California Governor Signs Bill To Limit Certain Prop. 65 Lawsuits

Posted by in Emerging Issues, Environmental Litigation on October 10, 2013

By Michael Einhorn and Nancy Wilms

Governor Jerry Brown recently signed into law Assembly Bill 227 (Gatto) to provide a two-week grace period to address certain alleged violations of failure-to-warn requirements under Proposition 65.

In addition to the previously required “60-day” notice, AB 227 mandates that a potential Prop. 65 plaintiff first provide certain potential defendants a notice of special compliance procedure and “proof of compliance” form.  The potential defendant then has 14 days after receiving the notice to (1) correct the alleged violation, (2) pay a $500 civil penalty, and (3) notify the potential plaintiff that the violation has been corrected using the provided “proof of compliance” form.  This $500 civil penalty is substantially smaller than the potential $2,500 per day per violation civil penalty otherwise provided for in Section 25249.7 of Prop. 65.  The law limits application of this grace period to once for every violation arising from the same exposure at the same location.  This new compliance procedure is limited to alleged violations for exposure to four categories of substances:

  • alcohol legally consumed on an alleged violator’s premises;
  • chemicals that occur naturally in food prepared for consumption (which were not intentionally added);
  • second-hand smoke exposure on premises where smoking is permitted, if caused by non-employees; and
  • vehicle exhaust at primarily non-commercial parking garages.

The Governor had proposed his own legislation in May 2013 with broader changes to Prop. 65, including capping attorney fee awards, requiring stronger proof by plaintiffs prior to litigation, requiring greater disclosure by plaintiffs, limiting the amount of money in an enforcement case that can go into settlement funds in lieu of penalties, and providing for more useful warnings to the public.  No legislation has been passed under this proposal.  AB 227, while narrower, is nonetheless described in a press release by the bill’s sponsor, Assemblyman Mike Gatto (D-Los Angeles) as providing a “fix-it ticket” method to curb “meritless lawsuits.”

Prop. 65 was passed in 1986.  By its own terms, amendments to Prop. 65 require a two-thirds supermajority vote of the Legislature and it has therefore been difficult to reform.  AB 227, which amends Cal. Health and Safety Code Section 25249.7, was approved on September 11, 2013 on a 75-0 vote and signed into law on October 5, 2013, making it the first substantial amendment to Prop. 65 in 15 years.

Ninth Circuit Holds Wood Preservative from Utility Poles Discharged into the Environment does not Violate the Clean Water Act or RCRA

Posted by in Clean Water Act, Emerging Issues, Resource Conservation and Recovery Act, Stormwater on July 1, 2013

Nancy Wilms and Michael Einhorn

In Ecological Rights Foundation v. Pacific Gas and Electric Company, 713 F.3d 502 (9th Cir. April 3, 2013), the Ninth Circuit panel affirmed the dismissal of a citizen suit alleging utility poles discharged wood preservative containing pentachlorophenol (“PCP”) into the environment in violation of the Resource Conservation and Recovery Act (“RCRA”) and the Clean Water Act (“CWA”).   Based on the allegations of the complaint, the court held PCP-based wood preservative that escapes the poles was not a “solid waste” under RCRA.  It also held stormwater runoff from the utility poles was neither a “point source discharge” nor “associated with industrial activity,” and therefore does not violate the CWA.

Preservative that escapes through “normal wear and tear” is not “solid waste” under RCRA

To establish an “imminent and substantial endangerment” citizen suit under RCRA, a plaintiff must establish three things:  (1) the defendant has been or is a generator or transporter of solid or hazardous waste, or is or has been an operator of a solid or hazardous waste treatment, storage or disposal facility; (2) the defendant has “contributed” or “is contributing to” the handling, storage, treatment, transportation, or disposal of solid or hazardous waste; and, (3) the solid or hazardous waste in question may present an imminent and substantial endangerment to health or the environment. 42 U.S.C. § 6972(a)(1)(B).  In this case, which focused on the third prong, the Ecological Rights Foundation (“ERF”) did not allege the PCP-based wood preservative at issue is “hazardous waste.”  Therefore, the Ninth Circuit found the case turned on the issue of whether that preservative is “solid waste” within the meaning of RCRA.

