Category: Environmental Law

ASHHRA 47th Annual Conference & Exposition Sept. 10-13, 2011, Phoenix, AZ

We are pleased to inform you the American Society for Healthcare Human Resources Administration’s 47th Conference & Exposition is taking place on September 10-13, 2011 in Phoenix, Arizona.

 

 

 

Why Should YOU Attend the ASHHRA Conference?  

Educational Programs

  • Enhance your health care business knowledge
  • Advance your leadership capabilities
  • Strengthen your role as a change agent
  • Gain knowledge of the hottest trends in health care HR
  • Network with your peers

Valuable Resources

  • A variety of take-away tools, best practices and policies
  • Networking opportunities with other HR practitioners nationally and regionally
  • Exposure to more than 150 suppliers helping to advance health care HR products and services

Hottest Products & Services

  • More than 150 exhibitors showcasing products that can help you solve problems within your organization
  • Networking and knowledge sharing on state-of-the-art services in health care HR

Smart Investment

  • Take-away tools and resources in health care HR
  • Focused learning on leadership and strategic business knowledge
  • Sessions designed around five leadership competencies
  • Partnership opportunities with top health care HR leaders

    18.5* Recertification Credit Hours

    Earn up to 18.5* Recertification Credit Hours, which includes 17.0 Strategic Business, and 1.5 California Specific Credit Hours.  Check out the “Schedule ” tab to see the learning sessions and secure your spot!

    *The 18.5 general recertification credits include the 6.0 hours of the Pre-conference Learning Tracks on Sept. 10, 2011 in addition to the 12.5 recertification credit hours for Full Conference attendance on Sept. 11-13, 2011. The 17.0 Strategic Business Credit Hours include 6.0 hours of the Pre-conference Learning Tracks on Sept. 10, 2011 in addition to the 11.0 strategic business credit hours for Full Conference attendance on Sept. 11-13, 2011.

    These recertification credit hours are pre-approved for PHR, SPHR and GPHR recertification through the HR Certification Institute. For more information about certification or recertification, please visit the HR Certification Institute website at www.hrci.org.

     Two NEW Learning Tracks at the

    ASHHRA 47th Annual Conference & Exposition

     

    NEW!
    Non-Hospital (NH)
    Learning Track

    NHThe Non-Hospital Track is a new learning track this year at the ASHHRA annual conference.  ASHHRA is seeking to fully understand the needs of HR practitioners who work in a non-hospital setting.  We realize that HR issues and concerns might differ from hospitals, and we want to become the primary source for information, tools, and resources to help members address the challenges faced in non-hospital facilities. 

    If you work at a non-hospital facility setting like:

    • Long-term Care facility
    • Acute Care facility
    • Clinic
    • Treatment center
    • Hospice center

    ASHHRA has created a special learning track that is designed to help address common issues that you may face in your organization.  The Non-Hospital sessions are offered during each learning session time and are indicated by “NH/NH.”

    NEW!
    Advisory Board Company Learning Track

    The Advisory BoardThis track is a continuation of an ongoing collaboration between the Advisory Board Company and ASHHRA, to educate heath care human resources (HR) executives and advance the health care HR field at-large. Two divisions of the Advisory Board Company are represented at the conference.  The HR Investment Center serves HR executives through best practice research and implementation support and has directly embedded a portion of their national member meeting into this year’s conference to help executives optimize their time and travel. The Talent Development division provides comprehensive leader development services and is presenting content from some of their most popular workshops.  This track will help to support the health care HR field with more substantive knowledge, expertise, and best practices for health care organizations.

    For more information about the HR Investment Center, Talent Development partnerships, or any other Advisory Board Company offering, please visitwww.advisory.com or contact Jordan English at englishj@advisory.com

    Click below for the learning sessions
    in this new track.

Eastern Population of Gopher Tortoise Eligible for Endangered Species Act Protection

Recently posted in the National Law Review an article about The United States Fish & Wildlife Service (USFWS) has released its listing decision for the eastern population of gopher tortoise by Ivan T. Sumner of Greenberg Traurig, LLP.

