May 28, 2010
On May 3, 2010, the New York State Department of Environmental Conservation (“DEC”) released the long awaited revised DER-10: Technical Guidance for Site Investigation & Remediation. The document becomes effective June 18. DER-10 is DEC’s authoritative guidance on how to characterize the nature and extent of contamination at a site and how to design an appropriate work plan to investigate and remediate a contaminated site.
There have been significant changes to the laws governing contaminated site cleanup since DER-10 was first published in draft form in December 2002. The New York Brownfields Cleanup Program (“BCP”) has come into being, and significant changes have been made to the State Superfund statute and its implementing regulations, 6 NYCRR Part 375. DEC has revised DER-10 to reflect these changes, conform its guidance to the newer regulatory regime, and address concerns from the regulated community that elements of the 2002 draft version of DER-10 were unmanageable or confusing.
The revised DER-10 makes significant changes to chapters addressing remedy selection, site management, periodic review and closeout. The first chapter, containing general provisions including definitions, was also significantly revised. In Section 1.3, DEC added definitions and modified others to conform them to the BCP and the modified State Superfund and Part 375 language. For example, “engineering control” and “environmental easement” were added and cite to their regulatory definitions. See 6 N.Y.C.R.R. §§ 375-1.2(q), (p). Other definitions were deleted because they were never used in practice or were poorly defined. The revised DER-10 also better defines certain elements that are not included in the regulations. For example, day care facilities, which are not classified in the regulations, are classified as a restricted residential use in the guidance.
One of the major changes to DER-10 is in Section 1.5, which relaxes certain work plan and report certification requirements. Under the 2002 draft version, DER-10 provided that only a professional engineer licensed or authorized to practice in New York could certify work plans and reports. The revised 2010 version disposes with this restrictive language, and now creates a spectrum of persons who may prepare and certify work plans and reports, which includes: New York State licensed professional engineers; qualified environmental professionals; remedial parties; and site owners at the time of certification. While most plans and reports must still be certified by either a qualified environmental professional or NY licensed engineer, remedial parties and site owners may certify periodic review reports if they relate to land or groundwater use restrictions. The revised DER-10 also includes specific certification language, consistent with the BCP and Superfund Program that must be included on the title page of all submissions and must be fully executed when a document is submitted to DEC’s Division of Environmental Remediation for approval.
Chapter 4 provides the framework for remedy selection and the means and methods to identify, evaluate and select a remedy or alternative remedies to address the contamination at a site. The section provides detailed reporting and documentation requirements based on whether the site is in the Superfund program (state or federal), BCP, Environmental Restoration Program, Voluntary Cleanup Program, or petroleum spills program. It also provides DEC’s Remedial Action Objectives (“RAOs”) and preference hierarchy for removing and containing identifiable sources of contamination – removal and/or treatment at the top; treatment of source at point of exposure at the bottom. See 4.1(d).
Chapter 6 has been significantly revised; sections 6.1 (Site Management), 6.2 (Site Management Plan), and 6.3 (Periodic Review) were added. Site management, the last phase of the remedial program, commences once a Certificate of Completion (“COC”) or closure letter is issued. DER-10 describes necessary activities for proper and effective site management, including inspections by the person responsible for site management and reporting of all results in a periodic review report. The guidance requires that design, implementation, periodic review, and closeout of site management are described in a Site Management Plan (“SMP”); DEC’s website will provide a template for the SMP.
DEC also decided to rescind some TAGMs (Technical and Administrative Guidance Memoranda) developed in the 1980s and 1990s and incorporate the substance of those TAGMs into DER-10. For example, fugitive dust will no longer be monitored pursuant to a TAGM; instead, a fugitive dust and particulate monitoring program has been included as Appendix 1B in the revised DER-10. Consolidating these TAGMs into DER-10 will facilitate access to these materials for the regulated community.
