Secondary_and_cumulative_impacts_analysis_in_the_environmental_context_for_assessing_environmental_damage_00109435...

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Litigation News and Analysis • Legislation • Regulation • Expert Commentary

ENVIRONMENTALWestlaw Journal

41247335

VOLUME 32, ISSUE 24 / JUNE 20, 2012

RADIATION CONTAMINATION

10 Supreme Court shouldn’t review Rocky Flats radiation case, U.S. says

Cookv.RockwellInt’lCorp. (U.S.)

RCRA

11 Ohio federal judge OKs 1 of 4 RCRA claims in TCE case

Town&CountryCo-Opv.AkronProds.Co. (N.D. Ohio)

CLEAN WATER ACT

12 Massachusetts town must face citizen suit over water tank discharges

Berberianv.TownofAndover (D. Mass.)

FORMALDEHYDE

13 Settlement near over Hurricane Katrina homeless illnesses

InreFEMATrailerFormaldehydeProds.Liab.Litig. (E.D. La.)

NATURAL GAS DRILLING

14 Colorado court dismisses water contamination suit against gas drillers

Strudleyv.AnteroRes.Corp. (Colo. Dist. Ct.)

DIESEL EXHAUST FUMES

15 Diesel exhaust fumes can cause cancer, WHO says

SEE PAGE 6

SEE PAGE 3

COMMENTARY

7 deadly sins: Environmental due diligence 2.0 in a post-recession economyDaniel Lavoie and Andrew Perel of Michelman & Robinson give helpful advice for buyers, sellers and lenders of commercial property to perform their environmental due diligence.

COMMENTARY

Secondary and cumulative impacts analysis in the environmental context for assessing environmental damageMichelle Diffenderfer of Lewis Longman & Walker in West Palm Beach, Fla., and Chelsea Jones, a law student at St. Thomas University School of Law, discuss the various federal environmental statutes that can affect a court’s ruling on natural resource permitting.

CONTINUED ON PAGE 16

SPENT NUCLEAR FUEL

Federal Circuit upholds $160 million judgment against DOE over nuclear wasteA U.S. district court in Washington has finally arrived at the correct damages award to be paid to a number of energy providers that sued the Department of Energy for breaching a decades-old promise to accept and dispose of spent nuclear fuel, a federal appeals court has ruled.

REUTERS/Kevin Lamarque

Yankee Atomic Electric Co. et al. v. United States, Nos. 11-5020, 11-5021, 11-5022, 11-5027, 11-5028 and 11-5029, 2012 WL 1759983 (Fed. Cir. May 18, 2012).

The case has bounced back and forth between the Court of Federal Claims and the Federal U.S. Circuit Court of Appeals several times.

The federal appeals court now affirms the trial court’s damage award of nearly $143 million to three nuclear energy companies. The panel

© 2012 Thomson Reuters2 | WESTLAW JOURNAL n ENVIRONMENTAL

Westlaw Journal EnvironmentalPublished since December 1980

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Westlaw Journal Environmental (ISSN 2155-5850) is published biweekly by Thomson Reuters.

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TABLE OF CONTENTS

© 2010 Thomson Reuters2 | WESTLAW JOURNAL n ENVIRONMENTAL

TABLE OF CONTENTS

Spent Nuclear Fuel: Yankee Atomic Elec. Co. v. United StatesFederal Circuit upholds $160 million judgment against DOE over nuclear waste (Fed. Cir.) .........................1

Commentary: By Daniel R. Lavoie, Esq. and Andrew J. Perel, Esq., Michelman & RobinsonWhat every buyer, seller, and lender should know ............................................................................................ 3

Commentary: By Michelle Diffenderfer, Esq., Lewis, Longman & Walker, and Chelsea Jones, St. Thomas University School of LawSecondary and cumulative impacts analysis in the environmental context for assessing environmental damage ......................................................................................................................................6

News in Brief ......................................................................................................................................................9

Radiation Contamination: Cook v. Rockwell Int’l Corp.Supreme Court shouldn’t review Rocky Flats radiation case, U.S. says (U.S.) .............................................. 10

RCRA: Town & Country Co-Op v. Akron Prods. Co.Ohio federal judge OKs 1 of 4 RCRA claims in TCE case (N.D. Ohio)...............................................................11

Clean Water Act: Berberian v. Town of AndoverMassachusetts town must face citizen suit over water tank discharges (D. Mass.) .......................................12

Formaldehyde (Trailers): In re FEMA Trailer Formaldehyde Prods. Liab. Litig.Settlement near over Hurricane Katrina homeless illnesses (E.D. La.) ..........................................................13

Natural Gas Drilling: Strudley v. Antero Res. Corp.Colorado court dismisses water contamination suit against gas drillers (Colo. Dist. Ct.) .............................14

Diesel Exhaust FumesDiesel exhaust fumes can cause cancer, WHO says ........................................................................................15

Case and Document Index ............................................................................................................................... 17

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JUNE 20, 2012 n VOLUME 32 n ISSUE 24 | 3© 2012 Thomson Reuters

COMMENTARY

7 deadly sins: Environmental due diligence 2.0 in a post-recession economy

Whateverybuyer,seller,andlendershouldknowBy Daniel R. Lavoie, Esq. and Andrew J. Perel, Esq. Michelman & Robinson

Caveat emptor! How often have you ever bought a used car without first taking it out for a test drive and looking under the hood? Never? OK, good. Then why would you buy a piece of commercial real estate without doing the same thing? The answer, again, should be never. Yet far too many investors either overlook or perform shoddy pre-purchase investigations that could expose them, and their lenders, to environmental liabilities. This article provides seven common environmental due diligence “sins,” or mistakes, and how buyers, sellers and lenders should protect themselves to ensure smooth, error-free and sustainable transactions.

In emerging from the doldrums that gripped the commercial real estate markets since 2008, buyers, sellers and lenders are now embarking on what has been called “Commercial Real Estate 2.0.” Although the credit markets are loosening up, lenders are still very cautious about environmental issues complicating their underwriting process and subjecting them to potential liabilities as a secured creditor. With the strict, retroactive joint and several nature of environmental risks, buyers and sellers also continue to be concerned about post-closing liabilities, and who will bear those burdens.

To address these competing and often conflicting interests, this commentary focuses on three distinct areas of environmental due diligence: legacy liabilities, operational liabilities and strategic liabilities. Simply checking the box is not enough. All aspects of a property’s legacy risks must be reviewed, including past industrial activities, on-site landfills, gas stations, dry cleaners, and underground storage tanks must be identified and qualified from a historic risk perspective.

Similarly, current risks from an operational perspective must be analyzed, including environmental permits, and may require an environmental audit be performed. Finally, strategic considerations, including exit strategies for investors, must be considered and factored into long-term business planning.

By taking a comprehensive and holistic view of environmental risks, from the macro, 50,000-foot strategic level, down to the

micro, operational level, we can paint a complete picture of the risks for all parties involved. So don’t just check the box, avoid these common mistakes and you will be happy you did.

MISTAKE 1: WAITING UNTIL THE LAST MINUTE

Effective environmental due diligence starts with enough lead time to get the necessary investigations performed to allow you the

Daniel R. Lavoie (L) and Andrew J. Perel (R) are partners at Michelman & Robinson in New York. They specialize in all aspects of environmental law, including due diligence, regulatory compliance, risk management, insurance and litigation.

Performing comprehensive environmental due diligence saves all parties to a real estate

transaction time, money and future headaches.

flexibility to address any issues that come up prior to closing. If the investigations are performed early enough in the transaction process, the information gathered can be used by all parties to negotiate remediation agreements, escrow hold-backs, indemnity agreements, insurance, price reductions and other deal mitigation techniques that bring more certainty to a deal.

