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The EPA has proposed a rule that would require concentrated animal feeding operations (CAFOs) to submit operational information to EPA. The EPA claims that this will allow the Agency to ensure that CAFOs are implementing practices to protect water quality and human health. The proposal is part of a settlement agreement reached with the Natural Resources Defense Council, Waterkeeper Alliance, and the Sierra Club. Under the proposed rule, EPA is co-proposing two regulatory options regarding which CAFOs would be required to submit information to the EPA. One option would require every CAFO to report this information to EPA, unless states with authorized NPDES programs choose to provide this information on behalf of the CAFOs in their state. A second option would require CAFOs in focus watersheds that have water quality concerns associated with CAFOs to report information to EPA.
This proposal follows a now-familiar path whereby the EPA creates rules through settlements with environmental advocacy organizations. Industry interests are usually prohibited under Federal case law from intervening in the lawsuits and are not allowed any voice in countering the terms of the settlement. Only after the settlement is complete and the rules are proposed does industry get an opportunity to lodge comments.
Does a skirmish taking place between the United States Army and the Environmental Protection Agency over the transfer of the former Kansas Army Ammunition Pant in Parson, Kansas threaten to condemn farmland sold for development to the status of RCRA hazardous waste sites requiring remediation and removal of agricultural pesticides? That seems to be a possible result if the EPA has its way.
Here is the background. In 2009 the Defense Department closed the Kansas Army Ammunition Plant. The plant consisted of 6,700 acres with roads, rail, water and wastewater treatment plants. Plans were soon underway to transfer ownership of the plant to the Great Plains Development Authority for an industrial park. A snag developed when it was determined that wooden structures had been treated with pesticides to protect them from termite damage. The EPA asserted that it had authority under the Resource Conservation and Recovery Act (RCRA) to require the cleanup of pesticides in the soil around buildings being demolished at facilities required to have permits under RCRA when the contamination might be the result of normal application of pesticides to the soil to prevent termite damage.
In a letter dated March 4, 2011, from Mathy Stanislaus, Assistant Administrator of the Office of Solid Waste ad Emergency Response, to Congresswoman Lynn Jenkins, the EPA pointed to its authority under section 3004(u) of RCRA to require that all RCRA permits issued by the EPA or an authorized State must include provisions for the cleanup of releases of both hazarous wastes and hazardous constituents. The pesticides are listed at 40 C.F.R. Part 261, Appendix VIII as “hazardous constituents” subject to the corrective action obligations of section 3004(u) of RCRA. The EPA reasoned that once a structure is no longer usable or is slated for demolition, “the pesticides no longer serve their intended purpose.” Even the sale of buildings with the knowledge that they will be demolished constitutes “disposal” under RCRA, according to the EPA’s interpretation. The EPA concluded that “[a]ny pesticide-contaminated soil disturbed through building demolition and excavation activities should be treated as hazardous waste if it is a RCRA listed or characteristic waste.” The obvious implication is that although the pesticide-containing soil was fine when there was a building there (presumably filled with people) it is suddenly a health risk if the building is demolished. This will mean that the soil must either be treated or hauled away to a hazardous waste landfill. That is an extremely expensive proposition, possibly driving up the cost of demolition quite considerably. This is a particularly perverse result given that the pesticides may not even be present in the soil at levels that exceed their original application rate.
One unintended, but direct, consequence is that this position raises the stakes for those property owners considering the use of legal pesticides at their labeled rate in order to protect the building from termites. If the owner does not use the pesticide, then the building may be destroyed. If the owner uses the pesticide, then the owner may be subject to millions of dollars in cleanup costs if the building has to come down anyway (perhaps because the owner waited too long to apply the pesticides).
At a minimum, there is a question as to whether this policy or interpretation by the EPA changes the parameters of the due diligence inquiries necessary for property transfers. If a facility has a RCRA permit, then the EPA seems to be arguing that common pesticides, or even pesticides in soil left over from farming operations, may trigger remediation. This would be a very strange result given the fact that we eat food grown on fields that contain pesticides. Why does the fact that a building will being torn down trigger a federal mandate to address a new health threat? The pesticide has not changed in its character. It is going to continue to kill bugs even if there is no building to protect. Also, how can environmental consultants distinguish between pesticides applied to protect buildings from pesticides applied to kill crop pests? Why should it make a difference?
