Transport Canada amends TDGR – Marine Requirements and other miscellaneous changes

As reported by the Compliance Center, the December 13, 2017 edition of the Canada Gazette II contains the expected rewrite of Part 11 “Marine” requirements of the Transportation of Dangerous Goods Regulations (TDGR). In addition, there are related changes in other parts, as well as some unrelated miscellaneous changes in other areas.

Marine Amendment

The most wide-reaching change, although perhaps of relatively minor significance to the general regulated community, is the replacement of the term “ship” with “vessel”. This, among other changes, is to update the TDGR to current Canada Shipping Act (CSA, and related regulations) terminology. Many aspects of Part 11 related to the CSA had not been updated since 2008.

Note: Interestingly, the referenced definition of “vessel” in the CSA includes all “means of propulsion”:
http://laws-lois.justice.gc.ca/eng/acts/C-10.15/page-1.html#h-2

This differs from the TDGR definitions for road and rail vehicles which expressly exclude “muscle power” as a means of propulsion. 

Other definition changes include elimination of the reference to “short run ferry”, previously defined in TDGR Part 1.3 as operating between points “not more than 3 km apart”. TDGR 1.30 special case exemption now refers only to “Ferry,” but describes within the exemption that it’s applicable to operating between two points “not more than 5 km apart.

The definition of an “inland voyage” now cites the CSA Cargo, Fumigation and Tackle regulations (CFTR):
http://laws-lois.justice.gc.ca/eng/regulations/SOR-2007-128/index.html

; which, in turn, defer to the Vessel Certificate regulations (VCR):
http://laws-lois.justice.gc.ca/eng/regulations/SOR-2007-31/

Other aspects of dangerous goods vessel shipment are also found in these CSA regulations.

One more definition that’s been changed to a citation is the one for a roll-on/roll-off (ro-ro) ship. The vessel is still referred to as a “ship”- since the definition cites the IMDG Code. For those without ready access to the IMDG, the current Ed. 38-16 version reads, in Chapter 1.2 (s. 1.2.1 Definitions):

“…Ro-ro ship (roll-on/roll-off ship) means a ship which has one or more decks, either closed or open, not normally subdivided in any way and generally running the entire length of the ship, carrying goods which are normally loaded and unloaded in a horizontal direction.”

Additional requirements now apply also to ferries regarding passenger vessel limitations, location of shipping documents and incident reporting.

Vessel Restrictions & Exemptions

Schedule 1 Column 8 restrictions regarding carrying DG on passenger vessels is further clarified by TDGR Part 1 sections 1.6 and new special case 1.10.

Gasoline and propane now have a Part 1 special case exemption 1.30.1 to facilitate fuel deliveries and reduce the need for equivalency certificates.

UN3156 is also now permitted in 25 L quantities on passenger vessels.

Mercurous chloride (calomel) is no longer included in the s. 1.46 special case exemption list.

The requirement to mark the flash point on packages with Class 3 contents (s. 4.13) has been removed as it was never an IMDG requirement.

IMDG v. TDGR

Additionally, the often-confusing reference to “Home Trade Voyages” in determining the applicability of the IMDG Code, versus the “standard” TDGR extension of ground requirements, has been replaced by a direct, simplified explanation. Voyages where the vessel (oops – I almost said ship!) is within 120 nautical miles – i.e. 222 km- from shore are considered non-IMDG unless the vessel travels south of the ports of New York or Portland, Oregon, or to another foreign destination. Thus, vessel transport of dangerous goods to St. Pierre and Miquelon (territories of France), despite being within 20 km or so from Newfoundland, require compliance with IMDG.

Inland (mostly “fresh water”) voyages between Canada and other countries – e.g. Great Lakes or rivers to the US – remain excluded from mandatory IMDG compliance. Conversely, vessels registered in Canada but transporting between two foreign destinations, remain under IMDG requirements.

Other Amendments

Changes not directly related to Part 11 topics include correction of some typographical and miscellaneous errors in the TDGR or website html information.

Examples include re-entering the PG II information for UN1790, UN2734 on the website; editing SP 159 to clarify that the new Class 9 Lithium Battery label illustration is only used for labels and not used for placarding purposes – standard Class 9 placards are used (as is the case in air, ocean and US 49 CFR); and updating ICAO references in Part 12.

The Table in 5.16 has been repealed due to the updates in the referenced CSA standards.

Transition:

The changes are effective as of the December 13th CG II publication date and have a transition period of 6 months for mandatory implementation. The CGII document which includes a discussion of the changes in the RIAS (Regulatory Impact Analysis Statement) is found at:

http://canadagazette.gc.ca/rp-pr/p2/2017/2017-12-13/html/sor-dors253-eng.html

 

Brownfield Redevelopment in Western New York

As reported in the Buffalo Law Journal/Buffalo Business First, Gov. Andrew Cuomo designated four Brownfield Opportunity Areas in Buffalo last month, providing another tool for area stakeholders to have the areas developed.

He designated areas in South Buffalo, the Buffalo Harbor, the Buffalo river corridor and the Tonawanda Street corridor.

