December 17, 2009
The Manhasset Lakeville Water District has secured a $2.75M settlement for costs incurred in response to contamination of the aquifer underlying the Water District’s service area. Sive Paget & Riesel represented the Water District in its efforts to recover these costs.
The Water District provides drinking water to its 45,000 customers in Manhasset, Great Neck, and New Hyde Park, NY. After Freon-22 was detected in the aquifer waters, the Water District was forced to build a treatment system to remove the contaminants and render the water safe for public consumption in compliance with New York State drinking water quality standards.
SPR assisted the Water District in locating parties that were potentially responsible for the contamination, investigating the historic source of the contamination, and bringing a federal litigation in the Eastern District of New York against the owners of the source of the contamination for recovery the Water District’s costs. The litigation asserted federal claims under the citizen suit provisions of the Safe Drinking Water Act (SDWA) and the Resource Conservation and Recovery Act (RCRA).
The Water District has now settled certain of its claims in that litigation for $2.75M. These settlement funds will offset costs incurred to build the treatment system, legal and engineering fees, as well as the ongoing operation and maintenance costs of removing contaminants from the drinking water supply. The settlement also serves as an important example to public water districts, demonstrating that ratepayers need not bear the burden of addressing environmental contamination in the water supply.
The following SPR attorneys represented the Water District in this matter: David Yudelson, Daniel Riesel, Dan Chorost, and Ashley Miller.
October 29, 2009
On October 27, 2009, the New York State Court of Appeals held that individuals who can prove that they use and enjoy a natural resource frequently for repeated recreational use, more so than the public at large, may have standing under the State Environmental Quality Review Act (“SEQRA”) to challenge government actions that threaten that resource. In Save the Pine Bush v. Common Council of the City of Albany (“Pine Bush“), Save the Pine Bush and nine of its members brought an action under SEQRA challenging the City of Albany’s (the “City”) acceptance of a Final Environmental Impact Statement (“FEIS”), which concluded that the proposed rezoning of a 3.6 acre parcel to allow construction of a hotel would not have a significant impact on the Karner Blue butterfly or its habitat. Petitioners argued that they had standing because they lived near the site of the hotel project and used the Pine Bush for recreation and to study and enjoy its unique habitat. The closest petitioner lived approximately one-half mile from the Pine Bush.
The Court held that petitioners met the test for standing outlined in Society of Plastics Industry, Inc. v. County of Suffolk, 77 N.Y.2d 761 (1991) (“Society of Plastics”), where the court held that the standing of an organization is “established by proof that agency action will directly harm associate members in their use and enjoyment of the affected natural resources.” This harm must be “different from that of the public at large.” Id. at 774. Society of Plastics has often been cited for the proposition that adjacent property owners or occupants may suffer harm for standing purposes, because in that case petitioners argued standing based on their adjacent property. However, in Pine Bush, petitioners alleged harm based on repeated use of the natural resources at issue for recreation, at a level greater than that of the public at large. The Court held that petitioners demonstrated that their injury was real and different from the injury faced by the public at large. The Court refused to adopt a rule, proposed by the City, that only those who own or inhabit property adjacent to, or across the street from, a project site may allege environmental harm.
However, the Court dismissed the petition on its merits, holding that an agency complying with SEQRA does not have to investigate every conceivable environmental problem. The City had discretion, within reasonable limits, to determine which environmental issues were relevant. The City took the requisite hard look at the potential adverse impacts on the Karner Blue butterfly, and its decision not to consider the potential impacts on other species (i.e., the frosted elfin butterfly, hognosed snake, worm snake, and spadefoot toad), “matters of doubtful relevance,” was within the City’s judgment.
