Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

Although some of you may think that the regulatory agencies are now all climate change all the time, Massachusetts DEP has demonstrated that there is still life in some more traditional aspects of environmental regulation. MassDEP has just proposed sweeping new stormwater regulations that would go far beyond the traditional EPA model of regulating construction sites and stormwater discharges from industrial facilities.

DEP’s proposal is far too detailed for a blog post. For those interested in this issue, take a look at the client alert we issued, which hits the big issues. One big-picture item to note: There certainly seems to be something of a competition brewing between EPA and DEP regarding regulations of stormwater. 

Anyone who has at least 5 – and perhaps at least 2 – acres of impervious surface should certainly consider commenting on the regulations when they are formally issued for public comment.

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The Environmental Protection Agency (EPA) is set to publish a Final Rule creating an optional, alternative set of generator requirements for hazardous waste generated or accumulated in laboratories at “eligible academic entities”: (1) colleges and universities; (2) non-profit research institutes owned or affiliated with a college or university; or (3) teaching hospitals owned or affiliated with a college or university. 

The Rule will append a new subpart, Subpart K, to the Resource Conservation and Recovery Act (RCRA) hazardous waste generator regulatory requirements of 40 CFR 262. Eligible academic entities may choose to have their laboratories subject to Subpart K in lieu of existing generator requirements. Notable provisions of Subpart K, include the following:

(1) Rather than requiring a hazardous waste determination at the time of generation, Subpart K allows eligible academic entities to make hazardous waste determinations when the waste is removed from the laboratory or within four days of arriving at an on-site central accumulation area (CAA) or on-site interim status or permitted treated, storage, or disposal facility (TSDF).

(2) Eligible academic entities will need to create Laboratory Management Plans (LMPs), a portion of which will be enforceable by EPA, describing how the entity will label containers and manage “unwanted materials” prior to hazardous waste determinations.

(3) Once every twelve (12) months, each laboratory will have thirty (30) days to clean-out any hazardous waste that consists of unused or commercial chemical products and will not have to count such waste towards the entity’s generator status. 

Eligible entities that have developed successful programs consistent with the existing generator regulations may choose not to become subject to the increased burden of Subpart K. I believe, however, that the Rule will be a welcome option for entities that have had a difficult time managing large numbers of laboratories (and students) generating small amounts of hazardous wastes that vary in type by semester.   

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That did not take long. When I first drafted the introduction to this blog, I included text inviting people to notify us if, God forbid, I made a mistake. The powers that be vetoed that language, apparently on the basis that it was not possible for a Foley lawyer to make a mistake.

Well, the blog’s been up for less than a week, and I have received my first such notice. In my post yesterday about the Governor’s announcement regarding changes to the state building code, I noted that developers would be concerned about a multiplicity of building codes in different municipalities. The Commonwealth’s MEPA director, Alicia McDevitt, correctly notes that municipalities will not be able to promulgate their own building code provisions regarding energy efficiency. There will be only two codes: the baseline code and the “stretch” code, which municipalities will be permitted to adopt at their option.  However, the municipalities will not be able to tinker with either code; they will have to choose between them.

I have revised the original post, but wanted to thank Alicia and invite everyone to tell me when I’m wrong if, God forbid, it should ever happen again.

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In Massachusetts, officials are continuing to try to walk the climate change walk as well as talking the talk. Today, Governor Patrick and Secretary of Environmental Affairs Ian Bowles announced a program to encourage installation of solar panels on roofs and big box stores and other commercial buildings with flat roofs that are larger than 50,000 square feet.

Initially, the program will be voluntary, but there is no question that this is part of a broader effort by the administration to make energy efficiency a central issue in building design and construction. It is of a piece with the issuance of the greenhouse gas policy issued by the Commonwealth’s MEPA office and the requirement recently imposed by the Department of Public Health to require consideration of energy efficiency in making determinations of need for health care facilities.

