Cleaning Up Nature: The Swift Creek Conundrum

Posted on February 28, 2020 by Andy Fitz

 width=

Dredged spoils along the Swift Creek channel; landslide visible at upper right (author photo).

Swift Creek. The name evokes a clear, fast-moving mountain stream. 

The Swift Creek at issue, however, is hardly clear or swift for most of its length.  A massive, mile-long landslide hangs at the head of its southern fork, in the foothills of Washington’s North Cascades. The landslide has exposed a weak bed of serpentine rock, which weathers quickly into clay and delivers a heavy load of sediment to the creek—some 30,000 to 150,000 cubic yards annually. When the creek reaches the Nooksack Valley below, much of this material settles, clogging the channel, turning the creek sluggish, and creating a constant risk of flooding each winter.

In an effort to protect farms and rural homes, the affected local government, Whatcom County, began periodically dredging Swift Creek in the late 1950s, piling the dredged spoils along the channel. In 1971, the U.S. Army Corps of Engineers undertook its own large-scale dredging of the channel and further shaped the dredged spoils into levees.

width=

Swift Creek in May 2016 (author photo).

In 2006, however, this work largely came to a halt. In its place, a regulatory conundrum emerged.

Since at least the late 1970s, Swift Creek’s sediment has been known to contain a naturally occurring chrysotile form of asbestos derived from the serpentine bedrock. In 2006, the U.S. Environmental Protection Agency (EPA) sampled the dredged spoils and completed an activity-based risk assessment. That assessment, and a subsequent assessment in 2011, concluded that asbestos levels in dust generated from the sediment pose a human health threat, with the lifetime excess cancer risk approaching 8 in 1,000 under the most intensive exposure scenario. Making matters worse, naturally elevated levels of metals in the sediment retard plant growth, making the dredged spoils an attractive target for local four-wheelers and dirt-bike riders.

Left wholly to nature, there is no environmental liability associated with Swift Creek’s sediment: the “potentially responsible” entity is Mother Earth. And there is no clear environmental authority under which to address threats associated with the sediment. Under Section 104(a)(3)(A) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), EPA cannot respond to a “naturally occurring substance . . . from a location where it is naturally found.” Likewise, under Washington’s Model Toxics Control Act (MTCA), there must be intentional or unintentional “entry” of a hazardous substance “into” the environment in order to have an actionable release. RCW 70.105D.020(32).

Once humans move and reconfigure the sediment, however, potential liability
may arise from those activities. See, e.g., United States v. W.R. Grace & Co.—Conn., 280 F.  Supp. 2d 1149, 1155, 1175 (D. Mont. 2003). Therein lies the conundrum: absent human intervention, there can be unabated exposure to naturally occurring asbestos from the creek channel and flood deposits, but no authority to address the situation under cleanup laws. But any human intervention to abate that exposure is discouraged by the specter of liability under those very same cleanup laws.

For more than ten years, this conundrum stymied efforts to address Swift Creek sediment, despite continued discussion among EPA, the Washington Department of Ecology, and Whatcom County. Neither EPA nor Ecology had the authority, mandate, or resources to address what at its heart is a civil engineering effort. And the entity with the clearest public works mandate—the County—did not want to assume full ownership of a situation it did not have the resources to address by itself, with potentially open-ended liability. This concern was heightened by EPA threats of cost recovery and enforcement under CERCLA.

In 2013, Whatcom County did complete an alternatives assessment and Environmental Impact Statement (EIS) for addressing Swift Creek sediment. The preferred alternative was a series of actions to capture and manage sediment in the upper reaches of Swift Creek, before it reaches the valley floor, including sediment traps, sedimentation basins, periodic dredging of those features, and disposal of the sediment in a constructed repository. The historic dredged spoils lining Swift Creek would also be armored and covered with clean soil.

Two key developments broke the Swift Creek stalemate. First, the Department of Ecology and the Washington State Attorney General’s Office reached agreement with the County on the terms of a proposed consent decree to be lodged under MTCA. With no traditional “site” to clean up, the basis for the decree is creative. It is premised on MTCA’s authority to prevent “threatened releases”—here, releases that would inevitably arise as local government and residents are forced to deal with flood-distributed sediment, but for preventive actions. The covenant not to sue is thus prospective, providing liability protection for the County within the specific areas where sediment will be managed under the decree, for activities to be undertaken by the County under a “Swift Creek Action Plan” that largely incorporates the preferred alternative from the 2013 EIS. The County is responsible for the operations and maintenance costs associated with this sediment management, up to an annual cap.

Second, bolstered by this provisional agreement, Washington’s Legislature appropriated the first installment of capital funding for the project, totaling $6.4 million. With initial construction funds in place, the parties moved to enter the decree, which became effective on December 6, 2019. Based on the plan and decree, EPA has indicated it does not intend to exercise CERCLA authority at the “site,” such as it is.

There are challenges ahead. Full construction of the engineering controls is still dependent on further state capital appropriations, with an estimated remaining cost of $11 million. And it remains to be seen whether the engineering controls are a long-term solution or only a temporary stopgap. Based on a creative application of cleanup law, however, the Swift Creek conundrum appears to have been broken.

 width=

Conceptual layout of engineering controls to be constructed under the consent decree (sediment repository not shown). Source: Swift Creek Action Plan, Washington State Department of Ecology (December 2019).

PFAS: All you Need is Outrage?

Posted on February 6, 2020 by Kenneth Gray

To some, it’s outrageous that PFAS (Per- and Polyflouoroalkyl substances) are omnipresent in the environment, in biota, in drinking water, and in a number of past and present products.  All PFAS are highly dangerous some claim (or at least presumptively so), based on data on a limited number of the thousands of compounds. It is therefore outrageous that some of the compounds are likely present in a vast majority of Americans.

Bypassing issues of dose, cause and effect, the conclusion is that all PFAS are dangerous and unwanted.  Throw in the allegations that companies knew of hazards before phasing out manufacturing or use (of some of the chemicals) and you have a perfect storm for outrage. Ban them all! Contrary views?  The activists’ answer is that the experts have been bought off or are misleading, so public policy should be based on public opinion, right? And what politician in his or her right mind would ignore public outrage?

The fear of many, and the public in general, is undeniable. The presence of a chemical in the human body, without more information, is information of unknown significance.  For most PFAS, since we don’t have data.  Scientists are struggling currently with whether there is any basis for toxicity grouping or classes of PFAS.  For most PFAS, this is “fear of the unknown,” borne of ignorance, but heightened by uncertainty. 

Public outrage doesn’t have to be, and often isn’t, correlated to actual harm or evidence of likelihood of harm.  The media and press don’t cause outrage, but they can and do amplify it.  Add activists who are media savvy and you get the current PFAS crisis.

Here’s an equation (thanks in part to Dr. Peter Sandman):  Risk = (perceived) Hazard + Outrage.  While experienced environmental law practitioners, toxicologists, and regulators know that Risk = Toxicity X Exposure, that is not the calculus of the public.  To the public, the risk equation is fueled by outrage. To be sure, there are data for some PFAS compounds that justify concerns, but I question whether it justifies the hysteria we see.

Believe it or not, public outrage -- whether justified or not -- is never a substitute for a scientific data, or for risk assessment, or for protective environmental policy.  Lack of data and fear of the unknown don’t inform thoughtful decision making. Yet public fear is undeniable, and legislators and regulators are feeling the heat.

To quote others:  Now is the time for facts, not fear. 

Why not work on better risk communication?  The basic tools include:

  • Understanding and acknowledging the outrage
  • Acknowledging the legitimate concerns
  • Avoiding extremes
  • Sticking rigidly to the facts
  • Recognizing and reminding others that actions or decisions without a scientific and rational basis, or that can’t be implemented do more harm than good in the medium and long run, and likely to be successfully challenged in court
  • Being realistic – there are funding limitations, both public and private
  • Remembering we live in a federal system that has independent actors capable of moving at different speeds
  • If testing is to be required, making sure that we can explain to the public and the regulated community the meaning of the environmental test data produced

While I understand some of the EPA’s 2019 PFAS Listening Sessions helped in some communities, better risk communication must be an ongoing task.

Finally, what’s the role an environmental lawyer can play?  While we are advocates and counselors, the experience we bring must contribute to better decisions.  Not the least of these are the skills and lessons from analyzing environmental problems, making sure that there is credible scientific evidence to justify action, and identifying alternatives that efficiently address health and environmental risks without unnecessary costs or other adverse impacts.

