To Sample or Not: U.S. EPA Issues Interim Guidance on Site Field Work During the COVID-19 Pandemic

Written by Amy L. Edwards, Bonni F. Kaufman, and Meaghan A. Colligan,  and  Holland & Knight LLP

On April 10, 2020, the U.S. Environmental Protection Agency (EPA) Office of Land and Emergency Management (OLEM) and Office of Enforcement and Compliance Assurance (OECA) issued Interim Guidance on Site Field Work Decisions Due to Impacts of the COVID-19 Pandemic to all EPA Regional Administrators. The Interim Guidance outlines the factors that EPA Regional Offices should consider on a case-by-case basis to evaluate if cleanup actions should continue as is, be reduced or paused, as well as affirmative steps that EPA Regions must take depending on what decision they make. The Interim Guidance is applicable to Superfund cleanups, Resource Conservation and Recovery Act (RCRA) corrective actions, Toxic Substances Control Act (TSCA) PCB cleanups, cleanups under the Oil Pollution Act, the Underground Storage Tank (UST) program and EPA emergency responses to releases or substantial threats of releases (Response Actions) when EPA is the lead agency. The Response Actions may be performed by EPA, states, tribes other agencies of the federal government and potentially responsible parties where EPA is the lead agency.

EPA was clear that Regional Office decisions and follow-up steps must be made in accordance with EPA’s priorities to 1) protect the health, safety and welfare of the public, EPA staff and third-party environmental professionals, and 2) maintain EPA’s ability to respond to environmental emergencies and protect the environment (EPA’s Priorities). EPA indicated that adherence with federal, state, tribal or local health declarations and restrictions (Health Declarations), when possible, is integral to EPA’s Priorities. EPA was clear that no one factor outlined in the Interim Guidance should be considered in a manner that would override protection against unnecessary potential exposure to COVID-19. Furthermore, EPA indicated that Regional Office decisions to provide extensions or pause work obligations will not supersede or amend enforcement instruments.

When evaluating whether or not to continue, modify or pause a Response Action, EPA made clear that Regional Offices should closely consider whether or not the Response Action is addressing an imminent public health issue, such as access to clean drinking water or vapor exposure concerns, emergency spills, catastrophic events, disposals of certain wastes that may cause an imminent safety issue and in-progress decommissioning of former nuclear facilities and landfills. Applying EPA’s clear guidance that EPA’s Priorities must be at the forefront of the Regional Offices’ decisions, Holland & Knight does not believe the Regional Offices will permit any schedule alterations in these situations, so long as appropriate lodging and personal protective equipment is available for EPA workers or third-party contractors. In contrast, EPA may be more willing to approve schedule modifications for investigations that are part of long-term remedial actions that would not be completed in six months under ordinary circumstances, and remedial actions that do not address an immediate public health concern, i.e., the remedial action was already not scheduled to begin for at least one or two years regardless of any delays caused by the pandemic.

EPA indicated that Response Actions will not simply be abandoned without any controls. Rather, if Regional Offices decide that an action should be paused, Regions should continue to monitor the site and plan to resume field work as soon as it is safe to do so. If a Response Action will continue, Regional Offices must review and modify the health and safety plan (HASP) to ensure that it accounts for CDC’s COVID-19 guidelines and other Health Declarations.

EPA expects work that can be performed remotely to continue, such as completing investigation and cleanup reports, work plans, negotiations between parties, issuing decision documents, progress reports and maintaining compliance with financial assurance obligations.

Parties that believe a COVID-19 restriction will impact their obligations to perform any element of a Response Action are directed to consult the applicable enforcement instrument to review force majeure provisions and any provisions that outline the process for requesting schedule adjustments. Scheduling adjustments will be made on a case-by-case basis in line with EPA’s Priorities and the factors outlined in the Interim Guidance.

EPA indicated that it will update the Interim Guidance as the current situation evolves, as necessary.

Key Elements of the Interim Guidance

General Guidance for Response Field Work Decisions

EPA made clear that Regional Offices would continue to respond to releases or threats of substantial releases to the environment but that Regions should make every effort to ensure worker safety and compliance with travel restrictions, Health Declarations and access to personal protective equipment and lodging.

Under the Interim Guidance, Regional Offices are to perform an evaluation before deciding to continue, modify or pause Response Actions and pre-construction, construction and post-construction activities. In jurisdictions where Health Declarations have been issued, Regions are to evaluate the status of ongoing response work and the possible impact of the COVID-19 pandemic on sites, surrounding communities, EPA personnel and response/cleanup partners. In jurisdictions where Health Declarations have not been issued, Regions should weigh additional factors, including the safety and availability of work crews and EPA, state and tribal staff; the critical nature of the work; logistical challenges such as travel and lodging, and other factors particular to a site.

EPA indicated that Response Actions will not simply be abandoned without any controls. Rather, if Regional Offices decide that an action should be paused, Regional Offices should continue to monitor the site and plan to resume field work as soon as it is safe to do so. If a Response Action will continue, Regional Offices must review and modify the HASP to ensure that it accounts for CDC’s COVID-19 guidelines and other Health Declarations.

During the COVID-19 pandemic, EPA encourages parties and lead agencies to regularly communicate with EPA project managers about the status of the Response Actions and any anticipated challenges and mitigation measures. If COVID-19 restrictions impact a party’s ability to perform any Response Actions, that party should review the enforcement instrument, i.e., consent order, settlement agreement, etc., for the applicable provisions allowing for schedule adjustments or invocation of force majeure provisions. EPA project managers will promptly issue decisions about schedule adjustments on a case-by-case basis.

Factors to Consider for Site Field Work Decisions

EPA provided a list of situations in which Regions have decided and may continue to decide to modify or suspend Response Actions:

  • State, tribal or local health officials have requested suspensions.
  • Any site workers have tested positive for or exhibited symptoms of COVID-19.
  • Any sites where there may be close interaction with high-risk groups or those under quarantine.
  • Sites where contractor field personnel are not able to work due to a jurisdiction’s travel restriction or Health Declarations.
  • Other sites where social distancing is not possible.

EPA provides a list of factors that regional management should consider with respect to site-specific work decisions, including generally:

  • whether failure to continue the Response Action would likely pose an imminent and substantial endangerment to human health or the environment, such as emergency spill responses, catastrophic events, sites that impact drinking water or result in on-site exposures or vapor intrusion, disposals of certain wastes that may cause an imminent safety issue, and in-progress decommissioning of former nuclear facilities and landfills, and whether it is practical to continue the Response Action
  • whether maintaining Response Actions would lead to a reduction in human health risk/exposure in the next six months, such as vapor intrusion investigations, residential site work with current exposures to residents, and drinking water-related work
  • whether the work would not provide near-term reduction in human health risk, such as periodic monitoring, routine sampling activities and field sampling for remedial or facility investigations. In these instances, EPA is more likely to consider the possibility of a delay, suspension, or rescheduling of work and with updated HASPs as appropriate.

