Wednesday, November 30, 2005

Proposition 65 Safe Harbor Warnings Upheld

In Environmental Law Foundation v. Wykle Research, Inc., the California Court of Appeal affirmed a decision awarding summary judgment to Wykle Research, which used one of Proposition 65's "safe harbor" warnings to warn of lead in dental amalgam. ELF challenged the warning, which used the safe harbor language verbatim, on the grounds that it was not likely ever to reach the ultimate consumer. The court acknowledged that, as many dentists are not subject to Proposition 65's warning requirements, it was possible that some consumers would never receive the warning. But it concluded that the safe harbor warnings were designed to provide certainty to product sellers and that this purpose would be frustrated by holding that a manufacturer must use not just a safe harbor warning, but also the best possible warning. Proposition 65's warning requirements are often difficult to interpret for specific sellers, and any decision that brings greater certainty to Proposition 65's requirements is welcome.

Tuesday, October 11, 2005

Supreme Court Agrees to Review Three Clean Water Act Cases

The Supreme Court is taking a rare excursion into environmental law to review three Clean Water Act decisions. See the AP article here. These cases will give the Supreme Court an opportunity to decide the scope of federal power in environmental cases. The decisions may also determine the reach of the Commerce Clause in other, non-environmental contexts.

After Aviall, and with possibly two new justices on the Court, almost nothing that the Supreme Court might decide in these cases would suprise me. It will be an interesting year.

Friday, September 30, 2005

Regulatory Activity Related to Air Emissions from Petroleum Refineries

By Brett S. Henrikson

Starting October 1, 2005, Bay Area refineries face new wastewater collection and reporting requirements. Regulation 8, Rule 8 of the Bay Area Air Quality Management District was adopted on September 15, 2004, to reduce air emissions from wastewater collection systems by focusing on transportation and separation equipment. The Rule is found here: http://www.baaqmd.gov/dst/regulations/rg0808.pdf BAAQMD has issued an advisory to assist refineries in meeting the upcoming deadlines. The Advisory is available at:
http://www.baaqmd.gov/enf/compliance_assistance/advisories/adv_091405_refinery_wastewater.pdf
Rule 8-8 is not the only recent regulation on Bay Area refineries. Just 2 months ago, BAAQMD issued a new rule regulating emissions from refinery flaring. Petroleum refineries use flaring for the safe disposal of gases generated during the refining process. BAAQMD originally identified refinery flaring as a potential regulatory target in the San Francisco Bay Area 2001 Ozone Attainment Plan. New Regulation 12, Rule 12 governing refinery flaring can be found here: http://www.baaqmd.gov/dst/regulations/rg1212.pdf and further regulatory history, including the BAAQMD Staff Report and Environmental Impact Report, can be found here: http://www.baaqmd.gov/pln/ruledev/regulatory_public_hearings.htm The Bay Area 2001 Ozone Attainment Plan can be found here http://www.baaqmd.gov/pln/plans/ozone/2001/index.htm.
Air emissions from petroleum refineries will also be the target of federal regulators in the coming months. As part of a proposed Consent Decree, U.S. EPA has committed to update the New Source Performance Standards for petroleum refineries. Section 111 of the federal Clean Air Act (42 U.S.C. § 7411) requires U.S. EPA to establish initial NSPSs for certain industrial classes that contribute significantly to air pollution. http://www4.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00007411----000-.html U.S. EPA generally must also review an existing NSPS every 8 years to determine if updates are necessary. U.S. EPA has not reviewed the NSPS for petroleum refineries since 1974. Under the terms of the settlement agreement, EPA must propose revisions to the NSPS (40 CFR Part 60, Subpart J) within 18 months, with the final rule due within 30 months. http://www.access.gpo.gov/nara/cfr/waisidx_05/40cfr60_05.html
The lawsuit leading to the settlement is Our Children's Earth Foundation, et al. v. U.S. EPA, Case No. C05-00094 (N.D. Cal.). The settlement agreement was published in the Federal Register on August 29, 2005 (70 Fed. Reg. 51040).