The Ninth Circuit found RCRA’s statutory definitions of “solid waste” and “disposal” were too ambiguous to help decide whether “solid waste” includes wood preservative that escapes from utility poles.  42 U.S.C. §§ 6909(3) and (27); see also 42 U.S.C. § 6901(a)(2).  The court then turned to RCRA’s legislative history, and found “RCRA covers ‘waste by-products of the nation’s manufacturing processes,’ as well as manufactured products ‘themselves once they have served their intended purposes and are no longer wanted by the consumer.’” ERF v. PG&E, 713 F.3d at 515, citing H.R. Rep. No. 94-1491(I), at 2.

The court explained ERF was concerned not with wood preservative that is in or on the utility poles, because there the preservative is clearly being put to its intended use as a general biocide.  Instead, ERF was concerned with wood preservative that leaks from or otherwise escapes the utility poles.  The Ninth Circuit held such escaping preservative is neither a manufacturing waste by-product nor a material that the consumer (in this case defendants PG&E and Pacific Bell as owners of the utility poles) no longer wants and has disposed of or thrown away.  The Ninth Circuit concluded PCP-based wood preservative that escapes from treated utility poles through normal wear and tear, while the poles are in use, is not “automatically” a RCRA “solid waste.”[1]

The court supported its holding by citing a Second Circuit opinion which held pesticides are not being “discarded” when sprayed into the air consistent with their intended purpose.  ERF v. PG&E, 713 F.3d at 515-516, citing No Spray Coal., Inc. v. City of New York, 252 F.3d 148, 150 (2d Cir. 2001).  The Ninth Circuit explained that, like the pesticide example, the application of wood preservative to utility poles furthers the intended purpose of those poles.  While ERF argued wood preservative that escapes from utility poles is no longer serving its intended use, the court disagreed, reasoning wood preservative that falls to the base of a utility pole still serves its intended purpose by inhibiting the growth of vegetation, fungi, and other organisms.  The court further supported its decision by noting EPA treats spent munitions under RCRA in the same way – as having served their intended purpose rather than being discarded, citing Military Munitions Rule: Hazardous Waste Identification and Management; Explosives Emergencies; Manifest Exemption for Transport of Hazardous Waste on Right-of-Ways on Contiguous Properties, 62 Fed. Reg. 6,622, 6,630 (Feb. 12, 1997) (codified at 40 C.F.R. § 266.202).  In addition, the Ninth Circuit noted EPA approved the use of PCP as a wood preservative for utility poles, railroad ties and pilings under the Federal Insecticide, Fungicide, and Rodenticide Act while regulating certain categories of materials containing PCP, including “wastes” from PCP manufacturing processes and discarded unused formulations containing PCP.  ERF v. PG&E, 713 F.3d at 516-517, citing 7 U.S.C. §§ 131-136y; 40 C.F.R. § 261.31(a)(Table — F021, F027, F032), 261.32 (Table — K001).

Finally, the Ninth Circuit stated “common sense” compels its decision because accepting ERF’s argument would lead to untenable results.  The court noted that as of 2008, there were 36 million utility-owned wood poles in the United States treated with PCP, so requiring their replacement defies reason.  In fact, accepting the plaintiff’s argument might lead to extreme results as everything from railroad ties to lead paint that naturally chips away from houses could also qualify as “solid waste” and thus be potentially actionable under RCRA.

