Transcript of PP - Real Estate CLE June 2015 - final
- 1. Keith W. Turner Watkins & Eager
- 2. Environmental Risks Are Not Always Obvious
- 3. 2012
- 4. 1992
- 5. Former Wood Treating Facility
- 6. Federal Environmental Laws Clean Air Act (CAA) Clean Water
Act (CWA) (original title: Federal Water Pollution Control
Amendments of 1972) Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA, or Superfund) Emergency
Planning and Community Right-to-Know Act (EPCRA) Endangered Species
Act (ESA) National Environmental Policy Act (NEPA) Oil Pollution
Act (OPA) Resource Conservation and Recovery Act (RCRA) Safe
Drinking Water Act (SDWA) Toxic Substances Control Act (TSCA)
- 7. Mississippi Environmental Laws Mississippi Air and Water
Pollution Control Law Miss. Code Ann. 49-17- 1 through 49-17-43
Environmental Self-Evaluation Reports Miss. Code Ann. 49-2-71 Solid
Waste Disposal Law of 1974 Miss. Code Ann. 17-17-1 through 17-17-67
Disposal of Waste Tires and Lead Acid Batteries;
Right-Way-to-Throw-Away Program Miss. Code Ann. 17-17-401 through
17-17- 445 Mississippi Nongame and Endangered Species Conservation
Act Miss. Code Ann. 45-5-1 et seq.
- 8. Miss. Enviro Laws cont. Mississippi Brownfields Voluntary
Cleanup and Redevelopment 49-35-1 Mississippi Underground Storage
Tank Act of 1988 49-17-401 Lead-based Paint Activity Accreditation
and Certification Act 49-17-601
- 9. All Appropriate Inquires (AAI) ASTM Standards E 1527-13
Phase I ESA (-05 allowable until Oct. 2015) E 1528-00 Transaction
Screening E 1903-07 Phase II Site Assessment E 2247-08 Phase I ESA
for Forests and Rural Property Remember these reports expire
- 10. Phase 1 ESA By an Environmental Professional Past and
present owners Historical resources aerials, title, sanborns
Government records Consultant reliance on EDR Site inspections
- 11. Sanborn Maps
- 12. Pending ASTM revisions What is a REC (HREC - historical,
CREC - controlled) What is sufficient records review Vapor
intrusion issue
- 13. Types of Purchasers (CERCLA) Innocent Landowner No prior
knowledge of contamination Bona Fide Prospective Purchaser Purchase
with knowledge but not responsibility Contiguous Property Owner
Adjacent to contamination Indicia of Ownership Holds property to
protect security interest
- 14. Maintaining Protection - Continuing Obligations Compliance
with land use restrictions Allow access by agencies Stop continuing
releases Prevent future releases Prevent or limit exposure
- 15. PCS Nitrogen Inc. v. Ashley II of Charleston, 2013 WL
1340018 (4th Circuit) April 4, 2013 43 acre site First used in 1884
as phosphate fertilizer plant Several owners over the years 9
PRPs
- 16. RHCE Innocent Landowner Defense Purchased 2 acres of the
property in 1990 Excavated pond in 1991 Installed more sewer and
water lines Removed 6 inches of topsoil and graded land
- 17. Innocent Landowner Defense (429607(b)(3)) Must show 1.
another party sole cause of contamination 2. PRP did not cause
release in contractual connection with defendant 3. defendant
exercised due care
- 18. RHCE Defense Failed Lower court found all three pongs were
not met RHCE argued it met prongs one and two court held need all
three prongs
- 19. Ashley - Bona Fide Prospective Purchase Defense
(429601(40)) Purchase 27 acres in 2003 with knowledge of
contamination Time of purchase contaminated soil was exposed After
commencement of this action purchased additional 3 acres Incurred
$194,000 for investigation and response costs
- 20. Ashley - BFPP Must meet 1. disposal prior to purchase 2.
All appropriate inquires 3. Notice 4. Care 5. Cooperation 6.
compliance with institutional controls 7. Complies with requests 8.
