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Couple admits illegally storing 4,500 tons of hazardous waste in warehouse

As reported in the St. Louis Post-Dispatch, a husband and wife recently plead guilty to a U.S. federal charge and admitted improperly transporting 4,500 tons of hazardous waste and storing it in a warehouse near St. Louis, Missouri.

The couple, both in their 60’s, pleaded guilty in U.S. District Court in St. Louis to a misdemeanor charge of placing someone in danger of death or serious bodily injury from a hazardous waste.

Green Materials LLC facility in Missouri (Photo Credit: Robert Patrick, Post Dispatch)

Their company, Missouri Green Materials LLC, Missouri Green Materials LLC stored a large quantity of spent sandblasting materials inside a warehouse located in the town of Berger, approximately 70 miles west of St. Louis.  They couple admitted that they arranged for the transport and storage of the hazardous waste from Mississippi, and failed to tell both the trucking companies that hauled the waste and the personnel that unloaded it of the danger.  Their storage facility was not properly permitted was not registered as a permitted hazardous waste storage or recycling facility.

The sandblasting waste materials are considered to be hazardous because they contain amounts of certain metals, including cadmium, that exceed regulatory limits established by the Missouri Department of Natural Resources and the U.S. Environmental Protection Agency (U.S. EPA).

The materials were stored in a warehouse in a flood plain for more than four years.  There are no indications of any release of the materials from the warehouse.

The couple have agreed to pay $1.5 million to the U.S. EPA for the costs of dealing with the waste. They could face probation or a sentence of six months behind bars for the crime under federal sentencing guidelines.

The source of the sandblasting waste was for a site in Mississippi.  An Ohio company, U.S. Technology Corp had been buried the waste.  The company was repeatedly ordered by regulators to remove it.

In 2016, the U.S. EPA and U.S. Technology signed a consent agreement whereby the company agreed to remove the waste from Green Material’s facility in Missouri and test the site for soil contamination.  According to prosecutors, this work was never performed.

U.S. Technology and president Raymond Williams, 71, both pleaded not guilty in the case. A hearing has been scheduled to change both pleas later in June.

Some sandblasting waste is classified as hazardous

Environmental Fine for Violation of Canada’s Regulations related to Petroleum Products Storage

Mosquito Grizzly Bear’s Head and Lean Man First Nation and band administrator, Arnold Moosomin, were recently sentenced in the Provincial Court of Saskatchewan for failing to comply with an environmental protection compliance order issued by Enforcement Officers from Environment Canada and Climate Change (the Canadian equivalent of the U.S. EPA).

Mosquito First Nation is an Assiniboine Nation located in the Eagle Hills approximately 30 kilometres south of Battleford, Saskatchewan.  It is nearly 50,000 acres in size and has approximately 1000 members.

The Court fined the Mosquito Grizzly Bear’s Head and Lean Man First Nation $100,000 and Moosomin $5,000.  The funds will be directed to the Environmental Damages Fund.

The fine was the result failing to comply with an environmental protection compliance order following an inspection to ensure compliance with the Canadian Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations.  These regulations establish technical standards for the design and installation of storage tank systems under federal jurisdiction and include requirements for operation, maintenance, removal, reporting and record-keeping.

Environmental Officers subsequently laid charges under the Canadian Environmental Protection Act, 1999 after it was determined that the First Nation and band administrator failed to comply with all of the terms of the order. The defendants were convicted following a trial.

Ontario Legal Report: Thompson Fuels Ordered To Pay Costs

Article by Paula LombardiSiskinds LLP

The case of Gendron v. Thompson Fuels, related to a home furnace oil tank that developed a leak in December 2008. The leak caused damage to the Gendron’s home and the surrounding environment, including nearby Sturgeon Lake. The City of Kawartha Lakes cleaned up the Lake.

On July 17, 2017 the court released its decision on this matter, (2017 ONSC 4009) granting judgement in favour of Gendron against Thompson Fuels. The court appropriated 60% liability to Gendron and 40% to Thompson Fuels. The parties agreed that, based on the court’s findings, Gendron’s total damages were $2,161,570, and Thompson Fuels’ portion of those costs equalled $901,747 ($864,628 plus $37,119 interest). In that decision the court found that the two remaining defendants, the Technical Standards and Safety Authority (“TSSA”) and Les Reservoirs D’Acier De Granby Inc. (“Granby”) were not liable.

