Environmental Law and Compliance

Transcription

1 Environmental Law and Compliance By Peter C. Anderson, JD, CCEP 104 With assistance from: Jessalee Landfried, JD, Gayatri Patel, JD, and Margo Ludmer, JD 105 I. Introduction and Overview Unique Aspects and Challenges of Environmental Liabilities and Risks Over the past forty years, the scope of environmental law has continued to expand to reach almost every company and regulated industry. In this unique field, liabilities abound, as do opportunities for dedicated compliance professionals who are willing to keep up with the evolving changes. Depending on the company and its operations, environmental compliance can encompass the well-known and traditional challenges of regulating industrial wastewater discharges, controlling toxic air emissions, or managing hazardous wastes as well as the lesser-known liability risks arising from adversely impacting endangered species or developing in unpermitted wetlands. While environmental compliance is a complex field that can (and does) occupy many volumes within an entire treatise (if not an entire library), this Chapter is designed to serve as a primer and provide a general introduction. Obviously, when facing environmental legal or regulatory issues, all compliance professionals must work closely with, and rely upon the guidance, advice and direction of experienced in-house counsel. However, the primary goal of this Chapter is to assist non-lawyers with an overview of some of the common statutes, as well as the concepts, terms and issues that are likely to arise in dealing with various corporate environmental disputes. Organizationally, after this brief introduction, Part 1 of this Chapter includes a brief discussion of some recent statistics relating to environmental liabilities and enforcement statistics; as well as the interplay between local, state and federal laws (which are often inter-related in our federally delegated regulatory system). Part 2 provides an overview of the most common statutory and regulatory programs. Part 3 then shifts from the substantive rules to the process which discusses the different venues where environmental disputes can arise such as by private parties (e.g., tort claims or class actions) or by the government enforcement (e.g., administrative, civil enforcement or criminal prosecution). Finally, Part 4 concludes by looking at the unique aspects of environmental compliance 104 Peter Crane Anderson, JD, CCEP, is a former federal prosecutor and a Shareholder who leads the White Collar and Compliance Group at Beveridge & Diamond, PC. He currently works in both Washington, DC and Charlotte, NC. Jessalee Landfried, J.D., Gayatri Patel, J.D., and Margo Ludmer, J.D. are associates in the Washington, DC office of Beveridge & Diamond. Beveridge & Diamond, P.C. is one of the oldest environmental boutique law firms in the nation. The firm has six offices across the United States and has provided preventive counseling and reactive defense for corporate clients for over 40 years. More information is available at: The co-authors would also like to thank the following law students who provided excellent research and writing assistance in completing this Chapter as summer associates with Beveridge & Diamond during the summer of 2015: Hayley Carpenter, Toren Eisen, Rachel Fuller, Neel Sheth, Dacia Thompson, Zaheer Tajani, and Shengzi Wang. The Complete Compliance and Ethics Manual (2016) 5.139

2 and what tools the professionals in this field can use to prevent, detect and respond to the most common corporate environmental risks. In an era of enhanced environmental enforcement, and high stakes civil liabilities, the value and importance of corporate environmental programs is paramount to prevent violations (or reduce their likelihood); to reduce clean-up costs or fines and penalties; as well as to influence the broad enforcement discretion of the regulators and prosecutors. Effective environmental compliance, like the rest of this discipline, can help greatly reduce the risks, while also adding value to the corporation. Federal and State Interplay Through Delegated Programs Since compliance officers with environmental responsibilities will interact with local, state and federal agencies and inspectors, it is important to provide the following overview of the interplay and interconnections between the federal and state laws and regulations. The Environmental Protection Agency (EPA) is the federal agency charged with administering and enforcing most of the environmental laws addressed in this chapter. EPA s national headquarters are in Washington, D.C., but it has various regional offices throughout the country that oversee activities in particular regions. Each state has its own environmental regulatory agency, which also play an important role in environmental law because EPA delegates (or transfers) the administration of many of the most important laws to the states. Some statutes (such as FIFRA, the law governing the use of pesticides) only authorize EPA to make decisions. Other laws (such as those governing air, water, and solid and hazardous wastes) allow for state authority. For those statutes, states can seek primacy or program delegation which means that the state will have the lead role in running the program. However, to obtain such delegation, the states must meet certain minimum requirements. In particular, states must convince EPA that they have adopted adequate laws and regulations to meet minimum federal standards, and that they have sufficient funding and other resources to administer and enforce the laws properly. EPA has an ongoing obligation to monitor the delegated programs to ensure that the state programs continue to meet federal standards. In some cases, EPA may not approve of certain elements of the states programs, and in such cases EPA itself will administer those components of the state programs rather than fully withdrawing the state s delegated authority. Regardless of whether EPA or the state has the authority to issue environmental permits and approvals for a particular program, both EPA and the state have legal authority to bring enforcement actions The Complete Compliance and Ethics Manual (2016)

