The EPA Proposed Two Different Coal Ash Regulation Options, Just to Keep Us Guessing!

Right now, coal combustion residuals, or coal ash, are considered exempt wastes under an amendment to the Resource Conservation and Recovery Act (“RCRA”). Many are byproducts of the combustion of coal in power plants captured by pollution control technologies, like scrubbers. According to the American Coal Ash Association, nearly 110 million tons of coal ash was produced in the U.S. in 2012, and about 47 percent of that was re-used. The rest was deposited in landfills. Lately, pundits across the political spectrum have been writing about the coal ash regulations the Environmental Protection Agency (the “EPA”) is due to finalize any day. But what does that all mean?

First, a quick background. In 2008, a slurry spill from the Tennessee Valley Authority (the “TVA”) Kingston Fossil Plant in Kingston, Tennessee triggered numerous lawsuits against the TVA. The EPA considered the spill from the plant’s “surface impoundments” (ponds) to be an unpermitted discharge of a pollutant in violation of the Clean Water Act. The TVA and EPA entered an Agreed Order delineating the cleanup responsibilities and requiring the TVA to meet all federal and state environmental regulations in restoring the damaged areas. At this point, there were no federal regulations governing the handling of coal ash; instead, the EPA had allowed the states to enact their own rules and regulations. Various groups pressured the EPA to promulgate rules regarding the storing, handling, and disposal of coal ash

Fast-forward several years to 2013. Several environmental groups sued the EPA to push it to finalize regulations on the storage and disposal of coal ash. The result of that suit was a Consent Decree from the District Court for the District of Columbia setting a deadline of December 19, 2014 for an EPA rule.

On June 21, 2010, the EPA issued a Proposed Rule for the required public comment period. The Proposed Rule can be viewed here. The public comment period closed on November 19, 2010. Over 11,000 comments were received. The EPA issued numerous Notices of Data Availability over the next several years and invited further public comment.

The EPA has proposed two possible outcomes for the management of coal ash. Both options fall under RCRA. The first option is the “Subtitle C” option. Under this creatively-named option, the EPA would list coal ash as a “special waste” when destined for disposal in landfills or surface impoundments, subject to hazardous waste regulation under subtitle C of RCRA. The second option is referred to as the “Subtitle D” option because under it, you guessed it, the EPA would regulate coal ash under subtitle D of RCRA, the section for non-hazardous wastes. Environmental groups have lobbied for the former option, while industry representatives prefer the latter. The EPA sent its proposal to the White House Office of Management and Budget (the “OMB”) in October, 2014. This is the final review stage for the rule.

What does all of this mean for the industry? Option C would require state and federal enforcement, while Option D would leave federal enforcement to citizens’ suits (states would be considered citizens). Option C would require state and federal monitoring, but Option D is self-implementing. Importantly, under Option C, the rule would include a federal requirement for permit issuance by states. Option D would not. Option C includes requirements for storage, including containers and tanks. Option D does not.

A key provision involves those surface impoundments, or ponds. Option C would require existing impoundments to remove solids, meet land disposal restrictions, and retrofit the impoundment with a liner. Option D would require existing impoundments to remove solids and install a liner or stop accepting coal ash within five years. Option C requires new surface impoundments to meet land disposal restrictions and liner requirements. Option D also would require the installation of liners in new impoundments, but would not require them to meet land disposal restrictions. Option C essentially would phase out the use of existing and new surface impoundments. Even Option D, in practice, would make using new surface impoundments difficult.

Option C also includes financial assurance requirements. Option C includes requirements for generation, storage, transport, management, and disposal of coal ash, while Option D focuses on disposal. Under Option C, the effective date will vary by state, as each authorized state must adopt the rule individually, which could take one or two years. Option D would be effective six months after the final rule is promulgated for most provisions; certain provisions have a later date. Both proposals exempt “beneficial uses” from any regulation under RCRA. The definition of “beneficial uses” is still unclear, but may include agricultural soil amendments, use in capped structural fill such as road beds, and recycling coal ash into asphalt or concrete. The EPA has a handy chart that summarizes many of these differences here.

Several bills have been introduced in Congress to block the EPA from regulating coal ash; the most recent passed the House in July but didn't make much leeway in the Senate. We will find out in the next week whether the White House picks Option C or D, or, more likely than not, some combination of the two options. Rules do not come out of the OMB review in the same shape in which they went in. The OMB's role is, in theory, to allocate finite resources, ensure relevant agencies are sharing scientific information and cost data, and to make sure the final regulation takes the public comments into consideration. In practice, however, the OMB places the ultimate authority for rule-making in the hands of the OMB personnel, who may not be experts in the substantive areas of regulations and are not accountable to Congress or the electorate. With this wide leeway, and the intense lobbying from all sides, the best bet is that the White House OMB will authorize a blended approach, some where between Option C and Option D. As the wise philosopher Adam Levine once sang: "it's not always rainbows and butterflies, it's compromise that moves us along."

