Transcript Title

2014 A&WMA
Environmental Law Update
David Ashton
Assistant General Counsel
What We Will Cover
● Clean
Water Act (CWA) developments
● CERCLA
developments
● Bankruptcy
& Environmental law
Expansion of Clean Water Act Jurisdiction
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Jurisdictional Background for “waters of the United States”
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1970s
• Any water body the use, degradation, or destruction of which could affect interstate
commerce.
2001
• “Isolated” non-navigable ponds and waters whose only connection to interstate commerce
is their use by migratory birds not subject to CWA.
– Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531
U.S. 159 (2001)
2006
• Streams and wetlands are only subject to CWA when “significant nexus” to navigable
waters.
• “Adjacent waters” must be reasonably close in proximity to a river or lake.
– Rapanos v. United States, 547 U.S. 715 (2006)
» Raised considerable doubt as to whether tributaries with only intermittent or
ephemeral flows were subject to CWA
2007
• Existing regulations cover only adjacent wetlands, and not other types of adjacent waters.
– San Francisco Baykeeper v. Cargill Salt, 481 F.3d 700 (9th Cir. 2007)
Expansion of Clean Water Act Jurisdiction
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Connectivity of streams and wetlands to downstream waters:
A review and synthesis of scientific evidence
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EPA draft report (2013) findings:
1.) All streams, regardless of size or frequency of flow,
are connected and have important effects on
downstream waters.
2.) Wetlands and open-waters in flood plains and riparian
areas are integrated with streams and rivers.
3.) There is insufficient information to generalize about
wetlands and open-waters outside of riparian areas and
floodplains and about their connectivity to down stream
waters.
Expansion of Clean Water Act Jurisdiction
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Proposed EPA Guidance to identify waters protected by CWA
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1.) Small streams and streams that flow part of the year are protected under
CWA if they have a physical, chemical, or biological connection to larger
bodies of water downstream and could affect the integrity of those
downstream waters.
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2.) When a water body does not have a surface connection to an interstate
water or a traditional navigable water, but there is a significant physical,
chemical, or biological connection between the two, both water bodies should
be protected under CWA.
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3.) Water bodies may be “traditional navigable waters” and subject to CWA
protections, under a wider range of circumstances than identified in previous
guidance.
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4.) Interstate waters are protected.
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If the body of water crosses state boarders it is protected whether it is
navigable or not.
Expansion of Clean Water Act Jurisdiction
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Summary of Key Points in the Proposed Guidance
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The following waters are protected under CWA:
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Traditional navigable waters
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Interstate waters
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Wetlands adjacent to either traditional navigable waters or interstate waters
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“adjacent” means bordering, contiguous, or neighboring.
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“neighboring” encompasses all waters located within a flood plain or
riparian area of, or that have a surface or shallow subsurface hydrologic
connection to, a jurisdictional body of water.
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Non-navigable tributaries to traditional navigable waters that are relatively
permanent (i.e., contain water at least seasonally)
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Would eliminate Rapanos definition of adjacent.
Includes any natural or man-made channel or wetland that contributes flow
directly or indirectly to a downstream body of water
The territorial seas
Tributaries were not previously defined in the regulations
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Tributary: means a water body physically characterized by the presence of a
bed and banks and ordinary high water mark, which contributes flow, either
directly or through another water, to a water [that is jurisdictional]. In
addition, wetlands lakes, and ponds are tributaries (even if they lack a bed
and banks or ordinary high water mark) if they contribute flow, either directly
or through another water to a water [that is jurisdictional]. A water that
otherwise qualifies as a tributary under this definition does not lose its status
as a tributary if, for any length, there are one or more man-made breaks
(such as bridges, culverts, pipes, or dams) or one or more natural breaks
(such as wetlands at the head of or along the run of a stream, debris piles,
boulder fields, or a stream that flows underground) so long as a bed and
banks and an ordinary high water mark can be identified upstream of the
break. A tributary, including wetlands, can be natural, man-altered, or manmade water body and includes waters such as rivers, streams, ponds,
impoundments, canals, and ditches not excluded [in this section].
Expansion of Clean Water Act Jurisdiction
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Summary of Key Points in the Proposed Guidance (cont.)
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In addition, the following waters are protected by CWA if a fact-specific analysis
determines they have a "significant nexus" to a traditional navigable water or
interstate water:
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Tributaries to traditional navigable waters or interstate waters
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Wetlands adjacent to jurisdictional tributaries to traditional navigable waters or
interstate waters
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Waters that fall under the "other waters" category of the reg.
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guidance divides these waters into two categories:
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those physically proximate to other jurisdictional waters
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those that are not, and discusses how each category should be
evaluated.
Eliminates San Francisco Baykeepers’ “only adjacent wetlands” rule.