Effects on Non-Field Site Work

EPA expects work that can be performed remotely to continue, such as completing investigation and cleanup reports, work plans, negotiations between parties, issuing decision documents, progress reports and maintaining compliance with financial assurance obligations. EPA did recognize that laboratories and other supporting operations may be impacted by the COVID-19 pandemic and directed parties to follow procedures in those situations outlined in the applicable enforcement instrument.

Next Steps When Pausing Site Work

If a decision is made to pause work, EPA expects Regional Offices to continue to monitor site conditions, plan to resume field work when appropriate and utilize EPA’s internal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Interim Guidance on Public Engagement During COVID-19.

Conclusion

EPA has made it clear to the Regional Offices that they may approve a modification or pause of certain Response Actions, but not if the Response Action is in the process of addressing or will address an imminent or substantial threat to public health and the environment. EPA does, however, require the Regional Offices to balance any decisions with a close review of Health Declarations and exposure or any potential exposure to COVID-19 to the public, EPA workers, and contractors. Based on recent experience, EPA will not extend deadlines for deliverables such as work plans, reports or settlement negotiations based on COVID-19 that can be prepared remotely.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.

Information contained in this article is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


About the Authors

Amy L. Edwards is the co-chair of the Holland & Knight LLP’s National Environmental Team. She is a partner in the firm’s Public Policy & Regulation Group, which has been ranked among the top law and lobbying firms in Washington, D.C., by numerous publications. Ms. Edwards has been recognized as a leading environmental lawyer for several years by Chambers USA, Super Lawyers and Best Lawyers.

Bonni F. Kaufman is a partner in the Public Policy & Regulation Group of Holland & Knight, where she focuses her practice on environmental law. Ms. Kaufman represents clients in a wide variety of matters relating to environmental laws, focusing on regulatory enforcement and compliance, product regulation, litigation and environmental aspects of corporate and real estate transactions.

Meaghan A. Colligan is a Washington, D.C., environmental attorney and member of Holland & Knight’s Public Policy & Regulation Group. She focuses her practice in the areas of environmental, land use, energy and municipal law.

Canada: COVID-19 – Impact On Environmental Compliance And Due Diligence

Written by Bryan J. Buttigieg, Miller Thomson LLP
As these strange times continue to evolve, it is important to ensure that all companies whose operations raise environmental compliance issues try to think through and plan for what might happen in the coming weeks and perhaps months. In particular, both self-imposed and regulatory quarantine protocols may have a significant impact on critical staff levels at a facility. While we are all deep into implementation of directives about working from home when we can, there are, of course, a number of essential jobs that require physical presence for a plant to operate properly.

Despite all the dramatic changes going on in our lives, all conditions of operating permits such as Environmental Compliance Approvals remain in full force, and all obligations such as spill prevention, spill remediation, spill reporting and regular compliance reporting continue to apply. It is never an excuse to say something happened due to a staff shortage. If there are insufficient resources to conduct an operation in full compliance of environmental obligations, there is an obligation to revise operating plans including if necessary, reducing production levels, rather than continuing business as usual in the expectation that regulators will somehow turn a blind eye to non-compliance.

Care needs to be taken to ensure that all safety and regulatory requirements continue to be met. Careful thought should be given as to what minimum staffing would be needed to keep a facility operating safely and in full compliance. Consideration will have to be given as to whether production changes are needed to reduce the risk of an undesirable incident due to unexpected staff shortages. There may, in turn, be impacts on supply chain and customer obligations. While cross border closures are not supposed to impact the movement of goods, what happens if border screening is in place and a driver with essential supplies is refused crossing? Consider communicating regularly with any spill response contractors who are on retainer or may be needed: Are they adequately staffed? Will they be in a position to respond if needed? If not, what other steps need to be taken? We are at the stage where these are becoming foreseeable events and as such planning is required in order to ensure as orderly and safe a transition as possible.

Consider creating a dedicated COVID-19 Environmental Compliance Team whose main purpose is to review all applicable environmental obligations and try to anticipate internal compliance risks in the event of reduced staffing levels. Ensure that if employees are asked to step into temporary roles due to the absence of others, proper training is given on all obligations including spill detection and reporting. Be prepared to make quick decisions and make changes as the situation evolves. Communicate decisions to all affected clearly and concisely and ensure there is a channel for employee feedback and comments as quite often, those in the field will be the first to identify practical difficulties with any changes to long standing work practices.

Proactive communication with the regulators might be a useful step to consider. While many government employees are also working from home, they continue to enforce regulatory obligations. Proactive communication with a local abatement officer might be a useful way to ensure there is awareness of any special steps you are taking and an ongoing dialogue to ensure any concerns raised by the regulator are addressed.

Similarly, industry organizations might have put some thought into protocols applicable to all members that would assist you in ensuring you are exercising the appropriate level of diligence. Consider the need for community communications with neighbours or neighbourhood groups at this stage.

As the current situation continues to develop, vigilance to ensure ongoing environmental compliance is going to remain of utmost importance in order to minimise any additional disruption to daily business operations beyond that being caused by events that cannot be controlled or foreseen.

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.


Bryan Buttigieg is recognized as one of the leading practitioners of environmental law in Canada and is certified by the Law Society of Ontario as a specialist in Environmental Law. His practice includes a combination of litigation and transactional advice involving civil litigation and regulatory defence representation in environmental and occupational health and safety matters.

The Phase I Environmental Site Assessment: Unexpected COVID-19 Victim?

Written by David Quigley and Bryan Williamson, Akin Gump Strauss Hauer & Feld LLP and Summer Gell, Partner Engineering and
Science, Inc.

A number of commentators note the impacts of the COVID-19 crisis on the commercial and residential real estate markets. Some are obvious: falling interest rates, bargain hunting by investors (and some lenders) and a very different foreclosure environment.1 Recently, a less obvious impact emerged, as these lenders/servicers, investors and purchasers struggle with how to assess the environmental condition of the underlying assets. This brief alert provides answers to some frequently asked questions about phase I ESAs in the COVID-19 era.

Can I still do an ESA?

