Becker's Iowa Environmental Law Update : Iowa Environmental Lawyer & Attorney : Charles Becker : Belin McCormick P.C. Law Firm : IA Regulatory Compliance, Site Cleanups

On Sunday, the Prime Minister of England published an interesting article in The Observer.  In the article, he advances the case that England is going to be the “greenest government ever” and that, in doing so, “it will drive by more than ten-fold the increase of renewable heat over the coming decade, radically reducing carbon emissions and creating thousands of jobs.”  His primary point in the article is to say that there is a lot of money to be made in climate change initiatives and that it is not necessary to use the language of “threats and punishments,” which doesn't seem to be working anyway.

It is a message that many in this country should take to heart.  I thought EPA had come to this realization six months ago, but the inability to even have a discussion on cap-and-trade and, more recently, the election, has (as calculated) left EPA in a defensive mode. 

Is it really that difficult of a proposition?  If there is money to be made in climate change, then Republiucans should support it; if it’s something that needs to be done or our children and puppies will all die a fiery death, then Democrats should support it.  Each can deny the other's reason for action while pressing the "yes" button.  So why doesn’t it work this way?

The answer might be found in the more than two hundred (and counting) comments to the Prime Minister’s article.  A small sampling of those comments:

If you’re convinced, no one else will be.  You’re the ‘nowhere man’ of international politics.”

Here we go!  Dave wants to sell shares in the ozone layer now!  So, the answer to runaway consumerism is, more consumerism!  Buy, sell, buy sell, buy sell!  Is that all you've got?

There you go Mr. Cameron even applying your 'what's in it for us' philosophy to the future of the planet. As long as you can make a killing like all those financiers you support now ripping countries apart you're happy. True colours showing again I'm afraid.

So it's about making your mates in the City more money, typical. You still cycle with a Mercedes following you?

Can't quite work out whether your post is ironic or just moronic. Not being that familiar with your previous utterances I hope it's the former in which case we probably need an irony symbol for CIF that is recognised as such. If you genuinely believe all that crap then I suspect that nothing I can say will disabuse you

David, you have been fooled by lefty academics and hairy eco-fascists. There is no such thing as global warming. Even ExxonMobile thinks so.

The lumps on Mr Cameron's head do not signify intelligence.

Put a sock in it Dave we all know your Father-In-Law is sitting waiting with his wind farms to profit from the climate change scam.

Oh here we go. As long as someone can make a profit, everything will be hunky-dory.  Bugger off Dave. And take your crowd of overprivileged arsewipes with you.

These comments, but for some phrasing, would likely be similar in the United States.  The merits of the proposal get little discussion before personal attributes (or lack thereof) take over the conversation.  On the political front, it's all about denying the other side a victory -- for any reason and at all costs. At this rate, if the choice is to hope for a political solution or a capitalistic solution to climate change, put your money on the profit motive.  At least then when you're told to "bugger off," you can do so in style.

RELATED POSTS: Global Warming and Fast Cars: A Perfect Match

                                Money Is Green Too

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Iowa, like so many other states having a large agricultural-based economy, has water quality problems.  With the amount of fertilizer used for crops and the quantity of manure created by animals, it isn't hard to understand why one top official at the Iowa Department of Natural Resources recently said that that there is a "fight between agriculture and water quality."

Despite this disadvantage, EPA has to regulate Iowa (and the other ag-based economies) just like all of the other states.  To that end, EPA just concluded its review of Iowa's designated use changes to its Water Quality Standards and has, not surprisingly, found them wanting.  Of the 127 use designations considered,  EPA disapproved the proposed water changes for 57 water bodies while approving 69 water bodies. 

In commenting on those sites that were disapproved, EPA explained:

EPA's review of many of Iowa's UAAs identified the following six recurring situations associated with the data submitted for the assessed water body segments: 1) instances where the depth data did not support removing the Class Al primary contact recreational use or depth data is discounted due to perceived "elevated flow"; 2) instances where a public comment indicated a Class Al primary contact recreational use is attainable, yet the state removed the Class Al use; 3) instances where there was no data to support a change in designated use; 4) instances where data collected outside the recreational season do not support removing the Class A 1 primary contact recreational use; 5) instances where the UAAs and/or supporting data contains significant errors making it difficult to review the recommendation; and 6) instances where a general use, rather than an aquatic life use, is recommended despite the presence of water. For these situations, the data and information provided in the submission were not adequate to provide the necessary scientific and technical rationale to support changing the designated use from Class Al to Class A2 or to remove an aquatic life use. Therefore, EPA must disapprove changing the designated use from Class Al to Class A2 for the waters listed in Tables EPA 3 -5.

The errors noted seem to be of the type that a little money could solve. Problem is, there's no money.  Every Iowa DNR Director has lamented this fact for years. And with a newly elected Republican governor, operating in a farm state, with few funds, it will be interesting to see what a new DNR Director can do in the new year.   

