Environmental Law Practice

Updates

Chapter I: NSR Reform

The Bush Administration has promulgated two major revisions to the NSR program.  One of these is the NSR Reform rule package.  The other is the Routine Maintenance, Repair and Replacement rule.  Neither of these revisions is relevant to the problems or exercises as revised in the Second Edition.  To explain why this is so, it is useful to consider first Problems 1.1 to 1.6, which deal with the New Source Review (NSR) program, and then to look at Problems 1.7 to 1.11 and Exercises 1.1 and 1.2, which deal with the New Source Performance Standard (NSPS) program. 

Problems 1.1 to 1.6: This set of problems deals with the New Source Review (NSR) program.  The NSR Reform package does not affect these problems because it applies only to modified facilities.  The Fab Furniture plant in the problems is an entirely new construction, not a modified facility.  Thus, the NSR Reform Package does not affect it.  By the same token, the Routine, Maintenance, Repair and Replacement rule applies only to modifications.  Thus, the changes to this rule, too, have no relevance for entirely new sources such as the Fab Furniture plant.  In short, the revisions to the NSR program affect only modified facilities.  They do not affect new constructions.  Since the Fab Furniture plant is a new construction, the revisions have no relevance for it. 

One more small point.  The rule revisions change the current numbering of the NSR regulatory provisions.  We were not able to include these changes in the regulations provided in the book (the CFR came out to late).  If your students utilize the regulations provided to them in the book which is all that they should need for Problems 1.1-1.6 this will not pose an issue for them.  However, if they try and find these regulations themselves, they may get confused by the new numbering.  For Problems 1.1 to 1.6, they should stay with the materials provided them in the book.  So long as they do this, they should be OK.   (Note that they will do original research for Problems 1.7 to 1.11 and Exercises 1.1 and 1.2, but the rule changes do not affect these materials for the reasons that follow).

Problems 1.7 to 1.11 and Exercises 1.1 and 1.2:  The rule revisions also do not affect Problems 1.7 to 1.11 and Exercises 1.1 and 1.2.  The reason for this is that the recent NSR Reform Package, and the Routine, Maintenance, Repair and Replacement rule, govern only the New Source Review (NSR) program.  They do not pertain to the New Source Performance Standard (NSPS) program.  The problems and exercises here all deal exclusively with the NSPS program.  Thus, they are not affected by the recent Bush Administration rule revisions.

Chapter II: Environmental Enforcement

Problem 2.1, p. 83, and Problem 2.2, p.85

See also United States v. Hudson, 522 U.S. 93 (1997), in which the Supreme Court held that the imposition of a civil penalty and other sanctions did not preclude a later criminal prosecution under the Double Jeopardy clause. Students should be aware that just because EPA imposes a civil sanction for a particular violation does not mean it can’t follow up with a criminal penalty. The Court reaffirmed the Ward analysis for distinguishing between civil and criminal penalties.

Problem 2.4, p. 90:

In Riverdale Mills Corp. v. Pimpare, 392 F.3d 55 (1^st Cir. 2004), the First Circuit held that it was not illegal for EPA inspectors to take samples of a company’s wastewater without a warrant. The court carefully examined whether the company continued to have a reasonable expectation of privacy in the wastewater, when it was flowing toward the public sewer. Although the manhole location where the samples were taken was still on private property, the court found it significant that the wastewater would “irretrievably” flow into the public sewer, such that it would be exposed to the public, and therefore the company had abandoned its expectation of privacy. The court compared the wastewater to the trash cases, where courts have held that there is no reasonable expectation of privacy once trash is left on the curb for collection.

pp. 96-97: Jud. Review of NOV

The U.S. District Court for the Dist. of Columbia held that an NOV issued under the CAA was not judicially reviewable, because it did not constitute “final agency action” under the APA. Royster-Clark Agribusiness, Inc. v. Johnson, ___ F. Supp. ___ (2005 WL 2364949 (D.D.C. 2005). The court held that any enforcement action remained discretionary and that the company could challenge the factual basis for the NOV in any subsequent enforcement proceeding.

p. 101 n.31 A recent New Hampshire decision emphasizes that state courts are also not bound by the federal penalty policies in determining appropriate penalties under state law. New hampshire v. Elementis Chem., Inc., 2007 WL 1148717(N.H. Apr. 19, 2007).

p. 106: Supplemental Environmental Projects

EPA has issued additional guidance on what projects qualify for SEP credit. The agency will allow SEPs that will make a profit for the entity, if the health and environmental benefits outweigh the potential profitability. OECA will require those projects to meet a higher standard for acceptance, however. A second guidance document outlines ideas for acceptable SIPs, such as doing lead paint abatement to mitigate TSCA violations, or buying and retiring SO2 credits to satisfy Clean Air Act penalties. Finally, another guidance document describes the permissible use of SEP “banks” or escrow accounts, in situations where several cases may be aggregated into one SEP account.

The guidance documents are posted at <cfpub.epa.gov/complaince/resources/policies/civil/seps/>

EPCRA EXERCISE 2.1:

Note that the MSDS for azinphos methyl indicates that it is regulated under CERCLA 103, but it is not listed as such in the regs. In fact, azinphos methyl is listed under its trade name: "Guthion." The upshot is that this brings azinphos within the coverage of 304(a)(1) as well as (a)(2).