All impoundments of waters of the United States
“Significant nexus” means a water body that more than speculatively or insubstantially,
alone or in combination with similarly situated waters in the region, affects the chemical,
physical, or biological integrity of a jurisdictional water body.
Expansion of Clean Water Act Jurisdiction
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Summary of Key Points in the Proposed Guidance (cont.)
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The following aquatic areas are generally not protected under CWA:
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Wet areas that are not tributaries or open waters and do not meet the agencies' regulatory
definition of "wetlands"
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Waters excluded from coverage under the CWA by existing regulations
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Waters that lack a "significant nexus" where one is required for a water to be protected by the
CWA
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Artificially irrigated areas that would revert to upland should irrigation cease
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Artificial lakes or ponds created by excavating and/or diking dry land and used exclusively for
such purposes as stock watering, irrigation, settling basins, or rice growing
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Artificial reflecting pools or swimming pools created by excavating and/or diking dry land
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Small ornamental waters created by excavating and/or diking dry land for primarily aesthetic
reasons
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Water-filled depressions created incidental to construction activity
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Groundwater drained through subsurface drainage systems and
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Erosional features (gullies and rills), and swales and ditches that are not tributaries or
wetlands
Expansion of Clean Water Act Jurisdiction
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By expanding the Clean Water Act jurisdiction, the proposed rule would
require permits for a wide array of development projects in extensive areas
not previously subject to regulation.
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This would include virtually every category of resource utilization and
development interest including but not limited to:
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Real Estate development
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Including master planned communities
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Water resource development and use
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Forest products
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Mining
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Oil and gas
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Energy project siting and operation
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Marina and port development
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Transportation and infrastructure
NPDES Permits
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National Pollutant Discharge Elimination System (NPDES)
permits are required for all facilities that discharge pollutants
from any point source into waters of the United States.
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Pollutants
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Any type of industrial, domestic/municipal, and
agricultural waste discharged into water
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Three categories:
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Conventional
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Toxic
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Non-Conventional
NPDES Permits
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Pollutants can enter waters of the US from a variety of pathways including agricultural,
domestic/municipal, and industrial sources.
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sources are categorized as either Point Sources or Non-Point Sources, and Direct
and Indirect.
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Point Sources
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Typical point source discharges include discharges from POTW, and outfalls of
industrial facilities and urban areas.
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majority of agricultural facilities defined as Non-Point Sources and are exempt
from NPDES regulation.
Direct Point Sources
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Indirect Point Sources
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Discharge wastewater directly into the receiving water body.
Discharge wastewater into POTW, which in turn discharges into receiving body of
water.
NPDES permits are issued only to Direct Point Sources.
NPDES Permits
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NPDES permits are typically a license for a facility to discharge a specified amount of a
pollutant into a receiving water under certain conditions.
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However, permits may also authorize facilities to process, incinerate, landfill, or
beneficially use sewage sludge.
Two types of permits: individual and general:
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Individual Permits
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Specifically tailored to an individual facility
General Permits
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Covers multiple facilities within a specific category
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May cover a category of Point Sources
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Storm water point sources
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Facilities that involve the same or substantially similar types of operations
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Facilities that discharge the same types of wastes or engage in the same
types of sludge use or disposal
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Facilities that require the same or similar monitoring
Los Angeles County Flood Control District v. Natural
Resources Defense Council, Inc., 133 S.Ct. 710 (2013)
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Facts
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The County of Los Angeles and the Los Angeles County Flood Control District
control and operate a municipal separate storm sewer system (ms4).
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ms4 is highly interconnected between 84 cities and some unincorporated
areas of the county amounting to 500 miles of open channels and 2,800 miles
of storm drains.
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No comprehensive map of storm drain system exists.
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Storm water is channeled in the ms4 to various watercourses including the Los
Angeles River, the San Gabriel River, the Santa Clara River, Malibu Creek,
and eventually Pacific Ocean.
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Evidence was provided that the monitoring stations for Los Angeles River and
San Gabriel Rivers, located in a section of the ms4, discharge storm water
known to contain standards-exceeding pollutants into the two rivers.
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allows untreated and heavily polluted water to enter the rivers and eventually
Pacific Ocean.
Natural Resources Defense Council, Inc. v. County
of Los Angeles, 636 F.3d 1235
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2010 - 9th Circuit Held:
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CWA prohibits discharges that are not in compliance with CWA
into navigable waters.
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CWA is indifferent to originator of water pollution
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anyone who discharges pollutants into navigable waters is
responsible and liable.
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“Act bans the discharge of any pollutant by any person
regardless of whether that person was the root cause or
merely the current superintendent of the discharge.” Id. at
1253
Therefore, the County of Los Angeles and the Los Angeles
County Flood Control District are liable for pollutants that pass
through the ms4 and into the rivers whether or not they are the
originators of that pollution.
