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Environmental Cleanups

Avoiding Cleanup Liability for Industrial and Commercial Properties Under New Kansas Law

Effective July 1, 2016, buyers of industrial and commercial properties in Kansas may qualify for a Certificate of Environmental Liability Release (CELR) under the state’s new Contaminated Property Redevelopment Act. This liability release for pre-existing contamination is important for prospective purchasers of industrial and commercial properties by helping to facilitate those transactions and allow the buyer to avoid state cleanup responsibility. But not only buyers benefit, as sellers can also demonstrate a framework that allows the transaction to proceed and maximize the property value without the buyer or seller taking on unnecessary risk if the proper steps to obtain the CELR are followed.

EPA Issues Final Vapor Intrusion Guidance and Declares EPA, not OSHA, in Charge of Indoor Air Quality at the Workplace

At long last, after operating under the draft Vapor Intrusion Guidance of 2002 for almost 13 years, EPA finally issued final vapor intrusion guidances on June 11, 2015, a specific guidance for petroleum vapor intrusion at leaking underground storage tank sites, and a more general technical guide for assessing and mitigating the vapor intrusion pathway at chlorinated solvent sites. (Technical Guide). In response to criticism that EPA did not subject the guidances to the public scrutiny of the administrative rule-making process, EPA allowed for a longer public comment period than is customary for guidances. Additionally, both vapor intrusion guidances were the subject of extensive discussions between EPA, various sister agencies, private industry, environmentalists, and the White House.

Top 10 Things You Need to Know About Phase I Environmental Site Assessments

In a recent Midwest Real Estate News guest column, Spencer Fane Partner Andrew Brought shared his knowledge and insight on Phase I Environmental Site Assessments (ESAs) with readers. The article outlines the role and common misconceptions of environmental site assessments in property transactions and provides 10 important facts on ESAs as well as their impact on buyers and sellers involved in real estate transactions.

Next Generation Compliance—EPA Strategy to Delegate Enforcement to Third Parties?

In a recent January 2015 Memorandum to EPA’s Regional Enforcement Managers from Cynthia Giles, EPA Assistant Administrator for Enforcement, EPA is touting its Next Generation Compliance strategy as “an integrated strategy” intended to “bring together the best thinking from inside and outside EPA.” 

2005 Phase I ESA Will No Longer Satisfy All Appropriate Inquiries Under EPA Proposed Rule

On June 17, 2014, EPA issued a proposed rule in the Federal Register, 79 Fed. Reg. 34480, proposing to amend the standards and practices for satisfying All Appropriate Inquiries (AAI) under CERCLA. In particular, EPA is proposing to remove references to the 2005 Phase I ESA Standard ASTM E1527-05 as satisfying AAI.

CERCLA Will Not Save a Toxic Tort Claim which is Barred by a State Statute of Repose

Earlier today, June 9, 2014, the United States Supreme Court handed down its decision in CTS Corp. v. Waldburger, et al., slip op. No. 13–339 (U.S., 6-9-2014). Reversing the Fourth Circuit, the Supreme Court held that the Superfund law’s preemption of state statutes of limitation for personal injury or property damage claims does not apply to state statutes of repose. Not every state has such a statute on the books, but for those that do, this may provide an additional shield for defendants, and an additional hurdle for plaintiffs.

$5.15 Billion Settlement for Environmental Liabilities – Largest Ever Recovery

Earlier today, April 3, 2014, the U.S. Department of Justice announced its largest ever environmental enforcement recovery case involving a $5.15 billion settlement, $4.4 billion of which will go to environmental cleanup and claims. The settlement, with Kerr-McGee Corporation and certain of its affiliates, along with their parent company Anadarko Petroleum, arose from the 2009 bankruptcy of Tronox, Inc., and a December 2013 ruling by the federal bankruptcy court finding a fraudulent transfer of assets to avoid paying environmental cleanup obligations.

A More Pragmatic Approach to Cleaning Up Hazardous Waste Facilities

EPA is attempting to expedite cleanup at thousands of hazardous waste sites across the United States by directing its corrective action program to focus on practical cleanup strategies rather than on process.  This emphasis should yield faster and more efficient cleanups for industrial facilities in that program.