Closeup of an oil slick in water with fall colors in the grass on the shore

The parties were unable to agree on costs and requested that submissions on costs be deferred until the decision on the post-trial motions was released. On March 29, 2018 the Court ordered Thompson Fuels to pay Gendron’s costs on a partial indemnity basis in the amount of $473,000.00 (2018 ONSC 2079). In arriving at this amount, the Court considered the Gendron’s contributory negligence, the costs of various post-trial motions brought by the parties, the reasonableness of Gendron’s bill of costs, and the fact that neither party had beat its offer to settle.

The Court then awarded $150,000 in costs to TSSA as against Gendron and Thompson Fuels, who had cross-claimed against TSSA. The Court further ordered Gendron and Thompson Fuels to contribute $140,000 and $10,000, respectively. The Court also ordered Gendron and Thompson Fuels to pay equal shares of TSSA’s costs of $7,500.00 for the post-trial motions. In deciding to award only partial indemnity costs, the Court found that given TSSA’s limited involvement at trial, it did not require two lawyers to attend at trial. The Court also noted that even though Gendron’s action in negligence against TSSA had failed, the trial Court had found that the TSSA had not been “a model of efficiency or clarity” in its dealings with Gendron.

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 Siskinds Law Firm web site.

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About the author

Paula Lombardi is a partner of Siskinds LLP,  and practices in the areas of environmental, municipal, regulatory and administrative law.  Prior to joining Siskinds, Paula worked as an associate at a Bay Street law firm where her practice focused on occupational health and safety, environmental and regulatory matters.

Paula recently spent two years as in-house counsel for a major privately owned US corporation, whose owner is on the Forbes 500 list, and was responsible for all Canadian legal and business issues relating to the import and export of goods, transportation of hazardous materials, remediation of contaminated sites, construction of large infrastructure projects, regulatory compliance, NAFTA matters, and preparation of environmental assessments in the US and Canada.

Paula has a great deal of experience in: providing due diligence advice; dealing with contamination issues; handling of organic chemicals and hazardous wastes; obtaining environmental approvals; obtaining planning and development approvals; providing advice to municipalities; defending environmental prosecutions; and assisting companies with environmental and regulatory compliance. Paula has appeared before numerous administrative tribunals.

Pulp Mill in British Columbia fined $900K for releasing deleterious effluent

The Mackenzie Pulp Mill Corporation recently pleaded guilty, in the Provincial Court of British Columbia, to depositing a deleterious substance into water frequented by fish, in violation of the pollution-prevention provisions of the Fisheries Act.  The company was ordered to pay a penalty of $900,000, which will be directed to the federal Environmental Damages Fund.  This funding is to be used for the conservation of fish or fish habitat in the Omineca region of British Columbia. The company was also ordered to complete an independent audit of its operations to prevent future incidents of this kind.

The offence relates to incidents in July 2014 and September 2016, when effluent discharging from the Mackenzie Pulp Mill was found to be deleterious to fish. Environment and Climate Change Canada enforcement officers investigated the incidents, and their investigation revealed that the mill’s treatment system had not properly treated the effluent before discharging it, due in part to improper management of the wastewater entering the treatment system. The effluent was deposited into Williston Lake, which is frequented by fish.

As a result of this conviction, the company’s name will be added to the Environmental Offenders Registry.  The Environmental Offenders Registry contains information on convictions of corporations registered for offences committed under certain federal environmental laws.

Environmental Fine of $100,000 for Gas Bar Owner in Big River, Saskatchewan

Big River First Nation was recently sentenced to pay a fine of $100,000 in the Provincial Court of Saskatchewan for failing to comply with an environmental protection compliance order concerning the Miami Gas Bar, a company owned and operated by the Big River First Nation. An environmental protection compliance order is an order under the Canadian Environmental Protection Act, 1999, which directs various measures be taken to stop or prevent a violation of the Act or its regulations.