DEC is planning to host a training session in Fall 2010 to answer questions and help the public understand the changes in DER-10. Notice of the meeting will be posted on DEC’s website, and DEC will solicit questions and comments prior to the meeting.
May 13, 2010
On May 4, 2010, following significant revisions (reportedly at the behest of the Office of Management and Budget), the Environmental Protection Agency (“EPA”) released proposed regulations governing management of coal combustion residuals generated by coal fired power plants, commonly known as coal ash (the “Proposed Rule”). In Fall 2009, EPA indicated it would release the Proposed Rule by the end of 2009.
EPA has proposed two options for managing coal ash.
The first option would regulate coal ash as special waste under the Resource Conservation and Recovery Act’s (“RCRA”) hazardous waste provisions. Under this option, a comprehensive program of federally enforceable requirements for management and disposal of coal ash would be created. Measures would be adopted to phase out the wet handling of coal ash. Additionally, states would be authorized to develop a permit program or use the federally-established program. This option would include storage, manifest, transport, and disposal requirements for coal ash as well as mechanisms for corrective action and financial responsibility. Failure to comply would be subject to direct federal enforcement.
The second option would regulate disposal of coal ash under RCRA’s non-hazardous waste provisions. EPA would set performance standards for waste management facilities that handle coal ash. States that adopt their own coal ash management programs would be responsible for enforcing the rule and would have the option to establish a permit program. Surface impoundments built after the rule goes into effect would be required to have composite liners, but there will be no land disposal restrictions. Although citizen suits could be filed for failure to comply with the rule, this option does not provide for direct federal enforcement. This option also does not provide for any financial assurances, but EPA plans to develop a proposed regulation pursuant to the financial assurance requirements in Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) § 108(b) that would cover coal ash facilities. This option would go into effect earlier than the first option.
Under both options, landfills that accept coal ash will be required to conduct groundwater monitoring, even if they were built before the Proposed Rule is finalized. Landfills built after the rule goes into effect would also have to install liners. The Proposed Rule does not address depositing coal ash as backfill in mines, known as minefills. Nor does it affect the current status of coal ash that is beneficially reused. The Bevill exemption, which lists specific wastes that are exempt from regulation under RCRA, includes the beneficial reuse of coal ash (e.g., fly ash in cement and concrete). However, EPA is soliciting comments regarding the uses of coal ash in unencapsulated form, such as in road fill and agricultural applications. EPA is also soliciting comments on how to define “beneficial use.” Based on the comments submitted, EPA could determine that unencapsulated uses should be regulated or could redefine which “beneficial uses” remain exempt.
Once the proposed rule is published in the Federal Register, the public will have 90 days to submit comments.
For more information about the Proposed Rule and how to submit comments visit EPA’s website.
April 12, 2010
A recent decision in a matter litigated by SPR fills an important gap in Superfund law by establishing that suits by parties settling with a state brought under CERCLA’s contribution provision[1] must be brought within three years of the date of the settlement of liability. The District Court’s decision in Chitayat v. Vanderbilt Associates, et al., 03-5314-cv, Memo & Order (E.D.N.Y. March 22, 2010) also reinforces many of the emerging rules governing suits amongst private Superfund litigants.
The plaintiff in the case sought recovery of costs incurred under a 1998 consent order which required him to reimburse the New York State Department of Environmental Conservation (“DEC”) for its costs of cleaning up tetrachloroethene (“PCE”) which had been discovered at 100 Oser Avenue site in Hauppauge, NY (the “Site”). Costs incurred, and expected to be incurred, amounted to several million dollars.
Plaintiff alleged a claim for cost recovery pursuant to CERCLA § 107, and contribution under CERCLA § 113(f)(3)(B). The Court ruled that the plaintiff’s 107(a) cost recovery claim failed because pursuant to his consent order plaintiff was, “not required to expend his own funds to remediate the Site” but instead had to “‘reimburse’ the DEC for the DEC’s response costs.” (Slip. Op. at 14.) Accordingly, plaintiff had not incurred costs of response within the meaning of CERCLA § 107 and could not assert a claim under that section.
