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Leaking Sewers Cost City 50% of Dry Cleaner Site Cleanup Costs

Written by John A. McKinney Jr., Chiesa Shahinian & Giantomasi PC

Are you in a case where an on-site and off-site groundwater plume of dry-cleaning solution (perchloroethylene or PCE) or other hazardous substance is intersected by sewers through which the used and disposed solution flowed?  If so, the case of Mission Linen Supply v. City of Visalia (2019 WL 446358) bears your close review.

Based on the facts and expert testimony adduced at the bench trial, the court determined that: 1) the sewers were installed by the City below general industry standards; 2) the City sewers had numerous defects including holes and broken pipes, cracks, separated joints, missing portions of pipes, root intrusion and other conditions; and, 3) PCE was released into the environment as a result of these defects.

Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the two dry cleaners who operated at the site and the City were found liable.  In allocating the future cleanup costs, the court determined the equitable basis for allocation was the plume itself.  The prior dry cleaners were responsible for the on-site costs and the City was responsible for the off-site costs “because the City’s defective/leaking pipes transported and spread the PCE beyond the property boundaries.”   50% of future costs were assigned to the City.

A review of this case’s Findings of Fact show what expert testimony and evidence is necessary to reach the result reached by this court.  The case is also a warning to municipalities with sewer lines intersecting cleanup sites or what could become cleanup sites.  Do not fail to regularly and properly maintain your sewer systems.


This article has been republished with the permission of the author. It was first published on CSG’s Environmental Law Blog.

About the Author

John A. McKenney Jr. has been a frequent speaker at conferences and continuing legal education programs. For 18 years, John was on the faculty of Seton Hall University School of Law as an Adjunct Professor where he taught New Jersey Environmental Law. He also served as moderator of the ABA satellite seminar on Hazardous Waste and Superfund.

John is a co-editor of the ABA publication, CERCLA Enforcement – A Practitioner’s Compendium of Essential EPA Guidance and Policy Documents and co-authored the Generators’ Obligations chapter of the ABA’s RCRA Practice Manual. The standard form group agreement used at many remedial sites around the nation is based on a version he developed for The Information Network for Superfund Settlements.

Handbook on Managing Emerging Contaminants

The term “emerging contaminants” and its multiple variants has come to refer to unregulated compounds discovered in the environment that are also found to represent a potential threat to human and ecological receptors. Such contaminants create unique and considerable challenges as the push to address them typically outpaces the understanding of their toxicity, their need for regulation, their occurrence, and techniques for treating the environmental media they affect.

Unregulated compounds that could be potential issues continually surface as detection technology improves, driving the need to more quickly evolve our understanding, technology, and appropriate response options to address them. It is clear that conquering this challenge will play a role in protecting our quality of life.

In Emerging Contaminants Handbook, published by CRC Press, editors Caitlin H. Bell, Margaret Gentile, Erica Kalve, Ian Ross, and John Horst review the latest insights on emerging contaminant occurrence, regulation, characterization, and treatment techniques. The goal is to serve as a primer for deepening your emerging contaminant acumen in navigating their management where they may be encountered.

Use Emerging Contaminants Handbook to:

  • Explore the definition, identification, and life cycle of emerging contaminants.
  • Review current information on sources, toxicology, regulation, and new tools for characterization and treatment of:
    • 1,4-Dioxane (mature in its emerging contaminant life cycle)
    • Per- and polyfluoroalkyl substances (PFASs; a newer group of emerging contaminants)
    • Hexavalent chromium (former emerging contaminant with evolving science)
    • 1,2,3-Trichloropropane (progressing in its emerging contaminant life cycle)
  • Examine opportunities in managing emerging contaminants to help balance uncertainty, compress life cycle, and optimize outcomes.

Emerging Contaminants Handbook can be purchased at CRCPress.com or Amazon.com.

Top Environmental Clean Up Projects throughout Canada

by David Nguyen, Staff Writer

1. The Randle Reef Contaminated Sediment Remediation Project – Hamilton, Ontario

Cost: $138.9 million

Contaminant: polycyclic aromatic hydrocarbons (PAHs), heavy metals

Approximately 60 hectares in size and containing 695 000 cubic metres of sediment contaminated with polycyclic aromatic hydrocarbons (PAHs) and heavy metals, the Randle Reef restoration project is three decades in the making. The pollution stems from various industries in the area including coal gasification, petroleum refining, steel making, municipal waste, sewage and overland drainage.1

Slated to be completed in three stages, the first stage involved the completion of a double steel sheet-piled walled engineered containment facility (ECF) around the most contaminated sediments, with stage 2 consists of dredging of the contaminated sediments into the ECF. Stage 3 will involve dewatering of the sediments in the ECF and treating the wastewater to discharge back into the lake, and the sediments will be capped with 60 cm of sand and silt enriched with organic carbon. This cap will both the isolate the contaminated sediments from the environment and form a foundation or future port structures. The ECF will be capped with layers of several material, including various sizes of aggregate, geo-textile and geo-grid, wickdrains, and asphalt and or concrete. This isolates the contaminants and provides a foundation for future port structures.

The project is expected to be completed by 2022 and cost $138.9 million. The Hamilton Port Authority will take over monitoring, maintenance, and development responsibilities of the facility for its expected 200-year life span. It is expected to provide $151 in economic benefits between job creation, business development, and tourism.

The Canada–United States Great Lakes Water Quality Agreement listed Hamilton harbour (which contains Randle Reef) as one of 43 Areas of Concern on the Great Lakes. Only 7 have been removed, 3 of which were in Canada.

2. Port Hope Area Initiative – Port Hope, Ontario

Cost: $1.28 billion

Contaminant: low-level radioactive waste (LLRW), industrial waste

The town of Port Hope, Ontario has about 1.2 million cubic metres of historic LLRW across various sites in the area. The soils and materials contain radium-226, uranium, arsenic, and other contaminants resulting from the refining process of radium and uranium between 1933 and 1988. Additional industrial waste containing metals, hydrocarbons, and dried sewage and sludge with copper and polychlorinated biphenyl (PCBs) will also be contained at the new facility.