We need thoughtful communication and the best information available as we work through the current PFAS regulatory issues.

WHEN DOES “RESPONSIBLE” MEAN NEVER HAVING TO SAY YOU’RE SORRY TO CERCLA?

Posted on January 15, 2020 by Jeff Thaler

Given the billions of dollars that have been spent at federal Superfund sites, and the billions still to come, it is fascinating how relatively little attention has been devoted to the case of Atlantic Richfield Company (ARCO) v Christian recently argued in the U.S. Supreme Court. Is it because there might not yet be a final judgment in the Montana court case? Or because preemption is an insufficiently dramatic attention-grabbing legal issue? Or because relatively few amicus briefs were filed? Or are people just plain tired of CERCLA?

To the last question, certainly environmental lawyers and engineers are not so fatigued! Indeed, the Christian case raises some interesting issues.  If the Court reaches the merits rather than remands the case for lack of a final judgment, resolution of the issues could impact clean-up cases and the scope of remediation efforts all over the U.S., as well as who is a “potentially responsible party” under CERCLA, and potentially also impact federal-state relations and conflicts in other areas of law.

In 1980—the year that CERCLA was enacted—the Anaconda Smelter ceased its copper refining operations. However, because Anaconda’s smokestacks had emitted arsenic and lead across five nearby towns, 20,000 acres and thousands of homes, in 1983 EPA placed the area on its list of Superfund sites. While ARCO (the then-owner of the smelter) was identified as the lead Potentially Responsible Party (PRP), and has since spent $450 million in carrying out the EPA’s remediation plan, downwind landowners wanted more cleanup work done on their lands than what EPA had ordered. They thus sued ARCO in state court 11 years ago.

In its December 29, 2017 decision, the Montana Supreme Court allowed plaintiffs to bring state law claims for more clean-up at federally designated sites of ongoing remediation. The U.S. Supreme Court granted certiorari in June 2019. Two of the granted issues are particularly interesting and potentially far-reaching: 1) Is a private (downwind) landowner at a Superfund site a PRP who must first get EPA’s approval for remedial action, even if that landowner has not been ordered to pay for a cleanup—in other words, who really is “responsible” under CERCLA? And 2) Does CERCLA explicitly or implicitly preempt or otherwise bar state common law claims for restoration, if such claims seek cleanup remedies at odds with (i.e. exceeding) EPA-ordered remedies?

Public Citizen and a group of 15 states (led by Virginia) filed amicus briefs in support of the Montana landowners and the Montana court decision; the Solicitor General and the Chamber of Commerce (with a group of other trade groups) supported ARCO. Arguments of statutory interpretation and federal-state sovereignty were front and center in the briefs.

The case was orally argued on December 3, 2019. Some of the Justices seemed concerned with precluding the claim in light of CERCLA’s text which allows for states to have a meaningful role in the remediation of hazardous sites. Other Justices seemed sympathetic to EPA and ARCO’s concerns that plaintiffs’ desired remediation might worsen groundwater quality by releasing toxins in the soil. And the Solicitor General’s representative spent much of his time defending the assertion that the plaintiff landowners should be treated as PRPs.

Ultimately, should the Court reach the merits, the Justices appeared to be trying to devise a way for the states to maintain an active role in CERCLA remediations without allowing landowners to “interfere” with EPA’s cleanup plan. Coincidentally, in an ACOEL small world moment, because Vermont and Maine were part of the 15-state amicus team, ACOEL members Pat Parenteau (VT) and Jeff Thaler (Maine) were each interviewed after the oral argument by the same news reporter.

Fortunately, they did not contradict each other, or have to say “sorry” when the article came out.

Superfund: 20+20 = 40

Posted on January 14, 2020 by John Barkett

It seems hard to believe that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)—affectionately known as the Superfund law—will be forty-years old in December 2020.

I first became involved with CERCLA in 1981, a few months after the law’s adoption. The State of Florida’s environmental regulatory agency was concerned about a transformer salvaging operation. It feared that mineral oil containing polychlorinated biphenyls that had been spilled on the ground would be carried throughout the surrounding area if a hurricane hit Miami and caused severe flooding. So it called on the Environmental Protection Agency to conduct a removal action – an emergency response – under CERCLA. That led to a lawsuit to gain access.  I represented a utility that had sold transformers to the salvager. A federal district court judge set a hearing on EPA’s motion for a preliminary injunction to gain access and allowed two weeks for discovery.  The judge also ordered the utility to intervene in the action.  We were taking depositions around the clock until the judge called us into chambers just before the hearing was scheduled to begin. We left chambers and headed not to the courtroom but to a hotel where we were ordered to engage in settlement discussions and not to return until a settlement had been reached.  The settlement was reached.  No hurricane hit.  The site was eventually remediated.  And acronyms like RI/FS, RD/RA, PRP, and NPL became a part of my daily vocabulary.

This case, however, was not the norm.  Once Chem-Dyne came down establishing the principle that in a government cost recovery action, the Superfund law created joint and several liability, and other cases affirmed EPA’s position that liability was also strict and retroactive, the litigation floodgates opened.  To conserve enforcement resources, EPA (the United States) sued “deep pocket” parties. Those parties then sued other PRPs who sued other PRPs—waves of multi-party actions.  The calls to members of Congress became louder as pizza parlors were spending more money on lawyers for the hazardous substances in the ink on their pizza boxes than they could make on a calzone.

Reforms eventually followed in the next two decades of Superfund.  The Superfund Amendments and Reauthorization Act (SARA) in 1986 plugged some holes in the statute and expressly provided for contribution actions.  The “innocent landowner” defense was added and literally created an industry – environmental assessment firms sprung up over night offering their services to anyone buying land or lending money for a real estate acquisition. 

Other amendments followed.  Section 107 of CERCLA initially ended in subparagraph (m).  Now there is a subparagraph (n) to protect fiduciaries, (o) to protect “de micromis” parties, (p) to create a municipal solid waste exception, (q) to address contiguous properties, and (r) to address prospective purchasers.   The Superfund Recycling Equity Act was passed in 1999 to reverse decisions of courts which found that a person recycling certain products was an arranger for disposal liable under Section 107(a)(3) of CERCLA.

Landfills, used oil recyclers, and solvent recyclers received most of the attention in the first three decades of Superfund—and in many cases are still receiving attention.    In the fourth decade of Superfund, river sediment sites have been the most prominent sites on the National Priorities List.  Their remedial investigation/feasibility study and remedial design/remedial action costs dwarf those of landfills on the NPL.

The Supreme Court has weighed in on the Superfund law on a few occasions. Key Tronic wounded the private Superfund enforcement business when the Court in 1994 determined that a private Superfund plaintiff could not recover litigation attorneys’ fees under CERCLA. Aviall (2004), Atlantic Research (2007), and Burlington Northern (2009) followed in a string of decisions that shook up the Superfund jurisprudence in the arena of contribution actions, cost recovery actions, and the evidence required to establish when someone has arranged for disposal or treatment of a hazardous substance. Burlington Northern also weighed in on how to prove a reasonable basis for apportionment in a cost recovery action.

A lot of money has been spent on Superfund sites these past 39 years.  Whether the risk reduction bought with those dollars was the best use of these funds can be debated.  But there is no debate that toxicology has risen in prominence because of Superfund and lawyers have had to become familiar with notations or phrases like 1 x 106, slope factor, and reference dose, to make sense of the difference between carcinogenic and non-carcinogenic risks in human health risk assessments.

All Superfund lawyers know Section 113(f)(1) of CERCLA, the statutory standard applicable in a contribution action: the court is to allocate response costs according to “such equitable factors as the court determines are appropriate.”  That text has resulted in the “Gore factors,” the “Torres factors,” and a host of arguments – sometimes supported by facts and oftentimes supported by inferences or even educated guesswork – as judges and allocators attempt to satisfy the statutory standard.

As we embark on a fifth decade of Superfund, we have another Superfund Task Force and a new set of recommendations focused on trying to speed up cleanups, accelerate remedial design, encourage private investment resulting in reuse of Superfund sites, promote redevelopment of sites to revitalize communities, and promote transparency and engagement with Superfund stakeholders. Actions always speak louder than words, so we can all just watch and hope that the noble goals of this latest Superfund Task Force can be met.