3 II. The Substantive Rules Major Statutory and Regulatory Programs (Overview, Elements, Common Violations and Defenses) THE CLEAN WATER ACT ( CWA ) History and Overview The Clean Water Act (CWA) was enacted in 1972 to restore and maintain the chemical, physical and biological integrity of the Nation s waters. The Act is the primary federal statute regulating the protection of the nation s waters. The CWA established national programs for prevention, reduction, and elimination of pollution in water and groundwater, including a water quality standards program, a permit program for discharge and treatment of wastewater and storm water, and an oil pollution prevention program. The Act also aims to achieve this goal through a mandatory permitting system for the discharge of pollutants into surface water that constitutes a water of the United States. The CWA regulations establish two different permitting programs for wastewater discharges. Those facilities that discharge directly to surface waters (such as rivers, lakes, oceans) are covered by the National Pollution Discharge Elimination System ( NPDES ) permit program (described below). Those facilities that discharge into municipal wastewater treatment plants are indirect dischargers who are covered by the Pretreatment Program. Discharge Prohibition and General Framework Under Section 301 of the CWA, the discharge of a pollutant into the waters of the United States is unlawful unless authorized by a permit issued under the Act. 106 Thus, the heart of the CWA is its two permitting programs the National Pollutant Discharge Elimination System (NPDES) for discharges from point sources (such as discharge pipes), and the Section 404 Dredge and Fill permitting system for the subset of discharges composed of dredged or fill material. These programs are implemented in various capacities by the EPA, the Army Corps of Engineers, and the states. NPDES Permitting System Any addition of a pollutant to the waters of the United States through a point source requires an NPDES permit. Somewhat surprisingly for a four decade old statute, the scope of the fundamental term waters of the United States remains a subject of hot contention, which is currently being carried forward through regulation, litigation, and legislative initiatives. These permits are issued by the EPA, or by individual states where the state is authorized to do so by the EPA. 107 The CWA defines the term pollutant very broadly when used in the NPDES and Section 404 programs to include dredged spoil, solid waste, incinerator residue, filter backwash, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat, U.S.C. 1311(a) U.S.C. 1342(b). For information on a particular state s authorization status under the CWA, see State Program Information, U.S. Envtl. Prot. Agency, The Complete Compliance and Ethics Manual (2016) 5.141

4 wrecked or discarded equipment, rock, sand, cellar dirt, and industrial, municipal, and agricultural waste discharged into water. 108 There is no de minimis level below which the discharge of a pollutant is not subject to the permitting requirement. The CWA defines the term point source as any discernible, confined, and discrete conveyance. 109 Thus, if a pollutant is discharged into a waterway through a discrete conveyance, the discharger must obtain a NPDES permit from the state or the EPA. Pollutants that enter surface waters without passing through a point source are beyond the reach of the NPDES permit program and are addressed under EPA s Nonpoint Source Management Program. 110 An NPDES permit will require compliance with the more stringent of technology-based and water quality-based requirements for each pollutant addressed. For many industries the EPA has promulgated effluent limitation guidelines that establish technology-based requirements applicable to the industrial category (e.g., paper making, metal finishing, etc.), and these are written into NPDES permits. For industries and activities not yet covered by effluent limitation guidelines, NPDES permit writers establish technology-based effluent limits based upon their best professional judgment. Water quality standards are distinct from the technology-based requirements and are governed by CWA Section 303. Water quality standards are specific to a particular body of water and are determined by the state, or if the state is not authorized, by the EPA. To develop water quality standards, the relevant governmental body first designates uses for each body of water (drinking water, recreation, etc.). Then criteria are chosen that will protect and sustain the listed uses. The water quality standards for a particular water body are either narrative or numeric, and must be satisfied by all permits issued for discharges into that water body. Under Section 303(d), 111 authorized states are required to produce a list of the water bodies in the state that are not expected to meet their water quality standards after the implementation of applicable technology-based standards. These are termed impaired waters, and the state must produce Total Maximum Daily Loads (TMDLs) for all water bodies designated as such. 112 TMDLs are a numerical expression of the maximum level of a pollutant loading that a water body can absorb and still meet water quality standards. TMDLs are not enforceable in themselves, but are the basis for waste load allocations to individual dischargers that must be included and are enforceable through individual NPDES permits. Section 404 Dredge and Fill Permits The CWA dictates that the discharge of dredge or fill material into waters of the United States requires a permit from the Army Corps of Engineers. Though the Army Corps has primary author U.S.C. 1362(6). See also 40 C.F.R U.S.C. 1363(14). See also 40 C.F.R U.S.C This effort consists of a patchwork of voluntary state-run programs, in most cases supported by federal funding. For more information, see Clean Water Act Section 319, U.S. Envtl. Prot. Agency (July 3, 2013), U.S.C To see the impaired waters in your state or learn more about the TMDL program, see Impaired Waters and Total Maximum Daily Loads, U.S. Envtl. Prot. Agency, The Complete Compliance and Ethics Manual (2016)