The material was spread across town as the tailings were given away for free to be used as fill material for backyards and building foundations. An estimated 800 properties are affected, but the low-level radiation poses little risk to humans. The Port Hope Area Initiative will cost $1.28 billion and will include monitoring before, during, and after the construction of a long term management waste facility (LTMWF).

The LTWMF will be an aboveground engineered storage mound on the site of an existing LLRW management facility to safely store and isolate the contaminated soil and material, as well as other industrial waste from the surrounding area. The existing waste will also be excavated and relocated to the engineered mound. Leachate collection system, monitoring wells, and sensors in the cover and baseliner will be used to evaluate the effectiveness of the storage mound, allowing for long term monitoring of the waste.

The facility also contains a wastewater treatment plant that will treat surface water and groundwater during construction of the facility, as well as the leachate after the completion of the storage mound. The plant utilizes a two stage process of chemical precipitation and clarification (stage 1) and reverse osmosis (stage 2) to treat the water to meet the Canadian Nuclear Safety Commission requirements for water discharged to Lake Ontario.

3. Marwell Tar Pit – Whitehorse, Yukon Territory

Cost: $6.8 million

Contaminant: petroleum hydrocarbons (PHCs), heavy metals

This $6.8 million project funded by the governments of Canada and Yukon will remediate the Marwell Tar Pit in Whitehorse, which contain 27 000 cubic metres of soil and groundwater contaminated with hydrocarbons, such as benz[a]anthracene and heavy and light extractable petroleum hydrocarbons and naphthalene, and heavy metals such as manganese. Some of the tar has also migrated from the site.

Contamination began during the Second World War, when a crude oil refinery operated for less than one year before closing and being dismantled. The sludge from the bottom of dismantled storage tanks (the “tar”) was deposited in a tank berm, and over time other industries and businesses added other liquid waste to the tar pit. In the 1960s the pit was capped with gravel, and in 1998 declared a “Designated Contaminated Site.”

The project consists of three phases: preliminary activities, remedial activities, and post-remedial activities. The preliminary phase consisted of consolidating and reviewing existing information and completing addition site assessment.

The second phase of remedial activities began in July 2018 and involves implementing a remedial action plan. Contaminated soil segregated and heated through thermal conduction, which vaporizes the contaminants, then the vapours are destroyed by burning. Regular testing is done to ensure air quality standards are met. The main emissions from the site are carbon dioxide and water vapour. Remediated soil is used to backfill the areas of excavation. This phase is expected to be completed in 2019-2020.

The final phase will involve the monitoring of the site to demonstrate the remediation work has met government standards. This phase is planned to last four years. The project began in 2011 and is expected to be completed in 2020-2021.

4. Boat Harbour – Nova Scotia

Cost: approx.$133 million

Contaminant: PHCs, PAHs, heavy metals, dioxins and furans

The provinces largest contaminated site, Boar Harbour, is the wastewater lagoon for the local pulp mill in Abercrombie Point, as well as the discharge point for a former chemical supplier in the area. Prior to 1967, Boat Harbour was a saltwater tidal estuary covering 142 hectares, but a dam built in 1972 separated Boat Harbour from the ocean, and it is now a freshwater lake due to the receiving treated wastewater from the mill since the 1967.

The wastewater effluent contains contaminants including dioxins and furans, PAHs, PHCs, and heavy metals such as cadmium, mercury, and zinc. In 2015, the government of Nova Scotia passed The Boat Harbour Act, which ordered that Boat Harbour cease as the discharge point for the pulp mill’s treated wastewater in 2020, which allows time to build a new wastewater treatment facility and time to plan the remediation of Boat Harbour.

The estimated cost of the cleanup is $133 million, which does not include the cost of the new treatment facility. The goal is to return the harbour to its original state as a tidal estuary. The project is currently in the planning stages and updates can be found at https://novascotia.ca/boatharbour/.

5. Faro Mine – Faro, Yukon

Cost: projected$450 million

Contaminant: waste rock leachate and tailings

Faro Mine was once the largest open-pit lead-zinc mine in the world, and now contains about 70 million tonnes of tailings and 320 million tonnes of waste rock, which can potentially leach heavy metals and acids into the environment. The mine covers 25 square kilometres, and is located near the town of Faro in south-central Yukon, on the traditional territory of three Kasha First Nations – the Ross River Dena Council, Liard First Nation and Kaska Dena Council. Downstream of the mine are the Selkirk First Nation.

The Government of Canada funds the project, as well as leads the maintenance, site monitoring, consultation, and remediation planning process. The Government of Yukon, First Nations, the Town of Faro, and other stakeholders are also responsible for the project and are consulted regularly to provide input.

The entire project is expected to take about 40 years, with main construction activities to be completed by 2022, followed by about 25 years of remediation. The remediation project includes upgrading dams to ensure tailings stay in place, re-sloping waste rock piles, installing engineered soil covers over the tailings and waste rock, upgrading stream diversions, upgrading contaminant water collection and treatment systems.

6. Sylvia Grinnell River Dump – Iqaluit, Nunavut

Cost: $5.4 million

Contaminant: PHCs, polychlorinated biphenyls (PCBs), pesticides

Transport Canada awarded a contract of over $5.4 million in 2017 for a cleanup of a historic dump along the mouth of Sylvia Grinnell River in Iqaluit, Nunavut. The dump contains metal debris from old vehicles and appliances, fuel barrels, and other toxic waste from a U.S. air base, and is a site for modern day rogue dumping for items like car batteries. This has resulted in petroleum hydrocarbons, polychlorinated biphenyls (PCBs), pesticides, and other hazardous substances being identified in the area.

