By: Ralph H. Palumbo, Partner, Summit Law Group PLLC

The federal District Court’s recent decision in Care v. Cow Palace, LLC drastically enlarges the scope of RCRA citizen suits and expands the definition of “solid waste” to include products which have useful purposes if any residue from those products may be discharged into the environment. The court’s decision, if followed by other federal courts, will create additional regulatory burdens on agricultural and other industries without resulting in commensurate benefits to the environment or public health.

In February 2013, two non-profit environmental groups (collectively, “CARE”) brought citizen suits against three dairies (“Dairies”) located in Washington’s Yakima Valley, alleging that manure management, storage, and fertilizer application practices “may cause or contribute to an imminent and substantial endangerment.” Each dairy handles millions of tons of manure each year by selling manure as compost, applying manure to agricultural fields as fertilizer, and storing liquid manure in lagoons until it is applied to agricultural fields. Plaintiffs claimed that manure is a “solid waste” under RCRA field applications at greater than “agronomic” rates, and leakage from lagoons result in being “discarded,” thereby releasing nitrates that can potentially migrate to underground drinking water sources.

Each dairy had entered into a Consent Order with EPA under the Safe Drinking Water Act that required the Dairies to implement measures that would result in achieving the MCL for nitrate in the aquifer beneath and downgradient of the Dairy Facilities. By 2014, the Dairies had reached Consent Order soil nitrate goals for some of their application fields and other fields were very close to achieving the goal.

Other federal courts have held that RCRA citizen suits based on activities regulated under another statute are barred. Willet Dairy, 536 F.3d at 174; Jones v. E.R. Snell Contractor, Inc., 333 F. Supp.2d 1344, 1350-51 (N.D. Ga. 2004) (RCRA citizen suit based on activities covered by the Clean Water Act is barred); see also United States v. Burns, 512 F. Supp. 916, 918-19 (W.D. Pa. 1981) (enforcement action under RCRA based on substance regulated by Toxic Substances Control Act is barred). Moreover, the Safe Drinking Water Act, not RCRA, is the nation’s primary source of protection for underground drinking water. The Second Circuit has rejected attempts to sue under RCRA when the plaintiffs cannot sue under the primary regulatory statute. No Spray Coal, 252 F.3d at 148; Coon v. Willet Dairy, LP, 536 F.3d 171, 174 (2d Cir. 2008).

Even when the statutory non-duplication bar does not apply directly, courts have consistently held that citizens cannot maintain RCRA lawsuits when the environmental hazard has been addressed. Clean Harbors, Inc. v. CBS Corp., 875 F. Supp.2d 1311, 1330-32 (D. Kan. 2012; Trinity Indus. v. Chicago Bridge & Iron Co., 867 F. Supp.2d 754, 763 (W.D. Pa. 2012); 87th St. Owners Corp. v. Carnegie Hill-87th St. Corp., 251 F. Supp.2d 1215, 1219-22 (S.D.N.Y. 2002); SPPI‑Somersville, Inc. v. TRC Co., 2009 WL 2612227, *14-15 (N.D. Cal. 2009); Kara Holding Corp. v. Getty Petroleum Mktg., Inc., 2004 WL 1811427, *11-12.

Because the citizen suits sought to regulate the same activities (land-application and storage of manure) and the same substance (nitrates) in a manner inconsistent with EPA’s Consent Decrees, they should have been barred by RCRA’s non-duplication provision.

The Court held the citizen suits were not barred because the Consent Order did not encompass all relief sought by CARE, including that:

• CARE requested that the Dairies supply drinking water to residents within a three mile radius, as opposed to a one mile radius in the Consent Order;
• CARE requested “fate and transport” studies, while the Consent Order only requires monitoring;
• CARE requested studies to determine agronomic application rates, while the Consent Order merely requires compliance with NRCS Practice Standards to determine if manure was over-applied;
• CARE requested that Defendants immediately line the manure lagoons; while the Consent Order includes lining as a contingent remedy;
• CARE requested soil sampling to 4 feet, while Consent Order requires 1-3 feet.