This ruling provides further guidance on standing requirements for citizens under SEQRA and potentially other environmental claims. New York’s highest court has made clear that a petitioner may establish standing based on repeated, frequent recreational uses of a resource, which expose them to injury that is different from the public at large. As noted by the Court of Appeals in its decision, this route to establishing standing is similar to existing standing law in the federal courts, where injuries to recreational interests are recognized as a cognizable basis for standing. However, Court of Appeals was also cognizant of setting the barriers to standing too low, noting that SEQRA challenges “can generate interminable delay and interference with crucial government projects.” Id., slip. op. at 10. Petitioners, the Court noted, will have to do more than make “perfunctory allegations of harm” – each element must be supported by proof as with all matters where the burden falls to the petitioner. It remains to be seen whether in practice this ruling will result in a significant widening of the courthouse door for petitioners alleging environmental harms.
October 23, 2009
On October 16, the Fifth Circuit Court of Appeals held that residents and owners of property along the Mississippi Gulf coast had standing to assert public and private nuisance, trespass, and negligence claims against several energy, oil and chemical companies for emissions of greenhouse gasses, and that none of those claims presented nonjusticiable political questions. In its holding the appellate court reversed the trial court’s dismissal of the putative class action, which alleged that the companies’ greenhouse gas emissions contributed to global warming, caused a rise in sea levels, and added to the ferocity of Hurricane Katrina, causing extensive property damage. The Fifth Circuit’s decision follows closely on the heels of the Second Circuit’s recent decision in State of Connecticut et al. v. American Electric Power Company Inc. (“CT v. AEP”) holding that several states, New York City and private land trusts can seek injunctive relief against power companies to limit greenhouse gas emissions. Both of these decisions rejected earlier district court decisions that declined to hear climate change cases based on arguments that plaintiffs lack standing to sue for such a broad injury or that climate change cases present non-justiciable political questions.
Now that two courts of appeal have held that the federal courts are open for climate change claims, the battle lines will shift to issues that typically arise during later stages of litigation, including (1) whether plaintiffs will be able to establish a causal connection between the defendants’ greenhouse gas emissions and the specific harms they have suffered, (2) whether defendants (if held liable for money damages) should be assessed the full cost of harm or only their proportionate share of the total harm caused by all greenhouse gas emitters, (3) whether and how courts will fashion injunctive relief that includes mandatory reductions in emissions, and (4) whether claims of this type can proceed as class actions. The prospect of further litigation around these issues, as well as continued efforts by EPA to regulate greenhouse gases, will intensify efforts by companies to seek a comprehensive solution in Congress.
Just before the Fifth Circuit issued its decision, the United States District Court of the Northern District of California dismissed an action by the Eskimo Village of Kivalina against 24 oil and energy companies seeking $95-400M in damages for flooding and relocation impacts associated with global climate change. It remains to be seen whether the Ninth Circuit will join the Second and Fifth Circuits, reverse the district court, and uphold the right of the Kivalina plaintiffs to seek relief in federal court, but that outcome seems well within the range of possibility.
Many of the concerns raised by the district court in Kivalina, however, are likely to play out in all of these litigations, even if the cases are not dismissed at the initial stages on standing or political question grounds. For example, the Kivalina court rejected plaintiffs’ argument that federal courts could properly rely on standards developed in earlier air and water pollution cases, finding that prior cases involved impacts to geographically defined watersheds and airsheds, where there was a finite set of polluters contributing to the problem. By contrast, because the impacts of greenhouse gas emissions have no geographic constraints, the number of parties potentially responsible for climate change is essentially infinite.
The Kivalina court also expressed concern that plaintiffs would not be able to plead or prove that the “defendants’ conduct caused the plaintiffs’ injury in fact.” It concluded that the Kivalina plaintiffs could not plead or prove that any of the defendant’s polluting sources were the “seed of the injury” suffered by plaintiffs. A concurring opinion in the Fifth Circuit opinion also expressed considerable sympathy for defendants’ argument that the complaint “did not allege facts that could establish that the defendants’ actions were the proximate cause of the plaintiffs’ alleged injuries.” It remains to be seen how, on remand, the federal district courts in the Second and Fifth Circuits address this question. It may be difficult for plaintiffs to show that a particular greenhouse gas emission is the proximate cause of a particular injury, at least under a conventional proximate cause analysis. Faced with the near certainty that greenhouse gases are causing serious harm, however, the courts may approach the causation issue in a more pragmatic and less formalistic fashion. The Kivalina court stated strongly that it was unwilling to impose a form of enterprise liability on defendants, but one thing is certain – the Second and Fifth circuits have held that these claims should go forward.
