Vol. 17, No. 1, Spring 1998, Issue 53
Richard S. Baron, Chair
Linda L. Blais, Editor
Steven E. Chester, Assistant Editor
Table of Contents
2. Committee Reports
Cite this publication as 17 Mich Env L J, No 1, p (1998)
The views expressed in the Michigan Environmental Law Journal are those of the authors and do not necessarily reflect the position of the State Bar of Michigan, the Environmental Law Section, or any governmental body. The publication in the Journal of articles, committee reports and letters do not constitute an endorsement of opinions or legal conclusions which may be expressed. The Journal is published with the understanding that the Environmental Law Section is not engaged in rendering legal or professional services.
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EPA Region V Asserts Authority to Regulate Common Law Nuisances:Where Do We Draw the Line Between Federal and State Authority?
By: S. Lee Johnson—Honigman Miller Schwartz and Cohn
The Problem: EPA Intrusion into an Area of State and Local Concern
The United States Environmental Protection Agency (EPA) Region V is seeking to expand its authority to regulate air emissions in Michigan and, perhaps, other Region V states, to include many cases that have traditionally been considered to be within the exclusive jurisdiction of state and local authorities. The issue is whether EPA Region V can enforce a Michigan air pollution control regulation that prohibits emissions of air contaminants, such as odors, dust, etc., that amount to a common law nuisance. As discussed below, EPA Region V's position on this issue is contrary to well-established national EPA policy regarding such regulations and is unsupported by the administrative history of this particular Michigan rule.
The rule in question, MAC R 336.1901 (Rule 901), prohibits emissions that cause, "injurious effects to human health or safety, animal life, plant life of significant economic value, or property," or "unreasonable interference with the comfortable enjoyment of life and property." Rule 901 essentially codifies the common law standard for nuisance emissions. Currently, EPA Region V is requiring that Rule 901 be identified as a federally enforceable requirement in all Title V permits in Michigan, pending EPA action on the Michigan Department of Environmental Quality's (MDEQ's) request for clarification of the status of Rule 901 in Michigan's State Implementation Plan (SIP). Additionally, in 1997, EPA Region V brought administrative enforcement actions based on alleged violations of Rule 901 against two Michigan facilities, one of which was recently settled. To the best of this author's knowledge, these cases are the first attempts by EPA Region V to enforce Rule 901, which has been in effect under Michigan law since 1980. These cases may even be the first attempts by any EPA Region to bring enforcement actions predicated on a state general nuisance rule.
These developments are disturbing to regulated facilities throughout Michigan that may be subject to unwarranted federal intrusion into matters of traditional state and local concern. Federal enforcement of Rule 901 is also problematic for companies in Michigan because the rule does not set specific, clear standards. The rule is intentionally nonspecific so it can apply to a variety of unforeseen circumstances, but this lack of specificity means that exactly what conduct is prohibited is a matter of interpretation. If the rule can be enforced by both EPA and the MDEQ, the two agencies may not agree whether a particular situation is or is not a violation of Rule 901. A company could face fines from EPA even if MDEQ has concluded there was no violation.
The History of Rule 901
EPA's only basis for asserting the authority to enforce this general prohibition against nuisances is to claim that Rule 901 was approved for Michigan's Clean Air Act SIP in 1980, a dubious claim. Significantly, the May 6, 1980 Federal Register notice (45 FR 29790) that EPA Region V now cites as the basis of its authority to enforce Rule 901 does not once mention Rule 901. In fact, EPA and MDEQ have stated on numerous occasions over the years that Rule 901 is not part of Michigan's SIP. For example, in a January 25, 1995 letter, Robert Irvine, Strategy and Development Unit, MDEQ Air Quality Division, stated:
It is currently the position of the Air Quality Division (AQD) that [Rule 901 is] not part of the SIP. This position is based on three facts. One, we have to date been unable to find any EPA notice of rulemaking on Rule 901 specifying it as being in the SIP. Two, EPA has been unable to find such documentation and has told us to consider it not part of the SIP. Third, staff of the AQD have publicly stated that Rule 901 is not part of the SIP because the rule covers nuisance odors and injurious effects which EPA traditionally has not been concerned about enforcing and which may not involve emission reductions impacting the SIP.
Therefore, until EPA Region V's recent statements to the contrary, it has been MDEQ's and the regulated community's understanding that Rule 901 was not part of Michigan's SIP and not federally enforceable.
The Scope of EPA's Authority
Moreover, even if Rule 901 had somehow been approved as part of Michigan's SIP, EPA Region V's attempts to enforce Rule 901 are contrary to long-established EPA policy that odor rules, nuisance rules, and other rules similar to Rule 901 that are not related to the attainment and maintenance of national ambient air quality standards ("NAAQS") are not to be included in a SIP. EPA's policy in this regard has been particularly clear with respect to odor rules since the February, 1980, report to Congress entitled "Regulatory Options for the Control of Odors" (EPA-450/5-80-003) concluded that national standards and regulation of odors were unnecessary in light of local and state odor control measures. This policy is not limited to odor rules, however, but applies with equal force to general nuisance rules like Rule 901 and other state and local air pollution control measures that are not related to achieving and maintaining compliance with the NAAQS. This policy was described in a February 9, 1979 memorandum from Michael A. James, Associate General Counsel, EPA Air, Noise and Radiation Division, to Regional Counsels and Air Branch Chiefs regarding "Status of State/Local Air Pollution Control Measures Not Related to NAAQS" as follows:
[The EPA Office of General Counsel] has always advised the Regions that measures to control non-criteria pollutants may not legally be made part of a SIP. Section 110 of the Clean Air Act makes clear that the SIP. have this limitation. This limited scope seems to be pretty well understood and only rarely does a Regional Office include a non-criteria pollutant measure in a SIP approval proposal.
I mention this now because as States submit their major SIP revisions to meet the new requirements of Part D and other provisions of the 1977 Amendments, they may not always differentiate between their regulations to control criteria pollutants and their air pollution control regulations in general. The Regional Office should differentiate if the State does not. The usual practice is that the Region notes in the proposed approval/disapproval preamble that EPA is not taking any action on an identified non-criteria pollutant measure because it cannot legally be part of the SIP. (Emphasis added.)
According to the James memorandum, the non-criteria pollutant measures that could not legally be made part of a SIP include odor rules, hydrogen sulfide restrictions, and similar rules. Michigan's Rule 901, and similar general nuisance regulations, clearly fall into this category.
In accordance with this policy, EPA has, on numerous occasions, rejected state odor rules, general nuisance rules, toxic air contaminant rules, hydrogen sulfide emission rules, and other provisions that were submitted by a state to be included in a SIP, but that do not relate directly to the regulation of criteria pollutants. See, e.g., 61 FR 47,058 (Sept 6, 1996) (EPA promulgated a "correction" to the Wyoming SIP by removing from it the Wyoming odor rules on the grounds that "the rules do not have a reasonable connection to the [NAAQS]"); 60 FR 27,411 (1995) (removal of odor rule from Minnesota SIP); 60 FR 21,703; 21,704 (exclusion of odor rule from Washington SIP); 60 FR 36,715; 36,719 (1995) (EPA declined to include a state odor rule in the Montana SIP on the grounds that EPA "has no legal basis in the [CAA] for approving the State's odor control rule [citation omitted] and making it federally enforceable" (emphasis added)); 58 FR 28,359; 28,360 (1993) (refusal to incorporate county odor rule in the Michigan SIP "because the Clean Air Act does not contain provisions for the regulation of odor and there are no [NAAQS] which regulate odor"); 58 FR 11,374 (1993) (odor rule may not be lawfully incorporated into the Virginia SIP); 51 FR 18,438 (1986) (removal of odor rule from Pennsylvania SIP); and 56 FR 60,924 (1991) (exclusion of an odor rule from the Iowa SIP). In one recent rulemaking, EPA proposed to delete the odor rules erroneously included in the SIP for Puerto Rico, and stated: "It should also be noted that it is EPA policy that no odor regulations be included in SIPs because there is no NAAQS specifically for odor." 61 FR 31,885; 31,887 (June 21, 1996) (final rulemaking action still pending).
There are three prominent cases concerning odor rules in SIPs: Concerned Citizens of Bridesberg v EPA, 836 F2d 777 (CA 3, 1987); Save Our Health Organization v Recomp of Minnesota, Inc, 37 F 1334 (CA 8, 1994); and Cate v Transcontinental Gas Pipeline Corp, 904 F Supp 526 (WD Va, 1995). It has been suggested that these cases provide authority for EPA to enforce odor rules and other nuisance rules in SIPs, even if the approval of such rules for the SIP was improper, at least until EPA follows the rulemaking procedures to remove the odor or nuisance rule from the SIP. None of these cases, however, address the question of whether EPA can enforce an odor rule or other nuisance rule that was improperly approved for a state SIP.
In Bridesberg, the court ruled that EPA did not follow the procedures to remove a series of odor rules from Pennsylvania's SIP. The court did not rule on the substantive question of whether such rules were properly approved for Pennsylvania's SIP or whether EPA could enforce the rules while they were included in Pennsylvania's SIP. Similarly, in Recomp, the court ruled only that it had subject matter jurisdiction to hear a citizen suit based upon an odor regulation that undeniably was part of Minnesota's SIP. The court expressly did not address the issue of whether such a rule was enforceable under the Clean Air Act. In Cate, the court held that the state odor provision in question had never been submitted to EPA for approval or approved by EPA as part of the Virginia SIP. Therefore, the Cate opinion does not address whether such a rule may be enforceable under the Clean Air Act.