The letter has a footnote which indicates that the “letter only addresses [EPA's] authority at facilities required to have RCRA permits issued under Subtitle C of RCRA.” Therefore, the EPA will be able to argue that the impact of this dispute over pesticides will be limited in impact. However, the reasoning (or assumptions) behind the letter clearly suggest that the EPA may have its sights on the Agricultural industry in general.
The key to the EPA’s reasoning is what is most worrisome. The EPA is looking to the usefulness of the pesticide as triggering the possible requirement for an environmental cleanup. Although unstated, the EPA is necessarily taking the position that a pesticide’s regulatory protection is lost once the pesticide “no longer serves its intended purpose.” This same reasoning could be applied to other regulatory schemes such as CERCLA. Do we really want farmers to be required to conduct remediation of their farms before selling them for a new purpose? Even more pernicious is the possibility that the EPA might take the position that once a given pesticide application had run its course that the soil has to be dug up and hauled away to a hazardous waste facility. I understand that the EPA is not applying this policy to non-RCRA permitted sites, but the underlying reasoning behind the EPA’s position certainly opens up that possibility.
The best way to deal with this EPA policy is legislation providing that pesticides that are applied pursuant to their label are not deemed to be hazardous wastes when the pesticides no longer serve their intended purpose. This legislation should not be necessary because Congress already passed a comprehensive regulatory scheme for pesticides with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). That the EPA would ignore the congressional intent evident with the passage of FIFRA and deem pesticides legally used under FIFRA to be a hazard under RCRA is clear evidence that the EPA is taking an outcome-determinative approach to regulation.
Let there be no mistake. I have tested cropland for pesticide residue (a very expensive test) and the lab results that I have reviewed lead me to conclude that nearly all soil will have traces of the pesticides that have been applied to the fields. The half-life of many older pesticides means that fields can continue to contain quantifiable levels of those pesticides for many years to come. It would be a mistake for the EPA to take a position on pesticides in general in one bitter inter-agency dispute in Kansas that negatively affects all agriculture everywhere.
James Pray
First up we have a report that an Ohio Judge approved a confidential settlement in the West Virginia coal slurry case against Massey Energy subsidiary Rawl Sales & Processing. The reported payout is $35 million. The plaintiffs alleged that Rawl pumped 1.4 billion gallons of contaminates into abandoned underground mines in Mingo County between 1978 and 1987 and that this contaminated their drinking water wells. (JereBeasley Report and West Virginia Gazette)
Next, Kinder Morgan Energy Partners had a $7.5 million dollar verdict levied against it by a Clark County, Nevada jury. The plaintiff alleged that a tanker-truck worker developed Myelodysplastic Syndrome (MDS) from repeated exposures to benzene. Kinder Morgan tried to argue that benzene is not a carcinogen, that it was not a distributor of benzene-containing gasoline, and that it only operated a storage facility. Kinder Morgan had reportedly offered $20,000 to settle before trial. (JereBeasleyReport and BreakingLawsuitNews.com)
A federal court in Pennsyvania dismissed an EPA lawsuit against a power plant for modifying two electric generatinig units without the required permits and emissions controls. The judge ruled that the statute of limitations for the action had passed. The modifications had taken place from 1991 through 1996 by prior owners of the power plant. The court found that there was a five-year statute of limitations. The current owners were found to be not liable for injunctive relief as they did not own the plant at the time. The former owners were not liable for injunctive relief because they no longer owned the plant. United States v. EME Homer City Generation LP
A Michigan developer was recently held to be potentially liable under Superfund when it tore up a concrete slab in order to develop the property. The property was already contaminated with vinyl chloride. It was alleged that by tearing up the pad rainwater would infiltrate into the soil and cause the vinyl chloride to migrate. This migration, it was argued, would constitute a “release” of hazardous substances into the environment. The judge held that this was not an instance of passive migration but active migration. The court found that this fact prohibited the court from dismissing the case.
