The Nickel Report

The US Environmental Protection Agency (“EPA”) announced its enforcement and compliance results for Fiscal Year 2022 (“FY2022”) in late December. In the Annual Results report prepared by EPA’s Office of Enforcement and Compliance Assurance (“OECA”), OECA highlights EPA’s efforts to target the most serious violations of the country’s core environmental statutes and civil rights laws—effectuating the mission and principles set forth in its FY2022 to 2026 EPA Strategic Plan. According to OECA, EPA’s enforcement and compliance program used “a range of tools and best practices” to specifically target water, air, land and chemical violations that impacted communities the most. In so doing, EPA reportedly reduced, treated or eliminated approximately 95 million pounds of pollutants and compelled violators to pay over $300 million in fines, restitution or penalties. The enforcement and compliance trends highlighted below continue an overall decline seen in the last decade, yet provide evidence that EPA is succeeding in its enforcement and compliance efforts in areas that are the biggest priority for the Biden administration.

On 6 September, the US EPA released its proposed rule to add perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) to the list of hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund.

If finalized, these hazardous substance designations could have a significant impact on many industries, from creating new reporting obligations to increased compliance, enforcement and litigation risks related to site cleanup.

Click here to read the full article, published in Chemical Watch.

The U.S. Supreme Court ruled today in Atlantic Richfield Company v. Christian that private landowners at a Superfund site near Butte, Montana, can pursue state law claims in state court seeking “restoration damages” for cleanup actions that go beyond the EPA-selected remedial action. The Court also held, however, that these landowners are potentially responsible parties (PRPs) under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and, as a consequence, must obtain EPA approval of the restoration plans before they can be implemented. Chief Justice Roberts wrote the Court’s opinion, in which five other justices joined.  Justice Alito wrote a dissenting opinion declining to sign on to the majority’s conclusion “that state courts have jurisdiction [under state law] to entertain ‘challenges’ to EPA-approved CERCLA plans,” taking the position that it was unnecessary for the Court to address this question.  In a separate dissent, Justice Gorsuch, joined by Justice Thomas, disagreed with the conclusion that the landowners were “PRPs” who needed EPA’s approval to conduct more robust cleanup at their properties than otherwise required by EPA.

Today, April 10, 2020, the U.S. Environmental Protection Agency (EPA) issued its anticipated interim guidance on impacts to operations at cleanup sites due to the COVID-19 pandemic.  The guidance memorandum, issued jointly by the heads of EPA’s Office of Land and Emergency Management (OLEM) and Office of Enforcement and Compliance Assurance (OECA) and directed to Regional EPA Administrators, focuses on adjusting response activities at cleanup sites under a number of EPA administered programs and emergency responses due to the COVID-19 situation and the myriad of state and local shelter-in-place and business curtailment orders.

Last month, the Supreme Court held oral argument in a case that addressed cleanup obligations for potentially responsible parties (PRPs) at Superfund sites. In Atlantic Richfield Company v. Christian, a company tasked with remediating one of the nation’s largest Superfund sites is urging the Supreme Court to overturn a Montana Supreme Court decision that permitted residents to sue the company for additional restoration damages, despite its ongoing cleanup efforts under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

On March 15, 2019, the House Subcommittee on Environment and Climate Change held a hearing titled, “Protecting Americans at Risk of PFAS Contamination & Exposure.” The hearing examined approaches to eliminate or reduce environmental and health risks to workers and the public from per- and polyfluoroalkyl substances (PFAS).

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly referred to as the Superfund law, directed the United States Environmental Protection Agency (EPA) to create a list of the country’s most hazardous waste sites. Sites are proposed to be placed on this “National Priorities List” (or NPL as it is known to environmental law professionals) if they exceed a certain risk score, or Hazard Ranking, and added to the List if the ranking is confirmed after a formal notice-and-comment process. A detailed set of regulations called the National Contingency Plan (NCP) governs how sites placed on the NPL will be investigated, alternative remedies evaluated, and a final remedy selected and then implemented. The NPL, the NCP, and various EPA guidance memoranda have established what practitioners acknowledge is an imperfect but generally workable process in which EPA and states work with potentially liable parties to manage cleanups at NPL sites.

Nobody wants to live near a designated “Superfund” site. Aside from potential exposure to hazardous chemicals, the stigma associated with proximity to a Superfund site leads to loss of property value. In addition, the Superfund process is notorious for its record of protracted and expensive cleanups. In view of these well-founded concerns, a number of states have adopted voluntary cleanup programs (VCPs) as alternatives to the federal Superfund program. A well-structured and well-run VCP can keep a contaminated property out of the Superfund program while at the same time providing a mechanism for investigation and cleanup. VCPs often work particularly well to facilitate the cleanup and re-use of “Brownfields,” former industrial or commercial sites where future use is affected by real or perceived environmental contamination.