In any event, many in the industry already are preparing for the changes that either option will bring. Electricity-producers, waste management firms, and construction companies will be immediately affected by these regulations. Electricity-users (aka all of us) will also see an effect down the road as the changes are implemented.

Local Beer & The Environment

Interesting article about Sun King's efforts to be environmentally friendly brewers, written by Sun King's intern from the Bard Center for Environmental Policy Christina Wildt: http://pojonews.co/1vGcGfF (photo courtesy of Sun King's website).

Considerations in Land Application Leases

I recently wrote an article for the Indiana Agricultural Law Foundation Spotlight newsletter that focused on important considerations in land application agreements. These are the agreements used when a confined feeding operation ("CFO") applies manure to land not owned by the CFO. For example, a CFO may determine that it will produce more manure than it can legally apply to its own fields. The CFO can contract with a nearby landowner to apply excess manure to the landowner's fields. Here in our state, the Indiana Department of Environmental Management ("IDEM") has promulgated various regulations that control when and how much manure can be applied to the land.

A land application agreement should be carefully drafted to spell out the responsibilities of each party and the allocation of liability between the landowner and the producer who will be applying the manure. No one plans on an accidental release or runoff, but the agreement should include a section on how such a release will be addressed and who will be responsible for any resulting damages. For more information, link to the full Indiana Agricultural Law Foundation Spotlight newsletter article here.

Indiana Wines

As I've written before, Indiana wine growers produce a surprising number and variety of easy-drinking table wines. Read: Wine is Good for You...and for Agri-Tourism.

I recently enjoyed reading Purdue University's AGRIcultures Magazine, which just started a multimedia series called Through the Grapevine. The first installment was a story entitled "Getting to Know Indiana Wines". The article describes four varieties--Traminette, Vignoles, Chambourcin, and Noiret--that are home grown here in the Hoosier State. Read the story in full, here.

I plan on starting with Noiret--a rich, peppery, red. Cheers!

Indiana's Late Notice Prejudice Analysis Supported by 7th Circuit

(Image from 7th Circuit website)

Although this blog post is not about environmental law, it touches on a major funding source for environmental cleanups: insurance.  Insurers often contest coverage by claiming that a late notice defense precludes coverage. Last week, the 7th Circuit provided further support for Indiana's policyholder-friendly late notice prejudice analysis.               

The late notice prejudice analysis in Miller v. Dilts, 463 N.E.2d 257 (Ind. 1984) was recently supported by a well-reasoned decision from the 7^th Circuit.  In Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Mead Johnson & Co. LLC, Nos. 3:11-cv-00015RLY-WGH, 3:11-cv-00161-RLY-WGH (7^th Cir. Oct. 29, 2013), Mead Johnson’s insurance policies required it to notify its insurer “as soon as practicable” after a claim.  Mead Johnson, however, did not notify its insurer of a false advertisement lawsuit until after it had lost a $13.5 million jury trial.  Even though Mead Johnson “failed inexcusably to comply with the notice provisions in its liability insurance policies,” the 7^th Circuit reaffirmed that unreasonably late notice only “create[s] a presumption of harm.” Mead Johnson at 7.  The burden then shifts to the policyholder to produce “some evidence” of no prejudice from the late notice. Id.  When the policyholder does so, the burden shifts to the insurer to produce evidence of actual prejudice. Id. at 9.  The court held that because the insurer produced no evidence of prejudice, summary judgment for the insurer was reversed and the case remanded for further proceedings. Id.    

Judge Posner, writing for the 7^th Circuit concluded that the Indiana Supreme Court would not approve the holdings of two Indiana Court of Appeals decisions that had formed the basis for the trial court to erroneously hold that the presumption of prejudice from late notice can be irrebuttable. Id. at 10.  In Allstate Ins. Co. v. Kepchar, 592 N.E.2d 694, 699 (Ind. Ct. App. 1992) (involving a motorcycle accident) and Milwaukee Guardian Ins., Inc. v. Reichhart, 479 N.E.2d 1340, 1343 (Ind. Ct. App. 1985) (involving alleged negligence in clearing a drainage ditch) the Indiana Court of Appeals held that the failure to provide notice until after the underlying suit was tried deprives an insurer of the opportunity to make decisions regarding the conduct of the trial and justifies a finding of prejudice as a matter of law. Kepchar, 592 N.E. 2d at 699–700; Reichhart, 479 N.E.2d at 1343.  The 7^th Circuit held the deprivation of the right to control the defense “is not a tangible injury . . . nor, if the insurer could have done no better in managing the defense at trial than the insured did, even a cause of injury.” Mead Johnson at 10. 