Significantly, EPA was not a plaintiff seeking to enforce a state odor or nuisance rule in any of the three cases cited above. In fact, in Bridesberg, EPA argued vigorously that it lacked authority to approve the Pennsylvania odor rules in question. Cate and Recomp were Clean Air Act citizen suits to which EPA was not a party. This author has been unable to identify any published judicial opinion in a case in which EPA asserted that it could enforce a state odor or nuisance rule that, properly or improperly, had been approved as part of that state's SIP. Therefore, even if a state odor or nuisance rule was improperly or inadvertently approved by EPA for that state's SIP, no court has held that such a rule is enforceable under the Clean Air Act.
Importantly, Judge Hackett of the United States District Court for the Eastern District of Michigan, after surveying the numerous Federal Register notices and EPA and MDEQ correspondence and policy statements described above, recently ruled that Rule 901 is not part of Michigan's SIP. Charter Twp of Van Buren v The Environmental Quality Co, No 97-60076-AA (Jan 5, 1998). Although this opinion is not binding on EPA, and, therefore, does not conclusively resolve the issue of EPA enforcement of Rule 901, the opinion illustrates the compelling strength of the arguments against federal enforcement of Rule 901.
Responding to EPA's Assertions that it Can Enforce Rule 901 or other Nuisance Rules
Even if through carelessness or oversight, EPA mistakenly approved Rule 901 or another state nuisance rule for inclusion in a SIP, there has been a consistent EPA policy through the years that such rules are not appropriate for a SIP and, perhaps, may even be beyond EPA's legal authority to approve as part of a SIP. By now asserting the authority to enforce Rule 901, EPA is departing from long-established policies that distinguish areas of federal jurisdiction (criteria pollutant emissions and the enforcement of specific requirements under the Clean Air Act) from areas of state and local jurisdiction (all other matters, including Clean Air Act authorities delegated to the states by EPA).
Rule 901 and other nuisance rules epitomize the type of regulations that address purely local concerns. Rule 901 prohibits common law nuisances, i.e., odors, dust problems and other unpleasant or harmful air emissions. The harmful effects of such nuisances are generally limited to a small, local area. In fact, in 1979 and 1980, at the direction of Congress, EPA considered whether it should develop NAAQS standards for one of the main problems regulated by Rule 901 -- odors. EPA decided that uniform national standards were not appropriate for regulating odor problems and that state and local regulations were adequate to address odor concerns without federal intervention.
Several legal arguments are available to companies that face a claim that EPA can enforce Rule 901 or another nuisance rule. In Michigan, and perhaps other states that have a long tradition holding that a nuisance rule was never approved by EPA, one can argue that the nuisance rule is not, in fact, part of the SIP. Even if a state's nuisance rule was expressly, but mistakenly, approved for that state's SIP, one can argue that it is beyond EPA's statutory authority to approve such a rule for a SIP and, therefore, beyond EPA's authority to attempt to enforce it. In this way, companies may be able to avoid an over-stringent federal enforcement action or avoid being caught between inconsistent interpretations of nuisance rules by EPA and state authorities. Nuisance rules address matters of purely local concern that should not be elevated to federal cases.
In response to the controversy regarding the status of Rule 901 in Michigan's SIP, MDEQ Director Russell J. Harding formally requested EPA to clarify the status of Rule 901. "While we may not agree with the EPA that Rule 901 is part of the SIP, we believe an expedient way to clarify the issue is for the EPA to use Section 110(k)(6) of the Clean Air Act to clearly state that the rule is not part of the SIP." Letter from Harding to David Kee, Air and Radiation Division, EPA Region V, January 29, 1998. Section 110(k)(6) of the Clean Air Act, among other things, authorizes EPA to correct any errors that have occurred in approving any SIP or SIP revision. This procedure has been employed by EPA at least once before to remove a nuisance rule from the Wyoming SIP. See 61 FR 47,058 (Sept 6, 1996). EPA could take this opportunity to clarify, once and for all, that Rule 901 was never properly approved for Michigan's SIP.
MDEQ Proposes New Groundwater Permitting Rules
By: Scott D. Hubbard, partner, Warner Norcross & Judd LLP in Grand Rapids. Mr. Hubbard is the Chair of the Surface Water/Groundwater Committee.
Michigan's current groundwater permit program is governed by the Michigan Department of Environmental Quality's (MDEQ's) "Part 22" rules, MAC R 323.2201-2211. These rules were promulgated in 1980 under the former Water Resources Commission Act, now codified as Part 31 of the Natural Resources and Environmental Protection Act, MCL 324.3101 et seq. The program is administered by MDEQ's Waste Management Division (WMD). Over the years, the program has outgrown the regulations that govern it. Today, the majority of the substantive and procedural requirements applicable to groundwater permits are embodied in internal agency guidance that may or may not have the force of law.
MDEQ has proposed a new Part 22 rule package that would replace the current regulations in their entirety. The proposed rules would vastly expand the scope and complexity of the groundwater permit program. The proposal would also establish compliance standards and numeric criteria which in many cases would replace the nondegradation or background standard reflected in the existing rules. This article briefly highlights some of the more significant changes that would be effected by the proposed Part 22 rules, which are slated for final promulgation later this year. The public comment period for the rule package ended at the close of 1997.
Under the current Part 22 program, a facility discharging to groundwater generally must obtain either a permit or a conditional permit exemption. Exemptions are typically reserved for discharges of less than 10,000 gallons per day. Under the new program, a groundwater discharge would be regulated under one of six distinct permitting programs, each with its own unique qualifications and procedural requirements. Certain specific types of groundwater discharges, including some laundromats and sanitary system discharges to constructed wetlands, will be regulated under rules specifically tailored to the purpose. Other discharges will be subject to an assortment of permit mechanisms, ranging from fairly standardized exemptions and general permits to individually designed permits. The options available in any given case are a function of the source, composition, and magnitude of the discharge.
Regardless of permit category, all discharges will be subject to general conditions that include isolation distances from property boundaries and water supply wells; compliance with surface water quality standards; a prohibition on creating a "facility" within the meaning of Part 201 of NREPA; and a prohibition on ponding, runoff or flooding. Some of these requirements may significantly complicate the permitting process. The link to surface water quality standards, for example, would require all groundwater permits to meet the requirements of the Great Lakes Initiative (GLI) as adopted by Michigan in a rule package that became effective July 28, 1997. See MAC R 323.1041 et seq. These lengthy and extremely complex surface water rules are administered by MDEQ's Surface Water Quality Division (SWQD). It is unknown whether GLI-related questions on groundwater permits will be referred to the SWQD or managed by WMD.
The proposed rules are expressly applicable to stormwater. This not only raises some interesting compliance issues (relative, for example, to the prohibition on flooding), but may significantly increase the complexity of stormwater compliance for facilities already subject to stormwater permitting under the federal Clean Water Act. Other facilities which the U.S. EPA has thus far chosen to exempt from stormwater permitting may find themselves in need of a permit or exemption under MDEQ's more rigorous program.
Under the proposed rules, the groundwater permitting process will become subject to the "Part 21" rules, MAC R 323.2101 et seq., which govern the issuance and modification of National Pollutant Discharge Elimination System (NPDES) permits and associated application processes. In a similar development, the proposal includes "antibacksliding" provisions, similar to those applicable to NPDES permits, which generally prohibit upward adjustment of discharge limits. Wastewater treatment processes, and any changes thereto, will also become subject to MDEQ oversight and approval.
To obtain a permit, certain dischargers will be required to satisfy MDEQ that the waste stream at issue cannot be managed by pollution prevention or discharging to surface water or a municipal sewer system. The rules thus grant groundwater a higher environmental protection priority than surface water. The statutory basis for this distinction is unclear.
The proposed rules will establish a complex system of discharge standards and compliance mechanisms. The rule package includes stated numeric criteria for certain organic pollutants, including phosphorus, nitrogen, and chlorides. Other inorganics are limited by reference to regional background levels.
Organic pollutants are subject to several different standards. In some cases, a compliance standard is set at 20 percent of the level at which a Part 201 "facility" would be created. (Because the discharger must comply with the limit at the discharge point as well as in the groundwater, this compliance level is more stringent than it appears to be on a first reading.) For other organic pollutants, the rules incorporate "best available treatment" technology-based requirements established by the U.S. EPA. In the case of an organic for which there is no U.S. EPA-approved analytical method, "the discharge shall be controlled by limiting the volume of the substance used by the discharger." MDEQ is granted discretion to impose other standards, either higher or lower than those prescribed in the rules, based on economic feasibility, available technology, and other specified factors.
As some commenters have observed, the proposed rules' incorporation of the unpromulgated Part 201 cleanup criteria may violate the Michigan Administrative Procedures Act, MCL 24.201 et seq. MDEQ is evaluating this issue, which could be mooted upon the promulgation of the proposed Part 201 regulations.
The proposed rules specify minimum requirements for a number of treatment systems and discharge scenarios, including constructed wetlands, slow rate land treatment, overland flow treatment, rapid infiltration, and lagoons. The rules also authorize fairly extensive Waste Management Division involvement in cleanups under Parts 201 and 213 that involve groundwater discharges.
