Assisting in the Aftermath of Hurricane Harvey: Every Lawyer Can Help!

Posted on August 30, 2017 by Brian Rosenthal

Also authored by Andrea Field & Mary Ellen Ternes

Many in the College have been asking what lawyers can do to help those in need in Texas in the aftermath of Hurricane Harvey.  Answers to that question are pouring in from many sources.  The following are a few suggestions, based on what we are hearing from legal practitioners and aid organizations in Texas. 

First, if you are a member of the State Bar of Texas, you may have received a letter from Bar President Tom Vick.  It outlines specific ways in which you can provide legal and desperately-needed non-legal help.

Lawyers who are not members of the Bar of Texas, though, can also provide legal services.   Yesterday, the Supreme Court of Texas issued an emergency order to allow out-of-state lawyers to practice in Texas temporarily in the aftermath of Hurricane Harvey, and the Court provided a registration form for the temporary practice of law in Texas. According to Betty Torres – the Executive Director of the Texas Access to Justice Foundation, which is the largest funding source of legal aid in Texas – the following are some of the types of legal services that will be in high demand after the water recedes and people try to put their lives back together:  (i) assistance with securing FEMA and other benefits available to disaster survivors; (ii) assistance with life, medical and property insurance claims; (iii) help with home repair contracts and contractors; (iv) replacing wills and other important legal documents destroyed in the disaster; (v) assisting in consumer protection matters, remedies and procedures; and (vi) assistance with mortgage/foreclosure and landlord/tenant problems.

In addition, as is often the case, what is needed most right now is money.  For those who want to assist all Texans in need of essential legal services, please donate to the Hurricane Harvey Legal Aid Fund.

BP Tightens its Grip on the Deepwater Horizon Checkbook

Posted on June 9, 2014 by Jarred Taylor

BP Exploration and Production, Inc. (“BP”) was recently dealt another blow in its fight to reinterpret its multibillion dollar settlement for economic and property losses arising from the 2010 Deepwater Horizon disaster when the Fifth Circuit refused to rehear BP’s appeal of a prior district court ruling on “causation nexus” requirements in the agreement.  In December 2013, U.S. District Court Judge Carl Barbier ruled that individuals and businesses do not have to prove that they were directly harmed by the oil spill in order to get paid under the terms of the settlement agreement.

In 2012, nearly two years after the spill, BP reached a settlement with the Plaintiffs’ Steering Committee (which acts on behalf of individual and business plaintiffs in the multi-district litigation proceedings) to resolve hundreds of thousands of private economic, property damage, and medical claims stemming from the Deepwater Horizon explosion and oil spill.  BP has disputed many of the economic and property damage claims brought pursuant to the settlement agreement.  BP argues that the claims administrator was incorrectly interpreting the meaning of the settlement agreement, particularly with respect to whether or not a claimant must submit evidence that its losses were directly caused by the spill.

Judge Barbier, who is presiding over the multidistrict litigation stemming from the Deepwater Horizon disaster, ruled that the settlement agreement did not contain a causation requirement beyond the revenue and related tests set out in the agreement, opening BP’s checkbook to economic loss claimants who may not be able to trace the cause of their damages back to the 2010 disaster.  BP already had revised its original $7.8 billion estimate of its potential costs under the settlement agreement up to about $9.2 billion.  Later, as it began challenging economic loss claims, BP proclaimed it could no longer provide a reliable estimate of the ultimate cost of the deal.   

BP appealed the district court’s ruling to the Fifth Circuit Court of Appeals, claiming in December that it had to pay hundreds of millions of dollars to businesses and individuals that exaggerated losses from the disaster.  The Fifth Circuit affirmed the district court’s ruling in March 2014, and on May 19, declined to rehear BP’s appeal. In a strongly worded dissent joined by two other justices, though, Judge Edith Clement argued that the district court’s rulings would “funnel BP’s cash into the pockets of undeserving non-victims” of the 2010 spill, adding that the appeals court had made itself “party to this fraud” by rejecting BP’s arguments. Judge Clement concluded that “another court surely must resolve this.” BP clearly agrees and has vowed to appeal its case to the U.S. Supreme Court, declaring that “no company would agree to pay for losses that it did not cause, and BP certainly did not when it entered into this settlement.” 

