The EPA Significant New Use Rule (“SNUR”): More Bureaucracy or Real Change?

The U.S. EPA recently promulgated a Significant New Use Rule (“SNUR”) under the Toxic Substances Control Act (TSCA). The SNUR would require companies to notify EPA prior to newly manufacturing, importing, or processing certain perfluorinated chemicals commonly used in carpet treatment and manufacture.  See Christopher L. Bell, Environmental Protection Agency(“EPA”) Promulgates Significant New Use Rule for Perfluorinated Chemicals – And Limits Its Applicability to “Articles,” Greenberg Traurig, LLP, The National Law Review, October 29, 2013. 

The newly promulgated SNUR is different from prior TSCA rules issued by EPA because it focuses on certain articles containing the chemicals, whereas in the pasts EPA was only concerned with the chemicals themselves. Id.  The proposed SNUR was broader in its effect on all articles that contain the perfluorinated chemicals.  The final rule was narrower in scope, affecting only identified articles, namely carpets and carpet pieces. Id.  Perhaps comments submitted by affected industries and others during the comment period on the proposed rule provided information or reasons for EPA to narrow the scope of the rule. 

Hopefully, this rule does not simply have the effect of creating more paper-work for industry.  It will remain to see what practical affect this SNUR or other newly promulgated SNURs will have on the ultimate goal of chemical safety in the United States. 

-- Contributed by Ashley Ivanov

From Pristine to Earth: A Fictional Adventure About Many Environmental Realities

I freely admit that the children's novel From Pristine to Earth by Ashley Ivanov was written by my research assistant. So this is a biased review.

The novel, written for upper elementary and pre-teen students, is a creative means to a real-world end. It was written teach environmental concepts in an imaginative and entertaining way to make children aware of the need for a safe, healthy and clean environment. 

The novel touches on various topics, including the benefits of recycling and the need for clean air and water. However, the primary messages are the need to minimize the risks associated with harmful chemicals by creating safer alternatives and the need for society to develop and use plastics that break down faster in the environment. 

In the end the author leaves us not knowing whether these reforms will have a successful impact or merely be words on paper. As she writes, “[t]ime will tell.”

Students can learn that reform can be accomplished in various ways, including voting for candidates who support change and through the media which can sometimes influence Congressional action. Grassroots activists -- in the trenches planting the seeds for change -- are usually involved in both.

As the book points out, there are current attempts being made to influence Congress to pass new federal chemical legislation. Current federal law, the Toxic Substances Control Act (“TSCA”), was enacted in the 1970s and has been ineffective as it does not ensure that only safe chemicals are used in the United States. It is estimated that approximately eighty thousand chemicals available in the United States have not been fully tested for their safety. See Natural Resources Defense Council (NRDC), Of these eighty thousand chemicals, EPA has required testing for only an estimated two hundred (a quarter of one percent of the total) and has partially regulated only five (less than one percent).  Id.  

Congress is currently considering legislation to reauthorize TSCA. Perhaps, like the new law described in the book, a reauthorized TSCA would, among other things, shift the burden of proof from EPA to the chemical’s manufacturer to prove that that the chemical is safe and provide a means for adequate, independent validation and verification.  

You won’t find many (any?) books written for pre-teens that realistically addresses TSCA and other environmental issues in an entertaining story that engages kids. It could be used in science classes for upper elementary students to introduce these important environmental concepts through a good story with interesting characters.

The novel is available at Amazon.com and online only from Barnes & Noble.

Fourth Circuit Affirms Ashley District Court Decision

In a much anticipated decision, the United States Court of Appeals for the 4^th Circuit finally issued a decision in the PCS Nitrogen v Ashley II of Charleston, 2013 U.S. App. LEXIS 6815 (4^th Cir. 4/4/13) case.

The decision, however, did not provide the clarity that many were hoping for about the controversial decision by the District Court that the purchaser of the property, Ashley II of Charleston, did not qualify as a Bona Fide Prospective Purchaser (BFPP) and receive exemption from liability because it had indemnified a responsible party and, therefore, had an improper “affiliation” with that party.   

Larry Schnapf’s always illuminating blog, Business Environmental Law and Transactional Support, has a full discussion of the ruling and many of the other issues in the case here.

