United States: Protect Your Company from Waste Liability

Written by: Viggo C. Fish, McLane Middleton

Question: My company is purchasing real estate, and we are concerned there may be existing environmental contamination on the property. What steps can we take to protect ourselves from liability?

 Answer:  Conducting environmental due diligence correctly is essential to protect purchasers of potentially contaminated commercial properties from possible liability far exceeding the value of the property. Strict hazardous waste regulation exists at the federal, state and, sometimes, even the municipal level.

Under both the U.S. Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly known as Superfund, and corresponding state law, owners of contaminated properties are liable, without regard to fault, for environmental conditions on the property, whether or not the owner was involved in any way in the initial release of the contamination. There are, however, steps prospective purchasers can take to limit this liability.

Hazardous waste laws allow purchasers of potentially contaminated property to conduct the necessary level of investigation, and, if performed correctly, limit their liability.

For example, the Superfund All Appropriate Inquiry (AAI) rule provides for certain limitations on liability of a so-called “innocent purchaser” if such an investigation is completed before the acquisition.

The innocent purchaser provision allows a purchaser who, under certain circumstances, did not know and “had no reason to know” that the property was contaminated to avoid later Superfund liability. Similar rules apply to state hazardous waste liability. Importantly, to avoid that liability, the purchaser must be able to establish it “carried out all appropriate inquiries … into the previous ownership and uses of the facility in accordance with generally accepted good commercial and customary standards and practices.”

Careful compliance with AAI requirements can be used later to support the “innocent landowner” defense to liability of the new owner. The burden of proof is on the purchaser to establish it is entitled to this and other such landowner liability defenses.

The key element of proof is the Environmental Site Assessment (ESA).  Buyers of commercial property typically conduct a Phase I ESA to evaluate the potential for contamination in accordance with ASTM Standard E1527-13.

Following the ASTM Standard demonstrates compliance with the EPA’s AAI rule, that protects prospective purchasers of property from liability under CERCLA.  This area of the law is unusually complicated, and it is therefore usually necessary to have the advice and assistance of qualified environmental consultants and environmental legal counsel to assure that the legal and financial protections against hazardous waste liability will actually be available, if needed in the future.

This article was first published in Know the Law, a bi-weekly column sponsored by McLane Middleton, Professional Association.  Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation. 

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About the Author

Vigo C. Fish is an Environmental and Energy Associate in the Administrative Law Department where he assists clients with a wide variety of energy and environmental matters.  Viggo received his J.D., cum laude, and Master of Energy Regulation and Law (MERL) degree, magna cum laude, from Vermont Law School (2015), and his B.A. in English from Providence College (2010). While in law school, Viggo worked as a Research Analyst at Vermont Law School’s Institute for Energy and the Environment and as a Clinician in the Energy Clinic. In addition, Viggo worked as a Markets and Policy Intern in the National Renewable Energy Laboratory’s Strategic Energy Analysis Center.

When Is a Discharge to Groundwater Subject to the U.S. Clean Water Act? Can You Say “Significant Nexus”?

By Seth Jaffe, Foley Hoag LLP

Whether the United States Clean Water Act regulates discharges to groundwater has been a topic of significant debate.  At this point, there seems to be something of a trend in the cases towards concluding it does, but it remains true that all of the courts of appeal that have addressed the issue have concluded that it does not.  As I have noted, the problem with the “yes” answer is that pretty much all groundwater eventually discharges to surface water, making all such discharges subject to the CWA.  How can that be, given that groundwater is not considered to be “waters of the United States?”

Chief Judge Waverly Crenshaw recently addressed the issue in Tennessee Clean Water Network v. TVA.  Judge Crenshaw’s solution was creative – meaning he pretty much made up out of whole cloth.  That doesn’t necessarily mean that it’s wrong, however.

The case involves coal ash management at the TVA’s Gallatin plant.  Some of the – unlined – ponds directly abut the Cumberland River.  The plaintiff citizen groups brought claims under the CWA, alleging that TVA was discharging pollutants to the River – via groundwater – without an NPDES permit.  They requested an injunction requiring that the TVA remove the coal ash from the ponds, at a cost of $2 billion.

Gallatin power plant, operated by the Tennessee Valley Authority in mid-Tennessee on the north bank of the Cumberland River. Location of the main coal-burning facility is indicated by the icon and label.

Judge Crenshaw was clearly frustrated by an absolutist position on either side.  Clearly, he does not think that any link between groundwater and surface water, no matter how attenuated, can be enough for jurisdiction to attach.  On the other hand, he was also trying to reckon with the specific case in front of him.  As he saw it, the Gallatin ash ponds were a complete environmental mess.  They immediately abut the Cumberland River, clearly a water of the United States.  Can the outcome really be different if the ponds discharge directly to the River than if they discharge to groundwater 10 feet from the River, where that groundwater then discharges to the river?

His solution?

the Court concludes that a cause of action based on an unauthorized point source discharge may be brought under the CWA based on discharges through groundwater, if the hydrologic connection between the source of the pollutants and navigable waters is direct, immediate, and can generally be traced.

