Suffolk County Finally Putting Land Bank to Good Use

Environmental Law

 

The Suffolk County Land Bank Corporation (“SCLBC”) had not undertaken any activities pursuant to its mission since its creation in March 2012, until now. The mission of the SCLBC is to take control and redevelop vacant and abandoned properties, many of which are environmentally contaminated.

The SCLBC, in collaboration with the U.S. Environmental Protection Agency (“USEPA”), is assessing four eastern Long Island brownfield sites in an effort to remediate the contamination at the properties and return them to the tax rolls. Suffolk County is taking advantage of the USEPA’s Targeted Brownfields Assessment (“TBA”) program which assists eligible entities in minimizing uncertainty of contamination at brownfield sites. Through the TBA program, the USEPA contracts directly with environmental professionals to conduct environmental assessment activities to address the eligible entity’s needs.

 The four sites selected are: 70 Moffitt Boulevard in Bay Shore, in tax arrears since 2006; 95 Eads Street in West Babylon, in tax arrears since 1998; 1600 5th Avenue in Bay Shore, in tax arrears since 1996; and 156 Grant Avenue in Islip, in tax arrears since 1991.

In a press release announcing this collaboration, Suffolk County Executive Steve Bellone stated, “[t]his partnership allows us to take an important first step to redevelop abandoned and polluted brownfield properties that are blights on our local communities. We will continue to explore both private and public opportunities to clean-up and remediate dilapidated properties in our neighborhoods and the Land Bank will form the backbone of these efforts.”

Pursuant to the TBA program, these four properties will be assessed by a USEPA contractor, and the assessment will include a historical investigation and a preliminary site inspection to determine whether environmental contamination exists. Since contamination almost certainly exists at these selected properties, a more in-depth Phase II Environmental Site Assessment will be conducted. The Phase II will include the sampling of soil and groundwater to determine the location and extent of the environmental contamination.

Suffolk County, not satisfied with redeveloping only these four properties, has announced its intention to apply for a $1.2 million grant from the New York State Attorney General Land Bank Community Revitalization fund. With 133 properties within Suffolk County considered potential brownfield redevelopment sites, this additional funding would allow the SCLBC to support more environmental assessments with the USEPA TBA program, and begin transferring these sites to the land bank.

 Suffolk County and the SCLBC are finally acting on its mission set forth over a year ago, to assess and redevelop environmentally contaminated properties and return these properties to the tax roll. The potential here is huge, and not just from an environmental or a financial perspective, but for overall community improvement and growth. The redevelopment of these blighted properties could be a rising tide that will lift all boats. But alas, nothing in the environmental sector happens immediately. We must continue to monitor the SCLBC and see what progress is made in the coming year. But it is hard not to be optimistic about the future benefits of the land bank and its collaboration with the USEPA.

For more information on the use of municipal land banks and brownfield redevelopment, please contact Miriam Villani and Jason Kaplan.

Posted by Miriam Villani

New Cassel/Hicksville Ground Water Contamination Site Listed on NYSDEC Inactive Hazardous Waste Site Registry

Environmental Law

 

On June 18, 2013, the New York State Department of Environmental Conservation (“NYSDEC”) added the New Cassel/Hicksville Ground Water Contamination Site (the “Site”) to its Registry of Inactive Hazardous Waste Disposal Sites. The Site was classified as a Class 2 site because it presents a significant threat to public health and the environment. The Site was first listed by the United States Environmental Protection Agency (“EPA”) on its National Priorities List (“NPL”) in 2011. New York State Environmental Conservation Law § 27-1301(2) requires NYSDEC to list all NPL sites within the state on its Registry.

The New Cassel/Hicksville Ground Water Contamination Site is located within the Towns of Hempstead, North Hempstead, and Oyster Bay, Nassau County, New York and involves volatile organic compound (“VOC”) contamination of the groundwater. The primary contaminants of concern in the underlying aquifer are tetrachloroethene (“PCE”) and trichloroethene (“TCE”) which are chemicals used in paints, solvents, cleaners, automotive products, and dry cleaning fluids. The presence of these VOCs in the groundwater is a result of waste discharges by multiple current and past industrial and commercial facilities located in the vast area of Nassau County that makes up the Site.