The Court’s holding effectively eliminates RCRA’s statutory non-duplication bar because citizen suit plaintiffs will always be able to request some relief that is additional to, or different from, the relief sought by EPA. The Court’s refusal to enforce RCRA’s statutory citizen suit bar for reasons as superficial as the difference between a one and three mile radius for drinking water supply, or the difference between sampling to four feet rather than three feet, is directly contrary to RCRA’s express language. If the Court’s reasoning is adopted by other federal courts, the result will be duplicative and often inconsistent enforcement actions by EPA and citizens’ groups. Compliance with RCRA will be diminished, rather than advanced. For those reasons, the Court’s holding should be soundly rejected by other federal courts.

The Court’s decision on whether manure is a “solid waste” within the meaning of RCRA is equally troubling. Manure is a well-established product that the Dairies and third parties use beneficially. The Diaries’ manure is a valuable fertilizer used to raise crops. There was no evidence that the Dairies had ever applied manure “simply to be rid of it.” Tyson Foods, 2010 WL 653032 at *9. The availability of nitrogen to growing plants is governed by a complex, dynamic process known as the nitrogen cycle. The nitrogen cycle is understood and agronomic application rates can be estimated, but the nitrogen cycle processes cannot be directly controlled or precisely forecast. Thus, while dairies and other agricultural operations work towards the “perfect” application amount, it is virtually impossible to apply exactly the amount of manure that will be needed by the crop, such that no residual nitrates remain in the soil at the end of the growing season.

The Ninth Circuit and other courts consistently have rejected attempts to impose RCRA liability based on the contention that materials placed to some useful purpose nevertheless are “discarded.” This is true even though some residues or constituents of the materials enter the environment. See Ctr. for Comm. Action, et al. v. BNSF Railway Co., et al., 764 F.3d 1019, 1030 (9th Cir. 2014) (rejecting argument that particulate matter emitted in diesel exhaust is “solid waste” that is “disposed” of); Ecological Rights Found. v. Pac. Gas & Elec. Co., 713 F.3d 502, 516 (9th Cir. 2013) (rejecting argument that a chemical preservative dripping or leaching from utility poles is “solid waste”); Safe Air, 373 F.3d at 1047 (airborne particulate matter from burning grass residue as a field treatment is not a “solid waste”); No Spray Coal., Inc. v. City of New York, 252 F.3d 148, 150 (2d Cir. 2001) (rejecting argument that spraying pesticide along city streets misused the chemical and was “tantamount to a disposal” that rendered it a “solid waste”); Oklahoma v. Tyson Foods, 2010 WL 653032 at *10-11 (N.D. Okla. 2010) (land-applied poultry manure is not “solid waste”); Water Keeper Alliance v. U.S. Dep’t of Def., 152 F. Supp.2d 163, 169 (P.R. Cir. 2001) (rejecting claim that projectiles ending up in the environment after artillery practice are “solid waste”).

Before the Court’s decision in the dairy cases, no court had ever held (or even hinted) that RCRA requires a product such as fertilizer to be used at some theoretical minimum effective rate in an attempt to guarantee no escapement or over-application in any circumstance. The Court’s decision is contrary to established precedent in the Ninth Circuit and other federal circuits; and, if followed by other federal courts, will create uncertainty and regulatory burdens on agricultural and other industries without resulting in commensurate benefits to the environment or public health.
 
A founding member of Summit Law Group, Ralph’s practice includes a unique depth of experience in complex commercial litigation, environmental matters, and corporate and business law. He has tried cases in state and federal courts involving a broad spectrum of complex issues, including: antitrust and trade regulation; patent law and licensing; environmental law (hazardous and toxic substances, clean air, clean water, and natural resource damages); product liability, commercial and contract disputes; trade secrets/non- competition; products liability (biologics, toxic torts, explosions, and product defects); class-action litigation; state and federal securities regulation and shareholder rights; breaches of contract; insurance coverage and bad faith; fraud, misrepresentation and customer protection act violations; employment agreements, noncompetition, non-solicitation and intellectual property agreements; violations of fiduciary duties; and real property taxation.