The Iqaluit airfield was founded in Frobisher Bay by the U.S. military during World War 2 as a rest point for planes flying to Europe. During the Cold War, the bay was used as part of the Distant Early Warning (DEW) Line stations across the north to detect bombers from the Soviet Union. When the DEW was replaces by the North Warning System in the 1980s, these stations were abandoned and the contaminants and toxic waste left behind. Twenty-one of these stations were remediated by the U.S. Department of National Defence at a cost of about $575 in 2014.

The Sylvia Grinnell River remediation project is part of the Federal government’s responsibility to remediate land around the airfield that was transferred to the Government of Nunavut in the 1990s.The contract was awarded in August 2017 and was completed in October. The remaining nontoxic is sealed in a new landfill and will be monitored until 2020.

7. Greenwich-Mohawk Brownfield – Brantford, Ontario

Cost: $40.78 million

Contaminant: PHC, PAC, heavy metals, vinyl chloride

The City of Brantford have completed a cleanup project of 148 000 cubic metres of contaminated soil at the Greenwich-Mohawk brownfield site. The area was historically the location of various farming manufacturing industries that shut down, leaving behind contaminants like PHC, PAC, heavy metals like lead, xylene, and vinyl chloride.

Cleanup began in 2015, and consisted coarse grain screening, skimming, air sparging, and recycling of 120 000 litres of oil from the groundwater, using biopiles to treat contaminated soil onsite with 73% of it being reused and the rest requiring off site disposal.

Barriers were also installed to prevent future contamination from an adjacent rail line property, as well as to contain heavy-end hydrocarbons discovered during the cleanup that could not be removed due to the release odorous vapours throughout the neighbourhood. The 20 hectare site took two years to clean and costed only $40.78 million of the allocated $42.8 million between the all levels of government, as well as the Federation of Canadian Municipalities Green Municipal Fund.

8. Rock Bay Remediation Project – Victoria, British Columbia

Cost: $60 million

Contaminant: PAHs, hydrocarbons, metals

Located near downtown Victoria and within the traditional territories of the Esquimalt Nation and Songhees Nation, the project entailed remediating 1.73 hectares of contaminated upland soils and 2.02 hectares of contaminated harbour sediments. The site was the location of a former coal gasification facility from the 1860s to the 1950s, producing waste products like coal tar (containing PAHs), metals, and other hydrocarbons, which have impacted both the sediments and groundwater at the site.

Remediation occurred in three stages. From 2004 to 2006, the first two stages involving the remediation of 50 300 tonnes of hazardous waste soils, 74 100 tonnes of non-hazardous waste soils, and 78 500 tonnes of contaminated soils above commercial land use levels. In 2009, 250 tonnes of hazardous waste were dredged from two sediment hotspots at the head of Rock Bay. About 7 million litres of hydrocarbon and metal impacted groundwater have been treated or disposed of, and an onsite wastewater treatment plant was used to return treated wastewater to the harbour.

Construction for the final stage occurred between 2014 to 2016 and involved:

  • installing shoring along the property boundaries to remove up to 8 metres deep of contaminated soils,
  • installing a temporary coffer dams
  • draining the bay to remove the sediments in dry conditions, and
  • temporary diverting two storm water outfalls around the work area.

Stage three removed 78 000 tonnes of contaminated and 15 000 tonnes of non-contaminated sediment that were disposed of/ destroyed at offsite facilities.

Final post-remediation monitoring was completed in January 2017, with post-construction monitoring for 5 years required as part of the habitat restoration plan to ensure the marine habitat is functioning properly and a portion of the site will be sold to the Esquimalt Nation and Songhees Nation.

9. Bushell Public Port Facility Remediation Project – Black Bay (Lake Athabasca), Saskatchewan

Cost: $2 million

Contaminant: Bunker C fuel oil

 Built in 1951 and operated until the mid-1980s, the Bushell Public Port Facility consist of two lots covering 3.1 hectares with both upland and water lots. The facility supplied goods and services to the local mines, and petroleum products to the local communities of Bushell and Uranium City. Historical activities like unloading, storing, and loading fuel oil, as well as a large spill in the 1980s resulted in the contaminated soil, blast rock, and bedrock in Black Bay that have also extended beyond the waterlot boundaries.

The remediation work occurred between 2005 to 2007, and involved excavation of soil and blast rock, as well as blasting and removing bedrock where oil had entered through cracks and fissures.

Initial remediation plans were to crush and treat the contaminated material by low temperature thermal desorption, which incinerates the materials to burn off the oil residue. However, opportunities for sustainable reuse of the contaminated material came in the use of the contaminated crush rock for resurfacing of the Uranium City Airport. This costed $1.75 million less than the incineration plan, and saved the airport project nearly 1 million litres of diesel fuel. The crush was also used by the Saskatchewan Research Council in the reclamation of the Cold War Legacy Uranium Mine and Mill Sites. A long term monitoring event is planned for 2018.

10. Thunder Bay North Harbour – Thunder Bay, Ontario

Cost: estimated at upwards to $50 million

Contaminant: Paper sludge containing mercury and other contaminants

 While all of the projects discussed so far have either been completed or are currently in progress, in Thunder Bay, the plans to clean up the 400 000 cubic metres of mercury contaminated pulp and fibre have been stalled since 2014 due to no organization or government designated to spearhead the cleanup.

While the water lot is owned by Transport Canada, administration of the site is the responsibility of the Thunder Bay Port Authority, and while Transport Canada has told CBC that leading the cleanup is up to the port, the port authority was informed by Transport Canada that the authority should only act in an advisory role. Environmental Canada has participated in efforts to advance the planning of the remediation work, but is also not taking the lead in the project either. Further complications are that the industries responsible for the pollution no longer exist.

Industrial activities over 90 years have resulted in the mercury contamination, which range in concentrations between 2 to 11 ppm on surface sediments to 21 ppm at depth. The thickness ranges from 40 to 380 centimetres and is about 22 hectares in size. Suggested solutions in 2014 include dredging the sediment and transferring it to the Mission Bay Confined Disposal Facility, capping it, or building a new containment structure. As of October 2018, a steering committee lead by Environment Canada, Transport Canada, Ontario’s environmental ministry and the Thunder Bay Port Authority, along with local government, Indigenous groups, and other stakeholders met to evaluate the remediation options, as well as work out who will lead the remediation.