However, while the Ninth Circuit expressly decided “wood preservative that escapes from wooden utility poles as those poles age has not itself been ‘discarded’ and therefore is not a ‘solid waste,’ under RCRA” it also suggested different allegations could lead to a different result:  “we do not decide  whether or under what circumstances PCP, wood preservative, or another material becomes a RCRA ‘solid waste’ when it accumulates in the environment as a natural, expected consequence of the material’s intended use.” ERF v. PG&E, 713 F.3d at 518. 

Utility poles are not “point sources” or “associated with industrial activity” under CWA

Under the CWA, a “point source” is defined as any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, . . or vessel or other floating craft, from which pollutants are or may be discharged.”  33 U.S.C. § 1362(14).  The Ninth Circuit found the ERF allegations of generalized stormwater runoff were insufficient to establish that the utility poles were point sources and rejected ERF’s argument the utility poles are themselves “conveyances” as unsupported by case law.  The court noted ERF failed to allege the PCP-based preservative went directly into the waters of the United States or flowed into discrete conveyances and, from there, into the waters of the United States, and the court upheld the district court’s dismissal without leave to amend to add these allegations.  As a result, it is unknown what impact such allegations would have had on the Ninth Circuit’s ruling.

The Ninth Circuit also found dismissal of the CWA claim proper as stormwater runoff from the utility poles is not “associated with industrial activity” for four reasons.  First, a utility pole is not directly related to manufacturing, processing or raw materials storage at an industrial plant.  40 C.F.R. § 122.26(b)(14).  In reaching this holding, the Ninth Circuit applied Decker v. Northwest Envtl. Def. Ctr., 133 S. Ct. 1326, 1330 (U.S. 2013), where the Supreme Court held discharges of channeled stormwater runoff from logging roads were not “associated with industrial activity.”

Second, the Standard Industrial Classification system used in the Code of Federal Regulations to define the industrial activities it covers does not include utility poles.  See 40 C.F.R. § 122.26(b)(14)(ii)–(iii), (vi), (viii), (xi).  Third, EPA included “steam electric power generating facilities” in the definition of “industrial activity,” but rejected including “major electrical powerline corridors” in the regulation. See 40 C.F.R. § 122.26(b)(14)(vii).  Based on this distinction, the Ninth Circuit found it reasonable to conclude EPA did not intend to include utility poles in the definition either.

Finally, the Ninth Circuit reasoned if runoff from utility poles were a discharge associated with industrial activity, many other commonplace things, such as playground equipment, bike racks, mailboxes, traffic lights, billboards and street signs would arguably require stormwater runoff regulation which could lead to an “absurd result.”

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[1] The court emphasized its holdings turned on the particular allegations of ERF’s complaint and circumstances may exist wherein wood preservative released into the environment through normal wear and tear could be considered to be a “solid waste.”

The Impacts of Sequestration Cuts on EPA Programs

Posted by in Administrative Law, Emerging Issues, NEPA on April 9, 2013

Sequestration budget cuts (“budget cuts”) went into effect on March 1, 2013.  These budget cuts required EPA to cut approximately $425 million from its $8.3 billion annual budget, or about 5%.  In a February 6, 2013 letter, Lisa Jackson, then-Administrator of the U.S. Environmental Protection Agency (“EPA”), identifies to Senator Barbara Mikulski (D-MD) the specific EPA programs to be affected by the budget cuts.  The programs where spending must be cut cover a range of environmental issues including air, enforcement and compliance, tribal, research and development, water, and state cleanup and waste programs.

The air programs identified by Ms. Jackson where spending will be cut are the Energy Star program, the vehicle certification program and the state air monitoring program.  Ms. Jackson indicates that the budget cuts “would reduce the funding EPA provides states to monitor air quality, likely forcing the shutdown of some critical air monitoring sites.”

The enforcement and compliance programs affected are civil and criminal enforcement of violations of environmental laws, National Environmental Policy Act environmental reviews and Superfund enforcement.  Ms. Jackson states “sequestration would cut work to press responsible parties to clean up contaminated sites in communities and restore clean up funds for use at other sites – putting the costs back on the American public.”