Insurance Remains Property of Dissolved Corporation Even After Wind-up, According to Delaware Supreme Court

As Delaware has often been selected as a preferred place of incorporation by U.S. businesses, and consequently the venue for dissolution and bankruptcies, the recent decision by the Delaware Supreme Court, In the Matter of Krafft-Murphy Co., Inc., No. 85, 2013 (Del. Nov. 26, 2013), holding that insurance contracts remained property of the dissolved corporation may have significant implications for “orphan shares” at co-disposal, environmental remediation sites, as well as for non-environmental liabilities. As in other states, otherwise formerly insolvent corporations may find themselves once again parties to litigation as potential creditors seek to attach insurance assets.

EPA Approves 2013 Phase I ESA Standard – Agency Says Not to Use 2005 Standard

Effective December 30, 2013, parties may use the 2013 Phase I Environmental Site Assessment standard ASTM E1527-13 to satisfy the All Appropriate Inquiries Rule, according to the EPA. And while the agency has not yet removed references to the 2005 standard in the final rule, 78 Fed. Reg. 79319 (Dec. 30, 2013), EPA clarified that it intends to issue a proposed rule to remove the references to the 2005 standard.

Groundwater Restoration Guidance Issued by EPA – Remedial Action Completion to Entail Well-by-Well Analysis According to Agency

On November 25, 2013, EPA issued a new groundwater cleanup guidance document specifying the need for a well-by-well review when determining whether groundwater restoration remedial action is complete.

Environmental Indemnity or Waste of Words?

On November 12, 2013, the First Circuit Court of Appeals handed down its decision in VFC Partners 26, LLC v. Cadlerocks Centennial Drive, LLC, slip op. (1st Cir., 2013). This decision serves as a reminder that courts will look carefully at the words used in a loan agreement’s environmental indemnity provisions to decide whether or how they apply. If the actual wording chosen (likely many years earlier) does not fit the environmental costs sought to be indemnified, the party pursuing indemnity may be greatly disappointed.

New Final Phase I ESA Standard E1527-13 Issued

On November 6, 2013, ASTM issued its revised standard practice for conducting Phase I Environmental Site Assessments (ESA), with an effective date of November 1, 2013. Now the wait begins to see if EPA will continue to allow the 2005 version of the Phase I ESA standard E1527-05 to satisfy the All Appropriate Inquiries Rule (AAI) at 40 CFR Part 312, or whether the new revised E1527-13 completely supersedes the prior version.

Colorado Court Sides With Agency in Withholding Documents at Superfund Site

Documents sought to be obtained from the Colorado Department of Public Health and Environment (“Department”) by watchdog group Colorado Citizens Against Toxic Waste will remain protected pursuant to an Order issued October 22, 2013. Following an in camera review, Denver Judge J. Eric Elliff granted the Colorado Attorney General’s petition to withhold the documents.

As Colorado Flood Clean-up Begins, Water Quality Concerns are Front and Center

As the floodwaters recede in Colorado, they leave behind scenes of devastation. Communities torn apart, lives lost, homes and businesses left in ruin and disrepair. Second to life & safety concerns during this natural disaster have been impacts to infrastructure like our roads, bridges and water treatment facilities, leaving a major effect of the recent flooding on water quality. While floodwaters were high, the top priority of state and local officials was the preservation of life. As the rescues continue, many are now turning to cleaning-up and the start of rebuilding. Especially for small businesses owners, the process of cleaning and rebuilding can be fraught with legal and regulatory landmines.

Colorado Attorney General Resists Document Production at Superfund Site

In an effort to resist the production of documents sought by an environmental group under the Colorado Open Records Act, the Colorado Attorney General filed a petition on September 5, 2013, on behalf of the Colorado Department of Public Health and Environment (“Department”), seeking to protect disclosure under the “deliberative process privilege.” The case presents an intriguing question of exactly how much and what types of information must be made available to the public under the Colorado Open Records Act as it pertains to an environmental cleanup action.