“These designations will equip Buffalo officials with tools and resources needed to carry out their vision of community revitalization and help turn these blighted properties back into economic engines,” he said. “This is one more reason why Buffalo remains a city on the move.”

Before the designation, the city had to submit plans for the areas, said Michael Hecker, senior associate at Hodgson Russ. “The goal is to find these areas and figure out a way for the state to work with them to help them with long-term planning on how to redevelop the sites.”

It’s a three-step grant process to determine how to revitalize a brownfield area, Hecker said.

“The first step is a pre-nomination study,” he said. “The second is step is nomination and the third is implementation strategy.”

South Buffalo Brownfield Opportunity Area (Credit: Buffalo Urban Development Corporation)

In the pre-nomination phase, a municipality and associated groups look at an area that may have an issue and explore ways to revitalize the area. In the nomination process, funding sources are considered, as well as market trends. And in the third step, implementation of the plan is identified and there’s a thorough accounting of funding sources.

“It’s a wholesome package that the state has developed as a basis to spur economic development,” Hecker said.

The three steps are completed through the New York State Department of State. Once the governor designates a brownfield opportunity area, various programs can lead to more state benefits.

“If you do your redevelopment project through a BOA, there are additional tax credits available,” Hecker said.

“It’s basically the governor recognizing that these areas have spent the time and focus on an economic redevelopment strategy and they should qualify for additional credits to spur redevelopment in these areas.”

He said the designations fit in with the city’s Green Code under Mayor Byron Brown.

“(BOAs) are a central component of our city’s Green Code initiative and my administration’s place-based economic development strategy,” Brown said in a statement.

“The State’s approval of the BOAs, created by the city of Buffalo with significant public input, places Buffalo at the forefront of brownfield redevelopment nationally and will further enhance Buffalo’s ability to compete for investment, bringing new life to even more neighborhoods by making use of underutilized properties that create jobs for city residents.”

Some of the areas will need to go through remediation in order to be redeveloped, according to Hecker. For instance, the South Buffalo Brownfield Opportunity Area, which consists of approximately 1,968 acres in an area that was once heavily industrialized by the steel industry, has sites that will require remediation.

Plans for that site include a nine-hole golf course, indoor and outdoor recreation and expansion of the Tifft Nature Preserve.

The Buffalo River Corridor Brownfield Opportunity Area also has long-standing contamination issues. It’s made up of 1,050 acres in the Old First Ward, containing 58 possible brownfield sites.

“One of the main areas of that project is restoration and enhancement of the environmental quality of the river and enhancing waterfront access,” Hecker said.

“Buffalo is lucky in the fact that it has an unbelievable natural resource with water access. Over the last 10 to 15 years, you’ve definitely seen an enhanced focus on trying to leverage that natural resource to be an economic driver. I think the city, to its credit, has done a very good job of doing that. This is just another option for them to utilize that program to benefit it.”

The Buffalo Harbor Brownfield Opportunity Area is 1,045 acres, with six brownfield sites. The area includes waterfront space at both the Inner and Outer harbors.

Assemblyman Sean Ryan said BOA designation will help with future waterfront development.

“Investing in environmental remediation prepares our communities for revitalization and renewed economic activity,” Ryan said. “Contaminated sites along our waterfront have made progress difficult over the years.”

The Tonawanda Street Corridor Brownfield Opportunity Area is 650 acres containing 46 potential brownfield sites. Plans include reconstruction of the Scajaquada Expressway and restoration of Scajaquada Creek.

Hecker said the designated areas represent places where longtime residents can see the potential benefit to redevelopment.

“One of the interesting things to me about these projects is that they really are fully integrated community projects,” he said.

Brownfield funding is available at the federal level through the Environmental Protection Agency, as well, Hecker said.

While the Trump administration has pared back the EPA, Administrator Scott Pruitt has said that brownfields would remain a priority to the agency.

“There hasn’t been any change in that area,” Hecker said.

Pruitt is focused on shifting the responsibility for contaminated sites to states, Hecker said.

“(Pruitt) wants states to work together with the federal government in a limited capacity to manage these things on their own,” he said.

“From a standpoint of economic development, especially with President Trump’s focus on infrastructure, I don’t think this is going to be a major issue unless there are further cuts in the budget. That remains to be seen.”

Canada: Courts Struggle to Mix Bankruptcy and Environmental Law – SCC To Hear Redwater Appeal

Article by John GeorgakopoulosGiselle Davidian and Serin Remedios

Willms & Shier Environmental Lawyers LLP

The Supreme Court of Canada (SCC) granted leave to hear the appeal of Orphan Well Association v Grant Thornton Limited.1 The SCC will reconsider whether trustees and receivers in bankruptcy must remediate wells in priority to the claims of secured creditors.

In April 2017, the Alberta Court of Appeal released its decision in Redwater.2 The Court found that the Government of Alberta’s environmental orders for oil well remediation did not have priority over secured creditors in bankruptcy proceedings.

