preventing Animal Waste from Contaminating Service and Ground Waters – Concentrated animal feeding operations generate a large amount of manure which can end up being discharged into surface waters or seep into ground water. EPA intends to strengthen its enforcement focus on existing large and medium sized facilities that are not in compliance with permitting regulations;
Cutting Toxic Air Pollution that Affects Communities’ Health – Hazardous air pollutants have been determined to present significant threats to human health. This enforcement initiative will focus on industrial and commercial facilities that are allowing excess emissions;
Reducing Widespread Air Pollution from the Largest Sources, Especially the Coal-Fired Utility, Cement, Glass and Acid Sectors –Many industries have ignored the New Source Review and Prevention of Significant Deterioration requirements when building new facilities or making significant modifications to existing facilities. This national enforcement initiative will target these emissions, particularly at coal-fired utility, cement, glass and acid plants;
Reducing Pollution from Mineral Processing Operations – Mountaintop mining has not gone unnoticed by EPA. Mining and mineral processing facilities pose high risk to human health and the environment with many of the sites already being on the Super Fund National Priorities List. This initiative will seek to bring these facilities into compliance;
Assuring Energy at Extraction Sector Compliance with Environmental Laws – This is a new topic for EPA. The initiative indicates that EPA understands that a push for “clean energy” sources can result in a dirty environment. A particular area of scrutiny will be oil and gas extraction as well as coal mining.

Those that got knocked off of the list include environmental justice, Indian country drinking water, marine debris, RCRA enforcement, RCRA financial assurance, pesticides at day care facilities, industrial surface impoundments, wetlands and worker safety for agricultural pesticides.

Businesses should be aware of the final priority list because EPA has, in the past, followed it when deciding where to place its emphasis (and enforcement funds). While I doubt that the mining, oil, gas, coal-fired utilities, CAFOs or industries producing hazardous air pollutants are going to be particularly shocked by the initiatives targeting them, some municipalities may be very unpleasantly surprised by their next visit from EPA.

SERVICE OIL, INC. v. U.S. EPA: No Rain, No Pain

Chuck Becker — Tue, 23 Feb 2010 17:53:50 -0600

The Clean Water Act is complex and rule intensive. As such, it is easy to forget the purpose of the Act -- clean water. The Eighth Circuit recently had an opportunity to remind us of that purpose in the case of Service Oil, Inc. v. U.S. EPA.

For those who practice in the area of property development and storm water regulation, the facts were not surprising. Service Oil began construction of a Stamart Travel Plaza on more than five acres of land in Fargo, North Dakota. As soon as earth was turned, the site became a potential “point source” under federal law. The storm water discharges from the site were deposited into Fargo’s storm sewer system which then went into the Red River of the North. As a result of this discharge, the site was required to obtain an NPDES permit. The North Dakota Department of Health was authorized to issue the NPDES permits and required that a Notice of Intent to obtain such a permit had to be submitted at least 30 days prior to the start of construction.

In October of 2002, EPA and the North Dakota Department of Health officials inspected the Stamart site and found that no Notice of Intent had been filed, which was quickly corrected by Stamart. As luck would have it, there was apparently no rain fall that occurred at the site between the time that development commenced and the time Stamart was able to get its Notice of Intent on file. Though the state officials were satisfied, EPA continued its review and determined that Stamart had also failed to conduct site inspections as required by state law.

In bringing its action against Stamart, EPA sought an $80,000 administrative penalty based on two acts: (1) Stamart’s failure to file its Notice of Intent in a timely manner and 2) Stamart’s failure to conduct timely inspections. The majority of the penalty ultimately assessed by the Administrative Law Judge was for the failure to properly file the Notice of Intent. The ALJ found that Section 1318 of the Clean Water Act had record-keeping requirements supported by regulations that required the preconstruction submission of a completed permit application.

On appeal, the Court agreed that the Clean Water Act prohibits discharges without a permit. It also agreed that it is logical that the regulations provide for permit applications to be submitted prior to any initial discharge. The Court focused on the fact that the regulations required that a person who proposes a new discharge must submit its application before the date on which the discharge is to commence. However, the statute’s requirements, by its terms, applies to a point source. In the words of the Court:

Failure to comply with [the requirement of submitting an application before discharge] cannot be a violation of section 1318(a) because that statute’s record-keeping requirements are expressly limited to “the owner or operator of any point source.” Before any discharge, there is no point source. (Emphasis added).

The Eighth Circuit was simply emphasizing that EPA does not regulate “point sources.” Rather, a point source is just a defined term which determines whether the regulatory scheme might apply to that source. If the source is not deemed to be a point source (such as agricultural runoff), then the regulatory scheme does not apply to it. If it is defined to be a point source (such as a construction site), then the regulations do apply, but only after there has been a discharge. Since the statute gives jurisdiction only over actual water discharges, a developer cannot be penalized for failing to take out a permit, at least not until a discharge event, such as storm water runoff, has actually occurred.

To emphasis this point, the Court quoted an earlier Second Circuit case:

The Clean Water Act gives the EPA jurisdiction to regulate and control only actual discharges—not potential discharges, and certainly not point sources themselves. (Emphasis in original).

So does this mean the developer can avoid filing a Notice of Intent or obtaining a permit? The Court, recognizing that EPA might be concerned that it lacks regulatory authority to assess administrative penalties for failing to submit a timely permit application, offered these words of consolation:

Prudent builders know that permits do not issue over night and that storm water discharges can happen any time after the start of construction makes the site a point source. They will apply and obtain permits before starting construction to avoid penalties for unlawful discharges that may prove to be severe. That is the regulatory regime Congress crafted.

In other words, developers take note -- counting on the Farmer's Almanac is probably not a sound business plan.

EPA Has Its Priorities

Chuck Becker — Wed, 17 Feb 2010 12:52:56 -0600

A key aspect of being effective is figuring out what needs your attention right now and what can wait until later. EPA seems to understand this. Every three years, EPA creates a set of national enforcement priorities setting out the areas in which it will focus its inspections, compliance assistance and enforcement actions over the course of those three years. It provides for interesting reading.

