Wednesday, November 13, 2013

Agencies Send OMB Draft Regulations Defining Clean Water Act Jurisdiction

After years of starts and stops, the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers have drafted a proposed regulation that will significantly affect which waters are subject to regulation under the Clean Water Act. 

Following 2001 and 2006 U.S. Supreme Court rulings addressing which “waters of the United States” are subject to Clean Water Act jurisdiction, EPA, the Corps, federal courts across the country, and the regulated community have all struggled to interpret the Supreme Court’s rulings.  Those rulings, Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001), and Rapanos v. United States, 547 U.S. 715 (2006), offered no clear guidance.  Indeed, Justice Kennedy’s lone concurrence in the Rapanos plurality opinion stands as the guiding principle in determining what defines a “water of the United States.”

Justice Kennedy’s view that waters with a “significant nexus” to more traditionally jurisdictional waters may be regulated provides the basis of EPA’s and the Corps’ proposed regulation.  Among other things, the regulation would, for the first time, define “significant nexus.”  That term would be defined as “a more than speculative or insubstantial effect that a water, including wetlands, either alone or in combination with other similarly situated waters in the region . . . has on the chemical, physical or biological integrity” of more traditionally jurisdictional waters as defined in the regulation.  The proposal would also define “tributary” such that any defined tributary would have the significant nexus necessary to bring it within the scope of the Clean Water Act.

The agencies have submitted a draft of the proposed regulation to the Office of Management Budget.  When published in the Federal Register, it will undoubtedly generate thousands of comments.  It is far too early to speculate as to whether the final regulation will look like the proposed regulation, when a final regulation may be issued, and, in the face of almost certain litigation once the rule is final, when the regulations may actually be implemented. 

-- Josh Bloom

For more information, please contact Josh Bloom at (415) 228-5406 or jab@bcltlaw.com.

Tuesday, October 15, 2013

Supreme Court Agrees to Review EPA’s Greenhouse Gas Rules for Stationary Sources

Earlier today, the Supreme Court announced that it would review the EPA’s decision to regulate greenhouse gas emissions from stationary sources such as power plants and industrial facilities.

The Court granted certiorari on a narrow issue that follows from its decision in Massachusetts v. EPA, 549 U.S. 497 (2007):

“Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” 
In Massachusetts v. EPA, the Court held that EPA had authority to regulate greenhouse gases as “air pollutants” under Section 202(a)(1) of the Clean Air Act (42 U.S.C. § 7521(a)(1)), a provision that applies to new motor vehicles.  On remand following the Supreme Court’s ruling, EPA made the “endangerment finding” needed to initiate regulation of greenhouse gases in motor vehicles—i.e., that greenhouse gases may “cause, or contribute to,  air pollution which may reasonably be  anticipated to endanger public health or  welfare.”  (Id.)  In separate regulatory proceedings, EPA concluded that the its decision to regulate greenhouse gas emissions from new motor vehicles compelled the conclusion that it was also required to regulate greenhouse gases from stationary sources under the Clean Air Act’s Prevention of Significant Deterioration (“PSD”) program.

The Court’s order consolidates six petitions for review (12-1146, 12-1248, 12-1254, 12-1268, 12-1269, and 12-1272), but granted review on only the narrow question of whether EPA correctly concluded that its endangerment finding under the Clean Air Act’s new motor vehicle provision requires the Agency to also regulate greenhouse gas emissions from stationary sources.
--Chris Jensen

For more information, contact Chris Jensen at (415) 228-5411, or cdj@bcltlaw.com.

Monday, October 7, 2013

Debtors Beware: Resolving Environmental Liabilities in a Judicially Approved Bankruptcy Settlement Triggers the Statute of Limitations on CERCLA Contribution Claims

When an entity that has filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code resolves its environmental liability to a state or the United States via a settlement agreement, there are several steps involved in the process.  Typically, the debtor and the state or United States will first execute a written settlement agreement.  The parties will then submit that agreement for approval by the bankruptcy court.  If the bankruptcy court approves the settlement, it will issue a written approval.  The settlement is then incorporated into the plan of reorganization.  If the bankruptcy court approves the plan of reorganization, it will issue a written confirmation. 