Budget cuts to EPA tribal programs will impact tribes by hindering tribal governments’ ability to ensure clean air and water for its members.

EPA research and development programs that will receive reduced funding are air, climate and energy programs, chemical safety for sustainability programs, sustainable and healthy communities, safe and sustainable water resources, human health risk assessment and homeland security research.  Ms. Jackson indicates “under sequestration the reduction in funding would impede EPA’s ability to assess and understand the effect of nanomaterials on human health and dispose of rare earth materials used in electronics, thereby limiting Innovation and manufacturing opportunities with these materials in the US. The reduction in funding for endocrine disrupting chemicals research would limit our nation’s ability to determine where and how susceptible people are exposed to endocrine disrupting chemicals, and to understand how these toxic exposures impact their health and welfare.”

The EPA water programs affected by the budget cuts are the state revolving fund program, water program state implementation grants, water program implementation and Superstorm Sandy appropriations.  Ms. Jackson states, “reductions under sequestration would limit assistance provided to states and tribes to ensure safe and clean water, including protecting children from exposure to lead in drinking water; protecting rivers and streams from industrial and municipal pollution discharges, identifying and developing cleanup plans for polluted waterways, and developing science to support human health and aquatic life.

Lastly, Ms. Jackson lists the EPA state cleanup and waste program cuts which include reduced site assessments and inspections and cuts in leaking underground storage tank grants resulting in fewer contaminated site cleanups.

California Passes AB 1442, which Defines “Pharmaceutical Waste” and Authorizes its Transportation by Generators or Common Carriers under Certain Conditions

Posted by in Emerging Issues, Environmental Legislation and Regulation on April 1, 2013

A pharmaceutical waste hauling bill, AB 1442 (Wieckowski), was chaptered into law on September 29, 2012 and went into effect on January 1, 2013.  AB 1442 amends California’s Medical Waste Management Act (MWMA),[1] to define “pharmaceutical waste” and permit its transportation by generators or common carriers, provided that certain requirements are met.

Prior to AB 1442, the MWMA required that all medical waste be hauled by a registered hazardous waste handler, unless the hauler obtained an approved limited-quantity exemption.  Pharmaceutical drugs could be hauled by common carrier, but pharmaceuticals designated as waste (such as expired drugs) were classified as medical waste and required to be shipped as hazardous waste.  AB 1442 changes existing law to allow, if specific requirements are met, the transport of pharmaceutical waste through self-transport or common carrier in certain situations where: (1) unwanted pharmaceuticals are sent into reverse distribution, or (2) generators of pharmaceutical waste transport it for consolidation prior to treatment and disposal.

AB 1442 defines “pharmaceutical waste” as any “pharmaceutical” that is “waste,” as those terms are defined in pre-existing provisions of the MWMA.[2]  The pre-existing definition of “pharmaceutical” includes prescription and over-the-counter drugs, but exempts all drugs that fall within the definition of hazardous waste by the Resource Conservation and Recovery Act (RCRA) or the California Radiation Control Law (RCL) (these statutes have their own transportation requirements for qualifying pharmaceuticals). Whether or not particular pharmaceutical waste is classified as a RCRA or RCL hazardous waste depends on a number of factors, such as ignitability, corrosivity, reactivity, and toxicity.  AB 1442 does not modify the transportation requirements for pharmaceuticals that are regulated by RCRA or the RCL.

AB 1442 exempts unwanted pharmaceuticals from the definition of “pharmaceutical waste” if they are being sent to a properly-licensed reverse distributor.[3]  Accordingly, unwanted pharmaceuticals now may be sent into reverse distribution by self-transport or common carrier.  One caveat is that if the unwanted pharmaceuticals are sent to a reverse distributor located within California, the reverse distributor must be a permitted medical waste transfer station.  Reverse distribution is the practice of pharmaceutical dispensers returning pharmaceuticals to their manufacturer, or an agent of their manufacturer.  Under California law, a reverse distributor is defined as every person who acts as an agent for pharmacies, drug wholesalers, manufacturers, and other entities by receiving, inventorying, and managing the disposition of outdated or unsalable drugs.[4]  The drugs may be unwanted and returned for various reasons, such as oversupply, expiration, recall, shipping error, or damage.