For example, the priorities for the years 2008, 2009 and 2010 were:

Air toxics 
New source review/prevention of significant deterioration 
Concentrated animal feeding operations 
Municipal combined sewer and sanitary sewer overflows 
Storm water
 Mineral processing
 Financial responsibility
 Indian country

The Agency is in the process of setting its priorities for 2011, 2012 and 2013. To identify the possible areas of consideration, EPA collected information from the various regions, states, tribes, associations and the public. Based on the information it received, EPA created the following list of candidates for the upcoming enforcement priorities:

Air Toxics – EPA is proposing to continue to focus on leak detection and repair and the presence of hazardous air pollutants near schools;
Concentrated Animal Feeding Operations (CAFOs) – this initiative would focus on the regulation of surface water runoff carrying animal waste into waterways. There is no discussion of air or odor issues;
Environmental Justice – a review of burdens that pollution has disproportionately placed on vulnerable populations including children, communities of color, Native Americans and the poor;
Indian Country Drinking Water – it has been determined that the level of noncompliance of public water systems in Indian country is significantly hirer than at comparable public water systems outside of Indian country. This initiative would attempt to identify the reasons why and find a method of correcting those deficiencies;
Marine Debris – this would focus on debris that is improperly discharged into a water way. Enforcement of current regulations and cleanup activities would be key components of the initiative. It is viewed as a good fit to address along with municipal runoff issues;
Mineral Processing – mineral processing and mining use strong chemicals and generate large volumes of waste for disposal. Over the past decade, significant damage has been done to the environment from these operations. This initiative would focus on inspections and sampling by EPA;
Municipal Infrastructure – the storm water and sanitary sewer piping for many cities is outdated and frequently causes discharge events. This initiative would require significant modifications and repairs to many of the city systems;
New Source Review/Prevention of Significant Deterioration – EPA has determined that many air pollutant sources have made operational changes that have resulted in increased air emissions, but failed to obtain proper permitting. The industrial sectors which will be reviewed are coal-fired electric utilities, cement manufacturing facilities, sulfuric and nitric acid manufacturing facilities, glass manufacturing facilities and lime manufacturing sites;
RCRA Enforcement – increased emphasis on cleanups of contaminated facilities and creation of a nationally consistent approach to enforcement at all RCRA facilities;
RCRA Financial Assurance – increased enforcement of determining that sufficient funds are set aside for response and closure of RCRA facilities;
Resource Extraction – various forms of resource extraction, such as mountaintop mining and oil and gas development, have caused increased concerns about a rise in levels of air pollution and water quality degradation. This initiative would increase the focus on the regulation of these resource extraction activities under CAA, CWA and SDWA, with emphasis on federal lands and Indian Country;
Pesticides at Day Care Facilities – a study done in 2001 of wipe samples from indoor services at day care centers identified at least one pesticide in every day care center studied. Some centers had up to ten different kinds of pesticides in use. This initiative would investigate the use and effect of pesticides at day care centers;
Surface Impoundments – many industrial facilities use surface impoundments to treat or store non-hazardous liquid and solid waste which can contaminate surface water, groundwater and air. Additionally, hazardous waste storage in such impoundments without a RCRA permit is a violation of law. EPA estimates there are 18,000 surface impoundments operating and that inspection and oversight is a worthwhile initiative;
Wetlands – recent studies show a pattern of wetland loss under the Clean Water Act which justifies an enforcement initiative;
Worker Protection Standards for Agricultural Pesticides – studies show that farm worker families have a higher level of pesticide exposure than non-farm worker families. In light of the number of farm workers and pesticide applicators, an initiative of inspections for both product and use compliance is necessary.

Cynthia Giles, EPA’s Assistant Administrator for Enforcement and Compliance Assurance, spoke at the National Environmental Justice Advisory Council on January 29, 2010. At that time, Ms. Giles indicated that the fifteen new enforcement areas for consideration were likely too many and that, when finally published, there will likely be fewer than nine initiatives for the 2011 through 2013 period. She also indicated that air toxics emissions, large animal feeding operations and new source review violations will likely make the cut for the national enforcement priorities.

It is important for businesses and legal practitioners to carefully note the final list of initiatives. At least over the past three years, a great deal of the EPA’s enforcement activities have been conducted on the topics that they identified as initiatives and there is every reason to believe that this will continue in the future. To be forewarned . . . .

Clean Water, Agriculture and Sacred Cows

Chuck Becker — Tue, 09 Feb 2010 13:12:06 -0600

A recent guest editorial in the Des Moines Register makes an interesting observation about water quality in agricultural states -- it stinks.

The authors state that Iowa has a double standard concerning sewage. That is, there are significant and costly regulations for point sources, such as municipal and industrial wastewater treatment facilities that discharge into rivers and streams, but virtually no regulation of non-point discharges, like the transporting and spreading of manure on farmland that then washes off into the waterways. According to the authors:

If state officials hope to stop the degradation of Iowa’s waters, it does not make sense to ignore the agricultural component, which accounts for at least 90 percent of our water pollution.

To be sure, it’s hard to argue against cleaner water. But is it fair to impose a new regulatory and financial burden on cities and urban industries, while continuing to allow industrial agriculture to spread untreated sewage into the land?

The authors conclude that the agricultural, non-point sources should be held to the same standard as point sources and suggest that agricultural discharges should be required to pass through a wastewater treatment facility, though the article fails to mention the staggering cost of that proposal.

It’s certainly an interesting point, and it is not unique to Iowa or the United States. The Clean Water Act has always given a free ride to non-point pollution sources. Though it may make no scientific sense to say that a 40-acre field that has agricultural runoff is somehow different from a 40-acre field that is being prepared for a subdivision, that has been the regulatory scheme for decades. And it has been true despite the fact that, as pointed out by the authors, the vast majority of water contamination can be attributed to non-point sources.

In the past, even the mention of imposing such costs on agriculture, a significant employer in many state economies, was political suicide -- and maybe it will continue to be. But as EPA and state environmental agencies begin to force more and more costly regulation on point sources (for example, storm water runoff from construction sites), those same sources are going to start pressing the question of why non-point sources, which are significantly larger polluters, are virtually exempt from expensive regulation. It may be that it’s going to become harder and harder to keep this cow sacred. At a minimum, it’s going to make for an interesting debate.

Nuclear Power Is On The Table

Chuck Becker — Tue, 02 Feb 2010 10:00:03 -0600

In his State of the Union speech, President Obama promised / threatened (which eye you use affects the view) to increase nuclear power generation. His proposed budget for fiscal year 2011 gives support to that promise.

The proposed budget increases loan guarantees for nuclear power generation from $18.5 billion to $54.5 billion. While the proposal certainly has its detractors, any program that gets its funding tripled in the present economic times should be very happy. Is this a setback for renewable energy sources like solar and wind power? The answer appears to be, no.

While the proposed budget certainly increases the support for nuclear power production, it also cut $36 billion in tax benefits over the next decade for oil and gas and $2.3 billion for the coal industry (though, to be fair, these cuts are like giving a manicure to a polar bear) and provides for credit subsidy funding of $500 million to support $3 to $5 billion of loan guarantees for energy efficiency and renewable energy projects. Taken together, these proposals would appear to be a pretty strong indication that Obama wants: 1) less oil and coal; 2) more renewable energy; and 3) more nuclear power generation.

In the end, Congress will make its own decision as to what projects to fund, but it is notable that this President seems to be indicating that the extreme left voices that rail against allowing any nuclear power need to be ignored. If climate change legislation has a chance in 2010, a nuclear component will certainly be necessary and the President’s proposed budget simply reflects this political reality.

With his statement at the State of the Union and now with his support in the proposed budget, it will be difficult for Republicans to argue that this President is not trying to find a middle ground for climate change legislation. (Who says he hasn’t learned anything from the health care debacle). Now we’ll see if Congress (i.e. the Senate), sees it the same way.

