The states of Alabama, Florida, Kansas, Nebraska, Oklahoma, South Carolina, Texas and Virginia, along with several private companies, have sued the United States Environmental Protection Agency ("EPA") in federal court, seeking to halt implementation of EPA's Cross-State Air Pollution Rule ("Transport Rule"). The states and private companies have filed seven separate cases, which have been consolidated under the first-filed case, EME Homer City Generation, L.P. v. Envtl. Prot. Agency, No. 11-1302 (D.C. Cir. filed Aug. 23, 2011).
Yesterday, the U.S. EPA Office of Inspector General (OIG) released a report entitled "Procedural Review of EPA's Greenhouse Gases Endangerment Finding Data Quality Processes," which was conducted at the request of Sen. James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works. According to the report, the purpose of the review was "to determine whether EPA followed key federal Agency regulations and policies in obtaining, developing, and reviewing the technical data used to make and support its greenhouse gas endangerment finding," referring to EPA's "Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act," issued December 15, 2009. EPA had relied on assessments conducted by outside organizations, such as the U.S. Global Change Research Program (USGCRP) (f/k/a U.S. Climate Change Science Program (CCSP)), the Intergovernmental Panel on Climate Change (IPCC), and the National Research Council (NRC), as the primary scientific basis for its endangerment finding, summarizing the results and conclusions of those assessments in its technical support document (TSD) accompanying the finding.
On Thursday, September 16, 2011, EPA published in the Federal Register a final rule adding fifteen sites to the National Priorities List ("NPL") (76 Fed. Reg. 57702). Pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), EPA is required to develop a list of priority sites to be used to focus EPA's investigation of known or suspected releases. The NPL fulfills that obligation and represents the list of what EPA has determined are sites that pose a risk to human health or the environment. Once a site is placed on the NPL it is eligible for financing of a remedial action through the Trust Fund established by CERCLA (otherwise known as the Superfund). However, generally, EPA looks first to potentially responsible parties to investigate and, if necessary, remediate contamination at one of these sites.
The new sites include former mining sites, manufacturing plants, a landfill, a refinery, and plumes of known contaminated groundwater. The new final sites are:
When the Supreme Court returns from its summer recess on September 26 to select cases for review this fall, it is likely to consider taking up Morrison Enterprises, LLC v. Dravo Corp.
The question presented is: Whether a party that has incurred response costs either pursuant to an administrative order, or to a consent decree following suit under § 106 or § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), may ever seek to recover those "compelled" costs under §107(a), or whether the exclusive remedy for cost recovery is contribution under CERCLA § 113(f)?
Jenner & Block's Environmental Cost Recovery & Lender Liability Update for August 2011 Now Available
Jenner & Block's monthly Environmental Cost Recovery & Lender Liability Update, covering the latest case law and other developments in Environmental Cost Recovery & Lender Liability, is now available for August 2011. The August Environmental Lender Liability Update, as well as all prior months, can be found at Jenner & Block Environmental Cost Recovery & Lender Liability Update Resource Center. This month's update includes a discussion of cases covering CERCLA case law developments, RCRA case law developments, state case law developments in Wisconsin and Ohio, Toxic Tort Case Law Developments, and Insurance case law developments.
According to a new study by the U.S. Geological Survey, Trace Elements and Radon in Groundwater Across the United States, 1992-2003, about 20% of untreated water samples from public, private and monitoring wells contain concentrations of at least one trace element, such as arsenic, manganese and uranium, at levels of potential health concern.
These findings are based on over 5,000 samples collected primarily from public and private wells nationwide. This study is part of efforts by the U.S. Geological Survey's National Water-Quality Assessment Program to monitor the quality of the nation's groundwater and surface water.
Human health benchmarks used in this study include U.S. Environmental Protection Agency Maximum Contaminant Levels for regulated contaminants and Health Based Screening Levels (HBSLs) for unregulated contaminants. HBSLs are unenforceable contaminant threshold guidelines developed by the USGS in collaboration with EPA, and the New Jersey Department of Environmental Protection and Oregon Health Sciences University.
The major findings of the new study include:
- Arsenic, uranium, and manganese, were the trace elements in groundwater that most frequently exceeded USEPA human-health benchmarks.
- Climate and land use are important factors in trace element distribution.
- Basic geology and geochemistry of water samples helps to predict occurrence of trace elements in groundwater.
