Volume23, Issue 10
What's
JaJlU~ 3, 2003
Inside
,
Divided Supreme Court Allows 'Deep Ripping'
Decision to Stand
W. Va. High Court Finds State Law Doesn't
Support Monitoring Claim
A divided U.S. Supreme Court, \'tith Justice Anthony
Kennedy abstaining, has upheld a 9th Circuit decision that a
farmer violated the Clean Water Act by using the technique
of "deep ripping" to convert wetlands to vineyards \'tithout
obtaining a permit from the federal government. Borden
WestVlfginia's highest courthasfound that neither state
commonlaw nor statutorylaw supportsor recognizesa
claim for property monitoring in a class-actionlaWsuit
broughtby a homeownerwho allegedthat dioxin from a
nearbylandfill contaminatedhis property. Thehomeowner
wantedthe defendantsto payto determineifhis land was
contaminated. Carterv. MonsantoCo. P.1O.
RanchPartnershipv. US. ArmyCorps ofEng'rs. P.3.
Exxon's Punitive Damagesfor Valdez Oil Spill
Cut to $4 Billion
Dismissingconclusionsregardingptmitivedamagesstandards
from the 9th Circuit, a federaljudge hasreduceda $5 billion
punitive damagesaward againstExxon Mobil by only
$1 billion for the ll-million-gallon oil spill in PrinceWilliam
Sound,Alaska, 13yearsago. In re Exxon Valdez.P.4. m
Supreme Court to Define 'Excessive'
Punitive Damages
Calif. App. Ct. Says Passive Discharge
Not a ReleaseUnder Prop 65
A California appealscourthasfoW1dthat a conswnergroup
cannotsueExxon Mobil underProposition65 for discharging chemicals from its gasoline stationsinto sourcesof
drinking water,becauseW1derthe statute,passivemigration
of chemicalsthroughthe soil doesnot constitutea "discharge" or "release." ConsumerAdvocacy Group ~ Exxon
Mobil Corp. P. 11.
StateFarm Mutual Automobile InsuranceCo. contendedin
oral argumentDec. 11 before the U.S. SupremeCol.n1that a
punitive damagesaward in a car accidentclaims-handling
casewas lmconstitutionallyexcessive,basedon standards
establishedby the high col.n1in BMW v. Gore. The caseinvolves issuesof "extraterritoriality," with StateFarm arguing that a Utahjury improperlypunishedit for conductaffecting out-of-stateinterests. State Farm Mut. Auto. Ins.
Co. v. Campbell. P. 6.
Texas Fed. Judge Rules Railroads Barred
From Bringing CERCLAClaim
A federal district court in Texas has ruled that two railroads
are barred from bringing a contribution action under
CERCLA against a party who had resolved liability with the
state in a consent decree concerning the site of a former
chemical plant. In re Voluntary Purchasing Groups. P. 8.
Pipeline Companies Pay $36 Million
To Resolve Charges over Blast
Twopipelinecompanies
will pay$36millionto resolve
criminal and civil chargesover a J1n1e1999pipeline blast
that killed threepeople in Bellingham.Wash. This penalty
is the largestc;ombinedcriminal fine and civil'penalty ever
obtainedin a pipeline-rupturecase,accordingto the Justice
DepartmentP. 12.
The 50-Day Remedy: Expedited Remediation
Under California's Polanco RedevelopmentAct
In this commentary,Edward Sangsterof the SanFrancisco
office of Kirkpatrick & Lockhart gives his perspectiveon
the 60-daydeadlinein California's Polanco Redevelopment
Act and the perils of not complying with the requirement.
P.13.
EPA Can't Extend Deadline for Texas City
To Comply with Clean Air Act
The CleanAir Act did not authorizethe U.S. Environmental
ProtectionAgency to grantBeaumont,Texas,an II-year
extensionof its deadlineto reduceozone emissionsto the
maximum amountrequiredunderthe National Ambient Air
Quality Standards,the 5th Circuit hasruled. Sierra Club v.
EPA.P.9.
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Equilon Pipe Line Co., through its representative, John
Sullivan of the Shell Pipeline Co., pleaded no contestto
two criminal counts in connection with the incident and
will pay a criminal fine of $15 million, along with an additional civil penalty of $10 million. The federal governmenthas agreed that up to $5 million of the criminal
fine could be applied to appropriate community service
products in the Bellingham area.
Additionally,thepipelineintegrity/spill mitigationprogramwill requirethat ShellPipeline,asEquilon'ssuccessorininterest,undertakespecific inspectionand
damagepreventionmeasureson2,1OO-plus
miles of
Shell'spetroleumproductspipelinesthroughoutthe
UnitedStatesat anestimatedcostof$61 million.
then knowingly submitted a false report to the Alabama
Department of Environmental Management.