AB 1442 also allows pharmaceutical waste that is being transported for consolidation before treatment and disposal to be self-transported or transported by common carrier where specific requirements are met.  Where the requirements are met, the generator of pharmaceutical waste may self-transport it to “a parent organization or another health care facility for the purpose of consolidation before treatment and disposal.”  Or, if the requirements are met, the generator may contract with a common carrier “to transport the pharmaceutical waste to a permitted medical waste treatment facility or transfer station.”[5]  The requirements for the “consolidation” classification include, but are not limited to, providing notices and confirmations among the transporting entities and reporting discrepancies to enforcement agencies.  Generators are also required to be properly registered and/or have prepared medical waste management plans pursuant to various statutes depending on the status of the generator.

Advocates of the bill, including the City of San Jose and the County of Alameda, recommended passage of AB 1442, claiming the bill will make it more likely that pharmaceutical waste will be disposed of properly because use of self-transport or common carriers in reverse distribution will reduce the cost to recover the pharmaceutical waste.



[1] Cal. Health & Safety (“H&S”) Code §§ 117600 – 118360.

[2] H&S Code § 117748(a), referencing H&S Code §§ 25124 and 117747.

[3] H&S Code § 117748(b), referencing Cal. Bus. & Prof. Code §§ 4040.5, 4160 and 4161.

[4] H&S Code § 4040.5

[5] H&S Code § 118032.

Ninth Circuit Affirms Dismissal of Subrogated Claims Brought Under CERCLA Sections 107(a) and 112(c), as well as State Law Theories

Posted by in CERCLA, Cost Recovery, Emerging Issues, Environmental Litigation, Insurance & Liability on March 28, 2013

By Tiffany Hedgpeth and Michael Einhorn

On March 15, 2013, the Ninth Circuit held in Chubb Custom Ins. Co. v. Space Systems/Loral, Inc., Case No. 11-16272, 2013 U.S. App. LEXIS 5198 (9th Cir., March 15, 2013), that the insurer Chubb Custom Insurance Company (“Chubb”) could not maintain its Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and state law subrogation claims against various potentially responsible parties (“PRPs”) because (1) the insured was not a “claimant” under CERCLA § 112(c) since it had not made a written demand to the Superfund or another PRP; (2) Chubb did not itself incur “response costs” by reimbursing the insured and therefore lacked standing to bring a CERCLA § 107(a) cost recovery action; and (3) the subrogated state law claims were time barred because the period of limitations commenced running when the insured knew or should have known of contamination on its property, not on the date Chubb made its payment to the insured.

Background Facts

Chubb issued Taube-Koret Campus for Jewish Life (“Taube-Koret”) a policy for Environmental Site Liability Insurance (“Policy”) for two parcels of property.  After Taube-Koret acquired the properties, the California Regional Water Quality Control Board (“Water Board”) issued orders requiring Taube-Koret to investigate and remediate volatile organic compounds (“VOCs”) found on the properties.  Taube-Koret complied with the orders and performed the required work.  Pursuant to the Policy, Chubb paid Taube-Koret $2.4 million to make it whole for its remediation costs. The Policy contained a statement that said “If the insured has rights to recover all or part of any payment we have made under this insurance, those rights are transferred to us.”  Chubb filed suit against various defendants who formerly owned or operated the properties or adjacent properties at the time alleged releases of hazardous substances occurred.  Chubb’s action asserted claims under CERCLA Sections 107(a) and 112(c) and state law.  The district court dismissed Chubb’s initial complaint and two amended complaints, each with leave to amend.  The district court dismissed Chubb’s third amended complaint with prejudice, holding Chubb failed to allege Taube-Koret was a claimant under CERCLA § 112(c), that Chubb lacked standing under CERCLA § 107(a), and that the state law claims were time barred. Chubb appealed.