The United States Fish & Wildlife Service (USFWS) has released its listing decision for the eastern population of gopher tortoise. The USFWS has determined that listing the eastern population of the tortoise as Threatened under the Endangered Species Act (ESA) is warranted, however, it is precluded from doing so at this time due to higher priority actions and a lack of sufficient funds to commence proposed rule development. The western population is already listed as Threatened and will continue to be protected under the ESA. In the interim period of time the USFWS  will place the eastern population of the tortoise on its candidate species list until sufficient funding is available to initiate a proposed listing rule. The USFWS did not provide any time estimate on that front. Candidate species do not receive any statutory protection under the ESA. The gopher tortoise in Florida is still protected under Florida laws and policies implemented  by the Florida Fish and Wildlife Conservation Commission.

©2011 Greenberg Traurig, LLP. All rights reserved.

California's Green Chemistry Rulemaking Renewed

Published in the National Law Review on July 21, 2011 an article by Gene Livingston of  Greenberg Traurig, LLP about  California’s Department of Toxic Substance Control’s announcement of the new target date for new draft regulations to implement California’s Green Chemistry Law.

The new Director of California’s Department of Toxic Substance Control, Debbie Raphael, announced that mid-October is the new target date for new draft regulations to implement California’s Green Chemistry Law. The law called for regulations to be in place by January 1, 2011. However, universal opposition last year to the previously proposed regulations rendered that date impossible. Raphael, demonstrating political acumen, has the support of the legislative authors of the law to take the time needed “to get it right.”

Raphael promised to meet with stakeholders between now and mid-October to inform the rulemaking process, and after the draft regulations are released to seek comments from the Green Ribbon Science Panel at its November 14-15, 2011 meeting on the scientific aspects of the draft regulations. Then, the Director and her staff will produce regulations to launch the formal rulemaking proceeding.

Raphael laid out the principles that will guide the development of the regulations. They have to be “practical, meaningful, and legally defensible.” Those principles are easily embraced by political leaders, business interests, and environmentalists. There is something for everyone. The challenge will be getting consensus on what is practical but still meaningful with numerous aspects of the regulations, starting, for example, with selecting chemicals of concern, prioritizing the products containing chemicals of concern, describing the life cycle factors to assess existing chemicals and products and their possible alternatives, and imposing regulatory mandates, ranging from labels to bans of products.

The resolution of these aspects and others in the regulations will determine whether the green chemistry program sinks of its own weight, stifles innovation, drives up the cost of products, eliminates products in the California market, or becomes a model for other states, stimulates innovation, expands sustainable product development, results in fewer toxic products, and less toxic waste.

The green chemistry regulations can affect every manufacturer selling products in California as well as their suppliers, distributors, and retailers. They need to be aware of the rulemaking activities occurring in California during the next six months, a time period that will be critical as DTSC seeks to write regulations that are indeed practical, meaningful, and legally defensible.

©2011 Greenberg Traurig, LLP. All rights reserved.

Evaluating Insurance Policies After Japan’s Earthquake

Posted on July 14, 2011 in the National Law Review by Risk Management Magazine of Risk and Insurance Management Society, Inc. (RIMS) information about an essential first step is to review insurance coverages for losses caused by natural catastrophes.

Shock and tragedy were the emotions most felt throughout Japan when the March earthquake and tsunami ravaged the nation. But companies doing business there have since moved on to planning mode, looking for ways to mitigate their losses, both those already suffered and the inevitable ones to come from similar exposures in the future.

An essential first step is to review insurance coverages for losses caused by natural catastrophes. Of particular importance is the potential availability ofcontingent business interruption insurance coverage for lost sales to Japanese customers or lost supplies from Japanese producers.

Property insurance policies obviously cover direct property damage caused by natural disasters. But those same policies also cover other types of business losses. Time element coverage pays for the lost profits when damaged property affects a policyholder’s day-to-day operations. The amount covered generally depends on the time it takes to resume normal business operations. Time element coverage can be triggered by damage either to the policyholder’s property or a third party’s property, and the most common kinds are business interruption, extra expense and contingent business interruption.

Business Interruption

The purpose of business interruption coverage is to restore the policyholder to the financial position it was in before the property damage occurred. To recover these losses, the lost profits, at a minimum, must relate to the event that caused the policyholder’s property damage. Once the insured demonstrates covered property damage, the measure of the loss generally is the difference between expected profits during the recovery period after the event and actual profits during that period, less any unrelated losses.

