After “Roundup” of Evidence, EPA finds Glyphosphate “Not Likely to be Carcinogenic to Humans”

croppyEarlier this month, the EPA issued a position paper regarding the risks of glyphosate.  Notably, in classifying glyphosate’s cancer risk to humans, the EPA states, “The strongest support is for ‘not likely to be carcinogenic to humans’ at doses relevant to human health risk assessment.”

Although the EPA report is not dispositive on the issue and will be followed by with a “final assessment” in early 2017, it is a positive development.  The FIFRA Scientific Advisory Panel of the EPA, much like the European Food Safety Authority, is not accepting the recent IARC position that glyphosate is “probably” carcinogenic to humans.  Consequently, causation in litigation involving glyphosate will remain a challenge for plaintiffs’ firms to establish.

Since the IARC position was issued in 2015, plaintiff’s firms have filed a number of lawsuits in California, Illinois, and New York against Monsanto.  In late July, one plaintiffs’ firm filed a motion requesting that the multidistrict panel be in the U.S. District Court for the Southern District of Illinois, where three lawsuits are pending. In total, 21 lawsuits have been filed in 14 district courts nationwide naming Monsanto only.  The parties expect a ruling this fall on whether the matters against Monsanto will be consolidated.

Half the States, Environmental and Industrial Groups Call US EPA “All Wet” Over New Rule Redefining US Jurisdictional Waters Under Clean Water Act

navagableOn May 27, 2015, the United States Environmental Protection Agency and the United States Army Corps of Engineers jointly announced a new final rule defining the scope of jurisdictional waters protected under the authority of the Clean Water Act (“Act”).  Immediately following the announcement of the new rule, various entities including industrial and agricultural groups, more than half the states, and numerous environmental groups filed legal challenges in multiple federal jurisdictions.  On October 9, 2015, in In re EPA and Dept. of Defense Final Rule, 803 F.3d 804 (6th Cir. 2015), the Sixth Circuit issued a nationwide stay on enforcement of the new rule pending further developments, including the Court’s own need to determine its jurisdictional authority to hear Plaintiffs’ legal challenges.  Most recently, on February 22, 2016, the Sixth Circuit held that it may exercise subject matter jurisdiction over legal challenges to the new rule.

The Rule

The EPA and the Army Corps assert that the new rule addresses a number of questions raised by decisions of the United States Supreme Court in U.S. v. Riverside Bayview Homes, Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (“SWANNC”), and Rapanos v. United States (“Rapanos”).  Specifically, “[t]he [new] rule will ensure protection for the nation’s public health and aquatic resources, and increase [Clean Water Act] program predictability and consistency by clarifying the scope of the “waters of the United States” protected under the Act.”  According to the agencies, the new rule will also provide “greater clarity regarding which waters are subject to [Clean Water Act] jurisdiction, reducing the instances in which permitting authorities, including the state and tribes authorized with section 402 and 404 [Clean Water Act] permitting programs, would need to make jurisdictional determinations on a case-specific basis.”

In substance, the new rule divides water features into three general categories: those waters that are jurisdictional by rule in all cases; those waters that are subject to a case-specific jurisdictional analysis; and those waters that are excluded from jurisdiction by rule in all cases.

“Categorical” jurisdictional waters are jurisdictional by rule without the need for additional or case-specific analysis.  The categorical jurisdictional waters recognized by the new rule include: (1) traditional navigable waters which are subject to interstate commerce; (2) all interstate waters, including wetlands; and (3) the territorial seas.  Categorically jurisdictional waters under the new rule also include all tributaries, impoundments, and waters adjacent to the jurisdictional waters listed above.

Along with waters that are considered categorically jurisdictional, the new rule contemplates waters that are subject to a case-specific analysis.  In the new rule, the agencies have identified five specific types of waters located in specific regions which are subject to a case-specific analysis.  In addition, the new rule provides that waters located in whole or in part within the 100-year floodplain of traditional navigable water, interstate water, or the territorial seas, and those waters located within 4,000 feet of the high tide line or ordinary high water mark, are subject to case-specific jurisdictional analysis.  The new rule refers to the waters subject to case-specific analysis as “similarly situated.”