Chubb’s CERCLA § 112(c) Claim

The Ninth Circuit reasoned that Section 112(c) permits an insurer to file a subrogation action for reimbursement of costs from PRPs, so long as the insurer complies with the statutory requirements.  One such requirement is that the insured party must be a “claimant” as defined in the statute.  Section 112(c) provides that “[a]ny person, including the Fund, who pays compensation pursuant to this chapter to any claimant for damages or costs resulting from a release of hazardous substance shall be subrogated . . .”  42 USC § 9612(c)(2).  Therefore, Section 112(c) limits subrogation claims to compensation paid to any “claimant.”  A “claimant” is defined as any person who presents a claim for compensation, and a “claim” is defined as a demand in writing for a sum certain.  42 USC § 9601(4)-(5).  While CERCLA does not define or explain to whom this “claim” should be made, the Ninth Circuit stated that it has consistently held that the statute refers to a demand for reimbursement from either (i) the Superfund or (ii) a PRP.  See, e.g., Idaho v. Howmet Turbine, 814 F.2d 1376, 1380 (9th Cir. 1987).

Because Chubb did not allege that its insured, Taube-Koret, had made a demand to defendants, the Superfund, or any PRP, it could not maintain its CERCLA § 112(c) cause of action.  The Ninth Circuit rejected the argument that a claim to an insurer qualifies the insured as a claimant, stating “[t]here is no indication that section 112(c)(2) contemplates this meaning of claimant,” as Congress did not use the broader term “person” but instead used the term “claimant.”  Chubb v. Space Systems/Loral, at *22-23.

Chubb’s CERCLA § 107(a) Claim

The Ninth Circuit noted that the issue of whether CERCLA § 107(a) authorizes a subrogated cost recovery action was a matter of first impression, noting a lack of controlling or persuasive authority on the issue.  The Court engaged in a lengthy discussion that included an analysis of the text of Section 107(a), the statute as a whole, legislative history, and public policy.  The Ninth Circuit concludes that “an insurer that is only obligated to reimburse the insured for cleanup costs does not itself incur response costs,” and therefore it cannot bring a Section 107(a) cost recovery action.  In reaching this conclusion, the Court stated that Chubb could not bring a Section 107(a) action because it had no statutory liability: “Chubb lacks standing to sue under section 107(a) because it has not itself become statutorily liable for response costs under CERCLA.”  Chubb v. Space Systems/Loral, at *30.  The Ninth Circuit also held that permitting insurers to bring Section 107(a) actions would render Section 112(c) a nullity, which would violate rules of statutory interpretation, and that public policy favored disallowing subrogation claims to be brought pursuant to CERCLA § 107(a).

State Law Claims

The Ninth Circuit also affirmed the district court’s dismissal of Chubb’s subrogated state law claims (Cal. Health & Safety Code, negligence per se, and strict liability) as time-barred under California Code of Civil Procedure (“CCP”) § 338(b).  Under California law, the three-year period of limitation under CCP § 338 commences to run when a plaintiff knows, or reasonably should have known, of the wrongful conduct at issue.

Chubb challenged the district court’s dismissal by arguing that the statute of limitations did not commence until Chubb’s payment of the claim.  But the Ninth Circuit found that the cases cited by Chubb apply only to third-party subrogation actions, where an insurer asserts an equitable indemnity claim arising from a payment by an insurer to a third party on behalf of the insured.  Chubb’s claims were based on first-party losses by the insured – – Chubb reimbursed Taube-Koret directly for its costs of cleaning up contamination, and did not make a settlement payment to a third party.