August 27, 2009
On August 25, the Court of Appeals for the Seventh Circuit held that an injunction imposed pursuant to the Resource Conservation and Recovery Act (RCRA) against Apex Oil Inc. requiring Apex to remediate contamination at a former oil refinery in Hartford, Illinois was not discharged in Apex’s Chapter 11 bankruptcy. United States v. Apex Oil Co., Inc., — F.3d —, 2009 WL 2591545 (7th Cir. 009). Apex argued that the government’s remediation injunction, which was estimated to require expenditures of approximately $150 million, was a “right to payment” that had been properly discharged in bankruptcy proceedings. The circuit court rejected this argument.
Writing for the court, Judge Richard A. Posner concluded that a RCRA injunction to remediate does not qualify as a claim that can be discharged in bankruptcy because it does not give rise to a “right to payment” as that phrase is defined by the Bankruptcy Code. Unlike CERCLA, RCRA does not entitle the government to a monetary payment of cleanup costs by a responsible party; instead, it allows the government to secure equitable relief requiring a responsible party to abate an environmental hazard.
According to the Judge Posner, the fact that Apex did not have the ability to conduct the cleanup itself and would have to spend money to comply with the remediation injunction did not create a dischargeable claim. He reasoned that whether the defendant conducts a cleanup or hires a third party to do so proves irrelevant to the question of whether a “right to payment” exists since “[a]lmost every equitable decree imposes a cost on the defendant. ”
August 11, 2009
Almost thirty years after Congress instructed EPA to require facility owners and operators to set aside funds for the cleanup of property that may be contaminated by hazardous substances, a federal court in California has held EPA may take additional time to draft and issue the regulations. The court held that while Congress required EPA to issue such regulations, it granted EPA some discretion in when to do so. EPA has stated that it intends to require financial assurance for hardrock mining facilities first, and will also assess the need to regulate hazardous waste generators, hazardous waste recyclers, metal finishers, wood treatment facilities, and chemical manufacturers.
The regulations at issue are required under the federal Superfund law, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), passed in 1980. The statute is commonly said to have been motivated by the notorious hazardous waste contamination discovered buried at Love Canal, NY. Section 108 of CERCLA requires EPA to issue financial assurance requirements for certain types of facilities, based on the risk of injury from hazardous substances in operations at those facilities. The regulations, once issued, would require the operator of a covered facility to set aside funds or otherwise make funds available for a possible future cleanup of hazardous substances at the property. Without such funds, costly cleanups may force potentially responsible parties into bankruptcy leaving taxpayers with the bill, or lengthy litigation may ensue over the allocation of costs. EPA was first required to publish a notice of those classes of facilities which presented the “highest level of risk of injury” by December 11, 1980. CERCLA § 108(b)(1).
The December 1980 deadline passed, without EPA publishing the required notice. The statutory requirement languished, until in recent years it received renewed attention. EPA was sued in federal court in 2008, on the theory that EPA had failed to perform a non-discretionary duty under CERCLA. The suit was brought under to CERCLA’s citizen suit provision, which allows a private litigant to force non-discretionary agency action. In February 2009, the Northern District of California held in Sierra Club v. Johnson (N.D. Cal. No. C 08-01409) (“Johnson“), that EPA had a mandatory duty to publish classes of facilities which presented the greatest risk of injury. In July, 2009, EPA published a notice these classes of facilities in the Federal Register, pursuant to the court’s order. In its notice, the agency determined that it would promulgate the first financial assurance requirements for hardrock mining facilities, based on the extent of contamination from such facilities, and the high costs of cleanup.