Finally, the new rule also excludes a variety of waters from the definition of “waters of the United States.”  While it retains all pre-existing exclusions from jurisdiction, the new rule provides for several new exclusions which reflect “longstanding agency practice.”  Under the new rule, waters excluded from the definition of “waters of the United States” include: (1) prior converted cropland; (2) waste treatment systems; (3) groundwater; (4) stormwater control features; (5) artificial retention and detention basins used for wastewater recycling, groundwater recharge basins, and percolation ponds; and (6) three types of ditches.  In addition, the new rule carves out exclusions from jurisdiction for a number of specific water features, including, but not limited to, artificial lakes or ponds, artificial reflecting pools or swimming pools, and erosional features, including gullies, rills, and other ephemeral features that are not tributary to other “waters of the United States.”

Implications of the New Rule

The nationwide stay issued by the Sixth Circuit currently precludes the enforcement of the new rule in any jurisdiction.  Accordingly, although its impact remains uncertain, it is anticipated that the new rule will affect a variety of regulated industries, entities, and individuals.  While the new rule may authorize the exercise of federal jurisdiction over previously unregulated waters, the addition of bright line exclusions may exempt some features that would have otherwise been deemed jurisdictional.  It therefore seems that despite the agencies’ efforts to provide certainty and clarity regarding the scope of Clean Water Act jurisdiction, the new rule may raise as many questions as it answers.

 

California’s Proposition 65 Runs Amok with Addition of BPA

plastic-bottlesOn May 11, 2015, the California Office of Environmental Health Hazard Assessment (OEHHA) listed Bisphenol A (BPA) as a reproductive toxicant to be added to the list of chemicals subject to Proposition 65.  Given the widespread use of BPA in numerous consumer applications (e.g., plastics, adhesives, sealants, epoxy resin liners in food containers, and thermal paper such as the paper used to print cash register receipts), the addition of BPA is a significant development for a large number of businesses evaluating compliance with Proposition 65 with respect to BPA in products.

Proposition 65 provides a 12-month period from the date of listing before warnings are required.  Thus, warnings for exposures to BPA will be required starting on May 11, 2016, unless a person in the course of doing business can show that exposures are below the Maximum Allowable Dose Level (MADL) safe harbor limit for BPA.

OEHHA Takes Action with Deadline Approaching

As the deadline for the warning requirement is quickly approaching, OEHHA recently took emergency action with respect to the listing of BPA.  The first action was the issuance of a notice of proposed rulemaking to establish a MADL for dermal exposures from solid materials containing BPA.  The second was an emergency action to allow for the temporary use of a standard point-of-sale warning for BPA exposures from canned and bottled foods and beverages.

Proposed MADL

The warning requirements under Proposition 65 do not apply if a business can show that exposures from a product are less than the MADL established by OEHHA, which puts the business in a “safe harbor.”  Based on OEHHA’s review of the scientific studies, it has proposed a MADL of 3 micrograms/day (dermal exposure from solid materials) for BPA.  Significantly, the proposed MADL of 3 micrograms/day is a level believed to be above that which most people would encounter from a product in normal use.Bisphenol_A

Comments on the proposed MADL are due to OEHHA by May 16, 2016.  Note that this means that the proposed MADL will not be finalized until after the May 11, 2016 trigger date for warnings.

OEHHA Allows Uniform Point-of-Sale Warnings for Canned and Bottled Food and Beverages

OEHHA attempted to develop a MADL for oral exposure (as opposed to the dermal exposures discussed above) that could have precluded the need for an emergency action on the warnings.  However, OEHHA was unable to work through the technical, practical, and timing issues associated with adopting an oral exposure MADL.  Consequently, to avoid potential removal of many food products from the shelves in markets, OEHHA’s proposed solution, as presented in the emergency action, is to amend the regulations to provide for the temporary use of a standard point-of-sale warning as a compliance option.

The compliance option contemplates signs no smaller than 5 x 5 inches with the following warning language:

WARNING: Many cans containing foods and beverages sold here have epoxy linings used to avoid microbial contamination and extend shelf life. Lids on jars and caps on bottles may also have epoxy linings. Some of these linings can leach small amounts of bisphenol A (BPA) into the food or beverage. BPA is a chemical known to the State of California to cause harm to the female reproductive system.  For more information go to:  www.P65Warnings.ca.gov/BPA.