Ted Olsen, BP’s lead attorney, said in a 60 Minutes segment in May that the company would take its argument “as far as it is necessary to go to make sure that this settlement agreement is construed properly.” The New Orleans Times-Picayune reports that some experts following the case expect that the Supreme Court will not take up the case, but suspect that BP’s true motive may not be to win on appeal, but to simply prolong the litigation and delay paying claims. The Fifth Circuit lifted its stay on payout of settlement claims, and the Supreme Court just rejected BP’s request that the Supreme Court reimpose the stay pending filing and disposition of its petition for writ of certiorari. 

Meanwhile, in the midst of its attempt to walk back from the economic and property loss settlement it negotiated and—at the time—happily agreed to, BP rejected a $147 million claim from the National Oceanic and Atmospheric Administration (“NOAA”) demanding additional funds to conduct its ongoing Natural Resource Damage Assessment (“NRDA”) activities related to the Deepwater Horizon oil spill. NRDA is the process created by the Oil Pollution Act (“OPA”) and its implementing regulations that authorizes natural resources Trustees to assess injuries to natural resources caused by oil spills and spill response activities, and to restore the injured resources. OPA requires that the party or parties responsible for the oil spill pay for the reasonable costs incurred by the Trustees to carry out the NRDA and restoration. 

Last July, NOAA submitted a claim to BP for the estimated costs of NRDA activities that NOAA planned to implement in 2014. NOAA’s claim includes $2.2 million for research on the recovery of coastal wetlands, more than $10 million to remedy damage to dolphin and whale habitat, and $22 million for oyster habitat restoration. The Financial Times (free subscription required) reports that BP rejected the majority of NOAA’s requests, saying it was concerned by “the lack of visibility and accountability” in the process, and the unwillingness of the Deepwater Horizon NRDA Trustees (a handful of U.S. federal agencies and five Gulf Coast state governments) “to engage in technical discussions of the substantive issues.” The Financial Times reports that “BP said it had paid for work that was not done or done properly, been double-billed for the same study, and not been allowed to see research findings that it had been told would be shared”—evidence BP argues could be used at the trial over civil penalties to show that ecological damages from the spill are much less than once feared. 

According to an April 30 report on BP’s website, BP has already paid nearly $1.5 billion to federal and state government agencies for spill response, NRDA activities, and other claims related to the Deepwater Horizon spill, and over $11 billion to individuals and businesses. I need to disclose, too, that my firm is assisting several claimants to the BP settlement fund.

UPDATE ON THE DEEPWATER HORIZON OIL SPILL AND RESTORATION OF THE GULF COAST ECOSYSTEM AND ECONOMY

Posted on December 28, 2012 by Jarred Taylor

By: Jarred O. Taylor II and Shannon K. Oldenburg

The Gulf Coast Ecosystem Restoration Council (the “Council”) held its first public meeting on December 11, 2012, in Mobile, Alabama, intended to introduce the Council to the public and to give the public feedback opportunity on the Council’s plans.  The Council, established by the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (the “RESTORE Act”), is charged with developing and overseeing implementation of a comprehensive plan to help restore the ecosystem and economy of the Gulf Coast region in the wake of the Deepwater Horizon oil spill. 

The RESTORE Act will fund the Council’s work via a Trust Fund made up of 80 percent of all Clean Water Act administrative and civil penalties related to the oil spill:

• 35 percent of the money will be divided equally between the five Gulf States;
• 30 percent will be spent through the Council to implement a comprehensive plan;
• 30 percent will be used through States’ plans to address impacts from the oil spill;
• 2.5 percent will be used to create the Gulf Coast Ecosystem Restoration Science, Observation, Monitoring and Technology Program within the Department of Commerce’s National Oceanic and Atmospheric Administration (“NOAA”); and
• the remaining 2.5 percent will be used for Centers of Excellence Research grants, which will each focus on science, technology, and monitoring related to Gulf restoration.