I confess I like this solution, because it is practical and will generally yield reasonable results.  It avoids either effectively regulating all groundwater under the CWA or having to conclude that the CWA can’t reach situations such as the Gallatin ash ponds.

The problem?

There’s no textual support for this solution in the CWA.  To me, this test sounds a lot like Justice Kennedy’s “significant nexus in Rapanos.  There too, his position received a lot of support at a practical level, while many commentators noticed that the CWA says nothing about a “significant nexus.”

We all know how well that’s worked out.

This article was first published in Law and the Environment, a blog from Foley Hoag LLP.

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About the Authors

Seth D. Jaffe

A partner at Foley Hoag, Seth Jaffe is recognized by Chambers USA, The Best Lawyers in America and Massachusetts SuperLawyers as a leading… MORE

Kathleen Brill

Kathleen Brill is an Associate practicing in the Administrative Department of Foley Hoag’s Boston office. Before joining Foley Hoag, Kathleen had considerable experience…MORE

 

Canada: BC Court Of Appeal Rules That Contaminated Property Must Be Assessed Using Highest and Best Use

Article by Luke Dineley and Jacob Jerome Gehlen

Borden Ladner Gervais LLP

In a highly anticipated decision for the valuation of contaminated property in British Columbia, the BC Court of Appeal overturned a decision of the BC Supreme Court and set out how contaminated property should be assessed for tax purposes.

The case involved a Brownfield – a contaminated commercial property with potential for economic redevelopment. The property in question had been operated as a retail gas station, automobile dealership, and repair shop. The soil on the property was contaminated, and the contamination had spread to neighbouring properties. The owner of the property was in considerable financial distress. In addition to tax arrears, legal bills, and accounting bills, she was defending a claim from the owner of a neighbouring property. She therefore arranged to sell the property to this owner through a share purchase agreement for $42,363.24, which was sufficient to cover her debts. She also obtained a full indemnity from any legal liabilities she might have in the future regarding the contamination. The existing structure on the property was renovated and converted into income-producing multi-tenant commercial retail units.

Abbotsford, British Columbia

In 2013, the property was assessed for taxation purposes.

The assessor had valued the land and improvements at $975,000. The property owner, Victory Motors (Abbotsford) Ltd. (“Victory Motors”), appealed, and the Property Assessment Review Panel reduced that assessment to $500,000. Victory Motors appealed to the Property Assessment Appeal Board (“Board”), claiming the property had no value. The Board reinstated the original assessment. The owner appealed again, to the Supreme Court of British Columbia. That court found that the Board had erred in law, and remitted the matter to the Board for reconsideration. The Assessor appealed that decision.

The Court of Appeal allowed the Assessor’s appeal and restored the Board’s decision.

The issue before the Court was this: how does one properly assess the value of contaminated land for taxation purposes? The assessor determined that because renovation into a two-storey structure would require remediation, the best use of the property was as it currently stood: a one-storey commercial structure. The assessor’s estimate did not otherwise take into account the presence of contamination. Their approach is known as the “income approach,” whereby a property’s value is determined according to the subject property’s highest possible annual net income. The Board agreed with the assessor’s method and ultimate evaluation.

The Supreme Court, however, held that the Board had erred in law. The chambers judge found that the assessor had ignored the property’s brownfield status, which any potential buyer would have in mind as a risk. The chambers judge further held that the land should be valued not according to value for the present owner, but according to the market in accordance with the BCCA’s decision in Southam Inc. (Pacific Newspaper Group Inc,) v. British Columbia (Assessor of Area No 14 – Surrey/White Rock), 2004 BCCA 245 [Southam]. Because there was no evidence a competitive market for the property existed, the Board’s decision was therefore unreasonable.

However, after the BCSC decision was released, a five-judge division of the BCCA overturned Southam in Assessor of Area #01 – Capital v. Nav Canada, 2016 BCCA 71, leave to appeal refused [Nav Canada]. Nav Canada supports the Board’s income-based approach.

Applying Nav Canada, the Court of Appeal allowed the assessor’s appeal and restored the Board’s decision. The Court applied the “highest and best use” principle of assessment, and found that a multi-tenant retail building was the “best use” for the purposes of assessment. The Court held: “that property has value to its current owner can be a sufficient basis on which to determine its value.” In Nav Canada, the BCCA had held that even where there was no other potential purchaser, “one must regard the owner as one of the possible purchasers.” The Court in this case agreed, and held that “when, for whatever reason, there is no market for a property that has value to its owner, that owner can serve as a proxy for a competitive market.”