OEHHA’s actions will have a significant impact on businesses seeking to comply with Proposition 65 for products carrying the potential for exposures to BPA.

FTC Cracks Down On “Greenwashing”

Law 360 reported recently that that the FTC is taking decisive action against companies that make deceptive environmental marketing claims. “Greenwashing” involves misleading consumers concerning the environmental benefits of a product or service. In an earlier article, we discussed the “Six Sins of Greenwashing.”

If you do not have the time or inclination to review the FTC’s newly revised (October 2012) Guides for the Use of Environmental Marketing Claims (the “Green Guides”), a review of the “Six Sins of Greenwashing” will tell you almost all you need to know to stay out of trouble with the FTC. 

To test your "Greenwashing" prowess, you can go on the UL site called the "Sins of Greenwashing: Home and Family Edition" and play "Name that Sin", which is thought provoking and challening. 

Recent FTC enforcement actions fall under the “sin of fibbing” or, if you take a more charitable view of the manufacturers’ alleged actions, the lesser “sin of no proof.” Committing either sin, however, lands you in FTC purgatory. In November 2013, FTC announced settlements with three mattress companies that were marketing products as having no volatile organic compounds (“VOCs”) or chemicals. 

The mattress companies distributed advertising claiming that the products were VOC-free and chemical-free. The only problem with these claims was that they did not comply with the Green Guides which specifically address “free of” and “non-toxic” claims. The Green Guides set forth what steps a company must take to make such an environmentally friendly claim without running afoul of the regulations.

 In the case of one mattress manufacturer, EcoBaby, the FTC claimed that the company’s use of an environmental certification was false and misleading. Remarkably, over four hundred eco-labels and green certifications are used globally. The revised Green Guides advise industry that it is deceptive to represent that a product has been endorsed or certified by an independent third-party, or to give that impression, when that is not the case.

EcoBaby’s promotional materials included a seal of approval from the National Association of Organic Mattress Industry (“NAOMI”). According to the FTC’s complaint, however, NAOMI is simply an alter ego of EcoBaby, which awards seals to its own products. Thus, NAOMI is not an independent third-party, although a consumer might reasonably believe it is. Who has the time to research whether an environmental certification is legitimate or not?  The Pure Rest Organics site, which advertises (among others) Ecobaby products, boast no less than twelves environmental certifications on its website. 

In October 2013, FTC announced six enforcement actions addressing marketing claims that certain plastic products or additives were biodegradable. The Green Guides establish what is required to make a “biodegradable” advertising claim. Reviewing the FTC’s complaints, it is fairly clear that the companies involved either didn’t read the Green Guides or chose to ignore them.
 

Commensurate with the increase in FTC enforcement claims may be claims by companies against their own suppliers. A manufacturer who advertises to consumers should exercise reasonable caution before relying on its supplier’s representations concerning the environmental attributes of ingredients that they incorporate in their products. The Green Guides apply not only to the environmental attributes of a product, but to the environmental attributes of packaging as well as service provided in connection with marketing as well.
 

From a corporate perspective, in-house counsel should review environmental marketing claims to avoid running afoul of FTC regulators. An important first step in that due diligence process is to ensure that “good science” supports environmental advertising claims. 

Are Environmentalists Who Oppose Wind Farms Environmentalists?

Wind power can help address the nation’s compelling demand for electric power without increasing greenhouse gas emissions or enlarging our carbon footprint. Environmental activists, who are critical of the use of fossil fuels due to their perceived negative impact on the environment, are generally supportive of developing wind power as an alternative energy source. Wind is renewable, sustainable and non-polluting.

Why is it then that environmental groups sometimes oppose the development of wind power in the courtroom? From a global or even regional perspective, environmentalists should be rallying behind wind power, not opposing.

The short answer is that any commercial-scale, land-based development project within the United States is likely to involve a matrix of regulatory and environmental issues that arise during the siting process. Wind farm siting often involves addressing issues concerning aesthetics, noise and wildlife impacts. In many instances, environmental groups have joined local activists and Nimbies in opposing a wind power development.