Although some issues may have yet to be worked out, there is no doubt that the Part 22 rule package will significantly change the regulatory landscape for existing and potential dischargers to groundwater. Interested persons are welcome to contact the author for additional information or a copy of the rule package.
By: John Tatum
The Environmental Law Section's e-mail listserver finally has been established. Last year, at the suggestion of Todd Dickinson, the Council approved investigation of the project, and it was subsequently assigned to the Technology Committee for implementation. Because this was a first for the State Bar, implementation proceeded slowly.
The listserver provides an electronic mailing list allowing the distribution of electronic messages quickly to all list subscribers at much lower cost than by U.S. Mail. The Section intends to use the listserver to notify members with e-mail addresses of committee meetings and programs and similar items of interest.
The listserver also provides an electronic forum for the discussion of topics of interest to the Section membership. Topics which might have been (and still may be) discussed usefully in this electronic forum include the recycled paper initiative and the conflict of interest ethics opinion regarding multi-party representation at hazardous waste sites. Any member can raise a topic for discussion by sending an e-mail message. The reply button on most e-mail programs will allow other members of the list to respond to the issue raised. This forum is not moderated (responses are not reviewed or approved, but are automatically posted) and so, within the bounds of professionalism and Internet etiquette ("netiquette"), the discussions should be interesting and reflective of the diversity of opinion found within the Section.
The initial e-mail addressees for the listserver were taken from the State Bar's mailing list compiled from the annual directory information. Those Section members who had an e-mail address listed were added.
2. Committee Reports
By: Robert L. Schroder, Chair and S. Lee Johnson, Co-Chair
Contributions by: S. Lee Johnson, Tyler D. Tennent and Thomas P. Wilczak
I. FEDERAL CASE DEVELOPMENTS
United States v Hoechst Celanese Corp, 128 F 216 (CA 4, 1997)
On October 27, 1997, the United States Court of Appeals for the Fourth Circuit upheld the United States Environmental Protection Agency's (EPA's) interpretation of the Clean Air Act's benzene fugitive emission standard, National Emission Standard for Equipment Leaks (Fugitive Emission Sources) of Benzene, 40 CFR part 61, subparts A, J, and V (1996). The standard exempts from its requirements any plant that "uses" less than 1,000 megagrams per year of benzene. 40 CFR 61.110(c)(2) (1996). EPA filed the action, alleging violations of the standard from 1984 to 1992, and seeking penalties for those violations. The Defendant argued that it was exempt because "uses" in the regulation means "consumption," and its plant continuously recycled benzene such that it never "consumed" more than 1,000 megagrams per year. In the alternative, the Defendant argued that it should not be held responsible for any violations because it lacked fair notice of EPA's interpretation of the standard.
The district court found that EPA's interpretation of the exemption was reasonable and was entitled to deference, but that EPA did not provide the Defendant with "fair notice" of its interpretation and, therefore, the Defendant was not liable for penalties. On appeal, the Fourth Circuit affirmed the district court's finding as to EPA's interpretation of the standard, but reversed in part as to "fair notice," finding that the Defendant received actual notice of EPA's interpretation by a letter from EPA to the Defendant in 1989 alleging violations of the standard. The Defendant was not liable, therefore, for violations that occurred prior to receipt of the letter, but it could be held liable for violations that occurred afterward.
Disimone v Browner, No 96-70974, 45 ERC 1311 (CA 9, July 31, 1997)
In a Clean Air Act citizens' suit, the Ninth Circuit Court of Appeals ordered EPA to disapprove the Clean Air Act State Implementation Plan (SIP) for carbon monoxide in two Arizona counties and reinstate the Federal Implementation Plan (FIP) that had been adopted by EPA in 1991 in response to an order of the Ninth Circuit in a previous citizens' suit. The Ninth Circuit in this case held that EPA was estopped from arguing that the 1990 Clean Air Act Amendments mandated withdrawal of the FIP and approval of the amended SIP, because those arguments had been rejected by another panel of the court in 1991. The law of the case doctrine barred EPA from relitigating the issue, despite the fact that the petitioners had changed and a new lawsuit had been filed. This was because both cases were citizens' suits in which petitioners acted as private attorneys general against the agency and because both cases concerned violations of the carbon monoxide standard in the same two nonattainment areas.
Sierra Club v EPA, 45 ERC 1513 (CA DC, Nov 4, 1997)
The court held that the EPA violated the CAA when it promulgated a regulation granting a 12-month grace period during which nonattainment areas were exempt from the CAA's transportation conformity requirements. The Sierra Club challenged a regulation promulgated by the EPA providing for this grace period and argued that it violated Section 176(c) of the CAA. Section 176(c) provides that before any transportation activities located in an air quality region designated as "nonattainment areas" or "maintenance areas" can receive federal approval or funding, the transportation activity must be found to conform with the applicable SIP or, if a SIP is not yet available for the region in question, with interim requirements.
In 1995, the EPA amended the criteria and procedures for determining whether transportation activities (such as transportation projects, programs or plans) comply with the CAA's requirements. For areas or portions of areas which were in attainment for CO, PM-10, or N02 since 1990 and which were subsequently redesignated to nonattainment for any of these pollutants, the new regulations allowed for a 12-month time period within which the requirements of compliance with the State's SIP would be inapplicable.
The standard of review used by the court to review EPA regulations was first set forth in Chevron USA, Inc v NRDC, 467 US 837 (1984). Courts first see whether Congress directly spoke to the precise question. If it did, courts must give affect to the unambiguous expressed intent of Congress. If the statute is silent or ambiguous with respect to the precise question at issue, the courts must defer to the agency's construction of the statute if it is reasonable. The Court held that the grace period is contrary to the plain meaning of the CAA because the CAA required strict adherence to SIPs in connection with transportation requirements. Courts have consistently struck down these types of administrative actions narrowing the clear statutory mandates. Secondly, the court held that the regulation is also contrary to the congressional effort to strengthen transportation confirmatory planning in the 1990 amendments to the Act.
II. FEDERAL REGULATORY DEVELOPMENTS
a. Final Rules
Approval and Promulgation of Implementation Plans; Michigan - 40 CFR Part 52
EPA approved revisions to Michigan's State Implementation Plan (SIP) for the purpose of transferring the authority of the Michigan Air Pollution Control Commission to the Director of the Michigan Department of Natural Resources (MDNR) and subsequently to the Director of the Michigan Department of Environmental Quality (MDEQ). This action effectively recognizes Executive Order 1991-31, which abolished the Michigan Air Pollution Control Commission, transferring the authority of the Commission to the Director of MDNR. This action also recognizes Executive Order 1995-18, which transferred responsibility for air pollution control from the MDNR to the newly-formed MDEQ. 62 FR 59995 (Nov 6, 1997).
Compliance Assurance Monitoring - 40 CFR Parts 64, 70, and 71
The EPA promulgated the final Compliance Assurance Monitoring (CAM) rule under the federal Clean Air Act (CAA), requiring major emission sources utilizing add-on emission control devices to comply with an emission standard promulgated prior to 1990 to monitor the effectiveness of such control devices in order to assure compliance with the underlying emission standard. CAA Section 114(a)(3), added by the CAA Amendments of 1990, mandates that EPA promulgate regulations requiring major stationary sources to conduct enhanced monitoring and submit compliance certifications. In addition, the CAA provides that Title V Operating Permits must contain provisions for determining whether a major source is in compliance with its permit.
This action completes a controversial rulemaking that began with issuance of a proposed Enhanced Monitoring (EM) rule in September 1993. The EM rule was first proposed in conjunction with the "Credible Evidence" rule, which provides that a violation of an emission standard may be established using any credible evidence, as opposed to only evidence obtained through the performance of the reference test method specified in the emission standard. The original EM rule was strongly criticized by industry representatives and many state and local environmental regulatory agencies. Chief among the criticisms of the original EM rule was the concern that the rule would impose an excessive burden on industry and, in effect, require sources to install continuous emission monitoring (CEM) equipment, even when no such requirement was con tained in the underlying emission standard. In response, EPA withdrew the EM rule and proceeded separately with promulgation of the Credible Evidence Rule, which was issued on February 24, 1997.
After issuing its original 1993 proposal, EPA held a number of meetings with major stakeholders, which resulted in the release of a new draft rule in 1995 that focused on compliance assurance. In response to comments on the 1995 draft CAM rule, EPA released a revised draft CAM rule for public comment on August 2, 1996. The 1993 EM rule focused on direct compliance monitoring, which the regulated community argued would require the installation of CEM systems or development of other monitoring methods that were directly correlated to emission values. In contrast, the final CAM rule is intended simply to provide reasonable assurance that sources meet applicable emission limitations by ensuring proper operation and maintenance of emission control equipment. To accomplish this, the CAM rule defines minimum applicable monitoring, operation and maintenance requirements intended to ensure that emission control equipment does not deteriorate to the point that emission standards are not met.
The CAM rule applies to major air emission sources that use active emission control devices as required under federally enforceable regulations issued prior to 1990. CAM rule monitoring requirements apply not only to EPA-issued regulations, but also to any state regulation included in a facility's Title V permit. EPA decided that it could limit the applicability of the CAM rule to emission control devices required under pre-1990 regulations because EPA has incorporated "directly enforceable monitoring" into all post-1990 emission regulations, which in some cases is more stringent than CAM rule monitoring.
