IICLE Releases New Environmental Law Publication
By: E. Lynn Grayson
The Illinois Institute for Continuing Legal Education (IICLE) has released a new publication titled Environmental Law in Illinois Corporate and Real Estate Transactions 2014 Edition.
According to IICLE, this publication is a unique resource that balances Illinois business and real estate practice with environmental law issues. Whether you represent commercial landlords, manufacturers, real estate developers, government agencies, or private landowners, this handbook will prepare you to tackle any environmental issue. It also includes guidance on how to conduct an "all appropriate inquiries" investigation in a real estate transaction, the environmental due diligence process, practice in various environmental forums in Illinois, programs and redevelopment incentives to return brownfields to productive use, and how federal bankruptcy law intersects with environmental issues in real estate transaction.
The following chapters in this publication were authored by Jenner & Block EHS lawyers.
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Chapter 3 – Environmental Considerations in Corporate and Real Estate Transactions
E. Lynn Grayson, Jenner & Block LLP, Chicago
Chapter 4 – Lender Liability Under Environmental Laws for Real Estate and Corporate Transactions
Gabrielle Sigel and Alexander J. Bandza, Jenner & Block LLP, Chicago
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Chapter 5 – Illinois Environmental Forums
Steven M. Siros and Seth J. Schriftman, Jenner & Block LLP, Chicago
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Chapter 10 – Treatment of Environmental Obligations in Bankruptcy
Christine L. Childers, First American Bank, Elk Grove Village, and Keri L. Holleb Hotaling, Jenner & Block, Chicago
The publication is available from IICLE at http://iicle.inreachce.com/.
Certain Pesticides Fail New U.S. EPA Screening Guide for Volatilization Risks
By: Steven M. Siros
On March 26, 2014, U.S. EPA released its draft "Human Health Bystander Screening Level Analysis: Volatilization Risks of Conventional Pesticides". This screening guide is intended to provide a mechanism for evaluating exposure risks as a result of the volatilization of conventional pesticide products. Earlier in the year, U.S. EPA released a similar draft guidance that proposed a mechanism to evaluate the potential risk of pesticide drift.
U.S. EPA's proposed screening guide for evaluating volatilization risks takes into consideration the chemical and physical properties of the pesticide to evaluate the rate at which a pesticide volatilizes from a treated site and then relies on the AERSCREEN model to calculate estimated pesticide concentrations in the air at different distances from the treated location.
In conjunction with the release of the draft screening guide, U.S. EPA also released the results of a screening analysis that U.S. EPA ran using this proposed methodology on 253 commonly used pesticides. Of these 253 pesticides, 68 pesticides failed. Per the draft guidance, if a pesticide fails the screening analysis, that is a trigger for U.S. EPA to further evaluate the volatilization risks of that particular pesticide. Commonly used pesticides that failed U.S. EPA's draft screening analysis included atrazine, chlorpyrifos, diazinon, and pyrethrin.
U.S. EPA's proposed screening analysis has already been the subject to criticism by industry groups that have gone on record as saying that the draft assessment is too strict, relies on inappropriate models. Environmental groups, on the other hand, believe the assessment to be too lax and incorrectly weights the effects of dispersion on the exposure assessment. The comment period on U.S. EPA's draft screening analysis guidance will expire on May 27, 2014.
Steve Siros and Allison Torrence Presenting At CBA Seminar On Environmental Law
By: Allison A. Torrence
On Wednesday, March 19, 2014, Jenner & Block attorneys, Steve Siros and Allison Torrence, will be speaking at a Chicago Bar Association CLE Seminar. The Seminar is titled "Hot Topics in Environmental Law". Steve Siros will be presenting on TSCA: Green Chemistry and Other Reform Issues and Allison Torrence, who is the Legislative Liaison for the CBA Environmental Law Committee, will be presenting on Legislative Updates in Illinois.
The seminar is on March 19, 2014 from 3 – 6 pm at the Chicago Bar Association, 321 S. Plymouth Court.