The major concern is to the public health because the groundwater underlying the Site is the sole source aquifer for the public water supply. Several of the local public supply wells have been found to have TCE and PCE concentrations above the Maximum Contaminant Level (“MCL”). Water is being treated by engineered controls to remove contaminants prior to distribution to the public, however, a significant threat to public health remains due to the potential for contaminants in the groundwater to reach public supply wells that do not have the necessary treatment systems in place.

Currently, EPA and NYSDEC are working in concert to monitor and investigate the Site. EPA is reviewing and analyzing data generated from the monitoring of the public supply wells and formulating a comprehensive strategy for future investigation and remediation. NYSDEC continues to monitor and maintain all activities currently in place. Property owners adjacent to the Site or renting or leasing property near the Site should be aware of this classification and ensure their drinking water is being treated. Further, current and past owners and operators of industrial and commercial facilities within the Site area that have used, stored, or disposed of VOCs should keep abreast of the investigation and the status of steps being taken by the government agencies, which are likely to seek out potentially responsible parties to undertake and/or fund the investigation and remediation of the Site.

For more information on this Site and on groundwater contamination and inactive hazardous waste site classification, please contact Miriam Villani or Jason Kaplan.

Posted by Miriam Villani

Tenants Can Now Obtain Protection from CERCLA Liability

Environmental Law

 

The United States Environmental Protection Agency (“USEPA”) created new guidance relieving tenants who lease currently or formerly contaminated property of certain liabilities as long as they satisfy specified requirements. The December 5, 2012 Guidance Document titled “Revised Enforcement Guidance Regarding the Treatment of Tenants Under the CERCLA Bona Fide Prospective Purchaser Provision” adds to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) liability protection under Section 107(r) for parties that qualify as bona fide prospective purchasers (“BFPP”).

Under the guidance, a tenant can itself qualify as a BFPP or piggy-back on the BFPP status of the property owner. If the property owner loses BFPP status, at no fault of the tenant, the tenant may be able to maintain its BFPP status as long as it meets the following criteria:

     1. All disposal of hazardous substances at the facility occurred prior to execution of the lease;

     2. The tenant conducted All Appropriate Inquiry (“AAI”) prior to execution of the lease;

     3. The tenant provides legally required notices;

     4. The tenant takes reasonable steps with respect to hazardous substance releases;

     5. The tenant provides cooperation, assistance, and access;

     6. The tenant complies with land use restrictions and institutional controls;

     7. The tenant complies with information request and administrative subpoenas;

     8. The tenant is not potentially liable for response costs at the facility or “affiliated” with any such person (other than through the lease with the owner); and

     9. The tenant does not impede any response action or natural resource restoration.      

Although this guidance is not law, it is intended to assist USEPA personnel in exercising the Agency’s enforcement discretion. The USEPA intends to apply this guidance on a site-specific basis only to the extent appropriate based on the facts regarding the property, however it “is not a rule and it does not create new liabilities or limit or expand obligations under any federal, state, tribal, or local law. It is not intended to and does not create any substantive or procedural rights for any person at law or in equity.”[1]

Under section IV of the guidance, the EPA generally will not be involved with facility-specific transactions or determinations of BFPP status. As a general rule, tenants should be wary of environmental conditions at a property prior to entering into a lease, but should take some comfort in this USEPA guidance as long as the tenant meets the criteria for BFPP status.

For more information on CERCLA liability protections for tenants and BFPP status requirements, please contact Miriam Villani or Jason Kaplan.


[1] USEPA, Revised Enforcement Guidance Regarding the Treatment of Tenants Under the CERCLA Bona Fide Prospective Purchaser Provision, at 2.

Posted by Miriam Villani

The Evaluation of Building and Zoning Ordinances in the Aftermath of Superstorm Sandy

Environmental Law

 

It is unclear how many more severe weather events will destroy and devastate our coasts before comprehensive action is taken to prevent catastrophic damage. Superstorm Sandy was the most serious of these recent events. It provided a warning that if nothing changes, the nearly 400 miles of Long Island coastline will continue to be ravaged and its residents displaced. And, with sea-level rise projected to be 2 to 5 inches by the end of this decade, the damage could be ever-more severe. While this storm caused great loss, it also provided an opportunity. The current land use, zoning, and environmental laws and policies which regulate development in coastal areas should be scrutinized and changed in consideration of the potential environmental impacts.

While the long-term solution to ending extreme weather events may rest with the global reduction of greenhouse gas emissions and the anthropogenic effect on climate change, the immediate impacts of storms like Sandy can be mitigated by the enactment and amendment of local land-use and planning laws and regulations.