The Justi~eDepartment also said Koppers allowed
sumpsto be left opento the air instead of closing them,
as required by the Clean Air Act, to prevent benzene
emissions.
Commentary:
News Brief:
By EdwardP. Sangster*
Koppers Industries will pay a fine of $2.1 million aspart
of its ~lty plea for felony violations offederal environmentallaws at the company's coke production and
coal byproducts facility in Dolomite, Ala.
Califorriia has adopteda blunt approach for the
remediation ofbrownfields that compressesthe time
normally associatedwith investigation and remediation
of contaminated sites. Under California's Polanco RedevelopmentAct,l a redevelopmentagency may impose
short, inflexible deadlines for the investigation and
remediation of contaminatedproperties within its geographic jUrisdiction. Failure to adhereto approved
schedulesempowersa redevelopment agencyto undertake the investigation and remediation at the expenseof
responsible persons.
TheU.S.JusticeDepartmentsaidthe criminal charges
resultedfrom the releasesof hazardousair andwater
pollutantsthat~xceeded
permittedlimits atthecompany's
The Polanco Act also compels stateand regional environnow-dismantled
facility.
u.s. District JudgeC. Lynwood Smith of the u.S. District
Court for the Northern District of Alabama also sentenced
Koppers, a producer of carbon compounds and industrial
wood preservatives, to pay $900,000 in restitution to the
Black Warrior-CahabaRivers Land Trust..
The companywas also placed on three years' probation
for its violations of the C.1eanWaterAct and the Clean
Air Act. As a condition of probation, Koppers wiliinstirote company-wide environmental compliance programs
at all its facilities in the United States.
With respectto the Clean Water Act violation, the company adnii~ed that its employeeshad allowed the discharge of wastewater that exceededthe permitted level
of ammonia in January 1997 at its Woodward plant, and
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mental agenciesto respondto requestsfor regulatory decisions "within a reasonabletime," and empowersredevelopmentagenciesto shiftregutatory oversight away from
state or regional agenciesto competentlocal agencies.
Aside from expeditingthe remediation, the Polanco Act
facilitates reuse of contaminated,propertiesby affording
immunity under stateenvironmenta1lawsto personswho
acquireremediatedproperty from a redevelopmentagency.
Local governments may form redevelopment agencies
under'California's Community RedevelopmentAct to redevelop"blighted" areas. In general, blighted areasare
urbanized areascharacterizedby statutorily enumerated
conditions that depre'ssthe economic vitality of the area,
or threatenthe health or well-being of the community.2
Although the presenceof hazardouswastes would not be
sufficient, in and of itself, to constitute "blight," the
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January 3, 2003
combinationof contaminationand otherphysicalcharac
teristicsthat "preventor hinderthe economicallyviable
use"of property,or makethe property"unsafeor unhealthyfor personsto live or work," suffices. Most
brownfieldswould,therefore,qualify as"blighted."
For contaminated property located within a redevelopment project area, the redevelopment agencycan assume
powers normally exercised only by state environmental
regulatory agencies, suchas California's Department ()f
Toxic SubstancesControl, or regional agencies, such as
one of the regional water quality control boards.
"'By explicitly granting an agency authority over properties owned by responsible parties and participating owners, as well as expanding its autliority to act when those
parties fail to cooperate,' the Polanco Act gives redevelopment agencies 'more clout to clean up blighted properties.' "3 To begin With, a redevelopment agencycan
compel an owner or operator of property Within its redevelopment project areato disclose "all existing environmental information pertaining to the site," including all
assessmentsperformed pursuant to the requirements of
other environmental agencies.4If the information does
not exist, a redevelopment agency may compel the owner
or operator to perform a Phase I or PhaseII assessment.s
Not only can the owner be compelled to assessits own
property, a redevelopment agencycan enterand
remediate contamination at the expense of the responsible personunless that person acts with breathtaking
speed. Moreover, the redevelopment agencycan
remediatethe prope"rty"whether the agencyowns that
property or not. "6
To prevent a redevelopment agency from entering and
remediating the property, the responsible person must
submit a remedial action plan and schedulewithin 60
days following notice from the redevelopment agency.7
The Polanco Act does not defme what constitutes a "remedial action plan," but other California statutesuse the
term in a manner substantially similar to a "remedial
design/remedialaction" plan prepared pursuantto the
National Contingency Plan.s
require that remedial action plans be consistent with the
NCP "to the maximum extent possible."ll
The Polanco Act refers to plans to be submitted by aredevelopment agencyas "cleanup or remedial action.
plans," without def'mingthe difference. In order to~prevent a redevelopment agencyfrom taking overthe
remediation, however, the Polanco Act only permits submission of a "remedial action plan" by the responsible
person..Arguably, that dichotomy suggeststhat the Legislature intended to reqtrire responsible persons to submit a more detailed documentthan would be submitted
by a red~velopmentagency.
