May 6, 2013
On April 16, the United States Environmental Protection Agency (“EPA”) took a significant step towards finalizing its long-pending guidance on the evaluation and response to vapor intrusion from contaminated soil and groundwater, releasing an updated draft of the guidance for public comment. The guidance, which EPA first released in draft form in 2002, is anticipated to have significant impacts for the owners, operators, and potential purchasers of sites contaminated by solvents, petroleum, and other volatile organic compounds (“VOCs”), as well as any parties responsible for such contamination.
What sites are at risk of vapor intrusion?
Vapor intrusion, the migration of hazardous vapor from contaminated soil or groundwater into buildings, is of greatest concern at sites contaminated by VOCs , such as the chlorinated solvents perchloroethylene (“PCE” or “Perc”) and trichloroethylene (“TCE”), as well gasoline constituents. Vapor can enter a building because of cracks in the foundation, openings around pipes or electrical wires, and heating and ventilation systems that decrease indoor air pressure, creating conditions that draw in vapor.
How have environmental regulators addressed vapor intrusion in the past?
In response to new evidence of human health risks and potential explosion hazards from vapor intrusion, EPA released draft vapor intrusion guidance under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and Resource Recovery and Conservation Act (“RCRA”) in 2002. At the time, EPA stated that “as the state-of-the-science improves, this guidance will be revised as appropriate.”
Over the following decade, however, the draft guidance was neither finalized nor revised, and individual states began to fill the regulatory gaps left by EPA. New York’s Department of Environmental Conservation (“DEC”) and Department of Health issued their own vapor intrusion guidance, and DEC began a formal re-evaluation of hundreds of contaminated sites – many of which had already been remediated and delisted – for new vapor risks. In December 2009, EPA’s Inspector General reported that the absence of final EPA guidance had “[impeded] EPA’s efforts to protect human health at sites where vapor intrusion risks may occur,” and urged EPA to finalize its 2002 draft.
What changes did EPA propose in its revised vapor intrusion guidance?
In response to the Inspector General report, last month EPA released a pre-publication draft of its final vapor intrusion guidance for public review and comment. The updated document incorporates a number of revisions from the 2002 draft, including:
- A new, online calculator for determining generic and site-specific screening levels –contaminant concentrations where vapor intrusion is believed to present risk and additional investigation or mitigation is warranted;
- New recommendations for preemptive mitigation and early action at certain sites before a full vapor intrusion analysis is complete;
- New guidance on the use of deed restrictions and other institutional controls to restrict land uses or activities that could otherwise result in unacceptable exposure to the vapor intrusion pathway
- A separate guidance document addressing petroleum vapor intrusion from underground storage tanks, which was not covered in EPA’s 2002 guidance.
Who is likely to be impacted by EPA’s new guidance?
EPA’s guidance is specifically addressed to sites being evaluated pursuant to CERCLA and RCRA, and it is expected to influence the scope of remedial investigations, risk assessments, and remedy selection at such sites. Moreover, because many CERCLA sites where remediation is complete must undergo five-year reviews for remedial effectiveness, consideration of vapor intrusion could reveal new public health risks and trigger additional mitigation requirements.
The guidance will also have impacts extending beyond CERCLA and RCRA. Vapor intrusion is an increasingly common topic in environmental due diligence for real estate transactions, and Phase I Environmental Site Investigations often analyze possible vapor intrusion pathways. EPA’s new screening levels and recommended mitigation measures are likely to inform negotiating positions and risk allocation at sites where vapor intrusion is suspected. Vapor intrusion could also give rise to toxic tort liability, with plaintiffs relying upon EPA guidance and other regulatory standards to establish a violation of the defendant’s standard of care. Finally, because vapor intrusion may impose new costs at previously-remediated sites, the guidance could lead more property owners to pursue “reopener” environmental insurance policies covering expenses incurred after a “No Further Action” or “Construction Complete” letter has been issued by state or federal environmental regulators.
How can I submit comments on EPA’s new guidance?
Comments on EPA’s revised vapor intrusion guidance may be submitted online at http://www.regulations.gov/#!docketDetail;D=EPA-HQ-RCRA-2002-0033 through May 24, 2013.
For more information about EPA’s guidance or other issues relating to vapor intrusion, contact Christine Leas or Jonathan Kalmuss-Katz.
June 26, 2012
On June 21, 2012, the Supreme Court ruled in Southern Union Co. v. United States that the Sixth Amendment’s guarantee of a jury trial – and the corresponding requirement that a jury must decide, beyond a reasonable doubt, all facts leading to criminal liability – applies to criminal fines under RCRA. Because the ruling applies broadly to all criminal fines, it may affect criminal enforcement of other federal and state environmental laws as well.
Southern Union had been convicted by a jury of one count of violating RCRA by knowingly storing liquid mercury without a permit. Violations of RCRA are punishable by fines of up to $50,000 per day of violation. The jury’s verdict form stated that Southern Union had unlawfully stored mercury “on or about September 19, 2002 to October 19, 2004” – a period of 762 days – but the jury was not asked to specify the number of days of violation and did not do so. Hence Southern Union argued that the jury had only necessarily found them guilty of one day’s violation, and that increasing the fine above $50,000 would therefore violate a previous Supreme Court decision, Apprendi v. New Jersey, which held that the Sixth Amendment right to a jury trial in criminal cases prohibits a judge from deciding facts that increase a criminal defendant’s maximum potential sentence.