EPA did not limit its inquiry to hardrock mining; the notice also stated that EPA will examine the need for financial assurance at the following types of facilities: “hazardous waste generators, hazardous waste recyclers, metal finishers, wood treatment facilities, and chemical manufacturers.” 74 Fed. Reg. 37,219. EPA states that it intends to publish a notice of this “second wave” of types of facilities by December, 2009. Id.
However, the Northern District of California held that EPA is under no date-certain deadline to issue the financial assurance requirements. Instead, the court held, “that although Section 108(b) requires EPA to promulgate financial responsibility regulations and incrementally impose such requirements, Section 108(b) provides EPA with discretion as to when to promulgate such regulations. Unlike the duty to publish notice of classes, Section 108(b) does not include a date-certain deadline for the promulgation of financial responsibility regulations …” Johnson, Order, at 4-5 (Aug. 5, 2009). In so doing, the court rejected “a bright line rule that only duties with date-certain deadlines are non-discretionary for the purpose of citizen suits under CERCLA,” and instead looked to legislative history to help determine whether EPA’s duty to promulgate regulations by a particular date was non-discretionary. Id. at 5.
To maintain a claim that EPA has “unreasonably delayed” its duties under CERCLA, the court held that plaintiffs may continue to press their claims under another statute, the Administrative Procedure Act (APA), but must do so in another court. The court stated, “plaintiffs may bring an APA claim in the Court of Appeals for the D.C. Circuit alleging EPA unreasonably delayed in promulgating the financial responsibility regulations required under Section 108(b).” Id. at 6. Unless and until such a litigation is brought and decided, the timeline for financial assurance requirements under CERCLA will remain unclear.
EPA that although Section 108(b) requires EPA to promulgate
financial responsibility regulations and incrementally impose such requirements, Section 108(b)
June 2, 2009
Earlier this year, the Private Environmental Law Enforcement Act (“PELEA”) was introduced in both the New York State Senate and Assembly (S. 1730, A. 4272). The bill was passed in the Assembly and it is now being considered by the Senate. Unlike past years where similar proposals met a chilly reception in the Republican-controlled State Senate, this year the proposed legislation is getting serious consideration by the Democratically-controlled State Legislature.
The legislation, if enacted by the legislature and signed into law by Governor Patterson, would substantially increase access to New York courts by private citizens seeking to bring actions against parties alleged to be in violation of various state laws, regulations or permit requirements, or to enforce against a violation of an administrative or court order requiring remediation of an inactive hazardous waste disposal site. Notably, the current PELEA bill would relax the requirements for standing, granting the right to initiate such litigation to “any person who has suffered or may suffer an injury in fact, regardless of whether such injury is different in kind or degree from that suffered by the public at large.” That is a significant departure from the existing law which requires that a plaintiff demonstrate that it has suffered an injury different in kind or degree from that suffered by the public at large, and a significant difference between federal citizen suit statutes, which generally do not have a relaxed standing requirement.
Prospective plaintiffs would be required to provide notice to the alleged violator, the Commissioner of the State Department of Environmental Conservation (“DEC”) and the Attorney General at least 60 days prior to initiating litigation. However, such notice requirement may be waived if the party can demonstrate a “substantial and imminent hazard to the environment.” Private enforcement actions are prohibited if DEC or the Attorney General is already prosecuting an action for the alleged violation, has reached a settlement or decision in such an action, or is seeking remediation of the site at issue.
The Act would require judicial approval of all settlements and only after notice has been provided to all parties, DEC and the Attorney General. The Act specifically provides for the recovery of costs and “reasonable” attorneys’ fees and expert witness fees by the prevailing party. Although prevailing defendants may also recover costs and fees, they may only do so by motion showing that the action was frivolous and their recovery is capped at $10,000. We will keep you posted to the extent there are further developments in the legislature regarding this potential game changer environmental litigation in New York.
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