Perhaps the only recent U.S. event comparable to Japan’s earthquake is Hurricane Katrina. In Consolidated Cos. v. Lexington Ins. Co., the Fifth Circuit Court of Appeals ruled that business interruption losses resulting from Hurricane Katrina were covered without requiring proof to a level of specificity that the loss stemmed solely from damage to the policyholder’s property as a result of the hurricane. The insurance carrier argued that the policyholder had to prove what its likely performance would have been had Katrina taken place but not damaged the policyholder’s property, reasoning that, even absent damage to the policyholder’s property, profits would have been reduced because of the generally depressed economic conditions following the hurricane. Instead, the court concluded that the loss should be calculated as if Katrina had not struck at all.

Coverage for this interdependent business interruption loss can extend to locations that are distant from the damaged property if the policyholder can show that the undamaged facility operated in concert with the damaged one. An example would be a policyholder’s remote facility outside of Japan that cannot receive inventory because of damage to the policyholder’s manufacturing plant in Japan.

Extra Expense

Extra expense coverage aims to cover additional costs the policyholder incurs to minimize or avoid interruption of its business. Examples of such coverage are: additional utility costs needed to resume business operations; additional costs to store business equipment; moving costs to relocate to temporary facilities; and costs expended for the temporary repair or replacement of property. Most policies also contain a related coverage, similar to extra expense, typically called expense to reduce loss coverage, to reimburse additional costs incurred to mitigate property damage.

Contingent Business Interruption

Many policies protect against profits lost when a policyholder’s supplier or customer cannot conduct business because of property damage “of the type” covered under the policyholder’s policy. This coverage would provide, for example, recovery to a manufacturer of computers outside of Japan that suffers lost profits as a result of a supplier’s inability to provide required components because of damage to the supplier’s Japanese facility. Similarly, a policyholders’ profits affected by property damage to the facilities of a Japanese customer are recoverable. Covered costs also include losses incurred when a civil authority prevents access to the policyholder’s facilities, or when damage to property in the vicinity of the insured property prevents ingress to, or egress from, the policyholder’s facility.

John Banister, Erica Dominitz, Barry Fleishman, Helen Michael, Carl Salisbury and Caroline Spangenberg are all partners at Kilpatrick Townsend & Stockton.

Risk Management Magazine and Risk Management Monitor.  Copyright 2011 Risk and Insurance Management Society, Inc. All rights reserved.

IRS Defends Discretion to Withhold Section 1256 Exchange Designation for ISOs

Recently posted at the National Law Review by William R. Pomierski of  McDermott Will & Emery an article about the IRS defending its decision not to designate independent system operators as qualified board or exchange:

The IRS defended its decision not to designate independent system operators asqualified board or exchange (QBE) principally on the grounds that, as a matter of law, it is not required to designate any exchanges as QBEs under Category 3 of Section 1256 Contracts.

In Sesco Enterprises, LLC (Civ. No. 10-1470, D.N.J. Nov. 16, 2010), the Internal Revenue Service (IRS) defended its discretion to refrain from extending qualified board or exchange status under Code Section 1256 to U.S. Federal Energy Regulatory Commission (FERC)-regulated independent system operators.  The district court dismissed the taxpayer’s claim that the IRS acted arbitrarily and capriciously when it refused to classify electricity derivatives that traded on independent system operators as “Section 1256 Contracts.

Section 1256 Contracts in General

For federal income tax purposes, a limited number of derivative contracts are classified as Section 1256 Contracts.   Absent an exception, Section 1256 Contracts are subject to mark-to-market tax accounting and the 60/40 rule.  The 60/40 rule characterizes 60 percent of the net gain or loss from a Section 1256 Contract as long-term and 40 percent as short-term capital gain or loss.  Corporate taxpayers often view Section 1256 Contracts as tax disadvantageous, relative to economically similar derivatives that are not taxed as Section 1256 Contracts, such as swaps, unless the business hedging or some other exception is available.

Section 1256 Contract classification is limited to regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options and dealer securities futures contracts, as each is defined in the Internal Revenue Code.   Unless a derivative falls within one of these categories, it is not a Section 1256 Contract, regardless of its economic similarity to a Section 1256 Contract.