Overarching themes of the comments from both the Council and the public in attendance at the meeting were that ideas for Gulf restoration should originate from the Gulf Coast, not from the federal government, and that the Gulf of Mexico Ecosystem Restoration Strategy developed by the Gulf Coast Ecosystem Restoration Task Force (“GCERTF”) should be used as a framework for the Council’s work.  To much approval from the audience, Rachel Jacobson, Principal Deputy Assistant Secretary for Fish and Wildlife and Parks, Department of the Interior (Ken Salazar’s designated representative on the Council), commented that the Council should incorporate the “four pillars” of the GCERTF strategy into the process and work of the Council in determining how the RESTORE Act funds should be distributed and used.  These four pillars are (1) restore and conserve habitat; (2) restore water quality; (3) replenish and protect living coastal and marine resources; and (4) enhance community resilience.  Notably, Jacobson and many of the other designated representatives to the Council served as members of the GCERTF and also act as Trustees for the Natural Resources Damage Assessment (“NRDA”) for the Deepwater Horizon oil spill.

The Council has only 180 days from passage of the RESTORE Act to publish: 1) procedures to assess whether programs and activities carried out under the Act are in compliance with the Act’s requirements; 2) auditing requirements for disbursing funds from the Trust Fund; and 3) procedures to identify and allocate funds for the expenses of administering the Trust Fund.  The Council will publish a “proposed plan” by the end of this year that will be the focus of public hearings in late January and early February 2013, likely to be in the style of the public “listening sessions” held by the GCERTF last year.  The Council also will release a “draft comprehensive plan” for restoration in Spring 2013, and publish a final plan on July 6, 2013, the anniversary of enactment of the RESTORE Act.

An incredible amount of work has already gone into Gulf restoration, but much work remains.  Only time will tell if these legislative acts and work will translate into true restoration in the Gulf area.

Fracking on Election Eve

Posted on October 23, 2012 by Robert Kirsch

The technique known as hydraulic fracturing (“fracking”), especially in the context of developing natural gas, continues to generate controversy, legal fees and emotion.  The question remains as to whether the technique itself presents any unusual risk to the environment or natural resources.  What is clear, however, is the political significance of fracturing and the challenges that our polarized, political dialog presents to achieving a rational result in or from  the fracturing debate.

On the federal side, the Administration has taken steps in order to represent to voters that the President has done what he could to see that hydraulic fracturing occurs in a manner that does not threaten the environment.  Concrete steps are taking place in three Agencies.

-    BLM has issued draft regulations relating to fracturing activities taking place on federal lands.  The proposal drew thousands of comments and no action is likely until well after the election.

-    EPA issued draft guidance proposing to regulate hydraulic fracturing under the UIC program.  This proposal also resulted in thousands of comments, all but precluding any chance that EPA will be in a position to act until well after the election.

-    EPA is continuing its study into the possible connection between hydraulic fracturing and underground sources of drinking water.  A partial report reflecting some retrospective analysis is due before year end, but the meat of the report will not be available until 2014.

-    EPA continues to pursue its general investigation into the way fracturing occurs through its investigation into 9 fracturing companies.  EPA has proposed to publish information reflecting well densities and chemical use relatively soon. 

-    EPA has reviewed and is continuing to review petitions filed by environmental organizations seeking to force the Agency to take steps to regulate fracturing under various regulatory programs, including TSCA.  EPA has denied some of the relief sought, but is collecting information under some and beginning its evaluation of others.

-    At the regional level, EPA has engaged in studies when citizen pressure has suggested a connection between fracturing and contaminated drinking water.  This has proven to be an area where EPA has not maintained consistency or scientific integrity.  The agency’s work at Dimmock, Pavillion and elsewhere has resulted principally in controversy and criticism, and has done little to advance the state of knowledge about fracturing.

-    DOE Secretary Chu has been an Administration spokesman for White House efforts to coordinate the many federal entities that seem to be working on fracturing issues.  His role has been above the weeds and the fact that a Secretary charged with overseeing national energy policy, if there is one,  is the Administration’s front man, appears to be a bone to those suggesting the sole interest of the President is in making energy development more difficult.

