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A recent decision by a federal district court in Illinois answered the above question by concluding that the danger does not have to be very imminent.  Indeed, a plaintiff could state a claim by alleging that contamination that had been in the ground for more than 50 years and is not currently threatening anyone, may create an imminent danger.  City of Evanston v Texaco, 2014 WL 683736 (N.D,.Ill, February 2014).

The City instituted a RCRA citizen’s suit against an oil company and the owner of a property that was formerly occupied by a gas station. The oil company moved to dismiss arguing that the contamination was more than 50 years old, no one was permitted to drink the groundwater, the site was paved over and therefore, there could not be an “imminent and substantial endangerment.”  The court denied the motion, noting that the statute allows a suit where “hazardous waste may present an imminent and substantial endangerment.”  By emphasizing the word “may” the court allowed the case to proceed.

The case should probably not be read to mean that an imminent endangerment does not need to be imminent.  Instead, the better read is that courts may be hesitant to resolve such claims on a motion to dismiss.  The decision gives the City the opportunity to prove its case, but leaves open the future finding, after discover, that there is no imminent endangerment in this case.

The United States Supreme Court has agreed to hear a case interpreting the CERCLA provision that preempts State statutes of limitations. Section 9658 of CERCLA provides that for actions brought under State law relating to hazardous substances or pollutants, the statute of limitations cannot begin to run until the injured party knew or should have know of the injury. This provision preserves claims that might otherwise be time-barred.

There is a split in the federal circuits regarding what section 9658 means for statutes of repose. The difference between a statute of limitations and a statute of repose is that a statute of limitations bars claims that are brought a specified amount of time after a claim arises, which generally means after the injury, while a statute of repose bars claims a specified amount of time after an event (such as a sale of property) even if that event has not caused injury.  The Fourth Circuit Court of Appeals held that section 9658 applies to statutes of repose.  Waldburger v CTS Corporation, 723 F.3d 434 (2013).

The Supreme Court will decide whether, when section 9658 said “statute of limitations” it also meant “statute of repose.” The decision will impact not only what state law claims can be brought against alleged polluters, but it could also provide significant guidance regarding how to read CERCLA. Recent Supreme Court decisions have counseled lower courts to pay more attention to the language of CERCLA and if that trend considers, the Court will not extend the provision to statutes of repose.

A New York court recently concluded that sampling data cannot be protected from disclosure under either the attorney client privilege or the attorney work product doctrine. In Abbo-Bradley v City of Niagara Falls, __ F.Supp.2d __ (W.D. N.Y. July 2013), plaintiffs instituted an action alleging that they had suffered personal injury and property damage as a result of releases of hazardous waste. Shortly thereafter, plaintiffs sought a temporary restraining order to require defendants to provide plaintiffs with advance notice of any sampling and an opportunity to take split samples. An agreement was reached regarding the language of such an order. Then, when plaintiff’s began sampling, defendants sought a similar order requiring plaintiffs to provide advance notice and an opportunity to split samples. Plaintiffs objected to the proposed order based on the attorney work product doctrine.

The court noted that the work product doctrine protects two types of materials that are prepared for litigation: (1)documents that contain the opinions or mental impressions of attorneys and (2) factual investigations and technical analyses. The court noted that attorney opinions and strategies receive more protection than factual analyses. Work product does not, however, protect the factual material that is the source of the work product (i.e.,facts used by the attorney to develop strategy or facts analyzed by techical experts). Here, the court noted that defendants were not seeking mental impressions or strategies or the results of plaintiffs’ technical analysis. They were merely seeking facutal information to assure that all parties have access to the same material. The court also noted that the attorney client privilege could not protect this information because that protects confidential communications from attorney to client and the source of this information is not the client.

This decision raises questions about the common practice of having the attorney retain the consultant so that the consutant’s findings will be protected. The decision suggests that any such protection will be limited. The factual data is likely not to be protected, but the analyses can be protected.

In Litgo New Jersey, Inc. v Commissioner of New Jersey Department of Environmental Protection, 2013 WL 3985003 (3d Cir. August 2013), the Third Ciruit Court of Appeals discussed the issue of when a party who has liability as current owner also has liability as current operator. While both the current owner and the current operator can be strictly liable under CERCLA for response costs, the issue has signifcance for allocation among responsible parties.

Appellants were parties who had purchased contaminated property with the intent to develop the proerty. They engaged in various investigation and remediation activities and sued a prior owner and the United States government to recover response costs. After a trial, the court found that the current owner and operator was liable for 70% of the costs. On appeal, one of the arguments raised by the appellants was that, while they could have liability as current owner, they could not have liability as current operator.

