Supreme Court Denies GE’s Petition on Suit Challenging Constitutionality of EPA’s Unilateral Administrative Order Authority

Posted by in CERCLA, Environmental Litigation on June 17, 2011

On June 6, 2011, the Supreme Court denied a petition for certiorari by General Electric (GE) to hear the appeal of General Electric v. Jackson, a lengthy case in which GE had unsuccessfully challenged the constitutionality of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in the U.S. District Court for the District of Columbia and the U.S. Court of Appeals – D.C. Circuit.  GE had argued that CERCLA Section 106 unconstitutionally violates due process because it authorizes the U.S. Environmental Protection Agency (EPA) to issue unilateral administrative orders (UAOs) to potentially responsible parties (PRPs) to clean up contaminated sites and effectively prohibited prior judicial review by making the risk of non-compliance penalties so onerous that no PRP would ever risk them.  42 USC §§ 9606, 9613(h).

Under CERCLA, when the EPA determines that an environmental cleanup is necessary at a contaminated site, the agency may: (1) negotiate a settlement with PRPs, 42 USC § 9622; (2) conduct the cleanup with “Superfund” money and then seek reimbursement from PRPs by filing suit, 42 USC §§ 9604(a), 9607(a)(4)(A); (3) file an abatement action in federal court to compel PRPs to conduct the cleanup, 42 USC § 9606; or (4) issue a UAO instructing PRPs to clean up the site, 42 USC § 9606.  GE’s suit challenged the constitutionality of option (4)—UAO issuance.

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SWRCB Releases Draft of New Storm Water Industrial General Permit

Posted by in Environmental Legislation and Regulation, Stormwater on February 17, 2011

The State Water Resources Control Board (the Board) has released its draft NPDES Industrial General Permit (draft Industrial General Permit).  Under the federal Clean Water Act (CWA), discharges to waters of the United States are prohibited unless in compliance with a national pollutant discharge elimination system (NPDES) permit.  CWA § 301(a).  Under the California Water Code, the Board is charged with protecting beneficial uses of California’s waters.  U.S. EPA has authorized the Board to implement the NPDES program for discharges regulated under the federal CWA.

The draft Industrial General Permit applies to most industrial facilities, including manufacturing, oil and gas, mining, hazardous waste treatment/storage/disposal, landfills, recycling, steam electric power, transportation, and sewage/wastewater treatment.  The Board asked a blue ribbon panel of experts to address whether it is technically feasible to establish numeric effluent limitations or some other quantifiable limit for inclusion in general storm water permits.  The draft Industrial General Permit reflects the findings of the panel, and incorporates elements of the U.S. EPA’s Multi-Sector General Permit (MSGP).

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Ninth Circuit Holds That Under CERCLA, Declaratory Relief Is Not Available If Past Costs Are Not Established Under Section 107

Posted by in CERCLA, Environmental Litigation, Uncategorized on September 16, 2010

 In City of Colton v. American Promotional Events Inc.-West, et al., No. 06-56718 (9th Cir. Aug. 2, 2010), the Ninth Circuit considered the issue of whether a CERCLA plaintiff’s failure to establish liability for its past costs precludes its bid to obtain a declaratory judgment as to liability for its future costs as a matter of law, an issue of first impression in the Ninth Circuit.  The court concluded “that declaratory relief is available only if liability for past costs has been established under [CERCLA] section 107.”

The litigation relates to perchlorate contamination in the Rialto-Colton groundwater basin, from which the City of Colton (“Colton”) draws its water supply.  After low detections of perchlorate in three wells, Colton took the wells out of service and instituted a wellhead treatment program.  Colton brought suit against numerous entities that had engaged in industrial activities in the area.  Colton alleged that investigating the contamination and implementing the program cost $4 million, and asserted claims for cost recovery and contribution under CERCLA §§107(a) and 113(f), a claim for declaratory relief as to liability for future costs, and various state law claims.  The future costs were estimated to be between $55 and $75 million. 

 A number of defendants filed a motion for summary judgment, and the district court held that (1) Colton could not recover past costs associated with the wellhead treatment program because it failed to comply with the national contingency plan (“NCP”), as required for recovery of response costs under CERCLA §107(a)(4); and (2) that Colton’s claim for declaratory relief failed as a matter of law.  Colton appealed both holdings.

 The Ninth Circuit quickly addressed the first issue, affirming the district Court’s denial of past response costs because Colton conceded that it failed to comply with the NCP.  Regarding the second issue of declaratory relief for future costs, the court stated that it appeared to be an issue of first impression in the Ninth Circuit, while other circuits appear to be split.  The court reasoned that since Congress expressly provides a particular remedy in CERCLA §113(g)(2), the court would not read other remedies into it.  CERCLA §113(g)(2) provides that a declaration of liability for past costs has a preclusive effect on future proceedings as to future costs.  The court reasoned that Congress’s omission of a provision for declaration of liability for future costs evinced its intention, and therefore the court concluded that such relief is available only if liability for past costs has been established under CERCLA §107.

