Environment 2012: Contamination and Waste Management-Related Issues

January 11, 2012

This year is sure to bring a number of significant changes in the areas of waste and contamination, although some may be delayed so as not to create an election year issue. Areas where changes may occur are in vapor intrusion, waste management and cleanup, brownfields/due diligence and issues related to real estate purchases.

The following are contamination issues to follow in 2012:

Vapor Intrusion

  • EPA Vapor Intrusion Guidance : The United States Environmental Protection Agency (EPA) is expected to issue updated guidance for considering vapor intrusion in determinations about protecting public health at Superfund and Resource Conservation and Recovery Act (RCRA) sites. Such guidance is expected to be used as a basis for changes to or development of state guidance as well.
  • Reopening of Closed Remediation Cases: EPA and state agencies are expected to reopen sites during five-year reviews or otherwise to incorporate vapor intrusion considerations where not done in earlier remedial decisions.
  • Third-Party Vapor Intrusion Claims: Courts will continue to consider claims by third parties based on alleged exposure to vapors under the citizen suit provision of RCRA or traditional common law theories, including nuisance and trespass.

Waste Management and Cleanup

  • EPA Re-Revises Its Waste Rules Regarding Biomass and Other Alternative Fuels: On Dec. 23, 2011, EPA published proposed rules elaborating on its definition of Non-Hazardous Secondary Materials in conjunction with revisions to its Commercial and Industrial Solid Waste Incineration Unit regulations. (76 Fed. Reg. 80642) By this proposal, EPA intends to clarify the types of alternative fuels, including biomass, that can be burned for energy recovery without the combustion unit being characterized as a solid waste incinerator and subject to more stringent emission controls. Comments are due on the proposed rule by Feb. 12, 2012. For more information on the proposed rule, click here.
  • RCRA Cleanups: EPA’s National Enforcement Strategy for RCRA Corrective Action wants 95 percent of nearly 3,700 RCRA corrective action sites to have final remedies chosen and implemented by 2020. Achievement of this goal, however, is proving to be difficult. Over the next several months, EPA will be conducting a study to identify the resources it needs to implement the 2020 plan. One of the ideas being considered is to move some sites into the federal Superfund program, where EPA has more leverage to require cleanups and seek cost recovery, an approach that could greatly increase the risks faced by owners and operators of RCRA sites.
  • Coal Combustion Residues (CCR): EPA continues to mull over its choice between regulating CCR as a solid or as a hazardous waste, as proposed in June 2010. EPA recently issued a Notice of Data Availability on Oct. 12, 2011, containing the results of its ongoing information search. It also indicated its desire to issue the final rule in “late 2012,” which probably translates into being after Election Day.
  • Choosing a Cleanup Program: States and the regulated community continue to struggle with the multitude of different laws and their different cleanup requirements that apply to the cleanup of contaminated sites. From RCRA to voluntary cleanup programs, leaking underground storage tank programs and solid waste programs, to name a few, one has to determine the best program to enter if given a choice. Among other difficulties this poses is what is the cleanup “finish line” or within what timeframe the cleanup must be finished. Some states have or are moving to a single cleanup program to address these challenges, while others are considering doing the same. It is imperative that the regulated community follow these developments in 2012 and beyond and get involved as early in the process as possible to ensure that the “single” program helps alleviate, and not exacerbate, the past difficulties in cleaning up a contaminated site.

Brownfields/Due Diligence

  • New ASTM Phase I Standard: EPA published the All Appropriate Inquiries (AAI) standard in 2005 and expressly provided in the regulation that AAI could be met by following ASTM “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” E1527-05. ASTM has announced that it will publish an updated standard that it expects to release in late 2012. ASTM has indicated that it does not expect any significant changes. EPA will have to follow a rulemaking to adopt the new standard. For more detail on AAI, click here.
  • Possible Changes to Forest & Rural Land Phase I Standard: ASTM has not stated its intention to modify its separate standard for meeting AAI for forestland and rural property entitled “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property,” E2247-08. Conforming changes may be necessary though, depending on the changes to E1527, and will likewise require EPA to complete a rule making. For more information on this ASTM standard, click here.
  • Brownfields Grant Funding: With the continued dance between Republicans and Democrats on budgeting and deficit reduction, the funding of EPA Brownfield grants could be impacted if EPA’s overall funding is reduced, but this is only one of the many line items that could be affected in EPA’s budget.

Real Estate Purchasers

  • Asset Purchasers Beware: Two recent court decisions handed down in December show that asset purchasers may still take on a seller’s environmental liabilities. In U.S. v. Sterling Centrecorp, a California federal court noted that if an asset purchaser continued to operate the same business under the same name, the deal may be classified as a de facto merger and may saddle the buyer with the seller’s environmental liabilities. In U.S. v. NCR, a federal court in Wisconsin ruled that since the asset purchase agreement provided for the buyer to assume some of the seller’s liabilities, the buyer was responsible for cleaning up a federal Superfund site. The court reached this conclusion even though Superfund had not even been enacted at the time the assets were purchased. Since these cases will no doubt be relied upon by EPA and other cash-strapped state environmental agencies looking to expand the number of pockets that they can reach into to pay for cleanups, asset deals must be structured very carefully.
  • Circuit Court Appeal of BFPP Case: The U.S. Court of Appeals for the Fourth Circuit will receive briefs and may hear arguments in the appeal of Ashley II of Charleston, LLC v. PCS Nitrogen, Inc. LEXIS 104772 (D.S.C. Sept. 30, 2010) where a purchaser was found not to meet the requirements of a bona fide prospective purchaser (BFPP) and thus was liable under the Comprehensive Environmental Response, Compensation, and Liability Act. The court determined that the purchaser failed to meet certain “continuing obligations” that the purchaser must continue to meet post closing in order to maintain its BFPP defense. One of the parties has asked that the court take up the issue of successor liability of such party in the case, since the court’s decision could render the other issues moot, including the BFPP defense analysis. For more information on Ashley II and the BFPP defense, click here.
  • ASTM Continuing Obligations Standard: ASTM issued “Standard Guide for Identifying and Complying with Continuing Obligations,” E2790-11, in an effort to define the actions a purchaser must take to meet the “continuing obligations” requirement of the BFPP defense. EPA previously issued its own very brief guidance on the issue in 2003, commonly called the Common Elements Guidance, which does not provide much detail for how compliance may be met. While this new guidance may be helpful in determining how to meet the “continuing obligations,” it is neither legally required nor had time to even become custom, so the use of this standard should be carefully watched in 2012 and beyond.