Appellants’ argument was based on language in the Supreme Court’s decision in United States v Best Foods, 524 U.S. 51 (1998), which could be read to indicate that to be liable as an operator one needs to be involved in activities at site that result in liability (such as generation and disposal of hazardsous waste). The Third Circuit rejected that interpretation, concluding that anyone who manages or conducts the affairs of a facility is an operator. Applellants argued that this would lead to unfair results by adding to the liability of “innocent” purchasers. The court, however, explained that the result was compelled by the language of CERCLA, which distinguishes between persons who have liability because they operated the facility at the time of disposal of hazardous substances and persons who are the current operator, without regard to whether they are there is any current disposal activity.

The decision helps clarify the meaning of the Best Foods decision. The issue often comes up in the context of lenders, who do not take title, but engage in activities that could be construed as operation. The common question, which made sense in light of Best Foods, was whether they could be liable as operator if their activities had nothing to do with hazardous substances. While most answered that question in the affirmative, this decision makes that more clear.

Earlier this summer, the Environmental Protection Agency published a report entitled “Our Built Environments: A Technical Review of the Interactions Among Land Use, Transportation, and Environmental Quality.” The document examines the interactions among these factors in a manner that is different from the way environmental impacts are often looked at. For example, the redevelopment of a contaminated site is looked at positively, not only because of the improvement to that site, but also based on the fact that such reuse means that a new site, undeveloped site will not be developed by this project. It also recommends developing more compactly because such development will reduce the need for transportation infrastructue and encourage walking instead of driving. The report describes numerous ways to reduce the environmental impacts of development projects and should be a valuable resource.

A recent decision by an appellate court in Florida (Miami-Dade County v Concrete Structures, Inc., May 15, 2013) raised the issue of the extent to which a regulator can inspect (search) the premises of a regulated party without a permit.

The Supreme Court has addressed the issue a number of times and in New York v Berger, 482 U.S. 691 (1987), the Supreme Court upheld a New York statute that allowed warrantless searches of automobile junkyards. The Court stated that a person who engages in commercial activity that is regulated has a reduced expectation of privacy and the government’s interest in highly regulated industries is heightened. The Court said that where the State has a substantial interest in regulating an industry or activity and the warrantless searches are reasonably necessary to further that substantial interest, then a warrantless search will be upheld as long as the statute contains an adequate substitute for a warrant. This latter requirement has been the subject of much discussion. In essence, the statute must put people on notice that they may be subject to inspection and must contain limits on the scope of the inspection.

In Concrete Structures, the Florida statute allowed warrantless administrative insptection searches only in cases in which there was “reasonable suspicion” that a violation existed and none existed. However, the court held that where the regulated party has a permit from the agency to conduct certain activities and the permit contains a right to inspect, the warrantless inspection can be performed pursuant to the permit, without reference to the statute.

Regulated parties often ask about the agencies “Can they do that?” Of the course the answer depends on who (which agency) wants to do what. It is important to note, however, that agencies often have the “right” to perform warrantless inspections. It also important to examine the wisdom of trying to require a warrant in a given case. In many cases such action is unwise, without regard to the legalities. The Concrete Structures case adds another wrinkle. Parties regulated by a permit often give up their right to object to inspections when they obtain their permit.

The Ninth Circuit Court of Appeals in Chubb Custom Insurance Co. v. Space Systems/Loral, Inc., 710 F.3d 946 (9th Cir. 2013), affirmed the dismissal of a CERCLA (Comprehensive Environmental Response, Compensation and Liability Act) cost recovery action by an insurer against parties alleged to be responsible for the contamination. The insurer brought its claim under both §107 and §112 of CERCLA, which address cost recovery and subrogation claims.  The court explained that there was no right of subrogation because the insured was not a “claimant” as that term is used in CERCLA and §112 permits subrogation claims only on behalf of persons who have stated a CERCLA claim.  The court further held that an insurer is limited to bringing a subrogation claim pursuant to §112 and cannot use §107 to avoid the requirements of §112.

In discussing how the CERCLA subrogation provision works and how the provision relates to common law rules of subrogation, the court provided guidance to future insurers regarding how to avoid the problem that resulted in dismissal of this claim.  In response to plaintiff’s argument that allowing the claim to go forward would be consistent with the purposes of CERCLA, particularly, the goal of requiring responsible parties to pay for the cleanup, the court argued that the insured is in a better position to enforce such claims and insurers should require insureds to pursue claims against responsible parties. 