So, here’s to a “Happy 40th” to the Superfund law in 2020.  I was there for your birth and am glad to still be around to declare: you have definitely aged, but you still seem to be going strong!

Good Sam: A Base Hit Not a Grand Slam

Posted on September 30, 2019 by Kevin Murray

Depending on your source, abandoned mine lands across the United States number over 100,000 sites. Some, but not all, pose a threat to human health and the environment. The magnitude of the issue engulfs the resources of federal and state agencies. Moreover, responsible parties are most often dead and buried companies, leaving the need for options outside of routine scenarios and traditional regulatory programs relying on viable responsible parties.

The need for otherwise non-liable parties to voluntarily agree to study and remediate troubled sites seems the most likely path to success. Industry and public interest groups alike are needed if the issue of abandoned mine lands is to be addressed. The Good Samaritan program was intended to encourage private voluntary action. While there are some successes to date, the program has not received a robust welcome but has struck-out for several reasons—most significantly the lack of statutory authority to legalize the program and the inability of current agreements to protect well-meaning Good Samaritans from increased environmental liability.

Recently legislation was proposed that attempts to address deficiencies in the program, starting from shoring up statutory authority under CERCLA and the CWA and continuing with the proposal of some new structural elements. In short, the new Act would create a Good Samaritan permitting structure. Good intentioned citizens, groups, and companies would apply for and obtain a Good Samaritan permit. The permit would outline the activities to take place with certain protections written into the permit. While the effort is not a home run, the Act goes a long way toward improving the program; however, many are fearful that several issues may still impede successful implementation of a robust program. To encourage Good Samaritans to step up and address abandoned mines without fear of uncertain liability, the Act would benefit from the following revisions:

  • To address liability concerns, a Good Samaritan willing to undertake remedial activities under a permit is pronounced via the permit to be in compliance with all requirements under CERCLA and the CWA. This is probably not enough. The Act will need to state that a party will not be considered a Potentially Responsible Party (PRP) under CERCLA nor will the party be subject to long term obligations under the CWA.
  • The mechanism for discontinuing operations in the event circumstances or facts are discovered that reduces the feasibility of the project or significantly increases costs is a positive development; however, it is unclear whether the permit will contain language similar to the current EPA Good Samaritan model Administrative Order on Consent (AOC) that empowers the EPA to expand or modify the scope of work. The historic AOC provision has been a significant impediment for industry participation. Simply put, many will remain unwilling to accept a permit that allows EPA to expand the permit scope of work. Certainty with regard to the nature of the work and a defined end point are critical.
  • The Act contemplates judicial challenge prior to permit approval. While this sounds like a good idea, it will serve to chill many from engaging in the process. The prospect by a Good Sam of investing significant administrative expenses that may then be met (or have the potential to be met) with significant legal and administrative costs and delays will discourage parties from engaging in the first instance.
  • The Act still contemplates long-term involvement through operation, maintenance and sampling.  While this might work on select parties, for most the perpetual involvement will signal the inning is over.

The success of the effort will depend on the language of the permit. If the permit borrows from or is based on the current Good Samaritan model AOC, the program will languish. The permit must offer clear and unambiguous liability protection, a thoroughly and accurately defined scope of work, and an exit point for a robust program. The private sector requires certainty of entry and exit, and the assurance that by engaging in a Good Samaritan activity, they will not be drug into decades of CERCLA actions.

THE TAX MAN COMETH

Posted on February 5, 2019 by Donald Shandy

The 2017 Tax Cuts and Jobs Act (“Act”) has injected considerable confusion into environmental administrative and judicial settlements.

Since 1969, Section 162(f) of the Internal Revenue Code has not permitted the deduction of fines and penalties.  This would include fines and penalties related to environmental settlements including Supplemental Environmental Projects (SEPs).

Prior to the Act, Section 162(f) allowed deductions of “ordinary and necessary” business expenses related to environmental litigation and settlements.  New Section 162(f) permits deductions for expenses “constituting restitution” (e.g. remediation) or costs “paid to come into compliance with law.”  To qualify as restitution/remediation, two requirements must be met:

1.      The amount that is dedicated to restitution must be set forth in a settlement agreement or court order; and

2.      The governmental agency must prepare and file with the IRS and provide the taxpayer a 1099-series form stating the deductible amounts paid by the taxpayer.

It seems fairly clear that cash penalties and SEPs undertaken in lieu of a cash penalty are not deductible.  However, it is far less clear how remediation activities pursuant to CERCLA or RCRA should be addressed.  For example, how should remediation expenses be addressed where a settlement or court order was entered into prior to the effective date of the Act, but the costs are not incurred (paid for) until after the effective date of the Act?  Problematic case specific-issues under the new law seem almost endless. 

To date, the Treasury Department has not provided any guidance related to this issue.  Practitioners should be very careful when negotiating settlements with administrative agencies or entering into judicial orders.  Absent government guidance, careful drafting and execution of settlements and orders, there is a real possibility of an IRS audit or even a tax court case down the road.

Attaboy, Jeff!

Posted on August 16, 2018 by Paul Seals

On August 1-3, for the 30th year in a row, Jeff Civins chaired the Texas Environmental Superconference in Austin.  The well-attended sold-out event, presented multimedia, multidisciplinary programs addressing environmental issues and topics, with a Texas theme: “A Texas State of Mind.”  With over 500 registrants, the conference, through Jeff’s guidance, did it again.   The conference combines the latest legal and technical information with playful humor.  Jeff in his humble manner would give the credit to the planning committee, but the Superconference would not be “Super” without Jeff’s leadership and perseverance.  Who says you can’t herd cats!

The unique conference is recognized as one of the best environmental conferences in the country, attracting speakers from around the country and from federal and state agencies.  For two and a half days, cooperative federalism is on full display.

For the 30th Superconference, the program featured a panel of “experienced” environmental attorneys, who reflected on environmental regulation over the past 30 years “and then some.”  The panel included four Fellows, Pam Giblin, John Cruden, Kinnan Goleman, and myself.

As we say in Texas, “Jeff, you done good!”

Is the Superfund Taskforce an EPA Superhero or Just a Bunch of Smoke and Mirrors?

Posted on August 15, 2018 by Heidi Friedman

Is the Pruitt/Wheeler Superfund Taskforce the Clark Kent of Environmental Law, hidden cape and all, producing more effective and efficient cleanups and conquering the nasty villains of TCE and Vinyl Chloride to protect the human race?  Pruitt made his initial request to his superhero squad to prioritize Superfund on March 22, 2017, and the Task Force recommendations came out a few months later identifying 21 priority sites (which by the way were priorities well before that list came out because they were on the NPL) along with many other objectives.  On the Taskforce recommendations' first anniversary, EPA recently gave itself the traditional 1-year anniversary gift of paper by publishing an almost 100-page report detailing all of its Superfund accomplishments and identifying what the environmental villains of the world can expect in Year 2.   Although there is not enough space here to dissect the so-called “accomplishments,” the list feels a lot like that “To Do” list I sometimes generate for tasks I am about to complete, just so I can have the pleasure of drawing a line through it to say I finished something. 

Although many of those officials implementing the task force goals for EPA are superheroes in many ways, the main problem is that the Superfund process is much less than “super,” especially since the reach of the program is expanding not contracting.  For example, we are constantly dealing with new and emerging contaminants.  Closed sites are being reopened to look for 1,4-Dioxane, PFOS-PFOAs and other new or emerging contaminants, many of which are ubiquitous.  Then we have vapor intrusion to further complicate the investigation and pathway exposure evaluation process, even more so now that VI contributes to the hazard ranking system used by  EPA to score a site for listing on the NPL.  So as we make the scoring, listing, investigation and remediation processes broader and more complex, can we really argue that there is now more success in cleaning up these sites, converting them to beneficial use and delisting them?

I don’t think so, at least not yet.  To really move things along, industry and EPA should be focusing on identifying and testing more efficient technologies so that all media can be remediated in reasonable time frames.  How about working toward collaboration among stakeholders to develop reasonable, risk-based cleanup levels based on realistic exposures at sites rather than blindly insisting that MCLs apply for restoration even if no one has or will ever drink the groundwater?  And let’s talk about promoting voluntary actions instead of negotiating orders for every piece of work.  Ramming down model order language and picking insanely expensive remedies overnight to just check the boxes does not generate results or build relationships between industry and EPA to support the program.