TPH Risk Evaluation at Petroleum-Contaminated Sites

The United States Interstate Technology and Regulatory Council (ITRC) Total Petroleum Hydrocarbons (TPH) Risk Evaluation team has developed this guidance to assist state regulators and practitioners with evaluating risk and establishing cleanup requirements at petroleum release sites. This guidance focuses on factors that are unique to petroleum hydrocarbon releases and builds on other available documents published by the TPH Criteria Working Group (TPHCWG) (1997a1997b1997c1998a1998b1999), ITRC Risk-3 (2015), Massachusetts Department of Environmental Protection (MADEP) (2014), California State Water Board–San Francisco Bay Region (CASWB-SFBR) (2016a), and Texas Commission on Environmental Quality (TCEQ) (2017b).

Risk evaluations for petroleum release sites present complex and unique challenges to site managers, risk assessors, regulators, and other stakeholders. Mischaracterizing risks associated with petroleum contamination can lead to unnecessary cleanups, inappropriate property use limitations, or, most importantly, inadequate protection of human health and ecological receptors. Once released to the environment, petroleum contamination changes over time and space due to natural and anthropogenic weathering processes. Although traditional indicator compounds (e.g., benzene, toluene, ethylbenzene, xylene, and naphthalene [BTEXN]) may be present below levels of concern in impacted media, unidentified petroleum fractions or degradation products (metabolite compounds) could potentially still pose a risk to human health and ecological receptors. Summarizing approaches to evaluate this topic in more detail is one of the primary objectives of this document and it is hoped that this document will assist in further research regarding this subject.

A common assumption at petroleum release sites is that the carcinogenic indicator compounds (e.g., benzene, naphthalene, and, for some regulatory agencies, ethylbenzene and additives such as methyl tertiary-butyl ether [MTBE]) typically drive risk-based decision making rather than other petroleum compounds that may be present. However, very few field-based studies comparing risks posed by individual compounds found in TPH (such as benzene) to risks posed by the broader spectrum of TPH-related compounds have been published (Brewer et al. 2013). Additionally, concentrations of carcinogenic compounds might be reduced to low concentrations relative to other hydrocarbons due to natural attenuation processes. At such sites, the remaining petroleum hydrocarbons and petroleum-related degradation products (e.g., petroleum-related metabolites) can be expected to contribute to the potential human health noncarcinogenic risk at petroleum release sites.

This guidance will improve regulators’ and project managers’ understanding of the unique properties of TPH and provide the tools, techniques, and lessons learned to improve risk characterization and to make better-informed risk management decisions at petroleum-contaminated sites.

To access the guidance document, visit the ITRC website.

New Year, New Environmental Rules: Alberta’s Revised Remediation Rules Take Effect in 2019

by Dufferin Harper and Lindsey Mosher, Blake, Cassels & Graydon LLP

On January 1, 2019, significant amendments to Alberta’s Remediation Certificate Regulation came into force. These include:

  • Renaming the regulation the Remediation Regulation
  • Creating a site-based remediation certificate
  • Creating a new reporting requirement for impacts
  • Defaulting to the application of Tier 1 rather than Tier 2 Guidelines
  • Issuing a Tier 2 compliance letter
  • Establishing a new mandatory remedial measures timeline

As discussed in more detail below, many of the amendments address long-standing concerns within the existing remediation certification process. However, in several instances they also introduce new areas of regulatory uncertainty.

SITE-BASED REMEDIATION CERTIFICATE

One of the primary concerns with the existing regime is that it is too limited in scope. Although it provides for remediation certificates to be issued for specific areas of land impacted by a contaminant release, it does not enable a property owner to obtain regulatory signoff for a complete site as opposed to only an area of a site.

In response to that concern, the Remediation Regulation introduces a new type of remediation certificate applicable to a complete site, which is referred to as a “site-based remediation certificate”. A site-based remediation certificate confirms that all contaminants and areas of potential concern both on and off site have been addressed and necessarily involves the submission of more extensive documentation than what is required for a limited remediation certificate.  To assist in the application process, the Alberta government is expected to develop and release a new application form and guide for a site-based remediation certificate application prior to January 2019.

NEW REPORTING REQUIREMENT

A person responsible for a release currently has a statutory obligation to report the release. In addition to this existing obligation, the Remediation Regulation imposes an additional obligation to report any new information about the “impact” of a released substance. Neither of the terms “new information”, nor “impact”, are defined in the Remediation Regulation, and it remains to be seen what additional guidance, if any, will be provided to clarify the scope of the additional obligation. Until that occurs, or until the courts clarify the scope of the obligation, uncertainty will likely prevail.

APPLICATION OF TIER 1 VERSUS TIER 2 GUIDELINES

Under the current Remediation Certificate Regulation, a person applying for a remediation certificate may elect to apply either generic Tier 1 Soil and Groundwater Remediation Guidelines (Tier 1 Guidelines) or site -specific Tier 2 Soil and Groundwater Remediation Guidelines (Tier 2 Guidelines).

The Remediation Regulation removes this discretionary election. Instead, the Tier 1 Guidelines will always be the default remediation standard. Regulatory approval will be required to remediate to Tier 2 Guidelines.