-    Within DOA, the Forest Service has sent mixed signals with respect to whether fracturing is viewed as posing risks to other resources.  While several forests have adopted plans anticipating the development of resources within their jurisdiction, including by fracturing, the George Washington National Forest plan remains under review, having proposed to ban fracturing in its initial draft release.

-    The USGS recently has entered the fray in connections with published concerns linking fracturing and increased seismic activity.  Preliminary indications suggest the true focus of such efforts may be long term injection wells, rather than transient fracturing activities, but there is more to follow on this topic.

The federal role in the fracturing debate also has occurred in courts.  Environmental interest groups recently have begun to raise fracturing activities in a number of lawsuits challenging the adequacy of the environmental reviews conducted in connection with federal leases.  Many  such cases are making their way through the courts, and are being watched for the decisions..

In his public statements, the President, of course, has been careful to promote the safe development of natural gas resources, including by fracturing.  He has offered what generally have been viewed as favorable statements in his state of the union address, and more recently in his remarks at the Democratic National Convention.  Of course none of those favorable comments has slowed any of the developments noted above, nor were the President’s remarks necessarily inconsistent with such action.

There is much resistance to the above federal efforts from states, and from industry which has had decades of experience accommodating state regulators in connection with drilling and developing wells.  States too have been active, to varying degrees, with some devising thoughtful programs balancing the needs of developers with the concerns of some members of the public.  The politicization of the issue also has reached the states, however, and nowhere is it more in evidence than in the glacial SGEIS process that has been under way for years, with no regulations on the horizon. There also have been intrastate efforts directed at fracturing by the Susquehanna River and Delaware River Basin Commissions, with the former moving forward with water management programs while the latter has, by default, banned fracturing until a compromise is agreed upon among the member sovereign constituencies.

And – don’t expect the controversy and misunderstandings surrounding fracturing to disappear soon.  In addition to a small scale advocacy film last year, Hollywood is entering the fray with a major film slated for release in the not-too-distant future.  Television already has managed to capitalize on the drama fracturing offers in more than one series.

Things will change after the election.  Stay tuned to find out how.

FOUR CENTURIES OF FUEL FORAGING IN PENNSYLVANIA

Posted on October 4, 2012 by Joseph Manko

For four centuries Pennsylvania has been at the epicenter of America’s search for growth-sustaining fuel, but not without paying an environmental price.  In the 18th century, Pennsylvania’s (literally “Penn’s Woods”) abundant forests supplied wood to fuel America’s expansive westward development.  In denuding its forests, however, Pennsylvania experienced enhanced erosion and sedimentation and other environmental detriments.

In the 19th century, 1859 specifically, oil was discovered in Oil City. Pennsylvania (and America) turned its attention from wood to oil.  Although primary oil production shifted eventually to the Gulf states, nevertheless, Pennsylvania, as an oil producer, enjoyed the benefits and suffered the environmental detriments created by laissez faire, unregulated drilling and transportation of petroleum.

By the 20th century, coal was king in Pennsylvania.  The residual impacts from coal mining, especially strip mining, remain to this day in the form of scarred landscapes, acid mine drainage and air emissions, albeit the impacts are now monitored amid a focus on environmental enforcement efforts.

In the 21st century coal remains a force in energy production in Pennsylvania, but again nature has put the state in the national discussion over domestic fuel protection as it has become a national leader in developing the natural gas entrapped in the Marcellus Shale underlying large portions of southwest, north central and northeastern Pennsylvania.  Natural gas extracted from the Marcellus Shale has become Pennsylvania’s (and increasingly, America’s) fuel of choice for the 21st century.  Will the environmental legacy be different this time?

In February, 2012, Pennsylvania enacted The Oil and Gas Act Amendments of 2012, known as Act 13, in an attempt to adapt Pennsylvania’s longstanding Oil and Gas Act to issues unique to the technique used to fracture layers of shale and release natural gas, commonly known as “fracking.”  The Amendments raise a number of new legal issues:

1.    By offering shale gas fees to host municipalities who are willing to accept them, the Act preempts accepting municipalities from enacting zoning ordinances to regulate fracking.  A recent Commonwealth Court decision held such preemption unconstitutional.  An appeal by the State is pending before the Pennsylvania Supreme Court.  Briefs have been filed and oral argument is scheduled for October 17 in Pittsburgh.