June 2, 2015

By: Seth Brown, Principal, Storm & Stream Solutions, LLC

Introduction

Over 100 million acres of developed land exists in the U.S., which has generated 25 million acres of impervious area. While the area of impervious cover only represents about 2% of the land area, the impacts to the nation’s waters, especially in urban areas (where most of us live) go far beyond this proportion. These impacts will continue to happen, as will impacts from continued development, until we find new ways to make stormwater infrastructure investments cheaper, faster, and more effective.

A new approach has been developed to meet this challenge.  This new approach to implementing green stormwater infrastructure (GSI) at a large scale referred to as “community based public-private partnerships” or CBP3s places community benefits as the highest priority. A guide on this approach was released on Earth Day (April 22) of 2015 and is the first document dedicated to this approach.  The guide, titled Community Based Public-Private Partnerships (CBP3s) and Alternative Market-Based Tools for Integrated Green Stormwater Infrastructure: A Guide for Local Governments, provides an in-depth overview of the CBP3 approach.  It is my belief that this new approach to implementing GSI, as well as other environmental and social infrastructure, will become the norm in the future – this is truly a game changer in every sense of the word. Considering that the White House has repeatedly cited this approach as an innovative way to meet the growing demands in the Clean Water sector, I believe I’m not alone in my opinion on the significance of the potential that the CBP3 approach has now and in the future.

Overview of CBP3 Approach

So what is a CBP3 and how does it work? In a basic sense, this approach flips the traditional P3 approach on its head by placing the benefits of the public sector – and the community – at the center of the framework. Rather than rewarding the private entity in the P3 arrangement, all the profits gained from efficiencies or cost savings generated in a P3 project, the CBP3 approach take these savings gained and re-invests this money back into the program. By doing so, more work is generated, so more GSI gets placed into the ground and the private entity gains more revenue (by doing more work overall). By applying this approach in the stormwater sector, the CBP3 takes advantage of all the inefficiencies that currently exist in the status quo method of implementing stormwater infrastructure investments.

The traditional method of implementing stormwater projects is for the jurisdiction to study their watersheds, identify sites for implementation, develop a request for proposal (RFP) for design services, go through the environmental permitting process, send a final plan out to contractor for bids, and then build the project. This is done for each project, as if each project were not associated with the total outcome of getting more stormwater infrastructure in the ground to address stormwater pollution.   Each project carries its own costs associated with procurement and administration as well as “change order” costs that arise by contractors who find design flaws, run into unforeseen constraints, or just a different way to build than the design envisioned. The CBP3 approach does not use a traditional procurement process, but rather, seeks to integrate these steps together under one umbrella program and start putting Best Management Practices in the ground just as soon as they can cite and design them by using a handful of standardized practices that address a majority of the situations and project conditions that will be encountered.  But doesn’t this come at a cost of quality?  No – in fact, the program is built around the premise of “availability payments”, which means that the CBP3 partner doesn’t get paid for their work until the infrastructure is “available” to perform as expected.

The dimension of scale also comes into play in the CBP3 approach. In the past, stormwater runoff has been seen as a minor issue – as evident by the fact that it took 25 years after the Clean Water Act was passed into law to start regulating stormwater runoff. More recently a trend towards appreciating the growing impacts of urban stormwater runoff on the health of our waters and the toll excess runoff takes on downstream infrastructure has developed. As regulations become more stringent based upon this identification of the significance of stormwater pollution, the need for an expansion in stormwater management infrastructure is growing – but up until this time, stormwater has been seen as a “mom and pop” or “boutique” industry with little consideration for trying to reduce efforts (and therefore costs) in a per unit metric. The CBP3 approach challenges this limiting view of stormwater infrastructure investment by looking for large-scale outputs rather than piecemeal project-by-project means to attempting to address regulatory needs. By focusing on large-scale efforts, economies of scale are gained which further reduce costs.