Depending on the number of properties in a transaction, it can take several weeks to several months to conduct a comprehensive investigation. It can take weeks to wade through old environmental reports and other documents.

MISTAKE 2: RELYING ON OUTDATED INFORMATION

Hiring an experienced environmental consultant to perform updated Phase I environmental site assessments that comply with the most current ASTM International standards is an essential part of any due diligence plan. Phase I reports are deemed “stale” after one year and should always be updated no later than 180 days before the transaction.

4 | WESTLAW JOURNAL n ENVIRONMENTAL © 2012 Thomson Reuters

Commissioning updated Phase I reports allows a buyer, and by extension its lender, to satisfy the Environmental Protection Agency’s “All Appropriate Inquiry” rules to qualify as a bona fide prospective purchaser and enjoy certain “innocent purchaser” protections. Failure to satisfy the AAI rules subjects the buyer and lender to Superfund liability as an owner or operator of a facility and is easily avoided with a proper due diligence protocol.

MISTAKE 3: RELYING ON UNRELIABLE INFORMATION

Similar to Mistake 2, relying on non-standard or commodity-type environmental reviews can lead to disastrous consequences. To achieve compliance under AAI rules and analogous state regulations, environmental reports must comply with the latest ASTM standard for Phase I reports (ASTM 1527-05).

In order to save on costs, some clients will simply commission a “transaction screen” or “desktop review” and simply check the box. These assessments generally consist of a simple records review and a cursory inspection of the site usually conducted by a low-level and inexperienced staff member. These types of reports are rife with potential problems and may miss key historical and operational issues that would otherwise be flagged.

MISTAKE 4: FAILING TO UNDERSTAND STATE-SPECIFIC REQUIREMENTS

The AAI rules only address federal regulations, and, as such, a comprehensive due diligence protocol must also address state-specific analogs to the Superfund law. For example, in New Jersey certain state environmental regulations require prospective purchasers to take AAI a few steps farther in order to satisfy the innocent-purchaser defenses. This may include performing a “preliminary assessment and site investigation” that calls for a more exhaustive history of the site operations, listing of all raw materials ever stored at the

site, current and past wastewater discharges (sanitary and industrial), an interpretation of the aerial photographic history of the site, and an evaluation of the protectiveness of past remedial actions.

In addition, buyers and lenders are looking more carefully at certain states that impose so-called environmental “super liens” that allow state agencies to have first position or super-priority liens against a property for which environmental funds have been expended regardless of any prior liens recorded on the property. Numerous states

For example, in-depth investigations into building conditions such as lead paint, asbestos, PCBs, radon and mold are typically beyond the scope of a standard Phase I. Other building features that increase demolition and/or development costs include mercury and PCBs in electrical switches and lights, radioactive components of emergency-exit signs, and corroded or clogged sewer lines, which may leave openings for industrial waste to contaminate the subsurface.

Previously unknown underground storage tanks, drywells or septic systems can lie in wait until discovered during renovations. PCBs were historically used in many things besides transformers — paint, window caulking and electrical insulation among them. Dealing with all of these things costs money, and identifying as many of them as you can as far ahead of time as possible is a good idea.

In addition, a hot-button topic in recent years is vapor intrusion, which is not currently part of a standard Phase I assessment. In June 2010, ASTM issued E 2600-10, Standard Guide for Vapor Encroachment Screening on Property Involved in Real EstateTransactions, for assessing vapor intrusion issues. In the standard, ASTM defined a “vapor encroachment condition,” or VEC, as the presence or likely presence of vapors from “chemicals of concern” in the subsurface of a property caused by the release of vapors on or near the property. Some commentators suggest this standard will become part of a standard Phase I report before too long.

The potential for a VEC is important from both an operational and strategic perspective. Knowing the potential need to address indoor air quality problems, including decisions regarding the need for active or passive vapor barriers and other mitigation measures, can have a significant impact on building renovations and other operational costs.

Similarly, compliance with environmental laws related to operational risks, such as the Clean Air Act and Clean Water Act, or the risk of third-party toxic-tort and property damage claims, are critical for assessing the overall environmental risks associated with any given site.

In addition, in those instances where site development is planned, environmental regulatory compliance must be reviewed. Appropriate reviews of potential wetlands,

Waiting until the last minute

Relying on outdated information

Relying on unreliable information

Failing to understand state-specific requirements

Failing to look beyond the Phase I report

Failure to obtain an accurate opinion of probable costs

Overlooking mitigation tools to help manage environmental risks

The 7 deadly sins

Although the credit markets are loosening up, lenders are still very cautious about environmental issues

complicating their underwriting process and subjecting them to potential liabilities as a secured creditor.

currently have super-lien laws in effect, including Connecticut, Hawaii, Louisiana, Maine, Massachusetts, Michigan, New Hampshire, New Jersey and Wisconsin. As such, borrowers and lenders alike must be mindful of this added layer of potential risk that could impair the value of the underlying asset.

MISTAKE 5: FAILING TO LOOK BEYOND THE PHASE I REPORT

A standard Phase I report provides useful information for evaluating recognized environmental conditions at a site, but a Phase I scope is not all encompassing.


zoning, storm water, floodplain and sewer capacity issues may be required, along with the procurement of both state and federal environmental permits. Final development costs often are dependent on how these factors are resolved. Such factors as traffic and noise considerations may also be required in the form of an environmental impact statement. Identifying these “soft” environmental issues, and the costs associated with them, before you close can save many headaches after you close.

MISTAKE 6: FAILURE TO OBTAIN AN ACCURATE OPINION OF PROBABLE COSTS

One critical element of understanding overall environmental risk is developing an accurate representation of probable future costs. Too often environmental consultants identify potential environmental problems without quantifying the potential downside costs.

Any qualified environmental consultant should be able to provide a reasonable range of estimated costs based on a probability

analysis using a best-case, mid-case and worst-case range. Buyers, sellers and lenders will then use those estimates to negotiate remediation escrows to fund the future work. Lenders will generally require from 125 percent to 150 percent of the worst-case estimate to be held in escrow to account for potential cost overruns, which inevitably occur during the course of investigation and remediation.

form of a remediation agreement is also an essential tool to obtain certainty on the various parties’ future obligations.

As mentioned above, escrow agreements are usually necessary when known investigation and remediation costs are expected. Also, where known environmental risks are identified, indemnity agreements and/or environmental liability insurance are other tools to mitigate those risks.

Lastly, certain state agencies have programs, such as dry cleaning or underground storage tank remediation funds, to assist property owners with the cost of investigation and cleanup of known contamination. These state-sponsored funds should be investigated and used, as most also provide liability protections as well.

These seven deadly sins are just the tip of the iceberg when it comes to environmental risks. Qualified environmental experts, including consultants and attorneys, who know all the intricacies of federal, state and local regulations should always be engaged when contemplating any commercial real estate transactions. Such experts will always be beneficial to buyers, sellers and lenders alike and will allow all parties to avoid the seven deadly sins of environmental due diligence. WJ

Numerous states currently have “super lien” laws in effect, including Connecticut, Hawaii, Louisiana, Maine, Massachusetts, Michigan, New Hampshire, New Jersey and Wisconsin.

