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 post.  See 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.

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.

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, 2013:  The 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.

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

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

Lawsuit Filed in August 2012 To Compel California To Set A Drinking Water Standard For Hexavalent Chromium

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

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:

1. it is equitable in light of the characteristics of a long-tail injury, 
2. 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, 
3. 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 
4. 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.

 

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