EPA to Withdraw Rule Regarding New Phase I ESA Standard E1527-13 as Satisfying All Appropriate Inquiries

When EPA issued its Direct Final Rule on August 15, 2013 (78 Fed. Reg. 49690), approving the use of the new proposed 2013 Phase I Environmental Site Assessment (ESA) standard (ASTM E1527-13) to satisfy the All Appropriate Inquiries Rule, 40 CFR Part 312, the agency specified it would withdraw the Final Rule and it would not take effect if EPA received an adverse comment during the comment period. That has now happened as an adverse comment was received on August 28. Consequently, EPA will withdraw the final rule (if it does what it said it would do) and rely upon the companion Proposed Rule issued simultaneously on the same day, 78 Fed. Reg. 49714, and respond to comments in order to proceed with a final rule.

Owner/Operator Liability Under CERCLA Without Actually Owning or Operating the Site

A federal court has determined that CERCLA “owner” and “operator” liability may extend to parties even if an independent third party moves or transports the hazardous substances from the CERCLA “facility” to a new and different location. Consequently, according to the U.S. District Court for the District of New Jersey in EPEC Polymers Inc. v. NL Industries Inc. (No. 12-3842, May 28, 2013) (unreported), it is not necessary for a party to own the property on which the hazardous substances are ultimately deposited in order to be liable as an owner/operator under Superfund.

RCRA’s Reach to Retail and Consumer Products

On July 1, 2013, Andrew Brought presented to the Missouri Waste Control Coalition on RCRA’s Reach to Retail and Consumer Products.

A More Pragmatic Approach to RCRA Long-Term Cleanup Actions

The cleanup process under RCRA used to be synonymous with delay, bureaucracy, and an emphasis on comprehensive and complete studies at the expense of getting current and future risks to human health and the environment addressed. Cleanup progress was severely hampered because of the sequential process on which RCRA project managers insisted without adequate acknowledgement of site-specific circumstances. Additionally, the RCRA program was characterized by a command and control mentality which did not allow for productive interactions between the regulated community and the regulators. Further, the confusing RCRA regulatory process made expeditious cleanups impossible.

Green Remediation – Will EPA Endorse ASTM’s Standard?

According to EPA, the agency is working with ASTM International to develop a voluntary consensus-based standard for greener cleanups. That standard is due out in July 2013 according to the Greener Cleanups Workgroup Chair of the Association of State and Territorial Solid Waste Management Officials (ASTSWMO), as identified in an April 2013 presentation.

“The Fourth Circuit’s Ashley II Decision – Property Redevelopers and Superfund Liability Defenses”

On April 4, 2013, the Fourth Circuit handed down its much-awaited decision about what a bona fide prospective purchaser (BFPP) of contaminated property must do to retain the Brownfields defense to Superfund liability. In PCS Nitrogen Inc. v. Ashley II of Charleston LLC, No. 11-2087, slip op. at 31 (4th Cir. April 4, 2013), the Court held that a property redeveloper, Ashley II, was liable as a current owner potentially responsible party (PRP) for soil contamination at the former phosphate fertilizer plant despite its “all appropriate inquiry” pre-purchase investigation of past environmental conditions at the facility. Ashley II knew that old sumps at the property contained contaminated water, yet for years did nothing to clean out or close the sumps. This failure to stop a continuing release violated the post-purchase “due care” or “reasonable steps” requirements of the BFPP defense, and negated its applicability to Ashley II.

Kansas Seeks RCRA Corrective Action Authority from EPA

Since 1985 the Kansas Department of Health and Environment (KDHE) has administered the RCRA hazardous waste management program in Kansas through a delegation of authority from EPA. 50 Fed. Reg. 40377 (Oct. 3, 1985). KDHE’s delegated authority, however, has never included RCRA’s Corrective Action requirements. But that may be about to change as KDHE is in the process of seeking authorization to implement the Corrective Action program in lieu of EPA.

EPA’s UAO Cleanup Authority Challenged

The U.S. Supreme Court’s March 2012 decision in Sackett v. EPA, 132 S. Ct. 1367, 182 L. Ed. 2d 367, 73 ERC 2121, held that the Administrative Procedures Act (APA) allows property owners to challenge an administrative compliance order issued by the U.S. Environmental Protection Agency (EPA) under Section 309 of the Clean Water Act (CWA).