The CAM rule applies to an emission unit if it: (i) is subject to an emission limitation or standard for the applicable regulated air pollutant (or a surrogate of that pollutant); (ii) uses a control device to achieve compliance with an emission limitation or standard; and (iii) has "potential precontrol device emissions" in the amount, in tons per year, required to classify the unit itself as a major source under Title V. (For example, a source is major under Title V if it has the potential to emit 100 tons per year of volatile organic compounds.)
A control device is defined as "equipment, other than inherent process equipment, that is used to destroy or remove air pollutants(s) prior to discharge to the atmosphere." EPA has previously listed three criteria that would be used to distinguish between control devices and inherent process equipment:
Is the primary purpose of the equipment to control air pollution?
Where the equipment is recovering product, how do the cost savings from the product recovery compare to the cost of the equipment?
Would the equipment be installed if no air quality regulations were in place?
EPA has explained that the term "potential pre-control device emissions" means the same as "potential to emit," except that any emission reductions achieved by the control device are not taken into account, even if the owner or operator is otherwise allowed to do so under the regulatory definition of "potential to emit."
The CAM rule sets criteria that define the monitoring of existing control devices that a source should conduct in order to provide reasonable assurance of the source's compliance with emission limits. The CAM rule also includes compliance certification language for use in Title V operating permits that allows a source to use CAM data to establish its compliance status with its permit terms and conditions. When a Title V permit already specifies continuous compliance monitoring, the CAM rule exempts the permittee from additional CAM rule monitoring requirements and directs that the source use the continuous compliance monitoring requirements of the permit to fulfill the CAM rule monitoring and certification requirements.
For emission units with control equipment, the CAM rule requires the owner or operator to conduct monitoring. The monitoring must include an acceptable range, referred to as an "indicator range," within which to operate the control device. In general, an owner or operator will use the results of performance tests in conjunction with equipment design information to develop the indicator ranges, which if the equipment operates within those ranges, will provide a reasonable assurance of compliance with emission limitations.
If monitoring information reveals that control equipment is operating outside acceptable ranges, then the owner or operator is required to take prompt corrective action and notify the state that potential compliance problems may exist. If the control equipment operates outside of the indicator range for long periods of time, the CAM rule contains provisions allowing the state or EPA to require more intensive evaluation and improvement of emission control practices. To address such persistent control device problems, the CAM rule allows the state agency (or EPA) to require an owner or operator to prepare and implement a quality improvement plan, which is a two-step evaluation and correction process that requires preparation of a formal plan and schedule for correcting control device problems. An owner or operator may be required to perform significant repairs to or even replace control equipment. 62 FR 54900 (Oct 22, 1997).
Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone - 40 CFR Part 52
The EPA has proposed to require 22 states, including Michigan, and the District of Columbia to reduce emissions of nitrous oxides (NOx) by an average of 35% by 2005. The proposal is partially the result of analysis by the Ozone Transport Assessment Group (OTAG), a committee formed by EPA two years ago that includes representatives from environmental agencies in 37 states. NOx emissions are believed to contribute to the formation of ozone smog, sometimes at locations far downwind from the original emission source. The proposal is based on EPA's finding that emission sources in the 22 states and the District of Columbia "contribute significantly" to ozone concentrations in other states. Under the proposal, Michigan would be required to reduce total NOx emissions by 32%. The proposal does not specify what measures each state must enact to achieve the required reductions, but EPA has stated that it expects that the reductions can be achieved by reducing NOx emissions from utility boilers by 85%.
EPA expects to promulgate the final rule by September, 1998. The affected states would then have until September, 1998. The affected states would then have until September 1999 to submit plans to EPA to implement the NOx reduction requirements. The new controls must be in place by 2002, with emission reductions achieved by 2005. The other states that would be affected by the proposed rule are: Alabama, Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Missouri, North Carolina, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, Wisconsin, and West Virginia. 62 FR 60317 (Nov 7, 1997).
Ambient Air Quality Surveillance for Lead - 40 CFR Part 58
EPA has proposed lead air monitoring standards to reflect the fact that lead air pollution levels measured near U.S. roadways have decreased 97% between 1976 and 1995 due to the introduction and requirement of unleaded gasoline. Many lead monitoring stations are being shut down. In urban areas, monitoring networks are being maintained to determine compliance with the National Ambient Air Quality Standards (NAAQS). Stationary sources which emit lead may now be required to monitor for lead. This action was originally published as a "direct final" rule, but, because adverse comments on the rule were received, the "direct final" rule has been withdrawn and this rulemaking will proceed according to the normal public notice and comment procedures. 62 FR 59813 (Nov 5, 1997); 62 FR 59840 (Nov 5, 1997); 62 FR 67009 (Dec 23, 1997).
Environmental Litigation Committee
By: Steven H. Huff, Chair
The Toxic Tort Committee has expanded to become the Environmental Litigation Committee. The subject matters covered by the Environmental Litigation Committee include toxic torts, environmental enforcement (civil and criminal, including citizen suits), expert testimony, and other environmental litigation issues. If you would like to become a member of this Committee, simply send or fax a letter indicating your interest to Donnelly W. Hadden, P.C., Attn: Steven H. Huff, 301 E. Liberty St., Suite 585, Ann Arbor, MI 48104. The fax number is: (734) 662-8003. Your name will then be added to the Committee's mailing list for receiving notices of upcoming meetings and events. Notice concerning the first meeting of this new committee will be mailed shortly.
General Electric Co v Joiner, 522 US___No 96-188, 1997)
On December 15, 1997, the U.S. Supreme Court ruled that an appellate court should apply the "abuse of discretion" standard when reviewing a trial court's decision to admit or exclude expert testimony under Daubert v Merrell Dow Pharmaceuticals, Inc, 509 US 579 (1993), even when the evidence is dispositive of the entire litigation. In Joiner the Supreme Court explained that the Eleventh Circuit created an unwarranted distinction between district court rulings that admit evidence and those that exclude it. According to the Court, the district courts are still to act as "gatekeepers", even though the Federal Rules of Evidence allow for the admission of a broader range of scientific testimony than was admissible under Frye v US. "A court of appeals applying `abuse of discretion' review to such rulings may not categorically distinguish between rulings allowing expert testimony and rulings which disallow it." Slip op at 5. Thus, in applying an overly stringent review standard to the district court's ruling, the U.S. Court of Appeals for the Eleventh Circuit "failed to give the trial court the deference that is the hallmark of abuse of discretion review." Slip op at 5-6.
The Supreme Court also found the appeals court erred when it reversed the district court on the grounds that it incorrectly focused on the expert's conclusions rather than the expert's methodology and conclusions:
[C]onclusions and methodology are not entirely distinct from one another. Trained experts commonly extrapolate from existing data. But nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence which is connected to existing data only by the ipse dixit of the expert. A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered. Slip op at 9.
In the dissenting portion of his opinion, Justice John P. Stevens criticized the majority's opinion on this latter issue, stating:
The court of appeals' discussion of admissibility is faithful to the dictum in Daubert that the reliability inquiry must focus on methodology, not conclusions. Thus, even though I fully agree with both the district court's and this Court's explanation of why each of the studies on which the experts relied was by itself unpersuasive, a critical question remains unanswered: When qualified experts have reached relevant conclusions on the basis of an acceptable methodology, why are their opinions inadmissible?
Justice Stevens went on to explain that he believed that "the difference between methodology and conclusions is just as categorical as the distinction between means and ends." Justice Stevens did not think that the statement that "`conclusions and methodology are not entirely distinct from one another', ante, at 9, is either accurate or helps us answer the difficult admissibility question presented by this record." Stevens' Opinion, at 5-6.
On the issues of whether plaintiff was exposed to furans and dioxins and, if so, whether the opinions of his experts would then be admissible, the case was remanded by the Eleventh Circuit to the trial court on February 9, 1998.
National Bank of Commerce v Smits, No 97-1755 (CA 8, Jan 22, 1998)
Citing General Electric Co v Joiner, the Eighth Circuit recently upheld the exclusion of expert testimony that pesticides caused a plaintiff's birth defects. In a three page opinion, the Court explained that, "`[a]lthough we may not agree with the district court's analysis of Daubert in every detail, we find no abuse of discretion."' 12 TXLR 1009.
Kannankeril v Terminix International Inc, 128 F 802 (CA 3, 1997)
The Third Circuit ruled in October that a district court's Daubert ruling excluding a plaintiff's expert causation evidence was an improper exercise of its gatekeeping role. The Third Circuit found that the expert's opinion that Dursban caused the plaintiff's cognitive impairment had a factual basis, was the result of an acceptable differential diagnosis methodology and was supported by scientific theory.
The evidence was therefore admissible under Fed R Evid 702, Daubert and In re Paoli RR Yard PCB Litigation, 35 F 717 (CA 3, 1994).
Defendant argued that plaintiff's expert was unreliable because he had not performed any diagnostic medical tests himself and had not employed sufficient diagnostic techniques to have good grounds for his conclusions or to have properly performed a "differential diagnosis". In rejecting this argument, the Court stated:
Depending on the medical condition at issue and on the clinical information already available, a physician may reach a reliable differential diagnosis without himself performing a physical examination, particularly if there are other examination results available. In fact, it is perfectly acceptable, in arriving at a diagnosis, for a physician to rely on examinations and tests performed by other medical practitioners. Kannankeril, at 807.