Given the numerous steps involved in the process, the debtor entity may be uncertain as to which of the steps starts the clock on its statute of limitations for contribution claims under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) subsection 113(f).  The relevant statute of limitations provision is CERCLA section 113(g)(3)(B), which provides: “No action for contribution for any response costs or damages may be commenced more than 3 years after . . . entry of a judicially approved settlement with respect to such costs or damages.”  42 U.S.C. § 9613(g)(3)(B).  Recent decisions issued in federal district courts in Washington, Montana, Utah, New York, and Colorado confirm that the statute of limitations under CERCLA section 113(g)(3)(B) is triggered on the date that the bankruptcy court approves a settlement agreement between the debtor and the government, not on the date that the bankruptcy court approves a plan of reorganization or the date a plan of reorganization becomes effective. 

In ASARCO LLC v. HECLA Mining Company, 2012 WL 5929962 (E.D. Wash., November 27, 2012), defendant Callahan Mining Corporation (“Callahan”) filed a motion to dismiss a CERCLA contribution claim, arguing, in relevant part, that the bankruptcy court’s approval of Asarco LLC’s (“Asarco”) settlement with the State of Washington triggered the statute of limitations under CERCLA section 113(g)(3)(B).  Asarco argued that the statute of limitations did not begin to run until either the bankruptcy court approved the confirmed plan of reorganization or the plan of reorganization became effective.  Asarco further argued that even if its settlement with Washington triggered the statute of limitations, its complaint was still timely when the rules for computing time under Rule 6(a) of the Federal Rules of Civil Procedure are applied.  The district court denied Callahan’s motion to dismiss, stating that Rule 6(a) was relevant in determining the statute of limitations and thus impliedly holding that the triggering event for Asarco’s contribution claim was the judicial approval of the bankruptcy settlement, not the approval of the confirmed plan of reorganization or the effective date of the plan of reorganization.  2012 WL 5929962 at *5.  

In ASARCO LLC v. Atlantic Richfield Co., 2012 WL 5995662 (D. Mont. Nov. 30, 2012), defendant American Chemet Corporation (“American”) similarly moved to dismiss a CERCLA contribution claim on statute of limitations grounds, arguing that Asarco resolved its liabilities in settlement agreements with the United States Environmental Protection Agency (“EPA”) that were judicially approved in 1990 and 1998.  In response, Asarco argued that the statute did not begin to run until either the bankruptcy court approved the confirmed plan of reorganization or the plan of reorganization became effective.  The district court denied American’s motion to dismiss, but held that, “The plain language of § 9613(g)(3)(B) contradicts [Asarco’s] contention that the statute of limitations did not begin to run until its Reorganization Plan was either approved by the Bankruptcy Court or became effective.”  2012 WL 5995662 at *2.  The court held that the statute of limitations runs from the date of the entry of the settlement agreement, not the date that each provision of that settlement takes effect.  Id.

In a third case, ASARCO LLC v. Xstrata PLC, 2013 WL 2949046 (D. Utah, June 14, 2013), defendant Xstrata PLC (“Xstrata”) filed a motion to dismiss, arguing that Asarco’s CERCLA contribution complaint was filed outside the applicable statute of limitations under CERCLA section 113(g)(3)(B) because more than three years had passed since the bankruptcy court approved a private party settlement relating to Asarco’s environmental liabilities.  Asarco argued the entry of the order approving the private party bankruptcy settlement did not trigger the statute of limitations; it was triggered when Asarco’s plan of reorganization became effective because that is when the amount of liability under the private agreement was fixed.  The court rejected both parties’ arguments and denied the motion to dismiss, reasoning that under CERCLA section 113(g)(3)(B), the triggering date for the statute of limitations was the bankruptcy court’s June 5, 2009 approval of a settlement entered between Asarco and EPA, which gave rise to Asarco’s right to contribution under CERCLA section 113(f)(3)(B).  2013 WL 2949046 at *3-5.  Because Asarco filed its complaint on June 5, 2012, its complaint was timely.  Id. at *5. 