A more responsible role for an environmental group, which should recognize the benefits of wind power, should be to mediate siting disputes rather than oppose development. From the environmentalist’s perspective, the more available wind power to generate electricity the better.

Many of the so-called environmental groups that oppose wind power are actually not environmentalists at all, but single purpose organizations whose sole object is to oppose wind development. Most environmental groups have an agenda that balances the pros and cons of various types of energy. However, these single purpose groups do not advocate in favor of anything.

For example, Friends of Maine’s Mountains claim to be dedicated toward working to “foster a civil and fact-based debate with the goal of exposing the true costs of mountain-based industrial wind development in Maine.” This group seeks donations to further its work in “shaping a sound, scientific and economics-based energy policy for the State of Maine.” However, a review of its website demonstrates that it offers neither constructive energy policies nor recommendations for keeping Maine on the energy grid. Rather, it is a NIMBY group that advocates the view that any public or governmental support for wind power is misplaced.

In Friends of Maine’s Mountains v. Board of Environmental Protection, 61 A.3d 689 (Me. 2013), Friends of Maine’s Mountains, along with other environmental groups, opposed the approval of a wind energy project near a lake and multiple homes. The Maine Department of Environmental Protection (“DEP”) set the appropriate nighttime noise level and refused to treat Webb Lake, which is located near the project, as a “scenic resource of national resource.”

The Board of Environmental Protection (“BEP”) upheld DEP’s approval of the wind energy project. However, in doing so, BEP agreed to a higher noise threshold than what it had previously agreed to for wind projects generally. Plaintiffs brought suit to block the plan, claiming that BEP abused its discretion and violated the Maine Constitution.

On appeal, the court agreed that BEP had abused its discretion by approving the higher noise threshold. On the basis of this determination, the case was remanded for further consideration of the appropriate nighttime decibel level.  However, the decision represents a considerable setback for Friends of Maine’s Mountains (and other neo-environmentalists) despite the remand on the noise level issue.

The Supreme Judicial Court rejected plaintiffs’ constitutional arguments that: (1) the Maine Wind Energy Act denied plaintiffs equal protection by denying protection for lakes listed among “Maine’s Finest Lakes”; (2) the Wind Energy Act violated the separation of powers clause of the Maine Constitution; and (3) DEP and BEP denied plaintiffs’ due process rights because of demonstrated bias. The court  also rejected  plaintiffs’ argument that Webb Lake, despite its natural beauty, was deserving of protective “scenic resource” status. The Court determined that legislative action, not administrative orders, determines what lakes in Maine are protected as “scenic resources.”

In addition, the court flatly rejected plaintiffs’ argument that the Wind Energy Act’s criteria for assessing visual impact are overly vague and therefore violative of the Separation of Powers Clause. The criteria in dispute were the six factors that the Board considers when making its determination regarding a wind energy project’s impact on scenic resources.

The court held that a statute is not constitutional merely due to difficult application. For example, in an earlier case, the court grappled with the difficulty of defining an “annoying” dog bark. As difficult as it is to judicially determine when and under what circumstances a bark becomes an annoyance, this criterion was upheld as constitutional.

Maine’s Legislature enacted the Wind Energy Act as a means to promote wind as a renewable energy source and streamline the permitting process for wind energy. Despite the opposition of the NIMBY groups like Friends of Maine’s Mountains, the Supreme Judicial Court had previously held that the “state interest in facilitating the rapid development alternative, renewable energy resources” is a legitimate interest that rationally relates to provisions in the Wind Energy Act.

There is a constructive role for environmental activists to play in the wind power siting discussions, but single-minded opposition to the expanded use of wind power as an energy source is misplaced. These so-called “environmentalists” would better serve their stakeholders by engaging in constructive discussion rather than running to the courthouse. 

 

Greening The Big Apple

On September 27, 2012, the New York League of Conservation Voters ("NYLCV") published "Blueprint for a Greener New York City". The policy agenda sets forth NYLCV’s vision for the further "greening" of New York and makes dozens of detailed recommendations that will help guide city leaders through the end of the current mayoral administration. The Blueprint covers a wide range of sustainability issues, from water quality and climate change to transportation and solid waste.

