Tagged: CERCLA

Federal Budget Act Expands Lessees’ Ability to Claim Superfund Exemption as Bona Fide Prospective Purchasers

Federal Budget Act Expands Lessees’ Ability to Claim Superfund Exemption as Bona Fide Prospective Purchasers

The recently-enacted Consolidated Omnibus Appropriations Act made headlines in extending funding for federal government programs through September 30, 2018. Less widely noted were the myriad changes wrought by the Act to the administration of many federal programs. Among the programs affected was the federal brownfields program. The major substantive change in the Act was the expansion of the Bona Fide Potential Purchaser (BFPP) protection for lessees of properties. BFPP status exempts from Superfund liability parties who become owners or operators of facilities after the discharge of contaminants, so long as they are unrelated to parties responsible for the discharge, conduct “all appropriate inquiries” (e.g., a Phase I environmental site assessment) prior to closing, and observe certain other protocols post-closing. Until now, lessees were precluded from qualifying as a BFPP unless the property owner was also a BFPP. Now, if a lessee performs the required actions, it can obtain BFPP protection irrespective of whether its landlord is similarly exempted. This change will have a major impact on the liability exposure of lessees, particularly those who are developing and operating properties under long term ground leases. Most of the Act’s other brownfield-related provisions concern the funding of federal brownfield grants. Non-profit organizations are now...

New Jersey Appellate Division Upholds $225 Million NJDEP Settlement With Exxon Mobil for Natural Resource Damages

New Jersey Appellate Division Upholds $225 Million NJDEP Settlement With Exxon Mobil for Natural Resource Damages

In 2004, the New Jersey Department of Environmental Protection (NJDEP) sued Exxon Mobil Corporation under the Spill Act to recover natural resource damages (NRDs) for the Bayway refinery in Linden and another facility in Bayonne. Fourteen years later, New Jersey’s Appellate Division has upheld a consent judgment, entered by Judge Michael J. Hogan after a sixty-day bench trial, that settled NJDEP’s claims at the Bayway and Bayonne sites as well as 16 other Exxon facilities (including a terminal in Paulsboro) and over 1,000 retail gas stations, in exchange for a record payment of $225 million. In addition to the validity of the consent judgment itself, the case presented a number of important procedural questions regarding the ability of the non-party appellants – here, State Senator Raymond Lesniak and several environmental organizations – to participate in the litigation and to appeal from the trial court’s entry of the consent judgment. First, the Court upheld the trial court’s refusal to permit Senator Lesniak and the environmental groups to intervene in the case (either as of right or permissively) to argue against the settlement, holding for the first time in a reported decision that a putative intervenor must have standing, and that even under...

Opinion from Eastern District of New York May Have Opened the Door to a New Defense for Potential CERCLA “Arrangers”

Opinion from Eastern District of New York May Have Opened the Door to a New Defense for Potential CERCLA “Arrangers”

In Town of Islip v. Datre, a recent decision out of the Eastern District of New York, the court adopted an approach to “arranger liability” under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) that holds parties cannot be liable unless they knew that the substances they arranged for disposal were, in fact, hazardous. The Islip court’s approach represents a departure from traditional considerations of arranger liability and, if followed by future courts, may present a defense for potentially responsible parties who, though intentionally arranging for disposal of materials which ultimately lead to contamination, lacked specific knowledge that such materials contained hazardous substances. The Islip case arises out of illegal dumping of hazardous construction and demolition debris that occurred at a public park (“the park”) in Islip, New York between 2013 and 2014. Though the case involves an elaborate and bizarre dumping scheme involving, among many others, a local church, the parks department, and a number of haulers, as well as the eventual filing of criminal charges, it is sufficient for present purposes to distill the facts as follows. Relevant to the issue of arranger liability, a civil complaint filed by the Town of Islip (“the Town”) alleged that...

A Final Word on EPA’s New Recommendations on Sediment Cleanups

A Final Word on EPA’s New Recommendations on Sediment Cleanups

We recently wrote about a new memorandum from EPA’s Office of Land and Emergency Management that sets forth eleven recommendations for the agency’s regional offices on how to clean up contaminated sediments, and later covered some of the recommendations in greater detail. Here we discuss the rest of EPA’s recommendations. EPA’s recommendations are shown below in bold text, followed by our comments and analysis. Recommendation 6: Develop risk reduction expectations that are achievable by the remedial action. The National Contingency Plan requires EPA’s remediation goals at a given site to be protective of human health and the environment, but sometimes natural or anthropogenic background concentrations unrelated to the CERCLA release being remediated (especially for persistent contaminants associated with cancer risks, such as PCBs and dioxins) can make it impossible to achieve that goal via the cleanup. In such cases, expectations need to match reality, and the remedy should include additional risk reduction strategies (e.g., fish consumption advisories) to ensure protectiveness. Recommendation 7: Consider the limitations of models in predicting future conditions for purposes of decision making. Environmental professionals, no less than anyone else, can forget that computers are tools that help to inform decisions, but cannot replace human judgment. Even the most sophisticated...