In a fourth case, Asarco LLC v. Goodwin, U.S. District Court, S.D.N.Y., Case No. 1:12-cv-03749, Docket Nos. 30-32, defendant trustees filed a motion to dismiss Asarco’s CERCLA contribution claim, arguing that the bankruptcy court’s approval of Asarco’s settlement of its environmental liabilities with the State of Washington more than three years prior to the date of Asarco’s original complaint triggered the statute of limitations under CERCLA section 113(g)(3)(B) and barred Asarco’s claim.  Asarco argued that its claims were timely because the statue of limitations was not triggered until the amount of its liability was fixed, which occurred when its plan of reorganization was confirmed.  Case No. 1:12-cv-03749, Docket No. 35.  The court rejected Asarco’s argument and granted the defendant trustees’ motion to dismiss on the basis that Asarco’s claims were time-barred, among other reasons.  Case No. 1:12-cv-03749, Docket No. 41 and transcript of hearing on motion to dismiss.     

Finally, in ASARCO LLC v. Union Pacific Railroad Company, 2013 WL 5291422 (D. Colo., September 19, 2013), the court adopted the recommendation of the magistrate judge and granted defendants’ Union Pacific Railroad Company (“Union Pacific”) and Pepsi-Cola’s (“Pepsi”) motions to dismiss.  Both Union Pacific and Pepsi argued that Asarco’s CERCLA contribution complaint was time barred under CERCLA section 113(g)(3)(B) because more than three years had elapsed since the date that the bankruptcy court approved a settlement between Asarco and EPA.  Asarco argued that the statute did not begin to run until the bankruptcy court approved the confirmed plan of reorganization and the plan of reorganization became effective.  The court held that “the date a settling party makes payment is irrelevant” and that the statute of limitations was triggered by the bankruptcy court’s entry of the settlement between Asarco and EPA.  2013 WL 5291422 at *5.  The court cited the Atlantic Richfield Co. and Xstrata opinions (supra) as persuasive authority. 

Based on these decisions, debtors who resolve their environmental liability to a state or the United States via settlement should be prepared to file any claims for contribution under CERCLA subsection 113(f) within three years of the date that the bankruptcy court issues its approval of the settlement agreement. 

--Estie Kus

For more information, contact Estie Kus at (415) 228-5463 or emk@bcltlaw.com.

Thursday, October 3, 2013

CARB Releases Draft Update of Climate Change Scoping Plan

The California Air Resources Board (CARB) has released a discussion draft of the First Update of California’s Climate Change Scoping Plan for public review and comment. 

The California Global Warming Solutions Act of 2006 (AB 32) requires CARB to update the Scoping Plan every five years.  The updated Scoping Plan discusses progress toward meeting AB 32’s short-term target of reducing greenhouse gas emissions to 1990 levels by 2020, concluding that California is on track to meet that goal, and summarizes policy alternatives that would allow the State to achieve the long-term goal of reducing greenhouse gas emissions to 80% of 1990 levels by 2050.  (See Executive Order S-3-05.)

The Scoping Plan also states CARB’s intention to adopt an interim target for 2030 emissions, citing the United States’ pledge in the Copenhagen Accord to reduce emissions to 42% percent below 2005 levels (33% of 1990 levels) by 2030, and noting that “this level of reduction is achievable in California.”

With respect to the Cap and Trade Program that covers emissions from electric utilities, transportation fuels, and certain industrial sectors, the Scoping Plan notes that “CARB will develop post-2020 emissions caps to reflect the establishment of a 2030 midterm target,” and leaves open the possibility that the Cap and Trade Program “may need to include broader emissions scope” that would extend the Program to new industries. 

The Scoping Plan neither specifies the level of the midterm emissions reductions target nor does it identify the additional industrial sectors that may be covered under an expanded Cap and Trade Program.   These details are left for future legislation and regulatory activity and are sure to the subject of intense debate and lobbying efforts in Sacramento.

--Chris Jensen

For more information, contact Chris Jensen at (415) 228-5411, cdj@bcltlaw.com.

Wednesday, October 2, 2013

Central Valley Water Board Adopts New Groundwater Monitoring Rules for Agricultural Lands

On September 26, 2013, the Central Valley Regional Water Control Board adopted new rules authorizing the imposition of Waste Discharge Requirements (WDRs) on agricultural lands in Fresno, Tulare, Kings, and Kern Counties.  The new rules are the first regulations requiring farmers in California to monitor and protect groundwater, although surface water has been regulated on an interim basis since 2003. 

The new program is the latest development in the Water Board’s Irrigated Lands Regulatory Monitoring Program (ILRMP), established in 2003. The new rules will impact approximately 7,200 growers comprising about 850,000 acres of farmland within the Tulare Lake Basin area.

