Environmental and Land Use Department Update
Spring 2002
Successful Permitting Strategies
For Water-Oriented Development Projects
By Cynthia Anne Kennedy
Following the recent salmon listings
under the Endangered Species Act
(“ESA”), proponents of water-oriented
projects face new challenges obtaining
the permits necessary to construct docks,
piers, utility lines, outfalls, transportation
facilities, bridges, and other in-water
structures. Many of these projects now
trigger ESA consultations, which are
creating tremendous backlogs of permits within the
regulatory agencies. It can now take two years or longer to
obtain the various local, state, and federal permits for
water-oriented projects. Other regulatory requirements are
also changing in response to the ESA listings, leading
regulatory agencies to be more cautious and to interpret
their jurisdictions more expansively. This can result in
duplicative or contradictory permit conditions for the
unwary. In this complex regulatory climate, developing a
successful permitting strategy is more important than ever.
Investing in a winning strategy up-front can save time over
the long run, and, in project construction, time often is
money.
Last summer, as part of a permit streamlining effort for
transportation projects, representatives of various state
regulatory agencies met with the project permitting team
for the Tacoma Narrows Bridge Project to discuss how they
obtained a remarkable 20 permits in a one-year period. The
lessons learned from the bridge project are equally
instructive for other large water-oriented projects. Some of
the key elements identified for a successful permitting
effort include:
• Multi-Disciplinary Permitting Team
• Dedicated Agency Personnel
• Open Communications
• Shared Integrated Schedules
• Flexible Designs
Multi-Disciplinary Permitting Team With Well
Defined Roles Expedites Permitting
Expedited permitting starts with a strong, multi-disciplinary
team. The successful permitting team is led by a decisive
project manager, someone who thinks strategically and
clearly articulates the team’s goals. The successful
Inside This Issue:
permitting team also
Congress Narrows Superfund Liability includes environmental
Will the States Follow? . . . . . . . . . . . . . . . . . . . . . .2
consultants, engineers,
Incidental Take Statements: More Than
lawyers, public
Grazed By Arizona Cattle? . . . . . . . . . . . . . . . . . .4
relations specialists,
Washington State Supreme Court
and environmental
Decision in Asarco v. Department
managers, all
of Ecology, No. 69406-1 . . . . . . . . . . . . . . . . . . . .4
committed to working
together as a team to achieve common goals. Efficiently
managing the diverse talents of such a multi-disciplinary
team requires well-defined roles. Environmental consultants
can provide the solid scientific analyses necessary to
satisfy regulatory requirements. Engineers can develop
alternative designs that avoid or minimize environmental
impacts. Lawyers can work with agency personnel to
identify the limits of their jurisdiction and identify areas
regulated by other agencies to avoid conflicting conditions.
Lawyers can also identify permitting processes that can
take place concurrently to shave time off the project
schedule. Public relations specialists can address the
public’s environmental concerns and help garner political
support for the project. Environmental managers can
coordinate team efforts and serve as a primary contact for
agency personnel.
Dedicated Agency Personnel
With Clear Jurisdiction Aid Permit Processing
Expedited permit processing is easier when working with
agency personnel that have decision-making and policymaking authority. In some cases it may be possible to fund
a regulatory position for a specified period to free up other
personnel who can dedicate time to your project. This
investment can reap huge dividends of saved time.
Additional time savings can be achieved by arranging an
initial joint meeting with personnel from all key agencies to
identify potential environmental impacts and develop a
coordinated approach for addressing them. This kind of
coordinated review will not occur unless the project
proponent makes it occur. Although labeled a “Joint”
Aquatic Resources Permit Application, a “JARPA” actually
initiates separate project review by each local, state, and
federal regulatory agency, often resulting in conflicting
design preferences and contradictory permit conditions.
cont’d on page 5
Environmental and Land Use Department Update
Page 2
Congress Narrows Superfund Liability - Will The States Follow?