Instead, these actions may lead to more PRPs contesting EPA’s decisions as arbitrary and capricious, resulting in further delay and inefficiency.  In fact, we are already seeing erosion of the historical deference that has been given to EPA’s decision making process.  See, e.g., Genuine Parts Co. v. EPA.   Industry and EPA need to form a partnership that focuses on real risk to human health and the environment if there is really going to be a change in the Superfund program that will benefit our communities.  If not, we will remain in the same less than super program, attempting to clean up the same sites for the next several decades.   Or maybe Wonder Woman will swoop in and save the day??? Fingers crossed!

Just How Arbitrary Does EPA Have to Be to Be Arbitrary and Capricious?

Posted on May 29, 2018 by Seth Jaffe

Last Friday, the D.C. Circuit Court of Appeals vacated EPA’s rule adding the West Vermont Drinking Water Contamination Site to the National Priorities List, finding EPA’s decision to be arbitrary and capricious and not supported by substantial evidence.  As the opinion makes clear, EPA has to work pretty hard to lose these cases.

Why did EPA lose?

The critical issue was whether the overburden and bedrock aquifers beneath the site were directly connected.  EPA said that they were.  However, the petitioners pointed to cross-sections in the record that showed a confining layer existed between the bedrock and overburden aquifers.  More importantly, the record showed that EPA did not even attempt to explain why the cross-sections did not undermine its determination.  That’s a no-no.  As the Court noted:

It was arbitrary and capricious for EPA to rely on portions of studies in the record that support its position, while ignoring cross sections in those studies that do not. … Although EPA ‘is not required to discuss every item of fact or opinion included in the submissions it receives in response to a Notice of Proposed Rulemaking, it must respond to those comments which, if true, would require a change in the proposed rule.’

Counsel from DOJ tried to repair the damage in the litigation, to which the Court replied that:

These arguments come too late. We may only uphold a rule “on the basis articulated by the agency” in the rule making record.

Lesson for EPA?  Don’t ignore comments in the record – and don’t count on your lawyers to fill in the gaps.

Lesson for potential petitioners?  Make sure that the record looks as good as possible – and focus like a laser beam on EPA failures to respond to your evidence.

And who knew that there was a band called The Substantial Evidence?

BROWNFIELDS ON STEROIDS

Posted on April 24, 2018 by George von Stamwitz

Everybody loves Brownfields. Local, State and Federal agencies provide an array of tax credits, grants, expert support, statutory liability protections and contractual liability protections to developers of contaminated land. Brownfield buyers generally are looking to avoid assuming liability for pre-existing conditions and for a few incentives to sweeten the pot. The public sector is eager to help.

Less well known, and virtually ignored by the public sector, is a small but growing segment of the Brownfield ecosystem where buyers of contaminated land “run to the fire.” These buyers willingly take liability for pre-existing conditions, known and unknown, and provide the seller with a broad, collateralized indemnity. From the public sector’s perspective, these buyers are user–friendly, as they rarely seek government grants, incentives or liability protections. In recent years these “risk transfer” transactions have been particularly popular with owners of decommissioned power plants with ash ponds.

Indeed, these transactions have ingredients that EPA and the States typically love: tons of financial assurance for the benefit of the seller, an accelerated schedule for demo and cleanup with sanctions, engagement with the local community regarding future use, and job creation. Sometimes the risk transfer buyer turns the project over to a Brownfields buyer once the liability is managed.

Perhaps EPA, the States and NGOs can get to know the risk transfer portion of the Brownfield ecosystem a little better, add their expertise, and help get more sites cleaned up faster.

Fast & Furious: 21 Superfund Sediment Sites Targeted for “Immediate, Intense Action”

Posted on February 13, 2018 by Mark W. Schneider

On December 8, 2017, U.S. Environmental Protection Agency Administrator Scott Pruitt designated 21 Superfund sites for “immediate, intense action”. It’s an open question whether this effort will be more successful than many of EPA’s previous failed efforts to comply with its policies for contaminated sediment sites.

EPA has not met many of its prior commitments regarding sediment sites. On July 25, 2017, EPA’s Superfund Task Force identified 42 recommendations intended to, among other things, “evaluate and expedite NPL sites to completion”, “encourage and facilitate responsible parties’ expeditious and thorough clean-up of sites”, “create oversight efficiencies for PRP lead cleanups”, and “promote redevelopment/reuse of sites by encouraging PRPs to invest in reuse outcomes”. Since that time, some stakeholders have sought action from EPA based on the principles set forth in Task Force recommendations. In response, some have received commitments from EPA headquarters to seriously consider the requests, but the promises made by Headquarters often have not been turned into constructive action consistent with the recommendations.

Last year, EPA’s Office of the Land and Emergency Management (OLEM) issued Directive 9200.1.130 (Jan. 9, 2017), which identified 11 recommendations “based on current best practices for characterizing sediment sites, evaluating remedial alternatives, and selecting and implementing appropriate response actions”. OLEM directed the regions to, among other things, “develop risk reduction expectations that are achievable by the remedial action”. Unfortunately, just two days earlier, EPA issued a Record of Decision for the Portland Harbor Superfund Site that, in direct conflict with the OLEM Directive, established cleanup goals that are unachievable.

And these are just EPA’s recent promises. In 2002, EPA identified 11 principles in its Principles for Managing Contaminated Sediment Risks at Hazardous Waste Sites (OSWER Directive 9285.6-08). EPA announced that, among the key principles, it was important to “control sources early”, “ensure that sediment cleanup levels are clearly tied to risk management goals”, and “design remedies to minimize short-term risks while achieving long-term protections”. Similar principles were articulated in EPA’s 2005 Contaminated Sediment Remediation Guidance for Hazardous Waste Sites (OSWER Directive 9355.0-85). Unfortunately, many of EPA’s decisions regarding sediment contamination sites have been made without consideration or application of these principles.

Will things be different for the 21 sites targeted by Administrator Pruitt for “immediate, intense action”? Unlike earlier pronouncements by the agency, which established program-wide recommendations to be implemented at all applicable sites, the list of actions for the 21 sites sometimes are specific and measurable, e.g., “initiate and complete negotiations to begin implementation of early actions” at the Anaconda Co. Smelter. It’s possible that, where the recommendations are specific and measurable, EPA will be able to take action to advance progress at a particular site. On the other hand, some of the actions proposed for other sites on the list are so general, e.g., “resolve issues expeditiously” at Allied Paper, Inc./Portage Creek/Kalamazoo River; “initiate actions to allow revitalization of the site” at Des Moines TCE (aka Dico Company, that it will be difficult to measure success.

Musings on Starting a New Superfund Case – Hope springs eternal?

Posted on January 25, 2018 by David Rosenblatt

As lawyers, many of us enjoy the “rush” of starting a new case.  A new matter can be a welcome fresh tablet, providing us with the opportunity to use our skills and experience in creative and interesting ways to further our client’s interests.

But -- for those of us who have fought for clients on the front lines of EPA’s Superfund program over the years -- maybe not so much.  As Superfund practioners, we must deal with a cumbersome, almost 40-year-old law and an agency whose approach is dictated by a raft of standard operating procedures within an entrenched bureaucracy, decades-old guidance documents and forms, and a seemingly endless review and comment process.

To add to the challenge, clients have changed over the past 40 years, even if the Superfund law and its implementation have not. Today’s clients demand quicker, more practical, and cost-effective solutions in resolving their legal problems, without years of negotiations and endless administrative boxes to check off along the way in assessing and cleaning up sites.

There are other paradigms.  Many states have operated as laboratories of innovation in site cleanup through privatization and reduction of bureaucratic obstacles. In July 2017, EPA issued a Superfund Task Force report recommending numerous reforms to streamline the Superfund process and expedite cleanup.

Yet despite these advances on the state level -- and a supposedly business-friendly administration now in Washington and at EPA -- Superfund, well, remains Superfund. 

So here I embark on yet another Superfund Special Notice negotiation in early 2018.  I am armed with fresh ideas to bring to the table and an EPA Task Force report in my pocket, just hoping I will discover that a few of these new approaches will somehow have resonance with my EPA counterparts and that Superfund 2018 is somehow different from Superfund 1998.

Anyone want to take any bets on what I will find?    