I served as a mediator for the parties to assist them in resolving the allocation issues and settle the case before litigation. I will not comment about the many issues in the case or the 4^th Circuit decision – except to point out that, given the “much ado about nothing” results, as Larry described the decision, the parties could have resolved the case without litigation. Instead, no party “won” much and all parties lost something.

Certainly the cost of litigation could have funded some if not all of the costs of a negotiated settlement. 

Federal Agencies Told to Use ADR Techniques to Resolve Environmental Issues

Federal agencies have yet again been directed to use Alternative Dispute Resolution (ADR) techniques to resolve disputes.  This time the Acting Director of the Office of Management and Budget and the Chair of the Council on Environmental Quality have directed relevant departments and agencies to

“increase the appropriate and effective use of third-party assisted environmental collaboration as well as environmental conflict resolution to resolve problems and conflicts that arise in the context of environmental, public lands, or natural resources issues, including matters related to energy, transportation, and water and land management. See Memorandum on Environmental Conflict Resolution.

Of course this is not the first time the White House has encouraged the use of ADR techniques in the federal government. For example, in 1998 President Clinton ordered agencies and departments to take steps to promote greater use of ADR techniques to resolve disputes and to negotiate regulations See Memorandum for Heads of Executive Department and Agencies

The memo sets out the use of ADR techniques to address environmental matters and directs federal agencies to use neutral facilitation to settle conflicts in issues related to energy, transportation and water and land management issues.

The memo applies to all executive branch agencies with regard to each agency’s enabling legislation, the National Environmental Policy Act (NEPA) and other laws aimed at managing and conserving the environment, natural resources and public lands. The complete memo is here.

Information about other relevant federal environmental ADR resources can be found at the Department of Justice web site the Department of Interior Office of Collaborative Action and Dispute Resolution web site and the EPA Conflict Prevention and Resolution Center site.

DOHA 2012 Climate Change Conference

The United Nations Framework Convention on Climate Change (UNFCCC) created the Conference of the Parties (COP) in order to get developed and non-developed nations to produce a plan to lower greenhouse gas (GHG) emissions and help prevent global climate change.

Despite recent events like Hurricane Sandy, Doha 2012 COP 18 saw little progress towards a lasting agreement of significant limits on GHG emissions.

No major progress has been made with regard to any of the issues. One of the focal points of this year’s conference has been extending the Kyoto Protocol commitments, which are set to expire at the end of this year. Doha 2012 punted by simply extending Kyoto. The real issue with Kyoto though is how to track and enforce the commitment of different countries. And how to find an equitable solution that will satisfy all stakeholders.

While extending Kyoto is a necessary action, it certainly does not solve our global warming problems. For one, the Kyoto only applied to developed nations, so China, Brazil and India were not a part of any emission reduction agreements. With these nations rapidly industrializing, it is crucial to involve them in some kind of GHG emissions reduction pact. One way is for developed countries to lead with ambitious reduction goals, with the United States participating; something that has not happened up to this point.

Arab countries’ involvement is also critical and many hoped that holding COP 18 in Qatar would help encourage Arab nations to become more involved in climate negotiations. Unfortunately, few Arab nations seem interested. With many of these countries sitting on vast oil reserves with significant solar potential, they have failed to set any targets for solar energy use.

In a recent interview, the U.N. Secretary General said that developed nations should assume most of the responsibility in fighting climate change as historically developed nations have caused the most damage.  While many would not disagree with this assertion, it does not bring the parties closer to an agreement. 

Obviously developed nations are most responsible for our current dilemma. However, developing nations like China, Brazil and India are rapidly industrializing and are now will certainly in the future be a major source of GHG emissions and contribute significantly to global warming. The solution has to involve everyone.  

Assisted by Michael Ciccarone

Wayne State Law School Environmental Law Clinic Director Gaining Recognition

Nick Schroeck is executive director of the Great Lakes Environmental Law Center and teaches at the Wayne State University Law School Environmental Law Clinic.  A 2007 graduate of Wayne State University law school, Nick is receiving recognition for his many accomplishments in environmental law.  Good for Nick and good for Wayne State Law School, my alma mater.

Nick has worked on a wide range of environmental issues and often appears in the media to help educate the public about environmental issues.  He has been involved in many of the recent environmental law issues in the Great Lakes area.

Nick often appears in the media speaking about high profile issues such as how to keep Asian carp out of the Great Lakes and hydraulic fracturing.  Good to see Wayne State Law School taking a leadership role in the public discourse about the environment. 