By Brian K. Knox
On January 11, 2002,
President Bush signed
into law a bill amending
the federal Superfund
law, also known as the
“Comprehensive
Environmental Response,
Compensation, and
Liability Act,” or
“CERCLA.” The amendments, called the
“Small Business Liability Relief and
Brownfields Revitalization Act,” were
intended to encourage redevelopment of
contaminated properties and to provide
relief from CERCLA’s liability for
environmental cleanup costs. This
summary refers to the legislation as the
“Brownfield Amendments.”
CERCLA Liability
Before the Brownfield Amendments
CERCLA’s liability framework is extremely
broad, and includes many parties whose
connection to contamination at a given
site is quite remote. The Brownfield
Amendments exempt certain parties from
such liability. Prior to the Brownfield
Amendments, the following categories of
people or entities could be held liable
under CERCLA for costs incurred to clean
up a site contaminated through the
release of hazardous substances:
• The current owner or operator of
the site;
• Anyone who owned or operated the
site during the time that hazardous
substances were disposed of there;
• Anyone who arranged for disposal of
hazardous substances at the site; and
• Anyone who transported hazardous
substances to the site for disposal or
treatment.
42 U.S.C. § 9607(a). Such categories
of persons are “strictly liable,” that is,
liable without respect to whether they are
at fault. Courts have interpreted CERCLA
to impose joint and several liability,
meaning that any one of several liable
parties could be forced to pay for the
entire cleanup.
The CERCLA liability scheme has
resulted in a number of cases that
seemed unfair, and the Brownfield
Amendments attempt to address some of
these. For example, before the
Amendments, a business or municipality
that sent a relatively insignificant amount
of waste to a landfill could be charged
with all or a substantial portion of
cleaning up the landfill. This was possible
because liability attached to one who sent
any amount of hazardous substances to a
site. Another example of CERCLA’s
extensive liability before the Brownfield
Amendments involved parties who
deposited harmless materials at a site
that also received toxic substances from
others, but who later learned that their
wastes, nevertheless, contained
“hazardous substances” and therefore
they shared in liability for cleanup costs.
Yet another example of CERCLA’s
unfairness finds property owners liable for
cleanup costs even if their land became
contaminated solely by migration of
contamination from elsewhere. Such
unfortunate cases can be exacerbated
when the real polluters have disappeared
or are insolvent, and the unlucky victims
are the only responsible parties who can
pay.
The Brownfield Amendments also
attempted to reverse some of the
counterproductive land use impacts that
have resulted from CERCLA’s broad
liability provisions. Because CERCLA
liability is potentially so massive and can
be incurred unknowingly, potential
developers have avoided building on
contaminated properties or properties
suspected of contamination. Otherwise
suitable industrial sites have been
abandoned as a result, and new industrial
development has instead migrated toward
previously undeveloped “greenfield” sites
where developers could avoid the risk of
cleanup costs. Vacant industrial sites and
conversion of greenfield sites to industrial
uses have been the result.
Key Amendments
The Brownfield Amendments were thus
aimed at addressing some of the more
unfair cases of liability, and at
encouraging redevelopment of
contaminated properties. They include the
following key provisions.
“De Micromis” and Municipal Solid
Waste Exemptions. The Brownfield
Amendments provide that anyone who
sent only very small amounts of waste to
a site, or who sent only household
garbage to site, are conditionally exempt
from CERCLA liability. The so-called “de
micromis” exemption protects those who
sent less than 110 gallons of liquid
waste, 200 pounds of solid waste. § 102
(a). The Municipal Solid Waste exemption
applies to certain types of entities
(residential parties, small businesses, and
501(c)(3) tax exempt organizations) that
sent only municipal solid waste (waste
like that typically generated by
households) to a site. § 102 (a).
Both exemptions are subject to
important limitations. Key among the
limitations, they apply only with respect
to sites that the U.S. Environmental
Protection Agency has placed on the
“National Priorities List” of sites most in
need of cleanup. In addition, EPA is
authorized to override the exemptions in
particular cases if a party’s waste causes
or threatens to cause actual harm, and
the exemptions can be withheld from
anyone who fails to provide requested
information or who interferes with a
cleanup. § 102 (a).
