City Council Meeting 08-08-16 Item 6.A. Council Agenda Report To: Mayor La Monte and the Honorable Members of the City Council Prepared by: Christi Hogin, City Attorney Natalie C. Karpeles, Deputy City Attorney Date prepared: July 12, 2016 Subject: Whether the City may declare the use of caulking/building materials containing polychiorinated biphenyls (PCBs) a nuisance under the Malibu Municipal Code and require that the Santa Monica-Malibu Unified School District (SMMUSD) conduct additional tests for the presence of PCBs and abate such nuisance conditions on its properties within the City c/1~ Meeting date: ~~ August 8, 2016 RECOMMENDED ACTION: 1) Receive and file this report; and 2) Decide whether to engage special counsel for a more extensive analysis. BACKGROUND: Here are the facts as I understand them. In 2009 and 2010, testing of air and soil samples taken from Malibu High School (MHS) and Juan Cabrillo Elementary School (JCES) revealed PCB concentrations in excess of those permitted by the Environmental Protection Agency (EPA). In response, the SMMUSD enlisted experts from the EPA and the California Department of Toxic Substances Control to analyze compliance with the Toxic Substances Control Act (TSCA). The purpose of the TSCA is to prevent unreasonable risk of injury to health or the environment presented by exposure to toxic chemicals. These experts concluded that the PCB levels were either non detectible or within the health-based EPA safety threshold. On that basis, the SMMUSD re-opened its MHS and JCES campuses. In the fall of 2014, the City Council adopted Resolution No. 14-58 urging the SMMUSD to take immediate action to conduct source testing for PCBs at all Malibu school campuses and to remove all source PCBs in compliance with the TSCA. Subsequent testing by Jennifer deNicola in 2015 revealed levels of PCBs in excess of the threshold set by federal law. While the SMMUSD has consulted with the EPA and has agreed to remove the PCB-containing materials from certain areas within the schools, it has refused or has been slow to test additional areas within MHS and JCES that are also likely to contain building materials with levels of PCBs possibly in excess of those allowed by the EPA. Page 1 of 8 Agenda Item # 6.A. For that reason, on March 23, 2015, America Unites for Kids and Public Employees for Environmental Responsibility commenced a lawsuit against the SMMUSD alleging violations of the TSCA. The trial in this matter was held on May 17, 2016; and the court has not yet ruled and no judgment has otherwise been entered as of the time this report is being prepared. Many residents have expressed their frustration with the SMMUSD’s refusal to test additional areas and its delay in removing the PCB-containing materials from the MHS and JCES campuses. The SMMUSD contends that it has taken all necessary action and is operating in accordance with the law. Meanwhile, Jennifer deNicola has urged the City to further engage in the matter and, specifically, to bring a nuisance action against the SMMUSD. At the City Council’s request, this report evaluates whether the Malibu Municipal Code provides a mechanism by which the City may require the SMMUSD to test all areas within MHS and JCES that are likely to contain building materials with PCBs and/or to remove all building materials containing PCB5 in unsafe concentrations. DISCUSSION: Under the California Constitution, a city may make and enforce within its limits all local laws that are reasonably related to a legitimate governmental purpose and which promote the public health, safety, morals, or general welfare of the community. However, such enforcement is not absolute and is subject to constitutional limitations. One such limitation is preemption; where local legislation conflicts with state or federal law, that legislation is invalid and unenforceable. A. The City’s Nuisance Abatement Ordinance: Title 8 of the Malibu Municipal Code sets forth health and safety regulations. Under section 8.28.010, a nuisance is defined as “anything which is injurious to health or safety, or is indecent or offensive to the senses, or an obstruction of the free use of property... so as to interfere with the comfortable enjoyment of life or property”1 and may be subject to abatement.2 There are three paths which the City can use to remove or abate the activity which causes the public nuisance: file a criminal complaint, file a civil action, or proceed administratively. Under the City’s general penalties provision, any violation of the City’s Municipal Code may be prosecuted as a misdemeanor or an infraction,3 subject to the discretion of the prosecutor. In deciding whether to file a criminal enforcement action, the prosecutor must determine whether a reasonable probability of obtaining a conviction exists, including Malibu Municipal Code section 8.28.010 Malibu Municipal Code sections 8.28.060 & 8.28.100 ~ Malibu Municipal Code section 1.16.010 1 2 Page 2 of 8 Agenda Item # 6.A. whether the City can establish with admissible evidence the existence of the nuisance violation beyond a reasonable doubt. A civil action is another enforcement method that can be used to address violations of the Municipal Code. The City would request the court to issue an injunction requiring the responsible person to correct outstanding violations and thereafter