The court also rejected defendant's argument that there were alternate causes other than exposure to Dursban for plaintiff's condition. Her expert concluded that, while an alternate explanation for each of plaintiff's individual symptoms may exist separately, to a reasonable degree of medical certainty, Dursban was the most likely cause of her condition as a whole. Id., at 808.
With respect to the degree of exposure, the Third Circuit found that the trial court had erred in finding plaintiff's expert had no knowledge of plaintiff's level of exposure to Dursban where the expert "had sufficient knowledge of exposure from his review of Terminix's application records, showing when, how much, and where pesticide had been applied." Defendant argued that ambient air testing was the only reliable method of determining exposure to pesticide. The court, however, explained that, "[a]ll factual evidence of the presence of the chemical in the residence" is relevant in forming an expert causation opinion. It emphasized that the trier of fact, not the trial judge in pre-trial motions, is to determine what weight should be given to ambient air test results as an indication of exposure.
With respect to peer review and publication, the court explained that "`it is an abuse of discretion to exclude testimony simply because the trial court does not deem the proposed expert to be the best qualified or because the proposed expert does not have the specialization that the court considers most appropriate.' If the expert meets liberal minimum qualifications, then the level of the expert's expertise goes to credibility and weight, not admissibility." Kannankeril, at 809 (citations omitted). The Third Circuit, therefore, concluded that plaintiff's burden was "only to provide an expert opinion that is relevant and reliable and that will assist the trier of fact." Id., at 809-810.
BREAST IMPLANT LITIGATION
In re Dow Corning Corp, No 95-20512 (US Bankr Ct ED Mich, plan filed 2/17/98)
Dow Corning Corp. recently filed an amended bankruptcy reorganization plan. This one includes $3 billion for breast implant and other product liability claims and $1.4 billion for commercial claims. In August 1997, Dow Corning had filed a reorganization plan which included $2.4 billion for product liability claims and $1.3 billion for commercial claims. However, Judge Arthur J. Spector rejected that plan in November 1997. Overall, the new settlement proposal for individual claims tops the August 1997 settlement offer by $640 million. BNA reports that the revised plan offers women more than 15 settlement choices, with payments ranging from $1,000 to $200,000. Additional funds might also be available for women whose uninsured medical expenses exceed initial settlement amounts. 12 TXLR 1050.
Miller v Dow Chemical Co, No 97-30385 (ED Mich, 1997)
Breast implant recipients filed a putative national class action against Dow Chemical Co. in the U.S. District Court for the Eastern District of Michigan on October 14, 1997. The suit alleges that Dow Chemical, the parent of implant manufacturer, Dow Corning Corp. conducted toxicological studies on silicone for its subsidiary and conspired with Dow Corning to conceal its adverse affects. 11 TXLR 602. The proposed class includes all persons implanted with silicone gel breast implants manufactured by Dow Corning, except those individuals who qualified for membership in a class certified by the Louisiana court (Spitzfaden V Dow Corning Corp). The U.S. Supreme Court recently set very high standards for class certification in Amchem Products Inc V Windsor, No 96-270 (US Sup Ct, June 25, 1997) (a case finding asbestos plaintiffs' claims were too diverse to satisfy class action requirements). Dow Chemical spokesman John Musser told the BNA, "This proposed class action lawsuit really doesn't warrant a lot of attention", and added that he is "very skeptical that this complaint could ever achieve certification." On the other hand, plaintiffs' attorney J. Douglas Peters said he did not think Amchem would present any difficulties. He told the BNA that, unlike Amchem, specific disease categories were established in the global settlements in the multidistrict litigation case that preceded the bankruptcy filing. 11 TXLR 602.
Spitzfaden v Dow Corning Corp, No 92-2589 (La Civ Dist Ct, Jan 14, 1998)
Dow Chemical Co. intends to appeal a verdict finding it liable for breast implant injuries following the Louisiana trial court's ruling that the August 1997 verdict constituted a final order. Dow Chemical may also appeal a ruling by the trial court that the verdict applies to 1,800 class members as well as the eight named plaintiffs despite Judge Hood's December 1997 ruling decertifying the class. The verdict came in Phase I of the trial which addressed Dow Chemical's liability. The jury had found that the company researched the medical aspects of silicone and misled women about the product's safety. 12 TXLR 922. In the meantime, all further proceedings in the case have been stayed pending the outcome of the appeal.
Jurisdictional issues continue to be disputed. Judge Hood had removed the 1,800 cases to her court in May 1997 but allowed the eight named plaintiffs to go forward in Louisiana because they had no federal claims, and their cases could be timely adjudicated there. This ruling is currently on appeal in the U.S. Court of Appeals for the Sixth Circuit.
Texas v American Tobacco Co, No 5-96CV-91 (ED Tx, settlement announced Jan 16, 1998)
Like the cases in Mississippi and Florida, the Texas suit against the tobacco industry ended up in a settlement. U.S. District Judge David Folsom approved Texas' $15.3 billion settlement with the tobacco industry earlier this year. He now has oversight of the distribution of the largest settlement in U.S. litigation history. According to the BNA, Texas will receive more than $1.2 billion in 1998, and some $428 million will go to a nonprofit foundation that provides grants to orga nizations that offer a variety of health care services for Texans. The rest is designated for children's health care and smoking cessation. 12 TXLR 920.
Minnesota v Philip Morris Inc, No C1-94-8565 (Ramsey Cnty DC Minn, 1998)
Jury selection in Minnesota's Medicaid lawsuit against the tobacco industry commenced on January 20, 1998. In this first case to actually go past jury selection, plaintiffs are seeking more than $1.77 billion in damages as compensation for funds spent on treating sick smokers. The state is seeking additional damages for alleged violations of antitrust and consumer protection laws.
According to the Associated Press, an attorney's memorandum, introduced as evidence in Minnesota's suit, warned the American Tobacco Co. three decades ago against research into smoking and potential health problems for the reason that the research could someday be used against the tobacco company.
GULF WAR SYNDROME
Clark v United States, No 97-419 (US Sup Ct, cert denied December 15, 1997)
The U.S. Supreme Court refused to review a Fifth Circuit Court of Appeals' decision that the claims of children born after their parents left active military service are barred by the Feres doctrine. The trial court had dismissed a suit filed under the Federal Tort Claims Act by parents of a child born with profound congenital defects allegedly caused by her father's exposure to toxic chemicals during the Gulf War. It based this decision on the fact that "the child's injuries had their `genesis in the service related injury of a soldier,' and were therefore barred under Feres V United States which precludes recovery for service-related injuries." 12 TXLR 794. The Fifth Circuit had affirmed for those same reasons.
By: John L. Tatum, Chair and Thomas P. Wilczak, Co-Chair
The Program Committee met in January and February, 1998 to begin planning the Environmental Law Section activities for 1998. A program on the new Part 201 rules is being planned for the State Bar Annual Meeting of the Environmental Law Section at 9:00 a.m. on September 16, 1998. Lynelle J. Marolf of the MDEQ has agreed to be a speaker. Claudia Rast and Alan Wasserman will co-chair the program.
A Spring Program on environmental litigation will be co-chaired by Beth Gotthelf and Charlie Denton and will feature selected portions of a mock trial. Speakers will include John Byl and Skip Pruss; Judge Nancy Edmunds has agreed to be the judge if available that day. There is a possibility that the program also could include successor liability and/or insurance trigger updates.
The Program Committee also is working with the subject matter committees to develop 1998 programs. The Superfund Committee is planning a town hall meeting with EPA addressing Brownfields topics. A new Part 201 Operational Memoranda package also may be discussed. The Air Committee expects to put on a Spring program. The Wetland/Natural Resources Committee may offer a program in mid-to-late June on the wetlands banking rules, with a possible tour of the Crosswinds wetland. Also, there may be a Groundwater/Surface Water Committee program in the fall on storm water program rules.
Solid and Hazardous Waste/Insurance Committee
By: Susan L. Johnson, Chair and Mark S. Demorest, Co-Chair
The committee has not yet met this year, but hopes to schedule a meeting the end of March/beginning of April. In the interim, a survey will be sent to committee members to plan the focus and direction of the committee for the coming year. Mark Demorest of Hainer, Demorest & Berman, P.C. has agreed to co-chair the committee.
Part 115 Rules. The working group set up to develop revisions to the Part 115 rules has just about completed its work and expects to meet one more time before the package is finalized. Final rules are expected late summer/early fall, 1998.
RCRA Subtitle D Rules. A final rule setting forth a financial test for corporate owners/operators of municipal solid waste landfills to meet closure/post-closure care obligations has cleared OMB review and is expected to be issued prior to April 9, 1998.
HB 5284. Rep. Tom Alley, chair of the House Conservation and Energy Committee continues to hold hearings on this bill, which would provide for the unrestricted flow of solid waste between Michigan counties and significantly modify the current county solid waste planning mechanism to provide for more local control and involvement, similar to last year's Substitute for House Bill 5830, described in a prior committee report.
SB 4. This bill originally introduced by Sen. Loren Bennett and passed by the Senate last year, would amend Part 115 of Michigan's Natural Resources and Environmental Protection Act (NREPA) to prohibit the disposal of waste generated outside the State into Michigan landfills as soon as such prohibitions are authorized by federal legislation. The House Conservation and Energy Committee reported this bill out of Committee on February 11, 1998 with two amendments which would prohibit disposal of waste from states which do not have solid waste disposal regulatory systems at least as stringent as the State of Michigan's, unless the person disposing of such waste certifies that the waste does not contain materials prohibited from disposal in Michigan. The amendments would also impose a $50,000.00 fine for violation of this provision.