Los Angeles County Flood Control District v. Natural
Resources Defense Council, Inc., 133 S.Ct. 710 (2013)
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SUPREME COURT DISAGREES WITH THE NINTH CIRCUIT!!!
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Supremes held transfer of water from one water body to
another does not constitute a discharge under CWA.
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bases this opinion on previous holding of South Florida
Water Management District v. Miccosukee Tribe of
Indians, 541 U.S. 95 (2004) (Miccosukee I)
– Miccosukee
I: transfer of water from one water body
to another does not constitute a CWA discharge
unless the two bodies of water are “meaningfully
distinct.”
Los Angeles County Flood Control District v. Natural
Resources Defense Council, Inc., 133 S.Ct. 710 (2013)
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In LA County, Supremes held since the water merely flowed
through a manmade channel and back into the same river no
CWA discharge had occurred.
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“Under a common understanding of the meaning of the word
‘add,’ no pollutants are ‘added’ to a water body when water is
merely transferred between different portions of that water
body.” Id. at 713.
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Supremes cite the dictionary:
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“add” means “to join, annex, or unite (as one thing to
another) so as to bring about an increase (as in number,
size, or importance) or so as to form one aggregate.” Id.
Unitary Water Theory
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Unitary Water Theory
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all waters of the United States are one unitary whole, rather than separate
individual bodies of water.
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The unitary water theory arises from the language of CWA that prohibits
“the discharge of any pollutant by any person” unless done in compliance
with the act. “discharge of a pollutant” is defined as “any addition of any
pollutant to navigable waters from any point source.”
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Take note that the word “any” does not appear before “navigable
waters”, whereas it does appear in front of “pollutant” and “point
source”
This can be read in two different ways:
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1.) No pollutants can be discharged into any individual body of water,
or
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2.) No pollutants can be discharged into any water, with all bodies of
water representing the whole of navigable waters
EPA’s Water Transfer Rule
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The EPA’s water transfer rule:
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transfer of water between two bodies of water does not
implicate CWA unless the transfer subjects the transferred
water to an intervening industrial, municipal, or commercial
use.
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only initial point source of pollutants is regulated
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not transfer of polluted water
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Under this framework, the most polluted water can be
transferred into the most pristine water as long as the
transferred water is not subjected to an intervening
industrial, municipal, or commercial use.
Court’s Treatment of the Unitary Water Theory
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In Miccosukee I, Supremes criticized Unitary Water Theory but declined to rule on
matter.
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This was due to the conflicting NPDES regulations that arose from the practice of the theory.
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In Friends of the Everglades v. SFWMD, 570 F.3d 1210 (11 Cir. 2009)
(Miccosukee II), the Unitary Water Theory was upheld.
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Industrial water users can obtain “intake credit” for pollutants present in water that user
withdraws from navigable waters. When user discharges those waters user does not have
to remove preexisting pollutants as long as user discharges intake water into the same
body of water from which it was withdrawn.
At the time Miccosukee I was decided EPA had not yet formulated Water Transfer Rule. WTR
was a reasonable solution to an ambiguous statute (applying Chevron doctrine).
In Catskill Mountains Chapter of Trout Unlimited, Inc. v. USEPA, 2014 WL
1284544 (S.D. NY 2014) (Catskills III), application of Unitary Water Theory was
vacated.
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Holding – also applying Chevron doctrine - : 1.) water transfer rule was arbitrary and
capricious; 2.) the provision of rule interpreting scope of “navigable waters” was arbitrary and
capricious; and 3.) remand to EPA was warranted.
Catskill Mountains (2014)
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Catskill Mountains Chapter of Trout Unlimited, Inc. v. USEPA, 2014
WL 1284544 (S.D. NY 2014) (Catskills III), vacating application of
Unitary Water Theory through WTR:
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Soup analogy to explain differences between discharges within a
single body of water and discharges between two distinct bodies of
water:
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“if one takes a ladle of soup from a pot, lifts it above the pot, and
pours it back into the pot, one had not ‘added’ soup or anything
else to the pot”
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The question is whether there are two pots of soup, not one
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“The implication of the analogy is that ladling one type of soup-say
mulligatawny-into a pot of soup containing another type of soupsay, wild mushroom,-adds “pollutants” to the recipient soup,
spoiling the soup and leaving no soup for you.”
Silvicultural Rule, 40 C.F.R. § 122.27(b)(1)
1976 - 2014
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Silvicultural Rule
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NEDC v. Brown, 640 F.3d 1063 (9th Cir. 2010)
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Specifically defined timber "harvesting operations, surface drainage, or road
construction and maintenance from which there is natural runoff" to be "non point
source silvicultural activities" excluded from NPDES permitting.