The rule of Apprendi had generally been applied to prison sentences, but courts had reached differing decisions on whether it applied to criminal fines. The trial court in Southern Union decided that Apprendi applied to criminal fines, but that the jury had effectively found a 762-day violation. It calculated the maximum fine for that violation at $38.1 million, and imposed a $6 million fine and a “community service obligation” of $12 million. The appeals court affirmed the amount of the verdict, but held that Apprendi did not apply to criminal fines.
The Supreme Court reversed, holding that Apprendi applies to criminal fines. Since the jury’s verdict did not specify the number of days of violation, the verdict was limited to a single violation, with a maximum penalty of $50,000. Justices Breyer, Kennedy and Alito dissented from the Court’s decision.
This ruling has potentially broad implications for criminal prosecution of environmental violations, since several other environmental statutes – including the Clean Water Act, the Toxic Substances Control Act, and numerous provisions of the New York Environmental Conservation Law – include criminal fines that are keyed to the number of days of violation. Any prosecution under those statutes will now require that the jury decide, beyond a reasonable doubt, the number days of violation committed by the defendant. Those statutes also provide for civil penalties, including daily fines, which are not covered by the 6th Amendment or affected by the Supreme Court’s ruling.
For further information, contact Dan Riesel or Michael Lesser.
April 26, 2012
Earlier this month, a federal court in New Jersey denied Lockheed Martin Corporation’s (“Lockheed Martin’s”) motion to dismiss state and federal claims alleging personal injuries and reduced property values arising from soil vapor intrusion. Leese v. Lockheed Martin Corp., No. 11-5091, 2012 U.S. Dist. LEXIS 50963 (D.N.J. April 11, 2012). This decision allows the case to proceed to discovery and a potential trial on the merits. This case and others like it highlight the importance of considering vapor intrusion impacts in property and corporate transactions, especially when there are known or suspected off-site contaminant plumes. In addition to private party litigation, vapor intrusion is increasingly capturing the attention of regulators in New York and elsewhere, causing them to reopen remediations that were previously thought to be complete.
In Leese v. Lockheed Martin Corp., plaintiffs Michael and Ashley Leese and their minor children allege that groundwater under their property and indoor air within their home are contaminated with trichloroethylene (“TCE”) and tetrachloroethylene (“PCE”) released from defendant Lockheed Martin’s neighboring property.
Lockheed Martin remediated TCE contamination at its property under an agreement with the New Jersey Department of Environmental Protection (“DEP”), and, at DEP’s request, conducted near-slab and sub-slab soil vapor testing at surrounding residences. Lockheed Martin’s testing revealed elevated levels of PCE beneath the Plaintiffs’ property, and the Plaintiffs’ subsequent air quality testing detected PCE in the basement and first floor of their home. Plaintiffs filed suit under the New Jersey Spill Act, the New Jersey Water Pollution Control Act, the Resource Conservation and Recovery Act, and New Jersey common law under theories of nuisance, trespass, strict liability and negligence.
In support of its motion to dismiss, Lockheed Martin argued, among other grounds, that there was no possible connection between TCE in the groundwater underneath the Plaintiff’s home and any residential exposure. The Court rejected that claim, citing the Environmental Protection Agency’s finding that “TCE can be released into indoor air from … vapor intrusion … and volatilization from the water supply.”
Viewing the facts in a light most favorable to the Plaintiffs, the Court found that Plaintiffs had given Lockheed Martin sufficient notice of their claims and raised a reasonable expectation that discovery would reveal evidence to support all of their claims. As the Court noted, depending on the nature of the facts unearthed throughout the discovery process Plaintiffs may still face a summary judgment motion by Lockheed Martin. Regardless of the ultimate outcome of this case, this decision demonstrates the courts’ willingness to recognize vapor intrusion as a legitimate basis for environmental claims, and serves as a valuable reminder to be cognizant of potential liability arising from vapor intrusion.
Sive, Paget & Riesel represents a number of property owners on matters relating to vapor intrusion. For more information on this topic, please contact Christine Leas, Jeffrey Gracer or Michael Bogin.
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.
January 22, 2010
The promulgation of a proposed rule regulating coal ash has been delayed amid numerous meetings between industry representatives, environmental groups and federal agencies. On October 16, 2009, the Environmental Protection Agency (“EPA”) sent its proposed coal ash rule to the Office of Management and Budget (“OMB”). EPA Administrator Lisa Jackson had promised that a proposed coal ash rule would be published by the end of 2009. The rule may regulate coal ash as a “hazardous waste” under the Resource Conservation and Recovery Act (“RCRA”). However, the “noteworthy” number of meetings between industry groups, environmental groups and OMB, and the over 2,300 pages of documents OMB must review, have delayed the release of a proposed rule.
Industry representatives believe that regulating coal ash under RCRA would negatively impact companies who produce the ash as well as companies who beneficially reuse it (e.g., as structural fill or agricultural uses). Tom Addams, executive director of the American Coal Ash Association, a utility industry group, stated “[a] hazardous determination would make builders reluctant to use coal ash not because of what it may contain, but because of tort activity. If litigation was filed on a national basis, it would be mind-boggling to see what the defense costs were.” Industry representatives also believe that the toxic materials in coal ash are not in high enough concentrations for the ash to be regulated as “hazardous.”
Environmental groups want coal ash to be regulated as a “hazardous waste” because it contains mercury, lead, and other potentially toxic constituents. Representatives of these groups are concerned that industry may influence the outcome of the proposed rule.
The coal ash proposal could be published in the coming weeks.
More information about the meetings between industry, environmental groups and OMB is available at the OMB website.
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.
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. ”
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