- The effects of mixtures of trace elements are poorly understood and could cause further health concerns.
More information about the USGS and its national water quality assessment program can be accessed at USGS.gov.
Environmental Citizen Groups Have No Standing to Challenge Climate Change Impacts of Federal Actions
Two U.S. district courts recently issued separate decisions rejecting environmental groups' challenges to federal actions based on alleged climate change injuries. In both cases, using the same legal test, the courts found that the environmental groups did not have standing to pursue their claims against the federal agencies. This is an important development in climate change litigation, which in the past has addressed standing only in the tort context or regarding claims brought by States, not when private parties were challenging federal agency actions.
Jenner & Block's latest monthly Climate Change Update, for August 2011, is available on the Firm's website.
The Climate Change Update summarizes on a monthly basis important climate change legislative, litigation, regulatory and research developments. The August 2011 Climate Change Update includes a discussion of the Obama Administration's announcement of the first-ever GHG emission standards for medium/heavy-duty trucks and for other heavy-duty vehicles. The update also includes a discussion of important developments affecting the ability of environmental citizen groups to bring federal lawsuits challenging federal regulations based on alleged climate change injuries.
On September 16, 2011, the Virginia Supreme Court issued its long-awaited decision in The AES Corporation v. Steadfast Insurance Company. In that decision, the Virginia Supreme Court agreed with the insurance company's argument that it had no obligation to provide coverage for claims relating to alleged damages caused by greenhouse gas emissions.
In 2008, The AES Corporation ("AES") was sued by the Native Village of Kivalina and the City of Kivalina for damages related to global warming allegedly caused by AES' greenhouse gas emissions. AES in turn requested that its insurance company, Steadfast Insurance Company ("Steadfast") defend and indemnify it with respect to these claims. Steadfast filed a declaratory judgment action, contending that it owed no defense or indemnity on three grounds: (1) the Kivalina complaint did not allege "property damage" caused by an "occurrence"; (2) any alleged injury arose prior to the inception of coverage; and (3) the claims alleged fell within the pollution exclusion in the Steadfast policies.
In granting Steadfast's request for declaratory relief, the Virginia Supreme Court relied on the policy's definition of "occurrence". The court noted that the term "occurrence" was defined with reference to "an accident" which in turn has been held to refer to an incident that was unexpected from the viewpoint of the insured. Because the Kivalina complaint alleges that AES intentionally released greenhouse gases, the Virginia Supreme Court concluded that the alleged release of greenhouse gases could not constitute an "occurrence" as that term was defined in the policies. The court further noted that the Kivalina complaint alleged that AES "knew or should have known" that its activities in generating electricity would result in the environmental harms suffered by the plaintiffs. Per the court, "if an insured knew or should have known that certain results would follow from his acts or omissions, there is no 'occurrence' within the meaning of a comprehensive general liability policy." The court did not address the remaining two arguments raised by Steadfast.
The Kivalina case itself remains pending in the Ninth Circuit and briefing on the impact of the Supreme Court's decision in AEP on that case is ongoing.
On September 12, 2011, a Florida federal district court rejected a proposed consent order that purported to resolve a PRP's CERCLA liability at a site in Florida. The proposed consent order, which tracked U.S. EPA's model order, required the PRP to reimburse U.S. EPA's past response costs and conduct a remedial design/remedial action at a site in Florida. Notwithstanding that no objections were filed, the court, on its own initiative, evaluated whether the proposed consent order would provide the settling PRP with sufficient protection from future liability.
In reaching the conclusion that the consent order did not provide sufficient protection, the court noted that the proposed consent order required the settling PRP to waive its res judicata and other defenses. The court also noted that the proposed consent order provided an expansive reservation of rights on the part of the Government to pursue future claims. In light of the Government's broad reservation of rights and the requirement that the PRP waive its defenses, the court noted that "it is not clear what degree of finality, if any, the consent decree confers upon the [PRP]." The court further noted that because it could not determine what liability had in fact been resolved by the consent order, it could not grant the settling PRP contribution protection pursuant to Section 113(f)(2) of CERCLA. Finally, the court also was critical of U.S. EPA's efforts to impose on the court any kind of timeline on subsequent judicial review or to dictate the applicable standard of review to be applied to disputes arising out of the consent order. We will continue to track this matter to ascertain whether U.S. EPA will modify its model consent order language or seek further review of the district court's order. For a copy of the September 12, 2011 order, please click here.