Speakers and Topics:
CLEAN AIR ACT: DEVELOPMENTS IN THE STARTUP, SHUTDOWN AND MAINTENANCE (SSM) DEFENSE
Karl Karg, Latham & Watkins
ENDANGERED SPECIES ACT: LITIGATION HOOKS AND OPPORTUNITIES
Rebecca Riley, National Resources Defense Council
TSCA: GREEN CHEMISTRY AND OTHER REFORM ISSUES
Steven M. Siros, Jenner & Block LLP
CERCLA: 2013 UPDATES TO ASTM'S PHASE I ESA STANDARD
Erin Veder, ENVIRON
Robert Peachy, U.S. Environmental Protection Agency
Allison Torrence, Jenner & Block LLP
Margrethe K. Kearney, Latham & Watkins LLP; Chair, CBA Environmental Law Committee
For more information and to register for the seminar visit www.chicagobar.org/cle.
Ocean Exchange Launches 2014 Call For Solutions
By: E. Lynn Grayson
The Ocean Exchange has announced the launch of its fourth annual global competition for the 2014 Gulfstream Navigator Award of $100,000 and the 2014 Wallenius Wilhelmsen Logistics Orcelle Award of $100,000. The theme for the 2014 competition is ACCELERATE SUSTAINABILITY, innovations generating economic growth and increased productivity while reducing the use of nature's resources and waste. The Ocean Exchange is seeking innovative and globally scalable solutions, i.e. Solutions Inspiring Action, that are positive for our economies, health, and the environment, while respecting cultures around the world.
To enter the 2014 competition, register your solution in the Ocean Exchange Gallery by 11:59 p.m. (GMT) on May 5, 2014. Register by completing a pre-screening application through http://www.oceanexchange.org. Beginning May 6, Ocean Exchange's international solutions review panel of multi-disciplinary experts will review all applications registered in the Gallery to select:
Ten Solutions Inspiring Action to compete for monetary awards – these organizations, which are in need of financial support and global recognition, will be invited to present at the Ocean Exchange, October 5-7, 2014 in Savannah Georgia USA. At the Ocean Exchange invited delegates will select the winners of the $100,000 Gulfstream Navigator Award and the $100,000 Wallenius Wilhelmsen Logistics Orcelle Award.
Three Solutions Inspiring Action representing Excellence in Corporate Innovation – these Excellence Award winners will also be invited to present their Solutions Inspiring Action at the Ocean Exchange event in October, 2014.
In 2013 the Ocean Exchange introduced the Solution Inspiring Action Gallery that will become the go - to resource for organizations to identify and connect with Solutions that can advance their business and corporate social responsibility goals. In its first three years, the Ocean Exchange's competition generated applications from North America, South America, Europe, Asia, Australia, Africa and the Middle East, with four of ten finalists in 2013 from outside the United States.
Founded in 2010, the Ocean Exchange™ is an international platform for accelerating the adoption across industries of Solutions that positively impact environments, economies and health, while respecting cultures around the world. The Board of Governors includes 16 thought - leaders from around the world who represent diverse backgrounds and expertise and share a commitment to innovation. Working together, we AGGREGATE solutions and EMPOWER organizations to achieve their goals.
Lawsuit Seeks To Compel U.S. EPA Disclosure Of Pesticide Inert Ingredients
By: Steven M. Siros
On March 5, 2014, several environmental groups filed a lawsuit against U.S. EPA seeking to compel the public disclosure of "inert" ingredients in pesticide products. Under the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), pesticide manufacturers are obligated to list "active" ingredients. However, "inert" ingredients are not currently subject to the same disclosure requirements as "active" pesticide ingredients. According to the lawsuit, U.S. EPA has authority under FIFRA to also require the disclosure of "inert" ingredients which can comprise a significant percentage of a pesticide product's formulation.