As a practical matter, many people involved in environmental remediation would consider 60 days for the
preparation of a remedial action plan impossibly short
under the best of circumstances. To put the 60-day limit
in someperspective, according to a 1997General Accounting Office report, the remedy selection phase at
non-federal sites averagedabout eight years in 1996, up
from 2.6 years in 1986. Where a responsible person has
not already beeninvolved in the preparation of a remedial
investigation and feasibility study, however, it is practi- .
cally impossible to comply with the literal requirements
of the 60-day deadline.
Furthermore,a redevelopmentagencycan compound the
difficulties in meetingthe 60-day deadline if it choosesto'
do so. For example, in Emeryvi/le v. Elementis Pigments
Inc., 2001 WL 964230, 52 ERC 1648(N.D. Cal. 2001),
the redevelopmentagencydid not want a former owner to
undertakethe remediation of a seriously contaminated
site -ostensibly out of concernthat the remediation
would take too long. Although not discussedin the reported decision, the redevelopmentagencychose not to
reveal its interest in remediating a site to the former
owner and operator. The redevelopmentagencywent so
far asto object to the then-current owner's environmental
consultant on the grounds that the consultantworked for
the former owner in connection with other sites, and
might, therefore, alertthe former owner.
The redevelopmentagencythen servedthe 60-daynotice
on ChristmasEve, apparentlyin an attemptto further
minimize
the former owner's ability to respond. Although
Forexample,a remedialactionplan maynotbeprepared
the
former
owner submitted a voluntary cleanupagreeuntil aftera full remedialinvestigationhad beenconment
application
to the Department of Toxic Substances
ducted,the costs,benefitsand feasibility of a rangeof
Control
within
the
60-dayperiod, under which the former
remedialoptionshad beenconsidered,anda remedyhad
owner
irrevocably
agreedto remediatethe property, the
beenselected.9Eachof thosestepswould needto be unredevelopment
agency
assertedthat the proposedvolundertakenpursuantto a communityrelationsplan detary cleanupagreementdid not constitute a "remedial
signedto inform and consultthe community.1O
Indeed,
althoughthe PolancoAct fails to defmethe term, it does actionplan" and,therefore, undertookthe remediation.
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Even if a responsiblepersonsubmitsa remedialaction
plan within the 60-daydeadline,the redevelopment
agencyretainssubstantialdiscretionwhetherto accept
it. The remedialactionproposed,aswell asthe schedule pursuantto which the remediationwill be undertaken,mustbe "acceptable"to the redevelopment
agency? As a practicalmatter,the ability to rejectthe
proposedschedulepermitsthe redevelopment!lgency
to insist on the selectionof a remedythat is not necessarily the most costeffective -a remedythat would
not be selectedbut for the location of the site in a redevelopmentprojectarea. For example,althoughin
situ stapilization and fixation might be the mostcosteffective remedy,the addedtime necessaryfor that
work might renderit "unacceptable"to a redevelopment
agency.A disfavored"dig andhaul" remedymightbe
the only one that meetsa redevelopmentagency'stime
constraints.
Even assuming that a responsible personhas complied
with the 60-day deadline for submitting a remedial action plan, the responsible person must also agree, within
120 days following the original notice, to implement a
remedial action plan acceptableto the redevelopment
agency. If the responsible person fails to implement the
approved remedial actionplan within the agreed-upon
schedule, the redevelopment agencycan take over the
remediation.
Why should a responsible person care who impl.ements
the remedial plan? To begin with, the Polanco Act lacks
any incentive for a redevelopment agencyto minimize
the costs of the remediation. So long as the redevelopment agencycomplies with laws governing procurements, all costs, including attorney fees, may be recovered from responsible persons.l) Furthermore, the
Salvation Army Court recently held that a redevelopment
agency does not need to comply with the NCP in order
to recover its costs under the Polanco Act.14 Thus,
whereas a private party -or even anothergovernmental
entity -could not recover remediation costs incurred
for purely economic purposes,ISa redevelopment agency
is not similarly constrained.
loosely worded, the author's observation is that regula
tory agenciestake the requirement seriously, and respond promptly to requestsfor review and approval of
plans.