 Colton attempted to argue that denying declaratory relief for future liability would discourage private parties from further clean-up at hazardous sites if it failed to comply with NCP in its past actions.  The Court disagreed, stating:

CERCLA’s goal, however, is not simply to encourage private response, but rather to “make the party seeking response costs choose a cost-effective course of action to protect public health and the environment” and to achieve “a CERCLA-quality cleanup.” Carson Harbor [Village Ltd. v. County of Los Angeles, 433 F.3d 1260, 1265 (9th Cir.2006)] (internal quotation marks omitted). Providing declaratory relief based on mere assurances of future compliance with the NCP would create little incentive for parties to ensure that their initial cleanup efforts are on the right track. See [In re] Dant & Russell, 951 F.2d at 250 (noting that premature relief under CERCLA can create perverse incentives).

Moreover, awarding declaratory relief before a plaintiff has incurred any recoverable costs would undermine the very purpose of declaratory relief, which is to “economize[] on judicial time.” PMC, Inc. v. Sherwin-Williams Co., 151 F.3d 610, 616 (7th Cir. 1998). A court would have to make complicated determinations as to which defendants are responsible for what proportion of the release, without any assurance that the plaintiff would ever “meet its burden of proving in an adversary proceeding that its expenses were necessary and incurred in a manner consistent with the national contingency plan.” Stanton Road Assocs. v. Lohrey Enters., 984 F.2d 1015, 1021 (9th Cir.1993).

We conclude that CERCLA’s purposes would be better served by encouraging a plaintiff to come to court only after demonstrating its commitment to comply with the NCP and undertake a CERCLA-quality cleanup.

The court therefore concluded:  “[w]here, as here, the plaintiff fails to establish section 107 liability in its initial cost-recovery action, no declaratory relief is available as a matter of law.”

EPA Publishes Case Study of Solar Farm Located on Sacramento, CA Superfund Site

Posted by in Brownfields & Superfund, Emerging Issues, Renewable Energy on August 24, 2010

 

The Aerojet General Corp. Superfund site (“Site”), located in Sacramento County, is 5,900 acres and located roughly ½ mile from the American River.  Aerojet acquired the property in 1953 to develop, manufacture, and test liquid and solid propellant rocket engines for military and commercial applications.  In addition, the Cordova Chemical Company operated chemical manufacturing facilities on the site from 1974 to 1979.  Both companies’ practices led to soil and groundwater contamination, including trichloroethylene (TCE) and perchlorate.  Starting in 1979, these contaminants of concern (and others) were found in off-site private wells, in the American River, and in off-site drinking water wells. 

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Ninth Circuit Defines “Current Ownership” for Purposes of CERCLA Liability

Posted by in CERCLA, Environmental Legislation and Regulation on August 5, 2010

 

In Dept. of Toxic Substances Control v. Hearthside Residential Corp., No. 09-55389 (9th Cir. July 22, 2010), the Ninth Circuit has clarified the issue of whether “owner and operator” status under CERCLA is defined at the time cleanup costs are incurred or instead at the time that a recovery lawsuit seeking reimbursement is filed, a question of first impression.  The Ninth Circuit held that current ownership is measured at the time of cleanup, and therefore “the owner of the property at the time cleanup costs are incurred is the current owner for purposes of determining CERCLA liability.”   (more…)

Washington State District Court Holds WDOT, the Designer and Manager of a Highway Stormwater Drainage System, Liable As An “Arranger” Under CERCLA

Posted by in Environmental Litigation, Stormwater on July 20, 2010

 

A District Court in Washington has held that the Washington State Department of Transportation (“WSDOT”) is liable as an arranger under CERCLA because it designed a drainage system with the purpose to discharge highway runoff to the environment, and at some point had knowledge that the runoff contained hazardous substances.  United States v. Washington State Department of Transportation, Case No. C08-5722RJB, 2010 U.S. Dist. LEXIS 58952, (W.D. Wash. June 7, 2010)(“WSDOT II”). 

Stormwater Liability

The litigation concerns the Commencement Bay-Nearshore Tideflats Superfund Site (“the CB-NT Site”) in Tacoma, Washington.  In 1989 the United States Environmental Protection Agency (EPA) contacted over 130 potentially responsible parties (PRPs), including WSDOT, regarding the CB-NT Site.  EPA entered into consent decrees to provide funding with over 80 PRPs in early 2003, but not WSDOT.  Consequently, the United States filed a complaint against WSDOT in late 2008.  WSDOT filed an answer and counterclaim alleging, among other things, that the United States was liable for contribution to WSDOT for response costs at the CB-NT Site due to activities of the United States Army Corps of Engineers.   

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Bill Providing Incentives for Renewable Energy Development on Contaminated Sites Advances in Senate

Posted by in Emerging Issues, Land Use & Development, Renewable Energy on July 13, 2010

 

Senator Frank R. Lautenberg has introduced legislation, called the Cleanfields Act of 2010, to provide incentives for the private sector to develop clean energy projects on contaminated sites.  In addition, Sen. Lautenberg introduced the Cleanfields Investment Act of 2010 as a companion bill, which seeks to “authorize $50 million in grants annually for the inventory, assessment, planning, and remediation of brownfields for the purpose of locating renewable electricity facilities on those sites.”   