But I have digressed from my central point – that the CBP3 approach is focused on the community.  The most significant aspect of this is based upon a trusting and long-term relationship between the private sector partner with the public sector counterpart.  In the CBP3 approach, there is a 30-50 year commitment and the private sector doesn’t just build the infrastructure and walk away – they provide ongoing O&M services through the duration of the project. Beyond this commitment to the public sector partner is the commitment made to engage with all the stakeholders in the community.  And most of all, the commitment to the community comes in through targets for local jobs – meaning that part of the fees paid to the private partner in a CBP3 is based upon hitting goals for local jobs and small and minority-owned business involvement in the program.  Lastly, let’s not forget what it is that green stormwater infrastructure brings to the table beyond just water quality improvements:

• Improved public health (through mitigation of heat island effect and air quality),
• Enhanced social well-being (many studies illustrate the positive impacts of green space on urban dwellers – for example, why do you think Central Park in Manhattan is the most valuable piece of open real estate in the free world?),
• Increased property values through hedonic effects (i.e., why do you think having a flat that overlooks Central Park costs so much more than those a few blocks away?), and
• Is a catalyst for economic growth/revitalization (think of this as the opposite of the ‘broken window’ theory)

The First Application of the CBP3 Approach

The CBP3 is based upon a model developed in the mid/late-1990s to address the quality/quantity of military housing in a program referred to as the Residential Community Initiative (RCI). This framework lets the government and the private sector do what each do best by providing the private entity/developer land on which to build housing and an ability to leverage military housing stipends to obtain low-interest private investment to fund the development/redevelopment of military housing facilities. This approach, developed and deployed by Corvias Solutions, has been deemed a success, as evident by the amount of housing now available in many military facilities as well as positive feedback from the families who live in this housing, who state that the quality of housing has increased as has the responsiveness towards maintenance needs. This approach is now being applied in Prince George’s County, Maryland that will seek, for its first phase, to treat 2,000 acres of impervious cover with retention-based practices within three years at a unit cost that is close to half of what is often cited for urban GSI retrofits. The CBP3 entity in this case, the Clean Water Partnership, also has to meet specific goals for local jobs and minority/small business as part of their program. If goals are met for the first phase, additional phases will be added with an overall goal of 15,000 impervious acres treated within a 10-year timeframe, as spelled out in Chesapeake Bay nutrient and sediment Total Maximum Daily Load (TMDL) requirements. The original price-tag for this scale of effort would be well over $1B when using the status quo approach for urban GSI retrofits, but with cost-savings due to economies of scale and a streamlined procurement program, these cost could be driven far below those expected based upon conventional wisdom.

This is clearly an exciting time for the stormwater sector on many fronts – emerging technologies, evolving regulatory landscape, rising awareness – and now we can include the dimension of enhanced infrastructure investment in that list.  Going green in a big way has never had such promise both for the bottom-line as well as the value to communities.

Seth Brown is the Principal and Founder of Storm and Stream Solutions, LLC, a consulting firm providing a range of services from policy and infrastructure finance analysis in the water sector to the development and delivery of technical and policy-related training focused on topics such as stormwater and public-private partnership arrangements. Through his consulting group, Mr. Brown was a major contributor for the recently released EPA Region III guidebook, Community Based Public-Private Partnerships (CBP3s) and Alternative Market-Based Tools for Integrated Green Stormwater Infrastructure.