Tuesday, September 13, 2005

SBREFA

Have any of you had any experience using the Small Business Regulatory Enforcement Fairness Act (SBREFA) as a tool in settlement negotiations with federal agencies? The act has a provision regarding civil penalties that states:
Each agency regulating the activities of small entities shall establish a
policy or program within one year of enactment of this section to provide
for the reduction, and under appropriate circumstances for the waiver, of
civil penalties for violations of a statutory or regulatory requirement by a
small entity. Under appropriate circumstances, an agency may consider
ability to pay in determining penalty assessments on small
entities.
EPA has implemented this statute through a handful of self-reporting policies (see this report), but it seems to me that the statute also expresses a Congressional policy that might be useful in negotiations with EPA or other federal agencies. I would be very interested in anyone's experience in this regard.

Friday, July 29, 2005

Damages for Nothing

Some of the most interesting cases in environmental law arise when contamination does not occur. Two such cases came across my desk recently. In Doyle v. Town of Litchfield, 2005 WL 1342794 (D. Ct. May 31, 2005), Judge Hall held on a summary judgment motion that a property owner may be entitled to recover some CERCLA response costs even though his property had not been contaminated by the defendant's release of hazardous substances. The court cited Artesian Water Co. v. New Castle County, 851 F.2d 643 (3rd Cir. 1988), and Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., 4 F.3d 1209 (3rd Cir. 1993), and concluded that a plaintiff may recover monitoring and evaluation costs under CERCLA, even if no contamination ever occurred.

A similar question was presented in Jaasma v. Shell Oil Co., No. 04-2095 (3rd Cir. June 28, 2005). There the plaintiff owned property that was leased for a service station. When the lessee removed its tanks shortly before the lease expired, some contamination was found in the tank pit and partially excavated. After more than two years of sampling and reporting, the New Jersey Department of Environmental Protection issued a no further action letter, without ordering any further active remediation, which implied that the contamination that remained at the lease expiration (i.e., after the tank removal and excavation) had always been below the level requiring cleanup. The Third Circuit held that despite these facts the lessor was entitled to damages. The lease required lessee to return the property to lessor in its "original state," and, the court held, that there was a question of fact whether lessee was required to obtain a no further action letter in order to satisfy that requirement.

While the Town of Litchfield could not have avoided Doyle's claim, the claim in Jaasma resulted entirely from the language of the lease. While perhaps no one could have anticipated the Third Circuit's ruling, it is something to keep in mind the next time that you are reviewing the environmental provisions of a lease.

Monday, July 25, 2005

The Oldest Question In Environmental Law

The oldest question in environmental law is "how clean is clean?" It's a question that environmental practitioners are tired of discussing, and that quickly leads to glazed eyeballs at any environmental meeting. So I shouldn't be discussing it -- but there is a new development worth notice. Under state law, the Regional Water Quality Control Boards have a two-part cleanup target for contaminated groundwater: clean up to background levels, or to health-based levels, such as the maximum contaminant level (drinking water standard) or public health goal. Which of these goals (background or health) is selected for a particular site is not often an issue of substantial dispute because in practice usually neither of them can be achieved, at least with active remediation in a reasonable time.

In May, however, the State Water Resources Control Board confronted the issue in a context where the issue does have practical consequences: should a "discharger" be required to provide alternate water supplies to persons affected by contamination that is below health standards but higher than the naturally occurring level? The case involved an Olin Corporation site in Morgan Hill, and the chemical was potassium perchlorate, which occurs naturally, if at all, only at undetectable levels. Olin and another discharger were ordered by the Regional Board to provide alternate drinking water supplies to residents whose water contained perchlorate at or above 4 ppb, even when the level of perchlorate was below the new public health goal of 6 ppb established by OEHHA. The PHG is supposed to be a level at which a person may be exposed to a chemical for a lifetime with no deleterious effects.

