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Developer takes Alberta to appeal board over former Edmonton wood treatment plant

As reported by Global News, Cherokee Canada is fighting five enforcement orders imposed by Alberta Environment and Parks (AEP) connected to the former Domtar Wood Treatment Facility located in Edmonton.  AEP has been conducting an investigation on properties associated with the former Wood Treatment Plant. As a result of the investigation, a number of Enforcement Orders were issued to the current owners, Cherokee Canada.

Nearby residents, concerned by off-site migration of wood treatment chemicals, have been kept up-to-date of the results of the AEP investigation and subsequent enforcement actions. Contaminants from a historical wood treatment processing plant continue to exist on property formerly occupied by the Domtar Wood Treatment Plant.  This contamination, which originated prior to 1987, consists of benzene, dioxins and furans, free hydrocarbons, naphthalene, polycylic aromatic hydrocarbons (PAH) mixtures, and pyrene.

AEP stated in a news release that it issued the Enforcement Orders to ensure the responsible parties implement appropriate remedial measures and mitigate the potential risks that have been identified.  The latest Enforcement Orders require that the source of the contamination be controlled and remedial measures be implemented in specific areas of the property.

Off-site testing at lands adjacent to Cherokee Canada development (Photo Credit: CTV Edmonton)

Results of off-site testing for contamination in early 2018 found that contamination had not migrated off-site and that there are no health concerns in the surface soil of people’s properties. The off-site testing program was conducted by an independent third-party consulting firm under the direction of AEP.

Cherokee Canada, the developer has started turning the site of the old Wood Treatment Plant in northeast Edmonton into a new residential community but the current and ongoing legal proceedings have halted the project.  “It’s been very difficult because it’s effectively frozen our activities for three years now,” said John Dill, Cherokee Canada’s managing partner.  “It’s very expensive to go through this process, ” he added.

Houses have already been built in the neighbourhood but recently, the AEP questioned the safety of the soil.  AEP said third party testing at the site found chemicals dangerous to human health. The enforcement orders require Cherokee to remediate any contamination.

“The core aspect of these orders is to basically remove potentially large amounts of soil from these sites,” said Gilbert Van Nes, general counsel for the Environmental Appeals Board. “Domtar and Cherokee disagree that this is necessary.”

Both Cherokee Canada and Domtar have completed remediation efforts but AEP, through the enforcement orders, are claiming that they didn’t go far enough.

“Our approach was to take the contaminated soil, isolate it in a separate soil berm — again, a common practice in other jurisdictions — and ensure the soil was protected from exposure to other receptors, humans, animal,” Dill said.  “The disagreement is over how we can remediate this site so it’s safe for residential standards so that we can complete our residential development and restore the site that was previously contaminated to productive use.”

Three environmental experts are heading up the independent appeal board.  The board will pass its findings on to the environment minister and Shannon Phillips will make the final decision on whether construction can resume. However, a decision is not expected until December.

A map shows the former site of the Domtar creosote plant. (Photo Credit: CBC)

 

Vancouver files claim against owners of vessel that leaked fuel in 2015

As reported by CTV News, the City of Vancouver has filed a federal court claim against the owner of a vessel that spilled fuel into English Bay in 2015, as part of the city’s continuing effort to get compensation for its response efforts.

Vancouver Mayor Gregor Robertson says three years after the MV Marathassa spilled 2,700 litres of bunker fuel into the bay, the city still hasn’t been compensated for about $550,000 it spent on response efforts.

Robertson says Vancouver has sought repayment through the federal government’s Ship-source Oil Pollution Fund, but has only been promised compensation for 27 per cent of its costs — something Robertson called “totally unacceptable.

“It’s ridiculous that it’s taken over three years now fighting for our costs to be covered by an oil spill in our harbour,” Robertson told reporters gathered at Sunset Beach in Vancouver on Sunday.

The city’s claim against the ship owners — filed last month but announced on Sunday — calls for damages, interest and court costs related to the spill.

Robertson said the city’s difficulty in getting paid back for what he described as a “relatively small oil spill” shows there aren’t enough measures in place to protect coastal communities against more major spills.

He said the costs and impacts of a potential diluted bitumen spill from the increased tanker traffic that would come with the Kinder Morgan Trans Mountain pipeline expansion has not been meaningfully addressed by the federal government.

Robertson said the Ship-source Oil Pollution Fund was set up by the federal government to act in the interest of communities like Vancouver, but is failing to do so.

“It clearly does not do that, does not deliver the results. This speaks to the greater concern we have with Kinder Morgan and oil tankers,” he said.

Transport Canada, which oversees spill response, could not immediately be reached for comment.

The claim’s statements have not been proven in court.