A number of states and some localities promulgated stay-at-home orders prohibiting all but “essential activities” for the next few weeks, if not months (and perhaps longer). Though each state is different, and must be analyzed as such, a number of the restrictions provide lists of industries or activities that are “essential” and therefore exempt from shelter-in-place mandates. For example, an initial Virginia executive order allows professional services firms to remain open, provided that they adhere to social distancing recommendations, enhance sanitizing practices on common services and apply relevant workplace guidance from state and federal authorities.2 Other states, like Illinois, delineate essential categories, including real estate and legal services, as “essential.”3 These approaches at least implicitly seem to allow for the conduct of ESAs (and ESAs are still taking place). Many states allow consultants to apply for an explicit authorization if squeamish about moving forward. (Note that while some states allow for environmental investigation as part of remediation activities, this may not encompass the typical phase I ESA).4

Beyond these states permitting consulting or related services directly, other states may allow for a phase I ESA where it “supports” a different service deemed “essential,” such as financing, particularly for a transaction that supports the agriculture, energy, manufacturing, hazardous materials and waste sectors.5 Still other states omit ESAs from stay-at-home orders entirely, raising complicated questions of interpretation.

If I can do an ESA, what will it look like?

If your state or locality allows for an ESA, that does not mean it is business-as-usual. As with other services in the COVID-19 era, commonsense efforts should be taken to minimize personal contact before, during and after site assessments. These measures may include adherence to social distancing guidelines; driving (not flying) to sites when possible; proper use of personal protective equipment; and wireless or pre-arranged access to tenant suites or interior building areas. Interviews should be conducted remotely, where feasible. To the extent possible, spaces to be viewed by the consultant should be “cleared” of people for three or more days prior to arrival. If, as will often be the case, this is not possible, then the consultant may seek to restrict her “walk-through” to vacant or limited areas of the facility.6

With all these restrictions, is the ESA “legal”?

While they likely did not have a pandemic in mind, the existing federal regulations and the industry standard governing ESAs already provide for deviations to normal operating procedures. Specifically, the phase I standards include a mechanism through which consultants identify “data gaps” encountered during environmental investigations.7 Historically, data gaps include inadequate records detailing adjacent sites, unreturned interview questionnaires and missing information about physical objects identified at the site (e.g., pipes, vents, tanks). Given the COVID-19 disruption, we expect to see a number of additions to these traditional data gaps, such as: limited or no access to interior areas; inability to locate and interview key personnel; and inability to access regulatory records or obtain Freedom of Information Act responses from government agencies due to staffing reductions and office closures. Much like the interruptions caused by governmental delays and flight cancellations experienced in aftermath of the September 11, 2001, terror attacks and office closures seen during the Great Recession, external forces are likely to hamper even the most diligent and experienced consultants.

The fact that these data gaps exist does not render the phase I invalid (necessarily). As always, it is up to the environmental professional to determine whether any identified data gaps are “significant,” such that they affect “the ability of the environmental professional to identify conditions indicative of releases or threatened releases of hazardous substances, and as applicable, pollutants and contaminants, petroleum or petroleum products, or controlled substances, on, at, in, or to the subject property.”8 Often, experienced consultants can identify other sources of information to resolve any data gaps, such as owner/user interviews or government and third-party environmental databases. Regardless of the significance of identified data gaps, however, consultants must be sure to document and evaluate any data gaps within the text of the ESA report.

OK, it’s “legal.” But is it useful?

Assuming you get an ESA with a number of data gaps, questions will arise as to its utility in evaluating environmental risk. Your counsel and consultants can identify site-specific approaches to find alternative sources of information to “fill” data gaps or at least “put a box around” the potential liability resulting therefrom. Beyond that, the usefulness of the assessment will depend on the use for which it is intended.

If you are trying to determine or allocate risk to close a deal, the above strategies may suffice (or at least may allow for the procurement of insurance to close the deal). If you are looking for financing, it likely will depend on the specific bank. Some may require complete or even more fulsome information than usual as they struggle to measure and manage risk in a pandemic-impacted world. Others may feel comfortable moving forward given the “cost” of money currently, even if they may include more detailed “update” provisions or requirements allowing them to get a clearer picture down the road. If you are looking for protection from Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) liability, that path is still developing. While EPA announced in March that it may exercise discretion in enforcing specific instances of noncompliance with some environmental laws, this policy explicitly does not apply to “activities that are carried out under Superfund and RCRA Corrective Action enforcement instruments.”9 At this time, it is not yet clear what, if any, relief will be provided through CERCLA’s innocent landowner and lender liability requirements.


1 Christopher Rugaber, Federal Reserve Cuts Interest Rate to Near Zero in Response to COVID-19 Outbreak, TIME, Mar. 15, 2020, https://time.com/5803563/federal-reserve-interest-rate-cut-zero/; Katy O’Donnell, HUD, Fannie, Freddie suspend foreclosures, evictions during outbreak, POLITICO, Mar. 18, 2020, https://www.politico.com/news/2020/03/18/hud-suspends-foreclosures-evictions-coronavirus-135783.

2 Virg. Exec. Order No. 53 (March 23, 2020), https://www.governor.virginia.gov/media/governorvirginiagov/executive-actions/EO-53-Temporary-Restrictions-Due-To-Novel-Coronavirus-(COVID-19).pdf. Similarly, Washington state published lists of “critical” sectors and examples of essential personnel permitted to work during the crisis. Wash. Proclamation 20-25 (March 23, 2020), https://www.governor.wa.gov/sites/default/files/WA%20Essential%20Critical%20Infrastructure%20Workers%20%28Final%29.pdf.

3 See, e.g., Ill. Exec. Order No. 2020-10 (March 20, 2020), https://www2.illinois.gov/Documents/ExecOrders/2020/ExecutiveOrder-2020-10.pdf (deeming “professional services” essential, including legal and real estate services).

4 See, e.g., “COVID-19: Essential Services,” Office of Governor Charlie Baker and Lt. Governor Karyn Polito, https://www.mass.gov/info-details/covid-19-essential-services#health-care/-public-health-/-human-services- (deeming essential “[l]icensed site clean-up professionals and other workers addressing hazardous spills, waste sites, and remediation”).

5 Wash. Proclamation 20-25, supra note 3.

6 Still, many components of the phase I ESA report, such as historical use and satellite reviews, environmental database searches, lien and title searches, phone interviews, and electronic questionnaires, should remain unaffected.

7 According to the U.S. Environmental Protection Agency’s (EPA) “all appropriate inquiries” (AAI) rule and ASTM Practice E-1527-13, a data gap is “a lack of or inability” to obtain required information “despite good faith efforts.” 40 C.F.R. § 312.10; ASTM E-1527-13 § 12.7.

8 U.S. ENVTL. PROTECTION AGENCY, ALL APPROPRIATE INQUIRIES RULE: REPORTING REQUIREMENTS CHECKLIST FOR ASSESSMENT GRANT RECIPIENTS (2014), https://www.epa.gov/sites/production/files/2014-08/documents/aai-reporting-fact-sheet-and-checklist-062111-final.pdf.