The United States Environmental Protection Agency (EPA) concluded a series of eight Superfund Listening Sessions between May 21 and June 18 to explain a number of initiatives to reform the Superfund program and promote the cleanup and redevelopment of contaminated sites. The PowerPoint presentations used in these sessions can be accessed here. While informative, the sessions and PowerPoint slides used by the speakers also raise some interesting questions about potential changes in the remedy selection process and the restoration of damaged natural resources.

One of the first lessons that most Superfund practitioners learn is that it is no easy task to prevent EPA from placing a site on the National Priorities List. The NPL is the “list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States.”[1] It “contains the most serious uncontrolled or abandoned hazardous waste sites.”[2] There are nearly 1,350 sites on the NPL today. Since the first list was issued in 1980, only 399 – or, on average, ten per year – have been deleted. That is only two per state in a decade (on average). The pace of EPA’s decision-making on proposed deletions is protracted, if not glacial. And looking to the courts for relief from the stigma of having a site on the NPL rarely bears fruit.

It therefore surprised and may even have delighted some practitioners when the DC Circuit decided, in Genuine Parts Company v. EPA, No. 16-1416 (D.C. Cir. May 18, 2018), to overturn EPA’s decision to list the West Vermont Drinking Water Contamination Site on the NPL.

New chemicals of concern, new scientific and technical developments, newly discovered wastes, or natural disasters can add up to new CERCLA liabilities. When the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) was passed in 1980, it did not address the finality of judgments and settlements for the cleanup of contaminated sites. Some early settlements with EPA provided a complete release from all future CERCLA liability, but that later changed when the United States Environmental Protection Agency (“EPA”) began to limit the scope of covenants not to sue to specified “matters covered” by the settlement. The 1986 CERCLA amendments in section 122(f)(6), 42 U.S.C. § 9622(f)(6)(1) permanently made the change to require “reopeners” in all but a few limited circumstances.

The stakes are high for anyone facing environmental liability in the wake of superstorms like Hurricanes Katrina, Sandy, Harvey, Irma, and Maria. If you are among the parties potentially liable for the costs to clean up a release of oil or hazardous substances caused by a major storm event, you may be thinking about a possible “act of God” defense.  You may want to think again. In practice, the availability of this defense has proved elusive.  It is still a good idea, however,  to minimize risk in planning for the next “big one.”  Ultimately, advance actions taken to avoid or mitigate the impacts of natural disasters may be the difference between being excused from or being saddled with cleanup liability.

The Superfund program is much criticized for good reason on many grounds. It takes too long to investigate sites and decide on the appropriate cleanup. The costs for investigation and cleanup actions are excessive. The process is seemingly never-ending as contaminated sites languish on the National Priorities List for decades.

Streamlining the process is a worthwhile goal, but equally important would be reforms to promote remedy decisions that take account of the fact the resources are not unlimited. Money spent on cleanup is not available for another purpose. Unfortunately, because of its single-minded focus on often remote human health and ecological risks associated with exposures to chemical contaminants (usually based on highly conservative exposure assumptions), the Superfund program drives a lot of resources to cleanup that likely would be better allocated to another use.

In 1980, a lame duck Congress passed the nation’s first legislation, the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §9601 et seq. (CERCLA), to address the cleanup of toxic waste disposal sites. Comprehensive amendments were passed six years later. Over the next 30 years, EPA’s enforcement powers were used with increasing regularity and consistency to study, begin, and often complete cleanups at hundreds of the nation’s contaminated waste sites. The program has always had its critics, but not until the current administration has there been a fundamental reassessment of its basic cost-benefit structure, just as is being done with many other federal programs.

The application of economic principles to environmental law decisions has come a long way. Today’s conflicts over cost-benefit analysis and the value of mitigation projects and trading markets are more a sign of the important and well-accepted role that economics has come to play in environmental decision-making than a fight over the threshold question of whether economics matters at all. The battle lines have shifted. Economic concepts must be taken into account. The turf on which we now fight concerns to what extent economics should drive environmental decisions.

My daughter is on a high school team competing in “We the People: The Citizen and the Constitution” run by The Center for Civic Education to promote education about the Constitution and Bill of Rights. I have been privileged to have conversations with her about the Federalist Papers and some Supreme Court cases. She recently reminded me of the dissent in New State Ice Co. v. Liebmann, an opinion that may again become relevant to the evolution of environmental law, at least for those of us who live and function outside the Beltway.

How could a Depression-era case about the constitutionality of a certificate of public convenience and necessity be relevant to environmental law today? Well, there is a lot of discussion about ice manufacturing, which some might argue is relevant to climate change.