Waste Management Inc of Tennessee v Metropolitan Government of Nashville, No 95-586315900 (CA 6, Nov 5, 1997)
Overturning the lower court's ruling in part, the 6th Circuit Court of Appeals found the defendants' local ordinances which required that all waste collected in the Metro district be disposed of at Metro approved facilities and all residential waste at Metro's incinerator, to be facially discriminatory and violative of the Commerce Clause as "there [were] other means of advancing the legitimate local interests cited."
Gelman Sciences, Inc v Fidelity & Casualty Co,___ Mich___; 572 NW2d 617 (1998)
The issue in these consolidated cases, Gelman Sciences Inc v Fidelity & Casualty Co and Arco Industries Corp v American Motorists Ins Co, was whether coverage may exist under an occurrence policy when property damage may have occurred during the policy period, but the contamination was not discovered until years after the policy expired. In both Gelman and Arco, the Michigan Court of Appeals adopted the "manifestation" trigger of coverage, and held that no coverage existed because the contamination was not discovered until after the policies expired.
The Supreme Court was asked to choose among the four trigger of coverage theories which have been adopted by courts across the country for environmental claims: the (1) "exposure," (2) "injury in fact," (3) "manifestation," and (4) "continuous" trigger theories. The Supreme Court unanimously adopted the injury-in-fact trigger of coverage theory. The Court rejected the manifestation theory, reversed the Court of Appeals decisions in Gelman and Arco, and overruled Trans-america Ins Co v Safeco Ins Co,
189 Mich App 55; 472 NW2d 5 (1991), in part.
The Supreme Court began its analysis by noting that choosing a trigger of coverage theory is a matter of contract interpretation. If the language of the insurance policy is unambiguous, the policy must be enforced as written, "interpreting the unambiguous language in its plain and easily understood sense." 572 NW2d at 623. However, if the policy language is ambiguous, then "ambiguous provisions must be construed in favor of the policyholder." Id. Furthermore, the Court stated that if a policyholder's interpretation of the policy language is reasonable, the reasonable expectations of the policyholder must be protected.
Both Gelman and Arco involved insurance policies which defined an occurrence substantially as follows: "[a]n accident, including injurious exposure to conditions, which results during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured. . ." Id.
Because the policy language focused on the occurrence of damage during the policy period, the Supreme Court rejected the "manifestation" theory, which holds that coverage is triggered when damage is discovered or manifests itself. The Supreme Court reversed the Court of Appeals because the "manifestation trigger simply is not supported by the policy language." Id. The Supreme Court also felt that adopting the manifestation trigger might effectively convert "more costly `occurrence' policies into less expensive `claims made' policies because coverage would be denied unless the property damage were discovered within the policy period." 572 NW2d at 625.
The Supreme Court adopted the "injury in fact" trigger of coverage as being most faithful to the language of the insurance policies.
The Supreme Court held that coverage is triggered when the alleged property damage first occurs and that "[c]overage would also exist under any subsequent policy periods during which contamination continued to occur." 572 NW2d at 627. The Supreme Court did not extensively discuss the "exposure" trigger of coverage, which would trigger coverage when the exposure to injury-causing conditions occurs or the "continuous trigger," which holds that the injury occurs continuously from exposure until manifestation. However, the Court's discussion of its reasons for choosing the "injury in fact" trigger make it clear that both of these alternative theories were rejected by the Supreme Court.
In adopting the "injury-in-fact" trigger, the Supreme Court recognized that it may be difficult for the policyholder to show exactly when contamination occurred. "[T]he plaintiff may not be able to pinpoint when the property damage actually occurred, or to apportion the amount of damage occurring during each period." 572 NW2d at 625. In such a case, the Supreme Court instructed the courts to "establish some means of allocating the risk among the insurers." Id. The Supreme Court also suggested that coverage may be triggered at different times for different types of property damage.
The Supreme Court remanded the Gelman case for a determination of when the contamination occurred. In Arco, however, there had already been a determination by the trial court that there were occurrences during each of the defendants' policy periods. The trial court's findings in Arco were affirmed by the Supreme Court.
Surface Water/Groundwater Committee
By: Scott D. Hubbard, Chair and Dennis J. Donohue
The Committee met in Lansing on January 20, 1998. A separate meeting site in Detroit was connected by conference phone. The meeting featured a presentation by Frank J. Ruswick, Jr., of the MDEQ Waste Management Division concerning proposed revisions to Michigan's groundwater permitting rules. Copies of the presentation materials are available upon request. MDEQ expects to promulgate the rule package later this year.
FEDERAL ADMINISTRATIVE DEVELOPMENTS
EPA Selects 58 Chemicals and 13 Microbial Substances for Possible Regulation Under Safe Drinking Water Act
On October 6, 1997, the EPA announced that it has identified for potential regulation 58 chemical contaminants and 13 microbiological contaminants in drinking water (62 FR 5219). The EPA's action was necessitated by the 1996 amendments to the Safe Drinking Water Act, which requires that a final list of contaminants for potential regulation be published by February 1998.
EPA Issues Draft Strategy to Control Non-Point Source Pollution
In a draft document dated October 7, 1997, the EPA delineated a strategy to upgrade and implement existing programs on non-point source pollution. The strategy focuses on broadening public awareness, upgrading implementation of state non-point source programs and incorporating state non-point source controls into the TMDL process.
EPA Clarifies its Regulation of Stormwater Discharges from Ore Mining Activities
On October 22, 1997, EPA issued a notice of its proposal to clarify an interpretation of effluent guidelines for discharges from ore mining operations to clarify that certain stormwater discharges from these operations would not be subject to effluent guidelines unless they come from an "active mining area" (62 FR 54950).
EPA Proposes Pretreatment Standards for Industrial Laundry Facilities
The EPA has proposed regulations that would require certain industrial laundry facilities to meet pretreatment standards incorporating chemical precipitation to remove pollutants from wastewater generated from washing industrial items (62 FR 66182). The proposed standards would apply to facilities that launder industrial textile items shipped from another site and function independently of other industrial activities producing waste water.
EPA Proposes "Phase II" Stormwater Regulations
On January 9, 1998, EPA published proposed regulations implementing "Phase II" stormwater regulations, focused on controlling stormwater discharges from small cities (less than 100,000) and construction sites (53 FR 1536). Comments on the EPA proposal are due by April 9, 1998.
STATE ADMINISTRATIVE DEVELOPMENTS
New Part 22 Rules
The Department of Environmental Quality Waste Management Division published proposed amendments to the administrative rules governing discharges of waste or wastewater to groundwater (known as the "Part 22" rules) in last October's Michigan Register (1997 MR 9, p. 115). The proposed rules set forth an extensive set of regulations for groundwater discharges including greatly expanded permitting and reporting requirements for groundwater discharges than those that currently apply. The Department is currently evaluating public comments on the rule package and is preparing to send the rules to the Office of Regulatory Reform for review.
By: Cheryl Calloway, Chair
The purpose of the Technology Committee is to oversee development of the Section Web Page and to facilitate use of electronic means of communication among section members. To that end, we have initiated three listserves: firstname.lastname@example.org for exclusive use by Council members; email@example.com for exclusive use by the Technology Committee; and envirolaw@michbar. org for the use of all section members.
John Tatum is our "list wrangler" who will address issues concerning the use of these listservs, as well as addressing technical issues with the Bar concerning them. At this time, we plan to use the section listserv to provide information to section members. Section members also may post questions, responses to questions, or hold discussions on topics of relevant interest. Spamming will not be tolerated. Mr. Tatum will be providing more information to section members about this list, how to access it, and how to use it.
The committee also has established links to various sites of interest concerning environmental issues. The Program Committee is listing program information on the site, as well as accepting program registrations via the Internet. The Environmental Law Journal also can be accessed on our web page. Next steps are to get information about each of the Committees on the page and further address the issues of links.
At the November Council meeting, the Technology Committee was asked to provide a recommendation to the Council concerning links to law firm sites. The Committee recommended to the Council that a link be established on the Section web page to any section member who requested such a link. That recommendation was accepted by the Council. The Chair of the Technology Committee also reminded Committee chairs that they should provide relevant information about their committee. Specifically, the name, address, phone and fax numbers and e-mail address of the chair and co-chair; a brief description of the purpose of the committee; and information about upcoming meetings and events. Committee chairs also were asked to pass on to Jim Enright general information sites which the Technology Committee should consider linking to the Section page.
These casenotes were prepared by the students of the Environmental Law Society at the University of Michigan Law School.
117 S Ct 2537 through 1l8 S Ct 463
116 F 1451 through 129 F 137
952 F Supp 1575 through 974 F Supp 1
[6th Circuit cases only]
455 Mich 753 through 456 Mich 304
223 Mich App 619 through 225 Mich App 497
I. Federal Appellate Cases
Clinton County Comm'r v EPA, 116 F 1018 (CA 3, 1997)
The plaintiffs, county commissioners and a citizens group, sought to enjoin the EPA's proposed trial treatment of contaminated soil through on-site incineration. The court held that (1) district courts lack subject matter jurisdiction to hear CERCLA citizens suits against incomplete EPA remedial actions, despite allegations of harm; (2) plaintiffs do not have a constitutional right of access to the courts that overcomes the court's lack of jurisdiction; (3) plaintiffs' RCRA-based claims are precluded by the lack of subject matter jurisdiction; and (4) the district court does not have subject matter jurisdiction under the Kyne doctrine, which permits jurisdiction where the agency action is in excess of authority or in violation of a clear statutory prohibition.