Superfund: After Nearly Forty Years, Still a Work in Progress

Posted on October 19, 2017 by William Hyatt

Since its enactment, the Comprehensive Environmental, Response, Compensation and Liability Act of 1980, commonly known as the Superfund statute, has probably received more diagnostic attention than any other environmental law.  That is not surprising, considering EPA has devoted more resources to the Superfund program than to any other program the agency administers.  Matters were not helped by the program’s rocky start, with allegations of impropriety swirling around the agency and the head of the Superfund program winding up in jail. Meanwhile, the liability regime designed to fund the Superfund program spawned an avalanche of litigation, resulting in crushing transaction costs.  Over the years, the Superfund program has been consistently controversial and has undergone a steady stream of “reforms,” reports to Congress and GAO studies. The statute itself has also been repeatedly criticized, including by the Supreme Court, for its lack of clarity.

As two recently released reports attest, the diagnostic process continues.  Both reports should be required reading for Superfund practitioners, but the question remains whether the underlying structural problems of the statute have been, or even can be addressed.

The first report is a paper commissioned by the American Council of Engineering Companies, entitled Superfund 2017, Cleanup Accomplishments and the Challenges Ahead.  The author, Katherine Probst, is a longtime, thoughtful commentator on Superfund matters and was a key member of the Resources for the Future team that issued a 2001 Report to Congress, entitled Superfund’s Future: What Will It Cost? A Report to Congress.  Her latest effort is largely a report card on the Superfund remedial program, lamenting the lack of sufficient information to conduct a thorough diagnosis. She makes a number of recommendations that the missing information be gathered, following which a new diagnosis would presumably be undertaken. In the meantime, the Probst report makes a number of interesting, but telling observations. For example, right from the start, EPA has struggled to measure the success of the cleanup program, but Probst points out that even though a significant percentage (24%) of non-federal sites have been deleted from the National Priorities List (NPL), and another 48% have been deemed “construction complete,” seven percent of sites on the NPL are still characterized as “human exposure not under control” and another 10% lack sufficient data to make a protectiveness determination.  Federal funding for Superfund continues to decline; states also face shrinking resources.  Not surprisingly, cleanup progress has slowed, not just for lack of funds, but also because the sites in the cleanup program today tend to be far more complex (and expensive) than the NPL sites of the past. EPA finds itself continuing to implement a prescriptive cleanup program that was not designed for many of the more complex sites on the 2017 NPL (e.g., mining and contaminated sediment sites).

The second document, entitled Superfund Task Force Recommendations, was issued by EPA in June, 2017. The Task Force was charged by the Administrator “to provide recommendations on an expedited timeframe on how the agency can restructure the cleanup process, realign incentives of all involved parties to promote expeditious remediation, reduce the burden on cooperating parties, incentivize parties to remediate sites, encourage private investment in cleanups and sites and promote the revitalization of properties across the country.”   These familiar themes led the Task Force to identify five basic goals, forty-two recommendations and various strategies for improving the Superfund program.  All the goals and recommendations are directed at speeding up the process of cleanup.  For example, one strategy advocates the use of “adaptive management” to expedite cleanup through use of early actions, interim records of decision and removal actions. Another advocates more centralized management of complex sites to assure consistency and aggressive oversight.

Even if all the recommendations contained in these two latest reports were to be accepted and implemented, the Superfund program would likely still be highly controversial with many of the challenges identified in the early days of the program still remaining to be solved.  Among those challenges are the following:

·         Is the National Contingency Plan (NCP) still the best “cookbook” for cleanup?  If not, what changes should be considered to achieve cleanup faster and better? Is the Superfund program too “process heavy?”  Is amendment of the NCP even politically feasible?

·         How can cleanups be accomplished with less study?  Particularly at complex mega-sites, NCP-compliant studies can take far too long.  Is the NCP process too prescriptive and too inflexible? 

·         How to measure success?  Should the key measurement be “construction complete,” or deletion from the NPL, or reduction of risk, or something else?  Should there be intermediate metrics of success?

·         Should there be greater centralized management of the Superfund program, as the report of the Superfund Task Force appears to advocate?  How should that be accomplished?  What is the appropriate role for CSTAG and NRRB?

·         How clean is clean?  Should the Superfund program chase every last molecule of hazardous substances, or reduce risk as quickly as possible?  Should there be greater use of the removal program?  As the saying goes, is “perfect the enemy of good?”

·         What should “cost effectiveness” mean in context of the Superfund program? Should proposed remedies be subjected to a cost-benefit analysis?

·         What is the proper role of EPA “guidance” in implementing the Superfund program?  Should guidance be binding on EPA?  Could that happen without notice and comment rulemaking?

·         Are the remedies implemented thus far in the Superfund program really effective?  For example, many groundwater cleanup programs were projected to have cleaned up contaminated groundwater by now.  Has that happened?  Can the pumps be turned off?

·         Should federal funds be used to leverage private party investment in cleanups?  Does EPA’s orphan share policy strike the right balance?

·         Does the statute strike the right balance between the federal and state interests in cleanup?  Should EPA and the states be true “partners”?

·         Should the lapsed Superfund tax be reinstated?  If so, in what form?

·         Finally, is there a role for fairness in Superfund?  Is the ban on pre-enforcement review too harsh a standard?

As this list of challenges demonstrates, Superfund will almost certainly remain a key subject for continued diagnosis in the future.

EPA Beginning Anew at Portland Harbor Superfund Site?

Posted on October 18, 2017 by Rick Glick

Although no official pronouncement has been issued, it appears that EPA Headquarters is looking at resetting the scoreboard for the Portland Harbor Superfund site.  EPA had already signaled that it would be reviewing significant, long-unresolved Superfund sites with an eye toward streamlining the process.  However, the latest action on Portland Harbor may have the opposite effect, since EPA has not yet involved major stakeholders, including the State of Oregon, City of Portland, Port of Portland, or the tribes.

Portland Harbor is an 11-mile stretch of the Willamette River in industrial Portland.  After a 17-year, PRP-led remedial investigation process, at a cost exceeding $110 million, EPA Region 10 issued a Record of Decision (ROD) in the closing hours of the Obama Administration.  The ROD itself recognized that the baseline data upon which Region 10 relied in selecting its preferred remedy had grown stale, and called for another site-wide round of sampling prior to any Remedial Design for specific facilities. 

EPA now is negotiating with certain, undisclosed private responsible parties on an Administrative Order on Consent (AOC) and a new sampling plan.  A review of the current draft drew a sharp response from Oregon Department of Environmental Quality Director Richard Whitman.  In a letter dated October 5, 2017 to Acting Regional Administrator Michelle Pirzadeh, Whitman invoked a 2001 Memorandum of Understanding between EPA, the state and tribes on the process for investigation and cleanup of Portland Harbor.  The letter criticizes EPA for keeping the state in the dark and demands the opportunity to fully participate in and comment on the new planning work.  Similar objections were raised by Governor Kate Brown, the City of Portland and the Yakama Nation.

Director Whitman also voiced substantive concerns with new directions in the draft AOC.  These include revisiting assumed fish consumption rates, a “reset of achievable remedy targets/actions,” and a focus on downstream sites with “data gaps” within Portland Harbor itself.

There is much to be critical of in Region 10’s handling of the Portland Harbor site, and revisiting the Region’s conclusions is appropriate.  The assumptions driving the cleanup approach, emphasizing removal over natural riverine processes, could cost well over $1.5 billion for questionable environmental benefit.  Indeed, had EPA not added Portland Harbor to the National Priority List, Oregon DEQ would likely have implemented a cleanup plan incorporating routine Army Corps of Engineers maintenance dredging of the Willamette River at far less cost.  The resulting economic hit to the region will be enormous.

Still, I am reminded of Sen. John McCain’s famous thumbs down vote on bills to repeal and replace the Affordable Care Act.  Apart from substantive elements of the bills, Sen. McCain decried the absence of “regular order” in enactment of major legislation.  That is, the congressional leadership bypassed the usual committee and collaborative review that identifies and fixes problems with the bill and lends legitimacy to the outcome. 

Region 10 has responded well to the criticism.  Acting Administrator Michelle Pirzeda, sent a reply letter offering assurances that the state, city and tribes will be involved going forward.  The letter sets a deadline of October 24 to submit comments on the draft plan.

While unnecessary confrontation over who may participate in the process is averted for now, the substance of the Portland Harbor reset is likely to be contentious.  Watch this space for developments.