Held that NPDES permits were required for forest road storm water runoff.
Decker v. NEDC, 133 S. Ct. 1326 (2013)
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Reverses Ninth Circuit’s Brown
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Upholds the EPA’s interpretation of its regulations to exclude storm water runoff
from logging roads from NPDES permitting as a discharge associated with
industrial activity
NEDC v. Decker, 728 F.3d 1085 (9th Cir. 2013) (on remand)
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Revived specific issue of whether storm water runoff collected in a system of
ditches, culverts, and channels are point sources to which Clean Water Act
NPDES permit requirements apply.
February 2014 Farm Act, H.R. 2642 §12313
Silvicultural Activities
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Amends CWA to clarify that an NPDES permit is not required for storm
water runoff from logging roads and other specified forestry activities
conducted in accordance with standard industry practice
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Eliminates any uncertainty associated with the EPA’s pre-existing
regulation known as the Silviculture Rule, 40 C.F.R. §122.27 that
defines these same activities as non-point source silviculture
activities which are not subject to NPEDS permit requirements
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Does not change the status of other permitting requirements,
such as §404 Dredge and fill permits.
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Logging and other forest road operators will continue to be
subject to state best practices and similar rules protecting water
quality.
2014 Farm Act, H.R. 2642 §12313
Silvicultural Activities
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The new law specifically eliminates any NPDES permit
requirements for any discharge from runoff resulting from the
following forestry activities conducted in accordance with standard
industry practice:
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Nursery operations
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Site preparation
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Reforestation and subsequent cultural treatment
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Thinning
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Prescribed burning
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Pest and fire control
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Harvesting operations
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Surface drainage
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Road construction and maintenance
Hoosier Environmental Council and Citizens for Appropriate Rural
Roads v. US Army Corps of Engineers, 722 F.3d 1053 (2013)
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Background
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This case is concerned with filling of wetlands and six stream
crossings.
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CWA §404(a) authorizes USACE to issue permits to discharge
“dredged or fill materials” into US navigable waters.
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Permit will be denied if USACE finds a practicable alternative to
proposed discharge that would have a less adverse impact on
aquatic ecosystem, or if discharge would be contrary to the public
interest.
Facts
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I-69 is an incomplete interstate highway that is planned to run from
Canada to Mexico and passes through Indiana.
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This controversy centers on the construction of a section of
between Indianapolis and Evansville Indiana.
I-69
Hoosier Environmental Council and Citizens for Appropriate Rural
Roads v. USACE, 722 F.3d 1053 (2013)
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Facts (cont.)
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Before construction of I-69 there were two alternative routes one could travel between
Indianapolis and Evansville.
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Indirect Route:
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Take I-70 from Indianapolis to Terre Haute,
then Route 41 from Terre Haute to
Evansville
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Direct Route:
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The roads on the Direct Route
(future I-69) tend to be narrow,
crowded with truck traffic and
experience an above average
incidence of traffic accidents.
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The Indirect Route is 155 miles long
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The Direct Route is 142 miles long
circled section is the subject of this dispute
Hoosier Environmental Council and Citizens for Appropriate Rural
Roads v. US Army Corps of Engineers, 722 F.3d 1053 (2013)
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Facts (cont.)
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Environmentalists opposed building a highway on the direct route since it would destroy wetlands,
disrupt forests, and disrupt karst ecosystems.
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The federal and state highway authorities prepared Environmental Impact Statements concluding
that building the new interstate was preferable to upgrading the Indirect Route.
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USACE concluded that the CWA would not be violated since there was no less environmentally
damaging alternative that was practicable, and the highway (Direct Route) was not contrary to
public interest.
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USACE is only required to assess the environmental impact of practicable alternatives
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The highway agencies found that the Indirect Route was not a practicable alternative
USACE reviewed the Environmental Impact Statement before issuing the permit.
USACE found that the Federal Highway Administration's Environmental Impact Statement
narrowed USACE’s duty to the selection of alternative alignments within the Direct Route
HOLDING
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If another agency makes a responsible analysis, USACE can rely on it when making it’s own
determination.
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Different agencies have different comparative advantages and do not need to duplicate each
others’ studies, therefore USACE was not required to conduct a totally independent environmental
analysis
Agricultural Conservation Practices Exemptions
from Clean Water Act
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Interpretive Rule Regarding Applicability of Exemption from
Permitting under §404(f)(1)(A) of CWA to Certain Agricultural
Conservation Practices.
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Exempts certain discharges associated with normal farming,
silviculture, and ranching activities in “waters of the United
States,” including wetlands.
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interpretive rule is already in effect, as of April 21, 2014,
even though EPA and USACE are still receiving public input
on its implementation.
rule identifies specific Natural Resources Conservation Service
agricultural conservation practices that are appropriately
considered normal farming activities and are exempt from
permitting for discharges of dredged or fill material.