As set forth in the complaint, in August 2006, a coalition of public health and environmental organizations submitted a petition requesting that U.S. EPA require the disclosure of certain "inert" chemicals used in pesticide products. In December 2009, U.S. EPA initiated an advanced notice of proposed rulemaking that would have required this disclosure. However, U.S. EPA has taken no further action with respect to this advance notice. The lawsuit seeks to compel U.S. EPA to either complete its proposed rulemaking or otherwise take action with respect to the pending petition.
Please click here to see a copy of the complaint.
Green Climate Fund Board Makes Key Decisions On Operations
By Keri L. Holleb Hotaling
Last week, the Board of the Green Climate Fund (the "Fund") met in Bali, Indonesia. The Fund was designated as an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change ("UNFCCC"). The Fund's purpose is to promote, within the context of sustainable development, the "paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to help limit or reduce their greenhouse gas emissions and to adapt to the unavoidable impacts of climate change." The United States and other industrialized countries at the 2009 climate summit in Copenhagen pledged $100 billion a year to the Fund—from public and private sources—as climate aid beginning in 2020.
During the three-day meetings in Bali, the Fund's Board members agreed, among other things, that the Fund will aim for a 50:50 balance between mitigation and adaptation efforts and designate 50% of adaptation funding for "particularly vulnerable countries," including least developed countries, small island developing states and African states. The Board of the Fund also determined that it will maximize engagement with the private sector and be a leader on "gender mainstreaming" and will define its gender action plan in October 2014. Click here for a link to the press release.
EPA 2013 Enforcement Results: Higher Penalties With Fewer Enforcement Proceedings
By: Steven M. Siros
U.S. EPA recently released its 2013 enforcement report, which highlights the $5.6B in fines, restitution and court-ordered environmental projects that U.S. EPA obtained in civil and criminal enforcement proceedings in 2013 (as compared to $200M in 2012). It should be noted, however, that the Deepwater Horizon events themselves accounted for $5B of the $5.6B collected by U.S. EPA in 2013. Two additional matters accounted for $450M of the remaining $600M collected by U.S. EPA.
U.S. EPA acknowledged that it pursued 20% fewer enforcement cases in 2013 although the magnitude of the Deepwater Horizon prosecution provides a partial explanation for this enforcement decrease. However, this enforcement decline is consistent with U.S. EPA's draft Strategic Plan for 2014-2018 which was the subject of an earlier blog post . As discussed in the earlier post, instead of focusing on the numeric volume of enforcement cases, U.S. EPA's strategic plan proposes to target larger and more complex environmental violations and violaters.
Please click here to go to U.S. EPA's 2013 enforcement results website.
U.S. EPA Hikes Statutory Environmental Penalties
By: Steven M. Siros
Effective December 11, 2013, penalties for violations of certain environmental statutes will go up. According to a final rule issued by the United States Environmental Protection Agency, 20 of the 88 statutory penalty provisions are being increased in order to adjust for inflation. Although the standard daily fine for violations of the CWA, CAA, CERCLA, and TSCA will remain at $37,500, other penalties have increased substantially. For example, the fine for violating a CAA State Implementation Plan jumped from $295,000 to $320,000 and the maximum fine for hazardous releases under CERCLA is increasing from $107,500 to $117,500. Per the Debt Collection Improvement Act of 1996, U.S. EPA is required to review its penalties every four years and adjust those penalties to take into account inflation and cost of living increases under the consumer price index. Please click here to see a copy of the final rule and accompanying table that reflects these penalty adjustments.
EPA Ordered To Move Forward With Coal Ash Waste Rule
By Allison A. Torrence
On October 29, 2013, a federal district court judge ordered EPA to submit to the court within 60 days a plan and schedule for finalizing coal ash rules under the Resource Conservation and Recovery Act (RCRA). Appalachian Voices v. McCarthy, No. 12-cv-00523 (D.D.C. Oct. 29, 2013). Coal ash, also called coal combustion residuals (CCRs), is created as a byproduct of coal combustion at power plants. Coal ash is generally disposed of in either liquid form in surface impoundments or in solid form at landfills and is largely exempt from hazardous waste and solid waste regulations under RCRA.