Federal Agencies Directed to Use Conflict Resolution to Resolve Environmental Issues

Federal agencies have been directed yet again to use Alternative Dispute Resolution (ADR) techniques to resolve disputes.  This time the Acting Director of the Office of Management and Budget and the Chair of the Council on Environmental Quality have directed relevant departments and agencies to

“increase the appropriate and effective use of third-party assisted environmental collaboration as well as environmental conflict resolution to resolve problems and conflicts that arise in the context of environmental, public lands, or natural resources issues, including matters related to energy, transportation, and water and land management. See Memorandum on Environmental Conflict Resolution 

This is not the first time the White House has encouraged federal agencies to use ADR techniques. For example, in 1998 President Clinton ordered agencies and departments to take steps to promote greater use of ADR techniques to resolve disputes and to negotiate regulations. See Memorandum for Heads of Executive Departments and Agencies

The latest memorandum requires that agencies use ADR techniques when appropriate to develop regulations and policy, resolve land management disputes and resolve enforcement issues related to water and land management, energy and transportation issues.

The memo applies to the executive branch agencies’ enabling legislation, the National Environmental Policy Act (NEPA) and other laws aimed at managing and conserving the environment, natural resources and public lands.  The complete memo is here.

Information about some of the relevant federal environmental ADR resources can be found at the Department of Justice website the EPA Conflict Prevention and Resolution Center website and the Department of Interior Office of Collaborative Action and Dispute Resolution website.

Supreme Court Case on EPA’s Power to Order Environmental Compliance

On January 9, 2012, the Supreme Court will hear oral argument on a case that may establish the extent, both under law and the Constitution, of the power of the EPA to order compliance with certain environmental laws – and seek judicial enforcement of those orders.

The two questions presented to the Court are 1) whether parties can seek pre-enforcement review of EPA administrative compliance orders under the Administrative Procedure Act, 5 U.S.C. §704 (“APA”); and 2) whether, if not, the inability to seek pre-enforcement review is a violation of the Due Process Clause of the Constitution.

The Court granted certiorari to hear an appeal of Sackett v. U.S. Environmental Protection Agency (Docket No. 10-1062) http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/10-1062.htm. This case comes up from the Ninth Circuit Court of Appeals, the Circuit with the most cases, by far, recently reviewed and overturned by the Supreme Court. In the last term, the Supreme Court reversed the Ninth Circuit in 19 out of 26 cases, an extremely high 79% reversal rate.

The facts of the case are about the actions Chantell and Michael Sackett took on their own 0.63-acre -vacant lot near Priest Lake in Idaho. The Sacketts filled in a portion of the lot with dirt and rock to build a house. EPA issued a compliance order alleging that the filled in area of the property is a wetland subject to regulation under the Clean Water Act, 33 U.S.C. §1251 et seq. (“CWA”), and that the Sacketts were unlawfully discharging pollutants into waters of the United States without a permit, in violation of 33 U.S.C. § 1311(a).

The Sacketts, without first seeking a CWA Section 404 permit, a jurisdictional determination or informal guidance from the Army Corps of Engineers or EPA, sought a hearing with EPA to challenge the finding that their property was subject to the CWA; EPA refused to grant the hearing, so the Sacketts filed suit in the US District Court seeking an injunction and declaration from the Court that EPA did not have jurisdiction, alleging that EPA’s compliance order was (1) arbitrary and capricious under the APA; (2) issued without a hearing in violation of the Sackett’s due process rights under the Constitution; and (3) issued on an unconstitutionally vague standard of “any information available.”

The District Court granted EPA’s motion to dismiss based on lack of subject matter jurisdiction, agreeing with the government that the CWA precludes judicial review of EPA compliance orders before EPA initiates an enforcement action in federal court. The Ninth Circuit agreed (622 F.3d 1139), stating that “We join our sister circuits and hold that the Clean Water Act precludes pre-enforcement judicial review of administrative compliance orders, and that such preclusion does not violate due process.” Id. at 1141.

This case has become a big deal for the environmental law cognoscenti. Amicus briefs in support of the Sacketts were filed by many, including the American Farm Bureau Federation, the U.S. Chamber of Commerce, the Competitive Enterprise Institute, the Mountain States Legal Foundation and the American Petroleum Institute, among many others.