CONSERVATION PRACTICE STANDARDS
EXEMPT FROM PERMITTING UNDER CLEAN WATER ACT SECTION
404(f)(1)(A)
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Brush Management
Herbaceous Weed control
Irrigation Canal or Lateral
Clearing and Snagging
Conservation Cover
Prescribed Burning
Critical Area Planting
Monitoring Well
Windbreak/Shelterbelt Establishment
Fence
Fuel Break
Field Border
Irrigation Field Ditch
Riparian Herbaceous Cover
Riparian Forest buffer
Filter Strip
Firebreak
Stream Habitat Improvement and Management
Aquatic Organism passage
Fish Raceway or Tank
Fishpond Management
Bivalve Aquaculture Gear and Biofouling Control
Grassed Waterway
Hedgerow Planting
Hillside Ditch
Land Reclamation, Landslide Treatment
Land Reclamation, Toxic Discharge Control
Land Clearing
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Forage and Biomass Planting
Prescribed Grazing
Pumping Plant
Land Reclamation, Abandoned Mined land
Land Reclamation, Currently Mined Land
Grazing Land Mechanical Treatment
Range Planting
Trails and Walkways
Animal Trails and Walkways
Stream Crossing
Structure for Water Control
Vegetative Barrier
Tree/Shrub Establishment
Restoration and Management of Rare and Declining Habitats Wetland
Wildlife Habitat Management
Shallow Water Development and Management
Early Successional Habitat Development Management
Windbreak/Shelterbelt Renovation
Road/Trail/Landing Closure and Treatment
Forest Trails and Landings
Wetland Restoration
Wetland Enhancement
Tree/Shrub Pruning
Forest Stand Improvement
Mulching
Tree/Shrub Site Preparation
Obstruction Removal
Forage Harvest Management
In re Deepwater Horizon,
No. 12-30883 (5th Cir. June 4, 2014)
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Defendants BP Exploration & Production, Inc. (BP) and Anadarko
Petroleum Corp. (Anadarko) owned 65 and 25 percent, respectively, of
Macondo well drilled by vessel Deepwater Horizon, that subsequently
blew out in 2010 and resulted in a oil spill that lasted nearly three months.
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Following summary judgment in favor of Plaintiff US on the question of
defendants’ liability for civil penalties under CWA, defs BP and Anadarko
appealed.
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BP & Anadarko’s argument:
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Liable facility was the Deepwater Horizon (owned by Transocean)
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Not the well
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Deepwater Horizon vessel with riser, was the owner of the facility
from which oil was discharged
In re Deepwater Horizon,
No. 12-30883, (5th Cir. filed June 4, 2014)
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The Fifth Circuit affirmed district court’s holdings:
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(1) BP and Anadarko were liable for civil penalties under 33
U.S.C. § 1321(b)(7)(A), which imposes mandatory penalties
upon the owners of facilities “from which oil or a hazardous
substances is discharged;
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(2) Discharge is the point where “uncontrolled movement”
begins; and
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(3) Oil flowing from the well through the Deepwater Horizon’s
riser was a discharge from the well itself.
Conclusion
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The jurisdiction of the Clean Water Act is expanding!
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This may have impact on many activities that were previously not covered by
CWA.
NPDES Permits
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If you simply transfer water from one point in a body of water to another point
in that same body of water it will not be considered a “discharge” violating a
NPDES permit.
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Certain forestry activities are now exempt from NPDES permitting.
Dredged and Fill Permits
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Agencies, such as USACE, that are charged with permitting do not have to
conduct completely independent environmental analysis if a responsible
analysis has been conducted by another agency.
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Many agricultural conservation practices are exempt from dredged and fill
permit requirements.
CWA Penalties
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Discharge is point where “uncontrolled movement” begins
Comprehensive Environmental Remediation,
Compensation, and Liability Act
(CERCLA)
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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42 U.S.C. § 9658 provides that for certain state-law tort actions
involving environmental harms, CERCLA will preempt a state
statute of limitations commencement date and replace it with a
delayed commencement date provided by federal law.
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The Supreme Court recently granted certioriari to determine
whether the Fourth Circuit correctly interpreted § 9658 to apply
to state statutes of repose in addition to state statutes of
limitations.
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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CTS Corp. argues that § 9658 is “limited to a state’s statute of
limitations, not a state’s statute of repose.”
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CTS Corp.’s argument is dependent on a distinction between
time-barring statutes. CTS Corp. alleged that:
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Statutes of repose are substantive limitations, and
conditions precedent to a party’s right to maintain a lawsuit
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Statutes of limitation are procedural devices that operate
as a defense to limit the remedy available from an existing
cause of action.