Crews on spill response boats work around the bulk carrier cargo ship Marathassa after a bunker fuel spill on Burrard Inlet in Vancouver, B.C., on Thursday April 9, 2015. (Darryl Dyck/THE CANADIAN PRESS)

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.

 

 

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.

 

Key Developments in Environmental Law in Canada from 2017

A book on the developments in environmental law in Canada during 2017 was recently published by Thomson Reuters.  Edited by Stanley D. Berger of Fogler Rubinoff LLP, the book includes a number of interesting chapters related to contaminated sites and the issues raised in the Midwest Properties Ltd. v. Thordarson (“Midwest”) court case.  The Midwest case is part of a possible trend in Canada toward awarding damages based on restoration costs rather than diminution in value.  If nothing, else the Midwest Case has introduced uncertainty to the law of damages in contaminated sites cases.

In the chapter written by Natalie Mullins, a litigation partner in the Advocacy and Environmental groups in the Toronto office of Gowling WLG, on the evolution and current state of law on damages in contaminated sites, she states that despite being explicit about awarding compensatory damages only under section 99 of the Alberta Environmental Protection Act (“EPA”) and not at common law, the Alberta Court of Appeal may have implied that restoration costs are the default measure of damages in contaminated sites cases.  She also explores some other critical issues that have arisen post-Midwest, such as:

  • Whether diminution in value is still relevant to the measure of damages;
  • What it means to “restore” a real property;
  • How the court can take a proactive role to ensure that awards made to benefit the environment actually meet that objective; and
  • How defence counsel might prevent similar awards in the future, and how plaintiff’s counsel might use the case to obtain significant damages for their clients.

An interesting point raised by Ms. Mullins in her contaminated sites chapter is that in recent court cases, highlighted with Midwest, court decisions may be paving the way for plaintiffs to recover very significant damage awards for the contaminated of their sites that grossly exceed their actual loss and, in certain circumstances, may be completely unwarranted.

Ms. Mullins questions if the Midwest decision has created the potential for litigants to profit off purchasing contaminated sites and for defendants to face double jeopardy following judgment at trial.

The book is available at online for $144 (Cdn.).

 

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

by Beveridge & Diamond PC

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

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

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

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

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

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

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

  1. Is there government action that bars the suit?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  1. Can you recover your attorneys’ fees?

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

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

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

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

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

Class Action suit filed against CN Rail for derailment

As reported in the Sudbury Star, a Timmins law firm has sent a letter out to Gogama area residents and cottagers advising that a class-action lawsuit has been filed against CN Rail in connection with the derailment of an oil tanker train and subsequent oil spill that occurred on March 7, 2015.

The letter, signed by James Wallbridge of Wallbridge, Wallbridge Trial Lawyers of Timmins, was to advise residents to sign retainer agreements or to indicate whether or not they wish the law firm to proceed on their behalf.

The derailment and oil spill occurred in the area of the Makami River bridge, on the CN mainline near the village of Gogama, a town in Northeastern Ontario located between Timmins and Sudbury.  An eastbound CN Rail train hauling 94 tank cars had a derailment after riding over a broken rail. In all, 39 tank cars left the track.  Some of the cars fell into the river next to be bridge, exploded and burst into flame. Several of the cars were breached releasing many hundreds of thousands of litres of synthetic crude oil into the river and the surrounding environment.

Gogama train derailment

Wallbridge’s letter said the claim against CN Rail was filed back in July and that there are indications that the clean-up of the oil spill in the area is not properly done yet.

“We are advised by Fred Stanley of Walters Forensic Engineering that the cleanup continues notwithstanding CN and the Ministry of the Environment’s view the oil spill cleanup is complete,” said the letter.

Wallbridge went on to suggest that more environmental testing would be needed early next year.

“We are of the view that next spring may be an appropriate time to review the work that has been done and undertake independent testing. We have spoken to the Ministry of Environment’s legal counsel about testing and have indicated that we anticipate their cooperation in reviewing the overall cleanup.”

Wallbridge also advised that his firm has indicated that the timetable for the class action should be “held in abeyance” pending a review of the cleanup in May and June of 2018.

He said his firm elected to proceed by class action to preserve the limitation period of two years from the date of the occurrence. The class action serves to suspend the limitation period during the certification process, the letter said.

The Gogama-Makami River derailment was the second CN oil train derailment in that area in the winter of 2015. Both occurred along the section of the CN mainline known as the Ruel Subdivision. Another train hauling tank cars had derailed three weeks previous, on Feb. 14, 2015, in a remote bush and wetlands area, about 35 kilometres north of Gogama.

Canada’s Transportation Safety Board filed a report in August saying that a broken section of rail was the cause of the derailment at the Makami River bridge.

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

By Seth Jaffe, Foley Hoag LLP

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

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

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

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

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

His solution?

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

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

The problem?