Climate Change Idol Coming Soon

Chuck Becker — Mon, 25 Jan 2010 09:30:41 -0600

The game show that is Congress is nearly done with its first act of the new year. The performer, Health Care Reform (H.C.R.), started out great. In her first thirty seconds she hit all the high notes and put on a show that would make Madonna blush. But the last minute was a killer. The stones started flying. A couple of the 60 mice (an integral part of the show) refused to dance until they got some extra pay. And parts started falling off of her costume until, in the end, she was almost unrecognizable from her entrance. Simon and company were brutal on the act. We'll just have to wait for the public's official vote, but it doesn't look good.

If you look carefully in the wings, you'll see the next act. It's a big guy, probably a baritone, and he's . . . trembling like a wet kitten C.C.L. (Climate Change Legislation) has been watching what happened to H.C.R. and appears to be looking for the exit. A quick text message to bolster C.C.L.'s spirits might be in order:

C.C.,

You need to buck up, kid. It's not as bad as it looks. Let me give you three great reasons why they're gonna love you.

First, you're not even distantly related to H.C.R. Sure, you've got the same promoter, but you've been practicing a lot more than her and the number you're going to do is a lot more popular. Comparing your acts is like comparing apples and cars -- you'd like to have them both, but one has nothing to do with the other.

Second, you may not know it, but your fan club grew last week. You know that group that you thought hated your song? A bunch of them actually love it! Turns out that they think they can might be able to make some money off of it. Two separate corporate groups, having a total of more than 150 businesses want you to succeed. I'm talking heavy weights here: Toyota, Alcoa, PepsiCo, Shell and Campbell's. The Republican members of the audience, the one's with the really big rocks, are going to think twice about sending those rocks your way with supporters like these. Don't believe me? Listen for yourself. One group put an ad in the Wall Street Journal and said:

How will America take back control of its energy future while enhancing our national Security? . . . How can we protect our natural resources and future generations from climate change? . . . We believe it's time for Democrats and Republicans to unite behind bi-partisan, national energy and climate legislation that increases our security and limits emissions, as it preserves and creates jobs. It's a question of American leadership.

And another group sent a letter to the President and Congress saying:

American business leaders from companies of all sizes and sectors of our economy call on you to move swiftly and boldly to enact comprehensive energy and climate legislation. . . . We need strong policies and clear market signals that support the transition to a low-carbon economy and reward companies that innovate. . . . We stand ready to to work with you to create and grow this important economic sector. Now is the time to act. Together we can lead.

Wow! You can almost feel the love. And this comes from the group that everybody said didn't like your song. All H.C.R ever got was hate mail and death threats. You've got some great buzz.

And finally, news from the group that actually counts --your voting public. Two new polls show that there is strong bipartisan support to take action on climate change. I know it sounds contrary to what you heard last week, but do polls lie? That's your song that they're talking about! (A small word of advise: Before you start singing, announce that your song is in support of making America safer from our enemies. Don't ask why, just do it).

I see that Simon is just about done ripping apart . . . err . . . providing creative criticism to H.C.R. In a few minutes it will be your turn. Stand up straight, look the camera in the eye and belt out that song like our life depended on it (because it just might).

Wind Power Gets T-Boned By T. Boone

Chuck Becker — Sun, 17 Jan 2010 17:00:54 -0600

When one car collides with the side of a second car, the results are usually bad. That's what T. Boone Pickens recently did to wind power. The funny thing is, they used to ride in the same car.

T. Boone is the promoter of what is referred to as the "Pickens Plan." That Plan originally emphasized wind power as its solution to the energy and foreign oil problem. He even planned a 4,000 megawatt wind farm in Texas and went so far as to order 667 turbines from GE to get the project started.

The wind plans are no more. While the Pickens Plan will go on, it is now focused on natural gas as the solution. The question is why the change of heart.

Well, for T. Boone, it's not so much a change of heart as it is a change of wallet. He has explained that the price of natural gas is so low that it doesn't make sense to pursue the relatively more expensive wind solution. Recognizing that T. Boone has more money than most individuals, corporations or countries, does this mean that wind energy is dead? It doesn't appear so.

Currently, the U.S. has 31,109 MW of wind power production, with another 5,567 being planned. Wind projects in Iowa and Canada are moving forward. 130 turbines off of the coast of Massachusetts appear to be close to approval. China is likely to become a world-wide leader in wind generation and is placing turbines both in China and the U.S. Europe is scheduled to pick up 1,000 MW of wind energy this year.

Certainly the recession and T. Boone have delivered blows to the wind industry. But these seem to be temporary problems. While cost is an issue, subsidies for every sustainable energy source will be necessary to make them viable. For wind, the real issue is creating the transmission lines necessary for delivery of the wind energy from the areas that have the wind to the areas that need the energy. That's an issue that the Midwestern states will need to address soon. But don't count out wind just because T. Boone is a bad driver. The accident didn't total the car, it just left it a little dented. All indications are that wind will continue to be a significant player going forward.

Climate Change, Jedi Knights and Philosophical Beliefs

Chuck Becker — Wed, 13 Jan 2010 06:51:18 -0600

I will not make it a practice to review cases from other countries — there are enough interesting ones from our own courts. However, a case decided on November 3, 2009, in London is worth a look.

The case is entitled Grainger, P.L.C. v. Mr. T. Nicholson. It was in the Employment Appeal Tribunal which hears cases of employment discrimination. The case was at a very early stage, similar to our summary judgment proceeding.

Mr. T. claimed that he was terminated unfairly by Grainger, P.L.C. because he was discriminated against based on his asserted philosophical belief concerning climate change and the environment. In particular, Mr. T. contended that:

I have a strongly held philosophical belief about climate change and the environment. I believe we must urgently cut carbon emissions to avoid catastrophic climate change.

It is not merely an opinion but a philosophical belief which affects how I live my life including my choice of home, how I travel, what I buy, what I eat and drink, what I do with my waste and my hopes and my fears.

The trial judge decided that Mr. T's claim of discrimination was not cognizable under English law. He ruled that Mr T’s philosophical belief could not be the basis for a wrongful termination claim because the regulation in question stated that discrimination against another person occurs if, “on the grounds of the religion or belief of B, A treats B less favorably than he treats or would treat other persons.” The regulation also provided that “belief” means “any religious or philosophical belief.” The trial judge held that belief in climate change did not rise to the level of a philosophical belief protected by the regulation. The appellate court disagreed.

On review, the Court examined the regulations and quickly determined that the problem was the definition of “philosophical belief.” The Court went on to define the standard of when a philosophical belief rises to the level of a protectable interest, at least under the English employment regulation. He held that there were five conditions which must be satisfied for a philosophical belief to be protected:

1. The belief must be genuinely held;

2. It must be a belief and not an opinion or viewpoint based on the present state of information available;

3. It must be a belief as to a weighty and substantial aspect of human life and behaviors;

4. It must obtain a certain level of cogency, seriousness, cohesion and importance; and

5. It must be worthy of respect in a democratic society, be not incompatible with human dignity and not conflict with the fundamental rights of others.