EPA Issues New Guidance to Assist Tenants in Avoiding Cleanup Liability at Contaminated Sites

In an effort to encourage brownfield site redevelopment and renewable energy development on contaminated sites, on December 5, 2012, EPA issued a guidance document designed to clarify the scope of enforcement discretion the agency will provide to tenants who undertake steps to avoid liability under CERCLA’s Bona Fide Prospective Purchaser (“BFPP”) provisions. In conjunction with the guidance memorandum, EPA also issued three new model comfort/status letters for lessees involved in renewable energy development on contaminated property.

Missouri Revises its Model Environmental Covenant for Activity and Use Limitations on Contaminated Sites

Businesses that own contaminated property in Missouri, such as brownfield sites and former industrial locations, can avail themselves of Missouri’s Environmental Covenant Act (MoECA), RSMo Section 260.1000 et seq., 10 CSR 25-18.010(18) to expedite cleanup and, if site conditions allow, beneficial reuse of those properties. In particular, property owners can record an environmental covenant on their property that restricts certain land uses and site activities to minimize exposure to impacted soils and groundwater.

PCB Sediment Cleanup Case Settled for $366 Million by Single Defendant, With Reopener for NRD

EPA Region 1 and the Massachusetts Department of Environmental Protection announced recently the largest ever single-site Superfund “cash-out” settlement, $366.25 million (plus interest), associated with the New Bedford Harbor Superfund Site in New Bedford, Massachusetts.

California Supreme Court Addresses Insurance Coverage for Long-Tail Legacy Environmental Liabilities

In a long-awaited landmark ruling, the California Supreme Court in State of California v. Continental Insurance Company, 55 Cal. 4th 186, 281 P.3d 1000 (Cal. 2012), has held that insurers issuing CGL “occurrence” policies are obligated to pay all sums to indemnify policyholders for property damage attributable to the Stringfellow Superfund site. Additionally, the decision addresses “stacking” of policy limits when more than one policy is triggered by an occurrence, permitting each policy triggered to be called upon to the extent of its full limits, thereby allowing potential recovery up to the combined limits of all policies.

New Jersey Spill Act Requires Causation for Liability According to State Supreme Court

Companies with current or former operations in New Jersey, particularly those with operations situated on industrial properties and contaminated sites, have a new means to make the New Jersey Department of Environmental Protection (NJDEP) prove up responsibility for site contamination before joint and several strict liability may attach under the New Jersey Spill Compensation and Control Act (Spill Act). In a decisive unanimous opinion, the New Jersey Supreme Court recently held in NJDEP v. Dimant that the Spill Act requires a “reasonable link between the discharge, the putative discharger, and the contamination at the specifically damaged site.”

EPA to Issue Final Vapor Intrusion Guidance by the End of November 2012

Nearly 10 years to the day when EPA issued its Draft Guidance for Vapor Intrusion, EPA is poised to finalize its Final Vapor Intrusion Guidance on or before November 30, 2012.

Regulators Develop Framework to Address the “Hidden Costs” of Institutional Controls Associated with Remedial Site Cleanups

Companies undertaking remedial cleanups at Brownfield and CERCLA sites should anticipate increased cost estimates for long-term stewardship and oversight in response to a recently issued report by the Association of State and Territorial Solid Waste Management Officials describing fundamental flaws in the current cost estimation methodology associated with long-term stewardship.

Renewable Energy Installations on Closed Industrial Sites: An Overlooked Economic Opportunity

Redevelopment of contaminated properties is challenging even in the best of economic times. Renewable energy projects offer a meaningful alternative for property owners, communities, and regulators seeking to return impacted properties to productive use.

Renewable Energy at Remediation Sites

The United States Environmental Protection Agency encourages property owners and developers to install renewable energy facilities on underutilized industrial and potentially contaminated sites.

Recent Developments: CERCLA

Presentation on Recent Developments in Superfund Litigation to ACOEL Membership at the 2011 ACOEL Annual Meeting in Seattle, September 24, 2011.

Supreme Court Restricts “Arranger” Liability; Lower Courts Fall in Line

Thanks to a seminal 2008 decision by the United States Supreme Court in Burlington Northern and Santa Fe Ry. v. US Railroad 129 S. Ct. 1870 (2009), federal courts have begun restricting the concept of “arranger liability” under the Superfund Law.