The State Board decided that in this context the Regional Boards should defer to OEHHA, and should not require a discharger to provide an alternate water supply. The decision includes many caveats, and the State Board expressly limits its opinion to replacement water supply decisions ("This Order applies only to requirements for water replacement and not to groundwater or soil cleanup levels required under State Water Board Resolution 92-49"), but the decision nevertheless seems to mark an important choice. The Board could have required Olin to continue providing alternate drinking water supplies, even without a health-based reason to do so. But it chose instead to conserve societal resources for another day and another threat, a threat supported by scientific evidence.

Friday, July 22, 2005

Extraterritoriality

Can CERCLA be used to recover response costs incurred in a foreign nation? No is the answer, by implication from a recent case decided by the Ninth Circuit, Arc Ecology v. United States Dept of the Air Force, in which Philippine plaintiffs sought to compel the United States to conduct a preliminary assessment of Subic Bay and Clark Air Force Base in the Philippines. The Ninth Circuit found no express answer to the question of extraterritoriality in the statute, but the law presumes that a statute will be applied only within the territory of the United States. The court also found many provisions of CERCLA that suggested that Congress was thinking of the United States when it passed CERCLA.

Friday, July 8, 2005

Weird Science

One of the things that often leaves out-of-staters speechless about California is Proposition 65. It's not that a citizens group can sue a company for failing to warn of the presence of a chemical in a product that bothers out-of-staters, it is that there is no agreed safe level above which a warning is required. Prop 65 allows a product seller to forego a warning if there is "no significant risk," but determining whether there is significant risk is an expensive science project. To a single product seller, that science project usually isn't worth the money. The end result is that in deciding whether to place a warning on a product, a seller usually ignores the likely dose, and therefore ignores the true risk. Thus, Proposition 65 encourages companies to place warnings on products that, practically speaking, don't pose a threat to anyone, and that often pose very small or nonexistent risks in relation to the real toxicological risks that people face everyday, such as drugs, smoking, air pollution and workplace exposures to chemicals. There is no prioritization of risks under Proposition 65. Sometimes enforcers go after real risks and sometimes not, and there is no regulatory authority to guide enforcement towards real risks.

The absence of prioritization is becoming clearer now as OEHHA (Office of Environmental Health Hazard Assessment) struggles to deal with acrylamide in foods. Acrylamide is produced in many foods, such as bread and french fries, when they are cooked. The levels present in cooked foods are many times higher than the levels that OEHHA has determined to pose no significant risk. The food industry is pushing to exempt acrylamide in cooked foods from Prop 65's warning requirement on the grounds that the acrylamide is "naturally occurring," while environmentalists are arguing that OEHHA has no authority to create an exemption.

Whoever prevails, the argument just highlights the arbitrariness of Prop 65 warnings. There are no warnings under Prop 65 on naturally occurring carcinogens in peanut butter and many other foods, but there are warnings, when you get into an elevator in California for example, that point out that there is a theoretical risk from chemicals in indoor air. Now we may get a warning that bread is "known to the State of California to cause cancer." It is highly unlikely that a rational regulatory agency would structure enforcement in this manner.

Monday, June 27, 2005

New 17200 Case

One of the most versatile and poorly understood statutes in California law, Business & Professions Code Section 17200, has been the subject of much attention in recent years. Section 17200 allows a plaintiff to sue for violation of any California law. Proposition 64 recently limited the class of persons that can bring a 17200 claim, and the remedies under Section 17200 have also been limited by court decisions -- and they are getting more limited all the time. In Madrid v. Perot Systems, the court of appeal addressed two questions about the scope of available relief under Section 17200. First, the court held that "non-restitutionary disgorgement" is not available. Non-restitutionary disgorgement is disgorgement of profits that were not obtained from the plaintiffs. Section 17200 only authorizes restitutionary disgorgement of money obtained from the plaintiffs. Second, the court held that Section 17200 authorizes only prohibitory injunctions to stop an ongoing or threatened unfair business practice. If there is no threat of an ongoing or future unfair business practice, then no injunctive relief is available.