Under the new regulations, each farm must conduct an evaluation to assess groundwater quality and the effectiveness of existing water management practices. Based on these assessments, existing farmer-run coalitions will handle monitoring of ground and surface water, reporting results to the Water Board on behalf of coalition members. Farms deemed at high risk for ongoing water quality issues will be required to conduct additional monitoring and devise management plans to remedy contamination. 

While farmers have repeatedly expressed concerns about the financial burden the regulations will place upon farmers, the Water Board estimates the cost to implement the new rules will be less than $2 per acre. 

Ground water in the San Joaquin Valley has historically been contaminated with nitrates from fertilizers, septic systems, sewage treatment and decaying plants. In a 2012 study, University of California at Davis researchers concluded that 96% of the contamination in the Valley resulted from application of nitrates to croplands.

--Kathryn Oehlschlager

For more information, contact Kathryn Oehlschlager at (415) 228-5458, klo@bcltlaw.com.

Thursday, September 26, 2013

Plaintiffs’ Knowledge of “Environmental Concerns” Not Enough to Put Them on Notice of Health Risk

In a September 24, 2013 opinion, the California Court of Appeal for the Second District revived the claims of 58 plaintiffs whose personal injury claims against Exxon Mobil were dismissed on statute of limitations grounds. 

Most of the plaintiffs in the case, Alexander v. Exxon Mobil, No. B242458, were residents of an apartment complex in an unincorporated area of Los Angeles County.  From 1924 to 1962, various Mobil Oil Corporation related-entities operated an above-ground storage tank farm adjacent to the apartment complex.  The plaintiffs alleged that hydrocarbon releases from the tank farm caused a wide range of personal injuries and property damage and asserted claims for, among other things, negligence, trespass, nuisance, public nuisance, breach of the warranty of habitability, various statutory violations, and wrongful death.

Exxon Mobil (and other defendants) asserted statute of limitations defenses based on a letter from the Los Angeles County Housing Authority that certain plaintiffs received in May 2007 and a community meeting regarding the possible closure of the apartment complex in the same year.   The letter referred to “environmental concerns” at the complex but did not mention any specific health risk to residents.  The same “concerns” were also discussed at the community meeting, although the focus of the meeting was on plans to close the apartment complex.

After several rounds of pleading, the trial court issued an order under Cottle v Superior Court, 3 Cal. App. 4th 1367 (1992), requiring the plaintiffs to submit offers of proof with their next amended complaint showing, among other things, how and when they learned of the presence of environmental contamination at the apartment complex.  After the plaintiffs filed their amended complaint (accompanied by Cottle declarations), the trial court sustained demurrers without leave to amend as to approximately 100 plaintiffs whose declarations admitted that they had received some form of notice of the contamination more than two years before filing their claims in April 2010, holding that those claims were barred by the statute of limitations and could not be saved by the discovery rule.

Fifty-eight of the dismissed plaintiffs appealed the trial court’s ruling, and the Court of Appeal reversed.  The appellate court observed that while there was no dispute as to when the plaintiffs learned of the existence of contamination at the apartment complex, the trial court erred in concluding as a matter of law that the letter from the Housing Authority and the community meeting were sufficient to put the plaintiffs on notice of their personal injury claims. 

The court reasoned that knowledge that the existence of environmental contamination was not enough to put the plaintiffs on notice of their claims.  Rather, a reasonable trier of fact might conclude the plaintiffs had no reason to suspect the contamination was capable of causing them personal injury.  The court therefore concluded that the plaintiffs could take advantage of the discovery rule to avoid dismissal of their claims on demurrer.

In reaching this conclusion, the court distinguished CAMSI IV v. Hunter Technology Corp., 230 Cal. App. 3d 1525 (1991), and Mangini v. Aerojet-General Corp., 230 Cal. App. 3d 1125 (1991), two leading cases in which appellate courts held that notice of the existence of environmental contamination foreclosed the application of the discovery rule to save time-barred property damage claims.  The  court noted that the “injury” in both of these cases “was the existence of the pollutants, which devalued their property.”  In contrast, the Alexander plaintiffs’ personal injury claims required them to link the existence of the pollutants to the alleged adverse health effects.  The information that the plaintiffs possessed in April 2008, two years before their complaint was filed, was not as a matter of law sufficient to make such a connection. 