Interestingly, the APA Watch, a nonprofit organization which describes itself as devoting “significant effort to combating federal agencies’ exceeding their authority under the Administrative Procedure Act…” filed a brief supporting neither party but expressing its concerns about issues not raised by the parties to this litigation under the APA to protect future litigants.

While not raised by the Sackett’s in their case, APA Watch points out that parties injured by non-final agency action have an independent right of redress under the APA §10(c), even when that action is not made reviewable by the underlying statute.

This case presents equities on both sides of the question. On the one hand, agencies charged with protecting the environment must have the statutory and judicial tools necessary to enforce against parties who take action – even on their own properties – that violate the environmental laws that were enacted to protect all of us; on the other hand, the Constitution sets forth due process principles intended to restrain unfair and inequitable governmental actions.
I look forward to seeing how the Supreme Court balances these equities; my guess is that whatever the decision, the Court will recognize and protect the APA interests articulated by APA Watch.

Challenges to Environmental Permits in Maryland

In April, I wrote of a change in the Maryland Code that altered the Maryland environmental permitting appeals procedure to give standing to not only those with a direct financial interest in the results of the permit, but to anyone who participated in a public participation process conducted by the Maryland Department of the Environment (MDE).

Well, the Maryland Court of Appeals, in a September 2011 decision in Patuxent Riverkeeper v. Maryland Department of the Environment, et al. has given effect to this amendment by holding that environmental advocacy groups such as the Plaintiff, Patuxent Riverkeeper, can challenge actions by the MDE to grant permits because “its member…had alleged sufficient harm to his aesthetic, recreational and economic interests in connection with the issuance of the non-tidal wetlands permit in issue.” Id. at p. 3

As I previously suggested, and especially now that the Court has upheld this change in the law regarding standing to challenge permits, applicants should consider how to work with local citizens and other interested groups before requesting a permit. Working things out with affected stakeholders can be more cost-effective than litigation and produce better results.

Environmental Liability Insurance and Voluntary Cleanups

Pollution Legal Liability (PLL) policies offer pollution liability protection to industrial, commercial and agricultural property owners for gradual, as well as sudden and accidental, first-party and third-party environmental liabilities. They have become an increasingly common method for property owners of potentially contaminated properties to protect themselves from unexpected liability for the costs of environmental site cleanup as well as against third-party claims for property damage and personal injury.

As is the case in nearly all insurance policies, the details of the specific language and scope of coverage (and exclusions from coverage) matter a lot. For example, in a recent Connecticut Federal District Court case, the plaintiff bought property contaminated with solid waste with the intent to sell and purchased a PLL. The plaintiff agreed to remediate the site and entered into a state-approved voluntary cleanup plan (VCP). Unfortunately (and not uncommonly), the site was more contaminated than originally thought. The plaintiff then sought reimbursement under the insurance policy. When the insurance company denied coverage, the plaintiff sued. The Court decided that voluntary cleanups were not covered by the specific policy at issue in the case and held that since the cleanup was not "required," there was no "claim" under the policy. Fischer and Dab Three LLC v. American Specialty Lines Ins. Co., 2010 WL 2573909 (D. Conn.)

This outcome was entirely dependent on the language of the policy. The policy at issue did not have a discovery trigger (i.e., coverage is “triggered” by the discovery of contamination, not by the assertion of an adverse claim) in the relevant coverage section for cleanup costs based on pre-existing conditions. Therefore, the policy was only triggered by a “claim” for "cleanup costs" as required by "Environmental Law."

The lesson of this case: pay close attention to the specific language of the policy and what triggers coverage. It makes sense to purchase a policy that has a discovery trigger, not just a claim trigger. While coverage under PLL policies can be triggered by the insured's discovery of contamination, policies often limit the scope of cleanup cost coverage to the extent cleanup is "required by Environmental Law." Be sure that the definition of "Environmental Law" includes voluntary cleanup and risk-based corrective action programs.

In this case, the insured plaintiff was just removing debris, so there was no "claim" for "cleanup costs" under "Environmental Law." There were no measured levels of contamination. As the court pointed out, the definition of "claim" is closely linked to the definition of "cleanup" which is closely linked with "environmental laws."

John C. Cruden Named President of Environmental Law Institute

The Environmental Law Institute Board of Directors recently announced that they have selected John Cruden as President, one of the most respected environmental lawyers in the country. Until his selection by the ELI, John was Deputy Assistant Attorney General for the Environment and Natural Resources Division.