In upholding the lower court’s decision, set out in our previous update, the Court of Appeal added to the “untidy intersection” between bankruptcy proceedings and provincial environmental law. Both Courts concluded that receivers and trustees were permitted to renounce an insolvent debtor’s interest in its licensed assets while selling valuable licensed assets to maximize recovery for secured creditors.

The decision, as it stands, allows receivers and trustees in bankruptcy to disclaim unprofitable assets and not be required to fulfill certain environmental obligations associated with those disclaimed assets.

Recap

The case revolves around the assets of a junior, insolvent oil and gas producer, Redwater Energy Corporation (Redwater).

Orphan Oil Well

When Redwater’s primary secured creditor began enforcement proceedings under the Bankruptcy and Insolvency Act (BIA), Grant Thornton Limited (GTL) was appointed as receiver and trustee.3 Several of Redwater’s oil wells had costs of remediation exceeding the value of the wells. GTL took control of only 20 of 127 Redwater’s assets and disclaimed the oil wells that had onerous environmental abandonment costs.

Alberta oil and gas legislation requires licensees, including trustees, to comply with “end-of-life” rules for oil wells. Where no one is financially capable of remediating and abandoning a well, the well is designated an “orphan well” under Alberta’s Oil and Gas Conservation Act (OGCA).4/em>

The Alberta Energy Regulator (AER) ordered GTL to remediate the disclaimed oil wells before distributing funds to creditors. When GTL indicated that it did not intend to remediate the wells, AER and the Orphan Well Association (OWA) brought applications asking the court to void GTL’s disclaimer of the non-producing wells and order GTL to comply with AER’s orders. AER argued that Redwater’s insolvency and bankruptcy did not affect Redwater’s environmental obligations and that GTL was legally required to discharge those obligations before paying Redwater’s creditors.

GTL brought a cross-application challenging the constitutionality of AER’s stance on GTL’s environmental obligations and seeking approval of the sale of Redwater’s valuable wells.

At issue was whether AER’s orders were provable claims in bankruptcy and therefore subject to bankruptcy proceedings. If AER’s orders were subject to bankruptcy proceedings, other creditor’s claims would take priority. The practical outcome being that the corporation would likely have no means of satisfying its environmental obligations after settling its obligations to other creditors. The cost of remediating the orphan wells would then fall on the Government of Alberta.

As we previously reported, Alberta Court of Queen’s Bench concluded that the applicable sections of the OGCA and Pipeline Act (PA) frustrate the federal purpose of the BIA of managing the winding up of insolvent corporations and settling the priority of claims against them. Based on the doctrine of paramountcy, the OGCA and PA were inoperable to the extent that they conflicted with section 14.06 of the BIA. This section of the BIA exempts a receiver or trustee from personal liability, allowing a trustee and receiver to disclaim assets, and prescribes the priority of environmental remediation costs.

OWRA and AER appealed the decision.

Court of Appeal Decision

The Court of Appeal upheld the lower court decision. The key issue on appeal was the priority and treatment of environmental claims in bankruptcy, and whether environmental claims were provable claims under section 14.06 of the BIA.

Priority and Treatment of Environmental Claims in Bankruptcy

The Court found that the BIA was amended in 1997 to specifically address environmental claims. The BIA now incorporates environmental claims into the general bankruptcy process, rather than exempting them. Following the test set out in Newfoundland and Labrador v AbitibiBowater Inc., the Alberta Court of Appeal found that AER’s orders were subject to bankruptcy proceedings.5 By refusing to permit the transfer of Redwater’s valuable assets unless funds were set aside for remediation, AER reduced the environmental obligations to “sufficiently certain” monetary claims. Accordingly, AER cannot indirectly interfere with the value of assets in a bankruptcy by placing financial preconditions on the transfer of AER licences.

Constitutional Law Issue

The Court of Appeal held that there was an operational conflict between federal and provincial regimes. The Court found that the provincial regulatory scheme frustrated the purposes of the BIA, which include determining the priority of claims against insolvent corporations. The practical outcome being that GTL did not have to comply with AER’s remediation obligations prior to settling claims of secured creditors.

Nortel and Northstar

The dissenting opinion briefly considered the two leading cases in Ontario on environmental claims in bankruptcy and insolvency: Nortel Networks Corporation (Re) and Northstar Aerospace Inc. (Re).6 In Nortel, the Court found that some of the Ministry of the Environment’s (MOE, as it then was) orders had priority over creditor claims, but in Northstar, the Court found that the MOE’s orders did not have priority.

Implications

The practical implications of Redwater may be far reaching not only for the worlds of bankruptcy & insolvency and oil & gas, but also for the world of director and officer liability.

Will we see more Alberta provincial environmental orders aimed at former directors and officers? In Northstar, after the Court found the MOE’s orders did not have super priority in insolvency proceedings, the MOE issued a remediation order personally against the former directors and officers.7

We will look to the SCC to provide clarity on this important, albeit untidy, area of law.

Footnotes

1 2017 ABCA 124 [Redwater].

2 Ibid.

3 RSC 1985, c B-3 [BIA].

4 Redwater at para 21; Oil and Gas Conservation Act RSA 2000, c O-6, s 70 [OGCA].

5 2012 SCC 67.