In addition, the Polanco Act permits a redevelopment
agency to designate a local agency, such as a county department of public health, to review and approve the remedial action plan and to oversee the remediation. 17
The local agency must have sufficient technical expertise, and the DTSC may overrule the designation of the
local agency if it does not.18Nevertheless, the ability
to designateits own supervising agency gives a redevelopment agencythe ability to circumvent congested
state agencies.
In additionto expeditingremediation,thePolancoAct
facilitatesdispositionandreuseofbrownfields by removingfrom subsequent
purchasers
the threatofliability for cleanup.A redevelopment
agencythatobtains
certificationfromthe DTSC (orthe agencyoverseeing
the cleanup)that it hascompleteda remediationin accordancewith the approvedplanacquiresimmunityfor
all releasesof hazardoussubstances
identified in the approvedremedialactionplan from further actionby state
environmentalagencies.19
More importantly,anyone
who acquiresthe formerlycontaminatedpropertypursuantto a redevelopment
agreement
obtainsthe sameimmunity. Thus,muchof the risk andstigmaassociated
with acquisitionof formerlycontaminatedpropertyis
eliminated.
Although the process created by the Polanco Act undoubtedly expedites remediation and redevelopment of
brownfield properties, those efficiencies come at a
cost -a cost paid by persons held responsible for the
contamination. From the perspective of local governments, those costs are undoubtedly justified. Current
and former owners and operators derive little benefit,
however. They can be forced to incur exorbitant costs
performing expedited cleanups, only to lose the property through the exercise of eminent domain in the redevelopment process. In any event, the pace of
remediation ofbrownfields in California can be incredThe Polanco Act also includes several provisions deibly fast, at least when compared to remediation propsigned to prevent state and regional environmental buerties that are not in redevelopment project areas. Perreaucracies from slowing the process. The Polanco Act
sonsowning, or who formerly owned, properties in
requires the Department of Toxic SubstancesControl or
those areasneed to be prepared to take rapid steps to
regional water quality control board to respond to a reinvestigate and remediate contamination following
development agency's requeststo provide cleanupguide- notice from a redevelopment agency.
lines, and to approvean agency'sproposedremedial action
plan, "within a reasonableperiod oftime."16 Although
---
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Notes
1 Cal. Health & SafetyCode §§ 33459.01 through 33459.8
(referred to hereinafter as the "Polanco Act").
11Ca!. Health & Safety Code § 33459.I(b)(2)
12 Id.
13Cal. Health & Safety Code § 33459.4(a)
2 Cal. Health & SafetyCode §§ 33030through 33031.
14Salvation Army, supra, 127 Cal. Rptr. 2d at 40-41.
3 Redevelopment Agency of the City of San Diego v. SalvationArmy, 103Ca1.App. 4th 755,127 Ca1.Rptr. 2d 30,39(2002)
(hereinafter" Salvation Army"), quoting Sen.Rules Com.,
Analysis of Sen. Bill No. 1898,1995-1996Reg. Sess.,(Aug. 19,
1996).
l~ See, e.g., Carson Harbor Village Ltd. v. Unocal Corp., 270
F. 3d 863, 871 (9th Cir. 2001); G.J. Leasing Co. v. Union Elec.
Co., 854F. Supp.539,561-62 (S.D. ill. 1994),aff'd 54F. 3d 379,
386 (7th Cir. 1995).
4 Cal. Health & Safety Code § 33459.1(e)
16Ca!. Health & Safety Code § 33459.I(a)(I)
, Id.
11Ca!. Health & Safety Code § 33459.I(c)
6 Cal. Health & Safety Code § 33459.l(a)(1)
11 ld.
7 Cal. Health & Safety Code § 33459.1(b)(2). In the event that
a redevelopmentagencycannotidentify a responsible person,the
redevelopmentagencycan simply proceedwith the remediation.
Cal. Health & Safety Code § 33459.1(b)(1).
19 Cal. Health & Safety Code § 33459.3
a Cal. Health & SafetyCode §§ 25314,25322 and 25356.1.
9 See, e.g., Cal. Health & Safety Code § 253356.1(d); Washington State Dep't ofTransp. v. Natural Gas Co., 59 F. 3d 793,
803 (9th Cir. 1995)(discussingfederal NCPrequirements).
10For example, the DTSC "Remedial Action Plan Policy" makes
clear that a remedial investigationanda feasibility study mustbe
completed prior to preparationof a remedial action plan. See
DocumentNo. EC-95-007-PP(available onthe DTSC's Website).