Wednesday, June 15, 2005

Nagging Question

There are many issues in the law that are important to practitioners but that never seem to be addressed by courts. In California environmental cases, lawyers have been using continuing nuisance and continuing trespass cases to avoid the bar of the statute of limitations for decades, but there don't seem to be any cases that define the time period covered by a continuing tort claim: is it only the three years preceding the filing of the claim? or the three years preceding the filing of the claim up through trial? The latter rule would make much more sense, but try finding a plain statement of it in the cases.

Last week a new case came out that at least by implication adopts the "through trial" rule. The case was Watson v. Shell, and it concerned whether Shell would have to pay damages for the "benefit" it received from causing contamination beneath Watson's land. (Answer: no.) But tucked into the decision is this statement: "According to the jury, the amount Watson should receive for remediation was $3,915,851, and the value of the benefits obtained by Shell as a result of the gasoline contamination it caused at the Watson Center from June 1, 1993, to June 30, 2001, was $14,275,237." (Slip op. at 7.) Other portions of the opinion (unpublished unfortunately) show that trial was conducted in 2001. Because the case was tried on a continuing trespass theory, this statement strongly implies that the trial court allowed the plaintiff to seek damages up to the time of trial. The unanswered question is not directly answered, but we have a clue.

Sunday, June 5, 2005

Takings

In Lingle v. Chevron, the U.S. Supreme Court cut a branch out of its takings jurisprudence. Twenty-five years ago in Agins v. City of Tiburon, the Supreme Court suggested that a regulatory law could effect a taking of private property if it did not "substantially advance legitimate state interests." This formulation led the lower courts into inquiries about whether particular laws made rational sense. Indeed, in Lingle, the district court conducted just such an inquiry and concluded that Hawaii's Act 257 limiting gasoline service station rents made no economic sense, and thus constituted a taking. Lingle, however, held that the focus in a takings case should be on whether a particular regulatory act impinges upon property rights to such a degree that it effects a taking, not on whether the law is good policy.

Wednesday, June 1, 2005

What's left when cleanup is done?

In Hogan v. United States, a Sixth Circuit decision published on May 10, the court addressed one of those problems that lurks in environmental law but never seems to be directly addressed – whether the owner of contaminated property has sustained damage even after his property has been cleaned up. Indeed in Hogan, the question is never directly answered. In Hogan, the United States conceded that it had inadvertently sold Hogan radioactive thorium alloy that Hogan had intermixed with scrap metal and soil at his salvage yard. The cleanup of the property could not remove all of the thorium, and so the US left Hogan with a barrel in which he could place radioactive waste whenever he found it on his property. Unlike many radioactive materials, the “mag-thor” alloy on Hogan’s property did not pose a health threat unless inhaled, but there was nevertheless no dispute that there remained radioactive waste on Hogan’s property. The district court, and the Sixth Circuit, both decided that despite the presence of this waste, Hogan was not damaged. Hogan argued that “’common sense and every day experience’ suggest that the remaining mag-thor ‘certainly would have some affect [sic] upon the purchase price.’” The Sixth Circuit acknowledged that “Hogan’s position has a certain intuitive appeal, [but] the evidence presented at trial persuaded the district court to the contrary.” Ultimately, this case like many turned on the burden of proof. Hogan had the burden, and he was unable to produce credible evidence that in the absence of a health threat the remaining mag-thor had caused damage.

Wednesday, May 18, 2005

MTBE Cleanup Costs

The Association for Environmental Health and Sciences (AEHS) issued a press release yesterday about a soon-to-be published ENSR study on the cost to cleanup all MTBE sites nationwide. "By trending the EPA confirmed release data for the past 20 years, evaluating the history of nationwide cleanup costs, and then incorporating forecasts for streamlined technologies and cleanup methods, a national total cost of MTBE remediation over the coming 30 years is predicted to be in the range of $1 to $3 billion," according to AEHS.

