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.

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.

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).

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.

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.

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.

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.