5 ity over the 404 program, the EPA has authority to review and object to permits. The 404 permitting program has been extremely contentious in recent years in that property owners and developers contend that the Army Corps and the EPA have too broadly construed what is included in waters of the United States, and thus, what dredge and fill activities require a 404 permit. After a string of Supreme Court cases on the topic, 113 the EPA recently promulgated a rule that defines which types of water bodies are included in, or excluded from, the waters of the United States. 114 The rule is being challenged in multiple courts, so individuals or organizations that have a stake in the definition should stay abreast of new legal developments in this area. Common CWA Violations The following are some of the most common CWA violations: Discharge without a permit Discharge in violation of permit terms, including: Numeric effluent limitations Narrative effluent limitations Failure to develop or implement required pollution prevention measures, especially with respect to NPDES storm water permits Submission of false reports or certifications THE CLEAN AIR ACT ( CAA ) History The Clean Air Act 115 ( CAA or the Act ) is a federal pollution control statute designed to protect and enhance the quality of the nation s air to promote public health and the environment. Generally, the Act regulates air emissions from both stationary and mobile sources. The CAA is composed of five main sections (commonly known as Titles ). This section will focus on Titles I, V and VI, which are the most likely to apply substantive requirements to industrial facilities, and will provide generally applicable information on administration and enforcement of the Act. Titles II, III and IV, which we do not discuss here, address respectively mobile sources, CAA general provisions, and the acid rain trading program. 113 See Solid Waste Agency of N. Cook Cnty. (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001); Rapanos v. United States, 547 U.S. 715 (2006). 114 For more information on the specifics of the new rule, see Clean Water Rule, U.S. Envtl. Prot. Agency (June 11, 2015), U.S.C et seq. (1970). The Complete Compliance and Ethics Manual (2016) 5.143

6 Title I Title I covers stationary sources, and includes the National Ambient Air Quality Standards ( NAAQS ), New Source Performance Standards ( NSPS ), and National Emissions Standards for Hazardous Pollutants ( NESHAP ) programs. The NAAQS establish overall air pollution standards for the ambient air, while the NSPS and NESHAP rules apply to individual sources. Title I also includes the New Source Review ( NSR ) preconstruction permitting program, which is distinct from the Title V operating permit program discussed below. The NAAQS program, often considered the centerpiece of CAA regulation, directs the U.S. Environmental Protection Agency ( EPA ) to establish primary and secondary air pollution standards for criteria pollutants. Currently, standards have been established for 6 criteria pollutants under this program, including: sulfur dioxide (SO 2 ), nitrogen dioxide (NO 2 ), particulate matter (PM), carbon monoxide (CO), ozone (O 3 ), and lead (Pb). Under the NAAQS program, EPA sets standards based on the best available science and states develop implementation plans designed to achieve compliance with federal standards. The state implementation plans ( SIPs ) become federally enforceable obligations after EPA approval. The NAAQS program seeks to maintain progress toward cleaner air by preventing the deterioration of air quality in areas of the country achieving compliance with the standards (the Prevention of Significant Deterioration, PSD, program), and by improving air quality in areas not in attainment with NAAQS. States are divided into areas designated as attainment, nonattainment, and unclassifiable. 116 More stringent standards apply in nonattainment areas. Under the NSPS program, EPA identifies source categories that contribute significantly to air pollution and sets minimum standards to serve as the floor for any new or modified source in that category. EPA has currently identified and set standards for more than 60 source categories of stationary sources, primarily large industrial sources of air pollutants. EPA is to set new source performance standards that [reflect] the degree of emission limitation achievable through the application of the best system of emission reduction that has been adequately demonstrated for each category, taking into account costs to achieve these reductions and the environmental and health impacts. 117 Sources subject to NSPS include new sources and existing sources that undergo modifications. EPA is required to review NSPS every 8 years or whenever appropriate and update the standards through notice and comment rulemaking, however, in practice NSPS are revised on a more infrequent basis. Under the NESHAP program, 118 EPA promulgates regulations establishing emissions standards for Hazardous Air Pollutant (HAP) emissions from new and modified major and area sources in specific categories. NESHAP also sets standards for existing sources, requiring such sources to achieve the average emissions of the top-performing 12% of sources in the same source category. In setting these standards, EPA determines the maximum degree of emissions reductions achievable for each category and subcategory based on the most stringent level achieved in practice by the best controlled sources for each of the categories. Regulated entities must comply by implementing controls to meet this standard, also referred to as maximum achievable control technology ( MACT ). The Act cur U.S.C U.S.C. 7411(a)(1) U.S.C. 7412(d) The Complete Compliance and Ethics Manual (2016)

