Archive for the ‘RCRA’ Category

CA Court: RCRA Does Not Apply to Diesel Exhaust

Photo by Paul Hamilton. Some rights reserved.

RCRA (Resource Conservation and Recovery Act, or, less fondly, Really Confusing Regulations Act) governs the management of hazardous waste in order to prevent threats to human health and the environment. It was RCRA that plaintiffs in a recent case against Union Pacific Corp., et al., hoped would aid them in curbing the amount of “deadly diesel particulate pollution” that is “spewing from sixteen railyards located throughout California.”

The complaint in Center for Community Action and Environmental Justice et al v. Union Pacific Corporation et al was filed in October 2011. The plaintiffs (Center for Community Action and Environmental Justice, East Yard Communities for Environmental Justice and Natural Resources Defense Council Inc) argued that because diesel particulate matter (DPM) is comprised of solid particles, many of which are on the RCRA list of hazardous substances (such as arsenic and mercury compounds), that DPM is both a solid waste and a hazardous waste within the meaning of RCRA (42 U.S.C. § 6903(5), (27)) , and that DPM should be regulated as such. If this categorization passed muster with the court, the “creators” of DPM (the defendants) would be forced to follow RCRA regulations in handling, storing, treating, and disposing of the DPM, as well as limiting or controlling the amount of DPM generated.

The court, however, was not swayed. According to a Morrison Foerster, the court held that RCRA does not apply to the diesel exhaust “both because DPM is not a ‘solid or hazardous waste’ under RCRA and also because Congress intended the Clean Air Act (‘CAA’) to regulate diesel emissions comprehensively.” For more details, check out the recent MoFo Client Alert on the decision.

Dow Chemical Company Coughs Up a $2.5 Million Civil Penalty

Photo by peretzp. Some rights reserved.

Late last week, the EPA announced that Dow Chemical Company, after 5+ years of investigations and inspections, violations and corrections, has finally settled with both the EPA and the Department of Justice, agreeing to pay a $2.5 million civil penalty for alleged violations of the Clean Air Act, Clean Water Act and the Resource Conservation and Recovery Act.

The alleged violations (24 in all) centered around Dow’s chemical manufacturing and research facility in Midland, Michigan, and ranged from leak detection failures to threatened structural integrity in several containment structures.

In addition to the civil penalty, the Consent Decree also calls for Dow to implement a program designed to reduce emissions from leaking equipment and implement enhanced “work practices.”

$2.5 million might seem like a lot for these arguably administrative infractions, but it doesn’t look like much compared to the cost of cleaning up contamination in the same area. In their May 10-Q of this year, Dow estimated a hefty $36 million in potential obligations (remedial actions, investigations) relating to the Midland site.

Still, $2.5 million is a LOT more than the generic $100,000+ in civil penalties that the company estimated for the Midland matter in their 10-K in February.

Gene Green’s Mean, Clean, E-Waste Controlling Machine

Photo by georgehotelling. Some rights reserved.

Gene Green has earned his surname. The House Rep. has joined forces with Rep. Mike Thompson in an effort to pass the Responsible Electronics Recycling Act (H.R. 2284), legislation that would put some much-needed restrictions on e-waste that flows out of the U.S. and into developing nations.

Specifically, the Act adds a new section – “Electronic Waste Export Restrictions” – to the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.) that prohibits the export of certain discarded/used/broken/toxic electronics to countries such as China and India for salvage and recovery. Two GAO reports published in 2008 (here and here) determined that most of these countries “lack the capacity to safely handle and dispose of them.”

If passed, the Act would also establish a Rare Earth Materials Recycling Research Initiative “to assist in and coordinate the development of research in the recycling of rare earth materials found in electronic devices.” (The more we can recycle the better – pickins are slim!)

H.R. 2284 was introduced into Congress late last month, and while an earlier version of the bill had trouble gaining traction during the last Congressional session (it was introduced as H.R. 6252 on September 29, 2010 and referred to the House Committee on Energy and Commerce, but never made it further than that), bipartisan support has grown for the bill this time around, and it is expected to pass. It’s even being backed by corporate big-wigs such as HP, Dell, and Apple.

Nu-West vs. United States, CERCLA, RCRA, and More

Photo by Marion Doss. Some rights reserved.

A few weeks ago we reported on a recent Form 6-K filed by Agrium Inc – the parent company of Nu-West Industries – in which they disclosed earlier investigations by both the Idaho Department of Environmental Quality (IDEQ) and the EPA regarding facility- and industry-wide compliance with CERCLA, as well as possible violations of RCRA and the CAA.

The Form 6-K also revealed that Nu-West had entered into a voluntary consent order with the EPA (signed in 2009), which compelled them to “identify actual or potential human and/or ecological receptors to fully determine the nature and extent of the presence and/or release of hazardous wastes at or from the facility.” The filing goes on to affirm that the company is “working cooperatively with EPA and the IDEQ to implement this environmental assessment.”

The facility in question is a phosphate mine located in Conda, Idaho, but this isn’t the first time Nu-West’s Idaho facilities have come under attack. Nu-West had been leasing land in Idaho from the US federal government for decades when they “discovered” selenium contamination at several mining sites in the1990s. They later claimed that the US had known about the contamination for years without making the information public.