Both exemptions do include important
terms designed to help parties who claim
the exemptions avoid litigation. For
example, if a party claims coverage under
the exemption, anyone who contests that
position bears the burden of proving that
the exemption does not apply. In addition,
if a party (other than a government) does
try to disprove these particular
exemptions’ applicability and is
unsuccessful, that party becomes liable
for the exempted parties’ attorney fees
and costs of defense. § 102 (a).
De Minimis Settlements can take into
account ability to pay. As a result of the
Brownfield Amendments, parties who
qualify for de minimis settlements under
existing law can reduce or avoid payment
obligations in their settlements based on
their demonstrated inability (or
diminished ability) to pay. § 102 (b).
Contiguous Landowner Exemption. Under
CERCLA, before the Brownfield
Amendments, owners and operators of
property that became contaminated solely
by migration of contamination from an
off-site source could be liable for cleanup
costs. The Brownfield Amendments
exempt such owners, at least if they meet
eight criteria. § 221 (b). The criteria are
Page 3
quite complex, however, and leave
considerable room for interpretation. For
example, to qualify for the exemption,
the owner or operator must show that he
or she took “reasonable steps to stop any
continuing release” and “to prevent or
limit human, environmental, or natural
resource exposure to any hazardous
substance released on or from property
owned by that person.” Unlike the “de
micromis” and Municipal Solid Waste
exemptions, the new Contiguous
Landowner Exemption must be proven by
the party claiming its protection.
Bona Fide Prospective Purchaser
Exemption. Under the new “Bona Fide
Prospective Purchaser Exemption,”
anyone who purchases property after
Jan. 11, 2002 and who shows that they
meet eight conditions qualifies for an
exemption from the CERCLA liability.
§ 221 (a). The eight conditions require,
among other things, that the new owner
must examine the property for
contamination, report any contamination
that is found, cooperate in any cleanup
or investigation of the contamination,
respect any limitations imposed on the
property as a result of the cleanup, and
exercise appropriate care to prevent
further harm. This exemption includes
the possibility, however, of the
government imposing a lien on the
purchased property to compensate the
government for any unrecovered cleanup
costs it incurred which had the effect of
increasing the fair market value of the
purchased property. § 222 (b). Such
liens were meant to prevent bona fide
prospective purchasers from getting
windfall benefits from governmentfunded cleanups.
Clarification of Innocent Landowner
Exemption. Prior to the Brownfield
Amendments, CERCLA exempted from
liability new owners of a property who
acquired the property without knowledge
that it was contaminated, provided that
such owners carried out certain prepurchase investigations of possible
contamination. That exemption is known
as the Innocent Landowner exemption.
The Brownfield Amendments provide for
further clarification on what level of
investigation must be done to qualify for
the Innocent Landowner exemption.
§ 223. First, the amendment specifies
that, for properties purchased after May
31, 1997, purchasers whose prepurchase investigations followed the
American Society or Testing and
Materials (ASTM) protocol for Phase I
Environmental Site Assessment will
qualify. For the future, the Brownfield
Amendments require the EPA to develop
new rules setting standards. Until such
rules take effect, however, the ASTM
protocol will continue to serve as the
standard.
Limitations of the Brownfield Amendments
The Brownfield Amendments are subject
to important limitations that will confine
their practical impact. First, they
address only CERCLA liability, but not
similar liability imposed by various state
cleanup laws, many of which impose
liability through terms similar to
CERCLA’s. Second, the Brownfield
Amendments do not narrow liability with
respect to hazardous waste sites subject
to cleanup under the Resource
Conservation and Recovery Act, another
federal law that overlaps with CERCLA
with respect to many sites. Third, as
discussed above, some of the Brownfield
Amendments do not apply to all
contaminated sites cleaned up under
CERCLA, but only those which EPA has
listed on the National Priorities List.
Finally, the new exemptions are in some
cases heavily conditioned, and the
conditions are expressed in terms that
are subject to interpretation. Parties who
would like to rely on the new exemptions
may hesitate to do so, at least until the
courts have an opportunity to clarify the
exemptions’ terms or the EPA issues
guidance on how the agency interprets
the new law.
