The U.S. District Court for the Eastern District of Michigan rejected a party’s attempt to “slice and dice” its cleanup costs between Sections 107 and 113 of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) in Ford Motor Co., et al. v. Mich. Consolidated Gas Co., et al., Case No. 08-13503, E.D. Mich. (Feb. 10, 2015). Citing existing case law, the court concluded that if a party is eligible to bring a Section 113 contribution claim, then that party can only bring a Section 113 claim and cannot separately pursue its allegedly “voluntary” costs under Section 107.
This decision is another important example of courts refusing to let a party re-characterize Section 113 costs as Section 107 costs. The case also illustrates the importance of the procedural posture of a case when determining whether a Section 107 or Section 113 claim is appropriate.
I invite you to read my recently published article discussing this case in more detail.
On July 14, 2015, the Sixth Circuit Court of Appeals ruled that the Sierra Club had standing to challenge EPA’s determination that the Cincinnati metropolitan area had reached attainment status for particulate matter (PM 2.5). Sierra Club v. EPA, — F.3d —-, 2015 WL 4231713 (6th Cir. 2015). After granting the Sierra Club the right to challenge, the court held that EPA had failed to implement “reasonably available control measures” applicable to non-attainment areas, and therefore vacated the EPA’s determination that the Cincinnati metropolitan area was in attainment for PM 2.5. The court’s rejection of the attainment status was made notwithstanding the fact that the Cincinnati metropolitan area’s real time data showed that the National Ambient Air Quality Standard for particulates had been met. The Sixth Circuit found that meeting the particulate standard was not enough. EPA also had to implement reasonably available control measures under Section 107(d)(3)(E)(ii) of the Clean Air Act even if those measures were not necessary to meet the particulate standard. In so holding, the Sixth Circuit reasoned in accord with recent U.S. Supreme Court holdings granting less deference to EPA in interpreting statutory provisions under the two-step test announced in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984).
The Sixth Circuit’s decision places EPA and its state counterpart, Ohio EPA, in a quandary, namely, how to unring the bell and “fix” the prior failure to implement reasonably available control measures. Should EPA require Ohio EPA to re-submit a state implementation plan that includes requirements for reasonably available control measures for particulates? If so, how long must that approved plan be in place before the Cincinnati area can reapply for attainment designation?
The Sixth Circuit’s decision may not be the end of the judicial process. The court disagreed with the conclusion of the Seventh Circuit Court of Appeals that the phrase “applicable implementation plan” could refer to a plan other than the pre-attainment state implementation plan. The applicability of a different plan would likely have led to a different conclusion by the court. This disagreement establishes a conflict among the circuit courts that could be accepted for review by the U.S. Supreme Court.
Manufacturers and utilities that incorporate widely-available, low-cost internet protocol devices into their industrial control systems are at an increased risk for cyber-attacks. National Institute of Standards and Technology (NIST), which is responsible for developing information security standards and guidelines to protect the nation’s critical infrastructures, recently published the Guide to Industrial Control Systems (ICS) Security, NIST Special Publication 800-82, Revision 2, released May 2015. This publication provides guidance on how to secure Industrial Control Systems (ICS), including Supervisory Control and Data Acquisition (SCADA) systems, Distributed Control Systems (DCS), and other control system configurations such as Programmable Logic Controllers (PLC), while addressing their unique performance, reliability, and safety requirements.
I recently published an article on Taft’s Privacy and Data Security Insight blog describing the guide in more detail.
The tension between net-metering advocates and electric utilities has increased with the popularity of rooftop solar. Net-metering is used to track the amount of excess electricity produced by small-scale, on-site, sources, such as rooftop solar panels, and credit owners of these resources for the excess electricity. In a number of states, electric utilities have argued to regulators and legislators that net-metering customers do not pay their fair share for use of the electric grid, which results in non-net-metering customers picking up the tab for the cost of maintaining the grid.
Ohio recently became a battleground in the dispute between supporters of distributed generation and electric utilities. This dispute is largely focused on the amount of credits net-metering customers receive and which customers are entitled to receive credits from utilities. The issues arose out of the Public Utilities Commission of Ohio’s (PUCO) revaluation of its net-metering rules. AEP Ohio filed an appeal to the Ohio Supreme Court challenging the commission’s revisions to the net-metering rules.
The appeal is still pending and it remains to be seen whether the Legislature will weigh in on the net-metering battle, or whether a potential modification to the net-metering rules will satisfy the interests of the various parties. I invite you to read an article I recently published that discusses AEP Ohio’s arguments in more detail.