MISTAKE 7: OVERLOOKING MITIGATION TOOLS TO HELP MANAGE ENVIRONMENTAL RISKS

Numerous tools are available to buyers, sellers and lenders to mitigate risks associated with environmental risks identified during the due diligence process. A starting point is obtaining accurate representations and warranties from the seller as to the environmental condition of the property and compliance with environmental laws. Obtaining covenants to conduct future investigations and necessary cleanup in the

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Spanning the spectrum of asbestos liability litigation, focal areas of this publication include damages, insurance coverage, Chapter 11 proceedings of asbestos product manufacturers, and significant discovery actions.

Call your West representative for more information about our print and online subscription packages, or call 800.328.9352 to subscribe.


COMMENTARY

Secondary and cumulative impacts analysis in the environmental context for assessing environmental damageBy Michelle Diffenderfer, Esq., Lewis, Longman & Walker, and Chelsea Jones, St. Thomas University School of Law

Michelle Diffenderfer (L) is a shareholder in the law firm of Lewis, Longman & Walker. Her practice focuses on environmental, water, natural resources and land use law, specifically, permitting and enforcement. She chairs the firm’s natural resources and Everglades practice groups and is the executive shareholder for the West Palm Beach, Fla., office. Chelsea Jones (R) is a third-year law student at St. Thomas University School of Law. She is focusing on environmental law and can be reached at [email protected].

Though once rooted in common-law nuisance theory, the protection of natural resources has expanded into multiple environmental regulations administered by several federal agencies. Today, land development inevitably triggers those regulations. Many regulations seem to overlap or contradict each other, as is the case with the assessment of “cumulative impacts” and “secondary/indirect impacts” under the National Environmental Policy Act, 42 U.S.C. § 4321; the Endangered Species Act, 16 U.S.C. § 1531; and the Clean Water Act, 33 U.S.C. § 1311.

PURPOSE OF IMPACT ANALYSIS

NEPA, ESA and CWA are each the result of specific and unique congressional goals. Because the objectives of each act are different, the impact analysis for each is also different. NEPA’s impact analysis is designed to ensure agencies make procedurally informed decisions. The ESA and CWA are substantive in nature and are designed to protect species and their habitat and water quality and wetlands, respectively.

Under each act the federal action agency performs the analysis, and for the ESA and CWA if that analysis reflects negative impacts

that are not or cannot be appropriately minimized or mitigated, the proposed activity may be denied. The analyses are both administrative and legal in nature.

NEPA was developed to establish national environmental policy and goals and provides a procedural process for implementing those policies and goals. NEPA ensures the agencies consider the environmental consequences of their proposed action. An agency is not constrained by NEPA when making its final project decision, however. NEPA ensures an informed agency decision but not necessarily the least impactful. NEPA requires only that “the agency take a ‘hard look’ at the environmental consequences of the proposed action” without impinging an agency’s authority to render final project decisions.1

ESA is a substantive statute designed to conserve endangered and threatened species. 16 U.S.C. §1531(b). Thus, ESA’s impact analysis aims to prevent agencies

NEPA requires only that “the agency take a ‘hard look’ at the environmental consequences of the

proposed action” without impinging an agency’s authority to render final project decisions.

from acting in ways that may cause a listed species to become extinct. The Endangered Species Act requires the secretary of the Interior to implement protective measures authorized by the ESA and requires all federal agencies to confer with the secretary to ensure that actions “authorized, funded, or carried out by such agency … [are] not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined by the secretary.” 16 U.S.C. § 1536(a)(2). This consultation is known as Section 7 consultation.

Also a substantive statute, the Clean Water Act was enacted to “restore and maintain the chemical, physical, and biological integrity of the nation’s waters.” 33 U.S.C. § 1251. The CWA impacts analysis is intended to protect U.S. waters while also recognizing the need to consider endangered species requirements and protect critical habitat in compliance with 40 C.F.R. 230.10. The authority to issue pollutant discharge permits is split between the U.S. Army Corps of Engineers and the Environmental Protection Agency. The Corps issues permits for discharges of “dredged or fill material.” 33 U.S.C. § 1251(a).

However, the EPA retains oversight authority for the dredge and fill program through its own regulations, known as the 404(b)(1) guidelines. 40 C.F.R. Part 230. The Code of Federal Regulations requires the Corps perform impacts analysis on


aquatic resources during the permit review process. The factual determinations are used to evaluate compliance with Section 230.10, which generally prohibits permitting discharge of dredged or fill material if it degrades water, adversely impacts habitat or otherwise threatens the continued existence of a listed species.

Additionally, the Corps must evaluate cumulative impacts — the collective effect of piecemeal changes over time — during the Corps’ public interest review, 33 C.F.R. 320.4(a), which focuses on impacts to the public interest. If in the Corps’ overall analysis the proposed activity does not meet the 404(b)(1) guidelines, degrades or adversely impacts water quality or habitat, or does not meet the public interest criteria, the project will be denied.

CUMULATIVE IMPACTS

NEPA

Cumulative impact is “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (federal or non-federal) or person undertakes such other actions.” Cumulative impacts can result from individually minor, but collectively significant, actions taking place over a period of time.” 40 C.F.R. 1508.7.

It is noteworthy that “future” does not necessarily mean the immediate future, but can include impacts from projects that might not be built for more than a decade. Am. Canoe Ass’n v. White, 277 F. Supp. 2d 1244 (N.D. Ala. 2003).

Under the broad definition of cumulative impact, agencies must consider all “reasonably foreseeable” future impacts, but are not required to consider speculative risks or impacts. CityofShoreacresv.Waterworth,332 F. Supp. 2d 992, 1007 (S.D. Tex. 2004). Instead, agencies must evaluate whether there is “a sufficient likelihood that an action will occur to render that action foreseeable.” City of Oxford v. FAA, 428 F.3d 1346, 1356 n.22 (11th Cir. 2005). Additionally, agencies have special discretion when determining the extent and effect of cumulative impacts. Kleppev.SierraClub,427 U.S. 390, 410 (1976).

ESA

Cumulative effects/impacts are defined for the purposes of the Endangered Species Act

as “those effects of future state or private activities, not involving federal activities, that are reasonably certain to occur within the action area of the federal action subject to consultation.” 50 C.F.R. 402.02. Unlike under the National Environmental Policy Act, cumulative effects under ESA do not include federal activities. The rationale for this difference is that any future federal agency action will be evaluated during the permitting process, and future activities reviewable as cumulative impacts under ESA are more limited because they must be “reasonably certain to occur” (for example, more than a mere possibility).2

The U.S. Fish and Wildlife Service does account for some unpermitted future federal activities in its impacts analysis when establishing the environmental baseline even though such activities are not part of its impact assessment. “The environmental baseline includes the past and present impacts of all federal, state, or private actions and other human activities in the action area, the anticipated impacts of all proposed federal projects in the action area that have already undergone formal or early Section 7 consultation, and the impact of state or private actions which are contemporaneous with the consultation in process.” 50 C.F.R. 402.02.

Section 7 refers to the section of ESA that requires the action agency to initiate consultation with FWS on projects that may affect endangered or threatened species or their habitat.

When evaluating the potential effects of a project on a protected species, FWS assesses “the direct and indirect effects of an action on the species or critical habitat, together with the effects of other activities that are interrelated or interdependent with that action that will be added to the environmental baseline.” 50 C.F.R. 402.02. By doing this comparative analysis the FWS will be able to determine if there are additional habitat impacts that need to be minimized and/or mitigated by the acting agency. The environmental baseline is used to determine

what impacts are new or different due to the project under consultation.