9 Memorandum from Susan Parker Bodine, U.S. Envtl. Protection Agency, to All Governmental and Private Sector Partners (Mar. 26, 2020), https://www.epa.gov/sites/production/files/2020-03/documents/oecamemooncovid19implications.pdf, at 2. Similarly, some states, such as Texas, also announced their intention to provide limited enforcement relief during this crisis. See “TCEQ Reporting Requirements for Regulated Entities,” Texas Commission on Environmental Quality (last visited Apr. 9, 2020), https://www.tceq.texas.gov/response/covid-19/regulated-entities-reporting-requirements (announcing the Commission’s exercise of “administrative relief and enforcement discretion for various reporting requirements by regulated entities” during the COVID-19 pandemic).


About the Authors

David Quigley advises lenders, sellers and buyers on evaluating the environmental liabilities associated with commercial, multifamily and industrial transactions. He develops solutions that are cost-effective and realistic in terms of the role of client as lender and the value of the property or portfolio.

Bryan C. Williamson is an environmental and natural resources lawyer, advising and representing clients on a range of environmental regulatory, transactional and litigation matters. His experience extends to issues involving federal and state environmental protection laws.

Summer Gell is a principal at Partner Engineering and Science, Inc. who leverages her 25+ years of experience and background as an environmental scientist to provide valuable solutions to her clients’ environmental and engineering due diligence needs. Summer is an expert on all things Freddie and Fannie, having worked on hundreds of agency and multifamily deals in recent years. She also serves as the national account manager for several CMBS lenders and life companies.

How simulations and simulator training have amplified CBRNe capability

Written by Steven Pike, Argon Electronics

The use of simulations or ‘war games’ to exercise military strategic planning and to enhance operational readiness is a practice that has been in existence for many hundreds, if not thousands, of years.

The earliest documented records of war gaming can be traced back as far as the ancient Greeks in the 5th century BC, who are known to have played a skill-based board game called petteia or ‘pebbles’.

By the 2nd Century BC petteia was being played widely throughout the Roman Empire, under the name of ludus latrunculorum or ‘the game of little soldiers’.

Chess, which has its origins in Northern India in the 6th century AD, is an example of an early war game that combined both strategy and tactical skill.

By the mid 1700s, the fundamentals of chess would also stimulate the development of an increasingly elaborate range of new battlefield strategy games.

Perhaps the most notable of these is the genre known as kriegspielwhich was formulated in Prussia in the early 1800s and which is now widely regarded as being the ‘grandfather’ of modern military gaming.

The role of simulation in CBRNe training scenarios

As the use of modern weaponry has became more widespread and more destructive in its capability, military strategists have been forced to look for more ‘abstract’ ways to safely imitate and prepare for the realities of conflict conditions.

Today, the tools, technologies and scenarios that are used to train real-life CBRNe incidents have become increasingly sophisticated and life-like in their design.

The use of simulations and simulator detector equipment has become an invaluable addition to many military and civilian CBRNe training programmes.

One example of the way in which simulation is being used to enhance CBRNe capability is through the use of wide-area instrumented training systems such as Argon Electronics’ PlumeSIM.

The PlumeSIM wide-area training system

Using PlumeSIM technology, trainees are able to safely and effectively hone their skills in the operation of chemical and radiological equipment in a diverse variety of true-to-life threat scenarios.

For those tasked with CBRNe instruction, balancing realism with safety is a crucial consideration.

Using PlumeSIM’s innovative simulator technology, the parameters of each training scenario can be rigorously selected and controlled.

Instructors are able to recreate a specific threat, to simulate plumes, deposition or hotspots, to mimic the release of single or multiple CWA, HazMat or radiological sources and to replicate  environmental conditions such as changes in wind direction.

Portability, speed of set-up and ease of use are also key factors. PlumeSIM’s planning mode provides CBRNe instructors with the ability to prepare exercises in advance on a laptop or PC and without the need for any type of system hardware.

Its innovative system design allows the use of common file format map images or even ‘homemade’ sketches of a proposed training area.

The addition of a tabletop classroom mode also enables trainees to familiarise themselves with every aspect of the exercise before hands-on training commences.

Using simple gamepad controllers, students are able to ‘move’ icons of themselves around an on-screen display of the training area.

Once the virtual plume scenario has been activated, all student movement can also be recorded during the session and played back for later analysis.

In field exercise mode, trainees are provided with GPS enabled Player Units before being deployed to the external training area.

Their instructor can then monitor their location on the control base map in real-time via the use of a long-range radio communications link.

The ability to be able to record, document and review trainees’ decisions and actions is a vital element in the effectiveness of a simulator training system.

PlumeSIM’s After Action Review capability means trainee movement and instrument usage can be monitored in real time and can then be analysed and discussed once the exercise has been completed.

Enhanced CBRNe training capability

Simulator training is widely regarded for the role it plays in enhancing the effectiveness of 21st century military and civilian CBRNe capability.

With the help of simulator technology, students can train against actual threats in a realistic, safe and controlled environment.

In addition, expensive detector equipment is protected from needless wear and tear and instructors are able to monitor, assess and review every aspect of their trainees’ movements and decision-making.


About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators. He is interested in liaising with CBRN professionals and detector manufacturers to develop training simulators as well as CBRN trainers and exercise planners to enhance their capability and improve the quality of CBRN and Hazmat training.

Perfluorinated Compounds: No Longer an Emerging Contaminant

Written by Sarah Peterman Bell and John Ugai, Farella Braun + Martel LLP

Lawsuits present major liability risks to PFAS manufacturers and industries that historically used PFAS in their operations.

Per- and polyfluoroalkyl chemicals (PFAS) are synthetic, human-made compounds that were manufactured in the United States beginning in the 1940s and have been used in a wide range of industries. Because they repel oil and water, PFAS chemicals were used in numerous consumer products, including nonstick pans, outdoor gear, raincoats, and food packaging.

PFAS were also widely used in industrial processes, including in operations involving chrome plating, electronics manufacturing, and in firefighting foams. Indeed, the use of firefighting foam at airports, military bases, and firefighting training sites is a major source of PFAS in groundwater in such areas.

PFAS were used in fire-fighting foam

PFAS chemicals tend to persist in the environment. Two of the most prevalent PFAS, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), have been detected in groundwater in many areas throughout the United States, particularly where these chemicals were manufactured, used in manufacturing or industrial operations, or in areas associated with firefighting work and training.

Federal Regulation of PFAS

For now, the federal Superfund law – the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) – does not identify PFOA, PFOS, or any other PFAS as “hazardous substances.” Nor has the federal government issued maximum contaminant levels (MCLs) or other legally enforceable limits for PFAS in drinking water. Nonetheless, the U.S. Environmental Protection Agency (EPA) has added PFAS sites to its Superfund list. And some states have developed enforceable cleanup standards or issued MCLs for certain PFAS in drinking water.

