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Environmental & Energy Law Blog

Insights and Commentary on Environmental and Energy Issues Nationwide

Federal Stormwater Regulations – Now A Locally Isolated Event?

Posted in Stormwater

As evidenced by two recent announcements, US EPA seems to have concluded that broad regulatory programs may not be the best tool for regulating stormwater impacts.  These decisions rely on a more tailored regulatory and technical approach to controlling pollution impacts from stormwater.  In general, this is welcome news for commercial, industrial and institutional property owners – but there may be a cloud to this silver lining for those in US EPA Region I.

Since 2010, US EPA has been engaged in an intensive regulatory effort to develop national regulations for stormwater discharges from developed and re-developed sites following construction.  US EPA’s current NPDES construction stormwater regulations (applicable to construction sites larger than one acre) regulate only stormwater discharges associated with construction activity.  Unless the developed/re-developed site generates stormwater associated with certain industrial activities, it is not covered by the existing federal NPDES stormwater program.

In 2009, several public interest groups sued US EPA to compel regulation of stormwater impacts to the Chesapeake Bay.  US EPA subsequently entered into a settlement agreement that obligated it to promulgate nationally applicable regulations imposing stormwater management standards at non-industrial sites following construction – so-called post-construction stormwater regulations.

US EPA subsequently undertook a broad stakeholder process, which included questionnaires issued to hundreds of property owners pursuant to Section 309 of the Clean Water Act (meaning that failing to respond could result in penalties).  As reported here, US EPA repeatedly missed various deadlines and extended deadlines imposed by the settlement agreement to promulgate regulations.  Last fall, US EPA and the public interest groups reached an impasse over further extensions of the deadline.  However, US EPA continued to state publicly its intent to issue regulations as mandated in the settlement agreement, and released information about proposed elements of the regulatory program.

After months of silence on the status of the regulations, US EPA announced in mid-March that it would not promulgate national regulations mandating stormwater management practices at newly developed and re-developed sites.  US EPA indicated that it intended to pursue other approaches in lieu of regulations, including incentives and technical assistance to municipalities operating municipal separate storm sewer systems (MS4), adding provisions to municipal MS4 permits targeting properties discharging into MS4s, and promoting the use of so-called green infrastructure (aimed at enhancing infiltration).

This is welcome news for real estate owners who were facing potentially significant compliance costs under the proposed regulatory program – US EPA acknowledged that it had encountered problems assessing the costs and benefits of the program.  This decision represents a rare but welcome instance when an agency concludes that a “command and control” regulatory program is not the best solution for mitigating environmental impacts, and alternatively embraces a more flexible and creative approach.  Of course, the public interest groups involved in the Chesapeake Bay litigation could still seek judicial enforcement of their settlement agreement – so there may yet be another chapter in this regulatory tale.

In a separate but related announcement, US EPA also responded to petitions filed by other public interest groups requesting US EPA to exercise its residual designation authority (“RDA”) to regulate stormwater discharges from commercial, industrial and institutional properties in Regions 1, 3 and 9.  These petitions, filed in July 2013, were based on an arcane provision in the Clean Water Act (40 C.F.R. § 122.26(a)(9)(i)(D)) that permits US EPA, on a case by case basis, to regulate currently unpermitted discharges that are contributing to violations of water quality standards.  The petitions alleged that currently unpermitted stormwater discharges from commercial, industrial and institutional properties were causing impacts that had led to the listing of numerous water bodies as “impaired” under Section 303(d) of the Clean Water Act.  (This listing triggers the obligation to develop a Total Daily Maximum Load or TMDL for the pollutant(s) causing the impairment).

US EPA announced in mid-March (long after the 90-day deadline for responding to the petitions had passed) that it would deny the petitions filed in Regions 3 and 9 – meaning that it would not exercise its RDA to promulgate regulations for stormwater discharges from commercial, industrial and institutional properties.  However, Region I took a different tack and left the door open to future regulatory action.  Rather than denying the petition, Region I announced that it would consider using its RDA “where there is adequate evidence and documentation of storm water discharges from one or more [commercial, industrial or institutional] sites causing or contributing to water quality impairment.”  The decision specifically stated that Region 1 will revisit an earlier RDA initiated in November 2008 for stormwater impacts to the Upper Charles River.  At that time, US EPA had proposed a general permit pilot project in three municipalities, and commissioned a study to evaluate compliance costs.  When that study revealed that the compliance costs could exceed $300 million in just those three communities, Region 1 essentially abandoned the project.  How Region 1 intends to proceed with regulating stormwater discharges in the face of that compliance cost study is an interesting question, indeed.

So, while the anticipated downpour of stormwater regulations has apparently dissipated, owners of commercial, industrial and institutional properties in Region 1, and particularly in the Charles River watershed, should anticipate future regulatory initiatives to control stormwarter discharges from their sites.  The forecast for when and how those initiatives will develop remains unclear.