Going forward, property owners should be aware that even though there are no purchasers lining up to bid for a brownfield, that property may still be assessed at a high value for taxation purposes.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

About the Authors

Luke Dineley is a partner in both our Insurance and Tort Liability Group and Environmental Law Group in Borden Ladner Gervais LLP‘s Vancouver office. Luke focuses his practice on civil litigation, with an emphasis on insurance and tort law, and environmental law.  In the area of environmental law, Luke’s experience includes representing and advising clients on a wide variety of contaminated site issues relating to both commercial and residential properties — including cost-recovery actions on behalf of plaintiffs and defendants. In addition, Luke has represented and advised major companies on environmental regulatory compliance, emergency spill responses, and environmental prosecutions. Luke is also an executive board member of the British Columbia Environmental Industry Association and frequently publishes and speaks in the area of environmental law.

 

Jacob Jerome Gehlen is an articling student at Borden Ladner Gervais LLP‘s Vancouver office. He has a Juris Doctor law degree from the University of Toronto and a Bachelor’s degree from McGill University.

Canada: Managing Prosecution Risk When Regulators Issue Permits or Orders

Article by Stanley D. Berger

Fogler, Rubinoff LLP

A recent decision from the Yukon Territorial Court is a reminder of how important communication between the regulator and the regulated can be. At the same time, perhaps as an illustration of the power of fate, at least in a narrow set of circumstances, communication may make no difference at all. In R. v. Cobalt Construction Inc., released September 14, 2017 the sole shareholder/director and his road construction company were charged with failing to provide a detailed decommissioning plan in accordance with the conditions of a permit for a facility designed to accept, store and treat dirt contaminated with petroleum hydrocarbons. The defendants failed to establish a due diligence defence to the charges because of poor communication with the authorities, but were acquitted anyways because it was impossible for them to comply given the weather conditions during the time frame for compliance.

Cobalt Construction Inc. Vehicles (Credit: Brian Boyle/CBC)

The regulator’s plan required sampling results be obtained after contaminated piles of dirt were tilled as configured. The soil was to be mixed two weeks before the samples were taken for analysis. The sample results would then inform further elements of the plan including identification of an appropriate receiving facility. The defendant director testified that it would have been impossible to till the soil as required within the time frame set out by the regulator because snow on the ground would have prevented use of the excavator and the ground would have been frozen requiring a ripper to be used to break up the ground, thereby destroying the configuration of the piles. The defendants had in the initial plan set out dates for sampling beyond the time frame required by the regulator, but failed to offer any explanation as to why the sampling could not be done within the imposed time frame. Further, the defendants at no time sought an extension of time for performing the sampling. The Crown prosecutor argued that the authorities were under no obligation to notify the defendants that their initial plan was insufficient to satisfy the regulatory requirements. The Court observed that the more detailed the decommissioning plan provided, the more likely fairness would demand notification by the authorities of the deficiency and an opportunity to correct it. Conversely, the less detailed the plan, the less likely fairness would demand notification. “To decide otherwise would mean that a defendant could evade responsibility and delay consequences simply by making a cursory attempt at compliance.” The Court suggested that if the defendants had fleshed out the plan and included options for receiving facilities and restoration that would be contingent on the sampling results, this would trigger notification by the regulator that the plan was deficient. However, the initial plan provided was so clearly and objectively deficient on its face that the regulator had no obligation to notify the defendants that the plan did not comply and did not further require the authorities to give the defendants an opportunity to rectify the deficiencies prior to laying charges. The Court consequently rejected the defence of due diligence. Nevertheless, the Court acquitted the defendants, accepting the defence of impossibility, notwithstanding the absence of due diligence.

 The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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About the Author

 Stanley Berger is certified by the Law Society of Upper Canada as a specialist in environmental law.  He was called to the Ontario Bar in 1981. He joined the law firm of Fogler Rubinoff on July 4 2013.  Stanley was the founder of the Canadian Nuclear Law Organization and served as its President between 2008-2015, and remains a board member.  He is also is a former President of the International Nuclear Law Association.  He has taught nuclear law for the Nuclear Energy Agency in France and is an adjunct professor for York University’s Professional Master’s Degree in Energy.  Stanley is the author of a quarterly publication entitled “The Prosecution and Defence of Environmental Offences” and edits an annual review of environmental law.

Stanley represents suppliers and operators in the nuclear industry on nuclear liability, regulatory and supply chain issues. He provides legal advice to the Nuclear Waste Management Organization. Other clients include the CANDU Owners Group and a large Ontario municipality. His environmental practice includes litigation before courts, boards and tribunals, as well as solicitor’s work on behalf of renewable energy companies, landowners and waste management entities. He represented a First Nation on regulatory matters relating to a renewable energy project. His practice also includes the protection of proprietary information on applications before Ontario’s Freedom of Information and Privacy Commission.

This article was originally published on the Fogler, Rubinoff LLP website.

Technology to prevent rail disasters is in our hands

Author: Chris Bachmann, Assistant professor, Department of Civil and Environmental Engineering, University of Waterloo

As the trial of the 2013 Lac-Megantic rail disaster begins, new policies and practices that aim to employ better technology could help avoid similar disasters in the future.

The Transportation Safety Board (TSB) found more than 18 distinct causes and contributing factors in the Lac-Megantic derailment investigation, which makes the likelihood of this type of accident seem nearly impossible.