OHM Remediation Serv v Evans Cooperage Co, 116 F 1574 (CA 5, 1997)
The plaintiff responded to a hazardous waste release, but was unable to recover clean-up costs from a bankrupt recycling facility. Then, the plaintiff sought to recover costs under CERCLA from a company that had delivered waste to the facility. The court held that there is no requirement that claimants have a "protectable interest" to recover response costs and that only liable or potentially responsible parties may bring contribution actions under 113(f) of CERCLA.
US v Lowe, 118 F 399 (CA 5, 1997)
The United States sought to recover oversight costs in connection with a CERCLA action it brought against the defendant. The court held that oversight of a private party remedial action is a response under 101(25) of CERCLA, and thus, under 107(a)(4)(A), the responsible parties are liable for EPA oversight costs.
Pinal Creek Group v Newmont Mining Corp, 118 F 1298 (CA 9, 1997)
The plaintiff, a PRP group that was voluntarily cleaning up a CERCLA site, sued another PRP for imposition of joint and several liability and for the totality of the cleanup costs. The court held that because all PRPs are liable under CERCLA, a suit by one PRP against another is necessarily for contribution and the amount a second PRP is liable for under contribution is its equitable share of the total liability and not for the totality.
Sierra Club v EPA, 118 F 1324 (CA 9, 1997)
The plaintiff sued the EPA, questioning the validity of the rule it passed concerning the importation of PCBs into the United States for disposal. The Court of Appeals agreed with the plaintiff and said that the Toxic Substances Control Act (TSCA), 15 USC 2601 et seq., defines manufacturing PCBs to specifically include importing PCBs into the United States. Thus, the absolute ban on manufacturing PCBs also served as an absolute ban on importation of PCBs into the United States. Therefore, the rule was held to violate TSCA and was overturned.
Legal Environmental Assistance Foundation, Inc v EPA, 118 F 1467 (CA 11, 1997)
An environmental organization challenged an agency order denying its request to withdraw approval of a state's underground injection control program. The program did not regulate hydraulic fracturing, and the organization alleged that such regulation was required by the Safe Drinking Water Act, 42 USC 300f et seq. Although the agency interpreted the statute and regulations to cover only wells that injected fluid into the ground as their primary purpose, the court held that the plain meaning of the statute included hydraulic fracturing.
US v Sinskey, 119 F 712 (CA 8, 1997)
The court upheld a criminal conviction of the defendants, a plant manager and plant engineer of a meat-packing plant, for violating the CWA through "flow manipulation" and "selective sampling" of wastewater. The defendants claimed that the word "knowingly" in the statute required knowledge that their conduct violated the law. The court held that it merely referred to knowledge that their activities were rendering the monitoring methods inaccurate. Also, evidence that the plant engineer had encouraged the misleading monitoring scheme was sufficient to support a verdict of aiding and abetting.
Troy Corp v Browner, 120 F 277 (CA DC, 1997)
A group of chemical manufacturers sought to overturn the district court's grant of summary judgment in the EPA's favor in an action brought to invalidate the EPA's ruling that added 286 chemicals to the Toxic Release Inventory (TRI) under the Emergency Planning and Community Right to Know Act of 1986. The group sought to overturn the addition of the entire list of chemicals as a whole, and if that was not allowed, to overturn the addition of certain individual chemicals on the list. The court gave various reasons in support of its holding that an entire category of chemicals could be added to the TRI without individual testing of each chemical and that proper hazard evaluation was used in allowing the chemical list to be added. The court also held that two of the chemicals, Bronopol and Dimethylphenol, were improperly added to the TRI, stating that the addition of these two chemicals was arbitrary and capricious.
ABB Industrial Systems, Inc v Prime Technology, Inc, 120 F 351 (CA 2, 1997)
Current owners of contaminated property brought an action under CERCLA and RCRA, breach of contract and negligence, against several companies that had previously owned or been in control of the property. The court held that passive migration of hazardous chemicals was not a basis for liability under either CERCLA or RCRA, that the breach of contract claim was barred by the statute of limitations, and that there was no basis for a finding of negligence.
Sierra Club v Slater, 120 F 623 (CA 6, 1997)
The plaintiffs sued numerous federal, state, and local officials in an attempt to prevent the construction of an urban corridor development project which had a four-lane highway as its base. The Court of Appeals affirmed the district court's grant of summary judgment to the defendants, holding that (1) the statute of limitations commenced when the Federal Highway Administration issued its record of decision approving the EIS prepared for the project; (2) the Army Corps of Engineers was not required to prepare an EIS in connection with the defendants' request to fill a wetland; (3) the refusal to supplement the EIS was not arbitrary and capricious; and (4) the plaintiffs' motion for summary judgment was moot after the district court granted summary judgment for the defendants.
Simmons v US Army Corps of Engineers, 120 F 664 (CA 7, 1997)
The plaintiff sued the Army Corps of Engineers, alleging that they violated NEPA when, in their final EIS they failed to consider all reasonable alternatives for building a water reservoir. The court held that a federal agency must define a project's purpose and then identify all reasonable alternatives to be in compliance with NEPA. The defendant failed to do both and the court held in favor of the plaintiff.
Southwestern Pennsylvania Growth Alliance v Browner, 121 F 106 (CA 3, 1997)
The plaintiffs sought review of a final EPA ruling denying Pennsylvania's request to have nonattainment areas be given attainment status for ozone under the CAA. The court denied the plaintiffs' petition, holding that the EPA could consider data from more than a year and a half after it received the redesignation request and that under the CAA, the EPA may not redesignate an area that is nonattainment of the national ambient air quality standard. Consequently, the plaintiffs' petition was denied.
Public Interest Research Group of New Jersey v Magensium Elektron, Inc, 123 F 111 (CA 3, 1997)
The plaintiffs brought a citizen suit under the CWA, against a zirconium carbonate manufacturer, alleging that the defendant violated the terms of its NPDES permit. The court held that because the plaintiffs failed to show any actual injury or any credible threat of injury to any of its members as required under Lujan, the plaintiffs did not have standing. The case was reversed and vacated.
Western Radio Services Co v Glickman, 123 F 1189 (CA 9, 1997)
An operator and principal of a telecommunications facility located in a national forest sought NEPA and NFMA injunctions to prevent federal agency officials from granting permits to an industry competitor for construction of a facility on national forest land. The court affirmed the district court's dismissal, holding first that the 200 foot relocation of the facility did not require a new special use permit and that the challenge was precluded by an earlier action brought by a principal whose interests were identical to those of the operator. The court also dismissed the plaintiff's Ashenbacker claim, holding that the defendant-agency's denial of a special use permit to the plaintiff did not give rise to an Ashenbacker claim. Finally, the court dismissed the plaintiff's claim that the defendant improperly segmented the facility's EIS from that for an access road, holding that the facility's prior existence negated any claim that the projects were independent and holding that the plaintiff's claim was not yet ripe because the defendant had yet to grant final approval of the access road.
Aluminum Co of America v Beazer East, Inc, 124 F 551 (CA 3, 1997)
The plaintiff, ALCOA, sought a declaratory judgment that it was not an "operator" for purposes of CERCLA because it was simply a shareholder in the company that caused the incurrence of CERCLA liability. The court held that a corporation may only be held liable as an "operator" of facilities owned by another corporation if the "actual control" standard is met. In this case, the court specifically held that a corporation which controlled the violating corporation's board of directors and also supplied them with materals for their operation was not a responsible party under CERCLA because plaintiff acquired all of the operator's assets prior to the enactment of CERCLA, however, it was liable for the cost of environmental cleanup as the operator's successor.
Sun Company, Inc v Browning-Ferris, Inc, 124 F 1187 (CA 10, 1997)
The plaintiffs brought suit against a group of companies that they believed had contributed hazardous waste to a site that they had just finished cleaning under an order for remediation under CERCLA. They sought both recovery of costs and of contribution. The court held that the plaintiffs were limited to an action for contribution and that their cost recovery claims were not allowed.
Friends of the Bow v Thompson, 124 F 1210 (CA 10, 1997)
An environmental group brought an action against US Forest Service officials challenging the approval of a timber sale from a national forest. The court held that the Forest Service's decision to sell the timber was consistent with the evidence it had at the time of its decision. The court further held that the Forest Service did not act in an arbitrary and capricious manner (1) when it declined to raise certain issues with regard to the timber sales process, and (2) when it decided that a supplemental environmental assessment was not necessary because of the proposed sale.
Appalachian States Low-Level Radioactive Waste Commission v Pena, 126 F 193 (CA 3, 1997)
The commission requested that its claim to receive a proportional rebate of funds held in escrow under the Low-Level Radioactive Waste Policy Amendments Act of 1985 be reheard because of South Carolina's withdrawal from the Southeast Compact. The dormant commerce clause prohibited the state's Barnwell facility from discriminating against waste from out of the region. The plaintiff-commission contended that because its members could contract for the disposal of their waste for the last six months of 1995, they met the statutory requirement of "providing for" the disposal of the waste and were entitled to a partial rebate of the funds. The court held that the statutory language was unambiguous, but that it required a state to take an affirmative step to supply, afford, or furnish means to dispose of its waste. The commission did not meet this requirement by allowing its members to contract with Barnwell.