7 rently contains a list of HAPs subject to regulation under the NESHAPs, and EPA may add or delete pollutants from this list. A major source emits 10 tons per year of any listed HAP or 25 tons per year of any combination of listed pollutants. Area sources are smaller sources, still emitting any of the hazardous air toxics listed, but at levels below the major source thresholds. The NSR program requires preconstruction permits for new or modified stationary sources. For major sources in attainment areas, these permits are for Prevention of Significant Deterioration (PSD). A PSD permit requires installation of the Best Available Control Technology (BACT). It is a case-by-case determination that requires consideration of energy, environmental, and economic impact. Major sources in non-attainment areas are required to install the Lowest Achievable Emissions Rate (LAER) technology, which is typically more stringent than BACT. Title V Title V contains the Act s comprehensive operating permitting program which consolidates all applicable regulations into one document specific to each source regulated under the Act. Sources required to obtain a Title V permit include all major sources, affected sources, sources subject to Section 111, major or area sources subject to regulation under 112 for hazardous air pollutants, sources required to obtain a new source or modification permit, and other sources designated by the EPA under the Act. 120 The Title V permit program is an independent requirement in addition to preconstruction permit requirements and other requirements already in place under the PSD program or New Source Review ( NSR ). Title V also includes monitoring provisions which allow EPA to require that permits include periodic monitoring sufficient to assure compliance. Sources are required to certify compliance at the end of the year and submit semiannual deviation reporting. Title VI Title VI implements various programs to protect the stratospheric ozone layer. It provides for the phase out of certain ozone depleting substances (ODS), imposes labeling requirements for some products containing ODS, and bans the import of certain products containing ODS. Title VI also implements various regulatory requirements for bulk imports of ODS. Administration Though the CAA is a federal statute primarily enforced by the EPA, the Act relies on a structure of delegated federalism that allows states to administer all of the CAA s major air quality programs. In addition to crafting SIPs to ensure state compliance with NAAQS, states also implement PSD preconstruction and Title V permitting programs after EPA determines that each state s program meets federal standards. Submitting PSD and Title V permit applications is often a time consuming and complex process requiring extensive engagement with state regulatory agencies. For Title V permits, each regulated 119 EPA s Pollutants and Sources website states that 187 HAPs are listed: but also states that the list contains 189 HAPs: U.S.C. 7411, 7412, 7661(a). The Complete Compliance and Ethics Manual (2016) 5.145

8 source must submit a timely permit application in accordance with EPA regulations within 12 months of becoming subject to a permit program. 121 Among other things each permit application must include: identification of all points of emission, identification of all emissions of regulated air pollutants and pollutants for which the source is a major source, emissions rates in the terms necessary to establish compliance, description of control equipment, identification and citations to all federal air pollution control requirements applicable to the facility, and details on the source s plan to comply with its obligations under the Act. State permitting authorities are required to take final action of a permit within 18 months of receiving a complete and timely application. Before issuing a final permit, the state permitting agency must give the public notice and hold a public comment period of at least 30 days on any draft permit. The state must then submit final permits to EPA, giving the agency 45 days to reject the issuance of a final permit. Primary Violations and Penalties Like most other federal environmental statutes, the CAA empowers EPA to seek administrative, 122 civil, 123 or criminal 124 penalties from regulated entities for violations of the Act, and allows citizens to supplement EPA enforcement by initiating private citizen suits against regulated entities seeking penalties or injunctions for noncompliance with the Act. 125 EPA can also seek compliance orders or injunctions. EPA s Air Enforcement website 126 provides more detailed and specific guidance regarding enforcement priorities and obligations imposed on specific source categories. Further discussion can be found later in Part Two Process and Enforcement. Common CAA Violations The following are some of the most common CAA violations: Emissions without a permit Violating CAA permit terms, including: Emissions above limits Failure to accurately track emissions Installing new equipment without permit modifications Not properly operating emission control equipment Failing to properly report emissions Other improper record keeping Failure to meet numeric effluent limitations C.F.R U.S.C. 7413(d) U.S.C. 7413(b) U.S.C. 7413(c) U.S.C The Complete Compliance and Ethics Manual (2016)