Non-partisan and greatly respected on both sides of the aisle in Albany, NYLCV is the only statewide environmental organization in New York that fights for clean water, clean air, renewable energy and open space through political action.  The publications of NYLCV and its sister organization, the 501(c)(3) New York League of Conservation Voters Education Fund, provide an excellent source for background on the environmental issues that confront all of us as citizens of New York.. One such publication is "Protecting Your Community: A Citizen’s Guide to Reporting Environmental Offenses", which stresses the importance of citizen participation in reporting environmental crimes. This publication sets forth in detail how an environmental crime is defined, how it is identified and how it should be reported.     

 

 

 

 

Hydraulic Fracturing Risks and Opportunities

On April 18, 2012, Winston & Strawn and the Environmental Law Institute co-hosted an informative seminar on, “Hydraulic Fracturing Risks and Opportunities: Regulator, NGO, Industry and Investor Perspectives,” in New York City. The meeting was expertly chaired by May Wall, a partner in the law firm’s Environmental Law Department in Washington, D.C. The panelists included Kate Sinding, an NRDC Senior Attorney and Deputy Director of NRDC’s New York Urban Program; John Imse, a principal at Environ in Denver, who advises clients in the oil and gas industry; Lawrence A. Wilkinson, an analyst with Standard & Poor’s Oil & Gas Team; and Carol P. Collier, the Executive Director of the Delaware River Basin Commission. All four speakers were knowledgeable, informative and articulate. Unfortunately, there is insufficient space here to summarize all of the speakers’ discussion points.

John Imse emphasized how horizontal drilling evolved from the development of  “game-changing technology,” which has spurred significant changes in the gas exploration industry. As a result of new technology, there may be multiple horizontal wells drilled and developed from a single pad location – four to eight wells from a single drilling pad is not uncommon. Each well may have from as few as four to as many as twenty fracturing intervals. According to Imse, “these are not your wildcat wells of the early twentieth century,” but represent highly sophisticated technology.

Imse also discussed the evolving environmental consciousness of the gas exploration industry. He emphasized that “protective steel casing” and “a good cement job” is critical to a well’s success. Contrasting prior poor practices with current practices, Imse described the construction of drilling pads as “highly engineered sites” with liners and berms for spill control, and structural panels on working surfaces to protect the integrity of the liner. He emphasized the evolving consciousness concerning materials management, including the handling of chemicals in large volume containers; spill containment and secondary containment; and on-site 24/7 spill response.

To date, thirteen states have enacted statues requiring disclosure of fracking chemicals used by industry. These thirteen states account for 90% of current gas drilling, according to Imse. In response to pressure by the public and environmentalists, the additives used in fracking have evolved to “more green and more benign components.” For example, Halliburton is increasingly using guar-based gels and food grade mineral oil carriers, and less diesel for fracking.

There are a number of new web-based resources available to the industry. For example, the University of Colorado Natural Resources Law Center has assembled a compilation of Best Management Practices, which Imse strongly recommends as a reference.

Carol R. Collier, the Executive Director of the Delaware River Basin Commission, discussed the importance of the Delaware River Basin to New York City, which extracts 8.7 billion gallons of water per day. Collier’s “bosses” are the governors of the four states that comprise the Delaware River Basin – Pennsylvania, New Jersey, New York and Delaware. Significant portions of Marcellus Shale underlie portions of the Delaware River Basin. Water withdrawal from the Delaware River Basin is a significant concern. In addition to the 100,000-500,000 gallons of water extracted during the drilling of the well, another 5,000,000 gallons of water is withdrawn during the production life of each well.

Kate Sinding, a Senior Attorney with NRDC, discussed the highly charged political backdrop to the fracking controversy. According to Sinding, experiences in Pennsylvania over the past three to four years have given rise to much of the current environmental debate. Fracking has challenged the long held assumption that natural gas is a more environmentally benign fuel than coal, an assumption that is now coming under fire. Sinding expressed concern about environmental issues that she believed were “not amenable to best practices.” 

