Best Best & Krieger News Feed

South Ontario Neighborhood Has Lived on Trucked-In Water for Nine Years, Here’s Why

28 Sep 2016 00:00:00 -0800

Best Best & Krieger LLP Partner Gene Tanaka, representing the City of Ontario, discussed with the San Bernardino Sun a recently approved settlement over the clean-up of a toxic plume that has impacted drinking water supplies for 37 residences.

The article, which ran in the Sept. 23, 2016 edition, can be found by clicking here.

Best in Law: Get Out in Front on Possible Environmental Violations

19 Apr 2016 00:00:00 -0800

By Danielle Sakai

It’s no secret that businesses must run a gauntlet of federal, state and local environmental regulations in order to successfully operate in California.

But the hardest test may be when a business suspects that it may be in violation of one of the many applicable environmental regulations. The first reaction may be to rely on the old adage that “ignorance is bliss” and not take any action in the hopes that it will simply go away.

Actually, a different rule should prevail when dealing with environmental regulators: honesty is the best policy.

If there is a potential environmental issue or regulatory violation, it may ultimately be a better financial decision for the business to investigate the environmental issue and proactively report it to the appropriate regulatory agency.

Obviously, when a major accident has occurred and there is clear risk to human health and the environment, emergency measures must be taken and first responders will notify the environmental regulators.

However, when a violation has occurred on a much smaller scale, or when there is not a significant risk to human health and the environment, the natural reaction may be to take the chance that the regulators will not do an inspection or an audit and will never find out. After all, the percentages of businesses that are inspected and/or audited are low.

Nevertheless, it is a better practice to consult with legal counsel and environmental consultants immediately, as well as consider voluntarily reporting the violation to the appropriate regulatory agency.

The reason to consider self-reporting is that if the regulators discover the environmental violation through an inspection or an audit, that violation will likely come with a hefty price tag. Violations of certain federal environmental regulations allow for the assessment of penalties as high as $25,000 per violation, which can be assessed daily. It is not uncommon for civil penalties to exceed $100,000.

For the past two decades, the U.S. Environmental Protection Agency has been encouraging self-disclosure of violations of environmental laws through its policy called Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations. The California Environmental Protection Agency adopted a similar guidance document in 2003 that also identified incentives for voluntary disclosure.

The federal EPA policy provides several important incentives for self-disclosure, including: reduction of “gravity-based penalties,” which reflect the egregiousness of the violator’s behavior and constitute a punitive portion of the penalty; recommendation against pursuing criminal enforcement; and not requesting copies of audit reports prepared by the business.

The policy has been successfully implemented in California. The EPA has waived potential penalties ranging from $8,700 to $459,000 for dozens of companies that satisfied all of the conditions of the EPA self-disclosure policies and had no economic-benefit gains.

Under the federal EPA’s small business compliance policy, the EPA also can eliminate or significantly reduce penalties for businesses with fewer than 100 employees that voluntarily discover violations of environmental laws and promptly disclose and correct them.

Additionally, the federal EPA has incentives for new owners of businesses to encourage them to look closely at compliance issues at their recently acquired facilities, self-disclose and fix environmental problems they find. These incentives include penalty mitigation beyond those available to existing owners and include additional categories of violations.

If it is known or suspected that there has been a potential violation of an environmental law, time is of the essence, as a business has 21 days from the discovery to disclose the violation in writing to the federal EPA. Take action immediately. Consult a lawyer, discuss self-reporting and avoid paying penalties that would be better off going toward the bottom line.

* This article first appeared in The Press-Enterprise on April 17, 2016 Republished with permission.

From the Soil to the Rooftop: Emerging Trends and Issues Affecting Economic Development

04 Apr 2014 00:00:00 -0800

This panel discussed what environmental practitioners need to know about the new issues, trends, and legal regimes facing economic development in the Post-Redevelopment era, including issues such as: the disposition of property assets held by designated successor agencies; new standards regarding toxics and site contamination, renewable energy and the new energy code; and economic incentives and green credits associated with development.

When:
April 4, 2014
2:30 p.m. - 3:30 p.m.

Location:
Westin Bonaventure Hotel
404 South Figueroa Street
Los Angeles, CA 90071

BB&K Speaker:
Seth Merewitz, Partner

For more information about the symposium, please visit the LACBA website.