Communicating Basic Science in Environmental Cases

Posted in Articles, Environment

My column this month in the Pennsylvania Law Weekly takes on the challenging problem of communicating science from high school, even middle school in environmental matters.  One would think that it would be easy.  But some of these kinds of things are hard for courts, regulators, businesses, and the press:

  • scientific induction requires hypothesis testing — at least some possible results have to disprove what you are trying to prove;
  • mass and concentration are not the same thing;
  • scale matters — almost all data are averages, so it is important to know over what scale one is averaging; and
  • “not even one molecule” is a ridiculous standard because molecules are very, very small things and there are a very great deal of them.

These are merely examples.  It is by no means a complete list of the issues that seem to come up, but it is a start.

To read Communicating Basic Science in Environmental Cases, 37 Pa. L. Weekly 316 (Apr. 8, 2014), click here.

Massachusetts Endangered Species Act Regulations Upheld as Valid Agency Rulemaking

Posted in Uncategorized

In a case of first impression, the Massachusetts Supreme Judicial Court (“SJC”) recently rejected a landowner’s challenge to the so-called Priority Habitat regulations issued under the Massachusetts Endangered Species Act (“MESA”).  Pepin vs. Division of Fisheries and Wildlife, 467 Mass. 210 (2014).  These regulations require that projects located in areas mapped as Priority Habitat must undergo pre-development review to determine if the proposed project may result in a “take” of state-listed species.  Because significant portions of Massachusetts have been designated as Priority Habitat (nearly 340,000 acres in western Massachusetts alone), this case has been closely followed due to its potential consequences to real estate development in Massachusetts

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Proper Definition Of The Relevant Property Leads to a $7 Million Award In a Takings Case Arising From Denial of A Wetlands Fill Permit

Posted in Permitting, Uncategorized

From Jerry Stouck of GT Washington, D.C.:

A Florida company was awarded nearly $7 million by the U.S. Court of Federal Claims on March 14 in a long-running case involving a claimed unconstitutional taking of property arising from the denial of a Clean Water Act Section 404 wetlands fill permit.  The critical issue underlying the court’s ruling, as is often the case in “regulatory takings” cases seeking just compensation for the denial of property rights, was the proper definition of the property parcel that was taken.  This issue is often called the “parcel-as-a-whole” doctrine.  Developers and others whose businesses require permits of various types should be familiar with this doctrine.

The trial court initially found no taking, concluding that the denied permit was for a parcel that was merely a part of a much larger relevant tract.  Thus, the permit denial only impaired the value of the larger tract, which is not a taking.  The appeals court reversed, holding that the relevant parcel for takings purposes was just the parcel for which the permit was denied.  That ruling led the trial court on remand to find that the permit denial completely eliminated the value of the relevant parcel, which is a taking and entitled the property owner to substantial compensation (as well as attorneys’ fees).

Koontz-Inspired State Legislation Would Expand Supreme Court’s Ruling in Permitting Context

Posted in Exactions, Florida, Legislation, Permitting, Policy, State Regulation

Companion bills (H.B. 1077 and S.B. 1310) have been filed in the Florida Senate and House  that would prohibit local governments from imposing permit conditions or “development exactions” on a project that extend “beyond the direct impact of a proposed development.”  This legislation builds upon the U.S. Supreme Court’s ruling in Koontz v. St. Johns River Water Management District, a case about a Florida permitting dispute that we described last June.

The impetus of the Florida legislation is to create another layer of protection against extortionate permit conditions, beyond the holding in Koontz, which itself expanded the restrictions against the unconstitutional taking of private property to include instances when a permit was denied or  monetary demands were made as a condition of approval.  The Bills also attempt to reduce regulatory overlap, requiring the local government to accept the impact analysis provided by any federal or state agency.

It is unclear whether property rights supporters will promote the enactment of similar “takings-related” legislation in other states.

The passage of the Florida legislation is also far from certain, as at least one land use attorney has openly criticized the bills as unduly restricting the ability of local governments and developers to address the “real impact of development.”

Stay tuned for further updates as the Florida legislative session unfolds.

Insurance Recoveries and Superfund Contribution Claims

Posted in Articles, Court Cases, Environment

If you have a Superfund cleanup obligation, you may want to collect on insurance (if you have any) and also to seek contribution from others responsible for the Site.  What happens to the contribution claim when you collect on the insurance?  In most Superfund matters, the parties have simply ignored insurance recoveries.  However, in those few cases where the question has been raised in litigation, the courts have agreed that the collateral source rule — the rule that insurance should be ignored in determining the amount of a tort recovery — does not apply to a contribution claim under the Comprehensive Environmental, Response, Compensation and Liability Act.  But from there confusion sets in.  Is there no set off, an equitable consideration of insurance recoveries in allocating costs, a mechanical dollar-for-dollar set off, or something else?  That is the topic of my column this month in the Pennsylvania Law Weekly.

