Infrastructure – To Repair or Ignore?

Posted on March 16, 2012 by Joseph Manko

With significant funding in 2010 under the American Reinvestment and Recovery Act (“ARRA”), a major financial stimulus was afforded the water and wastewater industry to “go green.”  Although many large urban areas decided to address their combined sewer overflow (“CSO”) problems by replacing their existing sewage systems with separate systems, many others opted to construct “green infrastructure” to detain and/or retain the surcharge from rainstorms that could overwhelm operation of wastewater treatment plants and result in the discharge of sewage and other pollutants from CSOs.  In Pennsylvania, a $30 million loan was extended to the City of Philadelphia by the Pennsylvania Infrastructure Investment Authority’s Clean Water State Revolving Fund. This loan enabled the City, which had signed a Consent Order and Agreement with the Pennsylvania Department of Environmental Protection, to implement a green infrastructure program over a 20 year period. 

With the economic recession and major changes in the composition (and philosophies) of the members in both Houses of Congress from the 2010 elections, not only did the prospect of future similar economic stimuli programs go to the “back of the bus”, but the desire of these new members of Congress to reduce spending put increased pressure on the federal government to reduce the funding of any infrastructure improvements. 

A good example of this can be seen in the President’s proposed budget issued on February 13, calling for a proposed EPA budget of $8.3 billion. This reflects a decrease of 1.2 percent below the fiscal 2012 enacted level.  More pertinent to the water and wastewater industry, the proposed cuts included a 19.8 percent reduction (from $1.47 billion to $1.18 billion) in EPA’s budget for the Clean Water State Revolving Funds, and a 7.4% reduction (from $918 million to $850 million) in the Drinking Water State Revolving Fund.  Similar budget cuts occurred in most, if not all, of the states’ share of infrastructure funding.  With dire predictions associated with the Nation’s failure to maintain all of its infrastructure, one may recall the plot in “Atlas Shrugged” where the nation’s infrastructure failed and those who were its leaders “disappeared”.  Recall the query “Who is John Galt?”

As a result, we environmental attorneys find ourselves on the horns of a dilemma.  On the one hand, we are trying to adapt our infrastructure to climate change, foster the use of cleaner and more efficient energy in operating treatment plants, and conserve water. On the other hand, we face the reality of having to represent an industry with an infrastructure that is largely old and outdated and appears, at least in some cases, ready to fail. These failures will no doubt result in more and more violations of the Clean Water Act (and state water laws) in the future. 

Although funding cutbacks are not yet “carved in stone”, it would be wise for us to keep an eye on the budget debates. They may affect our practices in the near term and our environment as well.  

Managing the Legal Risks of Green Buildings

Posted on August 23, 2010 by Joseph Manko

As with “green washing” of products, which are subject to existing product liability law, there is an emerging area of law regarding liability for claims that a building marketed as “green” or alleged to achieve the desired platinum, gold, silver or standard Leadership in Energy and Environmental Design (LEED) certification has failed to do so.

As the LEED requirements and techniques for sustainable development become better understood and more widely adapted, more and more developers are seeking to build “green.” To the extent that the construction costs permit a manageable return on investment (ROI) and the specifications and requirements for such development are clearly spelled out in the various contractual documents, including especially the agreement with architects, we will likely see more and more claims that the resultant buildings are “green.”

Although some theories of liability will track areas in construction law, e.g., deficiencies in design, construction or installation, green buildings claims will face an additional layer of risk. Without such statutory coverage, cf strict product liability, today’s bases for liability may include breach of contract, tort, fraud and false advertising claims.

For example, in the Maryland case of Shaw Development v. Southern Builders, which was settled without an opinion, the loss of a tax credit based upon compliance with a LEED Silver certification level led to a claim of liability.

The best way to mitigate these risks is to ensure that all contractual documents are clear and consistent, project management is assured, information disclosures are accurate, and finally that insurance coverage, where available, is provided. With regard to documents, AIA form contract B214-2007 has been developed to provide some model contractual language; more than forty insurance carriers are now underwriting green building liability; and in many law firms, some of their attorneys and other technical people have become LEED accredited.

This is an area that will continue to develop as more and more green buildings are constructed. For more in-depth information on potential liability and tips to mitigate claims, see the Harvard Law School Environmental Law & Policy Clinic White Paper, “The Green Building Revolution: Addressing and Managing Legal Risks and Liabilities”.

Managing the Legal Risks of Green Buildings

Posted on August 23, 2010 by Joseph Manko

As with “green washing” of products, which are subject to existing product liability law, there is an emerging area of law regarding liability for claims that a building marketed as “green” or alleged to achieve the desired platinum, gold, silver or standard Leadership in Energy and Environmental Design (LEED) certification has failed to do so.

As the LEED requirements and techniques for sustainable development become better understood and more widely adapted, more and more developers are seeking to build “green.” To the extent that the construction costs permit a manageable return on investment (ROI) and the specifications and requirements for such development are clearly spelled out in the various contractual documents, including especially the agreement with architects, we will likely see more and more claims that the resultant buildings are “green.”

Although some theories of liability will track areas in construction law, e.g., deficiencies in design, construction or installation, green buildings claims will face an additional layer of risk. Without such statutory coverage, cf strict product liability, today’s bases for liability may include breach of contract, tort, fraud and false advertising claims.

For example, in the Maryland case of Shaw Development v. Southern Builders, which was settled without an opinion, the loss of a tax credit based upon compliance with a LEED Silver certification level led to a claim of liability.

The best way to mitigate these risks is to ensure that all contractual documents are clear and consistent, project management is assured, information disclosures are accurate, and finally that insurance coverage, where available, is provided. With regard to documents, AIA form contract B214-2007 has been developed to provide some model contractual language; more than forty insurance carriers are now underwriting green building liability; and in many law firms, some of their attorneys and other technical people have become LEED accredited.

This is an area that will continue to develop as more and more green buildings are constructed. For more in-depth information on potential liability and tips to mitigate claims, see the Harvard Law School Environmental Law & Policy Clinic White Paper, “The Green Building Revolution: Addressing and Managing Legal Risks and Liabilities”.