Ignoring Environmental Due Diligence Could Be Costly

08 Jan 2014 00:00:00 -0800

By Danielle G. Sakai

We have all heard the saying “ignorance is bliss,” but in the area of real property acquisition, the more important idiom is “what you don’t know can kill you.” That may be a bit dramatic, but what you don’t know about a property’s condition could certainly cost the acquiring special district a lot of taxpayer money – money that would be better spent fulfilling the agency’s statutory purpose, rather than cleaning up someone else’s toxic mess.

To read the entire article, click here.

* This article was originally published in California Special District magazine, Volume 8, Issue 6, Nov - Dec 2013. The magazine is published by the California Special Districts Association. Republished here with permission from the association.

New Laws Affecting Businesses in California

26 Nov 2013 00:00:00 -0800

During the 2013 legislative session, Gov. Brown signed into law new legislation affecting California businesses, most of which will go into effect in less than six weeks. For more information on any of the new laws below, click on the title to view the full legal alert or article and contact the attorney author or your BB&K attorney.

AB 44 - Assembly Bill 44 Requires Submission of Subcontractors' License Numbers in Public Construction Bids
Public Agencies Must Modify Bid Forms to Require Subcontractor LicenseNumber
Effective July 1, 2014

AB 227 - Amendment to Prop 65 Provides Businesses a Grace Period
Assembly Bill 227 Aims to Reduce Frivolous Lawsuits and Excessive Penalties
AB 227 was effective immediately

AB 440 – Local Agencies Empowered to Order the Cleanup of Contaminated Properties
Assembly Bill 440 Provides Agencies Immunity from Liability For Cleanup Efforts
Effective January 1, 2014

AB 556 and AB 218 – Two New California Laws Will Affect Hiring and Fair Employment Practices
Assembly Bill 556 Impacts All Employers; Assembly Bill 218 Impacts Public Employers Only
AB 556 is effective January 1, 2014
AB 218 does not impact businesses

SB 7 – Controversial New Law Conditions State Funding on Charter City Compliance With State Prevailing Wage Law for Locally Funded Projects
Senate Bill 7 Could Face Legal Challenges
Effective January 1, 2015, unless the contract was advertised for bid prior to that date

SB 323 - New Law Will Change the Way Limited Liability Companies Form and Operate
The California Revised Uniform Limited Liability Company Act Will Impact Existing and Future Businesses
Effective January 1, 2014

SB 594 – New California Law Further Restricts Nonprofit Organizations From Engaging in Campaign Activity
Restricted Resources Include Cash, Office Supplies and Other Property Received From Local Agencies
Effective January 1, 2014

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

Local Agencies Empowered to Order the Cleanup of Contaminated Properties

06 Nov 2013 00:00:00 -0800

Gov. Brown recently signed Assembly Bill 440 into law, providing an important tool for local agencies to force the cleanup of contaminated properties within their borders. AB 440 builds upon the Polanco Redevelopment Act (Act), which allowed a redevelopment agency to clean contaminated property within its jurisdiction itself or by bringing a legal action to require the responsible parties to clean the property. The new law will go into effect January 1, 2014.

AB 440 effectively revives the Act, which was made ineffective by the California legislature-ordered disbandment of redevelopment agencies in 2012. The bill allows local agencies -- including cities, counties and some housing authorities -- to take actions similar to those provided in the Act. Specifically, the bill gives a local agency the authority to identify contaminated or “blighted” properties, require property owners to turn over all environmental information concerning the property (including any environmental assessments), and order property owners to prepare phase I environmental assessments and phase II investigations. The law also allows local agencies to develop a site cleanup plan in conjunction with the Department of Toxic Substances Control (DTSC) and/or a Regional Water Quality Control Board (RWQCB). As an alternative, the property owner may be required to develop the cleanup plan and conduct the cleanup.

Additionally, AB 440 grants local agencies that clean up a contaminated property with immunity from potential liability resulting from release of hazardous materials specifically identified in an approved cleanup plan. Finally, if a local agency decides to perform the cleanup of the contaminated property itself, it may recover the cleanup costs, including attorneys’ fees, from the property owner.

BB&K is thoroughly analyzing the new law and assessing its potential impact on our clients. For specific questions about Assembly Bill 440, please contact one of the attorney authors of this legal alert listed at right in the Environmental Law and Natural Resources practice group, or your BB&K attorney.