Since Chubb asserted the claims of Taube-Koret in subrogation, the Ninth Circuit agreed with the district court and held that the statute of limitations period began to run when Taube-Koret knew, or should have known, of the release of hazardous substances on its properties.

Conclusion

The Ninth Circuit has made clear that CERCLA permits subrogation under Section 112(c) only when insurance payments are made to a “claimant” (i.e., parties who have submitted demands to the Superfund or other PRPs).  The court also made clear that Chubb lacked standing to bring a CERCLA § 107(a) claim because it was not itself a PRP.  Finally, the Court has made clear that in property contamination cases, insurers seeking subrogation under state law will be held to the same statute of limitations commencement trigger as is applicable to the insured.

Court of Appeal Requires Strict Compliance with CEQA 30-Day Public Notice Requirements

Posted by in CEQA, Emerging Issues, Environmental Legislation and Regulation on July 27, 2011

The California Court of Appeal, in Latinos Unidos De Napa v. City of Napa, 196 Cal. App. 4th 1154 (June 27, 2011), held that the City of Napa (“City”), which filed a CEQA Notice of Determination (“NOD”) with the County Clerk’s office, did not satisfy the 30-day posting and filing requirement when the notice was removed from the County Clerk’s office mid-day on the 30th day.  As a consequence, the plaintiff, an affordable housing advocate group, was allowed 180 days from the City’s approval of the project to challenge the CEQA NOD under Public Resources Code section 21167(a).

Public Resources Code section 21152(c) requires a County clerk to post the NOD “for a period of 30 days.”  The Court looked to Code of Civil Procedure section 12 for clarification on the timing requirement and determined that the “30-day” period excludes the first day of posting and includes the last day.  The Court clarified that “the NOD must be posted for the entire last (30th) day to satisfy the 30-day posting requirement.”  196 Cal. App. 4th at 1157-1158.  Since the City only posted the NOD for part of the 30th day, and not until the County Clerk’s office closed, the 30-day notice requirement was not met.  The City argued that because it filed the NOD with the County Clerk that action alone satisfied the 30-day posting and filing requirement of Public Resources Code section 21152, relying on CEQA Guidelines section 15094(g).  However, the Court of Appeals determined that CEQA Guidelines section 15094(g), like Public Resources Code section 21152, provides that a NOD must be both filed and posted, and thus rejected the City’s argument.

United States Supreme Court Holds that the Clean Air Act Displaces Federal Common Law Public Nuisance Law and Prohibits Nuisance Claims Against Carbon-Dioxide Emitters

Posted by in Clean Air, Emerging Issues, Environmental Litigation on June 30, 2011

On June  20, 2011, the United States Supreme Court held in an 8-0 decision that the Clean Air Act (Act) 42 U.S.C. §7401 et seq., and the Environmental Protection Agency action it authorizes, displace federal common law public nuisance claims against carbon-dioxide emitters. (American Electric Power Co., Inc., et al. v. Connecticut et al., 564 U.S. (2011) 13 (AEP)).

The underlying lawsuits considered by the AEP Court began well before EPA initiated efforts to regulate greenhouse gases under the Act.  In July 2004, two groups of plaintiffs filed separate complaints in the Southern District of New York against the same five defendants, each of which was a major electric power generator using fossil-fuels.  The first group of plaintiffs included eight States and New York City, the second joined three nonprofit land trusts.  The defendants/petitioners are four private power generating companies and the Tennessee Valley Authority, a federally owned corporation that operates fossil-fuel fired power plants in several states.  According to the complaints, the defendants “are the five largest emitters of carbon dioxide in the United States.”   The plaintiffs asserted that by contributing to global warming, the defendants’ carbon-dioxide emissions created a “substantial and unreasonable interference with public rights,” in violation of the federal common law of interstate nuisance, or, in the alternative, of state tort law.  Plaintiffs sought injunctive relief requiring each defendant “to cap its carbon dioxide emissions and then reduce them by a specified percentage each year for at least a decade.”  The District Court dismissed both suits as presenting non-justiciable political questions, but the Second Circuit reversed.  On the threshold questions, the Court of Appeals held that the suits were not barred by the political question doctrine, and that the plaintiffs had adequately alleged Article III standing.  Turning to the merits, the Second Circuit (1) held that all plaintiffs had stated a claim under the “federal common law of nuisance” by relying on a series of United States Supreme Court decisions holding that states may maintain suits to abate air and water pollution produced by other states or by out-of-state industry, and (2) determined that the Act did not “displace” federal common law.  At the time of the Second Circuit’s decision, EPA had not yet promulgated any rule regulating greenhouse gases, a fact the court thought dispositive.