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

We all know how well that’s worked out.

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

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About the Authors

Seth D. Jaffe

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

Kathleen Brill

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

 

Heiltsuk First Nation to sue Kirby Corporation over 2016 diesel spill

As reported in Coast Mountain News, this month marks the one-year anniversary of the October 13 oil spill in Bella Bella, British Columbia. With the community’s recovery efforts undermined by government and Kirby Corporation’s refusal to take responsibility for the spill and to cooperate in its aftermath, the nation says it has no option but to turn to the courts.

“The oil spill continues to be a catastrophic injury to our food sources, culture, and economy,” says Heiltsuk Tribal Council Chief Councillor, Marilyn Slett. “Thanks to Kirby Corporation and the governments of British Columbia and Canada, our community’s road to recovery keeps getting longer and longer.”

The Nathan E. Stewart articulated tug/barge was southbound from Alaska when it ran aground at Edge Reef near Athlone Island on Oct. 13, 2016. (Photo Credit: Western Canada Marine Response Corporation)

Kirby Corporation and government have kept information secret about what occurred on October 13, 2016 when the Nathan E. Stewart grounded, sank and spilled oil into Gale Pass. The Heiltsuk Tribal Council made numerous separate requests for information to the polluter (Kirby Corporation) and various government agencies, including Transport Canada, the Transportation Safety Board, and the Canadian Coast Guard. Those requests were largely denied or ignored.

The Nation claims this secrecy and lack of collaboration has continued throughout the post-spill recovery.

“Recently, we learned the B.C. Ministry of Environment and Kirby have been secretly negotiating an agreement on the post-spill environmental impact assessment since early this year,” says Chief Councillor Slett. “Since this nightmare began, the polluter and provincial and federal governments have ignored our questions and environmental concerns, our collaboration attempts, and our rights as indigenous people. We have no choice but to turn to the courts.”

The nation is preparing to take legal action, aiming to recover damages suffered by its members as well as to examine the actual state of Canada’s “world class” oil spill response system.

The case will seek compensation for loss of commercial harvesting of marine resources and infringement of Aboriginal rights relating to food, social and ceremonial importance of marine resources — factors that the current oil spill liability framework does not account for.

“When I’m not harvesting Gale Pass to feed my family, I am working there as a commercial fisherman, earning an income to support them – and I’m one of many,” says harvester and volunteer oil spill responder, Robert Johnson. “Despite our reliance on Gale Pass, the governments of British Columbia and Canada and Kirby the polluter have little interest in understanding the impacts of this oil spill on the health of my community, this environment, or our economy.”

The existing oil spill response framework excuses the polluter and government from full responsibility for oil spill impacts on Aboriginal rights otherwise protected by the Constitution.

As such, the government of British Columbia and Kirby are not required by law to do comprehensive impact assessments of the oil spill. To date, they have rejected multiple Heiltsuk requests to participate in a study of the current and long-term impacts of the oil spill on the health of the ecosystem and marine resources and the social and economic consequences associated with the loss of harvest and use of the impacted area.

Instead, Kirby Corporation and the BC Ministry of Environment are proposing a limited environmental assessment covering a minority of the area and species affected.

Heiltsuk Nation will be asking the courts to assess whether this existing regime of liability for oil spills can really be considered constitutional.

“We’re learning the hard way that indigenous people and coastal communities can’t count on polluters, Western Canada Marine Response Corporation, or the governments of B.C. and Canada in a crisis situation,” says Kelly Brown, Director of the Heiltsuk Integrated Resource Management Department. “For our sake, and the sake of our neighbours, we are consulting with a range of experts to assess damages, recovery times, and, ultimately, determine how we can prevent a similar disaster in the future.”

The Nathan E. Stewart sinking off Bella Bella, British Columbia

Analyses of the oil spill response have revealed massive safety and planning oversights by the polluter and federal and provincial government regulations. They include: a lack of spill response materials; ineffective booms and delays in employing them; a lack of safety instructions and gear for Heiltsuk first responders exposed to diesel and dangerous marine conditions; and confusion over who was in charge in the early hours of the oil spill.

“Government representatives travel the province, country, and the world preaching reconciliation and nation-to-nation relationships with first people. Meanwhile, back home, they are avoiding our calls and emails, excluding us from meetings, and ignoring our rights,” says first responder and Hereditary Chief Harvey Humchitt. “If the courts have to explain that this is not what nation-to-nation relationships and reconciliation look like, so be it.”

The Heiltsuk Tribal Council expects the results of the various impact assessments, legal analyses, and evaluations to materialize in the coming weeks.

CERCLA Trumps As-Is Sales

By Steven L. Hoch, Attorney, Clark Hill

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

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

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

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

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

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

 

This article was first published on the Clark Hill website.

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About the author

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

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

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