The proposed incentives in the Cleanfields Act would work in combination with renewable energy standards which are currently being developed.  Congress is considering legislation to set Renewable Electricity Standards (RES), which would require electric utilities nationwide to meet a certain percent of their electricity sales through renewable sources of energy (e.g., sun, wind, biomass, geothermal energy, hydropower) or energy efficiency.  (See American Clean Energy Leadership Act.)  The Cleanfields Act proposes providing triple credits for electric utilities to apply toward meeting an RES, where the renewable sources are developed on Brownfields sites as defined in CERCLA §101.

The EPA encourages renewable energy development on current and formerly contaminated land already.  In a renewable energy fact sheet, the EPA summarizes the benefits of government and private sector partnerships to redevelop such sites in addition to advancing cleaner and more cost effective energy technologies:  

These lands are environmentally and economically beneficial for siting renewable energy facilities because they:

  • Offer thousands of acres of land with few site owners;
  • Often have critical infrastructure in place including electric transmission lines, roads and water on-site, and are adequately zoned for such development;
  • Provide an economically viable reuse for sites with significant cleanup costs or low real estate development demand;
  • Take the stress off undeveloped lands for construction of new energy facilities, preserving the land carbon sink; and
  • Provide job opportunities in urban and rural communities.

 While the EPA’s initiatives address Superfund, Resource Conservation and Recovery Act (RCRA), Brownfields, and abandoned mine lands, the Cleanfields Act is limited to sites which meet the definition of Brownfields under CERCLA §101.  42 U.S.C. 9601.

Recently Adopted California General Permit for Construction Storm Water Discharges Becomes Effective July 1, 2010

Posted by in Environmental Legislation and Regulation, Stormwater on June 2, 2010

 

On September 2, 2009, the California State Water Resources Control Board Division of Water Quality adopted Order 2009-0009-DWQ, the National Pollutant Discharge Elimination System (NPDES) General Permit For Storm Water Discharges Associated With Construction and Land Disturbance Activities (General Permit).  All discharges of storm water and non-storm water from construction sites are prohibited except those specifically authorized by the General Permit or another National Pollutant Discharge Elimination System (NPDES) permit.

The General Permit applies to a broad range of construction or demolition activities including, but not limited to, clearing, grading, grubbing, excavation, and any other activity that results in a land disturbance of equal to or greater than one acre.  It also applies to projects less than one acre if the construction activity is part of a larger common plan, and other construction activities related to particular projects, such as those associated with linear underground/overhead utility lines, oil and gas, agriculture that is considered “industrial,” and others.

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Wind-Powered Remediation at the Massachusetts Military Reservation on Cape Cod, MA

Posted by in Emerging Issues, Remediation, Renewable Energy on April 30, 2010

 

In their Clean-Up Information website, the EPA reported that a wind turbine has recently begun operating at the Massachusetts Military Reservation (MMR) on Cape Cod, MA, and will produce 25-30% of the energy used by the remediation treatment.  The Air Force Center for Engineering and the Environment (AFCEE), which operates the wind turbine, is the lead agent for the Installation Restoration Program for the MRP.

The MMR is a military training facility which covers approximately 34 square miles.  It contains an industrial area where for over 60 years fuels, solvents and other chemicals were used and, especially during WWII, waste disposal, spills, and leaks were common.  The MMR sits atop the recharge area for the sole source aquifer known as the Sagamore Lens.  The towns of Bourne, Mashpee, Sandwich, and Falmouth all rely on this aquifer for their drinking water.

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Statutory Contribution and Indemnity Claims Brought Under HSAA Are Barred By Good Faith Settlement Determination Pursuant To CCP §§ 877 and 877.6

Posted by in Insurance & Liability on April 5, 2010

 

On March 20, 2010, the Court of Appeal of the State of California, Fourth Appellate District, filed an opinion holding that a trial court’s determination of a good faith settlement under California Code of Civil Procedure (“CCP”) sections 877 and 877.6 bars claims for contribution and indemnity brought under Health and Safety Code section 25363, a provision of the Carpenter-Presley-Tanner Hazardous Substance Account Act (“HSAA”).  Fullerton Redevelopment Agency v. Southern California Gas Company, No. G041781, 2010 Cal. App. LEXIS 437 (Cal. App. 4th Dist. Mar. 30, 2010).

CCP §§ 877 and 877.6 permit a party to shield itself from claims for contribution and indemnity by a joint tortfeasor when the party enters a good faith settlement.  On the other hand, the HSAA authorizes the California Department of Toxic Substances Control (“DTSC”) to order potentially responsible parties (“PRPs”) to clean up property with hazardous substances, and then grants the PRPs who incur clean up costs the right to seek contribution and indemnity from others who are liable.  The Court in Fullerton held that CCP §§ 877 and 877.6 bars HSAA contribution and indemnity claims based on the plain language of the two statutes, but also offered analysis of related case law concerning good faith settlements and the barring of related indemnity and contribution claims.

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