Fight Over Bill to Bar EPA Regulation of GHG to Slow 2011 Approval of Appropriations Bill?

On February 2, 2011, representatives Fred Upton (R–MI) and Ed Whitfield (R–KY) released Discussion Draft Bill, H.R.____ “Energy Tax Prevention Act of 2011” (the Bill) which would amend the Clean Air Act to prohibit EPA from regulating greenhouse gas (GHG) emissions. In general, the Bill prohibits EPA from taking action to regulate GHG emissions to address climate change and would repeal certain rules and previous EPA actions, including EPA’s December 15, 2009 GHG endangerment findings under the Clean Air Act, the Prevention of Significant Deterioration (PSD) GHG Tailoring Rule, the authority to issue PSD permits containing GHG emissions limitations, or any other federal action applying a stationary source permitting requirement for GHG emission standards relating to climate change concerns.

“Renovate Right” Lead-Based Paint Hazards Reminder

The U.S. Environmental Protection Agency has set October 24 to 30, 2010 as National Lead Poisoning Prevention Week. One of EPA’s objectives for this yearly exercise is to remind people of the rules and practices established by EPA to help prevent lead poisoning. This year’s lead poisoning prevention week comes as EPA resumes enforcement of its “Renovation, Repair and Painting” rule, also known as the “Renovate Right” or “RRP” rule.

Effective Public and Private Partnership Allows for Expedited Cleanup and Redevelopment of Former Defense Site

A Midwestern city was trying to expeditiously redevelop an approximately 3,000 acre site by implementing a new urbanism concept focused on mixed residential, commercial, civic and educational site use. In the 1940’s, the U.S. Army had operated a large ammunition facilities on this site. As a result of historic onsite disposal activities, portions of the site showed some low-level contamination, and a fifty acre site parcel owned by the City was perceived by the public to be more heavily contaminated.

Corps of Engineers Approves Retail Development in Wetlands Area, Addresses Wichita Neighborhood Flooding

A comprehensive drainage study found the City of Wichita needed additional storm water detention capacity on a particular 80-acre parcel of land immediately upstream of several residential communities in order to prevent flooding. The upstream property was privately owned, and the owner, Spencer Fane’s client, preferred to sell the property to a private developer. Obtaining the property by eminent domain would have been lengthy and costly for the City.

EPA News Release (Region 7): Grant of $75,000 to Help Anhydrous Ammonia Facilities in Missouri

EPA has awarded the Missouri Department of Agriculture (MDA) and Missouri State Emergency Management Agency (SEMA) a total of $75,000 to assist with outreach, education and implementation of the Clean Air Act’s Risk Management Program. All fertilizer facilities that handle, process or store more than 10,000 pounds of anhydrous ammonia are subject to EPA’s chemical safety requirements.

The U.S. Supreme Court Sets Limits on Environmental Superfund Liability

On May 4, 2009 the United States Supreme Court issued its third Superfund decision in five years: Burlington Northern v. United States, — S.Ct. — (2009). The Court continues the “plain language” focus it began in 2005 with Cooper Industries, Inc. v. Aviall Services, Inc., 125 S.Ct. 577 (2005), and rejects the Ninth Circuit’s attempt to expand CERCLA “arranger” liability to reach Shell Oil Company, a supplier/seller of an unused, useful pesticide product which ultimately contaminated a distribution site via known spills and leaks on the part of the distributor. This opinion also provides the Court’s first pronouncement on when and how the harm at a Superfund site is divisible and not to be imposed on a joint and several, 100 percent basis. The Court reinstates a district court’s determination that two railroads, who owned only part of the distribution site for a portion of the site’s operational life, would be liable for 9 percent of the site’s cleanup costs instead of the joint and several liability (100 percent of the costs) imposed by the Ninth Circuit.