EPA is apparently moving forward with regulating PFAS. Last month, EPA released an update to its 2019 PFAS Action Plan. As explained in 2019, EPA is evaluating regulation of PFAS, including designating certain compounds as “hazardous substances” under CERCLA, setting enforceable MCLs for drinking water, and/or developing regulatory standards for PFOA or PFOS at cleanup sites. EPA is also considering release reporting for PFAS.

In its February 2020 update, EPA reported that it has developed interim groundwater cleanup recommendations for CERCLA cleanup sites and Resource Conservation and Recovery Act (“RCRA”) corrective action sites. EPA has also begun the process to regulate PFOA and PFOS in drinking water and to add PFAS to the Toxics Release Inventory.

For industry, the regulations contemplated by the PFAS Action Plan would have significant implications. For example, adding PFAS chemicals to the CERCLA hazardous substances list could dramatically impact CERCLA cleanups by expanding the number of cleanup sites, increasing the number of responsible parties, and increasing cleanup costs – not to mention the possibility that closed sites might be reopened to address PFAS.

PFAS Litigation: States & Private Parties Step In

As of now, a growing number of states, nonprofits, and individuals are suing regarding PFAS contamination and exposure. These suits present major liability risks to PFAS manufacturers and industries that historically used PFAS in their operations. In one of the earliest PFAS lawsuits, Minnesota pursued 3M for liability associated with PFAS in groundwater near a 3M industrial facility. That case settled in 2018 for $850 million.

In January, Michigan sued 3M, DuPont, and 15 other chemical manufacturers, alleging that they concealed the dangers of PFASs, withheld scientific evidence, and contaminated the environment. New Mexico, Vermont, and Washington have also filed PFAS-related litigation, while New Hampshire, New Jersey, and New York have filed suits against firefighting foam producers and distributors as well as PFAS chemical manufacturers. And just last month, a group representing more than 31,000 rural utility systems sued more than 20 companies, including 3M and DuPont, to recover the costs to clean up PFAS in groundwater resulting from the use of firefighting foam products.

Nonprofits have also sought to address PFAS contamination through litigation. In February, Earthjustice filed a lawsuit on behalf of nonprofits representing communities in Ohio, Texas, Illinois, and California, alleging deficiencies in the U.S. Department of Defense’s (“DOD”) environmental review of plans to burn millions of gallons of firefighting foam (allegedly an expansion of ongoing efforts to incinerate unused stockpiles of firefighting foam).

Personal injury cases also present a significant potential source of liability. For instance, residents of Parkersburg, West Virginia, sued DuPont in 2001, for injuries from PFOA contamination in the waterways surrounding DuPont’s manufacturing facility. In 2017, DuPont and Chemours Co. settled roughly 3,550 of these pending cases for over $670 million.

Industry should be aware that while EPA’s progress towards regulating PFAS has been slow, states, nonprofit groups, and individual plaintiffs have been taking action regarding these “forever chemicals.” Litigation regarding PFAS is increasing, states are stepping into the regulatory void and setting MCLs and cleanup standards, and EPA has begun adding PFAS sites to the Superfund list.


About the Authors

Sarah Bell is a partner at Farella Braun + Martel.  She focuses her practice on environmental and natural resources litigation, administrative proceedings, and counseling, and advises clients in a broad range of disputes, including environmental enforcement actions, cost recovery, citizen suits, water quality, complex toxic tort, and product liability matters.

John Ugai is an associate in Farella Braun + Martel’s Environmental Law Department.

Environmental Due Diligence Carries on, With Limitations, During the COVID-19 Pandemic

Written by Michael A. NesteroffLane Powell PC

COVID-19 Resource

Banks, borrowers and their supporting professionals, like everyone else, are having to adapt to the rapidly-changing circumstances surrounding COVID-19. With commercial and multi-family real estate, one of the more difficult issues is how to conduct a Phase I Environmental Site Assessment in order to qualify as the “All Appropriate Inquiry” that most lenders require. A full Phase I investigation includes items such as a site visit, interviews with knowledgeable people, and records research, but each of those are constrained during this global pandemic and shelter-in-place or stay-at-home orders. Lenders and environmental professionals, however, are getting creative and flexible in the ways they address this unique situation.

Lender Adaptations

Because banks are considered an essential business service, many lenders are continuing to process loan applications, although they face the same logistical issues that we all are confronting with working from home. Depending on the type of loan involved, banks may be more flexible with the level of environmental due diligence required. For example, a refinance of a loan on a property where there was a recent Phase I, or the property has not changed, may not require any additional environmental review or a desktop review may suffice. Instead of one-size-fits-all approaches to due diligence, banks now are evaluating what’s needed on a property-by-property basis. In some instances, the environmental review may be called a “Limited Site Investigation,” instead of a Phase I, with follow-up site inspections conducted when the crisis abates.

Consultant Approaches

Environmental professionals, while not specifically called out as an essential business service, are considered support for an essential business service, such as a bank. This allows them to conduct the necessary site assessments and fieldwork but, in many cases, they may not be able to do so because the subject property is closed; the people to be interviewed are staying at home, whether because of stay-at-home orders or illness; and the government agencies and offices with relevant property records are not open to the public. Furthermore, the consulting firms are cognizant of the health and safety needs of their employees and don’t want to place them at unnecessary risk.

In some instances, such as hospitals, long-term care facilities, assisted living facilities, nursing homes or senior living communities, environmental consultants simply are not conducting in-person interior inspections. In other cases, multi-family properties for example, the inspections may consist of looking only at vacant units and common areas, but foregoing occupied units. Other workarounds include the site contact walking through the building on FaceTime or having a resident take photographs. One pitfall is that a building occupant or resident may not be as aware of what to look for, or may even want to minimize issues that an environmental consultant would spot. If a site visit is absolutely necessary, some consultants are scheduling visits for weekends or evenings when fewer people are around, having the site contact open all doors, wearing gloves, and maintaining social distancing as much as possible. For larger, open properties, use of a drone may be a helpful substitute.

Communication between the client and the environmental professional is key. If the scope of work may be more limited by current conditions, that should be made clear from the outset and the parties reach consensus on the necessary adjustments. Communication between the consultant and site contact also is important, although privacy issues prevent inquiring about a site contact’s COVID-19 status. Indeed, not everyone is convinced that current measures, such as social distancing, are warranted. In those situations, the consultants are having to communicate in advance their practices and expectations.