TIER 2 COMPLIANCE LETTER

Another major concern (and criticism) of the existing regime involves the situation where contaminant levels exceed Tier 1 Guidelines but not Tier 2 Guidelines. In such a situation, if the Tier 2 Guidelines are applied, the affected area will not require remediation. Notwithstanding the levels exceed Tier 1 Guidelines and would otherwise require remediation but for the application of the Tier 2 Guidelines, the regulator’s position is that, since there has been no “remediation”, it is unable to issue a “remediation certificate”.  The Remediation Regulation addresses this situation, albeit indirectly.  Rather than amending the scenarios under which a remediation certificate can be issued to account for the above situation, the Remediation Regulation introduces a hybrid type of approval, described as a “Tier 2 compliance letter”. Such a letter will be issued by the regulator when it is satisfied the area or the site meets Tier 2 Guidelines and therefore does not need to be remediated. The difficulty with such a hybrid approach is that it is unclear what type of legal protection a “Tier 2 compliance letter” provides. For example, a remediation certificate currently provides protection against a subsequent environmental protection order being issued for the same contaminant and area. A Tier 2 compliance letter provides no similar protection.  Furthermore, no reference to a Tier 2 compliance letter is set out in Environmental Protection and Enhancement Act and its legal significance is therefore unknown.

NEW REMEDIAL MEASURES TIMELINE

The Remediation Regulation introduces a mandatory timeline for remedial measures for all releases reported after January 1, 2019. If remediation cannot be completed to the satisfaction of the regulator within the following two years, a remedial action plan acceptable to the regulator must be submitted in accordance with the requirements of the Remediation Regulation.

The timeline is not mandatory for the complete remediation of a release. Rather, it is a timeline for the submission of a remedial action plan that will describe what further remedial activities will occur in the future. As such, it appears to be nothing more than an administrative requirement as opposed to an actual remedial efficiency requirement.

NEXT STEPS

The Remediation Regulation came into force as of January 1, 2019, and all releases now must comply with its provisions. Releases reported before January 1, 2019 continue to be regulated in accordance with the old regime under the Remediation Certificate Regulation.

This article was first published on the Blakes Business Class website. It is republished with the permission of the authors and Blakes. Copyright of this article remains with Blakes.


About the Authors

Dufferin (Duff) Harper practices in the areas of environmental law, commercial litigation and regulatory law. He routinely acts for clients on environmental due diligence and liability issues, especially as they pertain to brownfield redevelopment and transportation of dangerous goods. On the corporate side, he specializes in crafting complicated environmental agreements that allocate environmental risks and address remediation requirements. He also advises clients on greenhouse gas matters including the purchase and sale of greenhouse gas emissions credits, offset credits and other environmental attributes.

Duff has acted as lead counsel in several litigation cases involving contaminated sites, both on behalf of contaminated property owners and parties who were allegedly responsible for the contamination. On the regulatory front, he has appeared before numerous levels of courts and assessment tribunals, including tribunals constituted pursuant to the Canadian Environmental Assessment Act (CEAA) ), the National Energy Board (NEB) and numerous provincial regulators.

Duff also provides strategic regulatory compliance and environmental impact assessment advice to industrial clients, such as conventional oil and gas companies, mining companies, companies operating in the oil sands, and liquefied natural gas proponents.

Lindsey Mosher’s practice focuses on energy regulation, as well as environmental and administrative law. She has experience in a broad range of regulatory matters, including regulatory compliance issues, regulatory approvals and hearings, and corporate matters.

Prior to joining Blakes, Lindsey obtained industry experience working in the legal department of a large Canadian oil and gas company, Alberta’s utilities regulator and a large Canadian telecommunications company.

Lindsey has appeared before Alberta’s utilities regulator, the Provincial Court of Alberta and the Court of Appeal of Alberta.

United States: Successor Liability for Environmental Liabilities

by Julie Vanneman, Director, Cohen & Grigsby

What happens when one company acquires the assets of another, then—many years later—receives a demand to participate in the clean-up of a contaminated site based on the acquired company’s long-ago shipment of materials to the site? 

As a general rule, the buyer of assets in an asset acquisition does not automatically assume the liabilities of the seller. However, under the doctrine of successor liability, a claimant may be able to seek recovery from the purchaser of assets for liabilities that were not assumed as part of an acquisition. This claim may be employed in cases involving environmental liabilities, especially when the original party is defunct or remediation costs are greater than the original entity’s ability to pay for the cleanup.[1]

Courts have taken different positions on whether state law or federal common law governs the determination of successor liability for claims under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), known also as Superfund. This distinction may have little practical effect because federal common law follows the traditional state law formulation. Notably, though, when evaluating successor liability under federal law, and specifically environmental laws like CERCLA, the doctrine may be more liberally applied because of policy concerns about contamination.[2]

Under the successor liability doctrine, a buyer can be held responsible for liabilities of the seller if one of four “limited” exceptions applies:

(1) the successor expressly or impliedly agrees to assume the liabilities; (2) a de facto merger or consolidation occurs; (3) the successor is a mere continuation of the predecessor; or (4) the transfer to the successor corporation is a fraudulent attempt to escape liability.

K.C.1986 Ltd. P’ship v. Reade Mfg., 472 F.3d 1009, 1021 (8th Cir. 2007) (citing United States v. Mex. Feed & Seed, Co., Inc., 980 F.2d 478, 487 (8th Cir. 1992)). A fifth exception, the substantial continuity exception, is a broader standard,[3] but most circuit courts do not apply it in CERCLA cases.[4]

Exception 1, express or implied assumption, must be analyzed in terms of the specific asset agreement in question. Exception 4, fraud, is generally employed in circumstances where the acquired company shifts its assets to avoid exposure to another entity.[5]

Courts have addressed the main issue of successor liability by asking whether the transaction is simply the handing off of a baton in a relay race (successor liability) or whether the new company is running a separate race (no liability).[6]  Examining factors relevant to the remaining elements—numbers 2 (de facto merger) and 3 (continuation)—helps answer the question. Under the doctrine of a de facto merger, successor liability attaches if one corporation is absorbed into another without compliance with statutory merger requirements. A court would look at whether there is a continuity of managers, personnel, locations, and assets; the same shareholders become part of the acquirer; the seller stops operating and liquidates; and the acquirer assumes the seller’s obligations to continue normal business operations.[7]  The “mere continuation” theory “emphasizes an ‘identity of officers, directors, and stock between the selling and purchasing corporations.’”[8]

Given the high stakes that can be involved with CERCLA cleanups, assessing prospects for applying the successor liability doctrine could be an important part of the liability analysis.