Brownfield Redevelopment Grants
The Brownfield Amendments also
include grant funding use in
investigating and redeveloping
“brownfield sites,” a legally defined term
to describe qualifying sites. § 211. The
grants are available to state and local
governments, tribes, and similar public
purpose organizations, and are limited in
amount to $200,000 per site, although
that limitation can be raised to
$350,000 by the EPA. Sites excluded
from consideration for such grants are
sites where cleanup is already likely to
occur, including sites on the National
Priorities List, those which are already
the subject of a CERCLA administrative
order or consent decree or other federal
cleanup programs, and others.
Conclusion
The Brownfield Amendments provide
limited liability relief for specific
categories of parties who have long
sought protection, and they will help
parties who want to redevelop brownfield
sites to manage liability risks. Perhaps
the most important of the provisions is
the Bona Fide Prospective Purchaser
Exemption. It offers liability protection to
any redeveloper who, prior to the
Brownfields Amendments, could be
protected only by negotiating a consent
decree with the EPA and paying for a
portion of the cleanup. In practice, the
Brownfield Amendments will have
limited impact in states that have
CERCLA-like liability frameworks, but
which do not include the new Brownfield
Amendments exemptions. Congress’
decision to adopt the Brownfield
Amendments does provide momentum to
amend state laws to conform to CERCLA.
The new grant funding for brownfield
site remediation could be helpful in
specific site redevelopment efforts, and
qualifying entities should consider
applying for the funding. ■
Environmental and Land Use Department
Seattle
briank@prestongates.com
Incidental Take Statements: More Than Grazed By Arizona Cattle?
By Deborah Dean
The U.S. Fish and
Wildlife Service
(“FWS”) and the
National Marine
Fisheries Service
(“NMFS”) no longer
have unlimited
authority under the
Endangered Species
Act (“ESA”) to issue an Incidental Take
Statement (“ITS”) imposing restrictions
on public and private uses of land and
development projects. The Ninth Circuit
Court of Appeals’ decision in Arizona
Cattle Growers’ Association v. U.S. Fish
and Wildlife1 held that the agency must
predicate the issuance of an ITS on a
factual finding of an actual “take” of an
endangered species incidental to the
proposed activity. The mere speculation
of harm is insufficient evidence for FWS
or NMFS to issue an ITS.
The Bureau of Land Management and
the U.S. Forest Service consulted with
the FWS to review the grazing program in
Southeastern Arizona as required under
Section 7 of the ESA. The Arizona
Cattle Growers’ Association (“ACGA”)
challenged each of the ITSs issued by
the FWS that limited its ability to receive
cattle grazing permits. The FWS failed to
produce sufficient evidence of actual
harm or injury to an endangered species
in all but one of the ITSs analyzed in
this case.
The agency issued an ITS
concurrently with a Biological Opinion
during a Section 7 consultation. In
general, an ITS includes the amount or
extent of the anticipated incidental take
of a listed species, any mandatory
reasonable and prudent measures
considered necessary or appropriate to
minimize such impact, and the terms
and conditions the applicant must
comply with to implement the reasonable
and prudent measures.2 An ITS
functions as a shield protecting
government agencies and private
applicants from ESA Section 9 liability
and penalties for the “take” of an
endangered species.
In Arizona Cattle Growers’
Association, the FWS argued that “it
should be permitted to issue an ITS
whenever there is any possibility, no
matter how small, that a listed species
will be taken.” The court disagreed,
holding that FWS must demonstrate that
an incidental take was “reasonably
certain to occur” before issuing an ITS
that restricts the use of land. The
decision suggests that a lower burden
may apply “in rare circumstances such
as those involving migratory species”.
The species at issue in Arizona Cattle
Growers’ Association (one bird species:
cactus ferruginous pygmy-owl; five fish
species: razorback sucker, Sonora chub,
Gila topminnow, loach minnow and
spikedace), however, were not considered
migratory.