The Governor also announced today an effort to develop a "super-efficient energy code for consideration by the Board of Building Regulations and Standards as a local option for municipalities that want to reduce greenhouse gas emissions from development in their communities."  This would be beyond the revised version of the state building code that is required by statute to incorporate requirements in the International Energy Conservation Code.  This past year, developers successfully fought efforts that would have allowed communities to set their own energy standards in their building codes.  Hopefully, this new effort, which would allow communities to adopt what the Commonwealth is calling the "stretch" code, but otherwise not allow different codes in different communities, will prove more manageable. 

No doubt, the pace of incentives – and requirements – will only accelerate as the Commonwealth begins to implement the Global Warming Solutions Act over the coming months and years. Don’t blink or you’ll miss something.

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In the struggle to control greenhouse gases, one debate has been which should come first, innovation or regulation. The Bush administration, of course, came down firmly on the side of innovation. It invested money – though many argued, not enough – in developing energy efficient technologies or means of controlling greenhouse gas emissions, but it fought to end against regulation of CO₂ as a pollutant.

From a theoretical point of view, the Bush position was certainly inconsistent with traditional economic theory – as well as with off-stated conservative positions on issues. Once one accepts that greenhouse gas emissions lead to climate change, i.e., in economic terms, that there is a negative externality associated with energy generation, then the economic answer should be to put a price on the externality, so that economic entities that generate greenhouse emissions have to internalize the full cost of those emissions. 

Moreover, conservatives – and some liberals – don’t necessarily assume that government knows best which technologies will prove the winners in the market. Why should we believe that government will fund the right technologies? Thus, these twin arguments go, government should set a price on carbon and get out of the way. This is called technology-forcing, and it has a solid history in environmental regulation.

Recently, however, Michael Shellenberger & Ted Nordhaus, who certainly have solid environmental pedigrees, advocated for spending on innovation in advance of imposing regulation on carbon emissions. In fact, they state that “cap and trade regulations, which would cap greenhouse gas emissions and allow companies to trade reductions, cannot work in the U.S.--and are not working in Europe.” They also argue that, in a serious recession, deficit spending on innovation in energy efficiency and greenhouse gas control makes more sense than imposing significant new taxes.

I have to say that I’m open to persuasion on this. My default position is that I would rather have the market than the government make bets on technology (which is not to say that government funding doesn’t have a role, particularly in fundamental research). However, the complexities of greenhouse gas regulation truly are terrifying and the potentially adverse impacts on the economy are, to put it mildly, non-trivial, if we get it wrong.

Unlike those who supported the losing vice-presidential candidate in the recent election because she is like them, my position is firmly that I hope that President Obama understands this stuff better than I do, and I sure hope he gets it right.

Your thoughts?

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Foley Hoag is excited to launch the Law and the Environment Blog. In today’s fast changing world, almost all of us get our news—including our news about developments in environmental law and policy—electronically. This blog is not intended to be a substitute for the BNA™, or Greenwire™, or Google™, although we do hope that we will be able on occasion to let you know about issues that haven’t yet come to your attention.

What we really want to accomplish is to provide some perspective on those developments. We’ll try to tell you which developments may matter to you. And why they matter. And how they matter. Whether you’re a manufacturer or a power plant developer, whether you’re a renewable energy developer or hoping to be a renewable energy consumer, whether you are a municipality or public agency or university, we want to comment on current issues in a way that is useful to you in your business. We’ll cover climate change, renewable energy, hazardous and solid waste, clean air and water, sustainability and green design. You name it, if it’s got an acronym attached to it, we’ll cover it.

As the headline indicates, we want to inform, update, comment, and discuss. In other words, while we’re going to enjoy posting, we’ll enjoy the blog more—and its usefulness will increase—when we hear from you. Please comment on the blog entries. Let us know about developments we missed or implications of our discussions that we did not consider. Let us know, even if you disagree.

We look forward to the conversation.

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In Massachusetts v. EPA, the Supreme Court concluded that greenhouse gases, including CO₂, are “air pollutants,” the it left (barely) open the question whether CO₂ is “subject to regulation” under the Clean Air Act (“CAA”). 