[1] See, e.g., James T. O’Reilly, Superfund and Brownfields Cleanup § 8:16, at 360 (2017-2018 ed.) [hereinafter O’Reilly] (“Mergers, sales of assets, and changing corporate names does not remove potential CERCLA liability.”).

[2] See O’Reilly § 8:16; see also, e.g.In re Acushnet River & New Bedford Harbor Proceedings re Alleged PCB Pollution, 712 F. Supp. 1010, 1013-19 (D. Mass. 1989) (in the CERCLA context, concluding that successor liability applied where there would be “manifest injustice” if one of the companies could “contract away” liability for PCB contamination).

[3] See K.C.1986 Ltd. P’ship v. Reade Mfg., 472 F.3d 1009, 1022 (8th Cir. 2007)

[4] See Action Mfg. Co. v. Simon Wrecking Co., 387 F. Supp. 2d 439, 452 (E.D. Pa. 2005).

[5] See, e.g., Eagle Pac. Ins. Co. v. Christensen Motor Yacht Corp., 934 P.2d 715, 721 (Wash. Ct. App. 1997). This exception is rarely used. Restatement (Third) of Torts:Prod. Liab. § 12 cmt. e (Am. Law Inst. 1998).

[6] See, e.g.Oman Int’l Fin. Ltd. v. Hoiyong Gems Corp., 616 F. Supp. 351, 361-62 (D.R.I. 1985).

[7] Asarco, LLC v. Union Pac. R.R. Co., No. 2:12-CV-00283-EJL-REB, 2017 WL 639628, at *18 (D. Idaho Feb. 16, 2017).

[8] United States v. Mex. Feed & Seed Co., 980 F.2d 478, 487 (8th Cir. 1992)  (quoting Tucker v. Paxson Mach. Co., 645 F.2d 620, 626 (8th Cir. 1981)).

This article was first published on the Cohen & Grigsby website.

About the Author

Julie counsels and represents clients in a range of environmental and litigation matters. She assists clients with day-to-day environmental compliance concerns and provides enforcement defense counseling, particularly with solid waste and groundwater issues. Her extensive background in CERCLA matters includes serving as legal counsel for clients involved in remediation initiatives at complex Superfund sites as well as litigating cases through multiple phases, including discovery, allocation negotiations, and alternative dispute resolution. Julie’s litigation practice encompasses not only environmental matters, but also insurance coverage actions and other commercial and business disputes.

Former Contaminated Mine Site in NWT Declared Clean

The Government of Canada recently announced that the former Tundra Gold Mine, located in the Northwest Territories, has been successfully remediated.  The cost of clean-up was $110 million and was paid for by the government.

Tundra Mine was briefly operational in the 1960’s and was used as a dumping ground in the 1980’s.  It’s former owner, Royal Oak Mines went bankrupt in 1999.

Remediation of the site included revegetating soil, sealing mine openings, consolidating and isolating tailings and waste rock, treating petroleum hydrocarbon impacted soils, erecting barriers for erosion control, and removing buildings.  The clean-up project lasted more than a decade.

Though some re-vegetation has begun, the land – around 240 km north-east of Yellowknife – will remain recognizably an old industrial site for decades to come.

Tundra Mine Site post clean-up (Photo Credit: Jamie Malbeuf/CBC)

Dominic LeBlanc, Canada’s newly installed minister for northern affairs, called Tundra’s remediation “a great example of the hard work of northerners and the importance of partnerships with local Indigenous communities.”  Northern residents represented 76 percent of the project’s suppliers and 61 percent of its employees.  The Minister stated that the restoration will help local Dene and Métis peoples once again use the land for traditional practices.

The Canadian government will continue to oversea that monitoring of the site to ensure it remains stable.  Monitoring, using a combination of on-site equipment and drones, will cost an unspecified further sum each year.

More work to be done remediating the North

According to an article in Cabin Radio, Tundra’s successful clean-up remains a drop in the larger ocean of contaminated sites within the NWT.  Tundra is the 24th site under federal supervision to have reached this stage, a spokesperson for Crown-Indigenous Relations and Northern Affairs Canada said by email to on Cabin Radio.

federal webpage last updated in 2013 suggests Canada is responsible for more than 50 significant contaminated sites in the territory, including those 24.

separate federal website lists 1,634 contaminated sites within the Northwest Territories, where a contaminated site is defined by the Federal Goverment as “one at which substances occur at concentrations (1) above background (normally occurring) levels and pose or are likely to pose an immediate or long term hazard to human health or the environment, or (2) exceeding levels specified in policies and regulations.”

Some entries on the latter list are considered remediated and their files closed. Some are smaller sites not felt worthy of their own, separate clean-up projects.  Several dozen of them, for example, are grouped under one project to clean up the Canol Trail, a World War Two initiative which left contaminated soil, asbestos, and a range of hazardous materials strewn across 355 km of the Sahtu.

In the 2017-18 financial year, public records show federal agencies were obliged to spend money on some 275 separate contaminated sites in the Northwest Territories.  $157,000 was spent assessing a range of those sites, while a little over $103 million was spent on remediation work.

Of that figure, around $23.6 million was spent remediating the Tundra site in that financial year.

Unsurprisingly, Yellowknife’s Giant Mine – considered among the most toxic sites in Canada, harbouring 237,000 tonnes of poisonous arsenic trioxide in underground chambers – was the only site receiving more remediation money.

In the same period Canada spent just over $36 million on Giant, where full remediation work does not even begin until 2020.

Giant, like Tundra, was owned by Royal Oak when the company collapsed and the site became an unwanted federal problem. The full bill for Giant’s clean-up and maintenance – a program of indefinite, certainly decades-long duration – is expected to reach $1 billion in today’s money.