6 Nortel Networks Corporation (Re), 2013 ONCA 599 [Nortel]; Northstar Aerospace Inc. (Re), 2013 ONCA 600 [Northstar].

7 Northstar Aerospace, Inc. (Re), 2012 ONSC 4423. Subsequently, on November 14, 2012, the MOE issued a Director’s Order against the former directors and officers personally.

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 authors

John Georgakopoulos resolves complex environmental legal issues for clients, uniquely drawing on his technical knowledge as a former senior environmental scientist with the Ontario Ministry of the Environment and Climate Change. John is called to the bars of Ontario and Alberta.

Giselle Davidian is an associate lawyer practicing in the areas of environmental law, environmental litigation, energy and natural resource law and Aboriginal law.  Giselle draws upon her technical knowledge as a former environmental scientist at a consulting engineering firm to help clients meet their goals.  Giselle is fluent in French and Armenian and has a working knowledge of Italian.  Giselle is called to the bar of Ontario.

Serin Remedios is an associate lawyer practicing environmental litigation as well as environmental, Aboriginal, northern and energy law.  Serin’s past experience in environmental science helps her understand clients’ problems and assist them in meeting their goals.  Serin is called to the bar in Ontario.

This article was first published in the Willms & Shier Environmental Lawyers LLP website.

Innovations in Pipeline Design: Leak-proof technology

By Dema Mamon, M.Sc.Pl, BES and John Nicholson, M.Sc., P.Eng.

In Canada, getting approval to construct an oil pipeline has become increasingly difficult.  Every oil pipeline incident that involves a leak and subsequent clean-up is widely covered in the media,  providing fuel for pipeline opponents that call an end to the construction of new pipelines.

Abacus Data Inc., an Ottawa-based research firm, has been tracking public opinion on the construction of new pipeline capacity and has found some interesting trends.  Since 2014, polling has shown that the negative view of building new oil pipelines has remained steady at 21 to 22% range.  However, there was a drop in the positive attitude amongst Canadians toward building new pipelines – from 58% in 2014 to 44% in 2017.  Over that three year span, a good proportion of Canadians who once viewed building new pipeline capacity with a positive attitude have shifted to a neutral view.  The neutral view on oil pipelines have grown from 20% in 2014 to 36% in 2017.

There can be many theories to explain the three year shift in public opinion on new oil pipelines.  One plausible theory is that oil spills from pipelines typically make headline news, thus leaving an impression in the minds of Canadians the perhaps pipelines are not as safe as the industry states.  Oil leaks from pipelines damage the environment, are costly to clean-up, and fuel public opinion that pipelines are not safe.

One way to eliminate the perception that building new oil pipelines is bad for the environment and shift public opinion in favour of such projects is to build pipelines that don’t leak.  However, is it even possible to build leak-proof pipelines?

Are Double-Walled Pipelines the Answer?

One logical idea for building leak-proof pipelines is for them to be double-walled.  The outer wall would serve as protection from external damage.  The technology does exist to construct double-walled pipelines and they are used in certain circumstances such as when there is a large temperature difference between the liquid in the pipe and the surrounding environment.

Double-walled pipelines are not considered the cure-all by some in the industry.  Those resistant to the use of double-walled pipelines note that in some instances, it may be more cost effective to protect pipelines from the potential of external damage by burying them or placing slabs over them in higher risk areas.  Furthermore, it can be more difficult to monitor a double-walled pipeline and an outer pipe interferes with the maintenance of the inner pipe.

At the University of Calgary, researchers believe their two-walled pipeline design and monitoring system is the solution to preventing spills.  Although double-walled pipelines have been around since the 1980’s, Thiago Valentin de Oliveira, an electrical and computer-engineering master’s student, and Martin Mintchev, an engineering professor, say that their design is superior.

The U of Calgary researchers designed and constructed their prototype to consist of a typical steel inner layer with either a steel or plastic outer layer.  There is an air gap between inner and outer pipeline contains the oil that leaks from the inner pipeline leak.  The real innovation developed by the U of Calgary is the segmentation of the inter-pipe space and the inclusion of a linear wireless network linking the segments.  With the segmentation, a leak of oil from the inner pipe enters the air gap between the two pipes and is contained in a section of pipe.  Wireless pressure sensors between the two walled layers detect the pressure build up and send an alert to the pipeline control staff.

 

If commercially implemented, the U of Calgary system would allow pipeline operators with the means of quickly shutting down the pipeline when a leak was detected into the outer pipeline and crews could be dispatched to make repairs.  The oil that leaked from the inner pipe would be contained in the air gap between the two pipes and be confined to one section of the pipeline.

The U of Calgary researchers estimate that their design would result in an additional 25% in the capital cost of building pipelines.  They believe this cost could be reduced if the outer pipeline material was composite materials or plastic.

Is Advanced Monitoring the Solution?