In 2010, the Long Island Regional Planning Council published a report titled, Sustainable Strategies for Long Island 2035. This report outlines recommendations and sustainable measures for residents, businesses, and municipalities to adopt and enable Long Island to have a prosperous economic and environmentally sustainable future. In identifying the short-term and long-term risks associated with climate change, the Council recommended the revision of building codes in the coastal communities of Long Island, including the City of Long Beach, Town of Hempstead, Oyster Bay, Babylon, Islip, South Hampton, East Hampton, and Shelter Island.

In addition to building codes, changes to local zoning ordinances are necessary in these environmentally-vulnerable areas, however, these land-use law changes must be consistent with the local comprehensive plan. Before a municipality can make a change to its zoning ordinance based on concerns over sea-level rise or other environmental circumstances, express language concerning climate change and other environmental-related risks must be added to the comprehensive plan to ensure that all amendments and changes to the law on this basis will be consistent with the plan. New York State agencies and municipalities must look to integrate adaptive planning into the Plan for the projected effects of climate change and provide for changes to land-use planning ordinances. 

In 2007, the New York State legislature created the Sea Level Rise Task Force to assess impacts to the State’s coastlines from rising seas and recommend protective and adaptive measures. In a final report issued in December 2010, the Task Force made recommendations to discourage development in vulnerable coastal areas as well as to update the state and local building codes to address the impacts associated with sea level rise, coastal storms, and coastal flooding. Suggested changes include increasing setbacks to require structures be set back on a lot as far landward or upland as feasible, or limiting the size and height of structures to allow only for smaller structures that can be more easily relocated and put fewer people at risk. For vulnerable coastal areas, municipalities could downzone permitted uses by limiting development and redevelopment of critical facilities in these areas or require that more intense uses obtain special use permits.

In the aftermath of Sandy, FEMA has released updated flood maps for ten counties in New York and New Jersey. FEMA expects to release new flood maps for New York City and Westchester early this year. With the on-going changes to our coastal zones and floodplains, now is the time to develop robust and flexible land-use regulations to mitigate and adapt to our changing climate.

For more information on land-use and zoning regulations in response to sea-level rise, and on local municipalities’ efforts to adapt to climate change, please contact Miriam Villani, Michael Sahn, or Jason Kaplan.

Posted by Miriam Villani

NYSDEC Brings Environmental Justice Program to Long Island

Environmental Law

 

After conducting a successful pilot program in Westchester County, the New York State Department of Environmental Conservation (NYSDEC) recently expanded its Operation ECO-Quality program to four additional communities across the state, including the Long Island community of Wyandanch. Operation ECO-Quality is a program that uses a community-centered approach to reduce pollution and promote environmental justice in Potential Environmental Justice Areas (PEJAs).  Environmental justice refers to efforts to improve the environment in certain locations, often low-income and minority communities, which experience disproportionate rates of negative health and quality of life consequences as a result of poor environmental conditions.

The Operation ECO-Quality Pilot Program, conducted in Peekskill, Yonkers, and Mt. Vernon, NY, met with a great deal of success.  In addition to other factors, the communities were chosen based on public health data related to asthma rates, since the program focuses on reducing pollution that is believed to contribute to the disproportionate rates of respiratory disease in these communities. Designed to educate and encourage members of environmental justice communities to become more involved in their own improvement, the program took a three-pronged approach to increase compliance and thereby reduce pollution in the targeted areas.  First, the NYSDEC consulted with community leaders to explain the program and its goals, as well as identify key concerns of those within the community.  It then educated community leaders and owners of regulated businesses in order to improve awareness and understanding of the applicable laws and regulations.  Lastly, the NYSDEC’s Environmental Conservation Officers (ECOs) toured regulated businesses to determine whether they were in compliance with environmental laws, and issued warnings or formal violations to those businesses not in compliance.  On follow-up visits conducted several weeks later, ECOs found that more than 80% of businesses that had received warnings had come into compliance by the follow-up visits.

One peripheral and important benefit of the program’s structure was that, through the course of community consultations, community members had the opportunity to bring to the NYSDEC’s attention additional environmental concerns that were outside the immediate focus of Operation ECO-Quality.  This allowed the NYSDEC to address concerns that it may not have been previously aware of and take further steps to improve conditions within the communities, even beyond the concerns that the program was designed to address.