Tundra Mine 1963 (Photo Credit: Gerry Riemann)

 

British Columbia: Invitation to Participate: Land Remediation Client Survey

The British Columbia Ministry of Environment and Climate Change Strategy is requesting the assistance on B.C. environmental professionals to complete a survey regarding the suite of contaminated site services provided by the Land Remediation Section.  The survey is part of an internal Ministry effort to examine and evaluate the ways in which contaminated sites services are provided in support of administering the Environmental Management Act and Contaminated Sites Regulation, and feedback will inform efforts to improve the client experience in obtaining these services.

The survey takes approximately 10 minutes to complete, allowing for more or less time depending on how many or few contaminated sites services you use. The survey is open for approximately 6 weeks, and will close on September 5, 2018.

Questions regarding the survey can be forwarded to site@gov.bc.ca.

 

Canadian DND searching possible contaminated sites for buried Agent Orange stocks

As reported by the CBC, the Canadian Department of National Defence (DND) has identified up to six known contamination sites at a New Brunswick military base as it works to determine whether the cancer-causing defoliant Agent Orange was buried surreptitiously there decades ago.

Agent Orange is an herbicide and defoliant chemical. It is widely known for its use by the U.S. military as part of its herbicidal warfare program during the Vietnam War from 1961 to 1971. It is a mixture of equal parts of two herbicides, 2,4,5-T and 2,4-D. In addition to its damaging environmental effects, the chemical has caused major health problems for many individuals who were exposed.

Officials at the department’s Directorate of Contaminated Sites presented a map showing the various locations to a former military police officer and a retired civilian employee of Canadian Forces Base Gagetown, N.B. — both of whom say they witnessed chemical drums being buried on the base in separate incidents over 30 years ago.

Past Use of Agent Orange at CFB Gagetown

Agent Orange had been used on the base in the past.  In 2010, Jean-Pierre Blackburn, the Canadian Minister of Veterans Affairs and Minister of State (Agriculture) at the time, announced that the Government of Canada was extending the one-time, tax-free ex gratia payment of $20,000 related to the testing of unregistered U.S. military herbicides, including Agent Orange, at Canadian Forces Base (CFB) Gagetown in 1966 and 1967.

For three days in June 1966 and four days in June 1967, Agent Orange, Agent Purple and other unregistered herbicides were tested at Canadian Forces Base (CFB) Gagetown in cooperation with the U.S. military to evaluate their effectiveness. These are the only known instances that these military test chemicals were used at CFB Gagetown. Agent Orange, Agent Purple and other unregistered herbicides are not used at the base today. The base uses only federally regulated herbicides for brush control during its annual vegetation management program.

Claims 

The claims by retired sergeant Al White and Robert Wilcox, who worked at the training base in the 1970s and 1980s, were first reported by CBC News last month.

Defence Minister Harjit Sajjan promised an investigation and officials are now trying to cross-reference the eyewitness accounts with existing records. The maps are meant to jog the memories of the two men, and to find out whether their claims involve existing dumps or unreported ones.

A massive asbestos dump

The list of contaminated sites is extraordinary. It shows, among other things, more than 3,900 barrels of asbestos waste buried in the same area as the suspected chemical dump.

Officials have offered to escort White onto the base so he can point out the area where he believes Agent Orange was buried. They and White have yet to agree on a date for the visit.

“Pointing on a map isn’t going to work … obviously it has to be a face-to-face opportunity,” White said in an interview.

A spokesman for the defence department confirmed an invitation had been extended but downplayed the significance, saying officials were “simply conducting discussions … in order to gain further insight into their claims.”

The visit would be closed to the media, said department spokesman Dan Lebouthillier in an email.

White said none of the locations pointed out thus far by defence officials match his recollection of the location.

“I say that with clarity,” he said.

The burial, he claimed, involved over 40 barrels stacked on a flatbed truck. It took place early in the morning in the late spring of 1985 and happened in what he described as a disturbing, clandestine manner that has troubled him ever since.

Map showing the Use of Herbicides at CFB Gagetown from 1952 to Present Day

White said he didn’t believe it was his place to come forward until he lost three friends — all former Gagetown soldiers — to cancer.

Wayne Dwernychuk, an expert who spent over 15 years studying Agent Orange contamination and its effects on combatants during the war in Vietnam, said it’s good the federal government is trying to get to the bottom of the mystery.

Once White points out the area, he said, ground scanning technology can quickly and accurately assess what might be underground.

“They should initiate some sort of ground penetrating radar,” he said. “If something turns up, I believe they should follow through with some deep core sampling to determine the extent of the contamination.”

One of the sites listed by National Defence was a chemical dump that has since been excavated — something Wilcox, the second witness, claims to have seen.

Another location is where the military claims to have disposed of rinsed, empty chemical drums.

The main refuse site — known as the Shirley Road dump — “may also [have] accepted drums,” according to a department statement. There was a separate place for dumping ash from burning coal.

During the investigation 14 years ago into the spraying of Agent Orange at the base in the 1960s, officials looked at a fifth location near a tank firing range, but claimed nothing was buried at that spot.

The sixth possible location involves the dumping of asbestos. Federal environment officials have acknowledged in the past that the fire-resistant insulation, ripped out of 15 nearby federal buildings in 1980s, was present at the base, but have never acknowledged the enormous quantity of it.

The waste asbestos was all wrapped and stuffed into metal barrels.

Five years ago, the federal government’s annual report on contaminated sites pointed to the same locations on the base and said assessment on further remediation was under consideration.

The risks of remediation

The same report noted the unique challenges such a clean-up would involve.

“The waste materials might contain ordnance, presenting an unacceptable safety risk to a remediation team,” said the 2013 review.

The report said tests of the wetland adjacent to the contaminated sites did not show chemical concentrations that would be of concern.

Lebouthillier said the locations are “capped” — meaning there’s a barrier between contaminated and uncontaminated soil — managed and monitored “according to federal environmental regulations and guidelines.”

Agent Orange used during the Vietnam war has left that country’s the soil contaminated and compromised.  Many Vietnamese have life-long health problems as a result to exposure to Agent Orange.  The United States has provided almost $42 million since 2007 toward the effort to clean up the effects of Agent Orange in Vietnam.