CWA

The Corps must consider cumulative effects during its public interest review, 33 C.F.R. 320.4, and 404(b)(1) guidelines review. Cumulative impact means “changes in an aquatic ecosystem that are attributable to the collective effect of a number of individual discharges of dredged or fill material. Although the impact of a particular discharge may constitute a minor change, the cumulative effect of numerous such piecemeal changes can result in a major impairment of the water resources and interfere with the productivity and water quality of existing aquatic ecosystems.” 40 C.F.R. 230.11(g)(1).

As one court noted, “CWA regulations appear to define ‘cumulative impacts’ in a different and more narrow way [than under NEPA].” Utahans for Better Transp. v. U.S.Dep’t of Transp., 305 F.3d 1152, 1191 (10th Cir. 2002). Though “cumulative impact” is more narrowly defined under CWA than under NEPA, it is unclear whether the Corps is required to consider future projects or federal activities.

Section 230.10(c) requires the Corps to consider whether “the dischargeof dredged

The U.S. Fish and Wildlife Service does account for some unpermitted future federal activities in the impacts analysis when establishing the environmental baseline even though

such activities are not part of its impact assessment.

or fill material [pursuant to a 33 U.S.C. § 1344 permit] will cause or contribute to significant water degradation, not the effect of any completed project.” 40 C.F.R. 230.10(c)(3).

Thus, in the CityofShoreacresv.Waterworth, 420 F.3d 440, 449 (5th Cir. 2005), the court reasoned that because deepening the channel would not result in discharge of dredged or fill material it was “not an abuse of discretion for the Corps to construe the CWA and its regulations as not requiring the Corps to consider any future deepening of the Houston Ship Channel as an adverse environmental consequence of issuing a dredge and fill permit to the Port.”

Regardless, such projects are frequently included because the NEPA review (which


does consider known future projects) is used to satisfy the Corps’ cumulative impacts analysis obligations under CWA. Consequently, the Corps, for purposes of the cumulative impacts analysis, does distinguish dredging and filling impacts from operational impacts.

The Clean Water Act has a narrower scope of “reasonable” cumulative impact than NEPA. The guidelines state cumulative effects are:

attributable to the discharge of dredged or fill material in waters of the United States should be predicted to the extent reasonable and practical. The permitting authority shall collect information and solicit information from other sources about the cumulative impacts on the aquatic ecosystem. This information shall be documented and considered during the decision-making process concerning the evaluation of individual permit applications, the issuance of a general permit, and monitoring and enforcement of existing permits.

40 C.F.R. 230.11(g)(2).

Though this definition is not qualified by the word “certain,” as in the Endangered Species Act regulations, the CWA regulations do qualify what is considered reasonable cumulative impact to those that are practical. SeeWyo.OutdoorCouncilv.U.S.ArmyCorpsofEng’rs, 351 F. Supp. 2d 1232, 1257 (D. Wyo. 2005).

SECONDARY/INDIRECT IMPACTS

NEPA

Under NEPA action agencies are required to consider and discuss the indirect, or secondary, environmental effects of their actions. Under NEPA indirect impacts are those:

which are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable. Indirect effects may include growth-inducing effects and

other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems.

40 C.F.R. 1508.8(b).

Somewhat unclear, the definition leaves room for agency and judicial discretion, but the phrase “reasonably foreseeable” should remove from review the effects of an action too remote or speculative. Shoreacres, 420 F.3d 440.

If no causal relationship exists between the proposed action and the indirect effect, courts will not require consideration of the effect. See Fla. Wildlife Fed’n v.Goldschmidt, 506 F. Supp. 350 (S.D. Fla. 1981). Additionally, the U.S. Supreme Court has ruled that agencies are not obligated to consider indirect impacts outside their jurisdiction/control. Dep’t ofTransp.v.Pub.Citizen,541 U.S. 752 (2004).

The U.S. District Court for the Southern District of Florida held that PublicCitizendid not apply because the Corps had jurisdiction over future phases of the proposed biotechnology research park and required the Corps to develop an impact statement addressing growth-inducing effects of the project. Fla.WildlifeFed’nv.U.S.ArmyCorpsof Eng’rs, 401 F. Supp. 2d 1298 (S.D. Fla. 2005). Therefore, secondary and indirect impacts within an agency’s control or with a causal relationship to the proposed action will need to be considered.

ESA

As discussed previously, under ESA, the Fish and Wildlife Expert determines baseline conditions for the action area. The baseline is needed to compare other past, present and future impacts with the project’s effects.

Using the baseline the FWS analyzes “the effect of the action,” which is defined as “the direct and indirect effects of an action on the species or critical habitat, together with the effects of other activities that are interrelated or interdependent with that action, that will be added to the environmental baseline.” 50 C.F.R. 402.02.

“Direct effects” are generally those caused by the action and occur at the same time and place.3 “Indirect effects are those that are caused by the proposed action and are later in time, but still are reasonably certain to occur.”4 Under ESA, indirect impacts

The NEPA analysis is the broadest because NEPA

is procedural and designed to ensure informed decision-making.

The Endangered Species Act is aimed at regulating private and state impacts above the baseline, while the Clean Water Act

concerns the impacts caused by construction of a project.

must be “reasonably certain to occur,” while under NEPA they need only be “reasonably foreseeable.”

However, similar to the NEPA analysis, the scoping of indirect impacts under ESA may include other federal actions that have not undergone Section 7 consultation (not a part of the baseline) but would result from the action under consideration.5

Additionally, the FWS must review interrelated and interdependent actions. “Interrelated actions are those that are part of a larger action and depend on the larger action for their justification.” 50 C.F.R. 402.02. “Interdependent actions are those that have no independent utility apart from the action under consideration.” Id. If the activity in question would occur regardless of the proposed action it is not interrelated or interdependent.6 The interrelated or interdependent activities are then weighed against the proposed action and vice versa.

CWA

Under the Clean Water Act, the Corps is required to consider secondary/indirect impacts during the 404(b)(1) guidelines review. 40 C.F.R. 230.11(h)(1). The guidelines define secondary impacts as “effects on an aquatic ecosystem that are associated with a discharge of dredged or fill materials, but do not result from the actual placement of the dredged or fill material”. Id. The guidelines list examples of secondary effects such as “fluctuating water levels in an impoundment and downstream associated with the operation of a dam.” 40 C.F.R. 230.11(h)(2).

Unlike NEPA, secondary impacts under the guidelines do not extend beyond the aquatic ecosystem. Ohio Valley Envtl. Coal. v. U.S.Army Corps of Eng’rs, 479 F. Supp. 2d 608 (S.D. W. Va. 2007). An argument exists that the scope of the Corps’ secondary impacts analysis under the CWA is restricted to


impacts that will result from the discharge of dredged or fill material from projects currently under review. Though no case law is on point with this issue, it appears that because both cumulative impacts and secondary impacts are considered under the guidelines to determine compliance with 40 C.F.R. 230.10, the same limitation expounded in Shoreacres would apply to secondary impacts. Therefore, any future related project not directly resulting from current dredge and fill activity will be assessed during the permitting process for the future project.

CONCLUSION

As you can see, the goals of the cumulative and secondary/direct impacts analyses under each statute are distinct and when applied can lead to quite different results. The NEPA analysis is the broadest because NEPA is procedural and designed to ensure informed decision-making. ESA is aimed at regulating private and state impacts of

development on wildlife above the baseline, while the CWA concerns the impacts caused to navigable U.S. waters by construction of a project. However, the analysis under the CWA is less clear than under ESA.

The ESA’s implementing regulations enumerate standards/parameters for the impacts analysis that are absent from the CWA’s regulations. Hence, the conundrum that the practitioners in this field are facing now is that more of these analyses are under challenge in the courts.