Following Massachusetts v. EPA, there have been a number of cases in which advocates of climate change regulation have sought to require EPA to regulate CO₂ as a pollutant. One of those cases, In re Deseret Power Electric Cooperative, was just decided by the EPA Environmental Appeals Board. In Deseret Power, the Sierra Club had challenged issuance of a PSD permit issued by EPA Region 8 which would have allowed Deseret Power to construct a coal-fired power plant near Bonanza Utah. The basis for the challenge was the failure of EPA to impose a best available control technology, or BACT, limit on CO₂ emissions.

Notwithstanding the decision in Massachusetts v. EPA, EPA took the position that it historically had not interpreted the term “subject to regulation under the Act” to include CO₂. Moreover, it claimed in Deseret Power that it did not have authority to impose a BACT limit on CO₂ emissions. The EAB firmly rejected EPA’s position that it did not have authority to impose BACT limits on CO₂. However, the EAB also rejected the Sierra Club’s argument that EPA was required to impose compliance with BACT for CO_2.  In fact, the EAB concluded that “the statute is not so clear and unequivocal as to preclude Agency interpretation of the phrase ‘subject to regulation under this act,’ and therefore the statute does not dictate whether the Agency must impose a BACT limit for CO₂.”

So where does the Deseret Power decision leave the regulation of CO₂ under the CAA?  Probably pretty much where it was before the decision was issued – that is, right in the lap of the new administration. However, if I were a betting man, I would certainly be reluctant to back new ventures that involve significant CO₂ emissions unless the developer has a plan for addressing CO₂ emissions.

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Two recent federal decisions may aid regulators and activists seeking to hold companies liable under the Resource Conservation & Recovery Act (RCRA) for historical soil or groundwater contamination that could migrate as vapor and contaminate indoor air.

On July 28, 2008, in United States v. Apex Oil Company, Inc., the U.S. District Court for the Southern District of Illinois found the owner of a petroleum pipeline strictly liable under RCRA for pipeline leaks that contaminated soil and groundwater decades prior, and granted injunctive relief requiring the owner to abate the contamination. In Apex Oil, the Department of Justice filed suit under § 7003(a) of RCRA, which enables the federal government to force remedial actions when contamination may present an "imminent and substantial endangerment to health or the environment."  The Court found that vapors emanating from petroleum hydrocarbon contamination in soils could present an imminent and substantial endangerment to health under RCRA because residents could suffer adverse health effects when exposed to the vapors or be harmed by fires or explosions caused by the vapors. Of significance, the court noted that an “endangerment” need not be quantifiable, definite, or pose an emergency situation for it to be substantial and thus actionable under RCRA. An appeal of the Apex Oil decision is pending in the Seventh Circuit.

On June 12, 2008, in Grace Christian Fellowship v. KJG Investments, the U.S. District Court for the Eastern District of Wisconsin allowed, in part, rebuttal testimony supporting a RCRA claim that vapors from soil contaminated by a gasoline leak at an adjacent gas station were entering the basement of a church and threatening the health and safety of the occupants. The Grace court has yet to issue a final decision as to whether the gas station is actually liable under RCRA or required to remediate the underlying contamination. 

Both decisions could provide support for regulators and activists arguing that vapor intrusion meets RCRA’s standards for imminent and substantial endangerment to health or the environment. The Apex Oil decision also indicates that the underlying contamination need not be recent for RCRA standards to be satisfied. As liability under RCRA is strict, these cases highlight the importance of assessing whether a potential vapor intrusion condition exists on already-contaminated property or property that is the subject of a real estate transaction. 

Locally, the Massachusetts Department of Environmental Protection (MassDEP) recently promulgated regulations and standards under the Massachusetts Contingency Plan (MCP), governing the mitigation of potential indoor contamination caused by vapor intrusion. These state regulatory developments only underscore the fact that potential vapor intrusion issues must be addressed. Property owners will ignore these issues at their financial and legal peril.