Yesterday, the EPA released the final version of the Clean Water Rule (CWR), which defines categories of water that are now subject to regulation without the need to perform a case-specific “significant nexus” determination. The EPA states that the primary purpose of the new rule is to limit the sometimes slow, confusing and costly process of determining whether a “water” is subject to EPA regulation under the Clean Water Act (CWA) on a case-by-case basis.
However, by limiting the confusing and costly case-specific “significant nexus” determination, the EPA now imposes an equally onerous burden on those seeking to demonstrate that their “waters” are not “waters of the United States.”
The CWR will go into effect on Aug. 28, 2015, and will be considered issued for purposes of judicial review as of 1 p.m. Eastern time on July 13, 2015. Industry, local governments and private developers will clearly be affected by these new rules. And, given the impacts and ambiguities discussed in an article I recently published, it is likely that the CWR will be immediately subject to judicial review.
In United States v. NCR Corp., a Wisconsin District Court held that recent 7th Circuit guidance in the wake of Burlington Northern & Santa Fe Railway, Co., v. United States, required a volumetric apportionment of NCR Corporation’s liability under CERCLA for its contribution to PCB contamination in the Lower Fox River. This case may signal a relaxation of the hesitancy to apportion harm under CERCLA and could allow PRPs to more frequently use estimates of the volume of their individual contributions to comingled contamination to avoid joint and severability under CERCLA — at least where volume can be reasonably linked to actual toxicity.
I invite to you read more about this case in an article I recently published.
Landowners in Indiana who know their properties are contaminated may be liable for damages, even if they didn’t contribute directly to the pollution, according to a recent appellate decision. In JDN Properties, LLC v. VanMeter Enterprises, Inc., the Indiana Court of Appeals reversed summary judgment for the seller and remanded the case for trial on the buyer’s claim for damages under Indiana’s Environmental Legal Action Statute. Under the Statute, a person may recover removal or remediation costs involving hazardous substances or petroleum against a person that “caused or contributed to the release”.
The court recognized that the Statute does not permit claims against landlords “who by all counts …were not involved in the alleged release of hazardous substances and had no knowledge of the release.” But a landlord who knows of pollution on the property may be liable. “We conclude that a landlord who has knowledge that a tenant’s use of land is causing environmental contamination, but does nothing to halt or remediate such contamination and goes on to sell that property to a third party without disclosing the property’s condition, may fairly be said to ‘share responsibility’ for or contribute to such contamination.”
The implications of this decision are most likely to fall on property owners with commercial or industrial tenants, such as dry-cleaners or manufacturers that use hazardous substances in their operations. But residential landlords also may be on the hook. As just one example, a residential property owner could face liability under the Statute if a tenant is using his apartment as a meth lab. The costs to remediate environmental contamination can be substantial, potentially running in the tens (or even hundreds) of thousands of dollars.
You should consult with legal counsel about potential liability under the Statute. Knowledgeable counsel can also assess whether existing insurance coverage, such as a conventional CGL (commercial general liability) policy, will cover the costs of defending and indemnifying against any such claims.
This article originally appeared in INSites magazine, a publication of the Indiana Apartment Association (IAA). The article is re-published on Taft’s web site with permission from the IAA.
On March 15, 2015, President Obama issued Executive Order 13693 (the “Order”) with the goal of reducing the Federal government’s greenhouse gas (“GHG”) emissions while increasing clean energy consumption. The Order applies to all Federal agencies by definition and details a 3-tiered scope of applicability to encourage parallel changes “across the Federal supply chain.”
I invite you to read an article that I recently published, which includes a summary of the Order’s key provisions and definitions.
Congratulations to Taft partner Brad Sugarman for being appointed by Indianapolis Mayor Greg Ballard to serve on the Indianapolis Air Pollution Control Board. The board is responsible for enhancing and improving the air quality for the city of Indianapolis and Marion County.
Brad is a partner in Taft’s Environmental group and a frequent contributor to this blog. He represents clients in all areas of environmental law, from administrative enforcement to litigation and from regulatory counseling to environmental due diligence.Brad has extensive experience in complex civil litigation involving toxic torts allegedly caused by environmental contamination. He also has represented numerous corporations in CERCLA 107 and 113 actions, as well as administrative and judicial appeals of enforcement actions taken by EPA and IDEM. His regulatory practice includes providing advice to corporations and individuals regarding the Clean Water Act, the Clean Air Act, RCRA, CERCLA, rulemaking, hazardous materials transportation and Brownfield remediation.