Today there are few cases that draw distinctions between the impacts analysis under the CWA versus the other two statutes. Generally courts seem to blend the impacts analysis under NEPA with that of CWA, which is understandable given that a full consideration under NEPA for the most part includes the considerations required by the 404(b)(1) guidelines and the Corps’ public interest review. However, the result of the analysis can be quite different, leading to a variety of effects for the permittee. WJ

NOTES1 North Buckhead Civic Ass’n v. Skinner, 903F.2d1533,1541(11thCir.1990)(citingto Druid Hills Civic Ass’n v. Fed. Highway Admin.,772F.2d700,709 (11th Cir. 1985)); Robertson v. Methow Valley Citizens Council, 109 S. Ct. 1835, 1846 (1989)(“NEPA merely prohibits uninformed — ratherthanunwise—agencyaction.”);Sierra Club v. U.S. Army Corps of Eng’rs,295F.3d1209,1214(11thCir.2002)(“[NEPA]is not a substantive environmental statute which dictates a particular outcome ifcertainconsequencesexist” (emphasisadded).).

2 See Preamble to Final Joint ConsultationRules, 51 Fed. Reg. 19,926, 19,933 (1986).

3 See U.S. Fish & Wildlife Serv. & Nat’l MarineFisheriesServ.,EndangeredSpeciesConsultationHandbook:ProceduresforConductingConsultationand Conference Activities under Section 7 of theEndangeredSpeciesAct(March1998,Final),4-25.

4 Id.

5 SeeConsultationHandbookat4-27through4-28.

6 See ConsultationHandbookat4-26.

NEWS IN BRIEF

GAS COMPANY SETTLES CAA VIOLATIONS FOR $4 MILLION

Colorado-based QEP Field Services Co. will pay $4 million to resolve alleged violations of the Clean Air Act at five natural gas compressor stations on Indian lands in Utah, the U.S. Department of Justice said in a May 16 statement. The company, formerly Questar Gas Management Co., will pay a $3.65 million civil penalty plus $350,000 into a Tribal Clean Air Trust Fund for violations that occurred on the Uintah and Ouray reservations. Under a Utah federal court consent decree QEP will also reduce its emissions at the compressor stations by removing certain equipment, installing additional pollution controls and replacing its natural-gas-powered systems with compressed air control systems. The compressor stations contribute to air pollution by emitting hazardous air pollutants, volatile organic compounds and nitrogen oxides, the Justice Department said.

United States v. Questar Gas Management Co., No. 08-00167, consent decree filed (D. Utah May 15, 2012).

PIPELINE COMPANIES TO PAY $1 MILLION AFTER SPILLS

The owners and operators of a natural gasoline pipeline will pay more than $1 million in fines to settle alleged violations of the Clean Water Act under a consent decree filed in Nebraska federal court. According to a May 29 Environmental Protection Agency statement, the violations by Mid-America Pipeline Co. and Enterprise Products Operating LLC were connected to three pipeline spills in Iowa, Kansas and Nebraska between 2007 and 2011. The companies agreed to spend $200,000 to improve their reporting of spills and to prevent external threats to the pipeline by notifying local agencies, contractors and excavators of pipeline locations and depths. The EPA said the companies will also spend $200,000 to relocate, cover or replace pipeline segments; install new remote shutoff values; and build new fences or concrete barriers.

United States v. Enterprise Products Operating LLC et al., No. 12-00190, consent decree filed (D. Neb. May 29, 2012).

PLASTICS PRODUCER TO CUT POLLUTION, PAY $1 MILLION

Sabic Plastics US LLC and subsidiary Sabic Innovative Plastics Mt. Vernon will pay a $1 million civil penalty and improve equip-ment leak detection at two chemical manufacturing facilities in Indiana and Alabama to resolve alleged violations of the Clean Air Act, the U.S. Environmental Protection Agency said May 31. Emissions of hazardous air pollutants directly from leaking equipment, also known as fugitive emissions, can be controlled through enhanced work practices, including more frequent monitoring, the EPA statement said. A consent decree filed in Indiana federal court also requires Sabic to install low-emission valves or use valve packing material to reduce the likelihood of future leaks of hazardous air pollutants. These and other emission controls will cost an estimated $4 million, according to the EPA statement. Sabic will also invest an additional $1.3 million to control emissions from certain process vents.

United States v. Sabic Innovative Plastics US LLC et al., No. 12-76, consent decree filed (S.D. Ind. May 31, 2012).


RADIATION CONTAMINATION

Supreme Court shouldn’t review Rocky Flats radiation case, U.S. saysThe Obama administration has asked the nation’s highest court not to review a plutonium contamination case brought by property owners living near the former Rocky Flats nuclear weapons plant in Colorado.

Cook et al. v. Rockwell International Corp. et al., No. 10-1377, brief filed (U.S. May 24, 2012).

In response to a Supreme Court request, the government argues in a friend-of-the-court brief that the high court should not grant certiorari in the case. U.S. Solicitor General Donald B. Verrilli Jr. said the 10th U.S. Circuit Court of Appeals correctly held that the Price-Anderson Act, 42 U.S.C. § 2210, requires a plaintiff to prove that a nuclear incident has occurred to maintain a federal cause of action for damages arising from the release of radioactive materials.

Congress passed Price-Anderson in 1957 to protect the public and encourage development of the atomic energy industry by limiting the civil liability of nuclear power plant operators and providing federal funds to help pay for damage caused by nuclear accidents.

The law was amended in 1988 to extend federal court jurisdiction to all nuclear incidents, not just an extraordinary nuclear occurrence.

The statute not only covers injury to property but includes bodily, injury, sickness or death from a “nuclear incident.”

A court hearing a Price-Anderson case must derive its decision from the law of the state in which the nuclear incident occurred. The state law cannot be inconsistent with the aims of the federal law, however.

In their certiorari petition, the Colorado landowners argue the 10th Circuit erred by requiring a showing of physical injury to the property to establish a cause of action under

Price-Anderson rather than mere exposure to plutonium and diminished property value.

Several neighbors of the Rocky Flats facility filed a class-action suit in the U.S. District Court for the District of Colorado in 1990, seeking damages for the alleged decrease in the value of their properties.

Although the federal government owned Rocky Flats, Dow Chemical and Rockwell International operated it at different times as contractors for the Department of Energy and made nuclear weapons components that contained plutonium.

The facility was closed in 1989.

In 2006 a jury found Rockwell and Dow liable for nuisance and trespass for the alleged contamination of more than 12,000 Colorado properties.

Under Colorado law, a plaintiff bringing a nuisance claim must establish an interference with the use and enjoyment of his property that is “substantial and unreasonable.”

The jurors determined the companies caused the class members to be exposed to plutonium and put them at an increased risk of developing health problems.

The District Court awarded $725 million in compensatory damages and $200 million in punitive damages.

The defendants appealed to the 10th Circuit, which reversed and remanded.

The appeals court said it must construe the law as if the Colorado Supreme Court were interpreting it. Without some supporting scientific evidence, the state high court would not be likely to permit recovery premised on a finding that a landowner’s fear of health risks amounts to substantial and unreasonable interference, the panel said.

The 10th Circuit also said the plaintiffs failed to prove physical damage to the property as part of their separate trespass claim.

The property owners then petitioned the Supreme Court for review.

They argue that the 10th Circuit erred when it interpreted the Price-Anderson Act to impose a federal standard of harm despite the fact that the law says the rules for decisions “shall be derived from the law of the state in which the nuclear incident involved occurs.”

The high court asked for the government’s view on whether the court should grant review. Solicitor General Verrilli has responded in a friend-of-the-court brief that Price-Anderson was designed to safeguard the nuclear industry from liability under state laws that are more expansive than federal law.