About the Author

Mike Nesteroff is a preeminent environmental lawyer with extensive experience representing clients in environmental litigation, agency negotiations, property acquisition and leasing issues, and counseling clients on risk and compliance. During his 31 years at Lane Powell, Mike has represented clients in litigation claims involving hazardous material investigations, cleanups and cost recovery at sites in Washington, Oregon and Alaska. He has obtained a several million-dollar cost recovery judgment on behalf of one client and a defense verdict in another cost recovery case. Mike has also represented clients in litigation involving public records and obtained a favorable court of appeals ruling on a previously-untested exemption in the Washington Public Records Act.

What can the Act of God Defence in Regulatory Offences tell us about Responding to the COVID 19 Crisis

Written by Stanley Berger, Partner, Fogler Rubinoff

In April 2008 water bodies in Alberta were frozen over and as a result, migratory birds were drawn to Syncrude’s open tailings ponds where over 1600 waterfowl died from exposure to bitumen. Syncrude was prosecuted under federal and provincial environmental laws for the adverse impacts of the tailings on migratory birds.

The company defended itself by arguing that that the convergence of record snowfalls and the freezing of the adjacent waters that the waterfowl would naturally use for sustenance during spring migration amounted to an Act of God which could not reasonably be anticipated. The company had a system of deterrents which had worked reasonably well in previous years to prevent the loss of all but a small number of birds drawn to the open tailings, but the record snowfall had interfered with their planned deployment.

The Court, conceded that the convergence of adverse weather, open tailings, frozen natural water bodies and bird migration was an unavoidable natural event. (2010) ABPC 229 at par. 136) Nevertheless, the Court reasoned that while the exact circumstances or degree of severity may have been unpredictable, the convergence of these critical factors was not remarkable. The company’s response was deficient whether it had been “the second worst snowfall in 65 years that occurred, coupled with a late breakup and quick thaw or, or some lesser but still significant amount of snow or rain. “(at par. 138) On October 22, 2010

Provincial Court Judge Tjosvold imposed fines and orders totaling three million dollars for violations of Alberta’s Environmental Protection and Enhancement Act and Canada’s Migratory Birds Convention Act. see Berger and Myers, Prosecution and Defence of Environmental Offences, Sentencing Service on Thomson and Reuters Proview at https://nextcanada.westlaw.com/.

Lessons Learned: Regulatory Due Diligence During and After COVID  19

Regardless of whether one is religious or not, COVID 19 would certainly fit within the Act of God defence if faced with a charge of non-compliance with a regulatory offence. But the level of sympathy expected to be extended by a court to this defence will ultimately depend upon the magnitude of the harm environmental, health and safety or otherwise and the steps taken by a defendant to plan for a once in a lifetime event. The nuclear industry offers an excellent example. Licensees of nuclear facilities have always been required to deploy minimum complements of workers at all times to ensure that critical activities such as the operation of the nuclear reactor and its cooling systems are maintained. There are always control room operators on hand even during a pandemic though additional precautions are taken to ensure that their health and safety are optimized. Businesses should review their regulatory licenses and approvals and identify which of their operations need to be maintained at all times in order to protect public health and safety and the environment. Once identified, budgets
and schedules should be set for implementation. Particularly, but not exclusively where costs are prohibitive or actions are not feasible, transparent communication with the relevant regulatory authorities should be initiated without delay to ensure that there is a mutual consensus on the expectations of the parties. Finally, those expectations should be reduced to writing and kept on line so that they are readily accessible. Given the magnitude of the current crisis, regulators may not respond to e-mails in a timely fashion, so businesses should ensure that all requests for reviews of compliance plans are sent and kept electronically.

This republished article is intended for general information purposes only and should not be relied upon as legal advice.


About the Author

Stan Berger has practiced regulatory law for 37 years. He represents nuclear operators and suppliers, waste management operators, renewable energy operators, receivers-in-bankruptcy, municipalities and First Nations. He was an Assistant Crown Attorney in Toronto for 8 years, Senior counsel and Deputy Director for Legal Services/Prosecutions at the Ministry of the Environment for 9 years and Assistant General Counsel at Ontario Power Generation Inc for 14 years.  He is the author of a quarterly loose-leaf service published by Thomson Reuters entitled the Prosecution and Defence of Environmental Offences and the editor of an annual review of environmental law.  Mr. Berger was the President of the International Nuclear Law Association (2008-2009) and the founder, and President of the Canadian Nuclear Law Organization.

US Relaxation of Environmental Rules in the Wake of the COVID-19 Pandemic – The Implications for Canada and Mexico

Written by Joseph Castrilli, Counsel, Canadian Environmental Law Association

In a move that has implications for international arrangements with Canada regarding protection of the North American environment, the Environmental Protection Agency of the United States, citing the coronavirus pandemic as its justification, has announced that it will temporarily not seek penalties against companies that violate monitoring, reporting, and other obligations under US federal environmental laws. In a policy statement issued on March 26, 2020, the agency indicated that it will exercise “enforcement discretion…for noncompliance covered by this temporary policy and resulting from the COVID-19 pandemic” if the regulated community takes the steps set out in the policy.

Steps Under the Relaxation Policy

The steps under the policy require the regulated community to: (1) act responsibly to minimize effects and duration of any noncompliance; (2) identify the nature and dates of the noncompliance; (3) identify how COVID-19 was the cause of the noncompliance, the decisions and actions taken in response, including best efforts to comply and return to compliance; (4) return to compliance; and (5) document the information, actions, and conditions specified in steps 1-4.

Regulated Activities Covered by the Policy

The agency’s enforcement discretion under the policy covers: (1) routine compliance monitoring and reporting by regulated entities (the policy indicates that “EPA does not expect to seek penalties for violations of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training and reporting or certification obligations in situations where the EPA agrees that COVID-19 was the cause of the noncompliance and the entity provides supporting documentation to the EPA upon request”); (2) settlement agreement and consent decree reporting obligations and milestones (the policy adopts the same position as in point number (1), above, but notes that consent decrees are still subject to independent judicial oversight); and (3) facility operations (the policy indicates that it applies to facility operations impacted by COVID-19 that may create acute risk or imminent threat to human health or the environment, result in air emission control, wastewater, or waste treatment system or equipment failure that may result in exceedances of enforceable limits, cause hazardous waste generation transfer, or animal waste feeding operation compliance, delays, or other noncompliance, all of which are generally to be covered by steps 1-4, above, except for imminent threats which also will require EPA consultation with state or tribal governments).