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Can a party found liable of violating the Clean Air Act's New Source Review provisions be required to reduce future pollution more to mitigate emissions caused by past violations?  According to a recent U.S. District Court decision, maybe.

In U.S. v. Cinergy Corp., S.D. Ind., No. 99-1693, decided October 14, 2008, the first court to rule on whether retroactive, as opposed to prospective relief, is available under Section 113 of the Clean Air Act found that the court does have the authority to grant such relief.  Although the court stopped short of ordering this relief (procedurally, this opinion was a denial of the defendants' summary judgment motion), the court held in sweeping language that nothing in the Clean Air Act limits the full range of equitable relief that courts can order.

This recent ruling relies heavily on a 1946 U.S. Supreme Court decision, Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946), in which the Supreme Court held that when a court's equitable jurisdiction is invoked by a statute, "all the inherent equitable powers of the District Court are available for the proper and complete exercise of that jurisdiction," unless the law by "clear and valid legislative command" or "necessary and inescapable inference" has restricted the court's equitable powers.

In Cinergy Corp., the district court said its equitable powers were invoked by the phrasing of Section 113 of the Clean Air Act which gives a court, "jurisdiction to restrain [a] violation [of the Clean Air Act], to require compliance, assess [a] civil penalty, to collect any fees owed the United States... and to award any other appropriate relief."   Applying this rule, the court determined that it would have the authority to require the three defendants to take appropriate actions that remedy, mitigate and offset harms to the public and the environment caused by their proven violations of the Clean Air Act.

In this particular enforcement suit, three companies -- Cinergy Corp. (now part of Duke Energy Corp.), PSI Energy Corp., and the Cincinnati Gas & Electric Co. -- were found liable in May of long-term violations of the New Source Review requirements in their operation of a power plant in West Terre Haute, Indiana. The US requested in their filings that the court impose specific measures to reduce pollution beyond what is required for prospective compliance, in order to make up for the nearly two decades of illegal pollution caused by the plant. 

A trial on remedies is expected to begin in February, 2009.

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In a recent decision, the 7^th Circuit Court of Appeals confirmed that neither CERCLA nor RCRA provide convenient ways for the buyer of a building containing asbestos to finance the abatement of that asbestos. In Sycamore Industrial Park Associates v. Ericsson, the seller of the building replaced the old heating equipment shortly prior to sale, but left the old system, including piping, in place. The buyer sought to make the seller pay for the asbestos abatement on the ground that the seller has disposed of the old equipment by abandoning it in place when it installed the new system. The 7^th Circuit didn’t buy it.

The Court acknowledged that there might be a close question as to whether the asbestos constituted a solid or hazardous waste or RCRA and CERCLA. However, the Court concluded that it need not answer the question, because the seller had not “disposed” of the material. The Court concluded that, where all of the asbestos was either inside the building or inside a pipe chase, there “is no real threat that asbestos ‘or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters….” 

The Court did indicate that the intent of the seller may be relevant; it gave the example that a person looking to avoid liability for a toxic retaining pond, could not sell the entire property, including the pond, as a means of avoiding such liability. It described this situation as the “malicious motive case.” Absent such a malicious motive, however, sale of property including toxic or hazardous material does not put a person into the category of potentially responsible parties.

Similar to its analysis of the “disposal” question, the Court also concluded that there was no release or threat of release that would subject a person to CERCLA liability. “We reaffirm that when there is no emission into the outside environment,… there is no release or threatened release, and thus there can be no liability under CERCLA. 

The Court reached the same conclusion under RCRA. First, utilizing the same analysis as under CERCLA, it found that there had been no disposal by the seller. It also rejected the allegation that the seller had handled or stored the asbestos, concluding that “RCRA requires active involvement in handling or storing of materials for liability.”

In short, if the asbestos isn’t walking out the door, it may be a problem inside a building, but CERCLA and RCRA won’t help the building owner pay to fix that problem.

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