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Cities Prepared For California’s New Green Building Code

Posted by in Emerging Issues, Green Building on December 2, 2010

As many of California’s cities have adopted green building ordinances over the last several years, the state’s new Green Building Standards Code, to be added to the building standards code on January 1, 2011, is not likely to hinder development in these communities.  The Green Building Standards Code will be Part 11 of the California Building Standards Code in Title 24 of the California Code of Regulations.

Green Building

The new Green Building Standards Code, known as CALGreen, is the first in the nation statewide mandatory green building code for newly constructed buildings.  Finalized earlier this year by the California Department of Housing and Community Development and the Building Standards Commission, CALGreen is a comprehensive code that will apply to newly constructed residential, commercial, school and hospital buildings.  Residential-type buildings, such as single family dwellings, and motels, hotels, and apartments of three stories or less, are subject to the CALGreen Code when constructed new, under a permit issued on or after January 1, 2011.  Newly-constructed nonresidential buildings subject to CALGreen include, among others, state-owned buildings, state universities, and privately-owned buildings used for retail, office and medical services.  While CALGreen applies to all newly constructed buildings unless otherwise exempted by law (i.e. federal buildings and buildings constructed on Indian land or reservations) it does not apply to remodels and additions.

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EPA and DOT Propose To Regulate Greenhouse Gas Emissions For Heavy Trucks

Posted by in Clean Air, Emerging Issues, Environmental Legislation and Regulation on November 1, 2010

Responding to a Presidential directive to take coordinated steps to produce a new generation of clean vehicles, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) announced last week the first ever national standards to reduce greenhouse gas emissions and improve fuel efficiency of heavy-duty highway vehicles.  This broad sector of vehicles – ranging from large pickups to sleeper-cab tractors – represents the second largest contributor to oil consumption and greenhouse gas emissions, after light-duty passenger cars and trucks.  The program is projected to reduce greenhouse gas emissions by an estimated 250 million metric tons and save 500 million barrels of oil over the lives of the vehicles produced during the program’s first five years.

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California Proposes To Regulate Nanomaterials as Chemical Substances

Posted by in Emerging Issues, Environmental Legislation and Regulation, Green Chemistry on October 12, 2010

Nanotechnology, the study of the controlling of matter on an atomic and molecular scale, promises a number of benefits to society.  If current trends in manufacturing are any indication, this emerging technology is here to stay.  The August 21, 2008 Project on Emerging Nanotechnologies estimated that over 800 manufacturer-identified nanotechnology products are publicly available, with 3 to 4 new products arriving in the market place per week.

Early research has established that while some types of nanomaterials are seemingly inert, others may be highly toxic.  Thus, the field of nanotechnology is ripe for regulatory intervention.  Policy makers in several jurisdictions are already establishing legal frameworks for the management of nanotechnology.  For example, the federal Toxic Substances Control Act (“TSCA”) already includes nanoscale materials within its definition of “chemical substances.”  And if recent legislative proposals to overhaul TSCA become law, the level of federal regulatory scrutiny of nanotechnology will expand, subjecting manufacturers and processors to additional notification, reporting and review procedures.

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