--Chris Jensen

For more information, please contact Chris Jensen at (415) 228-5411, or cdj@bcltlaw.com

Monday, September 23, 2013

Bill Poised to Confer Polanco Act-Like Powers on Cities and Counties in California

A bill on its way to Governor Brown’s desk for signature promises to offer California’s local agencies, including cities, counties, and some housing authorities, authority and liability protection similar to that previously conferred on the former redevelopment agencies under the Polanco Redevelopment Act.  Assembly Bill 440 passed out of the state Senate on September 12, 2013 and tracks the key provisions of the Polanco Redevelopment Act, which authorized the state’s now dissolved redevelopment agencies to clean up contaminated properties and recover costs from responsible parties. 

The bill seeks to fill the gap left by the dissolution of redevelopment agencies in 2011 by enabling cities and counties to undertake environmental investigation and remediation activities on “blighted properties” located within “blighted areas,” as defined by the bill, that have been impacted by hazardous materials, in the event responsible parties fail to undertake the cleanup activities themselves. 

If  the investigation and cleanup efforts are consistent with the bill’s requirements, AB 440 protects the local agency, persons that enter into agreements with the local agency to develop or clean up the contaminated property, subsequent owners, and lenders by limiting their liability associated with the historic release of hazardous materials on the property.  The bill also allows local agencies to recover costs and attorney’s fees incurred during the investigation and cleanup activities from responsible parties.

--Nicole Martin

For more information, please contact Nicole Martin at (415) 228-5435, nmm@bcltlaw.com.

Thursday, September 19, 2013

Ninth Circuit Rejects Constitutional Challenge to California’s Low Carbon Fuel Standard

On September 18, the Ninth Circuit handed a major victory to the California’s program to control greenhouse gas emissions from transportation fuels, turning aside constitutional challenges to the program brought by ethanol and petroleum industry interests in Rocky Mountain Farmers Union v. Corey (No. 12-15131).

The case arose from rulings in two separate actions in the Eastern District of California involving California’s “Low Carbon Fuel Standard.” The Low Carbon Fuel Standard is intended to reduce greenhouse gas emissions attributable to the sale of transportation fuel in California by 10 percent by 2020.  To achieve this goal, the California Air Resources Board (CARB) set “carbon intensity” standards for different fuel feedstocks, which distinguished on a geographic basis among different ethanol sources and different categories of crude oil.  The district court found that the application of Low Carbon Fuel Standards to out-of-state ethanol and crude oil production violated the Dormant Commerce Clause of the U.S. Constitution by (1) facially discriminating against out-of-state ethanol, (2) impermissibly engaging in the extraterritorial regulation of ethanol produced outside of California, and (3) having the purpose and effect of discriminating against out-of-state crude oil production.
By a 2-1 vote, the Ninth Circuit reversed all three of these rulings.  In a strongly worded opinion, Judge Gould recognized California’s authority to “create a market that recognizes the harmful costs of products with high carbon intensity,” observing that “[t]he Commerce Clause does not protect Plaintiffs’ ability to make others pay for the hidden harms of their products merely because those products are shipped across state lines.”
The panel remanded to the district court with instructions to determine whether the Low Carbon Fuel Standard’s ethanol provisions have the purpose and effect of discriminating against interstate commerce, and if not, to apply the balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).  The panel also instructed the district court to apply the Pike balancing test to the standard’s crude oil provisions.
The panel affirmed the district court’s holding that the provision of the federal Clean Air Act saving California’s motor vehicle emissions standards from preemption (Section 211(c)(4)(b)) does not authorize the Low Carbon Fuel Standard under the Commerce Clause.
--Chris Jensen and Morgan Gilhuly
For more information, please contact Chris Jensen, cdj@bcltlaw.com, (415) 228-5411, or Morgan Gilhuly, rmg@bcltlaw.com, (415) 228-5460.

Monday, September 9, 2013

Third Circuit Holds That Settlement With a State Agency Is Sufficient to Give Rise to CERCLA 113(f)(3)(B) Contribution Claim

Since the Supreme Court’s decisions in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004) and United States v. Atlantic Research Corp., 551 U.S. 128 (2007), there has been continuing uncertainty about whether a CERCLA potentially responsible party (“PRP”) can bring a cause of action for contribution against other PRPs under CERCLA §113(f) where the PRP has settled with a state agency under state law, but has not resolved its liability with the U.S. EPA or a state agency via an “administrative or judicially approved settlement” under CERCLA. 