Supreme Court Limits "Joint and Several" Liability in CERCLA Cases

07 May 2009 00:00:00 -0800

On May 4, 2009, the United States Supreme Court issued an 8-1 decision limiting private entity responsibility for environmental clean-up costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). The decision limits the kinds of companies subject to liability and may reduce “joint and several liability,” a theory in which each potentially responsible party (“PRP”) is liable for all damages.

BACKGROUND

Burlington Northern and Santa Fe Railway Company v. United States, No. 07-1601, and Shell Oil Company v. United States, No. 07-1607 (consolidated), concern the contamination of a site owned by Brown & Bryant, Inc. (“B&B”) on which hazardous chemicals were stored and distributed. A small portion of the property was leased from Burlington Northern and Santa Fe Railway Company and Union Pacific Railroad Company (collectively, the “Railroads”) and some of the chemicals were purchased from, and shipped by, Shell Oil Company (“Shell”). Shell was aware that some leaks of their chemicals had occurred and took steps to reduce and prevent spills.

In 1983, the California Department of Toxic Substances Control (“DTSC”) and the United States Environmental Protection Agency (“EPA”) began investigating the site for contamination and named the Railroads and Shell PRPs under CERCLA. The Railroads sued B&B seeking to recover their costs. The EPA and DTSC also filed a cost recovery action against the Railroads and Shell.

LOWER COURT DECISIONS

The District Court held that the Railroads and Shell were PRPs and were responsible for a portion of the governments’ clean-up costs. Accordingly, the District Court apportioned the Railroads’ liability at 9% of the governments’ total response cost and Shell’s liability at 6%.

Shell appealed, reasoning that it should not have been identified as a PRP because it did not intend to dispose of a hazardous substance. DTSC and EPA appealed the District Court’s apportionment of liability.

The Ninth Circuit Court of Appeals determined that Shell was a PRP, regardless of intent, because Shell had “arranged” for delivery and knew that leaks had occurred. The Appellate Court acknowledged that apportionment was possible, but held that the basis of apportionment was unreasonable. It reversed the District Court and found the Railroads and Shell jointly and severely liable for the governments’ costs.

SUPREME COURT REVIEW

On review, the Supreme Court held that an entity qualifies as an “arranger” when “it takes intentional steps to dispose of a hazardous substance.” In this case, the Supreme Court found that Shell lacked the necessary intent and was not properly a PRP.

The Supreme Court also determined that the Railroads were improperly held jointly and severely liable and instead found that the facts supported the apportionment of the Railroads’ share at 9%.

IMPLICATIONS

This case may have far-reaching implications. The potential pool of PRP’s in future cases may be reduced if the requisite intent cannot be demonstrated. There may be increased litigation regarding whether or not an entity “intended” to dispose of hazardous substances as entities previously identified as “arrangers” seek to avoid, or reduce, their liability.

Additionally, there may be increased litigation regarding what constitutes a reasonable basis for apportionment as identified PRPs seek to avoid joint and several liability. This holding could also result in governments bearing a larger financial responsibility for hazardous waste clean-ups if joint and several liability is not imposed. New federal and/or state legislation may be necessary to reduce this liability.

The full text of the decision can be accessed by clicking here.

SB 375: Greenhouse Gas Relief or New Source of Indigestion?

16 Apr 2009 00:00:00 -0800

Please email Katey Lamke at Katey.Lamke@BBKlaw.com for a copy of the webinar recording.

The 90 minute webinar included:

Where does SB 375 fit within California's greenhouse gas regulatory formula?
What implications will SB 375 have on regional transportation and housing?
How will SB 375 interface with environmental review under CEQA?

California Green Initiative Final Report Brings New Focus to Environmental Regulations

19 Dec 2008 00:00:00 -0800

On December 16, 2008, the California Environmental Protection Agency (“Cal EPA”) released the Green Chemistry Initiative (“GCI”) Final Report. The Final Report identifies policies to eliminate or reduce the use of toxic substances in the design, manufacture and application of chemical products. Instead of concentrating on storing and disposing of hazardous waste, the Final Report identifies the following six-step strategy to promote use of safer, sustainable chemicals and eliminate the use of toxic compounds in the first place:

1. Expand pollution prevention programs to more business sectors and refocus additional resources on prevention rather than clean up.

2. Develop Green Chemistry education and training programs.

3. Create the first in the nation, online product ingredient database and require manufacturers to disclose non-confidential information regarding products sold in California. The database would allow consumers to access a list of the chemical ingredients for an individual product.