An unattended 74-car freight train carrying crude oil ran away and derailed, resulting in the deadly fire and explosion in Lac-Mégantic, Quebec, in July 2013. (Photo Credit: CBC)

Yet other derailments in Canada involving dangerous goods would soon follow in 2014 in Plaster Rock, N.B. and Clair, Sask., and two incidents in 2015 in Gogama, Ont.

This suggests that we must be mindful of the connection between human interactions and technology and how each will continue to underlie many causes and contributing factors of future incidents.

As a civil engineering professor who researches transportation infrastructure, dangerous goods and risk, I see several new developments and changes to technology and policy that can help to reduce future accidents.

Safer tank car standards

The type of tank cars involved in the Lac-Megantic accident (“Class 111”) were known to be vulnerable to failure, even in low-speed accidents (e.g., Cornwall, Ont. in 1999).

After Lac-Megantic, Canada and the United States developed a more robust tank car standard, Class 117. This new standard features improved puncture resistance, structural strength and fractural resistance.

Despite these improvements, Canadian and U.S. regulations will still allow Class 111 tank cars to be used for the transport of certain dangerous goods until mid-2025.

Even so, Canada accelerated the phase-out of the older Class 111 tank cars from being used for crude oil service in Canada as of Nov. 1, 2016, under Protective Direction 38.

Enhanced braking

In addition to new tank car standards, the U.S. is requiring enhanced braking standards on trains carrying flammable goods.

Any train with a continuous block of 20 tank cars loaded with a flammable liquid, or 35 or more tank cars loaded with a flammable liquid dispersed throughout a train, must have a functioning two-way end-of-train (EOT) device — an electronic unit that can be mounted on the end of a freight train instead of a caboose — or a distributed power (DP) braking system, which spreads braking across different points throughout a train.

Furthermore, any train with 70 or more loaded tank cars containing flammable liquids travelling at speeds greater than 48 km/h must be operated with an electronically controlled pneumatic (ECP) braking system by May 1, 2023.

In short, these technologies enable more controlled braking behaviour through a more responsive and uniform application of brake pressure. Benefits would include shorter stopping distances, lower risks of derailment and lower pile-up effects in the event of a derailment.

More information sharing

Technology also allows more information sharing for better decision-making. For example, Protective Direction No. 36 in Canada requires railways to provide municipalities with dangerous goods reports, including information on the number of unit trains, percentage of railway cars transporting dangerous goods, information on their nature and volume and number of trains.

This information is intended to inform emergency planning and responses.

The U.S. is also requiring more accurate classification of unrefined petroleum-based products to ensure proper classification, packaging and record-keeping through a documented sampling and testing process. This information is to be made available to the Department of Transportation upon request.

Human factors

The technology to prevent rail disasters is in our hands — just as it was in 2013. While these and future technologies are likely to reduce the risks of transporting dangerous goods across Canada and the United States, the interactions between humans and other elements of the system — the “human factors” — will remain predominant.

As we now know in the Lac-Megantic accident, the train carrying 7.7 million litres of crude oil sped toward the small Quebec town at 104 km/h before derailing, killing 47 people in the resulting fire and explosions on July 6, 2013.

Hours before derailing, the train was parked and left running on the main track in Nantes, Que., awaiting departure. But shortly after the engineer parked the train, a locomotive engine caught fire and was turned off by the Nantes fire department.

Without power from the running locomotive engine, air slowly leaked from the air brake system. An insufficient number of handbrakes were applied and the train eventually began rolling downhill on its final journey toward Lac-Megantic.

Some of the causes and contributing factors in the Lac-Megantic rail disaster were not technical failures so much as they were failures of humans to properly interact with technology: To properly maintain a locomotive engine, to have knowledge of interactions between locomotive engines and air brake systems and to properly set and test the effectiveness of handbrakes.

Although technical standards were less stringent in 2013, technology did not fail us. In many of the causes and contributing factors of Lac-Megantic, it is evident that we failed to understand and interact with our technology.

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This article was originally published on The Conversation. Disclosure information is available on the original site. To read the original article:

https://theconversation.com/technology-to-prevent-rail-disasters-is-https://theconvers

About the Author

Chris Bachmann is an Assistant professor, Department of Civil and Environmental Engineering, University of Waterloo.  His research interests include the interaction between transportation and economics, trade, energy, transportation network resiliency/criticality/robustness/vulnerability, risk, dangerous goods movement, transport economics, transport project and policy evaluation.