Also in Alberta, a Calgary-based firm, HiFi Engineering, recently announced that it has developed an innovative pipeline leak detection system.  Dubbed High-Fidelity Dynamic Sensing (HDS™), the monitoring system can spot the exact location of a leak in a pipeline within seconds of it occurring.  The system continuously monitors temperature, sonic and ultrasonic acoustics, and vibration and strain.  Any anomaly in the measurements results in an alert being sent to the pipeline company control room.

Hifi Engineering’s High Fidelity Dynamic Sensing (HDS) technology is being called the ‘ears of pipeline monitoring.’

The system works utilizing fiber optic cables that run the length of the pipeline.  A laser beam is sent down the length of the optic cable and sends signals back that provide a multitude of information to the pipeline control room.

TransCanada Pipelines Corporation has already installed the HiFi HDS™ monitoring system in sections of the Keystone XL oil pipeline that runs from Canada to the U.S.  Also, Enbridge employs the technology in its new northern Alberta pipeline.

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About the Authors

Dema is a graduate of York University’s Bachelor in Environmental Studies program (2008) and the University of Toronto’s Masters of Science in Planning Programme (2010). She is currently pursuing her Canada Green Building Council’s Leadership in Energy and Environmental Design’s Green Associate certification. Her research interests include environmental conservation, green infrastructure, and sustainability. She can be reached at dema.mamon@gmail.com.

John Nicholson is the editor of Hazmat Management Magazine.  He has over 25 years of experience in the environmental and cleantech sectors.  He is a registered professional engineer in the Province of Ontario and has a M.Sc. in environmental engineering.  His professional experience includes time at a large engineering consulting firm, a major Canadian law firm, and the Ontario Ministry of the Environment and Climate Change.

Top 10 Questions to Consider If Sued under U.S. RCRA’s Citizen Suit Provisions

by Beveridge & Diamond PC

No longer only a tool of public interest groups, an ever-expanding group of plaintiffs – including commercial plaintiffs – are using the citizen suit provision of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6972, to address alleged regulatory violations, seek cleanup of wastes alleged to be causing an imminent and substantial endangerment, and pursue fee awards. In addition, RCRA citizen suits have moved beyond traditional allegations of subsurface wastes migrating to soil and groundwater, and may include claims such as vapor intrusion. In light of this diversified landscape of plaintiffs and media, defendants should consider the following key questions when sued under RCRA’s citizen suit provisions.

  1. Do deficiencies in plaintiff’s pre-suit notice provide grounds for dismissal?

RCRA requires 60-day notice for suits brought under § 6972(a)(1)(A) (violation of specific RCRA requirement), and 90-day notice for suits brought under § 6972(a)(1)(B) (imminent and substantial endangerment). RCRA provides an exception for the notice period for citizen suits alleging violations of Subtitle C hazardous waste management provisions, which can be filed immediately after providing notice. The notice requirement reflects the preference for the government to take the lead enforcement role (rather than citizens), and serves to provide the defendant with adequate information to understand basis of the citizen suit. Evaluate whether the notice satisfies the statutory requirements of § 6972(b), and if applicable, the regulatory requirements of 40 C.F.R. § 254.3. If not, consider a motion to dismiss. Courts routinely dismiss RCRA citizen suits for failure to meet these requirements. In addition, check the law in your jurisdiction for other notice-based grounds for a motion to dismiss. For example, the U.S. Court of Appeals for the Second Circuit has affirmed dismissal where plaintiff’s notice only identified waste practices, but did not identify the specific contaminants at issue. Dismissal due to lack of notice typically is without prejudice to refile after proper notice is given, but dismissal may provide strategic or procedural advantages.

  1. Has plaintiff alleged an injury sufficient to satisfy constitutional standing requirements?

A plaintiff must meet the standing requirements of Article III of the U.S. Constitution in order to have standing to sue in federal court. An invasion of a concrete and particularized legally protected interest that is actual or imminent is required to establish standing; the injury may not be conjectural, hypothetical, or too temporally remote. In the RCRA context, standing defenses can be asserted, for example, where there are allegations of an injury to property the plaintiff no longer owns, where the claimed injury is based on future, speculative development plans, or a corporation claims its aesthetic interests have been injured. In such situations, an early motion for summary judgment may expose a plaintiff’s inability to show actual harm, although plaintiffs’ claims of standing are often viewed liberally.

  1. Is plaintiff’s claimed injury redressible by RCRA?

An injury must also be redressible for a plaintiff to have constitutional standing. RCRA provides only forward-looking injunctive relief; not monetary compensation for past costs. Accordingly, suits seeking such compensation are not redressible under RCRA, and thus lack standing. Additionally, where a remediation plan is in place and cleanup is ongoing, the plaintiff may lack an injury needing redress because a court cannot order superfluous relief.

  1. Is there government action that bars the suit?

Certain RCRA citizen suits are barred where the U.S. Environmental Protection Agency (“EPA”) or the state is “diligently prosecuting” a RCRA or Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) action. Plaintiffs have the burden of proving that prosecution is not diligent. This burden is heavy as a presumption of diligence attaches to government prosecution of actions; complaints about the government’s prosecution schedule or strategy generally will not suffice in themselves. Some courts have found that consent decrees and their enforcement amount to diligent prosecution.