9 Failure to meet narrative effluent limitations Failure to develop or implement required pollution prevention measures, especially with respect to NPDES storm water permits Submission of false reports or certifications Defenses to CAA Liability Under the Title V permit shield defense, a permitted facility in compliance with the terms and conditions of its permit is automatically deemed in compliance with all of the statutory and regulatory provisions pursuant to which the permit was issued. Although historically regulated facilities could take advantage of the upset defense, which allowed facilities to avoid liability by demonstrating that exceedances of permit limits were the result of emergencies, recent case law has severely limited use of that defense. Similar to other statutes, there are additional potential defenses which are discussed in the enforcement section. RESOURCE CONSERVATIONS AND RECOVERY ACT ( RCRA ) hazardous waste management History The Resource Conservation and Recovery Act ( RCRA ) was implemented by the United States as a way to promote the proper management of hazardous wastes. The primary goals of RCRA are to protect the environment and human health from the potential hazards of waste disposal, to conserve energy and natural resources, to reduce the amount of waste generated, and to ensure that wastes are managed in an environmental sound manner. The Act covers all phases of the hazardous waste cycle including generators, transporters, and treatment, storage, and disposal ( TSD ) facilities. What is Solid Waste and Hazardous Waste? Under RCRA, solid waste is defined as any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities, but does not include solid or dissolved material in domestic sewage, or solid or dissolved materials in irrigation return flows or industrial discharges which are point sources subject to permits under section 402 of the Federal Water Pollution Control Act, as amended, or source, special nuclear, or byproduct material as defined by the Atomic Energy Act of 1954, as amended. 127 Thus, RCRA could potentially apply to any type of waste, regardless of its physical properties. 128 RCRA defines hazardous waste as a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may (A) cause, or U.S.C. 6903(27). 128 David R. Case, Environmental Law Handbook 145 (Thomas F.P. Sullivan, 21st ed. 2011). The Complete Compliance and Ethics Manual (2016) 5.147

10 significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or (B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. 129 Identifying Hazardous Waste Before something is classified as a hazardous waste, one must first determine whether the substance is a solid waste. The U.S. Environmental Protection Agency (EPA) has promulgated regulations where it defines solid waste to include any discarded material that is not subsequently excluded by another regulation. 130 There are a number of items that are excluded from the EPA s definition of solid waste. 131 Once a material is determined to be a solid waste, then that substance should be analyzed to determine if it is a hazardous waste. The EPA has exempted a number of substances from the hazardous waste classification. 132 If a solid waste is not covered by one of the exemptions, it will be considered a hazardous waste if it is listed in 40 C.F.R. Part 261, Subpart D, or if it exhibits any of the characteristics (ignitability, corrosivity, reactivity, or toxicity) listed in 40 C.F.R. Part 261, Subpart C. 133 Hazardous Waste Lists The EPA has created three lists of hazardous wastes, and if a company produces the wastes listed on these lists, they are automatically deemed hazardous and subject to regulation. The first list describes hazardous wastes from non-specific sources. 134 The second list relates to hazardous wastes from specific sources. 135 These first two lists are self-explanatory; a company should compare their waste with the ones listed, and if there is a match, then the company is managing a hazardous waste. 136 The third list describes discarded commercial chemical products. 137 Regulation can be triggered under the third list when, for example, a company decides to discard a listed chemical product in its natural form, or when there is a spill of one of the listed chemicals. 138 Hazardous Waste Characteristics If a substance is not listed on one of the lists, it can still be considered a hazardous waste if it has any of the following characteristics: U.S.C. 6903(5) C.F.R (a). 131 See 40 C.F.R (a). 132 See 40 C.F.R (b) (f) and 40 C.F.R., Part David R. Case, Environmental Law Handbook 147 (Thomas F.P. Sullivan, 21st ed. 2011) C.F.R C.F.R David R. Case, Environmental Law Handbook 148 (Thomas F.P. Sullivan, 21st ed. 2011) C.F.R David R. Case, Environmental Law Handbook 148 (Thomas F.P. Sullivan, 21st ed. 2011) C.F.R The Complete Compliance and Ethics Manual (2016)

11 Ignitability. A solid waste demonstrates ignitability if (1) it is a liquid that has a flash point less than 60 degrees Celsius (140 degrees Fahrenheit) and is not an aqueous solution that has less than 24 percent alcohol by volume; (2) it is not a liquid and is capable, under standard conditions, of causing fire through friction, absorbing moisture or spontaneously changing chemical composition, and burns so vigorously that it creates a hazard; (3) it is an ignitable compressed gas, based on U.S. Department of Transportation (DOT) regulations; or (4) it is an oxidizer, based on DOT regulations. 140 Corrosivity. A solid waste is corrosive if (1) it is an aqueous solution and has a ph of less than or equal to 2 or greater than or equal to 12.5; or (2) it is a liquid that corrodes steel at a rate faster than 6.35 millimeters per year at 55 degrees Celsius (130 degrees Fahrenheit). 141 Reactivity. The EPA has listed a number of properties that a solid waste exhibiting reactivity may have. A few examples include substances that have violent reactions with water, substances that form potentially explosive mixtures with water, substances that are capable of detonating under standard conditions. 142 Toxicity. A solid waste exhibits toxicity if, using the given test method, the extract from the waste has any of the contaminants listed in Table 1 (see 40 C.F.R ) at a concentration equal to or above the listed value for that contaminant. 143 Mixing Hazardous and Solid Wastes If a hazardous waste that is included on one of the three lists is mixed with a solid waste, the resulting product should be considered a hazardous waste, unless it qualifies for an exemption. 144 However, if a characteristic hazardous waste is mixed with a solid waste, the resulting substance will only be deemed hazardous if the new substance exhibits any of the 4 hazardous characteristics. 145 Generators of Hazardous Waste A generator is defined as any person, by site, whose act or process produces hazardous waste identified or listed in part 261 of this chapter or whose act first causes a hazardous waste to become subject to regulation. 146 A generator is charged with initially determining, based on the criteria discussed above, whether the waste that is generated is a hazardous waste. 147 Once a generator identifies that they are producing a hazardous waste, the generator needs to obtain an EPA identification number before any transportation, treatment, storage, or disposal of the haz C.F.R C.F.R C.F.R More examples of properties that a substance might exhibit to make it reactive are listed in this regulation C.F.R C.F.R (a)(2). 145 Id C.F.R C.F.R The Complete Compliance and Ethics Manual (2016) 5.149