Canada: Environmental Review Tribunal gives Ministry Broad Preventative Powers over Migrating Contamination

Article by Stanley D. Berger, Fogler, Rubinoff LLP

On September 1, 2017, the Ontario Environmental Review Tribunal in the matter of Hamilton Beach Brands Canada Inc. et al. v. the Director, Ministry of the Environment and Climate Change made a preliminary ruling that the Director had jurisdiction to make an order under s.18 of the Ontario Environmental Protection Act (Ontario EPA) requiring a person who owns or owned, or has or had management or control of a contaminated undertaking or property to delineate contamination that had already migrated to off-site properties.  The property in question, formerly a small-appliance manufacturing business, was contaminated and the various contaminants were of concern to the Ontario Ministry of the Environment and Climate Change, having migrated to other Picton residential, commercial and institutional properties where they might be entering nearby buildings by vapour intrusion.  Section 18 of the Ontario EPA provides that the Director may make orders preventing, decreasing or eliminating an adverse effect that may result from the discharge of a contaminant from the undertaking or the presence or discharge of a contaminant in, on or under the property.  The Director’s Order was challenged on three grounds:

  1. The adverse effect the Director could address was limited to a future event or circumstance (given that s.18 is prospective and preventative);
  2. The adverse effect had to relate to the potential off-site migration of a contaminant that was on an orderee’s property at the time the order was made;
  3. The order could require work only on site but not off-site, to address the risk of an adverse effect.

The Tribunal rejected all three arguments, reasoning that adverse effects resulting from contamination were frequently ongoing rather than static, with no clear line between existing and future effects.  The Tribunal looked to the purpose of the Ontario EPA which was to protect and conserve the natural environment and found the orderees’ arguments were inconsistent with this purpose.  Contamination and adverse effects were not constrained by property boundaries and therefore it was immaterial whether the contaminant was on the orderee’s property at the time the order was made. Finally, the list of requirements that could be ordered under s.18(1) EPA included off-site work.

 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

About the Author

Stanley Berger is certified by the Law Society of Upper Canada as a specialist in environmental law.  He was called to the Ontario Bar in 1981. He joined the law firm of Fogler Rubinoff on July 4 2013.  Stanley was the founder of the Canadian Nuclear Law Organization and served as its President between 2008-2015, and remains a board member.  He is also is a former President of the International Nuclear Law Association.  He has taught nuclear law for the Nuclear Energy Agency in France and is an adjunct professor for York University’s Professional Master’s Degree in Energy.  Stanley is the author of a quarterly publication entitled “The Prosecution and Defence of Environmental Offences” and edits an annual review of environmental law.

Stanley represents suppliers and operators in the nuclear industry on nuclear liability, regulatory and supply chain issues. He provides legal advice to the Nuclear Waste Management Organization. Other clients include the CANDU Owners Group and a large Ontario municipality. His environmental practice includes litigation before courts, boards and tribunals, as well as solicitor’s work on behalf of renewable energy companies, landowners and waste management entities. He represented a First Nation on regulatory matters relating to a renewable energy project. His practice also includes the protection of proprietary information on applications before Ontario’s Freedom of Information and Privacy Commission.

This article was originally published on the Fogler, Rubinoff LLP website.

Canada: Oil Spill Liability – Kawartha Lakes Continues

By Donna Shier, Partner and Certified Environmental Law Specialist, Joanna Vince, Senior Associate and Raeya Jackiw, Student-at-Law, Willms & Shier

Background

In the most recent decision in the ongoing Kawartha Lakes saga, the Superior Court of Justice found homeowner Mr. Wayne Gendron partly responsible for an oil spill that destroyed his lakeside property.  The Court also found Mr. Gendron’s fuel distributor liable for a portion of the costs.  This decision serves to warn homeowners that a distributor’s delivery of fuel does not mean that their tanks are safe. It also cautions fuel distributors that they may be liable for spills brought about by a homeowner’s negligence.

The Facts

Thompson Fuels (“Thompson”) supplied 700 liters of fuel oil to two tanks in Mr. Gendron’s basement.  Mr. Gendron had installed the fuel tanks himself without proper shut off valves, contrary to industry standards.

During a period of financial difficulty, Mr. Gendron filled these fuel tanks with less expensive stove oil.  The stove oil introduced water and microbes into the tanks, causing the tanks to corrode.  When Thomspon delivered the fuel oil one of the tanks leaked, spilling approximately 600 liters.

In the hours following the fuel delivery Mr. Gendron tried to manage the spill on his own by collecting what he believed to be all of the leaking oil in Tupperware containers.  Approximately 24 hours later, Mr. Gendron called Thompson to complain that it had not delivered his entire shipment of fuel oil – he was short about 600 liters.  Mr. Gendron never called to report the spill to the MOECC’s Spills Action Centre hotline.

The fuel oil migrated under Mr. Gendron’s house, through the City of Kawartha Lake’s drainage system, and into nearby Sturgeon Lake. The Ontario Ministry of the Environment and Climate Change (MOECC) ordered Mr. Gendron and his wife to “ameliorate the adverse effects caused by the discharge of the furnace oil” and “restore the natural environment… to the extent practicable.”  Mr. Gendron began remediation of the contamination of his property and the contamination of Sturgeon Lake.

Early remediation efforts were complicated by the frozen lake and soil. Mr. Gendron’s personal insurance was rapidly exhausted.  His insurer eventually refused to fund further off-site remediation of Sturgeon Lake.