The conviction stems a 2014 inspection by Officers from Environment Canada and Climate Change (ECCC) to verify compliance with the Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations under the Canadian Environmental Protection Act, 1999.  As a result of the investigation, the ECCC Officers issued an environmental protection compliance order. Charges were subsequently laid when the compliance order was not followed.  In court, Big River First Nation pleaded guilty to failing to comply with measures identified in the order.

The Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations aim to reduce the risk of spills and leaks of petroleum products from storage tank systems, which can contaminate soil and groundwater. The Regulations apply to storage tank systems operated by a federal department, board, agency, or Crown corporation; storage tank systems providing services to federal works or undertakings that are a port authority, airport, or railway; and storage tank systems located on federal or Aboriginal lands.

U.S. Ninth Circuit Rules Military Contractor Liable on CERCLA Clean-up Costs

Written by: By Whitney Jones Roy and Whitney HodgesSheppard Mullin Richter & Hampton LLP

TDY Holdings, LLC brought suit for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against the U.S. government relating to environmental contamination at TDY’s manufacturing plant. The district court granted judgment in favor of the government after a 12-day bench trial and allocated 100 percent of past and future CERCLA costs to TDY. On appeal, the Ninth Circuit held that the district court sharply deviated from the two most “on point” decisions regarding allocation of cleanup costs between military contractors and the U.S. government when it determined the cases were not comparable, clarified the applicability of those cases, and remanded the case to reconsider the appropriate allocation of cleanup costs between TDY and the U.S. government.

TDY (formerly known as Ryan Aeronautical Company) owned and operated a manufacturing plant near the San Diego airport

From 1939 through 1999, TDY (formerly known as Ryan Aeronautical Company) owned and operated a manufacturing plant near the San Diego airport. TDY’s primary customer was the U.S. government—99 percent of TDY’s work at the plant between 1942 and 1945, and 90 percent of the work thereafter was done pursuant to contracts with the U.S. military. The United States also owned certain equipment at the site from 1939 to 1979. Id. at 1006. Chromium compounds, chlorinated solvents, and polychlorinated biphenyls (PCBs) were released at the site as a result of their use during manufacturing operations. Id. In some cases, the government’s contracts required the use of chromium compounds and chlorinated solvents. Id. After passage of the Clean Water Act and other environmental laws classifying these chemicals as hazardous substances in the 1970s, TDY began environmental remediation and compliance at the site and billed the government for the “indirect costs” of that work, which the government paid. Id. at 1006–07. TDY incurred over $11 million in response costs at the site. Id. at 1007. Until the plant’s closure in 1999, the government reimbursed 90 to 100 percent of TDY’s cleanup costs at the site. Id. at 1007, 1010.

In 2004, the San Diego Unified Port District brought CERCLA claims against TDY. TDY and the Port District entered into a settlement agreement in March 2007 in which TDY agreed to cleanup releases at the site. TDY then brought suit for contribution under 42 U.S.C. § 9613(f)(1) and declaratory relief against the United States. Id. at 1007. The district court granted TDY’s motion for partial summary judgment declaring that the United States was liable as a past owner of the site under CERCLA. Id. After a 12-day bench trial on equitable allocation of costs, the district court held that the contamination caused by the hazardous substances at issue was attributable to TDY’s storage, maintenance, and repair practices, as well as spills and drips that occurred in the manufacturing process, rather than to the government’s directives to use the chemicals. Id. Accordingly, the district court allocated 100 percent of the past and future response costs for remediation of the three hazardous substances to TDY. Id. at 1008.

On appeal, TDY argued that the district court erred (1) when it allocated liability according to “fault”; (2) that the government’s role as owner rather than operator should not have been a dispositive factor in the court’s allocation, and (3) that the government should bear a greater share of response costs because it specifically required use of the chemicals at the site. Id. The court of appeals summarily rejected TDY’s first two arguments, but found that the district court did err in its analysis and application of binding authority on point: United States v. Shell Oil Co., 294 F.3d 1045 (9th Cir. 2002) and Cadillac Fairview/California, Inc. v. Dow Chem. Co., 299 F.3d 1019 (9th Cir. 2002). Id. at 1008–09. Shell Oil and Dow Chemical each produced products to support the U.S. military during World War II and incurred liability for contamination caused by hazardous chemicals that the government required to be used. In both cases, the Ninth Circuit affirmed the district courts’ allocation of 100 percent of cleanup costs to the government because “the contractors’ costs were ‘properly seen as part of the war effort for which the American public as a whole should pay.’” Id. at 1009.