  1. Is there an action under CERCLA that bars the suit?

Certain CERCLA removal and remedial actions will bar a RCRA citizen suit. These CERCLA actions include: (i) state or federal government engagement in a CERCLA § 104 removal action; (ii) federal or state government incurrence of costs to initiate a CERCLA § 104 remedial investigation/feasibility study (“RI/FS”) combined with diligent remedial action; and (iii) a court order (including a consent decree) or an administrative order under CERCLA § 106 or RCRA § 7003, pursuant to which a responsible party is “diligently” conducting a removal action, RI/FS, or a remedial action. RCRA suits are also precluded if they “challenge” a removal or remedial action selected under CERCLA § 104. Courts generally find any actions consistent with initial investigations, monitoring, initial clean up, or negotiation or entry of a consent decree will constitute a CERCLA removal action sufficient to preclude a RCRA claim. Remedial actions barring RCRA claims generally consists of those actions consistent with the permanent remedy.

  1. Is the plaintiff alleging entirely past regulatory violations, or violations of superseded federal regulations?

Many RCRA citizen suits concern activities that occurred several decades ago. If a suit alleges regulatory violations based on claims of entirely past conduct (i.e., the violations are not ongoing), such claims should be dismissed. Courts have also ruled that a plaintiff may not bring suit to enforce federal RCRA regulations where they have been superseded by an authorized state program. (However, suits seeking enforcement of state regulations issued pursuant to a state program

authorized under RCRA are typically allowed to proceed in federal court). All claims of regulatory violations should be scrutinized in light of these simple arguments, which can be applied to quickly narrow the claims in a RCRA citizen suit.

  1. Do primary jurisdiction or abstention doctrines provide grounds for a stay, or dismissal?

The doctrines of primary jurisdiction and abstention have seen success as defenses to RCRA citizen suits in some jurisdictions. Abstention doctrines arise out of concern for the proper jurisdictional balance between state and federal courts, and can provide a basis for dismissal of a federal court complaint. Defendants in RCRA citizen suits most frequently invoke the doctrine known as Burford abstention, which applies in situations where a federal suit will interfere with a state administrative agency’s resolution of difficult and consequential questions of state law or policy doctrine. While some courts have rejected the application of Burford abstention to RCRA citizen suits, the argument has seen more consistent success in suits challenging agency permitting, licensing or siting decisions under state law.

Under the doctrine of primary jurisdiction, a federal court may stay proceedings where a claim involves issues within the special competence of an administrative body. Primary jurisdiction has been found applicable where: a consent order with the state completely overlapped with the relief sought by plaintiff’s RCRA claims; where EPA investigation and remediation had been diligent and ongoing for many years, and injunctive relief ordered by court could be conflicting; and where a state agency had extensive involvement in addressing alleged contamination and federal court intervention could result in delay of state agency response or substantial duplication of effort. Courts have been willing to apply primary jurisdiction to stay (or even dismiss) RCRA suits to allow these types of administrative activities to run their course.

  1. If plaintiff has alleged an endangerment to health or the environment, is it imminent?

To prevail on the merits of a RCRA citizen suit, a plaintiff must establish that an endangerment to human health or the environment is “imminent.” The Supreme Court has ruled that “[a]n endangerment can only be ‘imminent’ if it ‘threatens to occur immediately,’ and the reference to waste which ‘may present’ imminent harm quite clearly excludes waste that no longer presents such a danger.” Imminence may be absent where the endangerment is premised on speculative development plans or contingencies, where there is no exposure pathway (e.g., a claim of endangerment to human health based on alleged groundwater contamination, where groundwater is not used for drinking), or remediation has occurred, and to the extent waste remains, it no longer poses a risk. Imminence can be found lacking in these types of fact patterns, notwithstanding the presence of contamination.

will not likely be met. Risk assessments may also be very useful in showing the absence of a substantial risk, and defendants should evaluate the relative risks and benefits of performing such an assessment. For example, in a recent case alleging vapor intrusion, a risk assessment showed that the alleged vapor levels were many magnitudes below risk thresholds, and even below the risk presented by the same contaminants present in ambient (outdoor) air.

  1. If plaintiff has alleged an endangerment, is it substantial?

If a plaintiff cannot show that an alleged endangerment is imminent, it follows that it that RCRA’s substantiality requirement will not likely be met. Risk assessments may also be very useful in showing the absence of a substantial risk, and defendants should evaluate the relative risks and benefits of performing such an assessment. For example, in a recent case alleging vapor intrusion, a risk assessment showed that the alleged vapor levels were many magnitudes below risk thresholds, and even below the risk presented by the same contaminants present in ambient (outdoor) air.

  1. Can you recover your attorneys’ fees?

Although the majority of fee awards under RCRA are for plaintiffs, fee awards have been granted to defendants, especially where the suit was frivolous, unreasonable, or groundless, or where the plaintiff continued to litigate after it clearly became so. Don’t overlook other bases for fees as well. If there is a contractual relationship with the plaintiff (for example, as is common between successive property owners), all contracts should be reviewed for any applicable fee shifting provisions.