“There is no indication that the Indiana Supreme Court will retreat from its position that the presumption of harm to an insurer from untimely notice is rebuttable.” Id. at 10–11.  “Indiana law, as stated in the Miller case, holds to the principle that if an insured inflicted no cost on his insurer by untimely notice, with the result that the insurer lost nothing by virtue of the untimeliness, then to allow the insurer to reject the insured’s claim would confer a windfall on the insurer.” Id. at 11.  “In effect the insurer would be awarded damages equal to the insured’s claim even though the insurer had not been injured at all.” Id.  

If you have any questions about this decision or any other insurance coverage questions, please do not hesitate to contact me or any of the insurance lawyers at Plews Shadley Racher & Braun LLP.

Bird Law...or Something Like It

The legal expert Charlie Kelly once said, "I know a lot about the law and various other lawyerings. I'm well educated. Well versed. I know that situations like this- real estate wise- they're very complex." (Author's note: Charlie Kelly, of the lovely comedy series "Always Sunny in Philadelphia," is not an expert in anything except Nightcrawlers.) However, Charlie had a point about Bird Law. "Bird law in this country is not governed by reason." 

The closest thing we have to Bird Law here in the real world is the former U.S. Army Corps of Engineers "Migratory Bird Rule." At one time, the Corps adopted this so-called "Migratory Bird Rule," which asserted that the Corps had jurisdiction over any water, even over isolated wetlands, "which are or would be used as habitat by... migratory birds that cross state lines." This rule was overturned by the U.S. Supreme Court in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001). The Supreme Court held that neither the Corps nor the EPA can exert jurisdiction over isolated wetlands based solely on the presence of migratory birds. Thanks to SWANCC, Bird Law in the U.S. is one step closer to being governed by reason. The EPA and the Corps do not have jurisdiction over isolated wetlands just because a migratory bird takes a rest there. See Rapanos and my earlier post on the Clean Water Act here for more information about where the EPA and the Corps do have jurisdiction. 

Clean Water Act 101 for Farmers

Swampbuster was the villain of my last post. However, Swampbuster is only one of the two major federal statutes that affects a farmer's ability to cultivate, excavate, and control his or her farmland in areas where wetlands are prevalent. The other key law in approaching wetlands in agricultural areas is the Clean Water Act ("CWA"). 33 USC § 1251 et seq. The CWA allows the EPA to enforce its provisions and provides for citizen suits. Non-compliance with the CWA can lead to fines and lawsuits. Farmers should make sure they are not violating the CWA anytime they move dirt on their farm.

The definition of wetlands under the CWA is essentially the same as under Swampbuster. Again, "wetlands" are those areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. 40 CFR § 230.3(t). 

The national pollutant discharge elimination system ("NPDES") permit program controls water pollution by regulating point sources that discharge pollutants into waters of the United States. Section 404 of the CWA establishes a program to regulate the discharge of dredged or fill material into waters of the United States, including wetlands. It is also unlawful to discharge dredged or fill material into the waters of the U.S. without first receiving authorization from the U.S. Corps of Engineers. Waters of the U.S. generally includes wetlands. (There are scores of cases discussing exactly what "waters of the U.S." means, but suffice to say that it likely includes most wetlands.) “Discharge of dredged material” means any addition of dredged material into, including redeposit of dredged material other than incidental fallback within, the waters of the United States. This is the area most likely to affect farmers and agricultural areas. While most ongoing farming activities do not require Section 404 permits, a farmer likely does need a permit to discharge soil or any other deposit into a wetland because of the broad language in the statute. See 33 USC § 1311(a); 33 CFR § 323; 40 CFR 232.2. Point sources are discrete conveyances such as pipes or man-made ditches. Surface waters can include wetlands. Point sources may not discharge pollutants to surface waters without an NPDES permit from the Environmental Protection Agency ("EPA") in partnership with state agencies. In Indiana, the state agency responsible for NPDES permits is the Indiana Department of Environmental Management ("IDEM"). IDEM issues its NPDES permits, called "Rule 5" permits, for discharges pursuant to 327 IAC 15-5. Certain non-point sources (including agricultural stormwater discharges and irrigation return flows) are not subject to the federal permit program. 