This issue, which Cooper Industries and Atlantic Research left undecided, is of importance to any PRP that has resolved its liability under state environmental laws without settling CERCLA claims and then seeks contribution for response costs.

In Trinity Industries, Inc. v. Chicago Bridge & Iron Co., 2013 WL 4418534 (3d Cir. Aug. 20, 2013), the Third Circuit  allowed such a contribution action to proceed, holding that CERCLA Section 113(f)(3)(B) “requires only the existence of a settlement resolving liability to the United States or a state ‘for some or all of a response action’” to support a PRP’s contribution claim.  Id. at *3-5.  The Third Circuit’s decision provides further insight into this important issue, but signals a circuit split that may require further clarification from the Supreme Court.

Trinity Industries, Inc. and Trinity Industries Railcar Corporation (“Trinity”) entered into a consent order with the Commonwealth of Pennsylvania naming Trinity as a “responsible person” for the release of hazardous substances at a site that it owned and had for some period used for manufacturing railcars.  The consent order required Trinity to undertake remediation of the site under the supervision of the Pennsylvania Department of Environmental Protection.  The consent order was entered under state environmental laws and did not explicitly resolve Trinity’s liability under CERCLA.  Trinity subsequently filed a contribution claim under CERCLA § 113(f)(3)(B) against a former owner of the site for a share of the remediation costs.

Persuaded by arguments of both Trinity and the United States, which filed an amicus brief in support of Trinity’s position, the court of appeals agreed that the statutory language of CERCLA § 113(f)(3)(B) does not require resolution of CERCLA liability in order to pursue a Section 113(f)(3)(B) contribution claim.  Rather, it only requires the existence of a settlement resolving liability to the United States or a state “for some or all of a response action.”  “Section 113(f)(3)(B) does not state that the ‘response action’ in question must have been initiated pursuant to CERCLA – a requirement that might easily have been written into the provision.”  Trinity Industries, 2013 WL 4418534 at *4.  The court also noted that because remediation standards established under state law were considered “applicable, relevant and appropriate” to satisfy requirements under CERCLA and that compliance with those state remediation standards relieved a party from CERCLA liability, the consent order at issue had eliminated the risk of future CERCLA enforcement actions by the government.  Id. at *5.

The Third Circuit’s decision in Trinity Industries conflicts with the Second Circuit’s holding that CERCLA § 113(f)(3)(B) only allows for contribution claims where a PRP’s liability under CERCLA has been resolved.  See, e.g., Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 423 F.3d 90, 95 (2d Cir. 2005); W.R. Grace & Co. v. Zotos Int’l, Inc., 559 F.3d 85, 91 (2d Cir. 2009).  In declining to follow the Second Circuit, the Trinity Industries court notes that the Second Circuit’s Consolidated Edison decision relied on the legislative history of CERCLA § 113(f)(1) rather than Section 113(f)(3)(B).  The Third Circuit’s decision instead relied on the plain language of Section 113(f)(3)(B), and relevant legislative history, as well as Third Circuit precedent that declined to impose a requirement that a government agency specifically invoke CERCLA in its oversight activities as a condition precedent to bringing a CERCLA cost recovery action.  Trinity Indus., 2013 WL 4418534 at *4-5 (citing United States v. Rohm & Haas Co., 2 F.3d 1265 (3d Cir. 1993)). 

-- Tom Boer and Nicole Martin

For more information, please contact Tom Boer at (415) 228-5413, jtb@bcltlaw.com, or Nicole Martin at (415) 228-5435, nmm@bcltlaw.com.

Friday, August 23, 2013

California Issues Draft MCL for Hexavalent Chromium

On Thursday, August 22, 2013, the California Department of Public Health (CDPH) published notice of a draft Maximum Contaminant Level (MCL) of 10 ppb (µg/L) for hexavalent chromium.  The MCL proposal is higher than the 0.02 ppb public health goal adopted by OEHHA in 2011, but is significantly below the existing California MCL, in existence since the 1970s, of 50 ppb for total chromium and the current federal MCL for total chromium of 100 ppb.  CDPH will seek public comment on the draft hexavalent chromium MCL between August 23 and October 11, 2013.  CDPH will also hold public hearings in Sacramento and in Los Angeles on October 11, 2013, to receive comments on the proposed regulations. 

