Hexavalent chromium (“Cr6”) is an element that is found in drinking water from natural sources and from historical industrial uses. At present, there is no separate drinking water standard for Cr6. There is a federal and state drinking water standard for total chromium (all valences of chromium including Cr6). The federal drinking water standard for total chromium is 100 micrograms per liter of water (“ug/L”) and the California drinking water standard for total chromium is 50 ug/L.
On August 14, 2012, the Natural Resources Defense Council (“NRDC”) and the Environmental Working Group (“EWG”) filed a lawsuit in Alameda County Superior Court attempting to get a Court to set a date certain by which the California Department of Public Health (“DPH”) must set a drinking water standard for Cr6 in California. The lawsuit relies on a 2001 statute passed in California in response to the Academy Award winning film Erin Brockovich that was released in 2000. The primary focus of the movie was air/inhalation exposure to Cr6, not drinking water exposure. The statute, Health & Safety Code §116365.5, nevertheless required DPH to provide a report to the Legislature by January 1, 2003 regarding its progress in setting a drinking water standard for Cr6, and to finalize a drinking water standard for Cr6 by January 1, 2004. For a number of reasons, that deadline was not met.
The current estimate for DPH to set a draft drinking water standard for Cr6 is July 2013, with a final standard adopted between July 2014 and July 2015. The reason for the delays is that the toxicology of Cr6 through ingestion has been very uncertain, and from a number of experts’ perspectives, remains uncertain. In order to set a drinking water standard under the California Safe Drinking Water, California must first set Public Health Goal (“PHG”) for the chemical in question. Health & Safety Code § 116365. A PHG is set based solely on California’s evaluation of available toxicology. That process went through a number of iterations in California because a PHG was initially set that was not supported by the relevant science. See DPH's timeline for drinking water regulations for Cr6.
In July 2011, California set a new PHG for Cr6 of .02 ug/L, more than 2500 times more stringent than the current drinking water standard for total chromium in California, and more than 5000 times more stringent than the current federal drinking water standard for total chromium. The July 2011 PHG remains controversial among a number of scientists, and the process of setting a drinking water standard for Cr6 will be contentious. The August 14 lawsuit will add to that contentiousness.
This blog will periodically update the status of the development of a drinking water standard for Cr6 in California and the status of the NRDC lawsuit.
--Rick Coffin
For more information, contact Rick Coffin at (415) 228-5420, rcc@bcltlaw.com
Thursday, August 30, 2012
Wednesday, August 15, 2012
California Supreme Court Upholds "All-Sums" and Stacking Insurance Approach To Long-Tail Property Loss
In yet another chapter to the Stringfellow Acid Pits waste site saga, the California Supreme Court, in an August 9, 2012 unanimous decision, ruled that where there are "long-tail" continuous injuries (common in environmental and toxic tort cases where contamination occurs over the course of many years), an insurer providing coverage for any portion of the "long-tail" period may be liable for the entire loss, up to policy limits. Further, the Court held that where there were multiple policy years involved, the policy limits of each year could be "stacked" to form "one giant “uber-policy,” thereby increasing the total amount of insurance coverage available to pay clean-up costs or other damages.
In The State of California v. Continental Insurance Co., et al. (No. S170560), the Court addressed the extent to which various insurers were required to reimburse the State of California, which was found liable in federal court in 1998 for contamination at Stringfellow. The State had various occurrence-based policies with various insurers during the many years the site was in operation. Each policy provided that the insurer agreed "to pay on behalf of the Insured all sums which the Insured shall become obligated to pay by reason of liability imposed by law ... for damages ... because of injury to or destruction of property ..." (emphasis added). It was undisputed that the damage to the Stringfellow site "occurred" during numerous policy periods, and that it would have been impossible to prove what specific property damage occurred during any one policy period.
The Court concluded that all of the policies at issue covered the risk at some point during the property loss, thereby triggering each insurer's indemnity obligations. Citing to Montrose Chem. Corp. v. Admiral Ins. Co., 10 Cal. 4th 645 (1995) and Aerojet-General Corp. v. Transport Indem. Co., 17 Cal. 4th 38 (1997), the Court held that the "all-sums" language in the policies meant that each successive insurer who provided coverage for the risk during the long-tail property damage period was severally liable for the entire loss, up to each respective policy's limits, even if some of the damage occurred before or after the insurer's policy period or during times when the policyholder had no insurance. In doing so, the Court rejected the insurers' arguments for pro rata allocation, under which damages are spread across all of the years in which the long-tail loss took place, with the policyholder liable for damage assigned to periods in which it chose not to purchase insurance, or can otherwise not establish coverage.
The Court next turned to how to address the situation where the continuous "long-tail" loss exceeds the limits of any single policy. Under those circumstances, the Court applied an "all-sums-stacking-rule," which effectively stacks the limits of each policy from different policies to create a giant "uber-policy." Under that approach, instead of treating the long-tail injury as though it occurred in only one defined policy period, as a prior California intermediate appellate court had ruled, now all triggered insurance would be treated as if it were purchased for one long policy period, with a coverage limit equal to the sum of all purchased insurance policies.
As the Court noted, the "all-sums-stacking rule" is advantageous because:
Insureds should not expect policies going forward to be so generous, however. The Court specifically indicated that "in the future, contracting parties can write into their policies whatever language they agree upon, including limitations on indemnity, equitable pro rata coverage allocation rules, and prohibitions on stacking."
