On February 2, 2010, the Securities and Exchange Commission (“SEC”) issued guidance, in the form of an interpretive release (the “Release”), as to a public company’s disclosure requirements on climate change issues.1 The SEC puts companies on notice that it will review the effect of the Release on companies’ filings through its disclosure review program. This Release should be considered in the context of the SEC staff’s recent reminders that their review will look beyond the four corners of a company’s SEC filings, including considering disclosures in a company’s earnings calls, earnings releases, website and press releases.2 The SEC expects to hold a public “roundtable” on climate change disclosures in the spring of 2010.
At an open meeting held January 27, 2010, the Securities and Exchange Commission voted to issue an interpretive release (the “Release”) to provide guidance on existing climate change disclosure obligations. Specifically, the Commission’s discussion identified four categories of information about climate change that companies should consider disclosing:
· the impact of legislation and regulation;
· the impact of international accords;
· the indirect consequences of regulation or business trends; and
· the physical impacts of climate change.
Federal Legislative Developments
On January 27, 2010, in his first State of the Union address, President Obama reiterated his desire to see a comprehensive energy and climate bill adopted in the coming year. In his speech, Obama tied such legislation to job creation, providing examples of “green jobs” and emphasizing that, “to create more of these clean energy jobs, we need more production, more efficiency, more incentives.” Among the programs Obama espoused are the construction of new, “safe, clean” nuclear power plants; “continued investment in advanced biofuels and clean coal technologies,” and the passage of a “comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.” While Obama did not mention the words “cap and trade” in his speech, he supported his plea for climate legislation by stating that “providing incentives for energy-efficiency and clean energy are the right thing to do for our future—because the nation that leads the clean energy economy will be the nation that leads the global economy.” Obama also indicated that he would be willing to make “tough decisions about opening new offshore areas for oil and gas development,” but only as one component of his energy plan for the country.
CERCLA Case Law Developments
- District Court Finds Owner of Leased Equipment Liable Under CERCLA
On February 9, 2010, the United States District Court for the Northern District of Illinois held that an owner of equipment leased for use in an electroplating operation is a PRP under CERCLA as a “facility owner at the time [of cleanup].” United States v. Saporito, No. 07-C-3169, slip op. at 15 (N.D. Ill. Feb. 9, 2010). In Saporito, the federal government sought to recover $1.5 million it spent to clean up hazardous substances affecting soil and groundwater at the former Crescent Plating Works site on the northwest side of Chicago from defendant individuals James Saporito and Paul Carr. During the electroplating process, items to be plated were dipped into a series of chemical baths through which an electrical current was run, and hazardous materials contained in the baths, such as sodium cyanide, hexavalent chromium, and TCE, at times splashed onto the concrete floor, ultimately reaching the soil below. Saporito, whose dealings with Crescent Plating included his purchasing and leasing back to Crescent Plating equipment used in the electroplating process, filed a number of counterclaims against the government and moved for summary judgment on his liability. The government moved for summary judgment on its claims that Saporito was both an owner and an operator liable under CERCLA, and moved to dismiss Saporito’s counterclaims, both of which the court granted.