Saline River Properties, LLC, v. Johnson Controls, Inc. (E.D. Mich. Octover 17, 2011) Case Number 10-10507 and 10-13406.
Congress is toying with a bill called the Farm Dust Regulation Prevention Act of 2011. What is interesting about the title is that it is not farm dust that is being “prevented” but regulation of farm dust that is being prevented. The EPA insists that it has no intention to regulate farm dust but the GOP likely understands that with some bipartisan support from farm state Democrats and an uncertain political future that this may be the time to get a bill like this passed.
I have previously weighed in on the side of agriculture on the issue of dust from agricultural operations, not because I hate clean air, but because this is a problem with no real cost-effective solution. I just do not see any point in passing regulations and spending money trying to solve a problem that can’t be solved without bankrupting rural America.
Below is a cut and paste version of Bill HR 1633. A link to a clean pdf is here.
A BILL
To establish a temporary prohibition against revising any
national ambient air quality standard applicable to coarse
particulate matter, to limit Federal regulation of nuisance
dust in areas in which such dust is regulated
under State, tribal, or local law, and for other purposes.
1 Be it enacted by the Senate and House of Representa
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Farm Dust Regulation
5 Prevention Act of 2011’’.
1 SEC. 2. TEMPORARY PROHIBITION AGAINST REVISING ANY
2 NATIONAL AMBIENT AIR QUALITY STANDARD
3 APPLICABLE TO COARSE PARTICULATE MAT
4 TER.
5 Before the date that is one year after the date of the
6 enactment of this Act, the Administrator of the Environ
7mental Protection Agency may not propose, finalize, im
8 plement, or enforce any regulation revising the national
9 primary ambient air quality standard or the national sec
10 ondary ambient air quality standard applicable to particu
11 late matter with an aerodynamic diameter greater than
12 2.5 micrometers under section 109 of the Clean Air Act
13 (42 U.S.C. 7409).
14 SEC. 3. NUISANCE DUST.
15 Part A of title I of the Clean Air Act (42 U.S.C. 7401
16 et seq.) is amended by adding at the end the following:
17 ‘‘SEC. 132. REGULATION OF NUISANCE DUST PRIMARILY BY
18 STATE, TRIBAL, AND LOCAL GOVERNMENTS.
19 ‘‘(a) IN GENERAL.—Except as provided in subsection
20 (b), this Act does not apply to, and references in this Act
21 to particulate matter are deemed to exclude, nuisance
22 dust.
23 ‘‘(b) EXCEPTION.—Subsection (a) does not apply
24 with respect to any geographic area in which nuisance
25 dust is not regulated under State, tribal, or local law inso
26 far as the Administrator finds that—
1 ‘‘(1) nuisance dust (or any subcategory of nui
2 sance dust) causes substantial adverse public health
3 and welfare effects at ambient concentrations; and
4 ‘‘(2) the benefits of applying standards and
5 other requirements of this Act to nuisance dust (or
6 such subcategory of nuisance dust) outweigh the
7 costs (including local and regional economic and em
8 ployment impacts) of applying such standards and
9 other requirements to nuisance dust (or such sub
10 category).
11 ‘‘(c) DEFINITION.—In this section, the term ‘nui
12 sance dust’ means particulate matter—
13 ‘‘(1) generated from natural sources, unpaved
14 roads, agricultural activities, earth moving, or other
15 activities typically conducted in rural areas; or
16 ‘‘(2) consisting primarily of soil, other natural
17 or biological materials, windblown dust, or some
18 combination thereof.’’.
 The press has made much of recent reports that the EPA announced that it will not regulate rural dust. But that is not exactly what the EPA did. EPA Administrator Lisa Jackson released several letters (Klobuchar Letter Stabenow Letter ) to legislators dated October 14, 2011 in which she states that with regard to the PM10 standard she is “prepared to impose the retention – with no revision – of the current standard and form when it is sent to OMB for interagency review.” It is clear from the letter that PM2.5 is not subject to the retention of the standard. Farm dust is not mentioned in the letters at all, though there seems to be some consensus that farm dust would fall within the PM10 standard. Since the research on PM2.5 is still underway, and it remains to be seen what the EPA will do with PM2.5 in its rule review, I can’t say that a revision of the PM2.5 standard will not have a deleterious effect on rural air compliance.