By: Richard Kinch

March 2015

The U.S. Environmental Protection Agency’s (EPA) recent coal ash rule addresses environmental concerns associated with the solid residuals left over after burning coal at electric utilities.  Within this regulatory process, there was an array of concerns, including the structural safety of dams used to impound mixtures of water and coal ash, potential leaching of pollutants into groundwater, and fugitive dusts.  This rulemaking required a very significant effort, involving 450,000 comments on the proposed rule and an estimated cost of $735 million per year.  The intent of this column is to relay my perspective, based on my prior 40-plus years as an EPA employee, on the problematic human tendencies leading to conflict and excessive delays – and to suggest how these might be overcome.

While citizen groups, industry, and states have shown overall support for the development of coal ash regulations, a highly controversial and confrontational atmosphere exists regarding the details of those regulations.  Some of the primary differences are whether EPA should use hazardous waste regulations with federal enforcement authority, whether impoundments should be forced to close, and how federal requirements could be coordinated with states.  In addition, while there was general support for beneficially using these materials (i.e., coal ash can be used as a partial substitute for cement in making concrete, with improved properties, and cost and environmental benefits), there is conflict on how to ensure the wide range of uses is done in an environmentally protective manner.

The long painstaking process started on October 12, 1980, when Congress enacted the Solid Waste Disposal Act Amendments temporarily exempting fossil fuel combustion wastes, including coal ash, from hazardous waste regulation until “further study” could be completed.  With the December 19, 2014 signing of the coal ash rule, this painstaking work may finally be over – unless reassessment or litigation continues the process. In protecting human health and the environment, timeliness needs to be important, and 34-year studies should be unacceptable.

In addition to continuing exposure to health and environmental hazards, long delays waste taxpayer dollars and squander expertise when EPA staff change jobs or retire. In addition, citizen groups, and industry and state representatives are also tying up their valuable time as they advocate their strongly felt convictions throughout the entire EPA process.  All of these stakeholders deserve a better process.

While the coal ash venture took an exceptionally long time, it does shine a brighter light on process shortcomings, whose lessons can be valuable for ongoing projects. Based on my career at EPA, which included work on the coal ash rule, I believe that three critical behaviors need to be reconsidered:

First, senior leadership at times simply needs to make the tough decision – despite knowing that more evidence can be gathered and that not every group will be perfectly satisfied.  It can be tempting to believe that a little more time, data, and analysis will somehow make the decision-making process more straightforward, but at some point “we need to study this more” simply postpones a challenging decision.

Second, the desire for a complete and comprehensive solution can hinder the making of any decision at all, including one that substantially solves the most significant environmental problems at hand.  The desire to address all actual and hypothetical problems not only takes more time, but also ties up the limited resources that could be focused on the other significant environmental concerns that remain unattended.

Third and finally, we can greatly benefit by working together.  In the earlier stages of dealing with coal ash as part of a broader assessment of fossil fuel combustion, EPA found substantial concerns with oil ash in unlined impoundments.  We relayed the information to industry, and they voluntarily closed down the unlined oil ash impoundments – a simple, quick, and largely unnoticed success.  Subsequently, the association for the electric utilities offered to negotiate and establish a voluntary action plan to immediately initiate addressing the environmental concerns, but EPA declined – a missed opportunity to try and bring together EPA, industry, citizen groups, and states.

Early in EPA’s history, we addressed untreated industrial wastes that caused a river to catch fire, wholesale dumping of drums of toxics, and uncontrolled air emissions.  We have made great progress, which can be attributed to the conjoined works of EPA, citizens, industry, and states.  Still, there are difficulties in designing efficient and effective environmental regulations.  It is natural to want more analysis, to strive for greater comprehensiveness, and to expect contentiousness as a natural part of the regulatory process.  But, we should all be open to seeking something better and abandoning the underlying flaws of a 34-year regulatory process.

Richard Kinch is an independent consultant on environmental matters associated with solid waste, water pollution, beneficial use of industrial residuals, and sustainability. Throughout a 40-year career at EPA and his current endeavors, he seeks to improve our environment, respect the views of all parties, and foster sound societal decisions.