2.    Despite mandatory setback distances from wells, required by the Amendments, instances of citizens claiming that or suing because their water supply was contaminated as a result of the recovery of shale gas, either through leakage, spillage, or other events will need to be resolved.

3.    Pennsylvania’s Department of Environmental Protection has differed with EPA and the Delaware River Basin Commission regarding how much authority these agencies should have to regulate operations associated with Marcellus Shale gas production. 

4.    In a victory for the shale gas industry, the District Court for the Western District of Pennsylvania invalidated a 2009 U.S. Forest Services Agreement with environmental groups that would have required the preparation of a NEPA environmental assessment prior to drilling in U.S. forests. 

5.    Some property owners who have leased their subsurface drilling rights for Marcellus Shale gas recovery have found themselves unable to refinance their mortgages.  Although the property owners argue that their land has become more valuable because of the potential recovery of fees from the Marcellus Shale gas recovery, some banks have refused to refinance claiming that the fracking lowers the value of the property because of the potential of pollution and/or the location of drilling rigs and other heavy equipment on the property, thereby making foreclosure more difficult. 

6.    Pennsylvania’s Public Utility Commission (PUC) is the collector under Act 13 of the “impact fees” from natural gas well operators – which have to date exceeded $200 million and will be distributed in large part to “accepting” host municipalities.  In accordance with Act 13, the PUC has also begun issuing advisory opinions on the legality of local zoning ordinances.  The Pennsylvania Supreme Court’s decision on the Commonwealth Court’s invalidation of the preemption issue could affect how the PUC approaches these matters going forward. 

While the sources of fuel and the techniques for obtaining it have changed much over the centuries in Pennsylvania, fuel production from forests, coal mines, oil rigs and fracking wells share a common legacy, initially attracting often environmentally insensitive wild catters, raising issues of local control versus the need for statewide uniformity, and creating the risk of potentially permanent environmental impacts if state-of-the-art environmental protections are not implemented.  In sum, notwithstanding changes in preferred fuel sources over the past four centuries, the issues, impacts and challenges remain similar; the need to balance energy production and environmental protection, or, as they say – “the more things change, the more they remain the same”.  Rather than be resigned to repeating history, however, the Commonwealth should rise to the challenge and use its acquired knowledge to inform our discussion as to how to utilize its resources, including natural gas, to provide energy solutions going forward.

NJ Supreme Court Reins in DEP Strict Liability Claims Against Dischargers, Requiring" Reasonable Link" to Contamination

Posted on October 2, 2012 by David B. Farer

On September 26, 2012, the New Jersey Supreme Court issued its decision in NJDEP v Dimant, rejecting an attempt by the state DEP to seek damages from an alleged discharger under the state's strict liability statute, the Spill Compensation and Control Act (typically referred to as the "Spill Act").  The court found that DEP had not established the necessary connection, or nexus, between the alleged discharge and the contamination at the specifically damaged site. 

This was the second New Jersey appellate court decision in the past three months in which DEP's positions on regulatory and statutory authority have been successfully challenged.

In Dimant, DEP had sued to recover costs associated with investigation and remediation of PCE-contaminated groundwater found in residential wells, and was also seeking compensation for natural resource restoration. The defendant was a dry cleaner that had operated near the contaminated wells and had used the common dry-cleaning solvent PCE for 15 months in the late 1980s.  During that period, in the course of a site inspection, DEP noted an external pipe at the dry cleaning facility which the agency found to be dripping PCB-bearing liquid onto the pavement.

The Spill Act provides that “[a]ny person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs no matter by whom incurred.”

DEP argued that the discharge was sufficient to connect the dry cleaner to the contaminated groundwater in the nearby wells. The court rejected this argument, finding that DEP had not met its burden of proof. It noted that DEP never presented sufficient proof of a “reasonable, tenable basis” for how drips of fluid observed at the dry cleaner on one occasion resulted in groundwater contamination in the Bound Brook wells. 