Except for foreign currency contracts, Section 1256 Contracts are limited to derivative positions that trade on or are subject to the rules of a qualified board or exchange (or QBE).  QBE status is extended only to national securities exchanges registered with the U.S. Securities and Exchange Commission (SEC) (a Category 1 Exchange); domestic boards of trade designated as contract markets by the U.S. Commodities Futures Trading Commission (CFTC) (a Category 2 Exchange); orany other exchange, board of trade or other market that the Secretary of the Treasury Department determines has rules adequate to carry out the purposes of Code Section 1256 (a Category 3 Exchange).

Category 1 and Category 2 Exchange status is automatic.   Category 3 Exchange status, however, requires a determination by the IRS.  In recent years, Category 3 Exchange designation has been extended to four non-U.S. futures exchanges offering products in the United States: ICE Futures (UK), Dubai Mercantile Exchange, ICE Futures (Canada) and LIFFE (UK).

Sesco Challenges IRS Discretion to Withhold Category 3 Exchange Designation

According to its website, the taxpayer in Sesco (Taxpayer) is an electricity and natural gas trading company. The facts of the case indicate that it traded electricity derivatives (presumably INCs, DECs, Virtuals and/or FTRs) on various independent system operators or regional transmission organizations regulated by the FERC (collectively, ISOs).  Because ISOs are not regulated by the SEC or the CFTC, they cannot be considered Category 1 or Category 2 Exchanges for purposes of Code Section 1256.  To date, no ISO has been designated as a Category 3 Exchange by the IRS.

According to the facts in Sesco, the Taxpayer took the position on its return that derivatives trading on ISOs were Section 1256 Contracts eligible for 60/40 capital treatment.  The IRS denied Section 1256 Contract status on audit.  Somewhat surprisingly, a footnote in Sesco suggests, without any further discussion, that the IRS agreed with the Taxpayer’s position that these electricity derivatives qualified as “regulated futures contracts” under Code Section 1256 except for satisfying the QBE requirement.

During the examination process, the Taxpayer apparently requested a private letter ruling from the IRS that the relevant ISOs were Category 3 Exchanges.   According to the district court, “The IRS refused, asserting that the request for a QBE determination must be made by the exchange itself.”  The Taxpayer then asked one of the ISOs to request Category 3 Exchange status, but the ISO declined to do so.  Taxpayer then filed suit challenging the IRS’s adjustments and asserted that the IRS “acted arbitrarily and capriciously and abused its discretion when it refused to make a QBE determination except upon request from the ISO.”  In essence, the Taxpayer was attempting to force the IRS to designate the ISOs at issue as QBEs.

The IRS defended its decision not to designate the ISOs as QBEs principally on the grounds that, as a matter of law, it is not required to designate any exchanges as QBEs under Category 3.   After briefly considering the wording of Code Section 1256 and the relevant legislative history, the court agreed with the IRS position and dismissed the case on procedural grounds (lack of jurisdiction).

Observations

Although the District Court’s decision in Sesco may be of little or no precedential value due to the procedural aspects of the case, the decision nevertheless is important in that it reflects what has long been understood to be the IRS’ position regarding Category 3 Exchange status, which is that Category 3 Exchange status is not automatic and requires a formal determination by the IRS.  Sesco also confirms that the IRS believes QBE classification can only be requested by the exchange at issue, not by exchange participants.

Unfortunately, Sesco does not address the separate question of whether the IRS could have unilaterally designated the ISOs at issue as QBEs without the participation of the exchanges.  Sesco also raises, but does not address, the issue of whether derivatives traded on exchanges that are not “futures” exchange can be considered “regulated futures contracts” for purposes of Code Section 1256.  These are critical questions that will become more relevant in the near future as the exchange-trading and exchange-clearing requirements imposed by the Dodd-Frank derivatives reform legislation begin to take effect.

© 2011 McDermott Will & Emery

Bill Allowing More Offshore Drilling Introduced to Congress

Posted today at the National Law Review by Sabrina Mizrachi of Greenberg Traurig, LLP – news on the Infrastructure Jobs and Energy Independence Act introduced in Congress yesterday……

The Infrastructure Jobs and Energy Independence Act was introduced on May 12, 2011, and seeks to allow more offshore drilling in order to reduce U.S. reliance on imported fuels and create jobs. The bill was introduced by a bipartisan group of four congressmen, Democrats Jim Costa of California and Tim Walz of Minnesota in collaboration with Pennsylvania Republicans Tim Murphy and Bill Shuster.