In conclusion, if sued under RCRA’s citizen suit provision, consider whether these common defenses or fact patterns apply. Defenses based on notice, standing, or governmental action can provide an early and cost-effective dismissal of the case. Facts showing, for example, speculative alleged endangerment or lack of an exposure pathway should be explored fully in discovery, as they can provide effective defenses on the merits.

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Beveridge & Diamond holds a United States nationwide Tier 1 ranking for Environmental Litigation in U.S. News/Best Lawyers. The Firm’s litigators perform trial and appellate work in enforcement defense (civil and criminal), citizen suit defense, rulemaking challenges and defenses, and private litigation under all major federal and state environmental laws.  For more information about our experience defending RCRA citizen suits, please contact Harold L. Segall (+1.202.789.6038, hsegall@bdlaw.com) or Bina R. Reddy (+1.512.391.8045, breddy@bdlaw.com).

This update is not intended as, nor is it a substitute for, legal advice. You should consult with legal counsel for advice specific to your circumstances. This communication may be considered lawyer advertising.

This article was first published on the Beveridge & Diamond website.

U.S. Federal Brownfield Legislation: U.S. House of Representatives Passes Amendments

By Walter Wright, Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

The U.S. House of Representatives (“House”) on November 30th passed amendments that would address the federal Brownfield program.

H.R. 3017 is titled the “Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017” (“H.R. 3017”).

H.R. 3017 amends the Comprehensive Environmental Response, Compensation, and Liability Act and reauthorizes the United States Environmental Protection Agency’s (“EPA”)Brownfield Program.  The legislation appears to have bipartisan support.

Residential, commercial, agricultural and industrial properties are sometimes difficult to sell, redevelop, and/or finance because of perceived or real environmental contamination issues. Properties or facilities subject to such impediments are typically called “Brownfields.”

The EPA has defined a “Brownfield” as “abandoned, idled, or under-used industrial or commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination.” Besides EPA, many states have Brownfield programs whose purpose is to eliminate unnecessary barriers of the redevelopment of commercial or industrial properties which may have environmental concerns. Arkansas has had such a program for several years.

H.R. 3017 makes several changes to the federal Brownfield related statutory provisions, which include:

  • Clarifies the liability of states and local units of government that take title to property involuntarily by virtue of their function as a sovereign
  • Clarifies when sites contaminated by petroleum may be considered a Brownfield site and when a leaseholder may qualify for certain liability protections
  • Expands eligibility for nonprofit organizations and for eligible entities that took title to a Brownfield site prior to January 11, 2001
  • Increases the limit for remediation grants under the Brownfields Program, establishes multipurpose grants and allows recovery of a limited administrative cost
  • Adds to the list of criteria for the grant program, whether a grant would facilitate the production of renewable energy
  • Allows EPA to provide additional funds for small, rural, and disadvantaged communities and Indian tribes
  • Reauthorizes funding for Section 104(k) of the Comprehensive Environmental Response, Compensation, and Liability Act and Section 128(a) of the same statute

A bill addressing federal Brownfield issues has also been introduced in the Senate (“S. 822”). This bill is denominated the “Brownfields Utilization, Investment, and Local Development Act of 2017.”

Issues addressed in S.822 include:

  • Funding for technical assistance grants to small communities and rural areas
  • Expansion of the scope of eligible grant recipients to include nonprofit community groups
  • Authorization of funding from multipurpose grants to address more complex sites
  • Allow certain entities that do not qualify as bona fide perspective purchasers to be eligible to receive grants (as long as government entities did not cause or contribute to a release or threaten the release of a hazardous substance at the property)
  • Direct EPA in providing grants to give consideration to Brownfield sites located adjacent to federally designated floodplains

A copy of H.R. 3017 can be downloaded here and copy of Senate Bill 822 here.

This article was first published on the Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. website.

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About the Author

Walter G. Wright, Jr. is a member of the Business Practice Group.  His practice has focused for almost thirty years on environmental, energy (petroleum marketing), and water law.  Mr. Wright’s expertise includes counseling clients on issues involving environmental permits, compliance strategies, enforcement defense, property redevelopment issues, environmental impact statements, and procurement/management of water rights.

Mr. Wright routinely advises developers, lenders, petroleum marketers, and others about effective strategies for structuring real estate and corporate transactions to address environmental financial risks.  He also serves as General Counsel and provides legislative representation to the Arkansas Oil Marketers Association, Arkansas Recyclers Association (scrap facilities) and Arkansas Manufactured Housing Association.  A unique part of his practice has been drafting and negotiation of a variety of specialized agreements involving the sale or consignment of motor fuels along with the ancillary agreements associated with the upstream segment of the petroleum industry.

United States: New Standard Of Care Document On Environmental Due Diligence (“Phase I”)

Article by Jerrold Samford and Andrea L. Rimer

Troutman Sanders LLP

The GeoProfessional Business Association (GBA) – formerly known as ASFE – recently released a new study on the standard of care for conducting Phase I environmental site assessments.  This document is the fourth in a series of studies the organization has produced since the inception of the due diligence process in the early 1990’s.  The study is an evaluation of approximately 200 Phase I reports from across the country, written between 2007 and 2010. The results of the study will be a valuable tool in determining whether a Phase I conducted during that time period meets the standard of care or not.