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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CTS Corp. relied on statutory interpretation, particularly plain
language and legislative history analysis, to bolster their
argument.
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CTS Corp. noted that a CERCLA Study Group Report
distinguished between statutes of limitation and repose, but
the final language of the § 9658 mentions only statutes of
limitation, and thus CTS asserts that Congress deliberately
omitted statutes of repose from the statutory language.
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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CTS Corp. also made a federalist argument, stating that the
Fourth Circuit’s interpretation of § 9658 amounts to a dramatic
federal intrusion upon a matter traditionally left to the states
(“effectively eviscerating state statutes of repose”).
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Waldburger argued the term “statute of limitations” in § 9658
is should be interpreted broadly, and that the legislative
history supports a broad interpretation that it includes statutes
of repose.
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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Waldburger specifically noted that the Study Group Report,
under the heading “Statutes of Limitation,” recommends that:
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States adopt the rule that an action accrues when the
plaintiff discovers or should have discovered the injury or
disease and its cause, and
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States “repeal … statutes of repose which, in a number of
states have the same effect as some statutes of limitation
in barring [a] plaintiff’s claim before he knows that he has
one.”
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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Waldburger noted that the Fourth Circuit correctly reasoned
that Congress, in its adoption of § 9658, was “equally
concerned with statues of repose and limitations, and with
their effect of barring plaintiffs’ claims before they are aware
of them.”
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Walburger additionally noted that a search of the United
States Codes reveals that Congress never uses the term
“statute of repose,” although it indisputably enacts statutes of
repose; further, the North Carolina statute at issue similarly
omitted the term “repose”
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014)
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Following CTS Corp.’s petition, the Supreme Court granted
certiorari, and held that:
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(1) CERCLA’s discovery rule preempts only state statutes
of limitation and not statutes of repose (abrogating
McDonald v. Sun Oil Co., 548 F.3d 774 (9th Cir. 2008));
and,
–
(2) CERCLA’s discovery rule did not impliedly preempt
state statutes of repose.
CTS Corp. v. Waldburger,
No. 13–339, --- S. Ct. ----, 2014 WL 2560466 (June 9, 2014).
•
In support of its holding, the Supreme Court reasoned that
statutes of limitation and repose have distinct purposes
targeting different actors:
– (1) Statutes of limitation prevent the surprise revival of
claims that have been “allowed to slumber until evidence
has been lost . . . and witnesses have disappeared;”
however, they are subject to equitable tolling when
extraordinary conditions prevent bringing a timely action
– (2) Statutes of repose are not related to the accrual of any
cause of action, and are generally not subject to equitable
tolling; they effect a legislative judgment that defendants
should “be free rom liability after the legislatively
determined period of time.”
In re September 11 Litigation
No. 10-4197, 2014 WL 1717232 (2d Cir. May 2, 2014)
•
A building owned by Cedar & Washington Assoc., LLC,
plaintiff-appellant, was contaminated as a result of the
September 11, 2001 attack on the World Trade Center.
•
Plaintiff-appellant sought to recover costs incurred during
remediation of the contaminated dust and debris generated by
the collapse of buildings at the World Trade Center complex.
•
On appeal from decision on remand that went in favor of
defendants owners and lessees of World Trade Center,
airlines, and other companies), Second Circuit affirmed the
district court’s holdings that:
In re September 11 Litigation
No. 10-4197, 2014 WL 1717232 (2d Cir. May 2, 2014)
(1) Under CERCLA §107(b), 42 U.S.C.S. § 9607(b), the
September 11, 2001 attacks:
(a) wrested from the defendants all control over the planes
& buildings;
(b) obviated any precautions or prudent measures
defendants might have taken to prevent contamination;
and,
(c) located sole responsibility for the event, and the
environmental consequences, on fanatics whose acts
defendants were not bound by CERCLA to
anticipate or prevent;
In re September 11 Litigation
No. 10-4197, 2014 WL 1717232 (2d Cir. May 2, 2014)
(2) September 11 attacks fit the category of "acts of war" under
CERCLA;
(3) The act-of-war defense barred the CERCLA claim, and the
developer did not identify any other basis for its claim of
indemnification;
(4) Because no legal duty or equitable consideration obligated
defendants to remediate World Trade Center Dust from the
developer's building, this common law claim failed.
Commonwealth of Penn. Dep’t of Envtl. Prot. v. Beazer East, Inc.
553 F.App’x 153 (3d Cir. Dec. 17, 2013)
•
Dep’t of Envtl. Prot. (DEP) sought recovery of cleanup costs
under CERCLA § 107, 42 U.S.C.S. § 9607, for removal of
hazardous waste from a former strip mine that was later
converted into a landfill.