(Now here is a judge who understands how to create a standard that trial attorneys can embrace).

In applying the standard to the case of Mr. T, the Court held that his philosophical belief about climate change and the environment could, indeed, satisfy each of the five conditions. He was careful not to say that Mr. T.’s belief did, in fact, satisfy each of the conditions because the testimony had not yet been presented that would challenge, for example, whether the belief was genuinely held. Also, the Court didn’t address the question of whether the employer’s act of dismissal was in retaliation for Mr. T. acting on his belief or for some other reason. Those questions remain for trial. The Court simply held that a belief in climate change could be a protectable, philosophical belief.

So, what else might be deemed a philosophical belief worthy of protection? Interestingly, the opinion gives a number of examples: Humanism, veganism, pacifism, vegetarianism, socialism, Marxism, communism, capitalism and abstinence from alcohol made the cut. The Court saw all of these satisfying the five-part test.

What didn’t qualify? The opinion was a bit sparse on examples, but the Court explicitly found that racism and homophobia would not be philosophical beliefs that are worthy of respect in a democratic society.

In perhaps the unkindest cut of all, the Court found that a belief in the supreme nature of Jedi Knights would “fail on the basis of non-compliance with at least four of the limitations suggested above.” The Court did not identify which limitation might be satisfied. (The next London Comic Con should be lively).

Some have said that the opinion could be used to show that climate change is, in the end, a matter of faith, not science. Others contend that it does not stand for that proposition.

As luck would have it, we don’t need to address the issue because the case wasn’t decided in the United States. However, before one jumps to the conclusion that it couldn’t happen here, I would point out an interesting statement recently made by Representative Nancy Pelosi at the Detroit motor show where she said that green technology is "a moral issue if you believe, as we do, that this planet is God’s creation.”

If she's right, I wonder if there is an argument about separation of church and state somewhere in there.

The Train's A-Comin': More Stormwater Rule Changes

Chuck Becker — Tue, 05 Jan 2010 10:32:15 -0600

Let there be no question: EPA is very serious about adding significantly to the requirements imposed on developers, cities, homeowners and businesses relating to stormwater discharges from development and redevelopment sites. Either that, or someone in the stormwater section forgot to take a break for the holidays.

EPA has decided that it will hold five "listening sessions" designed to elicit input as to whether it should "strengthen stormwater regulations and to establish a comprehensive program to reduce stormwater from new development and redevelopment." Bear in mind that this is in addition to the proposal to send a 61-page questionnaires to 1000 developers seeking financial and project information.

The press release for the listening sessions provided the following description:

EPA seeks input on the following preliminary regulatory considerations: expand the area subject to federal stormwater regulations; establish specific requirements to control stormwater discharges from new development and redevelopment; develop a single set of consistent stormwater requirements for all municipal separate storm sewer systems; require those sewer systems to address stormwater discharges in areas of existing development through retrofitting the sewer system or drainage area with improved stormwater control measures; and explore specific stormwater provisions to protect sensitive areas.

The sessions will be held:

· January 19, 2010, 10 a.m. to 3 p.m. at EPA Region 5 Office, 77 W. Jackson Blvd., Chicago

· January 20, 2010, 10 a.m. to 3 p.m. at EPA Region 9 Office, 75 Hawthorne Street, San Francisco, Calif.

· January 25, 2010, 10 a.m. to 3 p.m. at EPA Region 8 Office, 1595 Wynkoop Street, Denver, Colo.

· January 26, 2010, 10 a.m. to 3 p.m. at EPA Region 6 Office, 1445 Ross Avenue, Suite 1200 Dallas, Texas

· January 28, 2010, 10 a.m. to 3 p.m. at EPA HQ Office, Ariel Rios Building, 1200 Pennsylvania Ave. NW, Washington, D.C.

The public can register by going to the Web site below.

EPA will accept written comments on the preliminary rulemaking considerations until February 26, 2010.

More information on listening sessions, the potential rule and instructions for submitting written comments: http://www.epa.gov/npdes/stormwater/rulemaking

Those who will be affected need to take this initiative very seriously. According to the Federal Register, EPA is relying heavily on a report of the National Resource Council entitled "Urban Stormwater Management in the United States." This document is a light read of 529 pages and it advocates a fundamentally new system of stormwater regulation which would impose additional costs and substantially greater regulatory oversight, particularly for cities. The new system discussed by NRC would apply not only to "building on previously undeveloped sites, but also to redeveloping and retrofitting existing development" (page 406). Rather than apply to individual sites, the new permitting system would be "watershed based" (pages 346, 387 and 419). That is, the entire watershed, wherever it is located, would be the permitted area, requiring heavy involvement by cities. According to the report:

At the heart of the proposal for a new system of regulating discharges to the nation's waters is issuing permits to groups of municipalities in a watershed operating as co-permittees under a lead permittee. Furthermore, the proposal envisions these municipal permittees assuming responsibility for and implementing the permits for all public and private dischargers in their jurisdiction. (Page 411).

This is your chance. Written comments can be made or, if you're near one of the five cities, you can go and be heard (so long as you sign up by January 15th and you limit your comments to three minutes). Speak now or forever hold your stormwater.

New Stormwater Regulations Rain Down on Developers

Climate Change Aesthetics: Not a Pretty Picture

Chuck Becker — Mon, 28 Dec 2009 13:48:36 -0600

Question: “Where is the logical place to install solar panels?”
Answer by most: “The desert.”
Answer by Dianne Feinstein: “Uhh . . . not so fast.”

Between 1999 and 2004, 600,000 acres of land in the Mojave Desert were acquired by an environmental group and donated to the Federal Bureau of Land Management. There are now 14 solar energy and five wind energy projects that are seeking to construct renewable energy projects on the land.

California Senator Feinstein, a supporter of climate change legislation, is introducing legislation to prohibit the use of the land for solar or wind projects. In her words:

The Catellus lands were purchased with nearly $45 million in private funds and $18 million in federal funds and donated to the federal government for the purpose of conservation, and that commitment must be upheld. Period.

It seems to me that someone might argue that Ms. Feinstein’s definition of “conservation” is pretty narrow. Isn’t the opportunity to create renewable energy a conservation purpose? Won’t wind and solar energy help to conserve other resources, like coal and clean air? If less oil is used, aren't we conserving natural resources?

Comments made by the Senator indicate that her objection may be to the aesthetics of the proposals. Solar panel facilities and wind farms are big and visable. For some they are beautiful, for others they are ugly. According to a group that discussed the matter with Ms. Feinstein, she seemed concerned about the visual effect of huge solar farms on Route 66, the highway that runs through the Mojave.