The court held further that the FWS
could not issue ITSs imposing terms and
conditions on land use permits where
either there was no evidence that the
endangered species existed on the land
or that a take would occur if the permit
were issued. Contrary to the argument
FWS raised, the court held it would be
improper to force the ACGA to prove that
a listed species does not exist on the
permit area, for two reasons: 1) it is the
agency’s burden under the ESA and 2) it
would require the proof of a negative. In
all but one of the challenged ITSs, the
FWS was unable to meet the prerequisite
factual showing of an incidental take due
to insufficient evidence in the
Administrative Record. The issuance of
the Cow Flat Allotment ITS was proper
cont’d on page 5
Washington State Supreme Court Decision
in Asarco v. Department of Ecology, No. 69406-1
By James A. Goeke
On March 21, 2002, the
Washington State
Supreme Court, in
Asarco Incorporated v.
Department of Ecology,
No. 69406-1, held that
Asarco’s declaratory
judgment action seeking
a determination that the
Model Toxics Control Act (“MTCA”) was
unconstitutional as applied to Asarco for
cleanup of the historic 44-acre Everett
lead and arsenic smelter site and 642
adjacent acres failed to present a
justiciable claim. Asarco had claimed that
MTCA was unconstitutional under the
“takings” and due process clauses of the
United States Constitution as applied to
Asarco at the site. A corporate
predecessor of Asarco purchased the 44acre smelter site in 1903 from a now
defunct company that had previously
begun operating a lead and arsenic
smelter on the site in 1894. Asarco
operated the smelter from 1903 through
1912 and sold its last interest in the site
by 1937. In 1991, after discovering lead
and arsenic contamination attributed to
the smelter on the 44 acre smelter site
and on the 642 adjacent acres, the
Department of Ecology (“Ecology”)
tentatively identified Asarco as a
potentially liable person under MTCA and
began to formulate cleanup options.
The Supreme Court’s seven to two
decision vacated a determination by
Thurston County Superior Court Judge
Gary R. Tabor that the imposition of
liability under MTCA for remediation of
the 642 acres adjacent to the smelter site
was unconstitutional as a violation of due
process principles and as an unlawful
taking. Judge Tabor, however, held that
MTCA liability for remediation of the 44-
acre smelter site (7.2 acres of which
Asarco has repurchased) did not offend
principles of due process or amount to a
taking. The Supreme Court reasoned that
Asarco’s takings claim was not justiciable
because Ecology has not yet entered a
final cleanup order, making any
consideration of the level of cleanup
Ecology may require and the economic
impact of any future cleanup order too
speculative. Similarly, the Court found
Asarco’s substantive due process claim
non justiciable because there was no
evidence in the record of the availability
or effectiveness of alternate protective
measures or of the economic loss Asarco
might suffer. The Court ordered Judge
Tabor’s decision vacated and dismissed
the case without prejudice. ■
Litigation Department
Seattle
jgoeke@prestongates.com
Environmental and Land Use Department Update
Successful Permitting Strategies For Water-Oriented Development Projects (cont’d from cover)
Early coordination between agencies can
alleviate these problems by helping the
permitting team to develop designs and
mitigation features that satisfy multiple
permitting requirements.
and appeals processes, etc. Sharing the
project schedule with regulatory
agencies helps to foster a collaborative
spirit and a common commitment to
achieving project deadlines.
Open Communications Build Good
Working Relationships
Flexible Design Can Avoid Environmental
Impacts and Costly Mitigation
Frequent, open communications are
essential to developing effective working
relationships between team members
and regulatory agencies and keeping
projects on track. Regular face-to-face
team meetings maintain project
momentum. They allow the project team
to formulate quick responses to requests
for additional information, which are
essential to gaining agency trust and
cooperation. Systematic follow-up
contacts with agency personnel further
ensure progress toward each step in the
process. Maintaining good public
relations and cultivating political
support are additional keys to moving
projects forward.