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In November of 2006, the earth shook.  At that time, the EPA regulations relating to the Bona Fide Prospective Purchaser Defense (“BFPP”), became effective.  The BFPP Defense, theoretically, allows the purchase of contaminated real estate without stepping into Superfund liability. Though too soon to tell, it looks like it might have just been a minor tremor.

For the first time, a court has interpreted the requirements of the BFPP Defense. In the case of Ashley II of Charleston, LLC v. PCS Nitrogen, Inc. v. Ross Development Corp. et al, the Federal District Court for South Carolina took on the issue. The facts are both complicated and, at times, confusing. The need for an $8 million dollar clean-up was identified at a fertilizer manufacturing plant. The remediation will require the removal of arsenic, lead, PAH contamination and raising the pH of the site. There were multiple parties brought into the action and the allocation made to each party is interesting reading. However, this post will focus on the liability of Ashley II, a limited liability company. Interestingly, the principals of Ashley are Cherokee Investment Partners which is a large investment fund that has dedicated $1 billion dollars to the acquisition of Brownfields properties.

As part of a multi-million dollar project, Ashley retained an environmental engineer.  The project included the purchase of a part of the land that now needs remedial action. A Phase I Environmental Site Assessment was issued and, shortly thereafter, the property was purchased. The Phase I identified some sumps and stained concrete pads as Recognized Environmental Conditions (“RECs”). Ashley did not do any testing around the sumps or the concrete pads to determine if the RECs had, in fact, caused a release.

Some time thereafter, Ashley tore down some buildings on a parcel of the property which had covered sumps that previously contained hazardous substances. No testing was done around the sumps prior to removal of the buildings.

THE EIGHT ELEMENTS OF THE BFPP DEFENSE

In analyzing Ashley’s assertion of the BFPP Defense, the Court required Ashley to prove eight elements by a preponderance of the evidence.

I. NO DISPOSAL AFTER ACQUISITION

The BFPP Defense requires that there be no disposal of any hazardous substances after the acquisition of the property. Judge Seymour arrived at an interesting reading of this requirement. The Judge found that Ashley removed the outside structure of the buildings but left in place a number of sumps and pads and did not conduct soil testing under the pads. Testimony showed that, after the removal of the building, the sumps would fill with rain water which would then seep through cracks in the sumps or fill up and overflow onto the site. Based on these findings, the Court determined that disposals "likely" had occurred after the purchase of the property.  More importantly, the burden of proof was held to be on Ashley.  In the words of the Court: "The court concludes that Ashley did not prove that no disposals occurred on the Site after its acquisition of the Site."

II. CONDUCT OF ALL APPROPRIATE INQUIRIES

The Court noted that Ashley had an ASTM-compliant Phase I Environmental Site Assessment conducted prior to purchase. While there were some claims of non-compliance with ASTM standards, the Court found that Ashley acted reasonably and that it “properly conducted AAI.”

III. LEGALLY REQUIRED NOTICES

Next, the Court looked to see if there was a release of any hazardous substance since acquisition of the property that needed to be reported. Oddly, the Court found that Ashley satisfied this requirement because

[t]he record does not establish that any releases occurred on the Site subsequent to Ashley acquiring ownership. The Court finds that Ashley has met its burden of proving that it made all legally required notices.

IV. THE EXERCISE OF APPROPRIATE CARE

To show that it exercised appropriate care, Ashley needed to show that it took reasonable steps to: 1) stop any continuing release; 2) prevent any threatened future release; and 3) prevent or limit human, environmental, or natural resource exposure to any previously released hazardous substance. Again, Ashley fell short.  The Court found that Ashley’s failure to clean out and fill in the sumps, thus leaving them exposed to the elements, resulted in possible releases. Also, Ashley failed to prevent debris from accumulating on the site, did not investigate a debris pile and did not remove the pile for over a year. For these reasons, appropriate care was not shown.

V. FULL COOPERATION, ASSISTANCE IN ACCESS

The Court found that Ashley fully complied with this requirement.

VI. INSTITUTIONAL CONTROLS

The Court did not find any violation that institutional controls were needed and therefore this element was satisfied.

VII. COMPLIANCE WITH REQUESTS AND SUBPOENAS

The Court found full compliance with this requirement.

VIII. NO AFFILIATION

Under this requirement, Ashley needed to show that it was not: 1) a potentially responsible party; 2) affiliated with persons that were potentially liable for response costs at the site through: a) any direct or indirect familial relationships; b) any contractual, corporate or financial relationship; or c) the result of a reorganization of a business entity that was potentially liable. Ashley passed this test.  However, Ashley's indemnification of others at the site, according to the Court, "reveals just the sort of affiliation Congress intended to discourage."  Again, the Court found the BFPP Defense requirements to have been violated.

 CONCLUSION

Once done with the analysis, the Court found that Ashley was, indeed, a PRP because it was the current owner of contaminated property and it did not satisfy the requirements of the BFPP Defense. That is, the Court found that a disposal occurred after Ashley acquired the site. The Court then undertook the difficult job of allocating the costs to the various parties identified in the case. The good news is that Ashley was allocated 5% of the entire costs of clean-up. The bad news is that $400,000 is still a significant amount to pay when Ashley clearly tried to follow the rules set out by EPA.