In 2009, Nu-West filed a complaint against the federal government, asserting that once Nu-West found out about the contamination, they “worked diligently to investigate and remediate the Mine Sites,” while the United States “has not cooperated in any fashion.” They went on to argue that “[a]lthough the United States is the landowner and the party most responsible for the selenium contamination at the Mine Sites, the United States chose to oversee the cleanup of the Mine Sites itself and has demanded that Plaintiffs conduct the remediation at their sole expense.”

The complaint sought to recover approximately $10 million in costs incurred by Nu-West in connection with the remediation of the Idaho mine sites, and on March 4, 2011 – just three days before the Form 6-K was filed – the court sided with Nu-West. In the order, the court deemed the United States “an owner, operator, and arranger for purposes of 42 USC § 9607(a) with regard to the CERCLA clean up costs sought in this case.”

What does this mean for the US as landowner? While it’s currently unclear exactly how much the government will have to dish out in this particular case, according to Marten Law, the decision could give the government “a share of cleanup costs on leased property throughout the nation.” For thorough background on CERCLA liability, and the definitions of “owner,” “operator,” and “arranger” thereunder, I recommend reading Marten Law’s recent article on the case.

Is the EPA’s Regulatory Impact Analysis of the Coal Ash Rule Flawed?

Just over two years has passed since the Kingston, TN coal ash spill, but according to the Environmental Integrity Project (EIP), federal proposals to regulate coal ash dumps are still “being held up by concerns that stricter standards would depress markets for coal-ash recycling.”

Aerial view of Kingston ash slide. Photo by Tennessee Valley Authority. Some rights reserved.

In December of 2008, more than 1 billion gallons of coal ash slurry gushed from the TVA Kingston Fossil Plant’s broken dike and destroyed several houses before pouring into the Emory and Clinch Rivers, killing numerous fish and polluting drinking water in the area.

Coal ash (also Coal Combustion Residuals or CCR), which is made up of byproducts of the combustion of coal at power plants, is currently considered an “exempt waste” under the Resource Conservation and Recovery Act (RCRA, 42 USC 6901 et seq). But even the EPA acknowledges that the ash contains “contaminants like mercury, cadmium and arsenic associated with cancer and various other serious health effects.”

In the aftermath of the spill, realizing that “without proper protections, the contaminants in coal can leach into groundwater and often migrate to drinking water sources, posing significant health public concerns,” the EPA began the process of regulating coal ash disposal.

On June 21, 2010, the EPA published the Coal Combustion Residuals Proposed Rule, which sought public comment on two possible approaches for regulation under RCRA. Regulation under Subtitle C (40 CFR Parts 260-279) would treat coal ash as a hazardous waste, while regulation under Subtitle D (40 CFR Parts 239-258) would treat it as only solid waste (see the key differences between the options here). Needless to say, utilities are gunning for the less strict – and therefore less costly – option under Subtitle D.

Yesterday, however, EIP published a scathing press release, in which it accused the EPA of grossly overestimating the value of coal ash recycling in the Regulatory Impact Analysis for the proposed rule. While most environmentalists applaud the reuse of coal ash to make products such as concrete, cement, or wallboard, EIP is concerned that the overstated benefits could end up “stacking the deck in favor of the weaker regulatory option favored by industry,” as the EPA’s analysis implies that the higher costs of the stricter regulation may cause roadblocks to recycling the ash.

EIP worked along with Earthjustice and the Stockholm Environment Institute to re-evaluate the estimates in the EPA’s Regulatory Impact Analysis. You can read their report here.

Bankruptcy Won’t Make RCRA Obligations Disappear

Early last month, the Supreme Court declined to review the 7th Circuit Court of Appeals decision in Apex Oil Co. v. United States, indicating that debtors who file for bankruptcy may not be off the hook for environmental cleanup obligations under RCRA.

Photo by trialsanderrors. Some rights reserved.

Apex Oil Company is the corporate successor to the Clark Oil & Refining Company, which filed for bankruptcy in 1987. In 2003, the EPA informed Apex that the company was potentially liable under CERCLA (42 U.S.C. § 9601 et seq.) for a subsurface hydrocarbon plume in Hartford, Illinois, that was contaminating groundwater and emitting fumes that were entering area homes. The contamination had happened under Clark’s watch. When Apex “declined” to participate in the site’s remediation, the EPA brought a suit against them in a federal district court, this time seeking relief under RCRA (42 U.S.C. §6901 et seq.).

Apex, who was looking at a $150 million cleanup bill, appealed the district decision that the liability could not be discharged in bankruptcy, still hoping that Clark’s reorganization relieved them of the liability. However, while certain debts may be discharged under the Bankruptcy Code, the 7th Circuit Court agreed that, because RCRA does not authorize any form of monetary relief in lieu of cleanup of contaminated sites, the obligation does not fit within the Bankruptcy Code’s definition of “claim,” and therefore could not be discharged in a bankruptcy plan or reorganization.

What does this mean for the future? Perkins Coie’s related Update posits that “the decision by the Supreme Court not to review the Seventh Circuit’s decision could encourage heavier reliance on environmental statutes like RCRA that do not authorize monetary relief. As a result, we may see more actions by the EPA structured as RCRA injunctive suits instead of CERCLA suits in situations where the defendant is at risk for declaring bankruptcy.”

And what can you do about it? Law firm Akin Gump urges investors and stakeholders in reorganized entities “to perform due diligence to assess potential environmental liabilities that may pass through a reorganization and, if appropriate, seek advice about alternative strategies for mitigating such liabilities.” You can read their specific suggestions (such as the purchase of environmental liability insurance) in their Alert on the subject.

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