--Josh Bloom and Jon Enscoe
For more information, contact Josh Bloom at (415) 228-5406, jab@bcltlaw.com or Jon Enscoe at (415) 228-5495, je@bcltlaw.com
In The State of California v. Continental Insurance Co., et al. (No. S170560), the Court addressed the extent to which various insurers were required to reimburse the State of California, which was found liable in federal court in 1998 for contamination at Stringfellow. The State had various occurrence-based policies with various insurers during the many years the site was in operation. Each policy provided that the insurer agreed "to pay on behalf of the Insured all sums which the Insured shall become obligated to pay by reason of liability imposed by law ... for damages ... because of injury to or destruction of property ..." (emphasis added). It was undisputed that the damage to the Stringfellow site "occurred" during numerous policy periods, and that it would have been impossible to prove what specific property damage occurred during any one policy period.
The Court concluded that all of the policies at issue covered the risk at some point during the property loss, thereby triggering each insurer's indemnity obligations. Citing to Montrose Chem. Corp. v. Admiral Ins. Co., 10 Cal. 4th 645 (1995) and Aerojet-General Corp. v. Transport Indem. Co., 17 Cal. 4th 38 (1997), the Court held that the "all-sums" language in the policies meant that each successive insurer who provided coverage for the risk during the long-tail property damage period was severally liable for the entire loss, up to each respective policy's limits, even if some of the damage occurred before or after the insurer's policy period or during times when the policyholder had no insurance. In doing so, the Court rejected the insurers' arguments for pro rata allocation, under which damages are spread across all of the years in which the long-tail loss took place, with the policyholder liable for damage assigned to periods in which it chose not to purchase insurance, or can otherwise not establish coverage.
The Court next turned to how to address the situation where the continuous "long-tail" loss exceeds the limits of any single policy. Under those circumstances, the Court applied an "all-sums-stacking-rule," which effectively stacks the limits of each policy from different policies to create a giant "uber-policy." Under that approach, instead of treating the long-tail injury as though it occurred in only one defined policy period, as a prior California intermediate appellate court had ruled, now all triggered insurance would be treated as if it were purchased for one long policy period, with a coverage limit equal to the sum of all purchased insurance policies.
As the Court noted, the "all-sums-stacking rule" is advantageous because:
- it is equitable in light of the characteristics of a long-tail injury,
- the insured's expectations are met because it paid premiums for coverage, along with the respective policy limits, in each of the policy periods in question,
- it meets the insurer's expectations because the insurer "reasonably expects to pay for property damage occurring during a long-tail loss it covered, but only up to policy limits," and
- it fixes the insurer's liability without the complication of artificially breaking the long-tail injury into "distinct periods of injury" to try to somehow calculate actual injury during the designated policy period.
The "all-sums-stacking-rule" will prove beneficial to policyholders subject to environmental clean-up obligations where the contamination was caused over a long period of time and is not easily divisible, by allowing them to stack the policy limits from each year, thereby exceeding any recovery than would otherwise be available if only one policy were triggered.
--Josh Bloom and Jon Enscoe
For more information, contact Josh Bloom at (415) 228-5406, jab@bcltlaw.com or Jon Enscoe at (415) 228-5495, je@bcltlaw.com
Tuesday, August 7, 2012
California Green Chemistry Regulations Proposed
On July 27, the California Department of Toxic Substances Control (DTSC) issued revised proposed Safer Consumer Product Alternatives regulations, more commonly referred to as the "Green Chemistry" regulations. This is DTSC's third attempt to get the Green Chemistry program off the ground, and is the result of an extensive informal review process.
The basic structure of the regulations has remained consistent throughout each proposed iteration, outlined by a four-step process:
A public hearing is scheduled for 10:00 a.m. on September 10, 2012 at 1001 "I" Street in Sacramento, and the 45-day public comment period ends on September 11, 2012.
--Josh Bloom
Update: The Department of Toxic Substances Control has extended the public comment period for the proposed Green Chemistry regulations, to October 11, 2012. The public hearing will proceed as initially scheduled on September 10, 2012.
Barg Coffin has an extensive consumer products practice, including Green Chemistry, Proposition 65, metals in jewelry, and CPSIA laws. If you would like more information about the proposed Green Chemistry regulations, please contact Josh Bloom jab@bcltlaw.com, (415) 228-5406, or Rick Coffin rcc@bcltlaw.com, (415) 228-5420. On the web at www.bcltlaw.com
The basic structure of the regulations has remained consistent throughout each proposed iteration, outlined by a four-step process:
- Identification of Chemicals of Concern,
- Development of a Priority Products list, for which Alternatives Analyses must be conducted,
- Performance of an Alternatives Analysis for each Priority Product by manufacturers, importers, or retailers, and
- DTSC's "regulatory responses" following the Alternatives Analysis, which, at its most extreme, may result in prohibiting the sale of the product in California.
A public hearing is scheduled for 10:00 a.m. on September 10, 2012 at 1001 "I" Street in Sacramento, and the 45-day public comment period ends on September 11, 2012.
--Josh Bloom
Update: The Department of Toxic Substances Control has extended the public comment period for the proposed Green Chemistry regulations, to October 11, 2012. The public hearing will proceed as initially scheduled on September 10, 2012.
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