If aesthetics begin to control the debate on locating renewable energy facilities, the winners will be the climate change objectors. They’ll sit back and watch the environmental advocates shoot at each other. For example, Ms. Feinstein’s position, which has already resulted in two major solar projects being canceled, has prompted Robert F. Kennedy, Jr. to say: “This is arguably the best solar land in the world, and Senator Feinstein shouldn’t be allowed to take this land off the table without a proper and scientific environmental review.” Governor Schwarzenegger, trying to increase the use of renewable energy in California to 33% by 2020, said: “If we cannot put solar power plants in the Mojave desert, I don’t know where the hell we can put it.” Bear in mind, these voices are supposedly on the same side.

This is one of those climate change issues that the environmental activists and climate change proponents need to get resolved quickly. Those promoting renewable energy need to understand that allowing aesthetic considerations is a sure fire way to severely limit solar and wind from the renewable energy mix because there will always be those (frequently powerful individuals) who will say that big and shiny is ugly. Without those options, what is left is primarily coal and nuclear. While that certainly is an approach that will be supported by Lamar Alexander and John McCain, I’m fairly certain it’s not what climate change advocates are contemplating.

Stormwater Regulation of Developed Sites Coming?

Chuck Becker — Fri, 18 Dec 2009 08:23:43 -0600

Recently, EPA promulgated new regulations for stormwater discharges from construction sites which, for the first time, will place a numeric limit of 280 NTU on discharges from those sites during construction. The regulations have drawn criticism but, since they will be phased in over four years, it is unlikely that any change will be made in the near future. Apparently not satisfied with addressing the runoff from construction sites, EPA has indicated that it will consider limitations for runoff which occurs at construction sites after completion of the development (otherwise known as post-construction runoff discharge). That is, EPA is considering requiring significant limits and the maintenance of controls on stormwater coming off of newly developed and redeveloped sites which will be regulated forever, not just during the period of construction.

To have a sound basis for these limits, EPA needs to collect information. It is proposing to do this by distributing a questionnaire to about 1000 developers. EPA plans to mail the 61-page questionnaire around April 2010 for response within 60 days. A response will be mandatory and failure to respond could result in civil or criminal enforcement.

The questionnaire is designed to collect financial, environmental and technical data about projects covering the period of 2005 to 2009. Some of the information to be collected includes:

1. The company’s balance sheet and income statements for 2005-2009;

2. For 10 completed projects, the Notice Of Intent permit number, number of acres, start and end dates of the projects, types of soils and capital costs for each project;

3. Land acquisition, development, financing and sales costs for each project.

A signed certification stating that the responder is aware that there are “significant penalties for submitting false information, including the possibility of fines and imprisonment” is found at the end of the form. EPA’s own estimate is that the information collection will cost just over $4,000,000 and will take the typical company 53 hours to complete the questionnaire.

I understand that EPA has broad power to obtain information. Usually that power is used when a company is suspected of wrongdoing, but that isn’t what is happening here. EPA is trying to do a study to see if the required placement and maintenance of controls for stormwater being discharged from a development . . . forever . . . can be justified. You’ll need to determine for yourself whether the data being collected will aid in making that determination.

In any event, if you want to be heard on whether this is a good way for EPA to determine whether if, and to what degree, stormwater runoff controls and limits should be imposed after a project is completed, now is your chance. You have until December 29, 2009, to give EPA your 2¢ worth. It may be the best 2¢ you ever spent.

The Train's A-Comin': More Stormwater Rule Changes

Climate Change Legislation: Ensuring A Future For Coal

Chuck Becker — Mon, 14 Dec 2009 10:10:46 -0600

While the discussions in Copenhagen move forward in fits and starts, it appears that serious progress is being made on the home front. On December 10th, Senators Kerry, Lieberman and Graham held a press conference to announce that they are going to propose climate change legislation designed to garner the necessary 60 (and perhaps more) votes. Draft legislation was not produced by the trio, but a written statement setting out the framework of the upcoming legislation was provided. There were three areas of discussion that I found particularly interesting.

First, nuclear power is a go. John McCain and Lamar Alexander required this and Graham, while discussing it, said that we will need 117 nuclear plants and that "the nuclear power industry represents the best of American jobs that will never go overseas." It will be interesting to see how much the industry will need to be subsidized to make it viable.

Second, the Midwestern politicians who want assurances that their constituents will not be penalized for having relied on coal for their energy source in the past, will be satisfied. During the move to cleaner energy, there will be "transitional assistance to households and businesses to ease the shift to a low-carbon economy." In other words, energy costs in the Midwest are not going to be disproportionate to the rest of the country.

Finally, and most surprising to me, was the declaration by the Senators that they will be "ensuring a future for coal." In their words:

Our country has plentiful, accessible coal resources and infrastructure. It is a key component of our current fuel mix. . . . Coal's future as part of the energy mix is inseparable from the passage of comprehensive climate change and energy legislation. We will commit significant resources to the rapid development and deployment of clean coal technology, and dedicated support for early deployment of carbon capture and sequestration.

In no uncertain terms, the Senators are stating that significant support will be given to ensuring that coal will be part of the mix of energy production going forward. Those that like to argue that "clean coal" is an oxymoron have been heard and their position has been rejected. From a political point of view, it was a bold, and necessary, declaration.

The statements made by Senators Kerry, Lieberman and Graham offer renewed hope that something will actually get done in the near term. Extremists have been angling for an opportunity to say that we should blow everything up and just start over because they didn't get what they wanted. At least these three Senators recognize that that isn't progress, it's capitulation. Now we'll see if they can find another 57 like-minded votes.

Will Nuclear Power Be Part Of The Solution?

New Stormwater Regulations Rain Down on Developers

Chuck Becker — Tue, 08 Dec 2009 14:22:49 -0600

Stormwater runoff from construction sites has been an area of environmental regulation that received only passing attention until sometime around 2004. In that year, EPA inspected a large retail facility, found multiple violations and imposed heavy fines. Since then, EPA has expended significant resources to ensure compliance with the regulations.

In 2008, EPA determined that the existing regulations were insufficient and proposed additional regulations. The proposed rules were put out for public comment and on November 23, 2009, EPA handed down new, technology-based guidelines. For developers and home builders, it wasn’t good news. The new regulations, found at 40 C.F.R. Part 450, impose two new requirements:

1. Construction site owners and operators that disturb one or more acres must use best management practices to ensure that soil disturbing during construction activities will not pollute nearby waters;

2. Construction sites that disturb 20 acres or more at one time (later being reduced to 10 acres) must monitor discharges from the site and prevent discharges that exceed 280 nephelometric turbidity units (NTUs) from leaving the site.

The second requirement sets out, for the first time, a numeric standard on discharge from construction sites. EPA’s original proposal was to have a numeric limit of 13 NTUs, which is a very clean discharge. During the comment period, EPA was informed that a limit of 13 NTUs would increase the cost of construction by $15,000 to $45,000 per acre. The final standard of 280 NTUs, while more lenient, will add some significant costs to new construction.