Maintaining flexibility in project design
can save time and avoid environmental
impacts and mitigation costs. For some
projects it may be possible to use a
design-build process, which allows
project designs to be refined up to and
through construction. Design-build
provides greater opportunity for agencies
and project permitting teams to work
together and design around potential
environmental impacts. To maximize the
Shared Schedules Increase Agency
Commitment to Achieving Project Deadlines
A comprehensive detailed project
schedule is an effective tool for
expediting permit issuance and
identifying critical-path approvals. The
project schedule should integrate all
steps necessary to obtain the required
local, state, and federal permits,
including: deadlines for requesting and
providing additional information, public
notice and comment periods, hearings
advantages of this process, regulatory
agencies must be willing to review plans
at earlier stages than they are
accustomed, articulate conditions in
terms of performance standards rather
than absolute limitations, and handle
subsequent design refinements and
permit modifications administratively. Of
course, for any environmental impacts
that cannot be avoided, project
proponents must still budget for
mitigation.
For more detailed information on
developing a successful permitting
strategy, please call Cynthia Kennedy at
(206) 623-7580. ■
Environmental and Land Use Department
Seattle
cynthiak@prestongates.com
There is new hope on the legislative horizon for everyone who has been
disappointed to learn that filing a Joint Aquatic Resources Permit Application
(“JARPA”) does not initiate a joint permitting process among the myriad of public
agencies with jurisdiction over water-oriented development projects. Recognizing how
cumbersome it has become to obtain the permits necessary to construct such
facilities, the Washington State Legislature has mandated three pilot programs to
look for ways to coordinate and expedite the permitting processes of local, state and
federal agencies. This initial “Streamlining Act,” Ch. 47.06C RCW, focuses on
transportation projects. The goal is to provide “one-stop decision-making,” allowing for
the first time concurrent, consolidated review by regulatory agencies. Transportation
projects will begin using a streamlined permitting process featuring joint hearings
this summer. In addition, programmatic actions are being developed that will permit
routine projects with minimal environmental impacts to move forward subject to
certain conditions. If the transportation pilot programs and programmatic actions
are successful, they may precipitate future permit streamlining efforts for other
water-oriented projects, such as docks, piers, utility lines, outfalls, and bridges.
Additional information about the “Streamlining Act” is available on-line at
www.wsdot.wa.gov/eesc/environmental/programs/regcomp.
Incidental Take Statements: More Than Grazed By Arizona Cattle? (cont’d from page 4)
because it was supported by evidence
that (a) the loach minnow existed on the
Cow Flat Allotment, (b) the cattle would
have access to the endangered species’
habitat, and (c) there was a causal
connection between harm to the species
and the land grazing activities. The FWS
articulated in the Biological Opinion
that the loach minnows are vulnerable
to the indirect effects of sedimentation
as a result of grazing and the potential
direct effects of cattle crossings
crushing loach minnow eggs and
reducing food.
Even though the issuance of the Cow
Flat Allotment ITS was upheld, the ITS
failed to contain the amount or extent of
anticipated take and to provide a clear
standard for determining when the
authorized level of take is exceeded.
Under the ITS as written, the authorized
take of the loach minnow would be
exceeded “if ecological conditions do
not improve under the proposed
livestock management.” The court held
the vagueness of the condition and the
lack of an articulated, rational
connection between the condition and
the take of the species made the ITS
arbitrary and capricious.
Arizona Cattle Growers’ Association
helps to clarify FWS’ and NMFS’
responsibilities when issuing an ITS.
Hence, the decision may provide
landowners some relief from the
restrictions imposed by the terms and
conditions of an ITS in circumstances
of limited evidence regarding a listed
species. However, it is important to
remember that without an ITS there is
no liability shield to protect an applicant
or agency from a “take” incidental to
the activity under a Section 7
consultation. ■
Arizona Cattle Growers’ Association v. U.S.
Fish and Wildlife, 273 F.3d 1229
(Dec. 17, 2001).
2
16 U.S.C. §1536(b)(4); 50 C.F.R.
§402.14(i).
1
Environmental and Land Use Department
Seattle
ddean@prestongates.com
701 Fifth Avenue, Suite 5000
Seattle, WA 98104-7078
701 Fifth Avenue
Suite 5000
Seattle, WA 98104-7078
Tel: (206) 623-7580
Fax: (206) 623-7022
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