12 ardous waste can occur. 148 The generator must also prepare a manifest form that identifies the name and EPA identification numbers of each authorized transporter and the TSD facility that will receive the waste. 149 A generator also needs to prepare the waste for transportation, relying on the DOT regulations under the Hazardous Materials Transportation Act regarding labeling, marking, packaging, and placarding of hazardous waste. 150 As long as a generator follows proper protocols, that generator may accumulate hazardous waste on-site for 90 days without a permit or obtaining interim status. 151 A generator can also accumulate up to 55 gallons of hazardous waste near the point of generation without a permit or interim status, as long as the specified requirements are met. 152 EPA has created separate regulations for small-scale generators that produce between 100 kilograms and 1,000 kilograms of hazardous waste in a month. A small-scale generator may accumulate hazardous waste on-site for 180 days without a permit or interim status, provided that they comply with the specified requirements. 153 If a small-scale generator needs to transport their waste 200 miles or more off-site for treatment, the waste can be stored on-site for 270 days without a permit or interim status. 154 Generators that produce less than 100 kilograms of hazardous waste in a calendar month are exempt from RCRA compliance, but are still required to follow certain standards. 155 Transporters of Hazardous Waste A transporter is any person engaged in the offsite transportation of hazardous waste by air, rail, highway, or water. 156 Any person who moves hazardous waste off the site where it is generated or the TSD site must comply with the requirements for transporters. 157 The regulations promulgated by EPA regarding transporters of hazardous waste mirror those issued by the DOT under the Hazardous Materials Transportation Act. All transporters must obtain an EPA identification number before acting as a transporter. 158 A transporter should not transport hazardous waste unless the transporter has received a copy of the manifest form and has signed and dated the manifest acknowledging receipt of the hazardous waste from the generator. 159 A transporter needs to ensure that the manifest remains with the hazardous waste at all times, and must give a copy to and receive acknowledgement from the subsequent transporter or TSD site that the waste is delivered to. 160 A transporter who is taking the waste outside the United C.F.R C.F.R C.F.R C.F.R (a) C.F.R (c) C.F.R (d) C.F.R (e) C.F.R C.F.R David R. Case, Environmental Law Handbook 161 (Thomas F.P. Sullivan, 21st ed. 2011) C.F.R C.F.R See Id The Complete Compliance and Ethics Manual (2016)

13 States has specific guidelines to follow. 161 Small-scale generators are exempt from these regulations, but have their own specific regulations to follow. 162 A transporter can hold hazardous waste at a transfer facility, such as a loading dock, for no more than 10 days without obtaining a RCRA storage permit. 163 If a transporter either transports hazardous waste into the U.S. from abroad or mixes different hazardous wastes together in the same container, the transporter will be subject to the generator regulations as well. 164 In the event of a discharge of hazardous materials by the transporter, the transporter has the responsibility of cleaning up the spill. 165 Treatment, Storage and Disposal ( TSD ) Facilities A treatment facility is one that uses any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste, or so as to recover energy or material resources from the waste, or so as to render such waste non-hazardous, or less hazardous; safer to transport, store, or dispose of; or amenable for recovery, amenable for storage, or reduced in volume. 166 A storage facility is one that engages in the holding of hazardous waste for a temporary period, at the end of which the hazardous waste is treated, disposed of, or stored elsewhere. 167 A disposal facility is a facility or a part of a facility at which hazardous waste is intentionally placed into or on any land or water, and at which waste will remain after closure. 168 The term facility is defined as all contiguous land, and structures, other appurtenances, and improvements on land, used for treating, storing, or disposing of hazardous waste, or for managing hazardous secondary materials prior to reclamation. 169 A number of different TSD facilities are exempted from compliance with the regulations. 170 There are regulations that apply generally to all types of TSD facilities, whether they are interim facilities or permitted facilities. Anyone who operates a TSD facility is required to get an EPA identification number. 171 Before treating, storing, or disposing of the waste, the operator of the TSD facility must obtain a detailed chemical and physical study of the waste. 172 Operators of TSD facilities also must take security measures to make sure that no unauthorized persons gain access to the active portion of the TSD facility. 173 The operator of the TSD facility must implement inspection procedures to catch any malfunctions in the facility that may lead to harm. 174 TSD facility personnel must be C.F.R (g). 162 See 40 C.F.R (h) C.F.R C.F.R (c) C.F.R C.F.R Id. 168 Id. 169 Id. 170 See 40 C.F.R and 265.1(c) C.F.R and C.F.R and C.F.R and C.F.R and The Complete Compliance and Ethics Manual (2016) 5.151