How the Policy Has Been Viewed in the United States

As reported in the media, the relaxation of environmental measures has been both assailed (“an open license to pollute…and abject abdication of the EPA mission to protect our well being” – Gina McCarthy, EPA Administrator in Obama administration) and defended (“a very straightforward and sensible guidance” – Grant Nakayama, EPA Office of Compliance in Bush administration) by legal, regulatory, and regulated communities in the United States. Others suggested that the issue was not so much the policy itself as how it will be implemented, particularly in the context of air pollution from industrial facilities located predominantly in low income communities where at-risk populations historically under stress from air pollutants that exacerbate asthma, breathing difficulty, and cardiovascular problems now also face respiratory threats posed by a virus that attacks the lungs.

Implications for Canada

Despite the policy’s direct impact in the United States, there are significant implications for Canada (and Mexico) as well. First, there are a myriad of cross-border environmental problems a policy such as this could exacerbate. Air emissions from the Ohio Valley have long had significant impacts in Ontario, Quebec, and the Maritimes. Superfund hazardous waste sites along the Canada – United States border, such as in the Niagara area, have long had significant implications for the integrity of the shared waters of the Great Lakes. Water pollution discharges from the state of Washington impact the Salish Sea, the estuary formed by inland waters with southern British Columbia that connect to the Pacific Ocean primarily through the Strait of Juan de Fuca.

Second, there are a variety of pacts between Canada and the United States that the policy could ride roughshod over:

• The Boundary Waters Treaty of 1909 (Article IV, section 2) that requires that neither country should cause water pollution in its waters which will cause injury to health or property in the other country and the companion Canada-United States Great Lakes Water Quality Agreement of 2012, which provides for a regional mechanism to achieve the Treaty’s goals in the Great Lakes Basin ecosystem;

• The Canada – United States Air Quality Agreement, signed in 1991, with the goal of reducing air emissions that cause acid rain, which was expanded in 2000 to reduce transboundary smog emissions; and

• The environmental side agreement under the North American Free Trade Agreement (as amended) commits Canada, Mexico, and the United States to ensuring that their laws and regulations provide for high levels of environmental protection and that they are effectively enforced through measures that include compliance monitoring and reporting (Articles 3 and 5).

Whether viewed as a waiver of monitoring and reporting requirements with respect to emissions or discharge limits or, more ominously, as a waiver of compliance with the limits themselves for the duration of the pandemic, this is not good news for the environment or public health in North America especially in the midst of a pandemic caused by a virus that attacks the respiratory system of its victims. It is also not clear whether Canada (or Mexico) were consulted by the EPA before this policy went into effect (it is retroactive to March 13, 2020). Coupled with the major de-regulation push the EPA has been engaged in over the past few years, the policy seems all of a piece with the worst impulses of those who want to de-construct the administrative state. We can do better than turn the clock back to the dark ages of environmental non-regulation. In the midst of a pandemic, stopping the spread of bad ideas would be a good place to start, including ensuring they are not imported to Canada.


About the Author

Joseph F. Castrilli is counsel to the Canadian Environmental Law Association in Toronto. He is a member of the Ontario and British Columbia Bars, is certified as a specialist in environmental law by the Law Society of Ontario, and has appeared before all levels of court on environmental matters, including the Supreme Court of Canada. He also has taught environmental law courses and seminars at Queen’s University, University of Toronto and Osgoode Hall Law School at York University.

 

The importance of collaboration in countering CBRNe threats

Written by Steven Pike, Argon Electronics

In what is a rapidly changing and increasingly challenging global environment, the importance of maintaining international cooperation in countering CBRNe threats has never been more crucial.

The successful management of any form of cross-border hazard – be it biological, chemical, nuclear or otherwise – relies on targeted, sustained and collaborative action.

The value of developing a cohesive approach to CBRNe response was just one of the topics touched on by Henriette Geiger in her opening speech at the Annual General Meeting of the European Union CBRN Risk Mitigation Centres of Excellence in Brussels in June 2019, in which she stated:

“We are facing challenges today that go beyond national borders and [that] cannot be tackled alone.

“This is true for cooperation on CBRN matters, as witnessed by recent CBRN attacks and events in Europe…[and] also by the re-emergence of epidemic diseases.”

Countering invisible threats

Fast forward just nine months, and the impact of the COVID-19 pandemic is demonstrating all too starkly just how vitally important it is to maintain global cooperation in the fight against an invisible yet deadly threat.

From governments to tech companies to international agencies, the race is on to put in place measures that can help to contain the spread of the coronavirus.

The challenge in any crisis situation though is in ensuring that those personnel operating on the frontline of emergency response are sufficiently trained and equipped to handle what can often be complex, highly charged and in many cases unprecedented emergency situations.

The role of realistic CBRNe training

When planning exercises for diverse CBRNe or HazMat threats, a key priority is to develop relevant scenarios that facilitate optimum readiness, maintain maximum levels of safety and present minimal regulatory burden.

In the last decade, there has been an increasing interest in the use of hands-on training exercises using simulators to enable civilian and military CBRNe practitioners to test their technical knowledge in a manner that is realistic, cost-effective and safe.

Classroom learning will always continue to provide value in helping build theoretical understanding of the science and technology that underpins CBRNe defence.

But it is through the provision of realistic training that knowledge and competency can truly be put to the test.

Hands-on training that uses actual equipment (or its simulator equivalent) can help to build deeper understanding of the key science that underpins the release, dispersal and measurement of CBRNe agents.

By incorporating the use of simulator detectors in the context of CBRNe exercises, there is also the opportunity for personnel to gain familiarity both with the chemical and physical properties of specific hazards and with the ways that these hazards may affect individuals, equipment and infrastructure.

The value of international collaboration

At a time when international cooperation can offer significant benefits, the cooperative research agreement (CRADA) signed between Argon Electronics UK Ltd and the the Lawrence Livermore National Laboratory (LLNL) is an initiative that promises to both bolster and re-envision the delivery of realistic hands-on CBRNe training.

The two-year agreement, valued at $2.55 million, merges LLNL’s game-changing Radiation Field Training Simulator (RaFTS) technology with Argon Electronics’ extensive experience in the creation and development of simulation hardware and software.

While the project is currently focused on enhancing the provision of radiation training, there is the ability for the same technology to be applied across the broader range of CBRNe response, and in doing so to substantially raise the bar of emergency preparedness.

As the events of COVID-19 pandemic have demonstrated, the consequences of CBRNe emergencies can stretch national capabilities to their very limits.

While responsibility for first response remains with individual nations, there is also much to be gained from countries working together, combining their resources and developing common frameworks in order to mitigate against the effects of future global threats.


About the Author

Steven Pike is the Founder and Managing Director of Argon Electronics, a leader in the development and manufacture of Chemical, Biological, Radiological and Nuclear (CBRN) and hazardous material (HazMat) detector simulators. He is interested in liaising with CBRN professionals and detector manufacturers to develop training simulators as well as CBRN trainers and exercise planners to enhance their capability and improve the quality of CBRN and Hazmat training.