The remediation efforts cost nearly $2 million  and required the demolition of Mr. Gendron’s home.

Sturgeon Lake, Kawatha Lakes Region, Ontario

The City’s MOECC Order

The MOECC ordered the City of Kawartha Lakes to clean up any fuel oil remaining in the City’s culverts and sewers that could re-contaminate Sturgeon Lake.  The City appealed the order first to the Environmental Review Tribunal, then to the Divisional Court, and ultimately to the Ontario Court of Appeal, losing each time. (See our previous article on the Court of Appeal’s decision here.)

Environmental Protection Act Claims

Using its powers under the Ontario Environmental Protection Act (“EPA”), s. 100.1 the City ordered compensation for its remediation costs from Mr. Gendron, Thompson and the Technical Standards and Safety Authority (“TSSA”).  Mr. Gendron, Thompson and the TSSA appealed the order to the Environmental Review Tribunal.  Thompson and the TSSA settled with the City and withdrew their appeals.  Mr. Gendron’s appeal was unsuccessful and he was required to pay more than $300,000 of the City’s costs.  Mr. Gendron then brought a claim for contribution and indemnity against Thompson under EPA, s. 100.1(6).  In this most recent case, the Court found that Mr. Gendron could not make out his EPA claim because ownership and control of the fuel oil had transferred to him when the fuel oil was delivered to him by Thompson.  Mr. Gendron’s claim for contribution under the EPA was dismissed.

About the Authors

Donna Shier, Partner & Certified Environmental Law Specialist.  With almost 40 distinguished years of experience practicing environmental law, Donna Shier is one of Canada’s leading environmental counsel to major industrial corporations. Donna is also frequently called upon by corporate, commercial and real estate lawyers to assist their clients with environmental legal issues, and provides environmental law expertise to external litigation counsel. Donna is a qualified mediator and is an accredited member of the ADR Institute of Canada. Donna is called to the bar of Ontario.

Joanna Vince, Senior Associate.  Joanna Vince has significant expertise representing a wide range of clients with environmental issues, civil claims and prosecutions, orders and appeals. Joanna was admitted to the bar of Ontario in 2011.  Joanna has a B.Sc. (Hons., High Distinction) in biology and environmental science, and a Certificate in Environmental Studies. Joanna’s knowledge of and commitment to environmental issues was recognized by the University of Toronto, which awarded her the Arthur and Sonia Labatt Fellowship and the Douglas Pimlott Scholarship. Also at the University of Toronto, Joanna assisted with preparing academic papers and books as a research assistant on wind power, carbon taxes and climate change.

Raeya Jackiw, Student-at-Law.  Prior to articling at Willms & Shier, Raeya was a summer student at the firm and conducted legal research on issues in environmental, aboriginal, energy, constitutional, administrative, contract, tort, and civil procedure law. She has a Juris Doctor, Certificate in Environmental Law from the University of Toronto, a Masters Degree in Environmental Science from the University of Guelph, and a Bachelor’s Degree in Environmental Science from Queen’s University.

This article was originally published on the Wilms & Shier website.

Confirming the Chemical Identity

Philip Tackett, a certified HAZMAT responder and a Product Manager at FLIR, discusses its latest tool for chemical identification

 

By Philip Tackett

Civilian and military responders face scenarios ranging from intentional chemical attacks and accidental hazardous material (HAZMAT) releases to natural disasters and environmental monitoring or remediation efforts.  Responders step on-scene with a diverse toolkit – sometimes small and other times extensive.  It is critical to stay familiar with the equipment in the kit, because no single chemical detection tool can provide answers for every scenario.

Colorimetric test kits are one of the most commonly used technologies for quickly collecting presumptive information about a chemical.  They are used to determine if a threat is present and determine its chemical class.  This information is important, but knowing the exact identity of a chemical can inform a safer response.  True chemical identity can provide information to responders and law enforcement officials beyond the initial threat, and lead to further discoveries to further safeguard the public.

Griffin G510

While some detectors only indicate the presence of a chemical, others specifically detect hazards in the presence of a complex chemical background, like a gas chromatograph mass spectrometer (GC/MS).  GC/MS is an incredibly sensitive and highly specific tool commonly used in laboratory environments.  It can sense trace level chemicals other equipment can’t, while also providing the ability to positively identify the chemical.  But chemical emergencies don’t just happen in laboratories – they can happen anywhere.

Real-time chemical detection and identification in the field is critical to the Chemical, biological, radiological, nuclear, and explosives (CBRNE) defense or HAZMAT response mission.  Confirmatory chemical identification enables responders to mitigate a threat and protect people and the environment from harm.

The most challenging aspects of taking gold-standard technology like GC/MS into the field is survivability in harsh environments and ease of use.  Significant technological advancements have led to the development of the FLIR Griffin G510 person-portable GC/MS system.  Its lab-quality detection performance, simple-to-use interface, and rugged construction are ideal for high-consequence response missions.