 

Forum Non Conveniens: Be Careful What You Ask For

In defending a United States defendant in an action involving a foreign accident and foreign claimants, it is almost a knee jerk reaction to file a motion to dismiss on forum non conveniens grounds. In a thought provoking article, “Be Careful What You Ask For – the Forum Non Conveniens Dilemma,” Cozen O’Connor lawyersRichard Dunn and Raquel Fernandez bring this practice into question. Mr. Dunn and Ms. Fernandez urge a different standard for analyzing whether to file the motion. The question that should be asked is whether it is beneficial for the U.S. defendant company to be subject to the laws and procedures in the foreign jurisdiction.

Thus, it is critical to understand the foreign jurisdiction’s law before your client is stuck there in litigation. A few of the considerations to think about include:

(1) Can your client get out of the case on summary judgment? Many foreign jurisdictions do not provide for summary judgment. Therefore, all matters before a court must be tried to conclusion, which may potentially lengthen and increase the cost of proceedings;

(2) How much time will your client have to prepare its case? Some foreign jurisdictions allow a short time for defendant to mount its defense, which may be an important consideration in a complex product liability case where it is necessary to hire and prepare appropriate experts. Moreover, the documentary evidence that supports your client’s case has to be translated into the foreign jurisdiction’s official language; 

(3) Will discovery be allowed? In some foreign jurisdictions, there is nothing akin to the discovery procedures that benefit parties in the United States;

(4) Will expert testimony be allowed? Often, the foreign court will place great emphasis on the government accident investigation report rather than on the expert evidence. In some jurisdictions, your client’s liability may be determined by the government authorities charged with investigating the accident, although they may not be competent;

(5) What is the role of the judge? Is the court the sole trier of fact?;

(6) Are there multiple claimants? You should determine whether all of the claimants involved in the incident can be consolidated before the same tribunal. If each claimant is able to file suit in his or her own locale, the client may need to defend numerous actions before numerous judges in different locations; and

(7) What are the attitudes towards the United States and American businesses in the foreign jurisdiction?

Anti-American bias and corruption figured prominently in Chevron’s environmental litigation in Ecuador. In the early 1990’s, Ecuadorian claimants filed suit in the United States alleging that Texaco’s operations polluted the rain forests and rivers in Ecuador, resulting in environmental and personal injury damages. The lawsuit was dismissed in 2002 on forum non conveniens grounds and the case was refiled in Ecuador the following year. In February 2011, an Ecuadorian court entered an $18,000,000,000 judgment against Chevron (which had earlier acquired Texaco).

Scott A. Edelman, a partner at Gibson Dunn in Los Angeles, made a compelling presentation at a recent IADC meeting concerning serious irregularities and a lack of impartiality in the conduct of that case. Chevron alleges that the plaintiffs’ lawyers are guilty of fraud and misconduct and have filed a civil lawsuit under RICO in New York federal court against the trial lawyers and consultants involved. Chevron’s suit alleges that these attorneys and consultants used the Ecuador lawsuit to threaten Chevron, mislead U.S. government officials, and harass and intimidate Chevron employees, to extort a financial settlement from the Company. Chevron further alleges that plaintiffs built their case through fabricated evidence and a campaign to incite public outrage.

It is likely that the pervasive fraud that permeated the Ecuador litigation would not have occurred in a U.S. federal court. As a result of Chevron’s experience, a U.S. defendant would have to think twice about filing a forum non conveniens motion if there was any likelihood that the case would end up in Ecuador or somewhere similar.

 

A Closer Look At Environmental Regulations & Health Care Facilities

Guest Blogger SHEILA A. WOOLSON, a member of Epstein Becker & Green in Newark,  focuses her practice on complex litigation matters across a wide array of commercial and environmental  disputes.  In expertly handling the defense of environmental and toxic tort matters across New Jersey, New York and Pennsylvannia, Sheila draws on her training as a former professional  chemist in the pharmaceutical industry.  She represents clients in those types of  products liability and toxic tort claims where her  scientific background is a valuable asset.  In the following discussion, Sheila analyzes the potential CERLCA liability of medical facilities for the disposal of non-medical solid waste and makes practical recommendations concerning how medical facilites can limit their CERCLA exposure.