There appears to be at least three lessons to be learned from Ashley. First, courts are going to carefully scrutinize every aspect of the BFPP Defense -- and there are a lot things that can go wrong.  Second, despite what you may have been told (by EPA officials or others), doing a Phase I ESA is not all that is necessary for the BFPP Defense -- RECs must be investigated and further reporting may be necessary. Finally, as we already knew, what happens after acquisition is important. Getting the defense is one thing, keeping it is another. 

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Remember the 1998 blockbuster Armageddon?  It starred Bruce Willis and Ben Affleck who were charged with traveling to a meteor that was on a collision course with the Earth.  They were supposed to plant nuclear bombs on the meteor to blow it apart so that the pieces would miss the earth by at least 200 feet.  It was a great thriller that, while panned by the critics, was the highest grossing film of 1998. It came in at 150 minutes -- it could have been much, much shorter:

(Intro credits roll over President saying that the earth is in danger and something has to be done immediately -- or at least before the next election.  Cut to the deck of a non-leaking oil drill rig somewhere in the Gulf of Mexico.  We see two men facing each other.  As the shot closes in, we are overjoyed to find that it is Bruce Willis and Ben Affleck but we are disturbed because they appear angry.)

Stage direction: Bruce looks mean and his head is shining.  Ben, hair waving in the wind, looks contrite but resolute, sorrowful but enigmatic, erudite but bedeviled.  They are standing on the deck of the oil rig after just having been told of the mission to attempt to blow up a small mountain moving 150,000 miles per hour using what amounts to a really large firecracker.

Discussion between Bruce and Ben:

Bruce:  I don't like you A.J.  You're dating my daughter and you've got hair.  That's a bad combination.  But we've got a job to do.  The likelihood is that we won't be coming back, so I'm going to overlook the hair thing . . . for now.

Ben: Harry, I'm not crazy about you either.  I mean, Ashton?  Come on!  Still, I guess I'm in.  What's the mission?

Bruce:  A rock is heading straight towards earth.  It'll land right on top of Des Moines, Iowa -- the geographic and intellectual center of the country.  Some have said that the losses would be acceptable, but they have an irreplaceable new sculpture garden that must be saved.  Besides, it'll also wipe out the rest of the planet.  We have to blow it up before it gets here.

Ben (after pausing for a moment to think - he appears quizzical but aloof - then says): It's heading straight at the earth?

Bruce:  Right.

Ben: And it's going to destroy the entire planet?

Bruce: That's right. No scientific disagreement on that.  It's a given -- we're goners.

Ben:  Uhh . . well . . is this rock man-made or natural?

Bruce:  What?  Are you nuts?    It's natural.  This kind of thing happens every 100 million years or so. So what?

Ben:  Well, I'm just sayin'.  If it's not a man-made problem, should we really mess with nature?   

Bruce:  What are you talking about.  You're missing the point. We're gonna die!

Ben:  Well, I suppose so, but we didn't make the problem so I don't think we should try to solve the problem.  I mean if nature caused it, won't nature fix it?

Bruce:  Sure, but nature is going to fix it by destroying every living thing!  All that will survive will be that waving hair of yours and a few million bed bugs.

Ben:  Still, it's not man-made.  If man didn't cause the problem, we don't need to fix it.  I changed my mind.  I'm not coming along.

After an appropriate glare and scowl, Bruce's eyebrows raise and he says:  Kid, you're right.  Maybe we can save the planet, but if they can't prove that the problem is man-made, then it should be hands off.  That's just common sense.  I was wrong about you, kid.  You are brooding but contemplative.  And, what the hell, go ahead and date my daughter.

(The end credits roll as Bruce and Ben meet up with the rest of the drilling party.  Being a cold day on the high seas, most of the men drink hot tea.)

(Total running time -- 4 minutes.  Four Academy Award nominations -- Best Depiction of Insanity, Best Lighting of an Abstruse Subject, Best Use of Hair and Non-Hair, Least Offensive Picture.  Won all four, but tight race with The Truman Show for Best Depiction of Insanity.)

This certainly seems to be the current focus of the climate change debate.  Most of the arguing, particularly from politicians, is whether climate change is caused by the sun or by man. 

There are only three questions to the climate change debate:

1.  Is climate change occurring?  (Even the U.S. Chamber of Commerce agrees it is).

2.  If so, is it harmful?  (This is the debate over the Endangerment Finding).

3.  If so, can we (and for some, should we) do anything about it?  (This is where solutions, affecting man-made sources and/or natural sources, will be considered).

All are important questions worth discussing . . . quickly.  The question of whether it has been caused by our activities is just a red herring that seems to be populating the entire sea.  Maybe we need to move on to better fishing, but with the current state of politics, that seems unlikely. 

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