Additionally, the 10th Circuit correctly held that a plaintiff must establish some physical injury to the property to seek damages under the statute, the solicitor general says.

Therefore, the federal government says the writ of certiorarishould be denied. WJ

Related Court Document: Amicus brief:2012WL1883084

The Price-Anderson Act not only covers injury to

property but includes bodily, injury, sickness or death

from a “nuclear incident.”


RCRA

Ohio federal judge OKs 1 of 4 RCRA claims in TCE caseAn Ohio manufacturer that allegedly contaminated groundwater while operating a plant it later sold must face an adjacent landowner’s Resource Conservation and Recovery Act claim, but RCRA claims against the site’s current owner cannot proceed, a federal judge has ruled.

Town & Country Co-Op Inc. v. Akron Products Co. et al., No. 1:11 CV 2578, 2012 WL 1668154 (N.D. Ohio May 11, 2012).

The plaintiff sufficiently pleaded a claim that the former owner, Akron Products Co., allegedly unlawfully disposed of the toxic chemical trichloroethylene in violation of RCRA, U.S. District Judge Dan Aaron Polster of the Northern District of Ohio said.

But because the complaint contained no allegations that the current owner, HAH Investments of Medina LLC, was ever actively involved in handling hazardous materials, the judge dismissed a similar claim against HAH.

The judge also held that the plaintiff, Town & Country Co-Op Inc., could not proceed against either Akron Products or HAH on illegal open-dumping claims.

According to the opinion, Akron Products had operated a manufacturing plant in Seville, Ohio, adjacent to Town & Country’s property, from 1976 to 2005. For at least part of that time Akron Products used TCE in its manufacturing operations.

After groundwater testing of Town & Country’s property revealed TCE contamination in concentrations exceeding safe drinking water levels, Town & Country sued Akron Products and the site’s current owner, HAH.

The complaint alleged the defendants’ conduct posed an “imminent and substantial endangerment to health or the environment” under RCRA’s endangerment clause, 42 U.S.C. § 6972(a)(1)(B), according to the opinion.

Town & Country also alleged a RCRA claim against both defendants under Section 6972(a)(1)(A), saying the companies violated a prohibition against persons “engaged in the act of open dumping.”

Judge Polster dismissed the endangerment claim against HAH because the complaint contained no allegation that HAH ever used TCE in its operations or exerted any control over Akron Product’s waste-disposal process.

Liability under Section 6972(a)(1)(B) “attaches only to parties that were or are actively involved in waste-handling activities,” he said.

The judge allowed the same claim against Akron Products, however, pointing to allegations that the former owner used and unlawfully disposed of the TCE on its property.

Judge Polster tossed the open-dumping claims against both defendants, saying Town & Country failed to allege that either company was engaged in the act of open dumping of TCE in violation of RCRA at the time the lawsuit was filed, a requirement to plead such a claim.

Finally, the judge refused to dismiss state law claims of trespass and nuisance against both defendants.

The claims against Akron Products were not time-barred because Town & Country filed the claims within four years of discovering the groundwater contamination, Judge Polster said.

Moreover, because the complaint alleged that HAH knew about the seepage of the hazardous waste but failed to remove it, the judge refused to toss the state law claims against HAH despite its contention that it did not actively cause the groundwater contamination. WJ

Attorneys:Plaintiff: R.BenjaminFranz,Ulmer&Berne,Columbus,OhioDefendants:GregoryJ.DeGulis,McMahonDeGulisLLP,Cleveland

Related Court Document: Opinion:2012WL1668154

See Document Section B (P. 28) for the opinion.

The District Court permitted a landowner to proceed against one of two defendants on RCRA claims that TCE contamination of groundwater posed an imminent and

substantial endangerment.


CLEAN WATER ACT

Massachusetts town must face citizen suit over water tank dischargesA property owner can proceed with a Clean Water Act citizen suit accusing a Massachusetts town of discharging contaminated sediment from a drinking water supply tank without a permit, a federal judge has ruled.

Berberian claims his property contained waterways that are “waters of the United States” because they drain into a tributary of the Shawsheen River, which flows into the Merrimack River.

The town filed a motion to dismiss, saying the complaint concerned only the discharges that occurred during the three-day cleanup in November 2010, thus precluding Berberian from bringing a citizen suit.

The CWA does not permit a citizen suit for “wholly past violations.” Rather plaintiffs bringing citizen suits must make a “good-faith allegation of continuous or intermittent violation,” the order explained.

However, Berberian’s complaint is not limited to the November 2010 discharges, Judge Collings said.

Berberian alleges the supply tank overflow is connected to the town’s catch-basin system and that, because of repeated tank overfills, “thousands of gallons of water containing sediment” have been routinely discharged into waterways on his property, the judge said.

This is sufficient to meet the requirement of a good-faith allegation of a continuous or intermittent violation, he said.

Judge Collings also rejected the town’s argument that because the Massachusetts Department of Environmental Protection was already prosecuting an action against the town for the tank’s November 2010 discharges, the CWA did not allow a citizen suit.

The bar on citizen suits when a state has commenced enforcement efforts for the same violations does not apply because Berberian’s claims involve ongoing discharges, not just those that occurred in November 2010, the judge said.

“In other words, Berberian’s lawsuit is not duplicative of the state’s efforts,” he said.

Consequently, Judge Collings denied the town’s motion to dismiss. WJ

Related Court Document: Order:2012WL1866293

REUTERS/Brian Snyder

Berberian v. Town of Andover, No. 2012-10247, 2012 WL 1866293 (D. Mass. May 21, 2012).

Magistrate Judge Robert B. Collings of the U.S. District Court for the District of Massachusetts rejected arguments by the town of Andover that the plaintiff’s purported allegations of “wholly past violations” and the state’s previous commencement of corrective action deprived the federal court of jurisdiction.

Rather, the complaint asserts recurrent CWA violations, not strictly past violations, and the plaintiff’s allegations are based on alleged discharge violations that are different from those being pursued by the state, the judge said.

James Berberian, who owns property on the street in Andover where the town’s drinking water supply tank is located, filed the citizen suit.

According to Judge Collings’ order, the town pumped silt-laden water from its supply tank into the catch basins in the road during a three-day tank cleanup in November 2010. The discharged sediment flowed onto Berberian’s property.

After testing undertaken by the town revealed high levels of iron and manganese in the sludge that migrated onto Berberian’s property, the town undertook a partial cleanup of the discharges.

In February Berberian filed suit against the town, claiming that discharged sediment remains on his property. He says his own expert has found the sediment contains the heavy metals arsenic, chromium, nickel and lead.

The complaint asserts that the town violated the CWA, 33 U.S.C. § 1311, by its “unpermitted discharges of sediment, sludge and pollutants into the waters of the United States,” according to the order.

“[T]he plaintiff has met the Supreme Court standard of ‘a good-faith allegation of continuous or intermittent violation,’” the judge said.

Two men fish in the fog in the Merrimack River in Massachusetts. The plaintiff in the lawsuit says his property contained waterways that are “waters of the United States” because they drain into a tributary of the Shawsheen River, which flows into the Merrimack.


FORMALDEHYDE (TRAILERS)

Settlement near over Hurricane Katrina homeless illnessesNEW ORLEANS, May 29 (Reuters) – Negotiators are nearing a settlement in a class-action lawsuit brought by thousands of people left homeless in 2005 by Hurricanes Katrina and Rita who said they were harmed by formaldehyde when living temporarily in FEMA-provided trailers.