An effective advocate, legal scholar and consensus-builder, John Cruden is the perfect choice to lead the EIL.

In the ELI press release announcing his appointment, Cruden is quoted as saying:

“The nation and the world are at an important crossroads,” said Cruden. “For 40 years, the U.S. has been among the world leaders in developing a legal framework to control pollution and manage our natural resources. Republican and Democratic presidents passed historic laws with broad bi-partisan support from Congress that benefit our nation, our people and our economy. That legacy—the essential framework of an efficient system of governance and level playing field grounded in the rule of law, sound science and public participation—is in jeopardy.

While it is a lot easier to develop consensus when you are holding the stick as the enforcer, John is certain to be an effective leader and consensus builder at the ELI. Congratulations to the ELI for the wisdom to select John and best wishes to John as he moves on to the next phase in his distinguished career.

For more information about John Cruden, please click here. For a video of John discussing his new role as ELI President, click here.

CERCLA Liability in Real Estate Transactional Documents

Jose R. Allen has recently posted a blog about CERCLA liability in real estate transactions for the American College of Environmental Lawyers. Transactional lawyers are now very aware of the need to address environmental liability issues in the connection with the purchase and sale of commercial and industrial properties.

I’ve mentioned the American College of Environmental Lawyers website before. Allen blogs about a recent federal district court decision, Stimson Lumber Co. v. Int'l Paper Co.,CV 10-79-M-DWM-JCL (D. Mont. 2011), that “illustrates the importance of not only including provisions in purchase and sale agreements for indemnity as to pre-closing conditions, but ensuring that such provisions unambiguously reflect the parties’ intentions regarding CERCLA statutory liability”.

The Stimson Lumber court held that the purchaser of industrial property could sue the seller for CERCLA costs “even though the period of seller's contractual indemnity for environmental claims had expired under the terms of the sale contract.”

All transactional lawyers drafting indemnification provisions allocating liability for hazardous waste contamination should pay close attention to the lessons from this case. The Stimson Lumber decision tells us that words matter and environmental liability and indemnification provisions in real estate contract must be, as Allen writes: “either very broad and quite absolute in the allocation of future liabilities or very specific and complete in reflecting sometimes subtle distinctions between indemnity for and assumption of liability.”

The only way to effectively protect clients in these cases is to first think through and then draft very clearly and carefully.

Environmental Lawyers as Problem Solvers

Charles Tisdale, a highly regarded environmental lawyer, mediator and arbitrator of Superfund cost allocation disputes has posted an insightful blog on the American College of Environmental Lawyers website about why environmental lawyers seem not to have split into litigation factions the way other fields of practice have (i.e., plaintiff personal injury attorneys don’t often represent defendants in PI cases, labor lawyers are generally either union or management and so on).

He suggests it is because we all breathe the same air. We all live in the same boat and we all have a stake in whether, in the end, the boat floats or not. As Chet writes:

We may argue over how clean is clean and what is the best available technology for control of pollution. However, our shared belief that earth must be preserved creates a basis for reasoned debate, which results in reduction of pollution and a successful resolution of conflict.

This, and perhaps other factors (see below), can lead to environmental lawyers focusing much more on negotiating solutions with the other side rather than on litigation as the first option. This is not to say, however, that environmental disputes are never litigated.

Environmental cases often involve complex technical issues, multiple parties and voluminous documents. This leads to very high litigation costs. And often the results of litigation are unsatisfying to many of the litigants; especially in Superfund cost allocation disputes where courts have a great deal of discretion. Often in such litigation no one wins.

These factors lead lawyers and their clients to negotiate. And that means that environmental lawyers especially must understand the other parties’ cases to reach a solution that works.

Successful environmental lawyers must establish reputations for honesty. It is difficult to successfully negotiate if you have been seen as hiding data or otherwise dissembling. This does not mean that environmental lawyers are better people or lawyers than other practitioners, just that, to succeed, when lawyers are forced to negotiate with adversaries they must be thoughtful about how to negotiate and must understand the consequences of their behavior – in the particular case and over time.

Another reason environmental lawyers tend to be problem solvers is they often must explain complex statutes to clients; develop productive relationships with regulators who are not going to disappear; and create successful solutions that avoid the need for litigation.