not affiliated with PRP
- 21. Ashley Level of Care reasonable steps Stop continuing
release Prevent future releases Prevent or limit exposure Ashley
wanted lower level of care from innocent landowner defense But
court suggests the care should higher for BRPP
- 22. Ashley Defense Fails Failed to clean sumps after conducting
demo at site Did not monitor conditions Allowed contamination to be
exposed to surface
- 23. Holcombe and Fair Purchased the site in 1985 Aware of
contamination in 1990 Both impacted contaminated areas and
protected areas Subdivided property to several owners
- 24. Holcombe and Fair Evidence of site grading (of known
contaminated areas) Became PRP for secondary disposal by moving
contaminated soils on and about the site
- 25. Attorney Role in AAI Process Consultant selection and
oversight
- 26. 2006
- 27. 2002
- 28. Environmental Consultant Selection Experience (of field
staff and PM) Insurance terms Contract terms (indemnifications and
limitations to contract values) State and local knowledge
- 29. What other roles for the Attorney ? Report review (review
draft and final) Transaction contract terms Indemnification terms
Financial assurance methods (insurance, letter of credit, deposits
Communications with MDEQ (if necessary)
- 30. Federal windfall liens No statutory environmental liens in
Mississippi MDEQ approach to cost recovery
- 31. Information is the Key
- 32. Risk controls Brownfield status CERCLA protections (AAI)
Contract terms Insurance Clean up costs Third Party claims
Re-opener costs Natural resource damages
- 33. Strategies to Protect Seller Pre-sale ESA Implement
Institutional controls Indemnifications Financial assurances Reps
and Warranties MDEQ actions NFA letters, Agreed Orders, Brownfield
Sites
- 34. Strategies to Protect Buyer Current Phase I ESA and Phase
II if necessary Indemnifications Financial assurances Reps and
Warranties MDEQ involvement If existing contamination confirm
planned site usage fits with continuing obligations/institutional
controls
- 35. Brownfields Protections CERCLA 9601(39) real property
complicated by the presence or potential presence of contamination
Mississippi 49-35-1 to 27 Property where use is limited as a result
of actual or potential contamination or the perception of
contamination
- 36. Brownfield Benefits/Limitations All property owners
directly impacted included No liability to all persons (not EPA)
for clean ups costs Section 49-35-14(l) Does NOT include other
damages So what about EPA enforcement ?
- 37. Protection from EPA Enforcement EPA letter to MDEQ: CERCLA
Section 128(b)(1) enforcement bar Bars federal enforcement if State
Program is sufficient Three exceptions State requests assistance
Multi-state site (contamination across state line) Immediate action
necessary
- 38. Mississippi Brownfields 2012 Brownfield Site Name -
Location 1 Amoco/AFTA - Natchez 2 Arizona Chemical Picayune 3 CECO
Building Systems Columbus 4 City Center Ridgeland 5 Colle Towing
Pascagoula 6 Copiah Co. MECO Property - Gallman 7 Emerson Appliance
Motors Div. - Oxford 8 DeSoto Co. School Bus Lot Hernando 9 Fabra
Care Master Dry Cleaner Jackson 10 Gautier Oil Gautier 11 Intex
Plastics/Hatco Plastics Corinth 12 Mound Plantation Red Barn
Rolling Fork 13 Nashville-Ferry Rd/Glenn Springs - Columbus 14
National Picture & Frame/Uniek - Greenwood 15 One Hour Cleaners
Starkville 16 Pennzoil-Quaker State Vicksburg 17 Pilot Travel
Center Richland 18 Swifty Serve #542 Moss Point 19 Tupelo
Fairgrounds/Longs Laundry Tupelo 20 W.R. Grace Solvent Waste Site -
Corinth 21 West Manufacturers Blvd. - Brookhaven 22 Whirlpool Corp.
- Oxford 23 Wolverine Tube - Greenville 1 2 3 4 5 6 7 8 9 11 10 12
1314 15 16 17 18 19 20 21 22 23
- 39. Brownfield risk No protection from third party lawsuits
Common Law Claims Trespass past and continuing Nuisance public and
private Negligence and gross negligence Strict liability
- 40. Blackard v. Hercules, Inc. 2014 WL 3549929 S.D. Miss
Private Nuisance and Trespass Ashland not liable for the failure to
correct Hercules wrongs Negligence Possessor or controller of land
not liable for prior acts of the current owner Remediation and
Restoration Costs Only recover restoration costs if less than the
diminution value
- 41. Wetlands Permitting Section 401 Water Quality Certification
(MDEQ) Coastal counties need to also obtain permit from Mississippi
Department of Marine Resources Section 404 Permit (Corps of
Engineers) Vicksburg/Mobile/Memphis
- 42. Why is there still confusion over wetlands? Rapanos v.