Past Investigations in Canada

In 2006, Golder Associates Ltd. (Golder) was retained by Public Works and Government Services Canada on a series of contracts on behalf of the Department of National Defence (DND) to research, organise and analyse all available information concerning the herbicides used at each Canadian Forces (CF) site across Canada. An objective of this undertaking was to confirm whether tactical herbicides such as Agent Orange and Agent Purple tested in 1966 and 1967 at CFB Gagetown were ever tested at other current and former CF Bases, Stations or Wings.

Golder’s review of the information has found no evidence of spray applications of the tactical herbicides Agent Orange or Agent Purple at any Bases, Stations or Wings aside from CFB Gagetown. Records do indicate that the non-tactical and commercially available herbicides 2,4,5-T and 2,4-D were potentially concurrently used, stored or disposed at each of Carp (Ontario), CFB Chatham and CFB Gagetown (New Brunswick), CFB Borden (Ontario) and another unidentified site.

As such, evidence to-date is to the effect that Agent Orange and Agent Purple were only applied at CFB Gagetown.

Soldiers detect Unexploded Ordnance (UXO) and defoliant Agent Orange in Vietnam’s central Da Nang City.

Tax rebate to fund $8.6M cleanup of former Kitchener Frame site

by Catherine Thompson, Waterloo Region Record

As reported by Catherine Thompson in the Waterloo Region Record, It’ll cost about $8.6 million to rid the soil and groundwater of contaminants at the former Kitchener, Ontario Frame site.

The huge industrial site at Homer Watson Boulevard and Bleams Road has been undergoing cleanup for the past three years. The soil and groundwater were contaminated with petroleum hydrocarbons, volatile organic compounds, metals, polychlorinated biphenyls (PCBs) and polycyclic aromatic hydrocarbons (PAHs), contaminants that are often found at former industrial sites.

The former Kitchener Frame Site (Photo Credit: Philip Walker/Record staff)

The city and the developers — Gary Ball and Marty Pathak — are keen to see the site redeveloped, said Rob Morgan, the City of Kitchener’s co-ordinator of development of former industrial sites. The site of the auto parts plant variously known as Budd Canada, ThyssenKrupp Budd Canada and Kitchener Frame, has been vacant since 2009.

Redevelopment of the sprawling 32-hectare site will give a big boost to the city’s supply of industrial land, Morgan said. About 16 hectares are slated industrial, 10 hectares are retail and 1.5 hectares are office. Another four hectares will be used for things like roads and storm water management.

“It’s much-needed land,” Morgan said. “Kitchener doesn’t have a lot of vacant industrial land left to offer.” There’s a couple of parcels, on Shirley Avenue and Strasburg Road, but not much else, he said.

The developers have applied to the city and region for grants under a program to encourage remediation of contaminated land.

The former Kitchener Frame site would be the biggest property ever to apply for the program, Morgan said.

Under the program, a developer cleans up a site and redevelops it. The new development generates far more taxes than the vacant land had. The city and region hand over the additional tax revenue to the developer for a set number of years, to repay the cost of the environmental cleanup.

The site now has an assessed value of $8 million, and generates about $108,000 in property taxes a year, split roughly 40-60 between the city and the Region of Waterloo. Once it’s cleaned up and redeveloped, it’s expected to have an assessed value of around $112 million, and generate $2.2 million in municipal property taxes.

“It’s a great program,” Morgan said. In exchange for foregoing the increased taxes for a certain number of years, the city gets vacant land cleaned up and converted to a productive use that generates more taxes and jobs.

“These lands are sitting dormant, contaminated, sometimes for many years. As a resident I’d rather see it cleaned up and earning money for the tax base.”

The Kitchener Frame site will be split into 11 different parcels from 1.3 to 10 hectares. Kitchener doesn’t expect to see the first new development on the site until about 2020, and development could continue for the next 10 or 15 years beyond that.

Morgan thinks it’s likely the property will be developed well before then, though. “They’ve got a lot of interest in that property. It’s a great location, because of its proximity to the 401; you’ve got a lot of variety in the lots; Kitchener has a strong manufacturing base, and we’ve got a lot of skilled workers.”

City staff are recommending that Kitchener council approve the application, which must also be approved by regional council, likely in June.

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About the Author

Catherine Thompson covers Kitchener City Hall for the Waterloo Region Record.

Events

RPIC Federal Contaminated Site Workshop: PFAS and Other Emerging Contaminants – The Science and Beyond

The Real Property Institute of Canada (RPIC) is well known for its Federal Contaminated Sites (FCS) Workshops, leading professional development events for federal and industry environmental professionals involved in the management and remediation of federal contaminated sites. These Workshops offer a unique opportunity for the public, private, and academic sectors to meet and exchange new ideas and information with colleagues and industry representatives from across the country and abroad. Since 2006, the RPIC FCS Workshops have been held in Ottawa, Vancouver, Montreal, Toronto, Kingston, Halifax, Edmonton and Richmond.

The next regional edition of RPIC’s Federal Contaminated Sites Workshop is scheduled for June 4-5, 2019 and is heading back to Halifax. This Workshop will provide a forum for the contaminated sites community to learn about technical, scientific and organizational innovations, and best practices for the management of sites contaminated with per and polyfluoroalkylated substances (PFAS) and other emerging contaminants. Under the theme PFAS and Other PFAS – The Science and Beyond, the proposed presentation streams include:

  • Environmental Site Assessment
  • Human Health and Ecological Risk Assessment
  • Remediation and Risk Management
  • Regulatory Framework/Guidelines
  • Project Management and Challenges Specific to Emerging Contaminants

The Call for Abstracts deadline is November 30 and the full technical program will be announced in early 2019. Registration is now open and you will want to confirm early so as not to miss this unique technical training opportunity.

We look forward to reconnecting with you in Halifax!

Clayton Truax
Workshop Chair

Cynthia Tremblay
Technical Co-Chair