The Ninth Circuit disagreed with the district court’s conclusion that Shell Oil and Cadillac Fairview were not comparable, but agreed that some deviation from their allocations were appropriate. Id. The Ninth Circuit agreed that the government exercised less control over TDY than it did over Shell Oil Co. or Dow Chemical. In support of this determination, the court noted that the government was an operator, rather than an owner, of TDY’s site, that the government-owned equipment was removed from the site 20 years before TDY ceased operations, and that TDY’s own practices at the site caused the contamination. Id. at 1010. Furthermore, the district court properly determined that “industrial operations undertaken for the purpose of national defense, standing alone, did not justify allocating all costs to the government.” Id.

However, the Ninth Circuit held that, in allocating 100 percent of cleanup costs to TDY, the district court failed to consider that the government required TDY to use two of the three chemicals at issue beginning in the 1940s, when the need to take precautions against environmental contamination from these substances was not known. Id. Furthermore, the Ninth Circuit determined that “[t]he court’s acknowledgement of the evolving understanding of environmental contamination caused by these chemicals, and TDY’s prompt adoption of practices to reduce the release of hazardous chemicals into the environment once the hazards became known, further undercuts the decision to allocate 100 percent of the costs to TDY.” Id. The district court also failed to consider the parties’ lengthy course of dealing through 1999, when the government paid between 90 and 100 percent of cleanup costs at the plant. Id. Although “a customer’s willingness to pay disposal costs . . . cannot be equated with a willingness to foot the bill for a company’s unlawful discharge of oil or other pollutants,” the Ninth Circuit nevertheless determined it should have been a relevant factor in the allocation analysis. Id.

This article was originally published on the Sheppard Mullin Real Estate, Land Use & Environment Law Blog

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About the Authors

Whitney Jones Roy is a litigation partner in firm’s Los Angeles office. Ms. Roy was recognized by Law360 as a “Female Powerbroker” and by the Daily Journal as one of the Top 100 Women Lawyers in California in 2014.  Ms. Roy has experience in all aspects of California and federal civil procedure through trial. She also defends her clients on appeal when necessary.  Ms. Roy also specializes in complex environmental litigation and related products liability litigation. Her expertise includes the Clean Air Act, CERCLA, RCRA, design defect, failure to warn, negligence, nuisance, and trespass.

Whitney Hodges is an associate in the Real Estate, Land Use and Natural Resources Practice Group in the firm’s San Diego office. She also serves on the firm’s Diversity and Inclusion Committee, Pro Bono Committee, Recruiting Committee, Energy, Infrastructure and Project Finance Team and Latin Business Team.  Ms. Hodges specializes in the representation of clients involved in real estate development. Her practice focuses on advising and representing major residential, industrial, commercial and mixed-use development projects, as well as Native American Indian tribes and renewable energy developers through all phases of the land use regulatory process and environmental compliance.

 

 

Environmental charges laid against Husky Energy Inc. and Husky Oil Operations Limited

Environment Canada and Climate Change (ECCC) recently laid a number of charges against Husky Energy Inc. and Husky Oil Operations Limited relating to the blended heavy crude-oil spill, in July 2016, which impacted the North Saskatchewan River, near Maidstone, Saskatchewan. The Government of Saskatchewan also filed a charge under the Environmental Management and Protection Act, 2010. These charges result from a 19-month joint federal-provincial investigation.

There are a total of ten charges which include one charge under subsection 36(3) of the federal Fisheries Act, one charge under subsection 38(5) of the federal Fisheries Act, six charges under subsection 38(6) of the federal Fisheries Act, one charge under the federal Migratory Birds Convention Act, 1994, and one charge under Saskatchewan’s Environmental Management and Protection Act, 2010.

The first appearance was at the end of March at the Lloydminster Provincial Court office.  According to the Premier of Saskatchewan’s office, the company faces a possible maximum $1 million fine.