Now that the program has been expanded to four additional communities, including the Long Island community of Wyandanch, Long Island residents will have the opportunity to work with the NYSDEC to reduce pollution and improve the quality of life in their own communities.  If the success of the pilot program is any indication, this program will have very positive implications for those in Wyandanch, and hopefully, other Long Island communities as the program expands further.  

For more information on environmental law, Operation Eco-Quality, or environmental justice, please contact Miriam Villani or Jason Kaplan.

This post was written by Amanda Lewis, Alumni Fellow, St. Johns Law School Graduate 2012.

Posted by Miriam Villani

New York State Department of Environmental Conservation Issues Draft Self-Audit Policy

Environmental Law

 

The New York State Department of Environmental Conservation (“NYSDEC”) has recently issued a draft Self-Audit Policy which will encourage entities to report environmental violations at their facilities. The Policy will enable entities that report environmental violations to reduce or avoid fines normally imposed by such non-compliance. Those entities enrolled in the self-audit program will be required to report any non-compliance violations within 30 days of discovery, and correct the violation with 60 days of its disclosure. Further, those entities that self-audit will be considered a “low priority” site for future NYSDEC compliance inspections.

NYSDEC is responsible for ensuring that public and private entities doing business in New York State comply with environmental law and policy. NYSDEC has the authority to inspect these entities and enforce penalties against those that violate these laws. “However, the high volume of activities potentially affecting human health and the environment as well as practical constraints, including resource limitations, compel the Department to evaluate and implement auxiliary strategies to address compliance with the Environmental Conservation Law (ECL),” as stated in the draft Self-Audit Policy.

It is no secret that NYSDEC’s resources are depleted, and the reality is NYSDEC cannot be everywhere to ensure that all public and private entities comply with New York’s environmental laws, from those using hazardous substances in the manufacturing process to those discharging wastewater during industrial operations. The goal of the self-audit policy is to alleviate some of this burden, but more importantly, to encourage both the voluntary disclosure of noncompliance and the reduction of environmental violations. Additionally, regulated entities that commit through a Self-Audit Agreement “to reduce the environmental impact of its activities, products and services by using environmental performance improvement tools and/or pollution prevention measures” will be rewarded with certain incentives under the Policy.

NYSDEC’s self-audit policy does have its detractors.  New York State Assemblyman Andrew Hevesi (D-Queens) sent a letter to NYSDEC Commissioner Joseph Martens to voice his concern over the policy. Hevesi’s major concern is that entities that participate in the self-audit program may take advantage of the policy’s provision characterizing these entities as “low priority” sites for future inspections. Hevesi is troubled that these entities might only self-report minor violations to NYSDEC, while not disclosing major violations and taking advantage of the promise that NYSDEC inspectors are less likely to inspect the site. These concerns will have to be acknowledged and discussed by NYSDEC before the Policy is finalized.

NYSDEC, as detailed in the Self-Audit Policy, has the discretion to exclude certain regulated entities from benefiting from the Policy, including those entities with a history of non-compliance, warning letters, and/or notices of violation, or entities that were uncooperative in remedying past violations. Further, NYSDEC excludes certain violations from eligibility from penalty relief, including “violations resulting in serious actual harm, or may have presented an imminent and substantial endangerment to human health or the environment.”

The draft Self-Audit Policy message appears to be clear. NYSDEC cannot audit and enforce against every environmental violation in New York State, but the implementation of a Self-Audit Policy may reduce the burden on the NYSDEC as well as encourage continued compliance with environmental laws by New York State public and private entities.

For more information on the NYSDEC Self-Audit policy and environmental compliance, please contact Miriam Villani or Jason Kaplan.

Posted by Miriam Villani

Local Impacts of Hurricane Sandy: Petroleum Spills and Discharges

Environmental Law

 

Hurricane Sandy has brought absolute devastation and destruction to New York. Fallen trees, wind damage, flooding, and loss of power are just a few of the immediate and obvious effects of this storm. However, there are other consequences that are less immediately evident. In many pictures of the aftermath, the recognizable sheen of oil is visible in the flooded waters surrounding local homes and businesses. And as the flood waters recede, the petroleum product that had been floating along will now contaminate the soil and adjacent lands. Underground and above ground storage tanks will have likely been damaged during the storm, resulting in the release of petroleum products and hazardous materials. These discharges can result in contamination to the soil and groundwater, threatening the health of the public and environment.