Read Insurance Recoveries and Superfund Contribution Claims, 37 Pa. L. Weekly 220 (Mar. 11, 2014), by clicking here.

Environmental Groups Appeal Federal Court Order Allowing the State of Florida to Adopt Nutrient Standards For Its Waters — March 6, 2014

Posted in Clean Water Act, Environment, Federal Regulation, Florida, Nutrient standards, Stormwater, Water quality

In a long-running controversy over nutrient standards for Florida waterways, five environmental groups filed a notice of appeal yesterday in the U.S. Circuit Court of Appeals for the Eleventh Circuit challenging the order of U.S. district court Judge Hinkle.  Click here  for a copy of the notice of appeal.  Specifically, the Florida Wildlife Federation, the Sierra Club, the Conservancy of Southwest Florida, the Environmental Confederation of Southwest Florida, and St. Johns Riverkeeper are appealing the district court’s January 7, 2014, order, which allowed the U.S. Environmental Protection Agency to modify a 2013  consent decree so that the State of Florida can set the nutrient criteria for all its waters.  Without the modification, the consent decree requires EPA to adopt numeric nutrient standards for Florida’s waters unless the State does so first.  Florida has established new nutrient limits but the standards are not numeric for all waterways.

Whether  the appeal will preclude Florida from proceeding with its rules is in dispute.  A spokesperson for the Florida Department of Environmental Protection was quoted as indicating that the rulemaking process would be delayed, whereas the counsel for the appellants expressed a contrary position, according to local reports.  There is no dispute, however, that  the legal battle over nutrient water standards in Florida is far from over.

Stay tuned for additional developments.

FTC Chops ‘Green’ Plastic Lumber Claims and Diaper Claims That Fail to ‘Pass the Smell Test’

Posted in Environment, Federal Regulation

Written by Justin J. Prochnow

On October 1, 2012, the Federal Trade Commission (“FTC”) issued a revised version of its “Guides for the Use of Environmental Claims,” better known to many as the “Green Guides,”  which describe the types of environmental claims that the FTC may find deceptive under Section 5 of the FTC Act.  Recently, Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection stated that “[w]hether they’re buying diapers or dishwashers, consumers base their purchasing decisions on claims about a product’s attributes. . . .  Consumers can count on the FTC to make sure claims made by marketers are meeting the standards for truthfulness, accuracy, and substantiation.”  These comments, coupled with several recent settlements announced by the FTC and summarized below, make it clear that the FTC intends to continue enforcing the law regarding environment claims vigorously, pursuant to the parameters set forth in the Green Guides.

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Claims for Common Law Waste

Posted in Articles, Court Cases, Environment

The recent decision in Bitler Investment Venture II v. Marathon Petroleum, No. 12-3722 (7th Cir. Jan. 27, 2014)(Posner, J.), offered an opportunity to consider claims for common law waste in this month’s Pennsylvania Law Weekly column.  Common law waste provides a claim by a lessor or a remainderman against a lessee or a life tenant for damage to the real estate or unreasonable depletion of a resource.  So, if the lessee mines coal when the lease was for surface use only or if the lessee cuts down immature timber in order to get the profits during the tenancy, that can be waste.  Contaminating real estate might be waste, but we do not have a good case.  In Bitler, the lessee removed underground storage tanks at service stations, but never returned the properties to conditions suitable for use, and, in fact, the buildings on some of them to deteriorate to the point of being condemned.  That was waste.  The common law claim exactly overlapped claims for breach of the lease, but under state law offered doubled damages.  Thus, the lesson may be that if you want the contract provisions to allocate rights between lessor and lessee, the document may have to disclaim common law claims explicitly.

To read Lessons in Claims for Common Law Waste, 37 Pa. L. Weekly 124 (Feb. 11, 2014), click here.

New York State Issues Public Notice of Draft MS4 Permit for New York City

Posted in Environment, NPDES, State Regulation, Stormwater

From Steven Russo of GT New York City and Robert Rosenthal of GT Albany.

The New York State Department of Environmental Conservation (“DEC”) has issued public notice of a draft State Pollutant Discharge Elimination System (“SPDES”) permit for Stormwater Discharges from Municipal Separate Storm Sewer Systems (“MS4s”) owned or operated by the City of New York (the “draft MS4 permit”).  Under existing law, DEC regulates discharges from MS4s that are located within the boundaries of a Census Bureau defined “urbanized area” or “additionally designated areas.”  DEC authorizes most MS4s to be covered under a SPDES General Permit; however, New York City MS4s are regulated through a separate general permit.  The draft MS4 permit would consolidate the MS4 sections from 10 of the 14 existing SPDES Permits that govern each of the Waste Water Treatment Plants operated by the New York City Department of Environmental Protection. Continue Reading