The manufacturers and contractors would admit to no liability or wrongdoing under terms of the settlements.

Woods estimated that the number of claims could range from 40,000 to 60,000, filed by people who lived in trailers provided by the Federal Emergency Management Agency after Katrina and Rita devastated the Gulf Coast and left thousands homeless in August and September 2005.

The settlements also would cover 14 contractors that installed, maintained or refurbished the trailers. Most of that settlement involves four companies that have agreed to pay a total settlement amount of $5 million: Shaw Environmental Inc., Fluor Enterprises Inc., CH2M Hill Constructors Inc. and Bechtel National Inc.

Other contractors would pay amounts ranging from $5,500 to $22,000, adding more than $123,000 to the total, according to court filings.

Lawyer David Kurtz, who served as liaison counsel for the contractors in the case, said contractors agree that all parties are best served by settling rather than proceeding with costly litigation.

Attorneys for the manufacturers could not be reached for comment.

If the judge grants preliminary approval to the settlements, people who lived in the homes will have until Aug. 17 to decide whether to opt out and pursue claims on their own, or until Oct. 12 to file claims to received some of the money.

The first lawsuit in the matter was filed in 2006, and many related cases in Louisiana, Mississippi and Alabama later were consolidated in federal court in New Orleans.

Manufacturers named in the April settlement proposal include Coachman Industries Inc., Frontier RV Inc., Heartland Recreational Vehicles LLC, Hy-Line Enterprises Inc., KZRV LP, Pilgrim International Inc., Play-Mor Trailers Inc., Recreation by Design LLC, R-Vision Inc., Skyline Corporation Inc., SunRay RV LLC, Thor Industries Inc., Timberland RV Co. and TL Industries Inc. WJ

(Reporting by Kathy Finn and Greg McCune;editingbyPhilipBarbara)

A plumber (far L) works on a home at a trailer site set up for victims of Hurricane Katrina. Some residents of the homes said they suffered illnesses ranging from respiratory irritation to more serious problems because of formaldehyde exposure.

REUTERS/Lee Celano

In re FEMA Trailer Formaldehyde Products Liability Litigation, No. 07-01873, motion to approve settlement filed (E.D. La. May 29, 2012).

Residents of the homes said they suffered from illnesses ranging from respiratory irritation to more serious problems, said Justin Woods, attorney for the claimants.

Formaldehyde is a colorless, flammable gas that has a distinct, pungent smell and is used in the production of paper, resins and building materials such as plywood. Exposure over a short period can lead to respiratory irritations. Longer-term exposure can lead to cancer, the Centers for Disease Control and Prevention says on its website.

If approved, the settlements would end the bulk of the lawsuits over formaldehyde in

trailers, ending an embarrassing chapter in the federal government’s response to the hurricanes.

Lawyers for trailer manufacturers and contractors who installed the trailers filed joint motions May 28 and 29 asking U.S. District Judge Kurt Engelhardt of the Eastern District of Louisiana to grant preliminary approval of settlements that would pay damages to people who lived in the trailers for varying periods after Hurricanes Katrina and Rita devastated the Gulf Coast.

They want to expand a preliminary settlement filed in April with about 20 manu-facturers that would pay $14.8 million to persons harmed by living in the trailers. It would add four more manufacturers: Forest River Inc., Gulf Stream Coach Inc., Jayco Inc. and Monaco Coach Corp.


NATURAL GAS DRILLING

The complaint asserted negligence, negligence per se, nuisance, strict liability and trespass.

The Strudleys claimed that because fracking is extremely dangerous, the defendants are strictly liable for their damages and injuries.

The lawsuit sought compensatory damages and the cost of future medical monitoring.

Antero argued that testing done on the Strudleys’ well by the Colorado Oil and Gas Conservation Commission showed that the water supply was not affected by oil and gas operations. Judge Frick then ordered the plaintiffs to make a prima facie showing of

REUTERS/George Frey

A natural gas drilling rig operates as natural gas piping rises from underground outside Rifle, Colo. The plaintiffs live in the nearby town of Silt.

Colorado court dismisses water contamination suit against gas drillersA Denver judge has dismissed claims brought by a Colorado family who allege natural gas drillers contaminated their drinking water, causing personal injury and property damage and forcing them to leave their home.

Strudley et al. v. Antero Resources Corp. et al., No. 2011CV2218, 2012 WL 1932470 (Colo. Dist. Ct., Denver County May 9, 2012).

Judge Ann Frick of the Denver County District Court ruled the plaintiffs failed to provide either sufficient data or expert analysis linking their injuries to their exposure to the defendants’ drilling activities.

William and Beth Strudley and their two children lived in Silt, Colo., within a mile of the gas and oil wells. They filed suit in 2011 against gas exploration company Antero Resources Corp., well servicer Calfrac Well Services and drilling equipment provider Frontier Drilling.

The plaintiffs said they were forced to abandon their home because toxic contamination from the drilling process known as fracking polluted their well water. Fracking requires the discharge of enormous volumes of chemical-containing fluid into the ground under extreme pressure in order to dislodge and discharge the gas.

The suit said the Strudleys’ air and water supply was contaminated by the defendants’ negligent drilling operations, including the use of improper drilling techniques and the release and burning, or flaring, of toxic and hazardous gases.

The defendants allegedly violated the Colorado Hazardous Waste Act, Colo. Rev. Stat. § 25-15-101, and the state Oil and Gas Conservation Act, Colo. Rev. Stat. § 34-60-101.

activities was a contributing factor causing the plaintiffs’ injuries or illness. He merely said “sufficient environmental and health information exists to merit further substantive discovery,” according to the order

Kurt’s affidavit said he did not have access to the air and water samples taken between the time wellhead preparations began in August 2010 and the time the Strudleys moved out of their house in January 2011.

”Plaintiffs’ sole expert is apparently not willing to go beyond a temporal connection between plaintiffs’ alleged injuries and defendants’ drilling activities,” the judge said.

Finding none of the plaintiffs’ submissions sufficient to support a prima facie case, the judge granted the defendants’ motion and dismissed the claims with prejudice. WJ

Related Court Document: Order:2012WL1932470

The plaintiffs claimed that because fracking is extremely dangerous, the defendants are strictly

liable for their damages and injuries.

exposure and causation before full discovery was initiated.

She told the plaintiffs to provide, among other things:

• The specific hazardous substances and the doses from the defendants’ activities to which the plaintiffs were exposed.

• The medical professionals who provided any health services.

• The plaintiffs’ medical records.

• Any studies, reports and analyses that contain any finding of contamination on the plaintiffs’ property.

The plaintiffs submitted reports based on an analysis of both air and water samples taken from their home, as well as maps and photos, according to the judge’s order.

Judge Frick said the plaintiffs’ physician, Dr. Thomas Kurt, did not state that exposure to hazardous substances from the defendants’


DIESEL EXHAUST FUMES

Diesel exhaust fumes can cause cancer, WHO saysLONDON, June 12 (Reuters) – Diesel engine exhaust fumes can cause cancer in humans and belong in the same potentially deadly category as asbestos, arsenic and mustard gas, World Health Organization experts said June 12.

In an announcement that caused consternation among car and truck makers, the France-based International Agency for Research on Cancer, part of the WHO, reclassified diesel exhausts from its group 2A of probable carcinogens to its group 1 of substances that have definite links to cancer.

The experts, who said their decision was unanimous and based on “compelling” scientific evidence, urged people across the world to reduce exposure to diesel fumes as much as possible.

“The (expert) working group found that diesel exhaust is a cause of lung cancer and also noted a positive association with an increased risk of bladder cancer,” it said in a statement.