Recent interest in regulating coal ash waste was prompted by the December 2008 spill at a coal ash storage facility for the Tennessee Valley Authority’s Kingston Fossil Plant. An estimated 1 billion gallons of coal ash slurry was released from the Kingston facility after a retaining wall in the surface impoundment failed. In response to the coal ash spill, in June 2010, EPA proposed to regulate coal ash to address the risks from the disposal of coal ash waste. The 2010 proposed rules provided two options for regulating coal ash: (1) regulate coal ash as a special waste under RCRA’s hazardous waste regulations; or (2) regulate coal ash under RCRA’s non-hazardous solid waste regulations. EPA has received approximately 450,000 comments on these proposed rules and has published additional data on the proposed rules, but has yet to finalize any regulations. Under the solid waste proposed rule, current surface impoundments would have to be retrofitted with new composite liners or cease operations within five years. Existing landfills would not need new liners, but would require groundwater monitoring. In the event that EPA were to elect to regulate coal ash as a special waste, coal ash impoundments or landfills would need RCRA permits and surface impoundments would effectively be phased out of use due to land disposal restrictions. Although EPA has indicated that the second option - regulating coal ash as a non-hazardous solid waste - is the most likely outcome, it has yet to issue final regulations.
After almost four years of inaction on the regulatory front, several environmental organizations sued EPA under the citizens’ provisions of RCRA for failure to finalize its RCRA regulations for coal ash. The environmental groups argued that under the statutory language in RCRA, EPA is required to review and, if necessary, revise hazardous waste and solid waste regulations every three years. Thus, they argued that EPA was required to review its decision not to regulate coal ash as a hazardous waste or solid waste at least every three years, which it has failed to do. In his October 29th Memorandum Opinion, District Court Judge Walton ruled in favor of EPA on a number of counts, holding that coal ash is exempted from RCRA’s general review and revision process for hazardous wastes. Nevertheless, Judge Walton ruled in favor of the environmental groups on the issue of non-hazardous solid waste regulations. Judge Walton held that EPA has a non-discretionary duty to review and, if necessary, revise solid waste regulations concerning coal ash at least every three years. Judge Walton declined to provide a set deadline for EPA to issue its review or regulations. Instead, he ordered EPA to submit a proposed scheduling order setting forth a proposed deadline by which it will comply with its statutory obligations under RCRA. EPA must submit this proposed schedule within 60 days (by December 30, 2013), at which point the environmental groups will have an opportunity to file a response to EPA’s proposed schedule.
EPA Proposes Increased Oversight Of State Enforcement Activities
By Steven M. Siros
U.S. EPA recently issued a draft strategy document in response to a December 2011 Inspector General Report that found inadequate enforcement of environmental laws at the state level. U.S. EPA's draft "National Strategy for Improving Oversight of State Enforcement Performance" outlines several possible enforcement options, including U.S. EPA overfiling and/or removal of a state's delegated authority to administer specific federal programs.
The draft strategy document acknowledges that although many states have effective enforcement programs, "state performance in meeting national enforcement goals and taking necessary enforcement actions varies across the country." Specific issues identified in the strategy document included (1) widespread and persistent data inaccuracy and incompleteness; (2) routine failure of states to identify and report serious non-compliance; (3) routine failure of states to take timely or appropriate enforcement actions; and (4) failure of states to seek appropriate penalties.
In an effort to address these issues, the strategy document proposes a tiered process. In the first instance, U.S. EPA would work with the state regulators in an effort to focus attention on the issue. If that is unsuccessful, the next step would be to elevate the issue to higher levels of management within the state. If the issue remains unresolved, U.S. EPA may elect to take more direct action, including conducting federal-only inspections and/or bringing federal-only cases. Finally, if these efforts fail, U.S. EPA may elect to overfile, withhold grant monies, or in rare circumstances, withdraw a delegated state program.