EPA Proposes to Defund Superfund Litigation

Posted on October 12, 2017 by David Uhlmann

The Trump administration has unleashed a withering assault on environmental protection efforts that seeks to roll back decades of bi-partisan efforts to provide clean air and water in the United States.  Environmental groups and state attorneys general are challenging the EPA in court over its proposals to repeal the Clean Power Plan, the Clean Water Rule, and dozens of lesser-known regulatory programs.  While those lawsuits have achieved some initial success, based on EPA’s failure to comply with the Administrative Procedures Act, there is justifiable concern about the fate of EPA’s regulatory programs.

But less attention has been paid to a rollback buried in the EPA’s FY 2018 budget, which also might have devastating impacts:  the proposal to end EPA funding of Superfund litigation by the Justice Department.  Since 1987, the EPA has reimbursed the Justice Department for the cost of bringing Superfund cost recovery cases, with as much as a third of the Environment and Natural Resources Division (ENRD) budget devoted to Superfund work.  (This year, ENRD was expecting about 20 percent of its funding to come from the EPA.)  The cost-sharing arrangement is enormously beneficial to the Superfund program, which receives hundreds of millions of dollars of cost recovery every year in cases litigated by ENRD.

EPA's effort to defund cost recovery litigation could lead to layoffs at ENRD, cripple the Superfund program, and undermine criminal and civil enforcement of the environmental laws.  The proposal has all of the features of another Trump administration executive fiat that could fly under our collective radar.  It deserves condemnation from everyone who cares about public health and the environment, as I explain in an October 4th New York Times op-ed entitled Undermining the Rule of Law at the EPA.

The Government’s “Bare Legal Title” CERCLA Defense Wears Thin

Posted on August 29, 2017 by Theodore Garrett

The United States has encouraged economic activities such as mining on federal lands.  Such activities have resulted in contamination and subsequent CERCLA cleanup orders.  Companies undertaking such cleanups have sought contribution from responsible parties including the United States.  Two recent decision reject the government’s argument that its “bare legal title” should not give rise to CERCLA owner liability.  A logical result and also poetic justice, since the United States has consistently urged that CERCLA be construed broadly and liberally as a remedial statute.  Turnabout is fair play.  

In Chevron Mining Inc. v. United States, the 10th Circuit on July 19, 2017 held that the United States was liable as an owner under CERCLA 107(a) because it owned national forest lands in New Mexico.  The lands were mined over several generations by Chevron Mining.  Chevron began remediation expected to cost more than $1 billion pursuant to three EPA administrative orders.  Chevron then filed suit against the United States seeking contribution.  The 10th Circuit held that owner liability attaches to the United States as the owner of portions of the site, and plaintiff need not show that the defendant caused the release of hazardous wastes that required cleanup.  The court rejected the government’s argument that “bare legal title” is insufficient to trigger owner liability, noting that CERCLA contains neither an express nor an implied exception for owners of “bare legal title.”  The court’s opinion also notes that Chevron received loans from the United States, under the Defense Production Act, to fund its exploration activities and received authorization from the Forest Service for pipelines to dispose of mine tailings.  The case was remanded to the district court for further proceedings to determine the government’s equitable share. 

Similarly, in El Paso Natural Gas Company v. United States, the District of Arizona ruled on August 15, 2017 that the United States is liable under CERCLA as an owner of 19 uranium mines.  The mines are located on the Navajo Reservation and are being remediated by El Paso.  The court cited longstanding law that the United States owns fee title to reservation land.  The fact that the Navajo Nation has significant rights in reservation land is not inconsistent with the power of the United States over reservation land.  The court cited the Chevron Mining case above with approval, and also noted dicta from the 9th Circuit that the passive title owner of real property is liable.  Given CERCLA’s broad remedial purposes, the district court held that the United States, as a fee title holder with plenary and supervisory powers over reservation land, is an owner for purposes of CERCLA.  The court’s decision does not address the extent of the government’s liability, to be addressed in the equitable allocation phase of the case. 

These and other decisions will support efforts by companies responsible for remediation at CERCLA sites on federal land to have the government contribute an appropriate share of the cleanup costs.  Also, mindful of its potential liability, perhaps the government will more carefully consider risks and costs when making remedy decisions, which would be welcomed at all sites, whether or not on federal lands.

The Annual Texas Environmental Superconference—Austin in August?

Posted on June 26, 2017 by Jeff Civins

The Texas Environmental Superconference is one of a kind. Held each year in Austin in sweltering early August, this conference consistently sells out, attracting over 500 participants from the public and private sectors.Indeed, now in its 29th year, it was the winner of the first American Bar Association Section of Environment, Energy & Resources (ABA SEER) award for Best State or Local Bar Environment, Energy and Resources Program of the Year.

The key to the conference’s popularity is its unabashed willingness to integrate humor into content--with annual themes, skits, quizzes, prizes, and, for the past several years, even a conference song.Past themes have included Yogi Berra quotes (“It’s like déjà vu all over again”); Clichés (“The best thing since sliced bread”); Shakespeare (“Much Ado About Pollution”); “Star Wars (“May the farce be with you”); and Willie Nelson songs (“On the Road Again”).Dwarfing all other past conferences, though, was the Disney movie-themed conference, which featured the song “SuperconferenceAustinTexasExpialidocious” and is the subject of 2 You Tube videos. (introductory remarks and conference song).

Speakers generally weave the conference themes into their presentations and, on occasion, even appear in costume.For example, an EPA chief of enforcement appeared as Harry Truman in the politically-themed conference, “Join the Party,” and as Darth Vader, in the Star Wars-themed program. And an EPA General Counsel appeared as a tiara-wearing Wonder Woman in the super hero-themed program.A former EPA Regional Administrator and TCEQ Chairman appeared variously as the Beatles, the Odd Couple, Game Show contestants, and Yoda and Luke Skywalker.

This year’s conference – to be held on Thursday-Friday, August 4-5, 2017 – has as its theme board games and is entitled “Let the Games Begin.”The Wednesday evening session on enforcement is entitled “Trouble.”Registration is at Environmental Superconference-2017.

Participants look forward to attending each year for the chance not only to experience a fun and informative program, but also to network and to informally discuss issues of concern with other environmental professionals representing diverse perspectives, e.g., private and public sectors; regulators, regulated community, and environmental organizations; legal and technical professionals; and local, state, and federal governments.

The conference is organized by the Environmental and Natural Resources Law Section of the State Bar of Texas, in conjunction with other environmental professional organizations, including ABA SEER, the Air & Waste Management Association—Southwest Section, the Water Environment Association of Texas, the Texas Association of Environmental Professionals, and the Environmental Health and Safety Audit Center.Proceeds from the conference are used to fund environmental internships, student writing awards, and section outreach programs.

Thanks to a generous contribution from Supporter, EARTHx (formerly Earth Day Texas), the Superconference this year is offering –and last year offered--scholarships for employees of non-profit organizations with environmental matters as a significant focus.

The Annual Texas Environmental Superconference is the answer to the question, why come to Austin in early August?

Superfund Reform, Part 2: Giving Credit Where Credit Is Due

Posted on May 30, 2017 by Seth Jaffe

Last week, I offered less than fulsome praise of EPA Administrator Pruitt’s announcement that he was taking control of remedial decisions for big Superfund sites.  Now, he’s followed up with a memorandum announcing establishment of a task force to look at ways to reform Superfund implementation.  While he’s still plainly wrong in putting Superfund “at the center of the agency’s core mission,” I have to confess that I think he otherwise has pretty much hit a home run with the latest memorandum.

Let’s start with the basics.  Superfund is a mess.  It’s one of the most poorly written statutes in Congressional history, and Superfund cleanups take way too long, are way too expensive, and fail to deliver bang for the buck in either risk reduction or productive reuse.

In a perfect world, Superfund would be amended to privatize cleanups and put cost-effective risk-based cleanups at the center of the program.  However, Scott Pruitt cannot unilaterally amend Superfund.  Heck, he may not realize it, but even Donald Trump cannot unilaterally amend Superfund.