The publication of the draft hexavalent chromium MCL follows an order commanding issuance of a hexavalent chromium proposed MCL by the Alameda Superior Court in the NRDC litigation discussed in Rick Coffin’s August 30, 2012 postSee Natural Res. Def. Council v. Cal. Dep’t of Public Health, No. RG12-643520 (Alameda Sup. Ct. July 26, 2013).  The court’s order also requires a further hearing in October 2013 to determine if the court will set a deadline for issuance of the final hexavalent chromium MCL.  Id.

Barg Coffin will continue to monitor California’s efforts to develop a drinking water standard for hexavalent chromium as well as the status of the NRDC lawsuit.

--David Metres

For more information, please contact Rick Coffin at (415) 228-5420, rcc@bcltlaw.com, Tom Boer at (415) 228-5413, jtb@bcltlaw.com, or David Metres at (415) 228-5488, dmm@bcltlaw.com.

Thursday, August 22, 2013

Court of Appeal Finds City’s “Meaningless” Discussion of Greenhouse Gas Emissions Does Not Comply with CEQA

In Friends of Oroville v. City of Oroville (No. C079448) (Aug. 19, 2013), the Third District Court of Appeal reaffirmed the importance of conducting a meaningful review of greenhouse gas emissions as part of the CEQA process. 

The case arose from the City of Oroville’s approval of the relocation and expansion of a Wal-Mart “Supercenter.”  A  community group challenged the City’s decision to approve the project, arguing that the City failed to conduct an adequate review of the project’s impact on greenhouse gas emissions (as well as challenging the project on other grounds not addressed in the published part of the court’s opinion).  The court agreed, concluding that the City used the wrong threshold for determining whether the project’s greenhouse gas emissions were a significant environmental impact under CEQA and also finding the City’s analysis of mitigation measures for greenhouse gas measures to be inadequate.

With respect to the significance threshold, the court found that the City erred in comparing the project’s estimated greenhouse gas emissions to total greenhouse gas emissions statewide.  While the EIR noted that the project’s emissions would be equal to only 0.03 percent of California’s total greenhouse gas emissions in 2004, the court called this comparison “meaningless,” observing that “[o]f course, one store’s GHG emissions will pale in comparison to those of the world’s eighth largest economy.”  (Slip Op. at 18.)  Instead of this meaningless comparison, the court found that the relevant question was “whether the Project’s GHG emissions should be considered significant in light of the threshold-of-significance standard of Assembly Bill 32 [AB 32], which seeks to cut about 30 percent from business-as-usual emission levels projected for 2020, or about 10 percent from 2010 levels.”  (Id. at 18-19.) 

The court also took issue with the City’s failure to properly analyze the effects of the project’s greenhouse gas mitigation measures to determine if they would meet AB 32’s emissions reduction target.  In the absence of any attempt to calculate or even “qualitatively ascertain” the effect of the project’s mitigation measures on greenhouse gas emissions, the court found the EIR’s conclusions regarding the effectiveness of mitigation measures “speculative and contradictory” and insufficient to support the City’s finding that the project would have a less than significant impact on greenhouse gas emissions after mitigation.  (Id. at 19-21.)

The court’s ruling follows Citizens for Responsible Equitable Environmental Development v. City of Chula Vista (2011) 197 Cal.App.4th 237, which approved of the use of a CEQA significance threshold based on a comparison of  AB 32’s greenhouse gas reduction targets to “business-as-usual” emissions levels.  The court’s ruling also provides further evidence that California courts will require cities and counties to perform a reasonably robust analysis of greenhouse gas emissions as part of the CEQA process.

--Chris Jensen and Morgan Gilhuly

For more information, please contact Chris Jensen, cdj@bcltlaw.com, (415) 228-5411, or Morgan Gilhuly, rmg@bcltlaw.com, (415) 228-5460.

Tuesday, August 13, 2013

New Draft Storm Water Permitting Requirements Issued

California water regulators recently published a new draft of permitting requirements applicable to many businesses – including many businesses never before subject to water quality regulation.  After 16 years of settled practice, businesses will face a significant change to storm water regulation in California if the draft requirements become the law.

On July 19, 2013, the California State Water Resources Control Board (“State Board”) issued a draft general NPDES permit that regulates storm water discharges associated with industrial activity.  This “Industrial General Permit” would require industrial facilities to comply with a set of new requirements. 