The bill contains no new taxes or increase of existing taxes, and would allow drillers to reach natural-gas reservoirs that could fuel industry in the U.S. for 63 years and the U.S. oil industry for 80 years, and also create 1.2 million jobs per year.

©2011 Greenberg Traurig, LLP. All rights reserved.

EPA, Clean Air Act & Climate Change: Consider the Facts

This week’s guest blogger at the National Law Review is Jon D. Sohn of  McKenna Long & Aldridge LLP.  Jon provides a great overview of some recent hearings and proposed legislation impacting greenhouse gas regulations at both the state and federal levels:

The U.S. Environmental Protection Agency (EPA) has taken a lot of hits from those opposed to greenhouse gas regulations in the past week.  In the House of Representatives, tough hearings led by U.S. Rep. Ed Whitfield, (R-KY), Chairman of the House Subcommittee on Energy, were held with EPA Administrator Lisa Jackson. Jackson’s testimony followed that of lead witness Senator James Inhofe (R-OK) who promoted his upcoming book, “The Hoax,” which takes aim at the science of climate change.  The House subsequently passed an amendment to the proposed Continuing Resolution that would strip EPA of its authority to regulate GHG emissions and significantly decrease funding for environmental and clean energy programs. Meanwhile, outside of Washington, D.C., the first two permits considered by EPA suggest cleaner facilities and job creation can be compatible with new regulations as opposed to some of the concerns expressed in the hearings and continuing resolution.

This past week, South Dakota issued a draft permit for Best Available Control Technology for greenhouse gases under the Clean Air Act (CAA) to the Hyperion Energy Center. Project owners describe the facility as a “HEC is a 400,000-barrel per day (BPD) highly-complex, full-conversion refinery which will produce clean, green, transportation fuel such as ultra-low sulfur gasoline (ULSG) and ultra-low sulfur diesel (ULSD).” South Dakota regulatory officials found that significant energy efficiency improvements to the refinery were the most cost-effective manner to move forward.  The officials considered carbon capture & storage as an alternative path, but decided that while the technology is technically feasible it is not cost-effective or environmentally appropriate in this instance.  EPA will now have 30-days to review the decision, but don’t expect any radical changes to the State-level decision. Construction will create an estimated 4,500 jobs and when finished, 1,826 permanent jobs will be created for the ongoing operation of the refinery and associated utility plant according to company officials.

In Louisiana, State regulators recently approved an air quality construction and operating permit that includes emissions control requirements for greenhouse gases as well.  The permit clears the way for an iron production facility, the initial phase of the construction of a larger Nucor iron and steelmaking facility in St. James Parish. Under the permit granted, the greenhouse gas limits rely on energy efficiency measures and set a 13 million British thermal units of natural gas per metric ton of direct reduced iron. State regulators estimate the plant will emit 3.39 million metric tons of carbon dioxide per year.  500 construction jobs and 150 permanent jobs will be created according to Nucor, although they would like the facility to be larger and note regulatory uncertainty as a cause of concern. On the other hand, some environmental groups including the Tulane Law Clinic may challenge that the permit is not strict enough. EPA will now conduct a review here as well.

Congress would be well-advised to consider these case studies as it moves forward in its deliberations.

© 2011 McKenna Long & Aldridge LLP

EPA and Corps Issue Draft Guidance on Waterways and Wetlands That Fall Under Federal Jurisdiction as Part of Obama Administration’s Just Released Clean Water Framework

Recently posted by Linda H. Bochert of  Michael Best & Friedrich LLP – details about the recent draft guidance issued about when a wetland is subject to federal jurisdiction: 

Five years after the US Supreme Court issued the decision that was supposed to – but didn’t – clarify when a wetland is subject to federal jurisdiction, the United States Environmental Protection Agency (“EPA”) and Army Corps of Engineers (“Corps”) are seeking public comment on draft guidance intended to explain how such decisions are to be made.

The Draft Guidance on Federal Jurisdiction

On April 27, 2011, EPA and the Corps issued “Draft Guidance on Identifying Waters Protected by the Clean Water Act” (“Draft Guidance”). The Draft Guidance interprets two key Supreme Court decisions, often referred to as Rapanos and SWANCC. Rapanos is the 2006 Supreme Court decision in the consolidated cases of Rapanos v. United States and Carabell v. United States Army Corps of Engineers, 547 UW 715 (2006); SWANCC is the 2001 Supreme Court decision in Solid Waste Agency of Northern Cook County v. Army Corps of Engineers, 531 U.S. 159 (2001). The Draft Guidance addresses both wetlands and waterbodies and is limited to whether the federal Clean Water Act applies; it does not determine what state laws or regulations might apply.