Health care facilities are among the most heavily regulated facilities in the country. Along with the myriad of laws and regulations pertaining directly to the provision of health care, health care facilities are also subject to federal and state environmental regulations regarding their operations, waste, emissions, and discharges. There are over 40 federal regulations and several different acts that potentially affect health care facilities, including the Resource Conservation and Recovery Act; the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”); the Safe Drinking Water Act; the Emergency Planning and Community Right to Know Act; the Clean Air Act; the Clean Water Act; the Toxic Substances Control Act; and the Federal Insecticide Fungicide and Rodenticide Act. See Profile of the Healthcare IndustryEPA Office of Compliance Sector Notebook Project (Feb. 2005).  Most states have their own regulatory schemes that overlay these federal schemes. In addition to complying with these regulations, health care facilities face the possibility of being named as potentially responsible parties (“PRPs”) in CERCLA litigation arising out of the disposal of non-medical waste in landfills.

Municipal solid waste is essentially the same as waste produced by a household, is picked up by normal municipal collections, and does not contain hazardous substances greater than the waste generated by a single-family household. The Environmental Protection Agency (“EPA”) estimates that hospitals produce approximately 3.4 billion tons of solid waste annually, more than half of which is paper. The waste also includes glass, plastic, metal, and other substances. Often, hospitals contract with haulers to dispose of this solid waste in landfills. 

There are currently over 1,300 sites on the National Priority List of Superfund sites that the EPA is currently investigating or remediating, many of which are landfills. There are even more landfills that are under investigation or remediation by state environmental agencies. If a landfill becomes the subject of an investigation and remediation by the EPA or concomitant state agencies, a health care facility could be named a PRP if it allegedly generated or arranged for the disposal of waste in that landfill.

CERCLA contains an exemption for certain nonprofit organizations. To be eligible, a nonprofit organization must qualify as a 501(c)(3) organization and have no more than 100 paid employees at the location generating the waste. This exemption does not apply if the EPA deems that the solid waste contributed significantly to the cost of the response, or the generator failed to comply with an information request or subpoena or impeded the response at the site.

The federal and state environmental agencies usually begin their investigations by sending out information requests that require the PRPs to provide information and documents relating to their activities at the landfill. This is an opportunity to educate the agency about why an entity should not be considered a PRP or why its contribution is de micromis.

If the agency cannot be persuaded to drop its claims against a health care facility, the agency will usually agree to negotiate with all the identified PRPs to have them pay for or undertake the cleanup. CERCLA encourages settlement by barring claims for contribution against settling PRPs. Often, early settlement is a more cost-effective option than litigation, although, of course, this depends on the individual circumstances, including the health care facility’s alleged nexus to the site, the amount of the individual contribution sought from the facility, and the cooperation of the PRPs.

When litigation is started, it is often a lengthy process from which it can be difficult for the entity to extract itself. For example, in United States v. El Dorado County, 2006 WL 1281860 (E.D.Ca. 2006), the government began its investigation in 1995 and filed a lawsuit in 2001. Barton Hospital was named as a third-party defendant in a CERCLA cost-recovery case. The hospital had allegedly deposited ash from incinerated solid waste in a landfill. In 2006, the hospital sought summary judgment, alleging that the contaminants driving the remediation—volatile organic compounds (“VOCs”)—had no connection to its ash. The landfill operator opposed the motion, contending that, because the investigation of the site was not yet completed, it was premature to argue that the VOCs were the only contaminants of interest. In particular, the landfill operator contended that the hospital’s incinerated ash contained detectable levels of metals that also may have required remediation. Therefore, the hospital was unable to demonstrate that its waste did not contain hazardous substances or that response costs would not be incurred to address those substances. This litigation continues to be active to some extent, even now.

In addition to the routine disposal of waste, hospitals and other health care facilities also can become embroiled in CERCLA disputes through construction projects and acquisitions. CERCLA provides for an “innocent landowner defense,” which requires the purchaser to have made “all appropriate inquiries” and to have no knowledge and no reason to know of any alleged contamination. If a health care entity cannot qualify for that defense, acquisitions and purchases of facilities can create liability.