With respect to plaintiff’s contribution claim under CERCLA § 113(f)(3)(B), the court held that while plaintiff was entitled to assert the claim, it was timebarred by a 3-year statute of limitations which began to run upon issuance of the consent order. Plaintiff filed his suit approximately 5 years after the date of his consent order.
The Court’s holding on contribution is notable for two reasons. First, the Court determined that the consent order had resolved plaintiff’s liability for purposes of § 113(f)(3)(B) despite the fact that plaintiff was required to pay back DEC costs in yearly installments over many years. Plaintiff would not receive a release from liability unless he continued to pay and comply until all DEC’s costs were reimbursed. Such a result could be decades away, and may never occur. The Court nonetheless held that under Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., – F.3d –, 2010 WL 626064 (2d Cir. Feb. 24, 2010), plaintiff’s consent order created a contribution claim under § 113(f)(3)(B).
The most significant aspect of the ruling relates to the statute of limitations which applies to § 113(f)(3)(B) contribution claims. The Court noted a gap in the statute, the, “lack of a triggering event in § 113(g)(3) encompassing a state administrative order or a unilateral EPA order under § 106,” but held that in light of recent Supreme Court precedents, a three-year statute of limitations applies to contribution claims arising from settlements of liability with a state. (Slip. Op. at 23.) In this context, the “triggering event should be the date of the ‘settlement’ of that liability,”—here, the date of plaintiff’s consent order. In so holding the Court rejected alternative theories that a six year limitations period, or no limitations period applies. (Id. at 21-23.) This holding clarifies a complex issue of statutory construction that has vexed courts for many years, and provides useful guidance to future litigants.
The following Sive Paget & Riesel litigators represented three defendants in the case: Daniel Riesel, Dan Chorost and Ashley S. Miller.
- A copy of the decision is available here (pdf)
[1] Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9613(f)(3)(B).
March 5, 2010
The Court of Appeals for the Second Circuit recently issued a decision in Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., — F.3d —-, 2010 WL 626064 (2d Cir. Feb. 24, 2010), another in a series of cases that attempt to chart the contours of liability of potentially responsible parties (“PRPs”) under CERCLA. Following its cleanup of a contaminated site along the Hudson River under an administrative consent order with the New York State Department of Environmental Conservation (“DEC”), Niagara Mohawk Power Corp. (“Niagara”), itself a PRP, commenced a cost recovery and contribution action against other PRPs.
The District Court ruled that Niagara could not seek contribution costs under Section 113(f)(3)(B) of CERCLA because DEC did not have the authority to resolve CERCLA liability without a specific agreement with the EPA and, thus, the administrative consent order did not resolve Niagara’s CERCLA liability. The Second Circuit reversed this ruling, holding that Niagara could maintain a contribution action against former owners and operators of the site pursuant to §113(f)(3)(B).
Section 113(f)(3)(B) allows a party to seek contribution from other PRPs when the party “has resolved its liability to the United States or a state for some or all of a response action in an administrative or judicially approved settlement.” Because Niagara had administratively settled its CERCLA claims with the DEC, the court concluded that §113(f)(3)(B) provided the proper mechanism for Niagara’s claims; settlement of claims with the federal government or express federal approval of the state administrative settlement was not required. In addition, the court held that because Niagara’s claims fit squarely within the requirements of §113(f)(3)(B), to allow Niagara to proceed with a cost recovery action under §107(a) would be inappropriate. This ruling should clarify that a DEC administrative consent order is sufficient to permit the settling party to bring a CERCLA contribution action.