Notice letters:

Here are two sample notice letters for Clean Water Act violations:

Notice with Letterhead

Sample Notice Letter

Court decisions regarding content of notice letter: the main test seems to be whether the letter was adequate to put the violator on notice of the legal standards it is accused of violating. For example, in Natural Res. Council of Maine v. International Paper Co., 2006 WL 783385 (March 28, 2006), the court held that a CWA notice letter was insufficient, because it did not clearly identify the specific legal claims of plaintiffs.

MONTHLY VIOLATIONS:

Note that EPA treats one violation of a monthly average limit as a separate violation for each day of that month (in other words, 30 days of violation instead of just one). Courts have upheld this approach, in cases in which that level of penalty seems warranted. See, e.g., United States v. Allegheny Ludlum Corp., 366 F.3d 164 (3d Cir. 2004); Friends of the Earth v. Chevron Chemical Co., ___ F. Supp. 2d ___ (E.D. Tex. 2006).

Chapter III: Environmental Litigation

Superfund:

Exercise 3.1: Joint Defense Agreement

Here is the example of the Joint Defense agreement in pdf format, for easier distribution. (thanks to Bo Abrams!)

Problem 3.1: HRS Score/NPL Ranking

In Carus Chem. Co. v. EPA, 2005 WL 41527 (D.C. Cir), the court rejected a challenge to the HRS regulation as untimely (outside of 90-day window for challenging regulations). Carus failed to show how the data it claimed EPA disregarded would have affected the HRS score. This case illustrates that a challenge to NPL listing must be based on failure to score correctly, rather than challenge to ranking system itself.

Problem 3.3: Joint and Several Liability

In U.S. v. Vertac Chemical Corp., ___ F. Supp. 2d ____ (E.D. Ark. 2005), the court refused to apportion response costs based on divisibility of harm. The found that the fact EPA divided the site geographically into separate Operable Units for remediation purposes did not provide a basis for apportionment, where the PRP’s waste was found throughout the site and commingled with other waste.

Problem 3.4: Consistency with NCP

In Young v. U.S., 2005 WL 15463 (10^th Cir.), the court denied plaintiff’s attempt to recover over $237,000 in response costs because they were not “necessary” or “consistent with the NCP.” The costs were mainly for site investigation, monitoring, and risk assessment work. The court denied recovery primarily because plaintiff thereafter abandoned its property without doing a cleanup. The court therefore thought the work was unnecessary because it was not associated with any actual remedial action.

Contiguous Property Owner liability:

On Jan. 22, 2004, EPA issued guidance explaining how “contiguous property owners” – that is, those whose land is contaminated by the migration of hazardous substances disposed on other property – can avoid CERCLA liability. Under the 2002 Brownfields Act, contiguous property owners are protected, along with innocent landowners and prospective purchasers, as long as they take certain steps. In March 2003, EPA issued Common Elements Guidance, explaining certain steps that must be met by all three groups. In the Jan. 2004 guidance, EPA outlined specific steps applicable only to contiguous property owners. To avoid liability, a contiguous property owner must:

· show that they did not cause, contribute to , or consent to the release;

· show they are not potentially liable for the response costs at the facility;

· take steps to stop any continuing releases, prevent future releases, and limit or prevent any exposure to releases;

· stay in compliance with any land-use restrictions.

The landowners must also be in compliance with any request for information or administrative subpoenas issued under CERCLA, have provided full access to the site to response teams, and have conducted all appropriate inquiry into past uses of the land.

See 72 Env. Reptr. 2448.

Exercise 3.2(a) Successor Liability

A recent 8th Circuit decision casts doubt on the continued viability of the "substantial continuity" doctrine after Bestfoods, but does not overrule Mexico Feed & Seed. See 1986 Ltd. Partnership v. Reade Mfg., --- F.3d ----, 2007 WL 14361
(8th Cir. 2007).

Exercise 3.2(c) Interim Landowner Liability/Passive Migration:

In Castaic Lake Water Agency v. Whittaker Corp., ____ F. Supp. 2d ____ (2003), the court held that “leaching” of perchlorate into groundwater constituted a “release”; note that this case does not have anything to say about whether passive migration constitutes a “disposal” which would render an interim landowner liable.

Innocent Landowner Defense:

EPA has issued a final rule defining “all appropriate inquiry” for purposes of the innocent purchaser defense. See 70 FR 66,070 (11/1/2005).

Exercise 3.2(f): Section 106 Orders

In General Electric v. Johnson, __ F.3d ___ (D.C. Cir. 2005), the Court of Appeals found that the issuance of a unilateral administrative order pursuant to Section 106 did not constitute a unconstitutional deprivation of property, since the PRP has a choice whether to comply, and a court hearing will be required before compliance can be ordered and penalties imposed.

Contribution:

In Cooper Industries, Inc., v. Aviall Serv., Inc., 125 S.Ct. 577 (2004), the Supreme Court held that a private party may not sue a PRP for contribution under CERCLA Section 113 unless an enforcement action has been filed against it first. The case does not appear to affect the “Shenandoah” fact scenario, but certainly should be discussed. Although the majority of the Court did not reach the question, a private party still should be able to use Section 107 to seek reimbursement from other PRPs. See Justice Ginsburg’s dissent, 125 S.Ct. at 586-87 (citing Key Tronic Corp. v. U.S., 511 U.S. 809 (1994)).

Another issue is whether a settlement between private parties can give a PRP contribution protection. The plain language of Section 113(f)(2) seems to indicate that only a settlement with the United States or a state can give such protection, but a couple of recent court decisions have expanded that to private party settlements. See United States v. Mallinckrodt, 2007 WL 2701755 (E.D. Mo.) and cases cited therein.