The draft strategy document has been sent to the states for review and comment. Notwithstanding any comments that might be received from the states, this strategy document clearly illustrates that U.S. EPA is closely evaluating state enforcement activities and appears ready and able (now that the shutdown is over) to step in and take action in situations where it decides that the states are not actively enforcing environmental laws.
Governor Approves Bill That Could Curb Some Proposition 65 Claims
By Steven M. Siros
California Governor Jerry Brown recently signed into law a measure that may curb what many believe to be meritless Proposition 65 claims against certain businesses in California. The current modus operandi for the Proposition 65 plaintiffs' bar in California is to hire people to visit restaurants, bars, and other businesses in the hope that the requisite Proposition 65 warnings have not been posted. A 60-day notice letter is then sent out and in most cases, the targeted business quickly settles the claim with plaintiffs' counsel pocketing a significant percentage of the settlement as "attorneys' fees".
Under the new law, businesses that are targeted by a Proposition 65 plaintiff for allegedly failing to post the requisite warning regarding exposure to alcoholic beverages, tobacco smoke, engine exhaust, and potentially harmful chemicals formed during the cooking process would have 14 days to post the requisite notice and pay a $500 fine. Assuming that the notice is posted within this 14-day period and the fine paid, no further action could be taken by a private plaintiff (it should be noted that this new law would not prohibit the Attorney General from bringing a separate action for violation of the Proposition 65 statute).
Since it will no longer be profitable for the Proposition 65 plaintiffs' bar to bring these types of claims, the expectation is that California restaurants and other similar businesses will no longer be targeted simply for having served a hamburger or operating a parking lot without having posted a warning. Of course, that probably just means that the plaintiffs' bar will focus more attention on other consumer products and businesses would be well served to verify that the products that they sell and distribute in California are compliant with Proposition 65.
ECHA Reports Significant Non-Compliance And Limited Enforcement Of REACH Requirements
By Steven M. Siros
According to a recent report issued by the European Chemicals Agency (ECHA), one out of every ten companies was found to be using at least one unregistered chemical substance. Under the REACH regulations, companies are prohibited from using chemical substances unless those substances were registered on or before December 1, 2008. In addition, the ECHA report found that 67 percent of the inspected companies were in violation of one or more provisions of REACH or the Classification, Labeling and Packaging regulations (which complement the REACH regulations). Notwithstanding the fairly systemic non-compliance noted in the report, enforcement was very sporadic with fines being levied in only eight cases and criminal proceedings being initiated in only four cases (compared to 789 total instances of non-compliance). Under REACH, enforcement authority is vested with each individual member state. Responding to the fairly low incidence of enforcement actions by individual member states, ECHA issued a statement noting that failure to comply with REACH's registration requirements constituted a "major" breach of REACH and that the individual member states should adopt an enforcement approach that is "proportional, effective and dissuasive."
Please click here to see a copy of the ECHA report.
Environmental Group Ordered To Pay Disney’s Attorneys’ Fees For Filing Baseless Reverse False Claims Act Lawsuit
By Steven M. Siros
In the latest saga of what has become a long running dispute between plaintiff RBC Four Co. LLC ("RBC") and the Walt Disney Company ("Disney"), a federal district court judge dismissed RBC's reverse False Claims Act allegations and ordered RBC to reimburse Disney for its attorneys' fees incurred in defending what the court determined to be baseless claims. According to the RBC complaint, since at least 1991, Disney has dumped dangerous chemicals into the waters surrounding its Burbank, California studios. In 1991, U.S. EPA sent Disney an information request seeking information relating to contamination at a Superfund Site in the San Fernando Valley and Disney was alleged to have responded to U.S. EPA with misleading statements and/or documents concerning its handling of hazardous materials at the Burbank site. In its complaint, RBC argues that Disney's misleading response to U.S. EPA's information request and other information it provided to regulators over the past decade constituted efforts by Disney to avoid payment of obligations owed to the Government pursuant to various environmental laws and regulations, including the Clean Water Act and CERCLA.