maintain the property in compliance with local laws. In some cases, the City may obtain a preliminary injunction to prevent noncompliance during the pendency of the lawsuit; this differs from a criminal action where a conviction must occur before a court can order compliance. Furthermore, the burden of proof in civil cases is not as high, requiring that the City prove its case by a preponderance of the evidence. As an alternative to judicial action, the City may employ its administrative abatement procedures to abate a nuisance violation. Upon notice that the conditions on the property constitute a nuisance, the property owner has 15 days to bring the property into compliance,4 otherwise a hearing is held before the City Council.5 Following a hearing and determination by the City Council that a nuisance exists, the property owner then has 30 days to abate the nuisance.6 If the property owner does not abate the nuisance within 30 days’ time, the City is authorized to cause the abatement of the nuisance and request reimbursement therefor from the property owner.7 Should the property owner fail to adequately reimburse the City, the City may impose a lien on the property;8 cause the charges to be billed on a tax bill;9 or initiate a court action1° to recover the costs of the abatement. These tools are most often employed where a malfunctioning septic system is on the property, or the property is being used for hoarding, or it is in a state of disrepair that creates a fire hazard or an attractive nuisance. In all cases, the threat to public health or safety is imminent and obvious as shown in evidence admissible in court. The Council has asked whether this nuisance abatement tool may be used in the unconventional context of enforcing the Toxic Substance Control Act. Regardless of the remedy selected, the City must first be able to establish the existence of a violation under the City’s Municipal Code. B. The presence of PCBs within the City may be a public nuisance under the City’s Municipal Code: ~ Malibu Municipal Code section 8.28.030 ~ Malibu Municipal Code section 8.28.04O~8.28.050 ~ Malibu Municipal Code section 8.28.050-8.28.060 ‘ Malibu Municipal Code section 8.28.060 8 Malibu Municipal Code section 8.28.070 ~ Malibu Municipal Code section 8.28.080 10 Malibu Municipal Code section 8.28.090 Page 3 of 8 Agenda Item # 6.A. The EPA has classified PCBs as probable human carcinogens; the long-term effects of PCB exposure include harm to the nervous and reproductive systems, immune system suppression, hormone disruption, and skin and eye irritation.H According to the EPA, items “with PCB concentrations of 50ppm12 or greater present an unreasonable risk of injury to health within the United States.”13 Therefore, any concentration of PCBs in excess of 5Oppm present on any property owned or possessed by the SMMUSD could be “injurious to health or safety” and could technically constitute a nuisance under the City’s Municipal Code. It does not appear that the SMMUSD disputes that the caulking tested in specific locations on both campuses contains concentrations of PCBs in excess of 5Oppm. The question the Council asked is whether the City may require SMMUSD to test additional areas and remove all PCB-containing materials found to have concentrations in excess of 5Oppm. The SMMUSD’s refusal to conduct additional tests does not constitute a nuisance within the meaning of the Municipal Code. In other words, the condition which may violate the City’s nuisance provisions is not the SMMUSD’s lack of testing, but the presence of harmful concentrations of PCBs on its Malibu campuses. In order to determine whether harmful concentrations of PCBs are present in the air, soil, and particular building materials of MHS and JCES, the City would have to sample and test each separately. Absent a court-issued warrant, the City has no legal authority to conduct such testing. The procedure to obtain an inspection warrant is relatively straighiforward, but inspection alone will not yield any useful information. The standard for obtaining a warrant to seize property (test samples) is much greater and would require significant effort and executing such a warrant would require expert involvement because the manner of obtaining the samples is usually part of the testing protocol. Should the City obtain a warrant (based on evidence establishing probable cause) and determine, through its efforts, that unlawful concentrations of PCBs exist elsewhere on the MHS and JCES campuses, the City would have to determine what actions would constitute satisfactory compliance. Because of its status as a toxic substance, the remediation and/or removal of PCBs is highly regulated by state and federal law.14 Therefore, any remediation or enforcement plan crafted by the City would likely be preempted unless it merely enforced as provided in the governing statute. Even before the City reaches that stage, additional legal research is required with respect to the application of the nuisance provisions to a condition that affects only those persons on the property, without affecting neighboring properties or the quiet enjoyment of persons in the neighborhood. It is not inconceivable that the police power may be exercised in this manner, but I have not conducted exhaustive research in connection Environmental Protection Agency website