The New Jersey Supreme Court upheld the prior trial court and Appellate Division decisions in the case, rejecting DEP's claims and holding that in order to obtain the requested relief, a real rather than hypothetical nexus must be shown to exist between the discharge of hazardous substances and the actual contamination at the specifically damaged site. That the substance dripping on the pavement in one location was the same as that found in the groundwater at another location was not a sufficient connection and did not constitute the “reasonable link” required to impose liability on the defendant.

The court further concluded that DEP could not credibly claim, many years after observing the dripping pipe, that the dry cleaner should bear the expense of studying how the drip may have impacted groundwater, and how the groundwater condition must now be addressed.

This was the second appellate court setback for DEP since July.  In an unrelated ruling on July 6, 2012 in Des Champs Laboratories, Inc. v. Robert Martin, the New Jersey Appellate Division found that DEP had overstepped its regulatory authority in narrowing one of the statutory exemptions available under the state's transaction-triggered environmental law, the Industrial Site Recovery Act ("ISRA").

Under ISRA, a wide range of property owners and operators must investigate and if necessary clean up contamination at subject properties upon the occurrence of specific business events such as cessations of operation or sales of properties or businesses, regardless of fault.  However, the legislature built certain exemptions into the law.  One of them, available to those who have used only small – or de minimis – amounts of hazardous substances, is known as a De Minimus Quantity Exemption, or "DQE."

However, in 2009 DEP issued new regulations unilaterally imposing an additional requirement on DQE applicants that they also establish that the subject property is free of contamination.  As the revision to the regulation was unsupported by the ISRA statute, and appeared to circumvent the very purpose of the DQE, Des Champs Laboratories challenged the regulation before the Superior Court, Appellate Division after its own application for a DQE was denied.

On July 6, 2012, the Appellate Division ruled in favor of Des Champs, invalidating the DEP regulatory change.  DEP subsequently issued the De Minimis Quantity exemption to Des Champs.

[Note:  See also William Hyatt's alert posted on September 2, 2011 on the NJ Appellate Court decision on the Dimant case.]

Wisconsin DNR’s New Phosphorus Rules – The Curious Story of the Delay That Never Happens

Posted on November 30, 2011 by Linda Bochert

On November 3, 2011, the Wisconsin Legislature completed its final regular session of the year without enacting a delay in the phosphorus rules adopted by the Wisconsin Department of Natural Resources (WDNR) that went into effect just short of one year ago.  This is news?  Well, yes.

Last June 23, 2010, the WDNR citizen advisory board approved significant revisions to three rules to regulate the discharge of phosphorus to Wisconsin’s waterways.  The result of several years’ work with outside interest groups, these revisions establish numerical standards for point sources and performance standards for non-point sources.  Following legislative review, on January 1 and December 1, 2010 the rules relating to non-point and point sources respectively went into effect. For additional background and information about the rule content, click here

On January 3, 2011, Wisconsin’s newly-elected Governor, Scott Walker, expressed his concerns for the financial impact on industries and municipalities of compliance with the new phosphorus rules for point sources.  After initially proposing that the rules be substantively rewritten, the Governor instead proposed a two-year delay in the effective date to be enacted as part of the Biennial Budget bill.

Bit it didn’t happen.

Environmental advocacy groups swung into action, urging the Legislature to assure that the rules would remain in effect.  Industrial and municipal groups voiced concerns over the economic consequences of rule implementation.  In May 2011, two Democratic Wisconsin legislators wrote EPA seeking EPA’s perspective on the proposed suspension or effective date delay; EPA responded that Wisconsin’s rules would remain applicable standards unless or until EPA promulgated a more stringent standard or approved a revision made by Wisconsin. 

And the Senate and Assembly Republicans couldn’t agree on any of the options for delaying the rules’ effectiveness.  So, they deleted the Governor’s delay proposal.  When the Biennial Budget was signed on June 26, 2011, there was no language implementing a delay.  The Budget bill did require WDNR to prepare an economic impact analysis on the new rules.  Interestingly, while that requirement remained in place, the Governor vetoed the deadline of December 31, 2011, on the grounds that setting a date certain “may compromise the quality” of the fiscal analysis.