14 trained, either through classroom instruction or on-the-job training that ensures that the employee knows exactly how to perform his/her duties. 175 Owners and operators of TSD facilities must also take special precautions to make sure that there is not an accidental ignition of ignitable waste, such as separating the waste from open flames, hot surfaces, etc. 176 Operators are also required to follow preparedness and prevention guidelines to avoid an explosion, and must have contingency plans in the event an explosion happens to occur. 177 The owner or operator of the TSD facility must sign and date the manifest to acknowledge that the hazardous waste was received, and give a copy of the signed manifest to the transporter. 178 The operator of the TSD facility should also send a copy of the manifest to the generator within 30 days of receiving the hazardous waste. 179 The operator of the TSD facility also needs to maintain certain records until closure. 180 Basic reports are required to be filed with the regional EPA administrator or an authorized state, including a biennial report of waste management activities and, within 15 days of accepting the hazardous waste, an unmanifested waste report for waste that does not have a manifest with it. 181 When a facility is no longer accepting hazardous waste and is completing treatment, storage, and disposal activities, there are general closure requirements that TSD facilities are required to follow. 182 The EPA has promulgated other regulations that apply only to specific types of facilities that are regulated under RCRA. These facilities include containers, landfills, land treatment units, and many more. 183 Consult the regulations to see whether one of your facilities has specific regulations that must be followed. Common RCRA Violations The following are some common RCRA violations involving hazardous wastes: Improper disposal Illegal storage Improper consolidation or mixing of hazardous wastes Failure to maintain hazardous waste manifests Failure to comply with hazardous waste generator requirements Record-keeping violations Submitting false reports or certifications C.F.R and C.F.R and See 40 C.F.R and C.F.R and Id. 180 See 40 C.F.R and C.F.R and See generally 40 C.F.R and See generally 40 C.F.R. Parts 264 and 265, Subpart J et seq The Complete Compliance and Ethics Manual (2016)

15 COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT ( CERCLA OR SUPERFUND ) History The Comprehensive Environmental Response, Compensation and Liability Act ( CERCLA ) was enacted in 1980 to address abandoned sites contaminated by releases of hazardous substances. CERCLA is also frequently referred to as Superfund because it originally established a trust fund allowing EPA to respond to serious threats to human health and the environment in emergencies or at contaminated sites. Congress has not re-authorized the taxes used to maintain this Superfund and, as a result, it is EPA s policy to have Potentially Responsible Parties ( PRPs ) perform or pay for response actions. There have been two major amendments to CERCLA. In 1986, the Superfund Amendments and Reauthorization Act established a right of contribution among liable parties, assisted the process of settling with the government, and clarified what level of cleanup was needed. In 2002, the Small Business Liability Relief and Brownfields Revitalization Act established incentives to work with state cleanup programs and exemptions from liability, particularly the bona fide prospective purchaser defense. CERCLA has been extensively litigated and this section should not be relied upon as an exhaustive description of CERCLA issues. EPA s website has extensive information explaining the statute, and can be accessed at Overview of CERCLA CERCLA imposes a broad liability scheme. The statute applies retroactively and, therefore, the government may compel the cleanup of hazardous substances released before 1980, even if these hazardous substances were disposed of legally at the time. In addition, CERCLA s strict liability standard means that a party may be held liable even if it is not found to be negligent. CERCLA also imposes joint and several liability; even if a party contributed only a small percent of the contamination, it may still be held liable for the full cost of cleanup. There are four classes of PRPs under CERCLA: (1) the current owner or operator of a facility; (2) the owner or operator of a facility at the time of the disposal of any hazardous substance; (3) any person who arranged for disposal or treatment of hazardous substances at a facility; and (4) any person who transports hazardous substances to a facility selected by that person. 184 A parent company can be liable if, under the traditional principles of corporate law, piercing the corporate veil is allowed or if the parent company exercised direct control over the hazardous waste management. 185 CERCLA has also been interpreted to allow successor companies to be held liable for the actions of their predecessors. EPA may choose to investigate or clean up a site itself and later seek reimbursement from PRPs. It may also compel PRPs to investigate and clean up the site or negotiate a settlement agreement under (a), 42 U.S.C. 9607(a). 185 See U.S. v. Bestfoods, 524 U.S. 51 (1998). The Complete Compliance and Ethics Manual (2016) 5.153

