1 Legal Developments Hazardous Waste & Hazardous Materials April 25, 2013 John E. Price Carnahan, Evans, Cantwell & Brown, P.C

2 Fertilizer and CFATS West Fertilizer, whose plant exploded April 17, did not self-report to DHS under CFATS. Reporting threshold for ammonium nitrate is 400 lbs. West Fertilizer had 270 tons. No DHS inspections had occurred. 4,000 sites in U.S. are subject to CFTAS.

3 CFTAS Summary Chemical Facility Anti-Terrorism Standards Act (CFATS); 6 CFR § 27. Regulates the highest-risk chemical facilities. Six phases to regulatory scheme: 1) Submission of a Top–Screen, 2) Notification of a preliminary risk-tier, 3) Submission of a Security Vulnerability Assessment (SVA), 4) DHS notification of its final tier determination, 5) Submission of a Site Security Plan (SSP), and 6) Ongoing compliance.

4 CFATS Top-Screen Facilities that possess any of the chemicals at the quantities and concentrations listed in Appendix A must submit facility and facility-related information to DHS via a secure web portal called the Chemical Security Assessment Tool (CSAT)(9/2010). DHS is currently evaluating 1,200+ agricultural facilities via its Agricultural Survey.

5 Appendix A – Chemicals of Interest Published 11/20/2007 in Federal Register 3 security issues: 1) Risk of release (toxic, flammable, explosive) 2) Theft or Diversion (easily used in weapons) 3) Sabotage or Contamination (pose risk if mixed with readily available materials)

6 Preliminary Designation After reviewing the Top-Screen, DHS notifies each facility by letter. Facilities that do not "present a high level of security risk" are not subject to CFATS. Facilities that do "present a high level of security risk" must complete a Security Vulnerability Assessment (SVA).

7 Security Vulnerability Assessment (SVA) DHS notified 7,000 facilities they were assigned to one of four risk tiers. Tiers 1 (greatest risk) to 4 (least risk). Each preliminarily tiered facility must complete an SVA. SVA is a comprehensive assessment of the facility and risks posed.

8 Final Tier Determination Decided by DHS. May classify as not high-risk and exit CFATS system, or move facility to higher risk category. 115 Tier 1 facilities 464 Tier 2 facilities 1,096 Tier 3 facilities 2,070 Tier 4 facilities 677 facilities still preliminarily tiered

9 Site Security Plan (SSP) Due within 120 days of notice of tiering. Submit via Chemical Security Assessment Tool (CSAT). Identify and describe how each security measure will meet, as applicable, the eighteen Risk-Based Performance Standards (RBPSs). CFATS RBPS Guidance Document (5/2009). Enforcement actions began mid-2010.

10 BOX STORES and RCRA Since 2010, 3 major box store chains have faced RCRA claims in California. Wal-Mart, May 2010: $27.6 M fine settlement. Target, March, 2011: $22.5 M fine settlement. CVS, April, 2012: $13.75 M fine settlement. Improper storage and disposal of Hazardous Wastes. Returns and damaged products (bleach, paints, pesticides, batteries, aerosols, fertilizer, motor oils) placed in regular trash and went to non-RCRA landfills, or down the drain. Shipped materials to central location – illegal transport of Hazardous Wastes.

11 CERCLA Refresher Any current or past O/O, arranger or transporter is liable. Any amount of contamination is sufficient to trigger liability if a “release” occurred. Strict, joint and several liability unless PRP can prove a “reasonable basis” for apportionment. Divisibility may be established by volumetric, chronological, or other types of evidence, including appropriate geographic considerations. Essentially unlimited liability. To be liable, PRP must take intentional steps to dispose of a hazardous substance, or sell a product with the intent (not just knowledge) that a portion of it will be disposed of during the transfer process. Economically viable products may not be hazardous substances under CERCLA’s “useful product” doctrine. SOL on remediation cost recovery by government is 6 years after remedy construction starts. 3 years from completion of removal actions.

12 CERCLA Cost Recovery Developments §107(a) - permits a private party who has voluntarily incurred costs cleaning up a site for which it may be held liable to recover necessary response costs from another liable party through a direct recovery action. §113(f) – allows a person to seek contribution from any other person who is liable or potentially liable under §107(a) during or following a civil action under §§ 106 or 107, and allows a person who has resolved its liability to the government for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement” to seek contribution from any person who has not so resolved its liability. Parties who settle with the government are not liable for contribution claims.