Talk then turned to a separate piece of legislation, to be considered during the regular legislative floor periods in September, October and November.

That didn’t happen either.

Meanwhile, in August 2011, WDNR circulated draft “Guidance for Implementing Wisconsin’s Phosphorus Water Quality Standards for Point Source Discharges” for review and comment: a document of nearly 150 pages on how to implement some 20 pages of rules.  As it appears these rules are in effect and likely to remain so, attention is now focused on figuring out what they mean. 

Natural Resource Damages - Why Not a Cooperative Restoration Approach?

Posted on December 7, 2009 by Susan Cooke

There’s lots of talk among environmental lawyers these days about how to litigate Natural Resource Damage (NRD) claims, but relatively little discussion of  how those claims can be settled through restoration projects. The latter approach deserves more attention.

Last year the Department of Interior (DOI) issued amendments to its NRD assessment regulations to focus on resource restoration through the use of cost/benefit methodologies.  Those methodologies compare losses from resource injury to the gains expected from restoration actions. Under the amended regulations they have been expanded to include habitat and resource equivalency analyses for measuring resource losses used in determining the value of project benefits, which value is in turn needed to compensate for the damaged resource. See 73 Fed. Reg. 57259-57268 (Oct.2, 2008). 

A project restoration approach can be very attractive from a monetary standpoint. Past experience has shown that the benefits to be achieved from restoration projects can be significantly greater than their cost, with the cost/benefit ratio often being 1:5 and sometimes even greater. 

 

A good example of this favorable cost/benefit ratio is the NRD settlement reached with some of the Potentially Responsible Parties (PRPs) at the Hylebos Waterway portion of the Commencement Bay Superfund site in Tacoma, Washington. As noted in an article appearing in the Summer 2009 issue of the ABA’s Natural Resources & Environment publication authored by Suzanne Lacampagne and Jeffrey Miller, the NRD trustees determined that those PRPs could settle their NRD liability for a cash payment of $13.5 million. Alternatively, they could underwrite restoration projects that provide an equivalent monetary benefit. The PRPs chose the latter route, expending about one sixth of the amount required for a cash settlement.

Of course, before the restoration projects were completed, the Hylebos PRPs faced the prospect of potential cost overruns. If concern about additional expenditures in the future is of paramount importance, or if there is a need to close out all liabilities in the near term, then an NRD credit strategy may make the most sense. Such an approach involves the purchase, or a commitment to purchase, NRD credits equivalent to the value of the damaged resource once the NRD trustees have certified the validity and transferability of those credits.

This approach is being implemented at the Duwamish River Superfund site in Seattle, Washington, where the city is leasing out parcels of its property along the river that are in need of restoration to a company that will carry out the restoration work and sell NRD credits to PRPs interested in settling their NRD liability. The Seattle mayor’s announcement of the restoration project and credit approach can be found here.  

A link to the protocol entered into by the NRD trustees and the company carrying out the restoration projects can be found here as well.

One interesting feature of the Duwamish River restoration effort is the willingness of NRD trustees to consider settlement of a PRP’s NRD liability prior to completion of the remediation effort. See, e.g., discussion at p. 7 of the inventory of properties for the Lower Duwamish River Habitat Restoration Plan prepared by the Port of Seattle.  

A related feature of that willingness to consider settlement is that restoration activities will begin earlier in the process, while cleanup is still underway. This in turn can lead to more cost effective cleanup and restoration activities, as both categories of actions can be formulated and coordinated contemporaneously for maximum benefit.

Another example of a comprehensive settlement approach encompassing both remediation and restoration activities is set forth in the consent decree for the West Site/Hows Corner Superfund site in Plymouth, Maine. As memorialized in Appendix H of that decree, the settling PRPs have addressed their NRD liability through a restoration project, i.e., acquisition of property to be held and maintained by the state government as wildlife habitat. The consent decree with its appendices and the November 19, 2009 Federal Register notice of the settlement at pp. 59991-59992 can be found here.

In addition to the cost/benefit and related timing issues just mentioned, two other favorable aspects of the restoration project approach are the positive publicity that can be generated in the local community upon implementation of such a project and the cost savings associated with earlier resolution of NRD liability. With all these attributes in its favor, and with increasing experience in using the new equivalency methodologies and implementing projects based on their numbers, the restoration project approach may yet achieve the attention it deserves.