In Menasha Corp. v United States Department of Justice (7th Cir. 2013), the court held that the work product privilege protects Department of Justice memoanda from discovery, even if Depatment of Justice lawyers appear to be adverse to each other. The suit arose out of a Superfund site in Wisconsin at which the United States filed an action against a number of entities that were alleged to have contributed to the contamination. In a consent decree with several defendants, the United States agreed to contribute $4.5 million dollars toward the remediation because of waste sent to the site by federal agencies. The consent decree was submmited to the court for approval and Menasha opposed the consent decree.

Menasha claimed that the consent decree was not fair because the United States was not paying its fair share. Menasha also counterclaimed against the United States. To support its claim, Menasha sought discovery (through a freedom of information request) of Justice Department memoranda regarding the negotiations within the Justice Department that led to the payment by the United States.

The court held that the work product privilege protected the memoranda. The court viewed the Justice Department as one law firm and explained that it was important for Justice Department attorneys to be able to be open with each other. The court said this was analogous to a debate within a corporate law department in which attorneys express opposing views. The expression of opposing views does not make the attorneys adverse to each other for discovery purposes.

The Court’s analogy to debate within a corporate law department seems way off point. A corporation cannot sue itself. The United States, on the other hand, is often on both sides of environmental litigation, both as envorcing agency and as a responsible party. In such cases, the govenment as law enforecment agency and the government as responsible party are adverse to each other and should not work together to the detriment of the other responsible parties. The court noted that the settling agencies were not parties to the litigation. If they were that should have created real adversity between the government lawyers and the outcome should in that case be differernt.

In Appleton Papers, Inc. v Environmental Protection Agency (7th Cir. Dec. 26, 2012), the Seventh Circuit Court of Appeals held that a defendant in an enforcement action could not obtain government expert reports under the Freedom of Information Law.  After the government alleged taht seven companies were responsible for contamination in the Fox River, near Green Bay, Wisconsin, the government hired an expert to prepare a report on the companies’ responsibility for the contamination. Appleton sought the report as part of a challenge to a consent decree between the government and another party.

The Freedom of Informatin Act makes most government documents publicly available, but exempts nine categories of documents from disclosure.  The government claimed the report at issue was exempt from disclosure based on the exemption for “inter-agency and intra-agency memorandums or letters which would not be available by law to a party in litigation.”  The government’s claim was that the document would not be available to a party in litigation because of the work product doctrine, which protects from disclosure, documents produced in anticipation of litigation or for trial.  Appleton argued that work product should protect theories, opinions and analysis, but not facts.  The court held, however, that the entire report was protected.  There is an exception to the work product doctrine for a party that has a special need for the information, but the court concluded that Appleton had made no showing of special need.

In most environmental matters, the facts are gathered by the potentially responsible parties and the basic information about the contamination is publicly available.   This decision does not change that general rule of procedure.  In this case, however, the governement report at issue was not an investigation report that sampled soil or groudwater and identified the contamination.  Instead, it was a report on which parties are responsible for how much.  Such reports are much more likely to include the governments opinions and theories prepared for litigation (as opposed to being prepared for remediation) and are therefore much more likely to be protected from disclosure.

A recent decision by a federal district court in the District of  Columbia addresses whether CERCLA section 113(h), which bars certain challenges to CERCLA remediations, bars a challenge which would not be barred by the parallel RCRA provision.  Anacostia Riverkeeper v Washington Gas Light Company, 20012 WL 4336243 (September 24, 2012).  Plaintiff argued that while both CERCLA and RCRA contain provisions that bar certain challenges to CERCLA remediations, the only way to give effect to both is to permit plaintiffs to proceed with their challenges whenever the action would not be barred by RCRA.  The court, however, noted that the CERCLA bar to challenges is broader and a RCRA action that is barred by CERCLA, not by RCRA, is barred.  The court therefore dismissed the RCRA endangerment action pursuant to CERCLA 113(h). 

The decision is important because it protects regulated parties, who are working with a regulatory agency, but who could be subject to regulation under more than one regulatory program, from the claim that the remediation that the regulatory agency approved is not adequate.  There is a significant overlap between CERCLA and RCRA.  In theory they are distinct in that CERCLA deals with inactive hazardous waste sites and RCRA manages the ongoing handling and disposal of hazardsous wastes.  Nevertheless, at many sites that have ongoing activities that generate hazardous waste (and are therefore regulated by RCRA), there were historic releases covered by CERCLA.  Each statute has a bar to claims that, in short says certain remediations approved by the appropriate regulatory body cannot be challenged by third parties.  This encourages parties to work with the regulatory agencies.   The court decision clarifying the relationship between the statutes further encourages cooperation with agencies by protecting them from certain third party claims.

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