available at: https://www3.e~a.qov/reqion9/pcbs/index.htrnl Ppm means parts per million 1340 CFR § 761.20 1415 usc §~ 2601, et seq. 11 12 Page 4 of 8 Agenda Item # 6.A. with this preliminary analysis. In addition, the fact that the property owner is another public agency and that the state regulatory agency is directly addressing (albeit perhaps in an unsatisfactory manner) the conditions under evaluation as a potential public nuisance may provide defenses to the SMMUSD to any action by the City. These issues would need to be researched thoroughly if the City Council were interested in pursuing this route. C. The City is preempted from attempting to regulate the testing and removal of PCBs differently than the federal Toxic Substance Control Act: Under the Supremacy Clause of the United States Constitution, state laws that interfere or conflict with federal law are “preempted” and invalid.15 Federal preemption analysis is generally the same for state and local laws.16 Federal law may preempt a state or local law in one of two general ways: (1) Congress demonstrates its intent to occupy the field of regulation and supplant state or local authority; or (2) state or local law conflicts with federal law by making it impossible to comply with federal law or by creating an obstacle to the goal of the federal law.17 Congressional intent is evidenced by the language, structure, and purpose of the federal statute.18 The overall purpose of the Toxic Substances Control Act is to set in place a comprehensive, national scheme to protect humans and the environment from the dangers of toxic substances.19 “Congress recognized that state and local ordinances might thwart the effectiveness of a national legislative and regulatory scheme; accordingly, section 2 of the TSCA states that ‘the effective regulation of interstate commerce in such chemical substances and mixtures also necessitates the regulation of intrastate commerce in such chemical substances and mixtures.”2° 15 USC §~ 2604 and 2605 are the basic provisions of TSCA mandating a comprehensive regulatory scheme for toxic substances. 15 USC § 2605(e)(1) provides in part that within six months after January 2, 1977, “the Administrator shall promulgate rules to (A) prescribe methods for the disposal of polychlorinated biphenyls, and (B) require polychlorinated biphenyls to be marked with clear and adequate warnings, and instructions with respect to their processing, distribution in commerce, use or disposal or with respect to any combination of such activities.” The EPA is responsible for administering the provisions of the TSCA, which include, among other things, the authority to (1) require testing of existing chemical substances for 15 us Const. article VI, clause 2 Wisconsin Pub. lnte,venor v. Mortier (1991) 501 us 597, 605 Crosby v. National Foreign Trade Council (2000) 530 us 363, 372 18 CSX Transp. v. Easte,wood (1993) 507 us 658, 664 19 The TSCA is found at 15 usc §~ 2601-2692 and is administered by the EPA 20 Rollins Environmental Services, Inc., v. Parish of St. James (Fifth Cir. 1985) 775 F.2d 627, 632 citing 15 usc § 2601(a)(3) 16 17 Page 5 of 8 Agenda Item # 6.A. their effects on human health and the environment;21 (2) regulate new chemical substances prior to their manufacture, import, processing, or distribution for commercial purposes and to regulate existing chemical substances for their significant new uses;22 (3) regulate existing chemicals based upon a finding that the manufacture, processing, distribution, use, or disposal poses an unreasonable risk to human health or the environment;23 and (4) inspect facilities, issue subpoenas, and assess penalties for violations of the TSCA.24 To effectuate Congress’ national regulatory objectives, Section 18 of the TSCA contains an explicit provision limiting local authority in specific ways. Under Section 18, a state or local government is preempted from establishing or retaining a rule regulating chemical substances or mixtures that are subject to EPA regulation under section 5 or section 6 of the TSCA unless (1) the state or local law is identical to the EPA prescribed requirement, (2) the law is adopted pursuant to another federal law, or (3) it prohibits the end use25 of such substances or mixtures in that state or political subdivision.26 Pursuant to section 6 of the TSCA, the EPA has specifically addressed the manufacturing, processing, distribution in commerce, and use prohibitions of PCBs within the state of California.27 Any local law attempting to regulate PCBs will be preempted by the TSCA, unless it falls under one of the three exceptions set forth in Section 18, none of which is applicable here. Consequently, the TSCA is the primary regulation of PCBs.28 This regulatory scheme seems to create a qircular path for the City that leads back to the EPA’s remediation plan because, even if the City had probable cause to obtain an inspection warrant and could test and prove the presence of PCBs in excess of the TSCA standard, TSCA Section 4 TSCA Section 5 23 TSCA sections 6 & 7 24TSCAsectionsll, 15, 16&17 25 “End use” refers to the life-cycle of the substance. So, for PCBs, this phrase would mean the use of PCBs as such or in a mixture as the last step before the substance is consumed in a process by reaction during use (including intermediate use), or is emitted to waste streams or the environment. 