The District Court granted summary judgment in favor of certain defendants on the grounds that Niagara had failed to raise a genuine issue of material fact as to whether hazardous substances had been released on defendants’ properties. Defendants had argued that Niagara’s failure to identify evidence that they had caused any release of hazardous substances entitled them to summary judgment. The Second Circuit reversed, holding that a party seeking contribution need not establish the precise amount of hazardous material discharged to demonstrate PRP liability and to move its CERCLA claims past the summary judgment stage; application of this standard will make it more difficult for PRPs to exit a litigation by moving for summary judgment. Whether the amount of hazardous waste deposited by a particular PRP is minimal does not erase liability, but presents an issue for appropriation of costs.
Former site owner Chevron, one of the defendants seeking summary judgment, argued that it could not be held liable for Niagara’s costs because it never engaged in any activities that could have produced manufactured gas production waste—the type of waste Niagara was required to remediate under the consent order. The Second Circuit held, however, that because Niagara was required to investigate and identify all hazardous waste, it could seek contribution for Chevron’s share of the investigation costs.
The Second Circuit also overruled the District Court’s finding that a genuine issue of material fact existed as to whether Niagara’s cleanup was consistent with the National Contingency Plan (“NCP”). Noting the presumption that actions undertaken by the government are consistent with the NCP, the court held that a PRP could establish consistence by conducting a response action under the monitoring and ultimate approval of a state environmental agency. Niagara’s adherence to the DEC consent order established the cleanup’s NCP consistency.
March 2, 2010
The US Environmental Protection Agency today announced that it has decided to add the Gowanus Canal in Brooklyn, NY to the National Priorities List, which will render the canal a Superfund site under the federal Superfund statute, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).
February 22, 2010
In a noteworthy ruling, the United States District in the Northern District of Illinois held that an owner of industrial equipment leased to the operator of a plating facility is strictly liable as a current owner of a “facility” under Section 107(a) of Superfund (also known as CERCLA). United States v. Saporito, 2010 WL 489703 (N.D. Ill Feb. 9, 2010) (“Saporito“).
In Saporito, the federal government sought to recover over $1.5 million in cleanup costs at the site of a former plating facility. The government sought summary judgment against Saporito, on the grounds that he was a current owner of a facility within the meaning of CERCLA, “based on his undisputed ownership of equipment used in the plating process.” Saporito opposed the motion on the grounds that there was no evidence that the equipment he owned and leased to the operator was connected to any release or threatened release of hazardous substances causing the cleanup, and because the equipment had been leased to someone who actually operated the plating facility.
The District Court rejected both arguments, holding that CERCLA is a strict liability statute that did not require proof of a connection between the property owned by the defendant and the incurrence of CERCLA cleanup costs. The court, relying on ELF Atochem North American, Inc. v. United States, 868 F. Supp. 707, 709 (E.D. Pa. 1994), held that the plating line owned by Saporito was “no less a facility than the land on which it operated.” The court further observed that just as CERCLA extends liability to a landowner who may not even be aware of pollution-producing activities of its lessee, it similarly extends to owners of equipment “whose lessee is using the equipment in a similar manner.”
Saporito also argued that if he is an owner of a CERCLA “facility” and thus a current owner PRP, he should be entitled to a defense for owners who are protecting a security interest. The District Court rejected that argument as well, finding that Saporito’s ownership interest was not “primarily to protect a security interest,” a necessary element of the defense.
The District Court’s ruling, if upheld on appeal, has the potential to significantly broaden the scope of CERCLA liability. CERCLA’s broad definition of “facility” explicitly encompasses “equipment,” so that aspect of the court’s ruling is not controversial. CERCLA, however, only holds liable the current owner of a facility “from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance . . . . “ 42 U.S.C. 9607(a). Thus, the District Court appeared to err in holding that the government did not have to establish that the equipment owned by Saporito (the plating line) was connected to the release or threatened release of a hazardous substance giving rise to response costs that the government sought to recover. The court confused the fact that, once liability is established, CERCLA holds such parties strictly liable, with the requirement that to establish liability based on ownership of a “facility” the CERCLA plaintiff must show that such facility caused the release or threatened release at issue. Once a party qualifies as a liable party under Section 107(a) liability is strict in the sense that there is no need to prove negligence or fault. However, that does not mean that a CERCLA plaintiff need not link the “facility” to the release or threatened release giving rise to the cleanup costs.