Response missions take place in complex environments that the GC/MS must withstand.  The Griffin G510 is completely self-contained in a 36-pound device, including batteries, carrier gas, vacuum system, injector, and heated sample probe.  It is also the first IP65-rated portable GC/MS.  This means it’s dust-tight and spray-resistant, which adds flexibility to decontamination procedures.  There is no 40-pound external service module like other portable GC/MS systems and no 20-pound external pump under the bench like those seen in a laboratory.  Batteries last up to four hours and are hot swappable, should the mission extend longer than expected, which eliminates the need for a power generator.  The Griffin G510 is designed from the ground up to operate outside of the lab.

Griffin G510 syringe injection

Hazmat technicians will dive into using the features that deliver lab-quality analysis.  First on-scene operators will appreciate that they don’t need a Ph.D. to use it.  Basic operator training is completed in only two hours, while expert training can be completed in a single day.  The user interface truly sets it apart from other portable GC/MS systems.  It’s streamlined design and guided controls help the user select the mode of operation.  First responders must perform quickly and with limited dexterity when wearing required PPE.  They are responsible for sample and data collection, and in some cases, real-time decision making.  The G510 alerts the operator with visual alarm confirmation both on the handheld probe, as well as the on-board 9” touchscreen.  The large touchscreen can be operated by a responder while wearing full personal protective equipment (PPE).

Hazmat responders can use the Griffin G510 to analyze all phases of matter (solid, liquid, gas). Its integrated survey mode capability identifies vapor-phase chemical threats within seconds.  Its integrated split/splitless liquid injector enables responders to perform direct injection of organic liquids – an industry first.  This same injector also accepts other sampling tools, including solid-phase microextraction (SPME), off-the-shelf headspace analyzers, and the Prepless Sample Introduction (PSI) Probe.  The PSI-Probe directly accepts solid samples in their native form (such as soil and water-based materials).  The Griffin G510 reduces the burden of sample preparation for the operator and provides ultimate flexibility as the daily mission changes.

Hazardous environments demand the ultimate toolbox include confirmatory instrumentation like GC/MS. The Griffin G510 portable GC/MS redefines performance, ease of use, and value for the responder toolkit.

Griffin G510 – checking readout

CERCLA Trumps As-Is Sales

By Steven L. Hoch, Attorney, Clark Hill

A federal court in Alaska assessed responsibility against the City of Fairbanks (City) for remediation costs found necessary to clean up property it previously owned.  The court concluded that the City should have mitigated the problem or at least warned the purchaser about the contamination, even though the property was sold “As-Is”.  Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) liability is assessed without reference to cause.  Further, the court said that numerous courts have held that CERCLA liability cannot be defeated by contract, unless specifically and clearly addressed in the contract language.

In Gavora, Inc. v. City of Fairbanks , Case No. 4:15–cv-00015-SLG, BL 256894 (D. Alaska July 25, 2017), the City owned two parcels of land and Gavora held leasehold on one of the parcels. For a considerable length of time, a dry cleaning business operated in the shopping center located on their parcel.  Eventually, the contamination drew the attention of the State of Alaska, who told the City about the contamination and that they suspected the contamination migrated from that parcel to the other.  While the State did not verify the findings, the district court found it clear that the City knew or should have known that the first parcel was also contaminated.

Fairbanks Mall – Satellite Image showing borehole and monitoring well locations as well as PCE contamination levels

The City sold the first parcel to Gavora on an “As-Is, Where-Is” basis.  This sale occurred 10 years after the City first learned of the contamination on the second parcel.  When the purchase took place, Gavora did not perform its own environmental assessment.  Five years later, contamination was discovered on the first parcel owned by Gavora.  Lacking options, Gavora remediated the parcel and sued the City of Fairbanks for contribution.

Even though the sale was “As-Is”, the court nevertheless held the seller liable. Further, the court allocated 55% of the costs to the City and 45% of the costs to the current owner. The court rationalized that this allocation was appropriate because (1) the city knew or should have known of the contamination, yet failed to inform the purchaser; (2) the current owner made substantial corrective action efforts upon learning of the problem whereas the City took no action, and (3) it would be inequitable to hold the current owner responsible for contamination occurring prior to its master lease, but the court could not “effectively apportion the contamination”, but (4) the current owner would obtain a greater benefit than the prior owner from the remediation.

In the final analysis this case affirms that “As-Is” does not exculpate a seller from CERCLA liability, and that not disclosing contamination even when it did not make any representation to the contrary. As this was a district court opinion, it does not have significant legal value, but should not be dismissed out of hand when confronting similar issues.

 

This article was first published on the Clark Hill website.