After years of confusion, the 2006 decision in Rapanos was widely anticipated to provide a clear test for when a wetland is subject to federal jurisdiction. It failed to do so. The court split three ways, with no point of view supported by a majority of the justices. The prevailing view since Rapanos has been that a wetland is subject to federal jurisdiction if it satisfies either of two tests:  1) the wetland must be immediately adjacent to a navigable body of water that has a relatively permanent flow; or 2) there is a “significant nexus” between the wetland and a body of water that was, is, or could be made navigable. But stating the tests and applying them are two different things – and application of that two-part test has been anything but clear-cut.  For more on Rapanos andSWANCC, see our June 29, 2006 Client Alert: Wetlands and Water Bodies Must Have “Significant Nexus” with a Navigable Water to Fall Under the Jurisdiction of the Clean Water Act.

The EPA and the Corps are taking another run at it. The Draft Guidance is carefully described as “consistent with Supreme Court decisions and existing agency regulations” – presumably to combat anticipated criticism that it either overreaches or underreaches the current state of the law, although the critics have already begun to weigh in. 

Under the Draft Guidance, federal jurisdiction would apply to wetlands that:

  • are adjacent to either traditional navigable waters or interstate waters
  • directly abut relatively permanent waters
  • are adjacent to jurisdictional tributaries to traditional navigable waters or interstate waters if there is a “significant nexus”

    And federal jurisdiction would apply to waterbodies that are:

  • traditional navigable waterbodies
  • interstate waterbodies
  • non-navigable tributaries to traditional navigable waters that are relatively permanent (contain water at least seasonally)
  • tributaries to traditional navigable waters or interstate waters if there is a “significant nexus”
  • in the category of “other waters” – including some that are physically proximate to other jurisdictional waters and some that are not, based on fact specific circumstancesFollowing the 60-day public comment period, EPA and the Corps intend to finalize the Guidance and then initiate formal rulemaking.  The message of that process is that the agencies want to identify as much of the anticipated controversy about their interpretation as possible before drafting a federal regulation implementing that interpretation.

    Effect in Wisconsin

    Implementation of the Draft Guidance is not likely to have a significant impact in Wisconsin.   As far as waterbodies are concerned, Wisconsin has historically taken a broad view of navigability for purposes of state jurisdiction.  With respect to wetlands, as explained in our June 2006 Client Alert following the SWANCC decision the Wisconsin Legislature extended the jurisdiction of the Wisconsin Department of Natural Resources (“WDNR”) to include “nonfederal wetlands”.  Wis. Stat. §. 281.36(1m). Thus, a nonfederal wetland may still be subject to state water quality standards and permit requirements implemented by WDNR, even if it does not come within federal jurisdiction under the Clean Water Act. 

    The Clean Water Framework

    The Draft Guidance is part of the Obama Administration’s national Clean Water Framework also released on April 27, 2011. The Clean Water Framework “recognizes the importance of clean water and healthy watersheds to our economy, environment and communities” and is composed of the following initiatives:

    • promoting innovative partnerships
    • enhancing communities and economies by restoring important water bodies
    • innovating for more water-efficient communities
    • ensuring clean water to protect public health
    • enhancing use and enjoyment of our waters
    • updating the nation’s water policies – this initiative includes the Draft Guidance
    • supporting science to solve water problems

     

    © MICHAEL BEST & FRIEDRICH LLP

Superfund Recycling Equity Act (SREA) Fee Shifting: PRP Group Liable for Third-Party Defendants’ Attorneys' Fees

Recent Guest Blogger at the National Law Review   Thomas A. Barnard  of  Taft Stettinius & Hollister LLP   explains a recent federal district court ruling that a PRP group seeking contribution under CERCLA must pay the attorneys’ fees incurred by a mining company targeted by the PRP group for contribution:  

The Superfund Recycling Equity Act (“SREA”) fee shifting provision puts PRP groups seeking contribution under CERCLA from generators of “recyclable material” at risk of paying the generators’ attorneys’ fees if the generator’s defense succeeds.  A federal district court recently ruled that a PRP group seeking contribution under CERCLA must pay the attorneys’ fees incurred by a mining company targeted by the PRP group for contribution.  Evansville Greenway and Remediation Trust v. Southern Indiana Gas and Electric Co., Inc.., No. 07-00066 (S.D. Ind. Feb. 25, 2011), Dkt. 917.