Tuesday, May 17, 2005

The Next Big Thing

One of the enduring features of the environmental law field is that there is always a “next big thing” on the horizon. When our firm’s lawyers first started in the environmental law business over twenty-five years ago, the new thing was CERCLA, which occupied a generation of environmental professionals, and as discussed in my May 12 entry, still occupies environmental lawyers today. But there is much less new about CERCLA today than there was in the 1980’s, when it took armies of lawyers to handle what we would think of today as a very small environmental problem. Once daunting problems, solved in prior cases, do not need to be solved again; the solutions are on the shelf.

Of course, there have been other new things over the years, each of which has become the work of a new class of environmental lawyers. I started in the 1980’s with toxic tort cases, in which we spent thousands of hours defending cases based on doubtful or non-existent causation claims – cases no rational plaintiffs’ lawyer would file today. And along the way there were electromagnetic field claims, which never sparked to life; asbestos, the litigation tsunami that is not considered an “environmental” issue because it is grounded in state tort law, but which has employed vast numbers of environmental lawyers over the years; MTBE cases, which changed ordinary gas tank leaks into multi-million dollar litigation; and in California, Proposition 65 cases, which are a special California blend of environmentalism and economic waste.

But what is the next big thing now? There is no obvious candidate for a transformative event that will occupy the legal profession in the years to come. Asbestos litigation will either terminate soon or gradually diminish over time, and while Aviall will occupy CERCLA lawyers for a while, it is unlikely that there will be any push towards CERCLA enforcement from the Bush administration. In California, there will be CERCLA issues associated with base closings, and plaintiffs will continually add new flavors to the menu of groundwater contamination litigation, but none of these events is substantial enough to occupy a generation of new lawyers. Will they all become intellectual property lawyers instead?

There is one event that while slow to develop will eventually dwarf all other environmental issues, if we live to see it, and that is global warming. Elizabeth Kolbert’s recent three-part piece in the New Yorker discusses among other things the markets that are even now developing for global warming products and services – for example, floatable houses in the Netherlands. While the effect on lawyers is arguably one of the most trivial effects of global warming, it will be a profound effect nonetheless. Imagine California with an 80 to 100 percent chance of drought each year, as one of the experts that Kolbert cites predicts. Kolbert’s article implies that the world will be lucky not to descend into anarchy as a result of global warming. If that dire result is to be avoided, environmental lawyers will be very busy.

Thursday, May 12, 2005

Aviall Fallout

Ever since the Supreme Court's decision in Cooper Industries v. Aviall, district courts around the country have been wrestling with how to apply it. Aviall knocks out one of the pillars of CERCLA jurisprudence -- that any PRP can bring a contribution claim against any other PRP even when there has been no government action or claim under CERCLA Section 107.

It's interesting to see how the district court's are dealing with this problem. In Metropolitan Water Dist. v. Lake River Corp., 2005 WL 925680 (N.D. Ill. April 12, 2005) and Vine Street LLC v. Keeling, 2005 WL 675786 (E.D. Tex. March 24, 2005), the courts decided that CERCLA Section 107 provides authority for a PRP to sue. CERCLA Section 107 allows the government or "any other person" to recover response costs. In the Metropolitan Water District case, the court's decision adopted a broad reading of the statute, but also seemed to hinge on the fact that there was no circuit authority directly prohibiting a PRP from bringing a Section 107 claim.

In other recent decisions, however, the courts have held that Section 107 does not provide authority for a PRP to sue another PRP. See City of Waukesha v. Viacom Int’l, Inc., 2005 WL 712423 (E.D. Wisc. March 23, 2005); Elementis Chemicals Inc. v. TH Agriculture & Nutrition, LLC, 2005 WL 236488 (S.D.N.Y. Jan. 31, 2005). These decisions are based on pre-Aviall circuit precedent prohibiting PRPs from bringing Section 107 actions. That precedent may be revisited in light of Aviall, but any change will likely have to take place at the circuit court level, not in the district courts.

Wednesday, May 11, 2005

Beginnings

This blog will contain news on environmental law topics for lawyers and environmental law professionals.