While this is good news for those who question the need to regulate dust in rural areas, the door is not completely closed until the scientific evidence and assessments for PM2.5 are evaluated.
Summary: An attempt by the Port of Los Angeles to regulate truck emissions and labor conditions was preempted by the FAAA.
Background: The Port of Los Angeles encountered resistance from environmental and community groups when it tried to expand its cargo terminal facilities to accommodate more and larger ships. The opposition argued that the expansion of the port would generate air pollution. In 2002 a California court issued an injunction against any business expansion. In order to appease the opposition, the Port adopted a “Clean Truck Program” in which the types and age of trucks entering the Port were restricted and stiff fees were imposed on terminal operators who shipped goods on non-compliant trucks. In addition, the Clean Truck Program required concessionaires to stop using independent owner-operators, imposed maintenance requirements on the trucks, addressed certain off-street parking issues, required placards to be attached to all trucks when in the Port with a number for the public to call if excess emissions were suspected, required concessionaires to demonstrate the financial capability to perform maintenance on the trucks, and imposed a one-time fee of $2,500.
The American Trucking Association and other interested parties filed numerous challenges to the Clean Truck Program, including a preemption argument that the 1994 Federal Aviation Administration Authorization Act (FAAA Act), 49 U.S.C. § 14501 et seq. prevents States from undermining federal deregulation of interstate trucking. The FAAA Act provides as a “general rule” that “a State [or] political subdivision of a State may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1).
The Ninth Circuit concluded that the financial capability provision, maintenance provision, off-street parking, and placard provisions were all adopted to address specific proprietary concerns faced by the Port and did not seek to affect unrelated conduct by third parties. However, the Circuit Court did find that the phase-out of owner-operators was really intended to increase wages for drivers. Thus, it was intended to affect the conduct of third parties involved in interstate commerce (trucking companies and owner-operators) and held that the provision violated the FAAA.
– James Pray
This case is a dispute between the U.S.Forest Service and owners of mineral rights in the Allegheny National Forest. Mineral rights owners are entitled to reasonable use of the surface to drill for oil and gas after providing a sixty-day notice after which the Service would issue a Notice to Proceed. The Service had taken the position that issuance of an NTP to a mineral rights owner was not a “major federal action” that would trigger an environmental analysis under NEPA. The National Environmental Policy Act of 1969, Pub. L. No. 91-190, 83 Stat. 852 (NEPA) requires federal agencies to file an environmental impact study (EIS) before taking any “major federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(C).
As a result of settlements with environmental groups, the Service postponed the issuance of any Notices to Proceed until a multi-year, forest-wide Environmental Impact Study (EIS) was completed. Mineral owners and related businesses filed suit to enjoin the service from implementing the policy, arguing that the new policy effectively put them out of business.
The District Court found that the change in policy by the Service constituted a “fundamental ‘sea change’ in the Service’s policy; therefore, they constituted final agency action subject to review under the APA. The court also found that the action by the Service was essentially a drilling ban and that the Service had not followed the APA’s notice and comment procedures. Finally, the district court found that the ban was not justified under NEPA because the issuance of an NTP was not a major federal action. The district court then issued an injunction.
On appeal the Circuit court agreed with the district court and affirmed the decision in all respects.
http://www.ca3.uscourts.gov/opinarch/101265p.pdf
– James L. Pray
Biofuel and ethanol refineries have a good working understanding of the need to take steps to avoid workplace accidents and damage to the refinery infrastructure. The insurance to cover these claims is also well understood. Workers’ compensation insurance covers injuries to employees; liability policies cover injuries to visitors, contractors, and third parties who are injured while at the facility; and property casualty insurance and business interruption insurance covers damage to the facility. But what about the risks posed by the transportation of goods both to and from the facility? Some of these risks arise from transporting products and other risks arise from the products themselves. In either case, these risks may be excluded by many of the standard policies.