The U.S. Court of Appeals for the Sixth Circuit recently rejected plaintiffs' efforts to obtain medical monitoring arising out of train derailment that allegedly released dioxin into the environment. In Hirsch et al. v. CSX Transportation, the district court granted summary judgment in favor of CSX Transportation, finding that plaintiffs had not met their burden to show that plaintiffs had been exposed to dioxin in an amount sufficient to cause an increased risk of disease. On appeal, the Sixth Circuit affirmed the district court's ruling, finding that plaintiffs failed to introduce evidence creating a genuine issue as to whether a reasonable physician would order medical monitoring. More specifically, plaintiffs' expert opined that "[o]ne should be afforded the benefit of medical monitoring, if one has sustained a dose equal to or in excess of 50% of [one-in-a-million cancer risk]." In evaluating this expert opinion, the Sixth Circuit found that "Plaintiffs have alleged only a risk that borders on legal insignificance, have failed to produce evidence establishing even this hypothetical risk with any degree of certainty, and have demanded a jury trial based upon their expert's review of this evidence and conclusory statement of the relevant legal standard. In this context, [plaintiff's expert] affidavit amounts to a mere scintilla of evidence." The Sixth Circuit noted that plaintiffs might have survived summary judgment had they obtained medical evidence that they did in fact face a one-in-a-million risk of cancer but that plaintiffs had not done so in this particular case.
On October 25 and 26 Jenner & Block, in conjunction with the National Brownfields Association, will host the "2011 Great Lakes Sustainability Summit." The event will be held on the 45th floor of Jenner & Block's Chicago office and will begin at 1:00 pm CT on October 25. The Summit will focus on some of the key issues facing Great Lakes communities including water, waste and natural resource management, and planning for sustainable growth. Karen Weigert, Chief Sustainability Officer, City of Chicago, will be the featured speaker.
Steve Armstrong of Jenner & Block's Environmental, Workplace and Health and Safety Department will moderate a panel discussion on water management issues in the Great Lakes region. Other panels will address redevelopment opportunities arising from the RACER Trust, creative end use strategies for landfills and realizing value from ecological assets.
Please click here for more information on the event.
A recent publication by Ceres, Disclosing Climate Risks and Opportunities in SEC Filings: A Guide for Corporate Executives, Attorneys and Directors, was part of the materials provided in the September 7, 2011 Changing Standards for Environmental Disclosures webinar co-sponsored by the Environmental Law Institute and Jenner & Block. The report addresses:
- Climate change and the new SEC guidance.
- SEC disclosure expectations and how companies are responding.
- Other key elements of strong corporate disclosure.
- 11-point checklist for developing a climate change strategy and disclosing risks and opportunities in SEC filings.
Jim Coburn, Senior Manager, Investor Program, at Ceres spoke at the September 7th webinar and made participants aware of this recent report. Jim's powerpoint presentation and other program materials are available at https://www.eli.org/index.cfm.
The Obama administration told EPA today that the President does not support finalizing the July 11, 2011 draft final rule, "Reconsideration of the 2008 Ozone Primary and Secondary National Ambient Air Quality Standards" and that the rule was being returned to the EPA for reconsideration. Following the recommendation of its scientific advisers, the EPA recently proposed lowering the ozone standard from 75 parts per billion ("ppb") set by the Bush administration in 2008 to a new stricter standard between 60 ppb and 70 ppb. In a statement, President Obama stressed his commitment to the environment, but stated, "I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover." Relevant provisions of the Clean Air Act forbid EPA to consider costs in deciding the stringency of both primary and secondary national ambient air quality standards. The President went on to say, "[w]ith that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time. Work is already underway to update a 2006 review of the science that will result in the reconsideration of the ozone standard in 2013. Ultimately, I did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered." In a letter to EPA Administrator Jackson, Cass Sunstein, head of the White House Office of Information and Regulatory Affairs, said that he had been instructed by the President to carefully scrutinize all regulations "that impose significant costs on the private sector or on state, local, or tribal governments." Administrator Jackson said in a statement that "[t]his Administration has put in place some of the most important standards and safeguards for clean air in U.S. history: the most significant reduction of sulfur dioxide and nitrogen oxide air pollution across state borders; a long-overdue proposal to finally cut mercury pollution from power plants; and the first-ever carbon pollution standards for cars and trucks. We will revisit the ozone standard, in compliance with the Clean Air Act."