The decision is a result of a weeklong meeting of independent experts who assessed the latest scientific evidence on the cancer-causing potential of diesel and gasoline exhausts.

It puts diesel fumes in the same risk category as noxious substances such as asbestos, arsenic, mustard gas, alcohol and tobacco.

Christopher Portier, chairman of the IARC working group, said the group’s conclusion “was unanimous, that diesel engine exhaust causes lung cancer in humans.”

“Given the additional health impacts from diesel particulates, exposure to this mixture of chemicals should be reduced worldwide,” he said in a statement.

PUBLIC HEALTH ISSUE

Diesel cars are popular in Western Europe, where tax advantages have encouraged technological advances and a boom in demand.

Outside of Europe and India, diesel engines are almost entirely confined to commercial vehicles. German carmakers are trying to raise awareness for diesels in the United States, where the long distances traveled on highways suit diesel engines.

IARC noted that large populations all over the world are exposed to diesel exhaust in everyday life, whether through their jobs or in ambient air.

“People are exposed not only to motor vehicle exhausts but also to exhausts from other diesel engines … (such as diesel trains and ships) and from power generators,” it said.

IARC’s director Christopher Wild said that against this background, the experts’ conclusion “sends a strong signal that public health action is warranted.”

“This emphasis is needed globally, including among the more vulnerable populations in developing countries where new technology and protective measures may otherwise take many years to be adopted,” he said in a statement.

equipment makers, fuel refiners, and emissions control technology makers have invested billions of dollars in research into technologies and strategies to reduce emissions.

“New technology diesel engines, which use ultra-low sulfur diesel fuel, advanced engines and emissions control systems, are near zero emissions for nitrogen oxides, hydrocarbons and particulate matter,” he said in a statement.

A spokeswoman for the European Auto-mobile Manufacturers’ Association said she was surprised by the move and the industry would “have to study the findings in all their details.”

“These technologies have been developed to address precisely these concerns,” Sigrid de Vries told Reuters. “The latest diesel technology is really very clean.”

After the IARC report was issued, General Motors Co. said in a statement, “We will continue with our plans to introduce new fuel-saving technologies and engines that run on alternate fuels, including diesel.”

GM said diesel engines being made today have lower sulfur content and emit much less particulate matter than engines from a few years ago.

Alan Baum, principal of Baum & Associates in Michigan, said it is unlikely that the IARC report will cause companies to change plans for expansion of diesel fuel in the United States.

About 5.5 percent of new autos, including light-duty pickup trucks, sold in the United States run on diesel, said Baum, and he said that figure is expected to rise to 8 percent or 9 percent by 2015.

IARC said it had considered recent advances in technology that had cut levels of particulates and chemicals in exhaust fumes, particularly in developed economies, but said it was not yet clear how these might translate into health effects.

“Research into this question is needed,” it said. “In addition, existing fuels and vehicles without these modifications will take many years to be replaced, particularly in less developed countries, where regulatory measures are currently also less stringent.”

IARC said gasoline exhaust fumes should be classified as “probably carcinogenic to humans,” a finding that was unchanged from its previous assessment in 1989. WJ

(ReportingbyKateKelland)

• Diesel fumes now in same risk group as asbestos, arsenic

• Exposure causes lung cancer, linked to bladder cancer

• WHO expert says public health action is needed

• Auto industry says diesel has cleaned up in recent years

DIESEL HAS CLEANED UP

For about 20 years, diesel engine exhaust was defined by IARC as probably carcinogenic to humans — group 2A — but an IARC advisory group has repeatedly recommended diesel engine exhaust as a high priority for re-evaluation since 1998.

The global auto industry had argued diesel fumes should be given a less high-risk rating to reflect tighter emissions standards.

Reacting to the decision, Allen Schaeffer, executive director of the Washington-based Diesel Technology Forum, said diesel engine and


Spent nuclear fuelCONTINUED FROM PAGE 1

“The trial court wisely foresaw that this court

could reverse its refusal to consider these costs,” the

appeals court said.

also upheld the trial court’s alternative decision to award an additional $17 million to Yankee Atomic Electric Co. for operating and maintaining a wet storage pool in 2000 and 2001.

The trial court had ruled in its latest decision that Yankee could not recover wet-pool costs, but issued an alternative finding that, if it could, the award would be $17 million.

THE DOE AGREEMENT

The Department of Energy agreed in 1983 to dispose of the spent fuel under the Nuclear Waste Policy Act.

The government remains in breach of its contractual obligation and does not envision that it will begin accepting the waste until 2020, if at all, it has said in previous court proceedings.

Yankee and several other power plants sued the government for costs they incurred storing spent nuclear fuel and high-level radioactive waste beyond the time that the DOE had promised to begin storing that waste in a permanent and secure repository.

The Court of Federal Claims ruled after a damages trial in 2004 that the companies had incurred nearly $143 million in costs to construct dry storage facilities and enlarge

storage pools as a result of the government’s breach.

The court rejected Yankee’s demand for $17 million in costs related to the operation of a wet-storage pool in 2000 and 2001. The court concluded that all the spent fuel would not have been removed from the wet pool even if the government had honored its obligation to do so by 1999.

The parties cross-appealed, and the Federal Circuit remanded the case for further consideration of the companies’ damages.

The trial court again awarded the companies nearly $143 million and found that all spent fuel would not have been removed from Yankee’s wet pool by 1999.

But the trial court again rejected the company’s $17 million demand, saying the limited scope of the Federal Circuit’s remand did not permit reconsideration of that issue.

It was at that point that the trial court issued an alternative ruling that, if Yankee could recover such costs, they would amount to $17 million.

The case returned to the Federal Circuit on yet another appeal.

This time, the appeals court agreed with the $143 million award calculation.

It took issue, however, with the trial court’s refusal to award wet-pool costs.

“Once the trial court determined on remand that all [spent nuclear fuel] would have been removed from Yankee Atomic’s wet-storage pool by the end of 1999, … the court was required to apply that finding to its prior damages calculations,” the appeals court said.

“The trial court wisely foresaw that this court could reverse its refusal to consider these costs” by issuing the alternative decision, the panel noted.

The appeals court, therefore, ruled that a remand for recalculation was not necessary. Rather, the panel returned the case to the trial judge for entry of a judgment that includes the additional $17 million. WJ

Attorneys:Plaintiffs: CatherineE.Stetson,HoganLovellsU.S.LLP,Washington

Defendant:HaroldD.LesterJr.,U.S.DepartmentofJustice,Washington

Related Court Document: Opinion:2012WL1759983

See Document Section A (P. 19) for the opinion.

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CASE AND DOCUMENT INDEX

Berberianv.TownofAndover, No. 2012-10247, 2012 WL 1866293 (D. Mass. May 21, 2012) ........................................................................................... 12

Cooketal.v.RockwellInternationalCorp.etal., No. 10-1377, brieffiled (U.S. May 24, 2012) ........................................................................................... 10

InreFEMATrailerFormaldehydeProductsLiabilityLitigation, No. 07-01873, motiontoapprovesettlementfiled (E.D. La. May 29, 2012) ........................................................................................................................................................................................................13

Strudleyetal.v.AnteroResourcesCorp.etal., No. 2011CV2218, 2012 WL 1932470 (Colo. Dist. Ct., Denver County May 9, 2012) .............................. 14

Town&CountryCo-OpInc.v.AkronProductsCo.etal., No. 1:11 CV 2578, 2012 WL 1668154 (N.D. Ohio May 11, 2012) ................................................. 11 Document Section B .................................................................................................................................................................................................... 28

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