Trucking and Railroad – Damage to Vehicles, Property, and People.
The transportation of biofuels usually requires the use of train cars or trucks. Liability can arise if a carrier’s vehicles are damaged on the facility grounds. As an example, poor road conditions and unclear signage can contribute to accidents on the facility. Releases of sulfuric acid and methanol (used to refine biofuels) and gasoline (used to denature ethanol) can escalate the size and complexity of the claim. The facility’s management should make sure that it has adequate insurance. Standard property casualty policies may not cover damage to trucks and trains owned by third parties because that property is not owned, controlled or leased by the facility.
Standard liability policies frequently exclude incidents involving train derailments or collisions. If the facility owns railroad tank cars, then management should check to make sure that there is coverage in place to cover not only the cost of repair but also any liability or demurrage claims that may arise if an injury or derailment is caused by a defect in the tank car. If coverage for damages to or caused by railroad trains is excluded, then the company should buy a special endorsement or policy.
Releases of Product
Transportation of finished biofuels and byproducts can also pose a liability risk. This risk is greatly reduced if the product is being carried by a common carrier on its equipment. Generally, the common carrier will be liable for accidents involving its own equipment and drivers. However, depending on the tariff or contract, the shipper may have a duty to secure the load properly. If the facility owns the trailer or tank car, then any equipment problem that contributes to an accident or release of product can also generate secondary liability even if it is being transported by a common carrier.
If product is released during transport, there are possible civil, administrative, and criminal penalties that can be assessed by state and federal agencies if the release can be traced back to a failure of the refinery to properly load and secure the product. For releases that are large enough to require removal and remediation, then there may also be liability to state and federal agencies that respond and third parties whose property may be affected. Standard policies may specifically exclude any claims arising from the release of a “pollutant.” Finding environmental insurance that will cover those claims can be very challenging. Lower-tier environmental insurance policies contain so many exclusions that they are nearly worthless. There is also no point in buying an environmental insurance policy if it excludes releases that take place during transport or cleanup costs. It is hard to believe that an environmental policy would exclude emergency response and removal costs, but they are out there.
Pursuing the Insurance.
The story does not end with the identification of an insurance policy that appears to cover a given claim. There is an old adage that insurance companies are in the business of collecting premiums and not paying claims. If the claim is small, insurance companies reject the claim knowing that the cost of litigation for the insured to recover on the claim will eat up the recovery. If the claim is large, they reject the claim knowing that when faced with prospect of costly and drawn-out litigation that the insured may be capitulate and take less than the full value of the coverage. In either case, the refinery may have to go to court in order to get the coverage that it has paid for.
Some well-respected publications have recently criticised efforts in the U.S. to grow renewable energy alternatives. Megan McArdle, a senior editor for The Atlantic, observes in a July/August article “the 14 Biggest Ideas of the Year” that in 2010 “we now generate less electricy from renewables than we did in 1997.” I cannot tell for certain, but it appears that this may be by a percentage measure and not raw output numbers. One reason for this is the fairly dramatic drop in hydroelectic power generation. The rise in wind and solar power has not made up for the difference.
The August, 2011 Scientific American has an article by David Biello, entitled “The False Promise of Biofuels.” Turning to ethanol, the author notes that even if the entire corn crop of 2009 was used to make ethanol, it would only replace 18% of the nation’s gasoline consumption. The article goes on to quote J. Craig Venter, co-founder of Synthetic Genomics, who states that to replace all U.S. transportation fuels with ethanol would require a farm three times the size of the continental U.S.
Replacing fossil fuels with alternative energy sources is still a long way off. Incremental improvements in efficiency, transmission, and production will only put a slight dent in our reliance on foreign oil.
 With floodwaters of the Missouri and Mississippi rivers causing widespread devastation, some are asking if the Army Corps of Engineers can be held responsible for the damages. Unfortunately, for lawsuits based on a negligence or similar theory, the answer is generally “no.” While there may be federal programs that offer assistance in the forms of low interest loans or emergency relief, the law clearly states that there is no liability for the United States due to floods or floodwaters.