26 15 U.S.C. § 2617(a) (2) (A); Section 18 of the TSCA establishes a procedure through which a state or locality may petition EPA for an exemption for those situations where preemption would apply (see 15 U.S.C. § 2617(b)) 2740 CFR 761.1, etseq. 28 Federal court decisions on this issue have held that local ordinances regulating PCBs will be preempted, unless they fall under one of the exceptions listed in Section 18 of the TSCA; see People v. Todd Shipyards Corporation (1987) 192 Cal.App.3dSupp. 20, 35 (California laws regulating the storage of PCB are exempt from federal preemption, under section of the federal Toxic Substance Control Act providing that if the EPA exercises its rule-making power, state laws are preempted, unless state laws regulate disposal of certain substances or state laws are adopted under authority of other federal law); Rollins Envtl. Serv., Inc. v. Parish of St. James, 775 F.2d 627 (5th Cir. 1985)(holding preempted a local ordinance effectively prohibiting PCB disposal operations); and SED, Inc. v. City of Dayton, 519 F.Supp. 979 (S.D. Ohio)(holding not preempted a local ordinance regulating the storage of PCBs because it was adopted under authority granted by the Clean Water Act). 21 22 Page 6 of 8 Agenda Item # 6.A. the method of remedying the violation is established by the EPA under the TSCA, not fashioned by the City pursuant to regular police powers. Also note that, even if the City had the legal authority to fashion a remedy, it still would not have the technical expertise to determine a remedy. In other words, the City’s successful declaration of a public nuisance leads right back to the EPA and the TSCA. Ordinarily, if the City is required to use its own forces to abate a nuisance, a lien may be imposed on the property to secure reimbursement. I doubt that the City could lien the SMMUSD’s property and even if it did the District does not pay taxes and is unlikely to sell the property. Collecting the cost of abatement may prove challenging and expensive, requiring subsequent litigation. In 2015, the SMMUSD implemented a removal plan that was prepared pursuant to EPA standards and monitored by the EPA. The remaining pre-1979 caulk with PCB5 in excess of 5oppm is scheduled for removal in connection with the campus modernization plan, which has obtained required coastal development permits. Admittedly, this is a limited analysis based on limited facts. I was asked whether the City could rely on the SMMUSD’s “admission” that PCBs in excess of the legal standard are present to declare a nuisance expeditiously and order abatement by the SMMUSD. The answer to that question is no because the SMMUSD contests that it has admitted an ongoing, existing violation; and, in any event, the statements alone are insufficient evidence to support a finding of nuisance. Obtaining the evidence would be expensive. Perhaps more importantly, the process to establish nuisance is unlikely to be quick. If the SMMUSD resists further testing (and we have every reason to believe it would because it has defended vigorously the citizen suit on the grounds that it is not in violation of the TSCA), the City would have to identify currently available evidence that would support probable cause to obtain an inspection warrant. Whatever evidence is garnered to support a finding of a nuisance, the City must hold a hearing and afford the SMMUSD due process, including the opportunity to challenge the evidence and the finding of a nuisance. Such a determination is subject to judicial review, meaning that the SMMUSD may challenge a declaration of nuisance in court before any abatement occurs. The question of whether the SMMUSD is in violation of the TSCA is currently pending before the federal district court. That was the primary claim in the case America Unites for Kids, et a!. v. Sandy Lyon, et a!. The City is not currently in possession of evidence that supports a finding of a public nuisance; if the City were to pursue a nuisance action, it would have to do so based on substantial evidence. The SMMUSD contends that it has acted in accordance with the TSCA and with EPA oversight in the manner it has addressed the PCB5. City staff does not have the expertise to evaluate that contention and would rely on the EPA with respect to the implementation of the TSCA. Page 7 of 8 Agenda Item # 6.A. If the Council is interested in pursuing this, I suggest that it authorize a request for qualification for special counsel familiar with the enforcement of the TSCA generally and the regulation of PCBs specifically. My preliminary analysis is that there is not an easy shortcut to abatement to be found in SMMUSD staff admissions of PCB levels in excess of the 50 ppm standard. Instead, a nuisance abatement action would require significant effort and expense. I have no basis to predict the likelihood of success. It seems clear that the SMMUSD would resist the effort and it is possible that the campus modernization project presents an opportunity to resolve the issue. FISCAL IMPACT: If the Council wishes to pursue this, the responses to the requests for qualifications will provide better guidance on the estimated cost. Based on past experience, the City could expect to pay $100,000+ assuming that the SMMUSD challenges any declaration of nuisance. Page 8 of 8 Agenda Item # 6.A.