•
In its claim against five defendants, DEP alleged that the
action taken at the site was a “remedial action” rather than a
“removal,” and thus subject to a longer statute of limitations.
•
When action originally taken DEP called it “limited interim
response” and decision documents indicated response was
not a final remedial response and additional response action
may be necessary
Commonwealth of Penn. Dep’t of Envtl. Prot. v. Beazer East, Inc.
553 F.App’x 153 (3d Cir. Dec. 17, 2013)
•
District court disagreed, and ruled in favor of defendants
•
On appeal, Third Circuit held:
(1) District court properly dismissed an action brought by
DEP seeking reimbursement for cleanup costs under the
CERCLA § 107, 42 U.S.C.S. § 9607, because:
(a) the actions undertaken by the DEP on the site were
a removal;
(b) action undertaken was intended to remove the
hazardous waste from the area, not remedy the
damaged environment.
Commonwealth of Penn. Dep’t of Envtl. Prot. v. Beazer East, Inc.
553 F.App’x 153 (3d Cir. Dec. 17, 2013)
•
Third Circuit held (continued):
(2) Because the action was not a remedy, but rather a
removal, the DEP filed its complaint beyond the applicable
three-year limitations period set forth in 42 U.S.C.S. §
9613(g)(2)(A).
Commonwealth of Penn. Dep’t of Envtl. Prot. v. Beazer East, Inc.
553 F.App’x 153 (3d Cir. Dec. 17, 2013)
•
Implications of Third Circuit decision:
“A removal action is not converted into a remedial action just
because it effects a permanent remedy.”
–
•
553 F. App’x at 158 (quoting Hatco Corp. v. W.R. Grace & Co.—
Conn., 849 F.Supp. 931, 962 (D.N.J. 1994)).
How a cleanup is described in decision documents can be decisive re
relevant SOL.
Bernstein v. Bankert, 702 F3d 964 (7th Cir 2012) cert. denied,
134 S.Ct. 1024 (Jan. 27, 2014)
•
•
Certiorari to Seventh Circuit denied, 134 S.Ct. 1024 (Jan. 27, 2014)
What CERCLA remedies does a person who has settled have under
CERCLA?
–
§ 107 cost-recovery; or
–
§ 113 contribution?
•
Trend: if you’ve settled; limited to § 113
•
Held:
–
Plaintiffs can bring a § 107 suit for costs they were compelled to incur
under the AOC.
–
However, under AOC once plaintiffs complete AOC work & EPA certifies
completion, plaintiffs will no longer have a § 107
•
“resolved liability”
•
Only § 113
Bernstein v. Bankert,
733 F.3d 190 (7th Cir. 2013), cert. denied, 134 S.Ct. 1024 (Jan. 27, 2014)
•
In its amended opinion, the Seventh Circuit held that:
–
A settling PRP’s liability is not resolved for purposes of CERCLA §
113(f)(3)(B) contribution claim, 42 U.S.C. § 9613(f)(3)(B)
–
until activities required under a settlement agreement have been
completed.
–
“The end result is that a § 9613(f)(3)(B) contribution action, predicated
as it is on the resolution of liability, is not available simply because a
settlement has occurred. The trigger is the resolution of liability
through that settlement, which, pursuant to the statute, does not occur
until satisfactory performance has been certified.” 702 F.3d @ 976.
–
EPA can still draft liability releases that are triggered prior to
completion of work required by settlement, thereby “resolving” liability
before work is fully completed.
Bernstein v. Bankert, 702 F3d 964 (7th Cir 2012)
cert. denied, 134 S.Ct. 1024 (Jan. 27, 2014)
•
7th Circuit Ruling Created Confusion:
–
What happens to a claim that starts as § 107 cost-recovery action once
plaintiff has completed AOC performance?
–
Case suggests that SOL limitations period for such actions does not start
running until work under settlement agreement is complete.
–
If trigger for actual resolution of liability to US is completion of settlement
obligations and not settlement signing, isn’t settling party vulnerable to a
lawsuit by US or others while it is performing its duties under an AOC?
•
Party’s liability would not be “resolved” and, therefore, the settling party
would get the protection from contribution lawsuits (“contribution
protection”) available through § 113(2)
ASTM 1527-13 – All Appropriate Inquiry
•
On December 30, 2013, USEPA issued its final rule approving
the use of ASTM International’s revised “Standard Practice for
Environmental Site Assessments: Phase I Environmental Site
Assessment Process,” ASTM E1527-13, for meeting the “All
Appropriate Inquiries” standard under Comprehensive
Environmental Response, Compensation, and Liability Act
(CERCLA) and implementing regulations at 40 C.F.R. Part 312.
•
EPA had issued a final rule approving the revised standard on
August 15, 2013, but withdrew that rule due to adverse public
comments.