The New York State Department of Environment Conservation (“NYSDEC”) maintains the Spill Response Program which responds to releases of petroleum and other hazardous material releases. The public must notify NYSDEC of petroleum product and hazardous material releases, and can call the NYS Spill Hotline at 1-800-457-7362, if a spill is discovered. Whether a spill is small (a release of a few gallons) or large, NYSDEC must be notified of the spill and approve of the eventual response and remedial activities. The spills and discharges as a result of Hurricane Sandy will vary in size. It is possible that these spills will release to the soil and potentially contaminate groundwater and require immediate response and remediation. NYSDEC has fielded thousands of calls so far.

The important question here is whether a home or business owner is responsible for contacting NYSDEC and cleaning up petroleum or other hazardous material contamination at their property, although the discharge did not originate at their property. A release of fuel oil from a building several blocks away may have traveled during the storm to your property and impacted its soil. Are you still responsible?

NYSDEC will characterize the current owner and/or operator of the property on which the contamination is found as the responsible party for the response and remediation. Thereafter, it will be that party’s burden to seek other responsible parties to recover cleanup costs. Especially in the aftermath of Hurricane Sandy, attempting to recover costs from the responsible parties becomes a complicated issue because there might be multiple sources of contamination and many being unknown.

In the immediate, it is imperative to contact NYSDEC if a spill or discharge is known. Once NYSDEC is notified of the spill, it will issue a Spill Number and coordinate the response and remediation of the contamination. Legal counsel with expertise in these environmental issues is recommended to assist in communication and negotiation with NYSDEC, as well as to initiate future actions against other responsible parties to recover costs of cleanup.

For more information on the NYSDEC Spill Response Program and petroleum product contamination and remediation, please contact Miriam Villani or Jason Kaplan.

Posted by Miriam Villani

Port Washington Landfill Joint Defense Group Cost Recovery

Environmental Law

 

In the last several weeks, the Port Washington Landfill Joint Defense Group (“JDG”), an association of potentially responsible parties (“PRPs”), has delivered another round of demand letters to companies and small businesses on Long Island seeking contribution for costs associated with the investigation and remediation of the Port Washington Landfill pursuant to the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). The State of New York is seeking to recover from the JDG its past and future response costs expended during its investigation, remediation, and monitoring of the Port Washington Landfill Superfund Site (the “Site”).

CERCLA was enacted by Congress in order to address the cleanup of properties heavily contaminated with hazardous wastes. CERCLA, also known as “Superfund,” established a large pool of money to finance the cleanup of such hazardous waste sites. CERCLA is a powerful federal environmental statute, which imposes strict, joint and several liability on PRPs, including generators and transporters of hazardous substances. Under the Act, businesses that had their wastes sent or that hauled waste to the Port Washington Landfill can be held liable regardless of actual fault and can be held responsible for the entire cost of cleanup.

The Port Washington Landfill is a 54-acre municipal landfill that was operated by the Town of North Hempstead from 1973 until September 1983. The landfill received a combination of industrial waste, residential and commercial waste, and construction/demolition waste. During the operation of the landfill, volatile organic compounds (“VOCs”) were disposed of at the Site, creating a significant environmental condition that resulted in the closure of nearby public water supply wells. In 1990, the New York State Department of Environmental Conservation (“NYSDEC”) and the Town of North Hempstead entered into a Consent Decree which mandated that the Town implement the remedial actions selected in the 1989 Record of Decision (“ROD”).

The Town implemented response measures at the Site to remedy the alleged release and/or threatened release of hazardous substances into the environment. Pursuant to the New York State 1986 Environmental Quality Bond Act, the Town was reimbursed by the State of New York (the “State”) for three quarters of the allowable response costs, including, but not limited to the cost of investigation, removal, remedial activity, and operation and maintenance.

The State has sought $20 million in its cost recovery from the Port Washington Landfill JDG. Pursuant to CERCLA 42 U.S.C. §§ 9607 and 9613, once the Port Washington Landfill JDG pays the State its costs incurred in the remediation of the Site, the JDG may seek cost-recovery and contribution from other PRPs. Therefore, the Port Washington Landfill JDG can attempt to recovery monies from any entities that may have disposed of waste at the Port Washington Landfill.