16 which PRPs undertake response actions. Lastly, EPA may choose to issue a unilateral administrative order ( UAO ) under Section 106 requiring PRPs to perform a cleanup. If a party is issued a UAO, there are only two methods of recourse. The party may comply with the UAO and later petition EPA for reimbursement after the cleanup is completed. Alternatively, the party may choose not to comply with the UAO and, if EPA seeks penalties in court, to raise the defense that it had sufficient cause for non-compliance (i.e., an objectively reasonable basis to believe that the party was not liable or that the response action was arbitrary and capricious). Note that failure to comply with a Section 106 order may result in penalties of up to $25,000 per day, 186 as well as treble the amount EPA spends as a result of the party s non-compliance. 187 Private parties cannot sue to compel cleanup under CERCLA. However, Section 107(a)(4) of CERCLA allows private parties that voluntarily investigate and cleanup a Superfund site to seek to recover costs from other PRPs. In addition, a private PRP that has been sued under Section 106 or Section 107 and has paid more than its fair share of costs may have a contribution claim under Section 113(f)(1). Parties that have settled with EPA are protected from contribution claims by other PRPs. Elements of a Cost Recovery Claim Whether brought by a private party or the government, the general elements of a cost recovery claim are the same. The plaintiff must first demonstrate that the defendant falls into one of the four categories of PRPs outlined above. Next, the plaintiff must prove that there was a release of hazardous substances from a facility. CERCLA defines release as any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment. 188 A facility is defined as any site or area where a hazardous substance has... come to be located. 189 Finally, the plaintiff must prove that the release resulted in response costs (i.e., the costs of investigating and/or remediating a site). Whether response costs are recoverable is based on their accordance with the National Contingency Plan ( NCP ), a plan created by EPA containing the guidelines and procedures needed to respond to releases and threatened releases of hazardous substances. 190 In order for the government to recover response costs, such costs must be not inconsistent with the NCP. If a private party is bringing the action, response costs must be consistent with the NCP to be recoverable. A court may reimburse qualified response costs, as well as provide a declaratory judgment that the defendant is liable for future cleanup costs (b)(1), 42 U.S.C. 9606(b)(1) (c)(3), 42 U.S.C. 9607(c)(3) (22), 42 U.S.C. 9601(22) (9), 42 U.S.C. 9601(9) , 42 U.S.C (g)(2), 42 U.S.C. 9613(g)(2) The Complete Compliance and Ethics Manual (2016)

17 Defenses to CERCLA Liability The defenses available to CERCLA liability can be found in CERCLA Section 107. The following are among the more commonly used defenses: Third party defense. A PRP has a defense to liability if the release of hazardous substances at a facility was caused solely by the actions of a third party. To make use of this defense, a party must establish that: (1) it had no contractual relationship, direct or indirect, with the third party; (2) it exercised due care with respect to the hazardous substance; and (3) it took precautions against foreseeable acts or omissions of the third party. 192 Federally permitted releases. A party is not liable under CERCLA for releases authorized by other environmental statutes, such as discharges in compliance with an NPDES permit under the CWA.193 Landowner defenses. A party may also take advantage of the landowner defenses. The innocent landowner defense ( 101(35)(A)) is a defense to liability for owners or operators of contaminated property that did not know, and had no reason to know, of contamination present on the property at the time the property was acquired. The bona fide prospective purchaser defense ( 107(r)) protects persons planning to acquire contaminated property. Lastly, the contiguous landowner defense ( 107(q)) may be used when property has become contaminated due to a neighbor s actions. Although the elements of each of these defenses are generally quite distinct, they all share the central requirement that the landowner must have conducted all appropriate inquiries into the previous ownership and uses of the facility, in accordance with accepted standards, prior to purchasing the property. The regulations contained in 40 C.F.R. Part 312 further describe the all appropriate inquiries requirement. FEDERAL INSECTICIDE, FUNGICIDE AND RODENTICIDE ACT ( FIFRA ) History and Overview FIFRA provides federal control of pesticide distribution, sale, and use. All pesticides used in the United States must be registered or licensed by EPA. Registration assures that pesticides will be properly labeled and that, if used in accordance with specifications, they will not cause unreasonable harm to the environment. EPA conducts periodical reviews and inspections to ensure compliance with the registration-related requirements. Moreover, the use of each registered pesticide must be consistent with use directions contained on the label or labeling. FIFRA interacts with the Federal Food, Drug, and Cosmetics Act ( FFDCA ) and the Toxic Control Substances Act ( TSCA ). Readers should examine these other statutes for a better view of the entire regulatory framework and consult with an attorney when specific legal concerns arise. EPA s pesticide program provides helpful information about FIFRA: (b)(3), 42 U.S.C. 9607(b)(3) (j), 42 U.S.C. 9607(j). The Complete Compliance and Ethics Manual (2016) 5.155