Shoreline cleanup for the Maidstone-area oil spill (Jason Franson/Canadian Press)

Saskatchewan Minister of Environment Dustin Duncan said the spill led to significant changes in the provincial Pipelines Act; changes that include greater regulation, auditing powers, penalty provisions and licensing flowlines.

“We take this very seriously. There, to my knowledge, hasn’t been a charge with respect to the unintended release of oil from a pipeline in the province’s history,” he told reporters in late March.

Duncan said the site cleanup was completed by the end of last year, but Husky will have to work with the province’s Water Security Agency and the Ministry of Environment to make sure nothing else is required.  He said he expects full co-operation.

“In the last year, despite a very unsettling situation, Husky was very responsive when it came to the cleanup but also responding to the concerns by First Nations, by communities along the river, as well as to the requests that were made by the government department,” Duncan said.

All charges are currently before the Court, and they have not yet been proven. Under Canadian law, those charged are presumed innocent until proven guilty. Therefore, Environment and Climate Change Canada and Saskatchewan’s Water Security Agency, which has a responsibility for the specific charge under the provincial Environmental Management and Protection Act, 2010, will not be commenting further at this time.

 

New Brunswick Southern Railway pleads not guilty to charges related to oil transport

As reported by the CBC, New Brunswick Southern Railway has pleaded not guilty to 24 charges related to the transportation of oil.  Defence lawyer Catherine Lahey entered the pleas on the Irving-owned company’s behalf during a brief appearance in Saint John provincial court on earlier this month.

The charges against the railway, a subsidiary of J.D. Irving Ltd., stem from a Transport Canada investigation triggered by the 2013 derailment that killed 47 people in Lac-Mégantic, Que., prosecutors have said.  Twelve of the charges under the Transportation of Dangerous Goods Act relate to failing to create proper shipping documents for the purpose of transporting petroleum crude oil.  The other 12 charges relate to having unqualified personnel handling dangerous goods — crude oil.

The offences are all alleged to have occurred between Nov. 3, 2012, and July 5, 2013, at or near Saint John.  Irving Oil would have imported about 14,000 cars of crude for its Saint John refinery during that period.

New Brunswick Southern Railway is part if NBM Railways, a subsidiary of J.D. Irving Ltd., which also includes Cavendish Farms, Kent Building Supplies and Irving Pulp & Paper.

A trial date will be set on June 4.  Judge David Walker said the Crown is expecting to take about three weeks to present its case.  There is no word on how long the defence will take.  Pleas were delayed last month because the defence was still in the process of receiving an estimated 9,000 disclosure documents from the Crown.

The rail cars full of crude that exploded in Lac-Mégantic, Que., in July 2013 were destined for Irving Oil’s refinery in Saint John. (CBC)

In October 2017, Irving Oil was ordered to pay $4 million after pleading guilty to 34 charges under the same act.  Those charges related to failing to properly classify the crude oil it transported by train and inadequately training its employees in the transportation of dangerous goods.

The crude oil in the derailed rail cars that exploded in Lac-Mégantic was destined for Irving’s refinery in Saint John.

New Brunswick Southern Railway, along with its sister railways — Maine Northern Railway and Eastern Maine Railway — operates 883 kilometres of railway in New Brunswick and Maine.

Court Rejects Environmental Consultant’s Third Party Claim Against Prior Owner/Occupants

by Stan Berger, Fogler Rubinoff

On March 22, 2018 the Ontario Superior Court of Justice in MVL Leasing Ltd. v CCI Group Inc. 2018 ONSC 1800 granted Rule 21 motions striking third party claims brought by an environmental consultant who was being sued by a purchaser of property for professional negligence and breach of contract. The lawsuit alleged that the plaintiff was led into closing the sale by the consultant’s Phase 1 and Phase 2 Environmental Site Assessments. The property turned out to be contaminated. The consultant in turn alleged that the contamination was caused by one or more businesses operated by the third parties. The consultant requested contribution indemnity from the third parties on 6 different grounds: nuisance, loss or damage caused by a spill pursuant to s.99 of Ontario’s Environmental Protection Act, the occupier’s duty under the Occupiers’ Liability Act to ensure the safety of persons entering upon the property, negligence, liability under the Negligence Act and unjust enrichment. The consultant argued that if found liable in the main action, it would have incurred pecuniary losses as a direct result of the spill, those damages being the plaintiff’s remediation costs and or the decrease in the property’s value.