United States, 547 U.S. 715 (2006) (Plurality decision) Three tests
Kennedy Significant nexus test (with waters of the US) (biological,
chemical, physical) Scalia Relatively permanent connection test
(flow) with waters of the US Dissent Corps reasonable
interpretation
- 43. SACKETT v. ENVIRONMENTAL PROTECTION AGENCY Supreme Court of
United States. 132 S.Ct. 1367 (2012)
- 44. 2/3 acre lot in Idaho across from home sites on lake
- 45. Sackett v. EPA
- 46. Sackett v. EPA EPA claimed violations of Clean Water Act
discharge of pollutants from a point source CWA 301 and 502
discharge of pollutants into waters of the US without a permit CWA
301
- 47. EPA issued a compliance order demanding Sacketts remove all
fill placed on the lot Sacketts requested a hearing from EPA but
were denied EPA did not consider the compliance order a final and
appealable action By not acting the Sacketts were accruing a
$75,000 a day liability ($37,500 CWA violation, $37,500 Order
violation) Sackett v. EPA History
- 48. Scalia Opinion APA action acceptable under CWA when no
other remedy available Is a compliance order a final agency action
ripe for appeal ? YES How will decision impact agency enforcement
approach ? Sackett v. EPA
- 49. Jurisdictional Determinations 5th Circuit and 9th Circuit
have held that a jurisdictional determination is not reviewable
final agency action under the Administrative Procedure Act and
therefore not eligible for judicial review 8th Circuit held that
courts may review the Corps' approved jurisdictional determinations
about whether a water body is subject to its authority.
- 50. EPA and Corps of Engineers Revisions to the regulatory
definition of Waters for the US became effective - May 27,
2015
- 51. According to EPA the Rule does: Clearly defines and
protects tributaries that impact the health of downstream waters.
Provides certainty in how far safeguards extend to nearby waters.
Protects the nations regional water treasures. Focuses on streams,
not ditches. Maintains the status of waters within Municipal
Separate Storm Sewer Systems. Reduces the use of case-specific
analysis of waters.
- 52. According to EPA - Rule does not: Protect any types of
waters that have not historically been covered by the Clean Water
Act. Add any new requirements for agriculture. Interfere with or
change private property rights. Regulate most ditches. Change
policy on irrigation or water transfers. Address land use. Cover
erosional features such as gullies, rills and non- wetland swales.
Include groundwater, shallow subsurface flow and tile drains
- 53. Jurisdictional ?
- 54. Jurisdictional ?
- 55. Jurisdictional ?
- 56. ?
- 57. Excluding Dusky Gopher Frog Critical Habitat
- 58. Markle Interests, LLC v. USFWS (5th Circuit Appeal filed)
USFWS designated 1600 acres as refuge the endangered dusky gopher
frog Weyerhaeuser and a group of similar landowners are appealing a
Louisiana federal judge's decision rejecting their challenges,
USFWS claiming land was a "critical habitat" that could be used to
revive a species close to extinction, under the ESA.
- 59. Designation of Critical Habitat of Dusky Gopher Frog (June
12, 2012) Approximately 4,933 acres are designated as critical
habitat in Forrest, Harrison, Jackson, and Perry Counties,
Mississippi
- 60. USFWS: public lands alone are insufficient to ensure
long-term survival of the species
- 61. Endangered frogs find home in Jackson Co. Workers at refuge
in Gautier have released hundreds since May Clarion Ledger June 15,
2015 We are taking an existing population of the frogs from Saucier
in Harrison County and repopulating them elsewhere, By bringing the
frogs to Jackson County, we now have two critically endangered
species on our South Mississippi refuge we also house the
endangered Mississippi sandhill crane.
- 62. Northern Long-eared Bat Interim 4(d) Rule Has a northern
long-eared bat maternity roost tree or hibernacula been documented
on or near the project area? trees that northern long-eared bats
have been documented as using during the active season
(approximately April October). Once documented, a tree will be
considered to be a known roost as long as the tree and surrounding
habitat remain suitable for northern long-eared bat.
- 63. Former Proposed USFWS Urban Refuge
- 64. No federal or Mississippi limits for IAQ or mold But,
Lumber Liquidators laminate wood flooring from China, exceeded
World Health Organizations limits (lawsuits, federal
investigations, and possible criminal charges)
- 65. New agency focus Exposure path soil vapor intrusion Both
MDEQ and EPA include a review of the issue for most sites
- 66. Soil Vapor Intrusion
- 67. Soil Vapor Intrusion No formal exposure limits State will
follow recommended levels or can conduct risk study Remediation
options Existing structures Vapor collection systems HVAC pressure
control New Construction Vapor collection Slab membrane or
sealers
- 68. Underground Storage Tanks v. Aboveground Storage Tanks
- 69. Federal State Site Specific
- 70. What about background levels ?
- 71. 2013 revisions to Mississippi Economic Redevelopment Act
(57-91-1) now includes all brownfields within the MDEQ program.
Credit for remediation and investigation costs Up to a ten year
period a percentage of taxes and fees are credited to developer -
limited to 2 times the amount of the allowable remediation
costs.
- 72. Before
- 73. AFTER Liberty National Golf Course New Jersey
- 74. Questions? Keith Turner Watkins & Eager
601-965-1958