Environmental Law Insight

Updates and Analysis from Taft's Environmental Trial Lawyers

EPA Releases Final Version of Clean Water Rule

Devin Parram Posted in Water

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.

U.S. EPA Issues New Vapor Intrusion Technical Guides: Highlights for Experienced Environmental Professionals

William C. Wagner Posted in Air

More than 12 years in the making, U.S. EPA recently issued two new technical guides for assessing and mitigating the vapor intrusion pathway: Technical Guide for Assessing and Mitigating the Vapor Intrusion Pathway from Subsurface Vapor Sources to Indoor Air and Technical Guide for Addressing Petroleum Contamination at Leaking Underground Storage Tank Sites.  You can read a summary of some of the key issues in the guides here.

Court Applies Volumetric Apportionment under CERCLA in lieu of Joint and Several Liability

Jeffrey Stemerick Posted in CERCLA / RCRA

 

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.

Indiana Landowners – Environmental Liability for Tenants’ Misdeeds

Geoffrey Slaughter Posted in Environmental Litigation, Insurance

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.   

Executive Order Issued to Encourage Sustainability Changes Across the Federal Supply Chain

Bradley R. Sugarman Posted in Sustainability

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.

Taft Environmental Lawyer Brad Sugarman Appointed to Indianapolis Air Pollution Control Board

Posted in Community Involvement

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.

Indiana Court of Appeals upholds trial victory for Taft client in environmental contamination suit

Bradley R. Sugarman Posted in Indiana Environmental Legal Action

In a case that examines the limits of liability for environmental cleanup costs under Indiana’s Environmental Legal Action Statute (“ELA”), the Indiana Court of Appeals recently upheld a trial judgment finding that a film-processing company and its owner had no liability for environmental cleanup costs of a commercial property located in Indianapolis under the ELA. The Court of Appeals upheld the trial court’s determination that the plaintiff and current property owner failed to prove that the previous owner caused or contributed to the site’s contamination.

Taft attorneys Brad Sugarman, Tom O’Gara and Jeff Stemerick represented the previous property owner and The Indiana Lawyer covered the case in a recent article.

Cyprus Decision Opens Door for Indirect Successor Liability Under CERCLA

Julian Harrell Posted in CERCLA / RCRA

In Cyprus Amax Minerals Co. v. TCI Pacific Comm. Inc., the U.S. District Court for the Northern District of Oklahoma addressed a successor-in-interest issue in an environmental cleanup case where plaintiff Cyprus Amax Minerals Company (“Cyprus”) sought contribution payments from defendant TCI Pacific Communications, Inc. (“Pacific”). The court examined Cyprus’s claim that Pacific was the successor-in-interest to New Jersey Zinc Company (“N.J. Zinc”) and that Tulsa Fuel and Management Company (“Tulsa”) was a subsidiary of N.J. Zinc. Cyprus alleged that Tulsa was the alter ego of N.J. Zinc and that Pacific had assumed responsibility for N.J. Zinc’s liabilities. Based on this argument, Cyprus sought to hold Pacific liable for environmental harms caused by one of Tulsa’s smelting operations. As discussed below, the court accepted Cyprus’s alter ego argument; however, it did not actually determine Pacific’s CERCLA liability.

The court’s decision in Cyprus is important because it demonstrates the potential pitfall of over-emphasizing a parent corporation’s control of its subsidiaries. Although N.J. Zinc’s arguments in the ICC Hearing prevented Tulsa’s formal complaint from being blocked by the statute of limitations, N.J. Zinc’s repeated assertions of broad and overarching control resurfaced in a harmful way such that its successor-in-interest, Pacific, could face indirect liability for costs of cleanup and investigation under CERCLA. The court’s analysis suggests that N.J. Zinc likely could have succeeded in persuading the ICC that it had limited authority to file a complaint on Tulsa’s behalf. Nevertheless, N.J. Zinc rejected that course of action and chose to demonstrate its utter control of Tulsa. Thus, Cyprus shows the potential danger of not evaluating how today’s decision could affect tomorrow’s outcome.

To date, the court’s ruling has not been appealed, and the parties are engaged in settlement discussions.

To learn more about this decision and its implications, I invite you to read a recent article that I published.

California Federal District Court Uses Burlington Northern Holding to Limit “Arranger” Liability

Jayna M. Cacioppo Posted in CERCLA / RCRA

Recently, a federal district court in California used the opinion from Burlington Northern to limit liability under a California statute with a CERCLA-like liability scheme. See City of Merced Redevelopment Agency v. Exxon Mobil Corp., 2015 WL 471672 (E.D. Cal. Feb. 4, 2015).

In 2009, the U.S. Supreme Court issued an opinion that fundamentally changed the scope of liability for “arrangers” under CERCLA. See Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009). Since then, a number of federal courts have applied the Burlington Northern holding, in varying degrees, to limit CERCLA liability.

I recently published an article on the City of Merced decision as well as more background on the Burlington Northern ruling and its impact since 2009.

U.S. Supreme Court Ruling: Interpretive Rules Issued by Federal Agencies Are Not Subject to Public Notice and Comment

Katherine Grgic Posted in Environmental Litigation

On March 9, 2015, the U.S. Supreme Court determined that interpretive rules issued by federal agencies are not subject to notice-and-comment procedures under the APA. Perez v. Mortgage Bankers Ass’n, 135 S. Ct. 1199 (2015). The court held that the Paralyzed Veterans doctrine requiring agencies to undergo notice-and-comment rulemaking procedures for interpretations that “deviate[] significantly” from previous interpretations was “contrary to the clear text of the APA’s rulemaking provisions, and it improperly imposes on agencies an obligation beyond the ‘maximum procedural requirements’ specified in the APA. . . .” Id. at 1206 (internal citations omitted).

As a result, as was the case in Perez, an agency can issue an interpretation of its regulations and then later change its mind and issue a contrary interpretation even if parties have detrimentally relied on the previous interpretation. See id. at 1204.

Perhaps the most interesting aspect of the decision, however, comes from the concurring opinions of Justices Thomas, Scalia and Alito. Justices Thomas and Scalia called into question the validity of the Seminole Rock doctrine — which required deference to agencies’ administrative interpretations of regulations — and signaled their willingness to reconsider the doctrine in an appropriate case. Justice Alito, referencing the reasons offered by Justices Thomas and Scalia, echoed their desire for the case that will allow for reconsideration of the doctrine. Taft will monitor upcoming cases for such developments.

I invite you to click here to read an article I recently published on this ruling.