In Hidden Lakes Development v. Allina Health System, 2004 WL 2203406 (D. Minn. 2004), Allina Health Partners (“Allina”) acquired a health care facility in Minnesota that had been constructed by its predecessors. The predecessors had undertaken a significant construction project, and they had used the resulting construction and demolition debris to fill a ravine on the property. They also contracted with a third party to allow it to dispose of additional construction and demolition debris in the ravine. Allina later sold part of its property to Hidden Lakes Development, which was aware of the fill at the time of the purchase. Hidden Lakes Development subsequently determined that the debris used to fill the ravine contained hazardous substances, including asbestos. The disposal of contaminated fill by Allina’s predecessors made Allina a “responsible party.”

Allina’s predecessors also sold a portion of the property to another party, Transitional Hospitals Corporation (“THC”). THC sold its portion of the property to Hidden Lakes Development, as well. Allina filed a third-party complaint against THC for contribution. However, unlike Allina, THC had settled with Hidden Lakes Development before the lawsuit was filed, paying the sum of $2 million. Because CERCLA bars claims for contribution/indemnification following a settlement of CERCLA liability, the federal district court granted THC’s motion for summary judgment, stating that THC had paid for its peace.

As these cases demonstrate, the disposal of non-medical solid waste may expose a hospital or other health care facility to potential liability under CERCLA, which may be difficult and/or expensive to resolve. Accordingly, health care facilities may want to review their practices, including the haulers and disposal sites, in order to minimize any risk. Additionally, health care facilities undertaking acquisitions should carefully review the current and historic disposal practices of any targets in order to assess and address any potential CERCLA liability. 

 

Jay Walder’s Vision Of MTA’s Future

 

 On September 22, 2010, the New York League of Conservation Voters Education Fund (“NYLCV Education Fund”) hosted Jay Walder, Chairman of the Metropolitan Transit Authority (“MTA”), at an Eco-Partner Breakfast, a quarterly event at which leaders from around New York State meet to network and discuss issues of environmental concern. Jay Walder was nominated by Governor David A. Patterson on July 14, 2009 and confirmed as chairman and chief executive officer of the MTA on September 10, 2009. We applaud Mr. Walder for his vision and the aggressive steps that he has taken in his one year in office to keep the largest mass transit system in the United States moving in the right direction. Walder has prior experience in public transportation within the MTA, where he previously served as Chief of Staff and later as Executive Director and Chief Financial Officer. Mr. Walder left the MTA in 1995 to teach public policy at the John F. Kennedy School of Government at Harvard. Thereafter, he joined Transport for London, where he was credited with the introduction of that system’s extremely successful “Oyster card” and with leading the transportation charge as part of London’s successful bid for the 2012 Summer Olympics. 

Mr. Walder set the tone for the morning’s discussion by emphasizing the importance of seeking “transformational” change rather than “evolutionary” change at MTA. Mr. Walder identified two significant transformational milestones in the New York subway system. The first occurred in 1982, when the MTA’s first capital program was established. As a New Yorker, Mr. Walder recalled to mind how the New York subway system was considered a symbol of urban decay in the 1970’s, characterized by graffiti, constant breakdowns, oppressive heat in summer and ineffectual heating in winter. As a result of capital improvements, today’s subway system no longer suffers from the systemic problems of the 1970’s. He points out that there was a breakdown every 7,000 system miles in the 1970’s as compared to today when there is a breakdown only every 150,000 miles. 

The second transformational milestone was the introduction of the MetroCard in 1991. As a result of the MetroCard’s introduction, tokens became relics of the past, and monthly and weekly passes and automatic bus/rail transfers became a pleasant reality. Subway ridership increased from 3.5 million riders daily in 1992 to over 5 million riders daily today. Although the MTA has been criticized for recently announced service cuts, Mr. Walder has made significant strides in his one year in office in reducing MTA’s annual operating budget. This cost-cutting initiative has resulted in the removal of 3,500 jobs, a reduction by 20% of positions at MTA HQ, reduction in overtime, consolidation of functions and renegotiation of contracts with vendors. MTA is now introducing “countdown” clocks in subway stations to remove rider angst over train delays and to make New Yorkers’ long-time habit of constantly looking over the edge of the platform toward the tunnel for the next train a thing of the past.