Who Pays When Remediation Goes Wrong? A U.S. Federal Court’s Evaluation of Contractor Liability

Written by Michael S. Kettler, an Associate in the Environmental Law Practice of Riker Danzig Scherer Hyland & Perretti LLP, with offices in Morristown and Trenton, New Jersey; New York City; White Plains, New York; and Stamford, Connecticut  He may be reached at [email protected] or 973-451-8520.

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) has been a prodigious generator of litigation for decades. First, the government sought to compel potentially responsible parties (“PRPs”) to clean up contaminated sites. Then, those PRPs who were found liable or who settled with the government sought contribution from other PRPs. Now, even after these interminable disputes over liability for remediation costs are resolved, the implementation of costly remedies can give rise to yet more litigation if those remedies fail. A recent decision by the federal district court in Philadelphia in Cottman Avenue PRP Group v. AMEC Foster Wheeler Environmental Infrastructure Inc., arising from one of the earliest CERCLA Superfund sites, is an example of this last type of case and offers important lessons both for parties responsible for remediation and the contractors they hire to fulfill those obligations.

A predecessor of AMEC Foster Wheeler (“AMEC”), acting as a remediation contractor, designed a sheet pile wall intended to prevent PCB-contaminated soil at a Philadelphia Superfund site from falling into the Delaware River. Construction of the sheet pile wall was completed in 2010, but by 2012, cracks in the wall and unwanted movement of the wall were observed. The PRP group, making claims both under CERCLA and its contract with AMEC, sued AMEC in 2016 after the PRP group had to repair the wall.

AMEC prevailed on the CERCLA claims based on its assertion of the statutory defense for “response action contractors.” That is, CERCLA provides that “a response action contractor with respect to any release or threatened release of a hazardous substance … shall not be liable … to any person for injuries, costs, damages, expenses, or other liability … which results from such release or threatened release”; however, a response action contractor nonetheless will be liable for “a release that is caused by” the contractor’s negligence. 42 U.S.C. § 9619(a)(1)-(2). (The New Jersey Spill Act includes a similar defense for contractors, see N.J.S.A. 58:10-23.11g1.) The court held that AMEC could not be liable under this standard because the PRP group incurred costs in response to a threatened release of PCBs only, and could not prove that an actual release occurred. In fact, the PRP group’s repeated assurances to the United States Environmental Protection Agency that the defective sheet pile wall did not cause any releases to the river ultimately proved fatal to its CERCLA claim against AMEC. The court concluded that, under the “plain terms” of the response action contractor defense, a contractor cannot be liable for a threatened release of hazardous substances under CERCLA because the statute immunizes them from liability for a release or threatened release, but the exception creating liability refers only to a release caused by the contractor’s negligence. Although a reasonable interpretation of this CERCLA provision when read in isolation, it seems inconsistent with the statute’s general liability scheme, which imposes liability for both releases and threatened releases.

In contrast to the dismissal of its CERCLA claim, the PRP group had mixed success on its contract claims. Yet, the success or failure of the contract arguments rested not on the intent of the parties as expressed in the contract, but rather on certain background legal rules that the parties may not have contemplated when they entered the agreement.

First, the court found that the warranty provided by AMEC for the remediation work had expired and, as a result, the breach of warranty claim brought by the PRP Group was untimely. Under Pennsylvania law, unless the contract specifically provides otherwise, the “discovery rule” does not apply to breach of warranty claims, so the four-year statute of limitations applicable to breach of warranty begins to run upon completion of the work under the contract, regardless of when the defect causing the breach of warranty becomes apparent. Here, AMEC’s final inspection of the sheet pile wall under the contract occurred in 2011 and the PRP group did not sue until 2016, so the breach of warranty claim was barred. This is a harsh rule for remediating parties, who might not expect that their warranty for a remedy intended to last for decades would evaporate after four years.

AMEC also raised timeliness as a defense to the PRP group’s claim under the contractual indemnity, but the court ruled in favor of the PRP group on that issue. Specifically, AMEC unsuccessfully argued that its indemnification obligations ended upon termination of the contract in 2011 because the indemnification clause did not state that it survived termination, whereas other terms of the contract included explicit “survival” language. The court analogized the indemnification clause to “structural provisions relating to remedies and dispute resolution,” such as an arbitration clause, which usually survive termination of the contract. Thus, in contrast to the warranty, specific language was not needed to preserve indemnification claims that might arise after the remedy was constructed.

Finally, AMEC could not escape claims that it breached the contract by not procuring all of the required insurance policies. Although during the term of the contract AMEC intermittently provided certificates of insurance to the PRP group, in discovery it could not produce insurance policies that satisfied the requirements under the contract. Unlike the breach of warranty claim, the “discovery rule” did apply to this breach of contract claim, so the PRP group could bring the claim even though the breach—the failure to obtain insurance—had occurred long before the PRP group brought the lawsuit in 2016.

Remediating parties and the engineers and contractors they hire should observe three takeaways from the Cottman Avenue case:

  • Response action contractors have a powerful and unique defense to statutory environmental claims. Strict liability does not apply to response action contractors under CERCLA (or the New Jersey Spill Act), and, under this case, even a negligent contractor would not be liable for threatened releases. Like the Cottman Avenue PRP Group, remediating parties may be caught in a bind between assuring regulators that no contaminants have been or will be released and preserving potential CERCLA claims against their contractors.
  • Specify survival of warranties and indemnification provisions. Contracts often contain an explicit period that a warranty will remain in effect and also provide that indemnities will survive termination of the agreement. The failure to include these terms in this contract led to extensive litigation that could have been avoided and that probably produced results that the parties would not have expected when they entered the contract.
  • Pay attention to insurance requirements (and other ongoing obligations). Before agreeing to maintain certain insurance, parties should make sure they have the ability to provide that insurance or evidence thereof, which it seems was not done in this case. It may be tempting to put a contract out of sight and out of mind after it is signed, but without a system to make sure ongoing insurance obligations are met, a party may find itself in the unfortunate position of acting as its own insurer.

Reprinted with permission from the Riker Danzig Environmental Law Blog.  © 2020 Riker Danzig Scherer Hyland & Perretti LLP.


About the Author

Michael S. Kettler is an associate in the Riker’s Environmental Group and is experienced in litigation and environmental counseling. Mr. Kettler received his J.D. degree from Columbia University School of Law in 2012. He earned his B.A. degree, summa cum laude, in Philosophy, Politics and Economics from the University of Pennsylvania in 2009, where he was Phi Beta Kappa. Prior to joining Riker Danzig, Mr. Kettler was an associate at K&L Gates LLP in New York. He is admitted in both New Jersey and New York.