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About the author

Steven Hoch has over 40 years of experience with both federal and state environmental laws and regulations in the context of permitting, regulatory proceedings, litigation, enforcement actions, water supply, public policy formation, and advice.  His work includes contamination of land and ground and surface water.  Steven has critical experience in the areas of environmental law and the federal and state Safe Drinking Water Acts, Title 23, water supply, and the mechanics of water distribution.  His experience also extends to groundwater modeling and water quality testing.  He also has significant experience in hazardous substances and waste handling practices, remediation, soil erosion, and claims of toxic exposures

Steven has in-depth experience working with numerous public water systems throughout the state.  He has also established a sterling reputation for his work with the Regional Water Quality Control Boards, the Department of Toxic Substance Control, and the United States Environmental Protection Agency both in the administrative and litigation.  His clients range from the country’s largest municipal water agency to individuals selling or buying contaminated sites.

Steven often takes primary roles in many environmental trials, and has served as liaison counsel for groups or parties at the request of fellow counsel.  He has been involved in several landmark cases, including acting as PG&E’s counsel in the case made famous by the movie Erin Brockovich.

 

The Ninth Circuit Reiterates That “Knowingly” Handling Hazardous Waste Without a Permit Is a General Intent Crime Under RCRA

By Richard E. Stultz

Max Spatig was convicted of knowingly storing and disposing of hazardous waste without a permit and sentenced by the U.S. District Court for the District of Idaho to 46 months in prison under 42 U.S.C. § 6928(d)(2)(A). See U.S. v Spatig (2017) 2017 WL 4018398.  At trial, Spatig had sought to introduce evidence on his diminished capacity arguing that he did not have the required state of mind for the offense.  The district court, however, granted the government’s motion in limine to exclude all such evidence because § 6928(d)(2)(A) under the Resource Conservation and Recovery Act (RCRA) only required general intent and diminished capacity was not a defense to a general intent crime.

For years, Spatig had operated a business which used paint and paint-related materials.  Over time Spatig had accumulated several used containers of this material, some of which ended up on his residential property in Idaho.  In 2005, the county discovered the several containers and reported it to the Idaho Department of Environmental Quality (DEQ). Working with Spatig, DEQ collected and destroyed most of the containers.  In 2010, Spatig was again found to be storing used containers of paint and paint related materials on another of his properties.  This time the job was too big for local or state authorities so the U.S. Environmental Protection Agency (EPA) was notified.  The U.S. EPA determined that the waste was hazardous and that a cleanup was necessary. The U.S. EPA removed approximately 3400 containers and spent $498,562 on the cleanup.  The EPA charged Spatig with violation of § 6928(d)(2)(A) for knowingly storing and disposing of a hazardous waste without a permit from either DEQ or the U.S. EPA.

Paint cans at a property off the Archer-Lyman Highway near Rexburg, Idaho

Spatig appealed his trial conviction and argued on appeal that § 6928(d)(2)(A) required specific intent.  He also took issue with the district court’s enhancement of his base sentence arguing that the cleanup did not result in a “substantial expenditure.”  The Ninth Circuit Court of Appeals, however, disagreed with Spatig and affirmed the district court.

Under § 6928(d)(2)(A), a person may not “knowingly” treat, store or dispose of a hazardous waste without a permit.  According to the U.S. Supreme Court, “‘knowingly’ merely requires proof of knowledge of the facts that constitute the offense.”  The Ninth Circuit had also held that “knowingly” generally does not require specific intent.  In other words, a defendant’s particular purpose or objective is not required.  The Ninth Circuit previously rejected the argument that § 6928(d)(2)(A) required that a defendant know there was no permit for disposal.  The court held there that “knowingly” only required “that a defendant be aware that he is treating, storing, or disposing of something that he knows is hazardous.”  The court found that RCRA was a public-welfare statute and that “§6928(d)(2)(A) fits within a class of general-intent crimes that protect public health, safety, and welfare.”  Because § 6928(d)(2)(A) only requires general intent, the Ninth Circuit upheld the district court’s exclusion of evidence at trial of Spatig’s state of mind.

Spatig argued that his sentence enhancement was error because the cleanup did not constitute a “substantial expenditure” required under the federal sentencing guidelines (U.S.S.G. § 2Q1.2(b)(3)).  The Ninth Circuit refused to establish a bright-line rule but noted that sister circuits had found that expenditures under $200,000 were “substantial.”  In upholding the district court, the Ninth Circuit noted that in the instant case the $498,562 underestimated the total cost because it did not include the local agencies’ expenditures.

This holding underscores the long-standing general purpose of environmental laws to protect the public welfare. These statutes do not generally require specific intent—only knowing of the act is required.

This article was first published on the Clark Hill website.

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About the author

Richard E. Stultz brings over eighteen years of experience in the environmental, land development and petroleum industries to bear in his practice of law. In addition to his law degree, he also earned a Bachelor of Science in Petroleum Engineering. Richard’s practice is currently focused on environmental litigation.

Richard is experienced in law and motion filings and hearings. He is practiced in written discovery and legal research. Richard has even co-written a First Amendment argument submitted before the California Court of Appeal. He is familiar with California’s environmental laws and regulations.

While in law school, Richard interned at the Los Angeles City Attorney’s Office in the Real Property/Environment division. He researched and prepared a key memorandum regarding good will compensation in eminent domain.