4. Create an online toxics clearinghouse to help prioritize chemicals of concern and identify existing data gaps regarding hazardous chemicals.

5. Accelerate the development of safer products by creating a process to evaluate the use of chemicals and alternatives to ensure product safety and reduce or eliminate the need for chemical-by-chemical bans.

6. Move toward a "cradle-to-cradle" economy by 2050 that will produce “benign-by-design” products and establish a California green products registry. Ultimately, this registry would be available to consumers while they are shopping and would provide information regarding a product's environmental footprint.

Although the Final Report was only released this week, the strategies recommended by the GCI are already being implemented. On September 29, 2008, Governor Arnold Schwarzenegger signed Assembly Bill 1879 authorizing the Department of Toxic Substances Control (“DTSC”) to identify and prioritize chemicals of concern, evaluate alternatives and specify regulatory responses. The bill also allows DTSC, with advice from a green ribbon science panel, to establish regulations necessary to advance Green Chemistry in California. Specifically, it empowers DTSC to establish labeling requirements and ban the use of certain chemicals in consumer products. The Governor also signed Senate Bill 509 on September 29, 2008, which establishes an online toxics information clearinghouse to provide public access to information on the toxicity of chemicals. The State has until January 1, 2011 to develop the regulations necessary to implement the two bills.

The Final Report could result in a significant expansion of existing environmental law depending on how the recommendations are implemented. The State is currently required to publish a list of chemicals known to cause cancer, birth defects or other reproductive harm under the Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65. Proposition 65 further requires businesses to provide notice before exposing anyone to a listed chemical. Proposition 65’s list covers hundreds of naturally occurring and synthetic chemicals, including additives or ingredients in pesticides, common household products, foods, drugs, dyes, and solvents.

In contrast, the Final Report recommends the creation of two separate lists - one that identifies all product ingredients and another that catalogs hazardous ingredients. The creation of the first database would significantly expand beyond Proposition 65’s reach by requiring businesses to disclose all chemical ingredients in products sold in California, including nanomaterials, in addition to those that are known carcinogens. Other than a safeguard for trade secrets, there are no limits or exceptions to the listing requirement identified in the Final Report’s third recommendation. The Final Report is also silent with respect to any timing requirement. Proposition 65 only requires the State to update its list annually. However, the Final Report could be interpreted to require businesses to maintain up-to-the-minute information regarding product ingredients.

The extent of the Final Report’s second list requirement for a hazardous substances clearinghouse may greatly overlap with the requirements of Proposition 65. The Final Report even suggests using Proposition 65 as a starting point for creating the clearinghouse. The extent of this list will be better known once the State’s Office of Environmental Health Hazard Assessment identifies the data that must be included in the clearinghouse as authorized by SB 509. Since the Office of Environmental Health Hazard Assessment has until January 1, 2011, to establish this criteria, businesses and other stakeholders should consider participating in the State’s decision-making process to help determine what chemicals, ingredients and other data are included in the clearinghouse.

Like Proposition 65, the recommendations of the Final Report will probably increase costs for entities doing business in California. It is not clear how programs identified in the Final Report will be funded. State government costs could be supported from fee-based special funds or the government may seek funding from specific industry sectors.

However, businesses that adopt the green practices outlined in the Final Report may benefit from reduced liability and insurance payments, reduced regulatory burdens and reduced hazardous waste clean-up costs. Additionally, at a time when green businesses have reached a level of mainstream popularity, businesses that comply with the recommendations may even benefit from greater sales. Those that do not comply with the recommendations may face increased financial penalties and additional litigation risks.

The Final Report can be viewed at www.dtsc.ca.gov/greenchemistry.

Dorris, Willis & Hedlund Spoke at County Counsels' Haz Mat Conference

23 Oct 2008 00:00:00 -0800

BB&K attorneys Beth Dorris, Jill Willis and Stefanie Hedlund were presenters at the County Counsels' Association of California Fall 2008 Hazardous Materials and Solid Waste Study Section Conference, which took place October 23-24, 2008 at the Sheraton Suites San Diego at Symphony Hall.

Beth Dorris presented "Climate Change and CEQA Compliance." Jill Willis and Stefanie Hedlund presented "Ethical Considerations in the Solid Waste and Haz/Mat Practice of Law by Public Agency Counsel."

For more information, visit the County Counsels' Assoc. website.