Given this reality, Pruitt’s memorandum identifies all of the appropriate goals for meaningful administrative reform.  They include:

  • a focus on identifying best practices within regional Superfund programs, reducing the amount of time between identification of contamination at a site and determination that a site is ready for reuse

  • overhaul and streamline the process used to develop, issue or enter into prospective purchaser agreements, bona fide prospective purchaser status, comfort letters, ready-for-reuse determinations

  • Streamline and improve the remedy development and selection process, particularly at sites with contaminated sediment, including to ensure that risk-management principles are considered in the selection of remedies

  • Reduce the administrative and overhead costs and burdens borne by parties remediating contaminated sites, including a reexamination of the level of agency oversight necessary.

The last is my personal favorite.

I somehow expect I’m not going to be praising this administration on a regular basis, but I can still acknowledge when they get something right.  Let’s just hope that the task force is for real and comes up with a set of meaningful administrative improvements.

Fingers crossed.

The Making of Bad Law

Posted on May 24, 2017 by John Barkett

One of the challenges for lawyers involved in CERCLA litigation is educating the judge on how CERCLA works.  But when both the advocate and the court misapprehend how CERCLA works, Voila!  Bad law is made. 

CERCLA is hardly a model of clear drafting, but one area of confusion involves the difference in the burden of proof in the application of Section 107(a)(4)(A) and (B).  As CERCLA practitioners know, a party liable under one of the four categories of Section 107(a)(1) – (4) is liable under Section 107(a)(4)(A) to the United States, a State, or a Tribe for costs that are incurred “not inconsistent with the national contingency plan.”  On the other hand, under Section 107(a)(4)(B), “any other necessary costs of response incurred . . . consistent with the national contingency plan” is the standard applicable to private cost recovery claims.   

Washington State Dep't of Transp. v. Washington Natural Gas Co., 59 F.3d 793 (9th Cir. Wash. 1995) is one of many decisions that explain the distinction. In a 107(a)(4)(A) action, a defendant has the burden of proving that the government or Indian tribe’s costs are inconsistent with the National Contingency Plan (NCP) because of the presumption of NCP consistency attached to governmental or tribal actions. “In contrast, any ‘other person’ seeking response costs under § 9607(a)(4)(B) must prove that its actions are consistent with the NCP.”  59 F.3d at 799-800 (citation omitted).  In other words, Section 107(a)(4)(A) focuses on costs because consistency is presumed.  Section 107(a)(4)(B) focuses on actions because consistency must be proved.

Lawyers, law clerks, and judges who do not understand the distinction can become the purveyors of bad law.  Pentair Thermal Mgmt., LLC v. Rowe Indus., Inc. Nos. 06-cv-07164 NC & 10-cv-01606 NC, 2013 WL 1320422 (N.D. Cal. Mar. 31, 2013) illustrates the problem.  In Pentair, there was a cleanup of polychlorinated biphenyls in soils.  There was no quarrel with the NCP process leading up to the selection of an excavation remedy. But during remediation problems were encountered that resulted in adjustments to the remedy and increased costs. CERCLA practitioners know that fundamental changes to a National Priorities List-site remedy require another round of public participation.  40 C.F.R. §300.435(c)(2)(ii)(H).  To defeat plaintiff’s costs, defendant decided to argue that the changes to the remedy required re-notice to the public of the remedial action because they were fundamental changes, and thus plaintiff’s actions were not consistent with the NCP.

Defendant’s argument was premised on United States v. Burlington Northern Railroad Company, 200 F.3d 679 (10th Cir. 1999), where the court of appeals concluded that the Environmental Protection Agency’s problems during a remedial action did, indeed, represent a fundamental change to the remedy requiring re-notice to the public. The court of appeals held that despite an NCP violation, on remand, the burden of proof remained on the defendant to establish that “EPA’s remedial actions resulted in demonstrable excess costs that would not have otherwise been incurred.” Id. at 695.

The district court in Pentair found NCP consistency even with the changes to the remedy.  However, without appreciating the fact that Burlington Northern was a Section 107(a)(4)(A) case—presumably because defendant was relying on the decision—the court said that even if the remedial changes were fundamental, defendant would still lose based on Burlington Northern and another governmental cost recovery action, Minnesota v. Kalman W. Abrams Metals, Inc., 155 F.3d 1019 (8th Cir. 2015).  Both of these were Section 107(a)(4)(A) cases where a defendant must prove which of the government’s costs were inconsistent with the NCP.  The district court in Pentair failed to appreciate the distinction.  It wrongly held that, had the district court determined that the remedy changes were fundamental, defendant would still have had the burden of proof to show which of plaintiff’s costs were non-NCP compliant. 

The dangers of dicta!  Compounded by the failure to comprehend the different burdens of proof in a 4(A) and a 4(B) action.  That’s the formula for making bad law.

Can We Really Expect An Administrator Not To Administrate?

Posted on May 19, 2017 by Jeffrey Porter

This month EPA Administrator Scott Pruitt announced that he will personally pass judgment on any Superfund remedy estimated to cost more than $50 million.  Revisions to CERCLA Delegations of Authority 14-2 Responses and 14-21A Consultations, Determinations, Reviews and Selection of Remedial Actions at Federal Facilities, May 9, 2017.

Administrator Pruitt’s announcement begins with his unequivocal assurances that the “Superfund program is a vital function” of EPA, and that he is taking this action “to facilitate the more-rapid remediation and revitalization of contaminated sites and to promote accountability and consistency in remedy selection.”

Skeptics fear that Administrator Pruitt has some other secret objective.   But no one can seriously argue that this isn’t Administrator Pruitt’s decision to make.  The Superfund statute unequivocally says “[t]he President shall select appropriate remedial actions determined to be necessary” in accordance with the statute and the implementing regulations, and “which provide for cost-effective response.”  42 U.S.C. §9621(a).  The implementing regulations unequivocally delegate that responsibility to Administrator Pruitt  (well, to be precise, it is theoretically possible that another federal agency or a state can be a “lead agency” under the regulations but, in that unlikely case, the Administrator’s May 9th decision presumably wouldn’t apply).  

After all, it was a perceived need for prompt federal action to clean up the most complex contaminated sites in our country that drove the enactment of the Superfund statute over thirty-five years ago.  Because Congress perceived that need, the statute limits the ability of anyone, including state and local governments, to interfere with the selection and implementation of a Superfund remedy.

Over the decades, the contaminated sites posing the most immediate concern have been addressed, sites that would never have been prospects for Superfund listing thirty years ago have found their way into the program, and the Superfund statute has been interpreted, and reinterpreted, in regulations, countless judicial decisions, and EPA guidance documents.   If those regulations, judicial decisions and guidance documents have one thing in common, it is that they vest in EPA the maximum decision-making discretion permitted by the statute.

Because the sites posing the most immediate concern have been addressed, and what was once new is now the subject of thousands of pages of regulations, judicial decisions and guidance documents, anyone familiar with the Superfund program has to agree that regional program staff have, over the decades, been increasingly left mostly alone to make remedial decisions costing hundreds of millions of dollars.

And, as someone who has practiced in this area of environmental law for almost thirty years, I think it is equally clear that regional decision-making has attempted to soften the effect of Congress’s unambiguous statement of its intention that no one, including state and local governments, stands in the way of Superfund remedies by local consensus building, and that what Administrator Pruitt calls “consistency” has suffered as a result.

As a life-long Democrat, I have plenty of concerns about the Trump Administration’s environmental agenda.  But Administrator Pruitt has been anything but obtuse about his support of aspects of that agenda that concern me so I’m going to take him at his word regarding his intentions for the Superfund program, including because increased accountability and consistency in the Superfund program would be a very good thing.

Scott Pruitt Just Solved All of the Problems with Superfund. Not.

Posted on May 17, 2017 by Seth Jaffe

Last week, EPA Administrator Pruitt issued a memorandum requiring that all Superfund remedies estimated to cost at least $50 million be approved by the Administrator.  I’m not optimistic that this will cure, or even ameliorate, what ails CERCLA.  

First, the memorandum gets off on precisely the wrong foot.  Administrator Pruitt states that:

 The Superfund program is a vital function of the U.S. Environmental Protection Agency, and under my administration, Superfund and the EPA’s land and water cleanup efforts will be restored to their rightful place at the center of the agency’s core mission.

What’s the problem with this statement?  When EPA has actually looked at the top risks addressed by its programs, risks from Superfund sites never even make the list.  Except for a limited set of circumstances, Superfund has been a colossal waste of money, resources, and focus for EPA.  If Administrator Pruitt wants to reform Superfund, he shouldn’t be “placing it at the center of the agency’s core mission.”  He should be further deemphasizing it.