A few items of note about the 280 NTU limit:

1. If the rainfall is in excess of the 2-year, 24-hour storm event, then the limit does not apply. In effect, such a large rainfall is treated as a bypass event;

2. If less than 20 acres (or, later, 10 acres) is disturbed at one time, then the limit does not apply. As soon as a developer goes over 20 acres of open area, the limit kicks in until there is a drop below 20 acres, in which case the limit no longer applies;

3. In counting the 20 (or 10) acres, the develop must count all of the acres within the same common plan of development or sale even if the open acres are not contiguous;

4. The developer can test the effluent multiple times over the course of the day, but the average of those test results must be less than 280 NTUs to avoid a violation;

5. The BMP requirement applies at all times and is not tied to the 280 NTU limit.

Because the new requirements are a significant departure from the existing regulations, they will be phased in:

1. Construction sites that disturb 20 acres or more at one time will need to monitor beginning 18 months after the effective date of the rule;

2. Construction sites that disturb 10 acres or more at one time will need to monitor beginning four years after the effective date of the rule.

For states that have not been delegated NPDES authority and that use the federal storm water construction permits (Idaho, Massachusetts, New Hampshire, New Mexico and the District of Columbia), this means that the monitoring will begin August 1, 2011, and February 1, 2014. States that have been granted authority and periodically receive approval for the program will have a delay of the effective date. In the past, EPA has allowed the states to phase in new rules in accordance with their permit renewal dates. For example, Iowa’s storm water construction permit will be renewed on or about October 1, 2012. Therefore, Iowa’s compliance dates for the new requirements could be April 1, 2014, and October 1, 2016. We’ll have to wait to see if this interpretation is allowed for these new rules.

The changes imposed by the new rule couldn’t have come at a worse time, but, to some extent, EPA had no choice. The rule changes were in response to a court order that compelled EPA to makes changes by December 1, 2009. The question that remains is whether the new rules are sensible. That question is for another post.

The Train's A-Comin': More Stormwater Rule Changes

Fairness In Allocating Greenhouse Gas Allowances: A Difficult Balancing Act

Chuck Becker — Tue, 01 Dec 2009 13:31:41 -0600

“Fairness” is a relative, not an absolute, concept. If this was not the case, lawyers would be out of a job. Apparently, this truism can also apply to senators.

With Copenhagen fast approaching, climate change legislation will again be the topic of the day. Cap-and-trade language, as currently proposed in both the House and the Senate, allocates free CO2 allowances to electrical distributors based on a 50/50 formula; that is, 50% on total emissions and 50% on total energy sales. Under this formula, utilities that are more coal dependent will need to purchase more allowances than they would if the allowances were allocated based only on emissions, and those higher costs will be passed on to their customers.

Fourteen Democratic senators, from coal-dependent, Midwestern states, have written a letter to Senate Democratic leaders requesting that the 50/50 formula be changed to base the allowances solely on emissions.

The effect of using the 50/50 formula is that those states that have historically relied more heavily on coal-fired electrical generation, such as Iowa, North Dakota, Wisconsin, Minnesota, Illinois and Colorado, will pay significantly more for future power, during the transition period to cleaner energy, than under a 100% emissions formula. The fourteen senators argue that legislation must equitably distribute transition assistance across individuals, states and regions. Put another way, they are saying that in this transition period, we should not penalize one group or geographic area, so the 100% emission formula is the "fair" thing to do.

There are, of course, those who disagree. They argue that the purpose of the legislation is to create financial incentives to switch to lower-carbon fuel sources, so causing higher costs to higher polluting states, is, in fact, “fair” and appropriate. It is, in their view, not proper to let one group be bailed out for relying so heavily on coal-fired energy in the past.

So who's right? Like most arguments that address fairness, it all depends on where you stand.

If you believe that cleaner energy is something that had to happen last week and that we must mandate an immediate change, then it would be “fair” to force the higher expense of cleaner energy on one group. If you believe that it will take some time to wean ourselves away from using coal as the primary form of electrical generation (which we have used for more than 125 years), then it would be “fair” to attempt to make the transition less painful as proposed by the senators.

Which view should prevail? That's for you to decide, but let me add two pragmatic considerations to the mix.

First, despite the best efforts of all concerned, coal will be with us for a long time. It will likely get cleaner but, due to cost and increases in demand for electricity, it will be a significant part of the mix, along with increasing use of solar, wind, geothermal and hydro. In fact, the U.S. Energy Administration expects coal to account for 47% of U.S. electricity in 2030, which is a 2% decrease from the present.

Second, in this age when a Senate majority requires 60 votes, can 14 votes be ignored?

The SCARLETT Letter of Operator Liability

Chuck Becker — Mon, 23 Nov 2009 18:45:47 -0600

When it rains, it pours, and right now there’s a veritable typhoon of Superfund liability cases.

On September 30, 2009, the federal district court in Georgia ruled on several summary judgment motions in Scarlett & Associates, Inc. v. Briarcliff Center Partners, L.L.C. The primary question was whether a property management service could be liable for remedial costs under CERCLA and/or RCRA. The Court said yes to both.

The property in question was a strip mall that housed a leaking dry cleaning facility. The contamination was identified in the early to mid-1990s and a release notification was issued on June 27, 1994. Since that time, the plume has continually migrated and expanded. When the owner of the center failed to make its payments, AmSouth Bank of Florida took over operation of the center.

In September of 1995, AmSouth retained Faison and Associates to undertake certain property management services, which they did until September of 1997.

What Faison could not do:

1) Manage any tenant operations;

2) Assert control over which tenants were permitted to lease space;

3) Evict tenants; or

4) Assert control over any hazardous substances handled by a tenant.

What Faison could do:

1) Attempt to rent and renew rentals space to tenants approved by AmSouth;

2) Collect rent and maintain common areas;

3) Make repairs;

4) Pay utilities and taxes for AmSouth;

5) Ensure that the operators of the dry cleaning business complied with EPA’s reporting requirements on dry cleaning facilities covering PCE emissions, equipment monitoring and repair, and accounting of PCE consumption.

AmSouth successfully argued that its indicia of ownership was for the sole purpose of protecting its security interest, so it had no liability pursuant to the Secured Creditor Exemption under Superfund. Faison, its agent, wasn’t as lucky.

With respect to the CERCLA claim, the court found that, to be liable, Faison needed to be actually involved in the operations involving leakage or disposal of a hazardous waste. The Court found that there was evidence that Faison “played at least a minimal role in managing the dry cleaner’s operations specifically related to pollution.” That role was that Faison had sent the dry cleaner a letter advising it of some reporting requirements (not release related) to EPA. Based on this act and Faison's general management actions, the court found that there existed a question of whether Faison had operator liability under CERCLA.

The Court then considered RCRA liability. While CERCLA is designed to address past releases, the intent of RCRA is to regulate the ongoing use of hazardous materials and to require cleanup from those operations. That is, the party, at the time that suit is filed, must be involved in an ongoing violation of a RCRA requirement, i.e., there must be a current violation. But, in this case, Faison had been off of the site for years prior to commencment of the suit. So why was Faison liable under RCRA?

The Court held that the existing plume was continuously expanding and was, therefore, a “current violation.” Although the Court specifically found that Faison did not contribute to the past or present handling, storage, treatment, transportation or disposal of PCE, its management role on behalf of AmSouth was sufficient to support a finding that it was operating a hazardous waste treatment, storage and disposal facility.