Court’s Reasons for Rejecting the Third party Claims

The nuisance claim was rejected on the basis that the consultant did not own, occupy or possess the property, or any adjacent or nearby property impacted by the alleged contamination. The s.99 EPA claim was only available where the damages were directly caused by the spill and that was not the case. The occupier liability claim was rejected because the consultant suffered no damages as a result of entering the property in question. With respect to the negligence claim, the Court refused to impose a new duty of care upon the third parties. There was no proximity in the relationship between the consultant and the third parties. The potential economic harm to the consultant was not a reasonably foreseeable consequence of the alleged acts or omissions of the previous third party owners/occupiers. The Negligence Act claim was rejected on the basis that the consultant and the third parties did not meet the test under the Act of being concurrent tortfeasors for contribution and indemnity to be available. The plaintiff’s actual or potential causes of action against the consultant and the third parties were entirely different in nature. The damages allegedly caused by the third parties were different and discrete from those caused by the consultant. Finally, the unjust enrichment claim was rejected as the consultant had not pleaded any direct conferral of a benefit upon the third parties and the consultant had not suffered a corresponding detriment. If the consultant had incurred a detriment in the future by the plaintiff succeeding with its action, that detriment only related to the breach of contract and/or negligence of the consultant and the third parties were not parties to that relationship.

What can we take away from this Decision?

In order to sustain a third party claim against historic owners or occupiers of contaminated property, environmental consultants who are sued by a purchaser of contaminated property, will have to show that that the historic owners/occupiers were somehow responsible for or at least connected to the contractual breach or negligence which the purchaser alleges against the consultant.

This article was previously published by Fogler, Rubinoff LLP and can be found on the firm’s website.

About the Author

Stanley Berger is certified by the Law Society of Upper Canada as a specialist in Environmental Law.  He was called to the Ontario Bar in 1981.  He joined the law firm of Fogler Rubinoff in 2013.

 

SJC Clarifies Statute of Limitations for Contaminated Property Damage Claims but Raises Questions of Application

by Marc J. GoldsteinBeveridge & Diamond PC

Plaintiffs with property damage claims under the Massachusetts cleanup law have more time to bring their claim than might be expected under the three-year statute of limitations according to a recent ruling by the top Massachusetts court.  The Supreme Judicial Court ruled that the statute of limitations begins running when the plaintiff knows that there is damage to the property that is “permanent” and who is responsible for the damage, pointing to the phases of investigation and remediation in Massachusetts’ regulatory scheme as signposts for when a plaintiff should have that knowledge.  Grand Manor Condominium Assoc. v. City of Lowell, 478 Mass. 682 (2018).  However, the Court left considerable uncertainty about when the statute of limitations might begin for arguably more temporary property damages such as lost rent.

In this Google image, the Grand Manor condominium complex is visible at the center-right.

In this case, the City of Lowell owned property that it used first as a quarry and then as a landfill in the 1940s and 50s before selling the property in the 1980s to a developer.  The developer constructed a condominium project on the site and created a condominium association soon thereafter. As part of work to install a new drainage system in 2008, the contractor discovered discolored soil and debris in the ground.  Subsequent sampling indicated that the soil was contaminated and that a release of hazardous materials had occurred.  The condo association  investigated in early 2009, and MassDEP issued notices of responsibility to both the condo association as well as the city in May 2009.  The city assumed responsibility for the cleanup and worked the site through the state regulatory process known as the Massachusetts Contingency Plan (MCP).  In the city’s MCP Phase II and III reports in June 2012, it concluded that the contamination was from the city’s landfill operations, that it would not be feasible to clean up the contamination, and proposed a pavement cap and a deed restriction.

The condo association and many of its members filed suit in October 2012 for response costs under Chapter 21E, § 4 and damage to their property under G.L. c. 21E, § 5(a)(iii).  At trial, the jury awarded the plaintiffs response costs under Section 4 but found that the plaintiffs had failed to prove that their property damage claim was brought within the three-year statute of limitations for such claims under G.L. c. 21E, § 11A.  The Supreme Judicial Court took the case on direct appellate review.