Parties have until August 31, 2012, to respond to the Port Washington Landfill JDG demand for settlement. After that date, parties who have not responded and settled with the JDG will likely be sued by the JDG in litigation similar to the pending lawsuit concerning the Babylon Landfill. (Please see Babylon Landfill Hazardous Waste Site – Responsible Parties Seek Contribution from Generators and Transporters Blog Post on Nov. 17, 2011)

Unfortunately, despite the fact that the landfill closed nearly three decades ago, under the strict, joint and several liability provisions of CERCLA, the JDG can still seek contribution from other PRPs. Ignoring this notice will not mitigate the problem and will likely lead to greater costs. Parties who have received a letter from the JDG should seek guidance from experienced environmental legal counsel concerning this demand.

For more information on the Port Washington Landfill and CERCLA issues, please contact Miriam Villani or Jason Kaplan.

Posted by Miriam Villani

Suffolk County Land Bank and Brownfield Redevelopment

Environmental Law

 

On March 13, 2012, the Suffolk County Legislature unanimously approved a resolution to create the Suffolk County Land Bank Corporation (“Land Bank”), pursuant to the New York State Land Bank Program (Article 16 of the New York Not-For-Profit Corporation Law), signed into law by Governor Cuomo in July 2011. Article 16 provides New York State municipalities the ability to apply for and create land banks in their communities to take control and redevelop vacant and abandoned land, known as brownfields.

The Suffolk County Legislature has taken advantage of this opportunity by creating a land bank, which “can serve to free up strategic brownfield sites and provide for local involvement in the disposition and re-use of these sites.” Suffolk County has accumulated in excess of $20 million in back taxes from these properties over the last 20 years, but has been prohibited by the Suffolk County Tax Act from selling them for less than the amount of the taxes owed. The Land Bank will allow the county to sell the property to developers for less than what is owed in taxes, however, the developer will then be responsible for the remediation of the land. Suffolk County Legislator DuWayne Gregory (D-Amityville), in an interview with the Times Beacon Record, says that under the Land Bank, “[the county is] not responsible for cleanup. We’ll try and get the [new] property owner to clean it up.” The Land Bank hopes to tackle the approximate 83 brownfield properties in Suffolk County, totaling more than 76 acres and representing $20 million in lost tax revenue. “This land bank will finally give Suffolk a tool to put dozens of brownfields in the hands of private individuals where they can be cleaned up and restored to good use,” Suffolk County Executive Steve Bellone said in a press release.

While there is no doubt that the goals of the Land Bank are worthy of praise, both the Land Bank and prospective purchasers should be wary of potential environmental liabilities that may result from these transactions. While it is clear that the Suffolk County Land Bank has no interest in conducting the remediation of these brownfields, the mere ownership of these properties may result in unexpected environmental liabilities. If contamination is not contained and further migration of hazardous substances occurs, the Land Bank potentially can be liable for damages to adjacent properties.

Additionally, a prospective purchaser of a brownfield may face environmental liabilities as a result of its ownership of the property. Under this program, the purchaser will ultimately be responsible for the cleanup and should conduct “all appropriate inquiry” (“AAI”) into the condition of the property in order to be eligible for environmental liability protections.

The United States Environmental Protection Agency (“USEPA”) encourages local governments, land banks, and prospective purchasers to conduct all AAI so that they may become eligible for CERLCA liability protection. AAI is a critical requirement of the bona fide prospective purchaser (“BFPP”) status, which would allow a land bank and prospective purchaser to avoid CERCLA liability, as provided in CERCLA §§ 101(40) and 107(r)(1). Further requirements to maintain BFPP status include: 1. the disposal of hazardous substances had to have occurred before the party acquired the property; 2. the party cannot have an affiliation with a liable or potentially liable party; 3. the party must comply with land use restrictions and not impede effectiveness of the institutional controls; 4. the party must take reasonable steps to prevent release of hazardous substances; and 5. the party must provide full cooperation, assistance, and access to overseeing agencies.

Obtaining BFPP status is one of several ways prospective purchasers can mitigate potential environmental liabilities and minimize future costs. In addition to conducting its own environmental due diligence at the property, a prospective purchaser should negotiate protective environmental language for the brownfield sale agreement, including indemnifications, representations, and warranties. A prospective purchaser of a brownfield may also consider purchasing environmental insurance to remove risk from potential unknowns at the property that could raise the cost of cleanup. Countless times purchasers take ownership of contaminated properties only to find the costs of cleanup much greater than originally anticipated. Understanding the protections and defenses under state and federal environmental laws is critical to entering into any contract for a contaminated property. Environmental legal counsel should be retained to assist in these transactions to ensure risks are minimized and interests are protected.