Looking at the activities of the management company, the short time period of oversight, and the length of time since the company worked on the property, I believe that most would say that this is a very disturbing holding. Obviously, the “polluter pays” principle is nonexistent but, more importantly, what message is being sent? One message is that if a property manager is aware of any contamination at a site being managed, there are only two options: 1) Don’t manage the property, or 2) Have an iron-clad indemnification from your customer (and if it’s anyone other than a bank or Microsoft, good luck with that).

But what if the property manager doesn’t know about the releases? Short answer – it doesn’t matter. In this case, the court found that there were active releases from the dry cleaner between 1995 and 1997, but there was no evidence that Faison was aware of those releases. However, nothing in the opinion or the law requires knowledge for operator liability. All that is required is that there be a release of a hazardous substance during the manager’s watch which is still migrating (I have yet to see a plume that hasn’t migrated) and is not remediated at the time of the action (which can be years after the manager has ceased managing).

Regardless of the final outcome, I would suggest that this is bad policy. We need property managers to be able to do their job without fear of being drawn into Superfund liability. We are in an era where it is permissable for banks and land purchasers to be sheilded from environmental liability. Surely we can afford similar protection to property managers.

CERCLA Operator Liability: A Tragedy in One Act

Top Environmental Law Blogs

Chuck Becker — Mon, 16 Nov 2009 16:46:18 -0600

Many thanks to Michael Foti at Attorney.org for including this blog in the list of "Top Environmental and Land Use Law Blogs." The primary focus of Attorney.org is to raise awareness and take stands on pressing issues in an effort to fight for change. They have decided to focus some of their resources on the environment and land use and have spent what appears to be a considerable amount of time researching the available law blogs.

If you like to see good writing on very current environmental issues, take a look at the list that Attorney.org has put together. The posts by those authors will make you laugh and make you cry. But most of all, they'll make you think. And in this environmental age, there's a lot of thinking--and acting--that needs to be done.

I'm proud to be included in the list and I would encourage you to look at all of the others found there. They deserve your attention and support.

RELATED POST: Best Environmental Law Blogs

City Superfund Liability Goes Down the Drain

Chuck Becker — Tue, 10 Nov 2009 16:29:12 -0600

In September of 2009, the federal district court for the Eastern District of California issued a ruling in Adobe Lumber, Inc. v. Hellman. If the holding catches on, it should scare the sewage out of every city in the country.

The facts are fairly unremarkable as Superfund facts go. Between 1974 and 2001, a shopping center, owned by Adobe Lumber, housed a dry cleaning business. A floor drain from the dry cleaners connected to the sewer system for the City of Woodland, California through a waste pipe. The dry cleaning operators used the floor drain to dispose of waste water containing perchlorethylene, which is a hazardous substance under CERCLA. In 2001, it was determined that PCE from the dry cleaning establishment had contaminated the soils and groundwater. So far, not too surprising.

The interesting aspect of the case is that the plaintiff chose to include the City in the lawsuit. The plaintiff''s claim against the City was that the contamination was a result of the leakage of PCE from the sewer system and that the sewer system was

especially likely to leak due to … its age, the large number of joints, grout (mortared) joints and defects in the sewer system and that the city’s management and maintenance of the sewer system was re-active, minimal, and inadequate.

In suing the City, the plaintiff sought declaratory relief and cost recovery under CERCLA as well as several other theories. The plaintiff moved for summary judgment on the CERCLA claim under the theory that the City, as the owner and operator of the sanitary sewer system, had liability for any leaking hazardous substances from those facilities.

The court first addressed the question of whether the sewer pipes constituted a “facility” under CERCLA. The court noted that the term “facility enjoys a broad and detailed definition.” (For those who don’t read a lot of cases, this kind of language is a bad sign). The court then found that the sewer pipes can be deemed a facility because the statutory language identifies a facility as any site or area where a hazardous substance has been disposed of or comes to be located. The court could find no language to exclude the city’s sewer system, so it held that the pipe was a “facility” under CERCLA.

The court then went on to determine whether the city was an owner or operator of the facility. This one, however, was easier because there was no question but that the city owned the sewer system.

Finally, the city asserted the innocent landowner defense. The elements of that defense are that the defendant must prove that: 1) the release or threat of release of hazardous substances was caused solely by the acts of a third party, and 2) the defendant exercised due care with respect to the hazardous substances and took precautions against foreseeable third acts or omissions. The Court found that neither of the elements were satisfied.

First, the court found that the dry cleaners did not constitute the “sole” cause because the City allowed the sewer lines to degenerate to the state which allowed the releases to occur.

Second, the court found that though the dry cleaner's conduct clearly violated state and local law, that did not render the conduct unforeseeable as a matter of law. The evidence showed that the City did not take steps to remedy the leaks in the sewer system until 2004 even though it was aware that several dry cleaners did operate in the area. The court found that it was foreseeable that the City would be aware that PCE could be illegally discharged from these facilities and the City was required to take “reasonable steps” to prevent ongoing contamination, which the City did not do until 2004. Therefore, the City was the “owner” and “operator” of a “facility” that allowed the release of a hazardous substance.

I believe it is safe to say that the City was surprised at the outcome.

There is still a long way to go and appeals to be had, but, based on the cases cited by the court, there is every reason to believe that the City will ultimately be one of those parties who gets allocated some of the response costs for this clean up. It will be interesting to see if the Burlington Northern case lets them get out for a low percentage.

The real import to this case, in my mind, is that it, once again, highlights the idea that the “polluter pays” under CERCLA is often not true. The environmental regulatory schemes under both federal and many state laws are much less concerned with who caused a hazardous release than they are with who can be easily located to pay for the clean up of a hazardous release. And while that may be expedient, it is a far cry from making the polluter pay as that phrase is understood by most people.

CERCLA Operator Liability: A Tragedy in One Act

The Cost of Going Green

Chuck Becker — Thu, 05 Nov 2009 19:01:47 -0600

When it comes to polling consumers about their environmental beliefs, I admit to being a skeptic. People just don't tell the truth. They want to, but they just can’t help themselves.

Ask a consumer if he/she supports prohibiting air pollution from an industrial facility and you will get roughly the same response as if you asked them if the United States is the greatest country on earth. Sierra Club, Greenpeace and hundreds of other environmental groups have done an excellent job of making it “un-American” to be anything other than an unqualified supporter of everything green. The problem is that a large majority of consumers don’t really seem to mean it. What they mean is that so long as it does not cost them any money, they will be supportive. A recent study done by Grail Research entitled “The Green Revolution” provides some illuminating poll results along these lines.