Accordingly, we predict that unless resolved out-of-court this case should be reversed on appeal. The court in this case was likely influenced by the fact that Saporito had been at certain times involved in the operation of the plating operation, and was not merely an owner of equipment leased to an unconnected third-party operation. Nevertheless and despite the flaw in its reasoning, the Saporito decision makes clear that owners of industrial equipment leased to third-parties should consider taking steps to mitigate potential CERCLA liability, especially in instances where a plaintiff can establish that the equipment in question played a role in the release of hazardous substance causing contamination. In such instances the owner of the equipment, even if not involved in the operations of the plant, could be held liable as the current “owner” of a CERCLA “facility” under a proper reading of CERCLA’s strict liability scheme.
September 24, 2009
The U.S. Environmental Protection Agency (“EPA”) is proposing to add New York City’s Newtown Creek to its National Priorities List (“NPL”) of sites with known or threatened releases of hazardous substances throughout the United States and its territories. The NPL is EPA’s list of sites that warrant further investigation and long-term cleanup. This proposed action follows closely on the heels of the well-publicized and hotly-contested proposed listing of the Gowanus Canal as an NPL site.
As it did with the Gowanus Canal, the State of New York referred Newtown Creek to EPA “due to the complex nature of the contamination along the creek.” This complexity apparently stems from the myriad types and potential sources of contamination. As EPA noted in its press release for the proposed listing, contamination found in Creek sediment and surface water samples includes pesticides, metals, PCBs, and volatile organic compounds (“VOCs”), the last category of which are potentially harmful contaminants that can easily evaporate into the air.
From the mid-19th century until World War II, Newtown Creek was a hub of a growing industrial America: more than 50 industrial facilities were located along its banks, including some of the nation’s largest oil refineries, petrochemical plants, copper production and smelting plants, fertilizer and glue factories, sawmills, and lumber and coal yards. Industrial pollution resulted from these activities and from the City’s sewers that for many decades dumped untreated into the Creek. Some factories and facilities still operate along the Creek and its tributaries, and various adjacent contaminated sites have also potentially contributed to its contamination. As a result, Newtown Creek is, according to the EPA, “badly polluted” and its listing on the NPL “will allow EPA to build on the extensive sampling of the creek that has already been done.”
EPA’s press release does not explain the need for an NPL listing, given that in 2007 New York Attorney General Andrew Cuomo commenced litigation against Exxon Mobil Corp., BP, Chevron Corp., Keyspan Corp. and Phelps Dodge Corp. for their respective roles in polluting the Creek. Also it is not clear how an NPL listing would affect any of the other three suits brought by private parties and the environmental group Riverkeeper that seek cleanup of the Creek and at least $58 billion in damages. Whether this proposed listing provokes opposition from the City of New York and others, similar to the proposed Gowanus Canal listing, will probably be known soon. It is worth noting that only several months ago, in June 2009, the City spent $100 million to purchase 30 acres of property at the mouth of Newtown Creek to construct the largest middle-income housing development in New York since the 1970s. Known as “Hunter’s Point South,” that project will include 3,000 affordable housing units, a 1,100-seat high school, 11 acres of parkland, and a network of pedestrian walkways and bike paths along what may soon be a new federal Superfund site.
No one knows yet how wide EPA intends to cast the Superfund liability net. In the event the Creek is listed, property owners along the waterway and in the immediate area may face claims relating to the current and historic uses of their property, and the extent to which these uses may have contributed to Creek contamination. These parties may be well served by making their interests known in EPA’s public comment period which accompanies any NPL listing. The public comment period for Newtown Creek began September 23, 2009, and will remain open for sixty days. Comments may be submitted via EPA’s website here.
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