For more information on Land Banks and brownfield redevelopment, please contact Miriam Villani or Jason Kaplan.

Posted by Miriam Villani

Sackett v. EPA: Challenging EPA Compliance Orders

Environmental Law

 

All Michael and Chantell Sackett wanted to do was build a house on their 2/3-acre residential lot in Bonner County, Idaho. They probably did not think the construction of their home would involve a decision by the Supreme Court of the United States.

The Sacketts filled their small parcel with dirt and rock in order to prepare for construction. Their property is located just north of a lake, but separated by several lots containing permanent structures. Nevertheless, some months later, the Sacketts received a compliance order from the United States Environmental Protection Agency (“EPA”). The EPA had determined that the Sacketts had illegally filled a wetland.

The Clean Water Act prohibits, among other things, “the discharge of any pollutant by any person,” without a permit, into the “navigable waters,”–which the Act defines as “the waters of the United States.” § 1311, § 1344, § 1362(7). The EPA found the Sacketts’ property to contain wetlands as that term is defined by 33 C.F.R. § 328.4(8)(b). The property is adjacent to a lake that is a “navigable water” within the meaning of § 502(7) of the Clean Water Act. When they placed dirt and rock on the property without a permit, the Sacketts had engaged in the discharge of a pollutant into a navigable water, violating the Clean Water Act according to the EPA. The EPA ordered the Sacketts to undertake activities immediately to restore their property to its prior condition.

The case rested on whether the Sacketts could appeal EPA’s order and obtain a hearing to present arguments in opposition to EPA’s wetland determination. The Sacketts argued that the EPA’s issuance of the compliance order was “arbitrary and capricious” under the Administrative Procedure Act (the “APA”), 5 U.S.C. § 706(2)(A), and that it deprived them of “life, liberty, or property, without due process of law,” in violation of the Fifth Amendment of the U.S. Constitution. The EPA argued that the Sacketts were not entitled to a hearing as the review of an agency order was barred until the Agency sued. The District Court agreed with the EPA and dismissed the Sacketts suit on the basis of lack of jurisdiction. The Sacketts appealed to the Ninth Circuit, which affirmed the District Court’s determination, further holding that the Clean Water Act “impliedly” barred pre-enforcement review under the APA, and EPA’s refusal to hold a hearing based on the compliance order did not violate the Sackett’s due process.

On March 20, 2012, the U.S. Supreme Court in Sackett v. EPA, struck down EPA’s ban on “pre-enforcement review” under the Clean Water Act. The Court held that the Sacketts had a right to appeal an EPA compliance order that required them to remove fill from their property and restore it to its previous condition.

The first issue the Court focused on was whether the compliance order was a final agency action. The Court noted that the compliance order “has all the hallmarks of APA finality that our opinions establish.” The Court found that the order “determined” “rights or obligations” by requiring the Sacketts to restore the wetlands on their property. Further, “legal consequences… flow” from the issuance of the order. The Court stated that the order also “severely limits the Sacketts’ ability to obtain a permit from the Army Corps of Engineers.” Finally, the issuance of the order marked the “consummation” of the Agency’s decisionmaking process. For these reasons, the Court rejected EPA’s contention that its action was not final.

Next, the Court was faced with determining whether the Clean Water Act barred pre-enforcement review. Judicial review is typically available under the APA to challenge final agency actions, except where the regulating statute precludes such review. A statute need not expressly preclude judicial review, but there must be legislative intent illustrating Congress’s desire to implicitly bar pre-enforcement review. The EPA argued that although the Clean Water Act did not expressly preclude judicial review, the Act “impliedly” barred such review. Both the District Court and the Ninth Circuit agreed with this argument. However, the Supreme Court was not persuaded by the reasons EPA offered as to why the Clean Water Act precludes review.

Ultimately, the Court held that “there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review—even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.” The Court concluded “that the compliance order in this case is final agency action for which there is no adequate remedy other than APA review, and the Clean Water Act does not preclude that review.”

For more information on wetland and Clean Water Act issues, please contact Miriam Villani or Jason Kaplan.

Posted by Miriam Villani