In September of 2009, Grail Research polled 600 consumers about their purchases, or possible purchases, of green products. There are many significant points made in the Report, but let me focus on a few of the more interesting findings:

1. 85% of those polled stated that they have bought green products. However, only 8% of consumers buy green for a majority of their purchases (these 8% are referred to as "Dark Green" consumers);

2. 93% said that a company being perceived as green was important to their purchasing decision, yet about 80% were unable to identify green companies;

3. 15% of those polled were non-green consumers and, for 70% of them, their top reason for not going green was that the products were too expensive. Of the remaining 85%, a sizable majority will consider a green product only if it is superior or at least on par with its conventional counterpart;

4. Of the various reasons given by consumers for not buying green (too expensive, the recession, don't feel a need, not easily available, green is a fad, and the product reviews aren't good), price and the economic recession are the main factors preventing consumers from buying green products in new categories.

I know there are a lot of ways to interpret polling results, but to me, these answers suggest that lip service is being paid to being green, with the pocketbook voting otherwise. Put another way, consumers apparently want to buy green, but they need to know the cost of doing so.

Is it a bad thing that people are green primarily when it doesn't cost them anything? Not necessarily. Especially in this economy, it's consumer nature. But do we have to ignore that nature? These findings indicate that advancing an environmental agenda is likely to be a lot more successful if there is an economic advantage (which is often the case) rather than lamenting that the end of the world is near or that your puppy is going to die. It's just a thought.

CERCLA Operator Liability: A Tragedy in One Act

Chuck Becker — Thu, 29 Oct 2009 07:39:16 -0600

The principle of "polluter pays" for environmental contamination and the activity of land development have always been uneasy bedfellows. The most recent example of a sleepless night can be found in the New Jersey federal district court case of Bonnieview Homeowner’s Association v. Woodmont Builders, LLC. In a foreshadowing of things to come, Judge Deberoise’s opening line, in that case says:

This matter involves a dispute over the environmental contamination of an area of land in Montville, New Jersey, where a fruit orchard was operated in the mid-twentieth century and which was later developed into a residential neighborhood.

There is not a single well-read developer that doesn’t understand that by the end of the opinion, this is a tragedy of epic proportions.

The facts of Bonnieview HOA are the ones that every developer fears. A seemingly innocuous parcel of ground is ripe for development in the lovely city of Montville, New Jersey. At some point in the past, the property had been an apple orchard, though a Phase I Environmental Site Assessment failed to note that the orchards may have used pesticides which may have contaminated the soils.

The developer of the site, in an effort to provide the finest of “natural homesites” with a “great place to raise children” removed the topsoil from the site, stockpiled it, built the homes and returned the topsoil to the site for the lawns. No testing of the soils was done before or during the process, but, as luck (and tragedy) would have it, the soils were heavily contaminated with metals and pesticides.

The Plaintiff homeowner’s association, after discovering the facts, brought action against the developers and others contending that:

[B]y clearing the topsoil, stockpiling it, then spreading it over the Residential Lots, the Defendants caused the pesticide contamination to spread “ubiquitously across the Residential Lots” and into areas previously not contaminated, and to be extended from the surface into the subsurface soil.

Liability under CERCLA, the federal statute that requires cleanup of contaminated property, for a person operating on the property (such as a developer) requires that the operations occur at a time during which there was a disposal of a hazardous substance. In this case, there was no question that the pesticides in the soil constituted a hazardous substance. The open question was whether the mere movement of the previously contaminated soils constituted “disposal.” The Court conducted an analysis of the case law and found:

Woodmont Builders’ movement of the contaminated soils on the Residential Lots may be considered a “disposal” under CERCLA.

Ironically, the members of the Plaintiff homeowner’s association that had moved soils to put in swimming pools, driveways, etc. were also found to be liable for response costs.

It is important to note that the Court acknowledged that the developers were not liable as arrangers (due to the recent holding of Burlington Northern Railroad) but found that the developers were liable based on operator liability, which does not require knowledge of the presence of a contaminant for liability to be imposed.

There are several other interesting aspects of the case, but the fact that a developer (or a homeowner) who moves around soil that turns out to be contaminated can be responsible for response costs is the most problematic. Environmental attorneys who practice in the area of CERCLA are not particularly surprised at the outcome, but I haven't met a developer yet who isn't shocked. It is yet another instance where the “polluter pays” principle means (tragically) very little.

The SCARLETT Letter of Operator Liability

Clean Water and Mountaintop Mining No Longer Mix

Chuck Becker — Tue, 20 Oct 2009 17:17:06 -0600

On October 16, 2009, EPA drew a line in the sand regarding mountaintop mining. With regard to the Spruce No. 1 Service Mine Permit located in Logan County, West Virginia, EPA informed Arch Coal, Inc. that it was beginning the process that could result in the rescission of its Clean Water Act permit. Although the mine had a validly-issued permit from the Corps of Engineers, EPA believes that it has broad authority to veto the Corps' issued permit if it finds that serious water quality damage may occur and that there are methods to avoid such damage. In the words of William Early, the acting regional administrator for EPA in Region III:

We recognize the issued permit contains several provisions that may be intended to address water quality and mitigation based upon information and data available at the time [of the issuance of the Clean Water Act Section 404 permit]. However, in light of new data and information since permit issuance, EPA remains concerned with much of the analysis set forth in your letter, particularly as it relates to the potential for adverse water quality impacts, further avoidance and minimization measures, the potential for accumulative impacts, and identification and enforceability of success criteria for mitigation.

Mr. Early’s concern, as stated in the letter, is that the operation of the mine “may result in unacceptable adverse impacts to fish and wildlife resources.” He noted that the project allows for the construction of six valley fills for placement of excess spoil material generated through the surface coal mining activities and that there were only minimally acceptable methods to minimize impacts to aquatic resources. In EPA’s view, “there is the potential for [the mine’s] associated discharges to cause further stream degradation.” Early also noted that the existing permit fails to contain adequate measures to mitigate environmental damage and does not set out what procedure would be appropriate if water-quality impacts would happen to occur.

The action of EPA is notable in several respects:

• It is the first time that EPA has threatened to rescind a permit for a project that had been previously authorized.
• Since 1989, only one other project has received a Section 404(c) veto from EPA.
• Prior to 1989, a total of eleven projects have received a veto, none of which involved mining.

Additionally, it is interesting to note that EPA's review is purportedly based on "new data and information since permit issuance," a process that took almost ten years. Some might wonder wherther it is new evidence or a new administration that is driving the review and, if it is the latter, what impact will it have on business to know that the fundamental rules of the game (such as revoking already issued permits) can be changed every four or eight years?

Though environmentalists may look on the EPA action as an indicator that the EPA under Obama is going to be much more aggressive against mountaintop mining, perhaps this is not really the best test case for that proposition. This site was, after all, one of the very few sites that even the Bush-era EPA was reluctant to give a glowing review. In June of 2006, during the comment period for the permit for the Spruce Mine, the site received a ranking of “EC-2,” which equates to “Environmental Concerns and Insufficient Information.” Further, in its statement, EPA "emphasizes that the Spruce No. 1 represents an unusual set of circumstances we do not expect to be repeated again."

While it is a significant first step, what action is taken by this EPA for the remaining seventy-eight mountaintop mining permits will be much more telling.