Global Warming Litigation Heating up - Village of Kivalina Lawsuit

Posted on August 21, 2008 by Mark Walker

As the debate regarding the contribution of anthropogenic greenhouse gases to global warming continues, some parties are taking their concerns directly to the courts. Perhaps the latest in the growing number of global warming lawsuits is the Native Village of Kivalina, Alaska v. ExxonMobil, et al., Case No. CV-08-1138, in the United States District Court for the Northern District of California, San Francisco Division.

THE VILLAGE OF KIVALINA

The Village of Kivalina is located in northwest Alaska about 120 miles from the Arctic circle. The Village is comprised of roughly 1.9 square miles of land which lies on the tip of a barrier island which separates the Chukchi Sea and a lagoon on the mainland side. There are 399 residents of Kivalina, 97% of whom are Native Alaskans referred to as "Inupiat" Eskimos, meaning "the people."

THE PROBLEM

With claims presaged by Al Gore's "An Inconvenient Truth", Kivalina claims that global warming has caused the melting of Arctic sea ice which formerly protected the Village from winter storms. Without the protective ice, the Village claims that storms have caused massive erosion, leaving "houses and buildings in imminent danger of falling into the sea." The Village contends that, "if the entire village is not relocated soon, the village will be destroyed." Governmental estimates of the cost to relocate run as high as $400 million –roughly $1 million per resident.

THE DEFENDANTS

The defendants are 9 oil and gas companies, 14 electric generation companies and 1 coal company. Kivalina contends that the defendants are among the largest emitters of greenhouse gases in the United States, and that the defendants "are responsible for a substantial portion of the greenhouse gases in the atmosphere that have caused global warming." The Village is pursuing a public nuisance theory.

CONSPIRACY CLAIMS

With allegations that are indeed carbon copied from the "Science Fraud" chapter in "An Inconvenient Truth", Kivalina claims that eight of the defendants have engaged in a civil conspiracy to generate misinformation and propaganda to create doubt as to whether global warming is occurring and, if so, whether man-made emissions are to blame. The Village claims that the alleged co-conspirators have used "front groups, fake citizens organizations, and bogus scientific bodies" to generate the alleged misinformation and doubt.

MOTIONS TO DISMISS

The Kivalina lawsuit is in its early stages, however, the defendants have filed motions to dismiss claiming, inter alia, that (1) the plaintiffs cannot pursue a federal common law nuisance claim because such claim is available only to States seeking injunctive relief and because the Clean Air Act displaces the authority of the courts to regulate nationwide greenhouse gas emissions and global warming; and (2) the plaintiffs' conspiracy claims are not independent torts, but are derivative of their underlying nuisance claims and should fail along with the nuisance claims. 

POLITICAL QUESTION DOCTRINE

Similar lawsuits have previously been dismissed on the grounds of lack of standing and non-justiciability under the political question doctrine. See Comer, et al. v. Murphy Oil, et al., Case No. 1:05-cv-00436-LTS-RHW, in the United States District Court for the Southern District of Mississippi, dismissal currently on appeal to the Fifth Circuit Court of Appeals (Appeal No. 07-60756); State of California v. General Motors, et al., Case No. C-06-05755-MJJ, in the United States District Court for the Northern District of California, dismissal currently on appeal to the Ninth Circuit Court of Appeals (Appeal No. 07-16908). In Comer the plaintiffs blamed Hurricane Katrina on global warming and on 8 oil companies, 31 coal companies and 4 chemical companies that allegedly contributed to global warming. 

So far, the courts appear to be of the view that the responsibility for developing a comprehensive global warming policy which balances the interests of reducing air pollution and its social costs with the corresponding harm to economic development and its attendant social costs is a political question which is reserved for the political branches of government, and that such policies should not be developed on an ad hoc basis by the courts. Kivalina is once again testing the resolve of the courts to stay out of the global warming debate until Congress and/or the EPA establish clear policies regarding man-made greenhouse gas emissions.

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