Section 11A provides that an action to recover damage to real property “be commenced within three years after the date that the person seeking recovery first suffers the damage or within three years after the date the person seeking recovery of such damage discovers or reasonably should have discovered that the person against whom the action is being brought is a person liable…”  Quoting Taygeta Corp. v. Varian Assocs., Inc., 436 Mass. 217, 226 (2002), the Court summarized this as a requirement that the claim must be brought within three years of when plaintiff “discovers or reasonably should have discovered [1] the damage, and [2] the cause of the damage.”

The Court quickly agreed that “the damage” referred to in Section 11A was, for these purposes, the property damages of Section 5 and moved on to the plaintiffs’ contention that the limitations period should not run until they discovered or reasonably should have discovered that the damage was “permanent” or, in other words, not reasonably curable.  Until that time, they argued, they could not know if they had a property damage claim because the site could be fully remediated.

The Court examined the application of the statute of limitations in the context of the statutory scheme for investigating and remediating sites in Massachusetts.  The Court found that the primary purpose of Chapter 21E is to clean up environmental contamination and to ensure responsible parties pay for the costs of that cleanup.  As a result, the statute prioritizes “performance and financing of cleanup efforts, and then considers the calculation of property damage that cannot be cured by remediation and remediation cost recovery.”

In interpreting the statute of limitations, the Court crystalized the question as “whether the word ‘damage’ in § 11A(4) refers specifically to damage under § 5, that is, damage that cannot be cured and compensated by the cleanup and cleanup cost recovery processes defined by the MCP and §§ 4 and 4A, such that the limitations period does not begin to run until the plaintiff knows there is residual damage not subject to remediation and compensation.”  In order to have knowledge that a plaintiff has suffered damage that is not curable by the MCP remediation process, the MCP process must have run sufficiently to know that § 5 damages exist – that there is contamination that will not be addressed through remediation leaving the property at a diminished value.  Since the liable party is required to determine the extent of the damage in Phase II and evaluate available remedies in Phase III of the MCP, as the Court noted, “[i]t would make little sense to require the plaintiff to independently determine whether residual property damage exists prior to the completion of these reports.” As a result, the Court concluded that the statute of limitations did not start to run until the plaintiff became aware that the site would not be fully remediated in the Phase II and III reports in June 2012 months before they filed their lawsuit.  Exactly what constitutes full remediation remains to explored in further cases, as the range of outcomes from achieving background conditions, implementing deed restrictions, reaching temporary solutions, or even leaving just a few molecules of contamination left behind could impact this analysis.

The Court contended that this interpretation of the statute of limitations provides a “prescribed and predictable period of time” within which claims would be time barred, given that there are timetables associated with the production and submission of MCP Phase II and III reports.  Under normal circumstances, the Court expected that a plaintiff will know it has a claim within five years of notifying MassDEP of contamination.

Despite the Court’s pronouncement that it had provided predictability for these types of claims, the statute of limitations for non-permanent property damages, such as lost rental value, or for sites where there is a long-term temporary solution in place, remain uncertain.  Lawyers and clients evaluating how and when to bring claims for temporary and permanent damages will need to carefully evaluate a range of potential options in pursuing a preferred single case for property damage without unacceptable risk that an uncertain statute of limitation may have run.

The article was first published at the Beveridge & Diamond website.

Beveridge & Diamond’s Massachusetts office assists parties at all phases of contaminated sites, guiding clients through the MCP investigation and remediation process and prosecuting and defending claims in court for cost recovery and property damage.  For more information about this practice, contact Marc Goldstein or Jeanine Grachuk.

About the Author

Marc Goldstein helps clients resolve environmental and land use disputes and to develop residential, commercial, and industrial projects. He serves as the Managing Principal of Beveridge & Diamond’s Wellesley, Massachusetts office and the Chair of the firm’s Technology Committee.

Marc provides practical, cost-effective advice to clients with environmental contamination issues, whether those clients are cleaning up hazardous materials and seeking contribution from previous owners or adjacent landowners or facing claims under Chapter 21E or Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for their alleged role in contamination.