Previously, district courts have refrained from awarding defense fees under SREA on the grounds that it would result in “manifest injustice” because the retroactive application of SREA (enacted in 1999) would impose a fee-shifting component that did not exist when the contribution actions were initiated.  See, e.g., RSR Corp. v. Avanti Development Inc., 2000 WL 1449859 at *4 (S.D. Ind. 2000) (“The plaintiffs made their decisions about whom to sue at a time when CERCLA did not allow a prevailing party in a contribution action to obtain costs and fees from its burden.  To burden that decision now with the imposition of the attorney and expert fees of any defendant that prevails under the SREA seems inconsistent with the ‘familiar considerations of fair notice, reasonable reliance, and settled expectations’ mentioned by the Supreme Court.”); see also U.S. v. Mountain Metal Co., 137 F.Supp.2d 1267, 1282 (N.D. Ala 2001).

In Evansville Greenway, the court determined that the third-party defendant, Solar Sources, Inc., qualified for an exemption to CERCLA liability established by SREA.  Specifically, the court found that Solar Sources had “arranged for recycling” because it sold scrap metal that met a “commercial specification grade for which a market existed,” and that a “substantial portion of the scrap was made available for use in the manufacture of a new product.  This satisfied the SREA requirements for scrap metal generators set forth in 42 U.S.C. 9627(d). 

Having determined that Solar Sources prevailed in its SREA defense, the court then awarded attorney and expert fees under the statute’s fee-shifting provision, 42 U.S.C. 9627(j).  Without referring to the prior case law interpreting this section, the court matter-of-factly awarded the fees “as we are required to do under the statute.”  The third-party complaint against Solar Sources was filed by the PRP group in 1999, after SREA was enacted, but the court did not discuss this timing in awarding defense fees.

Accordingly, PRP groups must carefully consider the risk of liability for defense fees and expenses prior to filing contribution actions against generators of material that potentially falls within the scope of SREA’s exemption.

Copyright © 2011 Taft Stettinius & Hollister LLP. All rights reserved.

EPA Redefines “Solid Waste” to Incentivize Creative Fuel Technology: Garbage to Gold

Recent Guest Blogger at the National Law Review  Kim K. Burke  of  Taft Stettinius & Hollister LLP highlights how the EPA recently changed the definition of Solid Waste and how this can lead to new fuel technology: 

Since the Resource Conservation and Recovery Act (RCRA, 42 U.S.C. §6901, et seq.) first became law, consternation among the regulated community has grown as a principal purpose of RCRA, namely, to encourage discarded material reuse as fuel, appears to have been ignored in EPA’s rulemaking.  Perhaps that discouraging trend is coming to an end.  On February 21, 2011, EPA released a pre-publication version of a proposed Final Rule amending the definition of “solid waste.”  What is particularly encouraging about the Final Rule is that innovative technologies for creating fuels from materials that would have previously been characterized as a “solid waste” are excluded from the definition.  This opens the door to creative technologies to transform municipal garbage into useable fuels for utilities and industrial boilers.  Not only does this technology reduce the amount of precious landfill space being consumed by valuable organic material, but it also offers the prospect of reduced and more easily controlled emissions from industrial boilers and fossil-fueled electric utilities that promise to be large consumers of this significantly cheaper, high BTU content fuel.

In this Final Rule, EPA spells out how previously discarded non-hazardous secondary materials may be used in combustion units for fuel.   40 CFR §241.3(b)(4).  The Final Rule is careful to spell out the criteria for assuring the “legitimacy” of the non-hazardous secondary materials which are used as “fuel” or “ingredients” in combustion units.  40 CFR §§241.3(d)(1) and (d)(2).  With this change in approach by EPA to encourage development of fuels from discarded materials, entrepreneurs in the wings with off-the-shelf recycling technologies are now given EPA’s blessing to pursue a green solution to some of our country’s energy and emission reduction problems.

Copyright © 2011 Taft Stettinius & Hollister LLP. All rights reserved.