13 CERCLA Cases Cooper Industries, Inc., v. Aviall Services, Inc., 125 S. Ct. 577 (2004). Court used a strict construction of CERCLA’s “clear meaning,” ruling that a party that performs cleanup may seek CERCLA §113(f)(1) contribution only if it was a defendant in a CERCLA §§ 106 or 107(a) “civil action,” or if it had previously resolved its liability to federal regulators in “an administrative or judicially approved settlement.” Absent a settlement agreement, costs incurred by a private party under threat of enforcement, or in performing a voluntary cleanup, may no longer be recovered through a CERCLA §113 contribution action. United States v. Atlantic Research Corp., 551 U.S. 128 (2007). Maintained the first part of Aviall's holding that PRPs can bring contribution claims under §113 only after a §106 or §107(a) action has been brought against them. But ruled that a party who had voluntarily incurred response costs but had not been sued could bring a recovery cost action against other PRPs under section §107(a). Morrison Enterprises, LLC v. Dravo Corp., No (8 th Cir. 2011) and Solutia, Inc. v. McWane, Inc., 672 F.3d 1230 (11th Cir. 2012). A party with a viable Section §113 contribution claim may not also seek recovery under section §107, even when that party has incurred costs voluntarily under a consent decree (a unilateral EPA order that may or may not release a PRP from liability).

14 PRP Considerations A PRP may: (1) clean up the site voluntarily and then try to sue other PRPs for cost recovery (§107a), or (2) wait for EPA to bring a §106 or §107(a) enforcement action against it and then seek contribution under §113(f) from other PRPs. After Avail, a PRP could no longer incur voluntary cleanup costs and sue other PRPs for recovery under §107(a). It could only sue for contribution after EPA brought a civil action against it. After Atlantic, a PRP can again incur voluntary cleanup costs and sue PRPs for §107 recovery, but only if a §106 or §107 action has not been brought against it. So a PRP that immediately addresses a site and voluntarily remediates before government enforcement has a better chance to obtain reimbursement from other PRPs. Delaying a settlement with EPA/MDNR may better preserve cost recovery rights, but EPA’s new settlement guidance suggests it may issue UAOs if a PRP delays settlement.

15 Vehicles as CERCLA Facilities Emergency Services Billing Corporation v. Vitran Express, Inc., 2011 U.S. Dist. LEXIS (12/2011) – truck carrying school books and 300 gallons of a hazardous substance in large plastic container that leaked, causing local government to incur response costs, was a CERCLA facility. Owner of equipment or vehicle that releases HS at a cleanup site can be liable even though it owns no interest in the contaminated real property.

16 NJDEP v. Dimant (2012) PCE contamination in groundwater. DEP inspectors saw pipe dripping PCE onto blacktop at Dimant’s facility. No evidence of cracks, frequency or duration of drips, fate of drips, or GW gradients. Other sources nearby. Ruling: “there must be shown a reasonable link between the discharge, the putative discharger and the contamination at the specifically damaged site.” DEP failed to show the “requisite connection” between the dripping pipe and the GW contamination.

17 OSHA HCS Litigation Update 12/1/2013 DEADLINE TO TRAIN WORKERS ON NEW LABELLING AND SAFETY DATA SHEET (SDS) REQTS Challenges to Final Rule are pending in DC Cir. Ct. of Appeals. Preemption Issue: Final Rule preempts all state laws and regulations, but does not preempt litigation. Would allow suits in state court for failure-to- warn even where company was in compliance with HCS requirements. Being challenged by NAM and American Tort Reform Ass’n.

18 New RBCA Guidance and Rule Missouri Risk-Based Corrective Action Process for Petroleum Storage Tanks guidance document, January 1, 2013 for all newly discovered releases. Can continue to use 2005 RBCA Guidance for prior releases if O/O implements a work plan previously approved by MDNR within 1 year of plan approval. New DTL Table 3-1. New Rule published; comment period runs until May 1, New Rule changes CAP requirements for maps, photos, sampling, boring logs. Removes landowner “veto” of RAFU determination; now MDNR decides RAFU.