Even if one assumes that this is just puffery, the new approach is flawed on the merits, for at least two reasons.

First, the problem with Superfund is that it’s the last bastion of command and control regulation.  I understand that Pruitt may want to take the reins precisely to reduce the number of ukases issuing from the regional offices.  However, the underlying problem will remain; he just thinks he’ll be providing kinder, gentler, command and control.  Wouldn’t it be better to support fundamental reform of CERCLA, to create a privatized program, such as in Massachusetts and other states?

Finally, while PRPs might just wish Superfund went away, in the real world, PRPs just want certainty and timely decisions.  Aside from a few cases where Pruitt might put the kibosh on expensive remedies that don’t eliminate real risks, I fear that in the majority of cases, all that will happen will be that cleanup decisions will be delayed; PRPs will pay more as a result of such delays.

This administration continues to give regulatory reform a bad name.

Does Chevron Ever Permit EPA to Rewrite a Statute? EPA’s Release Reporting Exemptions Are Struck Down

Posted on April 13, 2017 by Seth Jaffe

On Tuesday, the Court of Appeals for the District of Columbia vacated EPA’s final rule governing reporting of air releases from animal feeding operations.  The Court found that EPA had no statutory authority to exempt AFOs from the reporting regulations.

The decision is also important because it is another in a recent line of cases regarding the extent of agency authority to interpret statutes.  The issue was whether EPA had authority to exempt smaller AFOs from reporting requirements, on the ground that it could not:

foresee a situation where [it] would take any future response action as a result of such notification[s].

Although EPA did not explicitly justify its rule on de minimis grounds, the Court understood EPA to be making a de minimis argument and analyzed the rule in that context.  The Court concluded that EPA had not justified a de minimis exception, because:

an agency can’t use it to create an exception where application of the literal terms would “provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.”

Here, the Court found that there were benefits to requiring reporting without a de minimis exception.  That was enough to vacate the rule.

It is worth noting the concurrence from Judge Janice Rogers Brown, who agreed that EPA had overstepped, but was concerned about the panel opinion’s summary of Chevron as being focused on whether the agency’s interpretation is “reasonable.”  Stoking the anti-Chevron flames, Judge Brown wrote to make clear that the “reasonableness” inquiry does not apply at step one of Chevron.  Ever-vigilant, she wants to be certain that courts do not abdicate their duty to state what the unambiguous language of a statute means.

I don’t have any problem with that.  Phase I of Chevron is an important bedrock principle.  If there’s no ambiguity, there’s no deference.  However, it’s worth noting that Judge Brown also stated that:

an Article III renaissance is emerging against the judicial abdication performed in Chevron’s name.

Notwithstanding the congressional discussion of this issue, I remain skeptical that any such “Article III renaissance” is occurring.  One concurrence from one appellate judge who happens to be named Gorsuch does not a renaissance make.

Of course, the really important part of Judge Brown’s concurrence was her citation to Luck Be a Lady, from Guys and Dolls, the greatest musical of all time.

Applying EPA Guidance to Improve Sediment Site Cleanups

Posted on March 9, 2017 by Mark W. Schneider

After years of struggling to implement prompt and cost-effective cleanups of sediment sites under the Superfund program, EPA has adopted a new set of tools.  This would be a good time for EPA to conduct an unbiased evaluation of whether recent Records of Decision (“ROD”) issued for sediment sites comply with the Office of the Land and Emergency Management (“OLEM”) Directive 9200.1-130 (Jan. 9, 2017), and direct the regions to revise RODs where necessary. 

For example, Region 10 recently issued its ROD for the Portland Harbor, a complex, multi-party sediment site, which seems out of sync with the new guidance.  In particular, Region 10’s use of unachievable cleanup levels for several contaminants of concern, unwarranted assumptions about current and future land uses in certain areas of the site, and failure to properly assess background levels in some instances conflict with the Directive’s recommendations.

In prior posts, I advocated for actions that could help the agency, potentially responsible parties, and the public achieve success in sediment cleanups.  In one post, I recommended that Congress eliminate CERCLA’s bar on pre-enforcement review.  In another, I advocated for revision of the dispute resolution provisions in the model Administrative Settlement Agreement and Order on Consent (“ASAOC”) to require the selection of a neutral third party to resolve disputes between EPA and ASAOC respondents. The rationale for these earlier recommendations applies equally to this recommendation; each of them is intended to require EPA compliance with its own guidance and sound legal and scientific principles.  

In its directive, OLEM identified 11 recommendations “based on current best practices for characterizing sediment sites, evaluating remedial alternatives, and selecting and implementing appropriate response actions.”  In particular, OLEM directed the regions to “develop risk reduction expectations that are achievable by the remedial action.”  Most sediment RODs fail to comply with this “best practice.”  For example, EPA has repeatedly issued RODs that establish action levels that cannot be met using any current or reasonably foreseeable remedial technology, leading to remedies that are unrealistic and unnecessarily costly.  This causes potentially responsible parties to resist, resulting in litigation or delays that perhaps could have been avoided. 

EPA should apply its directive.  It should systematically review each sediment ROD issued in the last several years, determine whether and to what extent the ROD deviates from the OLEM directive, and instruct regional personnel to revise RODs to comply with the directive.  This would require a second look at the RODs at, among other sites, the Lower Duwamish Waterway, Portland Harbor, and the lower 8 miles of the Passaic River.  Review of these and other RODs might lead to more realistic cleanup decisions, reductions of risks, where necessary, and implementation of feasible remedies.

Trump’s Impact on Environmental Law? Let the Speculation Begin!

Posted on November 15, 2016 by Seth Jaffe

What will a Trump Presidency mean for environmental law?  trump-climateI’m not sure my crystal ball is better than anyone else’s, but here are a few quick thoughts:

  • It’s still going to be difficult to amend the key statutes, unless the GOP goes nuclear with the filibuster rules.  I don’t see Clean Air Act amendments happening.  Significant amendments might be possible to the Endangered Species Act and Superfund.
  • Changing regulations is more difficult than one might think.  As has already been noted, the Bush administration did not fare too well with judicial review of its efforts to roll back some Clinton environmental initiatives.  For example, I still think that the new ozone standard should survive and I think that courts would take a dim view of EPA efforts to raise it.  The Clean Power Plan is another matter.  All Trump needs there may be a new Supreme Court Justice.
  • The easiest target is executive orders.  The social cost of carbon?  Toast.  Guidance on incorporating climate change into NEPA?  Toast.

Trying to keep things light, I’ll close with a summary in haiku, which often takes nature as its subject.

Trump Presidency?

Deep-six the Clean Power Plan

Goodbye to winter

The Enforcement of CERCLA Section 106 Orders; the Seventh Circuit Suggests a New Twist

Posted on November 2, 2016 by William Hyatt

Superfund practitioners have long known that unilateral orders issued by EPA under Section 106(a) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), commonly known as the Superfund statute, can be very potent enforcement tools.  Recipients of such orders who “willfully” choose to defy them, “without sufficient cause,” face the prospect of potentially ruinous civil penalties under Section 106(b) and treble damages under Section 107(c)(3).  The term “sufficient cause” is not defined in CERCLA and has been subjected to very limited judicial interpretation.  Making matters worse, by virtue of Section 113(h), Section 106 order recipients cannot obtain pre-enforcement review of such orders.  Instead, they must wait until EPA brings an enforcement action, or one of the other triggers listed in Section 113(h) occurs (while the penalties and treble damages continue to accumulate, for a period which could last for years), before they can obtain a judicial determination of whether or not their defiance was “without sufficient cause.”  This enforcement scheme has thus far withstood due process challenges on the ground that no penalties or treble damages can be imposed until there is a court hearing.  Waiting for that court hearing can produce extreme apprehension on the part of defiant order recipients.

In United States v. Glatfelter, one of the prodigious number of reported decisions relating to the Lower Fox River Superfund Site, the Court of Appeals for the Seventh Circuit, after concluding that permanent injunctions will not be available to enforce Section 106 unilateral orders, suggested how that apprehension might be relieved:

“Nothing we have said prevents the government from seeking declaratory relief to establish that a PRP lacks sufficient cause for noncompliance, such as the arbitrariness of the selected remedy or a defense to liability.” 

This suggestion may trigger a whole new round of litigation regarding Section 106 orders.  For instance, does a private litigant enjoy the same right to seek declaratory relief?