Beveridge & Diamond PC
James M. Auslander, Ryan J. Carra, Andrew C. Silton, Shengzhi Wang and Nicole B. Weinstein

May 1, 2018

Soil Pollution

Liability

What regime governs liability for soil pollution (including the allocation, transfer and limitation of liability)?

The Comprehensive Environmental Response, Compensation and Liability Act (Superfund) and similar state laws. The Environmental Protection Agency (EPA) lists sites on the National Priority List based on a hazard ranking system. Liability under the act and state laws is typically strict, joint and several, and retroactive, even to legacy contamination sites. States also implement voluntary clean-up and brownfields programmes aimed at remediating and reusing legacy contaminated soil sites.

Due diligence

What environmental due diligence measures are recommended before concluding land transactions?

The purchaser should conduct environmental due diligence that is proportionate to the anticipated risk depending on the operations at the site, both historical and upcoming. For example, a property with a history of industrial operations will pose a greater risk of latent contamination than a property that has only ever been used to host office buildings. In addition, if the purchaser intends to change the type of operations from industrial operations to operations that may directly affect a vulnerable population (eg, a school or an apartment building), the purchaser should take extra precautions to ensure that the property is sufficiently clean for the intended use.
The purchaser should always:

• review environmental studies and reports for the subject property, if available;
• review prior purchase agreements and their corresponding schedules to identify environmental concerns and understand historical allocation of environmental liability; and
• interview individuals who have actual knowledge of the site’s current and historical operations.

A purchaser desiring environmental protections under the 2002 Brownfields Amendments to the Comprehensive Environmental Response, Compensation and Liability Act should also conduct “all appropriate inquiries” before purchase, especially if there is a history of on-site contamination or chemically intensive operations. This involves retaining an environmental consultant to conduct a Phase I environmental site assessment, including an evaluation of potential vapour intrusion risk, to better gauge the current condition of the property.

Because information gathered during environmental due diligence can greatly affect the negotiating power of the purchaser, it should be conducted early enough to ensure that the purchase agreement reflects the environmental risk that the purchaser may be assuming.

Remediation

What remediation and clean-up measures are typically applied and how can remediation costs be recovered?

Under the Comprehensive Environmental Response, Compensation and Liability Act and similar state laws, identified potentially responsible parties (PRPs) typically undertake a remedial investigation/feasibility study. Based on the results, the EPA selects a remedy for the site through a record of decision. Remediation may include a range of steps such as soil/sediment removal, capping, treatment or monitored natural attenuation. Remedies often include adaptive management steps based on ongoing monitoring. Under Sections 107 and 113 of the act, the EPA or PRPs undertaking the remedy can seek cost recovery or contribution of remediation costs from other PRPs; the available remedy and time limits differ by court jurisdictions and type of costs incurred. The EPA or states also can undertake or mandate that PRPs undertake time-critical interim actions to address imminent environmental threats.

Air Pollution

Regulation

How are air emissions regulated? What air quality standards and emission limits apply?

The Clean Air Act requires the Environmental Protection Agency (EPA) to set National Ambient Air Quality Standards (NAAQS) for common, criteria air pollutants that endanger public health or welfare nationwide. To date, the EPA has established NAAQS for six pollutants:

• particulate matter (coarse and fine);
• ozone;
• sulphur dioxide;
• nitrogen dioxide;
• carbon monoxide, and
• lead.

The act also requires the EPA to regulate emissions of listed hazardous air pollutants (HAPs). States must adopt state implementation plans (SIPs) to achieve the NAAQS and to control emissions of criteria and hazardous pollutants within their boundaries.

The act requires new or modified sources of air pollutants to obtain pre-construction approval. The preconstruction permit programme requires project proponents to demonstrate that emissions from the new or modified sources will not cause or contribute to an increase in air pollutants that would degrade air quality, and requires installation of certain levels of pollution control equipment depending on the area’s air quality. Following construction, new or modified sources must obtain operating permits, which require compliance with equipment standards (eg, best available pollution control equipment) and emissions limits. These standards and limits vary based on facility type and the nature of emissions. Permitting thresholds, emissions limits and equipment standards are generally more stringent for sources emitting HAPs or located in NAAQS non-attainment areas.

Although the EPA issues permits in some circumstances, most permits are issued by state or local air pollution control agencies under their SIP authority (with EPA oversight). Operating permits are generally required for larger sources and sources that are subject to new source performance standards, HAP standards and acid rain control requirements. Operating permits typically last for five years and include enforceable emissions standards and limitations (which vary by industry or source category), compliance schedules, and monitoring and reporting requirements.

Beyond stationary sources, the EPA has broad authority over mobile sources including aircraft, on-road vehicles and non-road engines and equipment. It sets emission standards for vehicles, imposes testing and certification for engines and controls fuel formulations and additives. Passenger cars and light-duty trucks must meet tailpipe emission standards for various air pollutants and greenhouse gases. Fuel economy standards for model years 2022 to 2025 are currently under review. In August 2016 the EPA finalised a finding that greenhouse gas emissions from certain classes of aircraft endanger human health and welfare, which is a precursor to adopting greenhouse gas standards for aircraft.

The Clean Air Act also requires the EPA to address ozone-depleting substances, acid rain and regional haze. In light of litigation and Trump administration developments, the future of the above regulatory programmes and other initiatives – such as the Clean Power Plan aimed at greenhouse gas emissions reductions from existing power plants – remains uncertain.

Non-compliance

What are the consequences of non-compliance with air emissions regulations?

The EPA maintains joint authority with delegated states to enforce violations of the Clean Air Act. The EPA and state agencies may enforce non-compliance with the act through administrative and judicial means. Under the act, the EPA has the authority to seek information from sources, inspect facilities, require monitoring or testing and require document production. The EPA thus may assess a source’s compliance with permit or regulatory requirements. If the EPA determines that a violation has occurred, it may:

• issue an administrative compliance order;
• issue an administrative penalty order; or
• bring a civil or criminal action.

The EPA often seeks injunctive relief specifying the terms and conditions under which a source must come into compliance, and also may seek substantial administrative penalties.

Water Pollution

Regulation

What rules govern the discharge of wastewater and the protection of water resources?

The Clean Water Act requires a permit for any person or entity to discharge either pollutants or dredged or fill material to waters of the United States (which include jurisdictional wetlands). The Environmental Protection Agency (EPA) oversees the former; the US Army Corps of Engineers oversees the latter (subject to EPA veto). Individual states also maintain their own programmes regulating these discharges to surface waters, and may be delegated authority to implement the act within their borders. State law governs extraction of water for consumptive use.

Non-compliance

What are the consequences of non-compliance with water pollution regulations?

Non-compliance with water pollution regulations or a permit issued pursuant to such regulations may result in the imposition of civil penalties, injunctive relief or other relief required to remedy damage to the environment caused by the non-compliance. The EPA, states and private citizens may all seek these civil remedies. Knowing or intentional non-compliance also may yield criminal liability.

 This article is being provided for informational purposes only and not for the purposes of providing legal advice or creating an attorney-client relationship. You should contact an attorney to obtain advice with respect to any particular issue or problem you may have. In addition, the opinions expressed herein are the opinions Mr. Auslander, Mr. Carra, Mr. Silton, Mr. Wang and Ms. Weinstein  and may not reflect the opinions of Synergy Environmental, Inc., Beveridge & Diamond PC  or either of those firms’ clients.