In completing the study, the GBA compared the Phase I reports to the elements of the ASTM Standard E1527-05, applicable during the time period of the reports, to see whether the reports included the elements of the ASTM standard. Although nearly all of the reports stated they were completed in accordance with the ASTM Standard, the committee reviewing the reports concluded that not a single report actually complied with every component required by the Standard. Consequently, the GBA study finds that strict compliance with the ASTM standard does not constitute the standard of care for conducting Phase I evaluations of commercial real estate.

The committee’s conclusion could become critical in legal actions where the issue at hand is whether appropriate environmental studies were completed prior to completion of the transaction. The GBA study could be used to show a court that because strict compliance with the ASTM Standard is not commensurate with the standard of care, a purchaser could still be in compliance with the All Appropriate Inquiry provisions of CERCLA even if some of the elements of the ASTM Standard had not been completed.

The study is available through the GeoProfessional Business Association at www.geoprofessional.org.

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.

This article was first published on the Troutman Sanders website.

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About the Authors

Jerrold “Jerry” Samford is an environmental compliance specialist at Troutman Sanders.  He is a certified professional geologist in the State of Virginia, a licensed professional geologist in the States of North Carolina and Kentucky.

Andrea L. Rimer is a partner at Troutman Sanders.  She has a national practice representing clients on transactional and regulatory matters involving brownfields redevelopment, hazardous site investigation and cleanup, hazardous waste management, and state and federal Superfund and voluntary remediation programs.

 

Asbestos & Disaster Relief Precautions

By Alison Grimes, MAA Center

2017 has proven to be an unfortunate memorable year of natural disasters.  Across the globe, countries including Afghanistan, China, Colombia, The Democratic Republic of the Congo Mexico, Peru, Sierra Leone, South Asia, Sri Lanka, Zimbabwe and more, have all suffered heartache and destruction as a result of natural disasters.

The United States even experienced the hardship of more than 50 separate weather, climate and flood disasters, above the 10-year average of 45 disasters.  With hundreds and thousands of lives affected, fast action and relief saves lives. However, although quick relief is important, safety and health should not be taken for granted.

Aerial view of flood damage from Hurricane Harvey (Photo Credit: Brett Coomer, Houston Chronicle)

Disaster Relief Precautions

Following a natural disaster, first responders, insurance adjusters, and contractors are called upon to re-build or repair damage in the home or workplace.  To ensure safety with relief and reconstruction, the following precautions and best practices will ensure good health and well-being, long after a natural disaster.

Asbestos

While managing flood recovery and other natural disaster reconstruction, asbestos is not often thought of.  Although entirely natural, asbestos is very harmful to health, leading to cancer such as mesothelioma, asbestosis, lung cancer and more.  There is no safe level of asbestos exposure and once asbestos fibers are consumed by way of inhalation or ingestion, health concerns can develop anywhere between 10-50 years later.  Therefore, it is important to consider the age of a structure before performing a repair.

Flood Damage Asbestos Abatement (Photo Credit: Patriot Abatement Services)

Asbestos use was widespread during the early 1930s with heightened use during the mid to late 1970s throughout the 1980s.  Its fire-resistant properties, abundance and malleability made it a popular additive in many products used in construction such as tiling, insulation, cements, caulking, heating ducts, roofing, siding, drywall and more.  When such products or materials that contain asbestos are properly encapsulated or enclosed, they will not pose harm to health, however in the case of natural disasters and water damage, the risks of being exposed to asbestos increase as a result.

 Mold

Natural disaster relief zones are breeding grounds for mold, which can begin to develop in as little as 48 hours.  Similar to asbestos, mold is often forgotten about during repairs and disaster relief.  When mold forms, spores enter the air and are easily inhaled, causing skin, eye and nasal passage irritation, wheezing and respiratory health concerns.  Considering the harm associated with mold exposure, it is essential to first dry any wet, humid or damp areas to prevent mold growth.  Additionally, any existing mold should be remediated by a specialist to ensure that all mold spores are eradicated. Control and prevent mold growth by limiting humidity levels, fixing leaky roofs, windows and pipes, cleaning and drying wet areas, and ensuring proper shower, laundry and cooking area ventilation.

 Awareness and training are two essential steps to ensure successful and safe, disaster relief.  However, asbestos and mold are only two concerns to be mindful of,  as lead, silica, PCBs, particulate matter and other hazardous building materials pose great harm to health as well.  Moreover, first responders and all others called upon during disaster relief, must prioritize self-care techniques to prevent burnout and secondary traumatic stress.

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About the Author

Alison Grimes is a Health Advocate at the Mesothelioma + Asbestos Awareness Centre (MAA Center).  The MAA Center is an independent group working to help mesothelioma patients, caregivers, advocates, and others looking to learn more about the disease.

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