Tenth Circuit finds that Ch. 11 Bankruptcy Debtor’s Settlement of CERCLA Claims No Bar to Post-Reorganization Contribution Action Against Other PRPs

Tenth Circuit finds that Ch. 11 Bankruptcy Debtor’s Settlement of CERCLA Claims No Bar to Post-Reorganization Contribution Action Against Other PRPs

The Tenth Circuit recently ruled in Asarco, LLC v. Noranda Mining, Inc. that a mining company (“Plaintiff”) could maintain a contribution action against another mining operation (“Defendant”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) despite the Plaintiff’s earlier representation in Bankruptcy proceedings that its fair share of liability for contamination at the site in question was $8.7 million — the amount it paid to settle the Environmental Protection Agency’s claim. The pertinent facts arose, largely, from the Plaintiff’s Chapter 11 Bankruptcy and a global settlement of all environmental claims. The global settlement, reached in 2009, resolved environmental claims at 52 different sites across 19 states, with a total cost of about $1.79 billion. Included among the myriad claims being settled was the one at issue in this case: an $8.7 million payment to address the Plaintiff’s share of liability at two related sites near Park City, Utah (“the site”). Defending the reasonableness of the settlement figure before the Bankruptcy Court, the Plaintiff maintained that $8.7 million represented its proportionate share of liability for contamination at the site. In 2013, following its Chapter 11 reorganization, the Plaintiff filed a CERCLA contribution claim against the Defendant, another potentially responsible...

More on EPA’s New Recommendations on Sediment Cleanups

More on EPA’s New Recommendations on Sediment Cleanups

Last month, we wrote about a new memorandum from the EPA’s Office of Land and Emergency Management that sets forth 11 recommendations for the agency’s regional offices on how to clean up contaminated sediments. Here we discuss some of those recommendations in greater detail. The EPA’s recommendations are shown below in bold text, followed by our comments and analysis. Recommendation 1: Consider early actions during the remedial investigation/feasibility study in site areas presenting high risks to help reduce risks quickly. Here, the EPA advises its regional offices not to wait until the sediments at a site are well characterized before taking steps to reduce serious risks. In many situations, the EPA can use its removal authority to reduce serious risks while other portions of the site are studied. Recommendation 2: Ensure adequate data collection during the remedial investigation/feasibility study to support the evaluation of alternatives. It’s never too early to plan ahead. From the very start of the process, the focus should be on collecting data that will support an eventual evaluation of remedial alternatives. Avoid “study for study’s sake.” Recommendation 3: Evaluate the risks associated with exposures to contaminated sediments, including submerged sediments. While the greatest risks at many sites likely involve...

EPA Issues Directive to Clarify Existing Guidance on Sediment Cleanups 0

EPA Issues Directive to Clarify Existing Guidance on Sediment Cleanups

From Portland Harbor in Oregon to New Jersey’s Passaic River, contaminated sediment sites present unique challenges. While the EPA issued guidance documents for addressing contaminated sediment sites in 2002 and 2005, it has since learned many lessons in addressing dozens of such sites. A new memorandum from the EPA’s Office of Land and Emergency Management (OLEM), formerly the Office of Solid Waste and Emergency Response, sets forth 11 recommendations for improving the way the agency’s regional offices handle the complex process of cleaning up contaminated sediments.

EPA Proposes First Financial Assurances Rule 0

EPA Proposes First Financial Assurances Rule

On December 1, 2016, following decades of inaction and a court order establishing a deadline by which the proposed rule was to be released, the United States Environmental Protection Agency (“EPA”) announced that it would publish a proposed rule regulating financial assurances required for parties conducting remediation projects in the hardrock mining industry. Section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) directed EPA to develop rules requiring “that classes of facilities establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous wastes.” 42 U.S.C. 9608(b)(1). Although these rules were required to be promulgated by 1985, EPA never published any rules, which led to a deadline of December 1, 2016 being set by court order in response to a lawsuit complaining that EPA failed to comply with the statute. See In re Idaho Conservation League, 811 F.3d 502 (D.C. Cir. 2016). In the absence of such rules, EPA required financial assurance through negotiated settlements, orders, and guidance.

William Hatfield, Susanne Peticolas, and Shawn LaTourette Speak at the 2016 Environmental Law Section Forum 0

William Hatfield, Susanne Peticolas, and Shawn LaTourette Speak at the 2016 Environmental Law Section Forum

William S. Hatfield and Susanne Peticolas, Directors, and Shawn M. LaTourette, an associate, in the Gibbons Real Property & Environmental Department will speak at the annual New Jersey State Bar Association Environmental Section Law Forum on June 24-26, 2016 at the La Mer Beachfront Inn in Cape May, New Jersey. Mr. Hatfield and Ms. Peticolas are speaking on the panel captioned “Divide and Conquer – Using Experts to Battle the Scourge of Joint and Several Liability.” Dr. Adam Love and Gregory Martin of Roux Associates round out the panel, which will examine the legal and technical issues in seeking a divisibility defense following the U.S. Supreme Court’s decision in Burlington Northern & Santa Fe Ry Co. v. United States.

EPA Provides Look Into Pending Financial Assurance Regulations 0

EPA Provides Look Into Pending Financial Assurance Regulations

Recently, the United States Environmental Protection Agency (“EPA” or “the Agency”) shared some preliminary details regarding its impending proposal of financial assurances regulations for the hardrock mining industry. These regulations, which are still under consideration by the Agency, will likely serve as a harbinger of the financial assurances requirements EPA intends to impose on other industries, and collectively, they have the potential to have a significant financial impact on parties responsible for cleaning up contaminated properties.