ASTM 1527-13
•
The new final rule addresses those comments and does not
provide an additional comment period. The rule went into
effect on December 30, 2013.
•
Although the new rule does not prohibit the continued use of
the previous ASTM E1527-05 standard, EPA states its intent
to publish a proposed rule, in the near future, to amend the All
Appropriate Inquiries final rule to remove the reference to the
previous ASTM E1527-05 standard. The anticipated
proposed rule will allow for public comment.
ASTM 1527-13
•
Although ASTM E1527-13 is not a significant departure from
ASTM E1527-05, there are three noteworthy changes:
(1) updates to the definitions of recognized environmental
conditions (RECs) and historical recognized environmental
conditions (HRECs), and the addition of a requirement to
identify controlled recognized environmental conditions
(CRECs);
(2) addition of requirements to assess the potential for vapor
intrusion; and,
(3) inclusion of additional steps in the regulatory file-review
process and mandatory user responsibilities.
Enforcement of Environmental Law
in Bankruptcy
In re Munce’s Superior Petroleum Products Inc.,
736 F.3d 567 (1st Cir. Nov. 20, 2013)
•
Debtor Munce’s Superior Petroleum Products ("MSPP") had a
long history of violating environmental regulations and
refusing to pay resulting environmental fines.
•
MSPP stored fuel in above-ground oil tanks at three of its
facilities in New Hampshire without secondary containment
systems, violating containment requirements and other
environmental laws.
•
New Hampshire Dep’t of Envtl. Servs. ("NHDES") notified
MSPP of violations, and MSPP did not take any corrective
action.
In re Munce’s Superior Petroleum Products Inc.,
736 F.3d 567 (1st Cir. Nov. 20, 2013)
•
In 2010, NHDES instituted a state court action seeking an injunction
and civil penalties against MSPP.
•
State court entered injunction requiring MSPP to comply or cease
using tanks. When MSPP did neither, NHDES moved to hold it in
contempt.
•
While the contempt motion was pending, MSPP filed for Chapter 11.
•
Bankruptcy petition stayed the contempt motion.
•
NHDES moved for relief from stay.
•
Bankruptcy court held that automatic stay did not apply to NHDES'
contempt action because it was an action “for the purpose of
protecting public health and safety, and the environment, and to
effectuate public policy.”
In re Munce’s Superior Petroleum Products Inc.,
736 F.3d 567 (1st Cir. Nov. 20, 2013)
•
Once the stay was lifted, the state court granted NHDES’
contempt motion. The court gave MSPP 10 days to remove the
tanks from service. After that, it fined MSPP $1,000 a day for
every day of noncompliance.
•
MSPP again did not take action.
•
NHDES moved for an assessment of contempt penalties.
•
The court ordered MSPP to pay $192,000 in civil penalties.
•
NHDES moved to have fines treated as an administrative priority
claim under Section 503(b) Bankruptcy Code.
•
Under 503(b), “actual, necessary costs and expenses of
preserving the estate” are entitled to priority as administrative
expenses and are paid in full ahead of general creditors’ claims.
In re Munce’s Superior Petroleum Products Inc.,
736 F.3d 567 (1st Cir. Nov. 20, 2013)
•
MSPP argued that, unlike a compensatory fine, which can be
given priority, a punitive civil fine cannot be given priority.
•
First Circuit disagreed, citing earlier law finding that it would
be “fundamentally” unfair to allow a polluter to avoid a civil
penalty simply because it had filed for bankruptcy.
In re Munce’s Superior Petroleum Products Inc.,
736 F.3d 567 (1st Cir. Nov. 20, 2013)
•
Implications of the First Circuit decision:
(1) In the First Circuit, civil penalties for environmental
violations are prioritized ahead of general creditors.
(a) The NHDES would receive its full $192,000 penalty
before any general creditor would be paid anything.
(b) This decision thus creates the potential that
environmental fines could greatly impair or even
eliminate the payments to general creditors.
In re Munce’s Superior Petroleum Products Inc.,
736 F.3d 567 (1st Cir. Nov. 20, 2013)
•
Cases in other circuits have similarly concluded that
noncompensatory environmental fines should receive
administrative priority:
•
In re Chateaugay Corp., 112 B.R. 513, 525 (S.D.N.Y. 1990)
(“penalties for post-petition violations would also be entitled to
be treated as administrative expenses”);
•
U.S. Dept of Interior v. Elliott, 761 F.2d 168 (4th Cir. 1985)
(civil penalties assessed while debtor is operating as debtor in
possession had administrative priority);
•
In re N.P. Mining Co., 963 F.2d 1449 (11th Cir. 1992) (“when
a trustee or debtor in possession operates a bankruptcy
estate, compliance with state law should be considered an
administrative expense”).
Thank you