The court found RBC's complaint to be devoid of any facts showing a particular legal obligation that Disney avoided by making allegedly false representations to the Government. In support of its decision to dismiss RBC's complaint without leave to replead, the court noted that the type of "obligations" that might give rise to a reverse False Claims Act claim do not extend to potential liabilities under an environmental statute as alleged by plaintiffs.
In ruling on Disney's request for sanctions, the court found that RBC's claims were "legally baseless from an objective perspective and cannot have been the product of competent inquiry." The court further noted that this was the fourth qui tam action that RBC (or one of its affiliates) had brought against Disney and is one of 12 actions that had been filed against Disney since 2007. Each of these actions has arisen out of the same or similar facts and several of those claims had been dismissed with prejudice. Although the court declined to designate RBC as a "vexatious litigant" as requested by Disney, the court noted that the record reflected that RBC had engaged in a pattern of duplicative and excessive litigation against Disney, suggesting that such a designation might be appropriate if future claims were filed. The court also ordered RBC to pay Disney's attorneys' fees and costs in defending the litigation. Please click here to see a copy of the court's order.
President Obama Issues Executive Order On Chemical Safety
By Allison A. Torrence
On August 1, 2013, President Obama issued an Executive Order titled "Improving Chemical Facility Safety and Security." The Executive Order is in response to recent tragedies involving chemical accidents at U.S. facilities, most recently the explosion at a fertilizer plant in West, Texas. The Executive Order establishes the Chemical Facility Safety and Security Working Group, co-chaired by the Secretary of Homeland Security, the Administrator of the EPA, and the Secretary of Labor. The Working Group is tasked with the following goals:
- Improving Operational Coordination with State, Local, and Tribal Partners.
- Enhanced Federal Coordination.
- Enhanced Information Collection and Sharing.
- Policy, Regulation and Standards Modernization.
- Identification of Best Practices.
Notable requirements in the Executive Order include:
- Assessing the feasibility of sharing data related to the storage of explosive materials and chemicals that are regulated under the Chemical Facility Anti-Terrorism (CFATS) standard with State, Tribal and local emergency responders.
- Developing recommendations on ways to identify chemical facilities that are not in compliance with all federal chemical safety requirements.
- Developing a list of potential regulatory and legislative proposals to improve the safe, secure storage, handling and sale of ammonium nitrate (the chemical at issue in the West, Texas explosion).
- Reviewing the Risk Management Program (RMP) and the Process Safety Management Standard (PSM) to determine if RMP or PSM should be expanded to address additional substances.
- Identifying any chemicals that should be added to the CFATS Chemicals of Interest list.
The Working Group is required to provide a status report to the President by April 28, 2014.
Executive Order, "Improving Chemical Facility Safety and Security" is available at: http://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safety-and-security
Final Rule On Solvent-Contaminated Wipes
By E. Lynn Grayson
EPA has issued a final rule that modifies the hazardous waste management regulations for solvent-contaminated wipes under the Resource Conservation and Recovery Act (RCRA). Specifically, this rule revises the definition of solid waste to conditionally exclude solvent-contaminated wipes that are cleaned and reused and revises the definition of hazardous waste to conditionally exclude disposable solvent-contaminated wipes. The purpose of this final rule is to provide a consistent regulatory framework for solvent-contaminated wipes that is appropriate to the level of risk posed by these wipes in a way that maintains protection of human health and the environment, while reducing overall compliance costs for industry, many of which are small businesses.
A summary chart developed by EPA provides a quick reference guide for how the new rule now will manage solvent-contaminated wipes. A press release and frequently asked questions document also are available.
The final rule will take effect January 31, 2014.
More information, including the rule, is available at http://www.epa.gov/osw/hazard/wastetypes/wasteid/solvents/wipes.htm.