The Fund for Animals, Inc v Thomas, 127 F 80 (CA DC, 1997)
The appellant environmental groups brought suit under NEPA and the Endangered Species Act to challenge the U.S. Forest Service's policy of letting states regulate game "baiting" on National Forest System land located within the state. The appellants' claimed that the Forest Service failed to perform an EIS or formally consult the Fish and Wildlife Service. The court found for the Forest Service and held that an EIS was not necessary because the policy is not a "major federal action" and that the Forest Service satisfied its duty to consult the Fish and Wildllife Service through "informal consultation."
Associated Fisheries of Maine v Daley, 127 F 104 (CA 1, 1997)
The plaintiff sought to invalidate a U.S. Dept. of Commerce promulgation of a fishery management plan (FMP) under the Magnuson Act. The plaintiffs claimed that the FMP violated the Magnuson Act because the regulation was unnecessary to achieve the stated goals and was inconsistent with the Act's national standards. The court disagreed, finding that the relations were not arbitrary and capricious but were the result of a rational exercise of deliberate decision-making consistent with the Magnuson Act and the APA. The court also held that amendments to the Regulatory Flexibility Act substantively affecting rulemaking documentation were not retroactive.
US v Hartsell, 127 F 343 (CA 4, 1997)
The defendant, a wastewater treatment and oil reclamation corporation, was convicted of numerous CWA violations for discharging pollutants into sewers in a manner that eluded monitoring devices. The court upheld the conviction and denied the defendant's claim that the CWA was not applicable because the sewer system was not navigable. The court held that Congress intended the CWA to cover discharges into public sewer systems even if they were not navigable.
Eastern Kentucky Resources v Fiscal Court of Magoffin County, 127 F 532 (CA 6, 1997)
The plaintiff brought an action challenging Kentucky's solid waste disposal program claiming that it unconstitutionally discriminated against interstate commerce by requiring agencies to identify additional capacities for disposal of out of state waste. The court held that the state's legitimate goals outweighed any burden that this requirement placed upon waste disposal companies and that this did not violate the dormant commerce clause.
National Wildlife Federation v Browner, 127 F 1126 (CA DC, 1997)
The plaintiff environmental group brought suit against the EPA for failing to review and approve or disapprove Michigan's water quality standards. The plaintiff had petitioned the state to modify its water quality standards, and the state denied the petition. The D.C. Court of Appeals, affirming the district court's decision, held that the EPA does not have a mandatory duty to review a state's unchanged water quality standards.
United States v Hoechst Celanese Co, 128 F 216 (CA 4, 1997)
The United States, on behalf of the EPA, brought suit against an industrial facility for violating of the Clean Air Act's National Emission Standard for Equipment Leaks of Benzene ("NESHAP"). The defendant-facility argued that it was exempt from the NESHAP because it qualified for a small volume user exemption. The Court of Appeals upheld the lower court's ruling that the EPA's interpretation of the exemption was entitled to deference, but reversed as to the " fair notice" finding that the defendant received actual notice of the EPA's interpretation.
Mahler v United States Forest Service, 128 F 578 (CA 7, 1997)
A private citizen brought suit under the Recissions Act of 1995 and the Administrative Procedures Act to challenge the U.S. Forest Service's decision to make salvage timber sales under the Emergency Salvage Timber Sale Program. Under the Act, the Forest Service may propose a salvage timber sale as long as "an important reason for entry includes the removal of disease- or insect-infested trees, dead, damaged, or down trees, or trees affected by fire or imminently susceptible to fire or insect attack." The plaintiff contended that a full Environment Analysis would be required to make such a determination. The Forest Service contended that the sale qualified for a categorical exclusion from the requirement for a full Environmental Analysis. The court held that the Forest Service's interpretation was not "arbitrary and capricious" and affirmed summary judgment against the plaintiff.
Sierra Club v EPA, 129 F 137 (CA DC, 1997)
The plaintiff sought review of a federal agency regulation promulgated under A7176(c) of the 1990 amendments to the Clean Air Act, granting a 12 month "grace period" which exempted federally funded transportation activity in designated nonattainment areas from State Implementation Plan requirements. The court first held that the plaintiff had standing to challenge the regulation based on injuries of exposure suffered by its members residing in nonattainment areas, where elimination of the grace period would remedy those injuries, and where the EPA's "alternative protective measures" did not negate the plaintiff's standing to enforce statutorily mandated regulations. The court then granted the plaintiff's petition for review, holding that the regulation violated the plain language compliance requirement of A7176(c), which made no reference to grace periods or exemptions.
II. Federal District Court Cases
Davis v Sun Oil Co, 953 F Supp 890 (SD Ohio, 1996)
The plaintiffs purchased land which the defendant had used to operate a gas station. Because the defendant only removed the gas storage tanks and not the pipes that led to the tanks, the plaintiffs brought suit under the citizen suit provision of RCRA, asking the court to order the defendants to take appropriate remedial action, to apply appropriate civil penalties under 42 USC 6928(g), and to award the plaintiffs their reasonable attorney's fees and expert witness fees. The court held that (1) the plaintiffs were not eligible for restitution because they did not plead it in their complaint, (2) civil penalties can not be imposed on the defendant under 42 USC 6928(g), and (3) federal courts do not have exclusive jurisdiction to hear citizens suits under RCRA.
Rowlands v Michigan Department of Natural Resources, 959 F Supp 422 (ED Mich, 1997)
The plaintiff owned land nine-tenths of a mile from the defendant shooting club which was located on land leased from the DNR. The plaintiff contended that the shooting at the club caused lead poisoning on his land. The court dismissed the DNR from the suit on the ground that under the Eleventh Amendment, a state agency is immune from citizen suits, and RCRA does not abrogate this immunity.
Rospatch Jessco Corp v Chrysler Corp, 962 F Supp 998 (WD Mich, 1995)
The plaintiff sued the defendant to recover costs which it incurred in responding to alleged releases of hazardous substances, and for a declaratory judgment that the defendant was liable for future costs that the plaintiff may incur as a result of these releases. The defendant cross-claimed the United States for contribution. The court held that even though the principal of operator liability is broad, the United States Air Force had not exercised substantial control over or active involvement in the management and operation of the land for liability to be extended to it. The case against the United States was dismissed on all counts except one involving allegations that the United States was liable as a potential owner of certain plating equipment used at the site.
United States v Detroit, 963 F Supp 613 (ED Mich, 1996)
The United States and the State of Michigan charged the City of Detroit with violating the Clean Water Act by failing to comply with its Industrial Pretreatment Program (IPP) in the discharge of industrial waste. The court held that before an IPP may be enforced, federal law requires that the IPP be incorporated within an NPDES permit and that because the permit issued to Detroit did not include this IPP, the United States had no basis for its suit. In denying the plaintiff's motion for reconsideration, the court ruled in favor of the defendant holding that the United States presented no basis for reconsideration of the earlier decision.
Ohio Public Interest Research Group v Laidlaw Environmental Services, Inc, 963 F Supp 635 (SD Ohio, 1996)
The plaintiff brought a CWA action against the defendant, a wastewater treatment company, claiming that the defendant unlawfully discharged pollutants and, in the process, violated local pretreatment standards. In reviewing a motion to dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief could be granted, the court held as a threshold matter, the defendant failed to show that the plaintiff did not meet the 60 days notice requirement. The court then held that because the plaintiff made good faith allegations of CWA violations that were sufficiently stated in its complaint, the court had subject matter jurisdiction.
Charter Township of Van Buren v Adamkus & Wayne Disposal, Inc, 965 F Supp 959 (ED Mich, 1997)
The plaintiff brought suit under the APA to challenge an EPA permit for disposal of PCB's in a Toxic Substances Control Act (TSCA) approved landfill. The court denied the plaintiff's motion to stay the permit because even though the stay would not subject the defendant to irreparable harm, (1) the plaintiff was unlikely to prevail in its claim under the APA, (2) the substantiality of injury caused by PCB exposure was outweighed by the low likelihood of its occurrence, and (3) because the EPA has met its obligations to the local residents, the public interest of the entire geographic area weighed against granting a stay.
Ergon, Inc v Amoco Oil Co, 966 F Supp 577 (WD Tenn, 1997)
The plaintiff sought to recover from the defendant the costs of remediating contamination caused by the defendant's alleged spilling of gasoline. The plaintiff sued under RCRA, the Tennessee waste and water-quality statutes, and several common law causes of action. In denying the defendant's motion to dismiss, the court allowed the plaintiff to amend its complaint to plead notice as required by RCRA A76972(a). At the same time, the court dismissed the state statutory actions, finding that the state laws did not authorize private rights of action. The court also dismissed a strict liability claim, but recognized the validity of the other common law claims.
III. State Cases
Sweepster v Scio Twp, 225 Mich App 497 (1997)
The plaintiff's property deed had an indemnity clause attached regarding waste contamination by a previous owner of the property. The indemnity clause provided that the previous owner would pay all costs relating to the contamination. The plaintiff argued that the land was worthless for tax purposes because of the contamination. The court upheld the ruling of the Michigan Tax Tribunal which said that the land had value because of the indemnity provision which protected the plaintiff from the financial burden of the contamination.