Is Anything The Matter With Kansas? One State’s Struggles With Climate Change

It was the proverbial shot heard around the world in the escalating war of words regarding coal-fired power plants and climate change: On October 18, 2007, the Secretary of the Kansas Department of Health and Environment denied an air permit to two proposed coal-fired generating units, citing only potential carbon dioxide emissions and concerns about climate change as the reasons. It was the first time a government agency in the United States had relied on carbon dioxide emissions to deny such a permit. This article examines that decision, the ensuing legal and legislative maneuverings, and the next steps.

EPA Tells California And 14 Other States “No” On Request To Regulate Greenhouse Gases From Automobiles

On December 19, 2007, EPA denied California’s 2005 request to impose greenhouse gas emission controls on new motor vehicles. California filed the waiver request based on claimed injuries to the state’s coastlines, snow pack and air quality caused by global climate change.

Federal Appeals Court Rejects EPA Mercury Cap And Trade Rule For Power Plants

On February 8, 2008, the D.C. Court of Appeals ruled that EPA violated Section 112 of the Clean Air Act when it removed electricity generation power plants from the list of sources of airborne mercury pollution, then attempted to control mercury pollution from those same power plants by a voluntary cap and trade program.

Omnibus Appropriations Act Requires Mandatory Reporting of Greenhouse Gas Emissions In All Sectors Of U.S. Economy by June, 2010

On December 26, 2007, President Bush signed the Consolidated Appropriations Act of 2008, H.R. 2764. This omnibus spending bill appropriated fiscal year 2008 (October 2007 through September 2008) funds for almost all domestic spending programs, including EPA.

President Bush Signs 2007 Energy Independence And Security Act

On that same Dece,ber 19, 2007, President George Bush signed into law the Energy Independence and Security Act of 2007. The Act covers 16 titles and 317 pages. Read more here on some of the highlights of the Act:

EPA Regulations Must Try to Protect Fish and Other Aquatic Critters Caught in Power Plant Cooling Water Intake

In issuing Phase II regulations under the Clean Water Act (CWA) for power plant cooling water intakes, U.S. EPA found that it would cost too much to require recirculation systems or extensive fish protection. The Second Circuit’s recent Riverkeeper, Inc. v. EPA decision may change that for 540 power plants.

RCRA Citizen’s Suit Compels Multi-Million Dollar Investigation Of Mercury in River

Frustrated citizens and environmental interest groups often turn to the citizen’s suit provisions of the Resource Conservation and Recovery Act (RCRA) for relief. Those attempts may have become easier under the First Circuit’s December 2006 decision in Maine People’s Alliance v. Mallinckrodt.

Supreme Court Says EPA Must Regulate Greenhouse Gases From Automobiles Or Give Very Good Reasons Not To Regulate

On April 2, 2007, the United States Supreme Court issued its 5-4 decision in Massachusetts v. EPA, and effectively instructed the U.S. Environmental Protection Agency (EPA) to regulate carbon dioxide (CO2) and other “greenhouse gas” exhaust emissions from new motor vehicles.

Supreme Court Tells Industry That Annual Emission Levels, Not Hourly Ones, Will Trigger PSD Regulatory Controls

On that same day the Supreme Court issued its landmark decision in Massachusetts v. EPA, the Court also issued another important Clean Air Act (CAA) case, Environmental Defense v. Duke Energy Corp. The 9-0 opinion holds that the CAA standard for triggering prevention of significant deterioration (PSD) permit requirements is modification of a facility with a potential increase in annual levels of air emissions. Before this ruling, electric power companies and others argued that PSD requirements were only triggered if a modification could increase hourly air emissions.

Windfall Liens

Congress had a good idea when it belatedly, and surprisingly, reformed parts of Superfund effective January 11, 2002. The main obstacle to Brownfields redevelopment has been the uncertain Superfund liability that potentially hangs over the head of any site owner – including a new buyer. So Congress exempted new buyers –”bona fide prospective purchasers,” or BFPPs – of contaminated sites from Superfund liability.

The Role of Outside Legal Counsel in Clean Air Act

The Clean Air Act Amendments of 1990 required EPA and the state regulators to issue a new form of operating permit to a large number of facilities. These programs are beginning to take effect, and many companies already are working to prepare applications. At Spencer Fane Britt & Browne (SFB&B) our clients often ask whether and to what extent they should use legal services in connection with that process. The principal questions, and basic answers, are set out below.