The new Industrial General Permit would impose mandatory best management practices (“BMPs”), require increased sampling and monitoring, and mandate technical reports and action plans if monitoring shows that storm water discharges exceed certain pollutant concentrations.  In addition, “light industry” facilities, previously exempt upon a simple self-certification, would now have to file an annual, public report and could be subjected to inspections by water regulators.

As under the current Industrial General Permit, facilities that fail to comply with Permit requirements would be subject to civil penalties of up to $37,500 per day per violation under the federal Clean Water Act.  Accordingly, all businesses and industrial facilities would be well advised to develop a sophisticated understanding of these new requirements.

The State Board is accepting written comments and evidence on the proposed Industrial General Permit until noon on August 29, 2013.  To learn more, the public can attend a web conference workshop on the new permit on August 14, or attend the public hearing on August 21 in Sacramento.  Following the comment period, final adoption of the Industrial General Permit is scheduled for early 2014. 

Additional information is available on the State Board website at http://www.swrcb.ca.gov/water_issues/programs/stormwater/industrial.shtml

--David Metres 

UPDATE, August 19, 2013The State Water Resources Control Board has extended the public comment period from August 29, 2013 to 12:00 noon September 12, 2013. 

UPDATE September 12, 2013: The State Board has once again extended the public comment period from September 12 to September 19, 2013.

Attorneys from Barg Coffin Lewis & Trapp, LLP, a nationally-recognized environmental law and litigation firm in San Francisco, will continue to monitor these developments. For more information, please contact Donald Sobelman, des@bcltlaw.com, (415) 228-5456, or David Metres, dmm@bcltlaw.com, (415) 228-5488.

Tuesday, April 23, 2013

Bill To Amend Proposition 65 Advances

A controversial amendment to Proposition 65, AB 227, has advanced out of the California State Assembly Environmental Safety and Toxic Materials Committee by a 7-0 vote.  That amendment would allow companies alleged to have violated Proposition 65’s warning requirements to avoid liability by correcting the violation within 14 days of receiving a 60-day notice from a private enforcer, and certifying that the corrective actions have been taken an providing a copy of the warnings that have been implemented.

Proposition 65 has long been criticized for its use by private enforcers to exact high attorney fee/cost recovery as part of settlements for marginal cases.  Because the cost of litigation in a Proposition 65 case can run into the high six figures, if not more, many companies simply agree to settle cases for far less, even when their defenses are meritorious, because of the expense.  In most of those settlements, the bulk of the payments go to attorneys’ fees and costs for the plaintiff.  AB 227 is intended to remedy that situation.

The bill has been referred to the Assembly Judiciary Committee, and its chances of ultimately being enacted remains uncertain.  As expected, there is substantial opposition to the amendment, and if it continues to proceed through committee, the debate over the proposed legislation will escalate. 

--Josh Bloom

For more information, contact Josh Bloom, jab@bcltlaw.com, (415) 228-5400

Wednesday, February 6, 2013

California Green Chemistry Proposed Regulations Revised Yet Again

On January 28, 2013, the California Department of Toxic Substances Control (DTSC) issued further revisions to its proposed Safer Consumer Product Alternatives regulations, more commonly referred to as the "Green Chemistry" regulations.  This is one of a number of revisions DTSC has made to get the Green Chemistry program off the ground. 

Consistent throughout the process, the basic four-step structure of the regulations remains unchanged: 
  1. Identification of Chemicals of Concern,
  2. Development of a Priority Products list for which Alternatives Analyses must be conducted,
  3. Performance of an Alternatives Analysis for each Priority Product by manufacturers, importers, or retailers, and
  4. DTSC's "regulatory responses" following the Alternatives Analysis, which, at their most extreme, may result in prohibiting the sale of the product in California.
The 30-day public comment period on this latest revision ends on February 28, 2013.
  
Upcoming:  Josh Bloom, a Barg Coffin partner and Chair of the Bar Association of San Francisco's Environmental Law Section, will be moderating and speaking at the Bar's May 2, 2013 Green Chemistry Program, featuring Debbie Raphael, Director of DTSC.  The program will run from 5:30pm-7:30pm, at One Embarcadero Center, 18th Floor, San Francisco, at the offices of Nixon Peabody.  Further details and registration materials forthcoming, but feel free contact Barg Coffin for more information.
 
--Josh Bloom
 
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