The Flood Control Act of 1928 (33 U.S.C. §702c) states: “[n]o liability of any kind shall attach to or rest upon the United States for any damage from or by floods or flood waters at any place.”
The 8th Circuit interpreted this law in National Mfg. Co. v. U.S. 210 F.2d 263 (8th Cir. 1954). There, plaintiffs brought action under the Federal Tort Claims Act after their business was flooded. The Corps of Engineers committed “negligent and careless acts and omissions,” and “carelessly and negligently disseminated misinformation respecting the course and action of the flood waters.” The fact that that the river was going to overflow its banks on July 13, 1951 and inundate plantiffs’ business was readily accessible to Corps officers. Because of the Corps negligent acts and omissions, plaintiffs had a false sense of security and therefore, did not take the appropriate protective measures to protect their property. The court held that the 1928 Act bars liability due to any kind of damage “by floods or flood waters,” as well as any damages that result, even indirectly, from floods, even if the government’s negligence contributed to plaintiffs damages. “Uniformly and throughout the country at any place where there is damage ‘from’ or ‘by’ a flood . . . no liability of any kind may . . . rest upon the United States.” Id.at 271.
It is possible that there may be state liability under certain circumstances. In Schneider et al. v. State of Iowa, ___ N.W. 2d ____ (Iowa 2010) No. 07-0887 the Iowa Supreme Court ruled that Iowa has no immunity for improper bridge design which violates Iowa laws on floodways and highway construction and which results in flood damage.
In 1994 the Iowa Department of Transportation (DOT) completed construction of a bridge spanning Quarter Section Run Creek, a stream flowing through Denver, Iowa. In a flood insurance study commissioned by the city of Denver in 1990, the creek was designated as a “regulatory floodway.” A floodway “`is the channel of a stream plus any adjacent flood plain areas that must be kept free of encroachment so that [a] 100-year flood can be carried without substantial increases in flood heights.’” K & W Elec, Inc. v. State, 712 N.W.2d 107, 110 (Iowa 2006) (quoting 1984 Federal Emergency Management Agency flood insurance study). Unfortunately, the DOT’s bridge and related structures were only designed to accommodate a 50-year flood event. The new bridge, consisting of twin structures 168 feet in length, spanned the creek, but not the entire floodway. In May 1999, Denver a flood which damaged thirty-five homes and thirty-four businesses. Landowners sued the State of Iowa alleging its negligent design and construction of a highway project caused the resulting damages. The State moved for summary judgment asserting statutory immunities. The district court granted the motion, the landowners appealed, and the court of appeals affirmed.
The State of Iowa filed a motion for summary judgment asserting that the State was immune under the Tort Claims Act, Iowa Code section 669.14(1). The district court granted the motion, finding that the design and construction of the bypass were discretionary functions based on “considerable planning” and a “balancing of governmental priorities and competing governmental demands.” The district court further concluded the State was entitled to summary judgment on the plaintiffs’ claims for damages for permanent devaluation of their properties under section 669.14(8) because the bridge was constructed or reconstructed in accordance with a generally recognized engineering or design theory. The Iowa Supreme Court found that Iowa Code section 455B.275(1) prohibits floodway obstructions or encroachments, including fill, new construction, or any development within a floodway without the approval of the DNR. In response to the State’s argument that the plaintiffs had not cited this statute, the plaintiffs countered by noting that they had cited an analogous federal statute. The prohibition in section 455B.275(1) was therefore held to invalidate the State’s argument that the applicable function was discretionary. The Court next addressed the “state of the art” defense at section 669.14(8). On this issue, the plaintiffs failed. However, this failure only affected the permanency of the injury. The Court next turned to the underlying issue of liability. The court noted that Iowa Code section 314.7 provides prohibits those in charge of improvements on a highway from turning “the natural drainage of the surface water to the injury of adjoining owners.” The case was sent back to the district court.
I have not researched whether there may be similar instances under federal law in which the immunity has been waived through illegal actions. However, the Iowa statute is far more complicated than the federal law’s blanket ban on liability.
– James L. Pray
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