There is no CWA jurisdiction over isolated waters or wetlands, but many wetlands that might appear "isolated" to a layman could be considered to have a "significant nexus" to traditional navigable waters. That is enough for the federal government to exercise jurisdiction under the CWA. The recent Supreme Court decision on this issue is called Rapanos v. United States, 547 U.S. 715 (2006). It includes five separate opinions and no majority, and is the perfect piece of reading material if you're having trouble sleeping.

There are exemptions to the Clean Water Act that might apply to a farmer's discharges into the water or wetland area. The "agricultural exemption" applies to "normal farming" activities. Those activities must be part of an established, ongoing program. Changing crops as part of a crop rotation is exempt. Resumption of farming fallow areas as part of a rotation is also exempt. "Normal farming" activities include cultivating, harvesting, plowing, seeding, and "minor damage." These words are all specifically defined in regulations. 40 CFR § 232.3(d). The agricultural exemption also applies to stormwater discharges, return flow from irrigated agriculture, normal activities associated with farm roads, and normal activities associated with construction and maintenance of irrigation ditches or maintenance of drainage ditches. The agricultural exemption, like other CWA exemptions, is construed narrowly. Farmers must be careful, because "maintenance" of a ditch does not include changing the location or footprint of the ditch or levee.  The agricultural exemption is subject to a "recapture provision." Any discharge of dredged or fill material into the waters of the U.S. incidental to any activity intended to bring an area of the water or wetland into a new use, whether the flow, circulation, or reach of navigable waters might be impaired is required to have a Section 404 permit. This "recapture provision" can bring a large swath of activities back under the CWA, even if at first glance it appeared the agricultural exemption applied. For instance, courts have held that converting from silviculture (growing trees) to soybean production and even from wetlands farming to dryland farming can subject the activities in question to recapture, particularly if it involves hydrologic alterations, such as loss of wetlands. 

Non-exempt discharges are not necessarily prohibited, but they do require either a general or individual Section 404 permit. Like the Swampbuster, the CWA contains mitigation provisions. When considering mitigation options, a farmer should seek to "avoid, minimize, and compensate" for the loss of wetlands. The farmer should work with the local Corps, NRCS, and state agencies to determine the appropriate use of mitigation in each situation.

 Like the Swampbuster, the CWA is not something to be ignored. Farmers and consultants should be aware of these federal statutes and the way in which those statutes can affect agricultural land use. Contact an attorney if you have questions. As always, this blog post should not be considered legal advice. 

Wetlands in Agriculture - Swampbuster

"Swampbuster." It is a fun word. However, it can cause some not-so-fun repercussions for farmers who violate its rules protecting wetlands. Swampbuster is the term used for the federal law that discourages farmers from altering wetlands by withholding federal farm program benefits from any person who: (1) plants an agricultural commodity on a converted wetland that was converted by drainage, dredging, leveling, or any other means; or (2) converts a wetland for the purpose of or to make agricultural commodity production possible. See 16 U.S.C.§ 3821.

Wetlands in Agriculture

The Natural Resources Conservation Service ("NRCS") has the lead responsibility for identifying wetlands on agricultural lands for purposes of implementing Swampbuster. NRCS will make a certified wetlands determination when a landowner submits a form AD-1026 for an activity that may be subject to the wetland conservation provisions. These forms are generally available at the local Farm Service Agency ("FSA") office.

First -- what, exactly, is a wetland? A farmer may think that she does not have to worry about wetlands because she thinks that a wetland always looks like a swamp. A swamp is likely a wetland, but not all wetlands look like swamps. A wetland (1) has predominance of hydric soils; (2) is inundated or saturated by surface or groundwater at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated soil conditions; and (3) normally does support such vegetation. 7 CFR § 12.2(a).  All three criteria must be present.

Because of differences between the Food Security Act and the Clean Water Act ("CWA") on the jurisdictional status of some wetlands, one agency’s wetland determination may not be valid or binding under the wetland laws administered by another agency. Therefore, NRCS makes its certified wetland determination for Swampbuster and the Army Corps of Engineers will conduct jurisdictional determinations for the administration of the CWA.  Both agencies consider the same elements. More on the CWA in a later post. 

The Federal agencies involved in Swampbuster and the CWA (EPA, the U.S. Army Corps of Engineers, the U.S. Department of Agriculture, and the U.S. Fish and Wildlife Service) are actively seeking to coordinate their activities and to clarify the relationship between the programs. For example, "prior converted croplands" have been excluded from regulation under Section 404 to be consistent with Swampbuster and one wetland identification can be used for both the Section 404 program and the Swampbuster program. http://water.epa.gov/grants_funding/wetlands/facts/fact19.cfm. 

There are, of course, exceptions to the general Swampbuster rule. These include the following exemptions: minimal effect, good faith, prior converted cropland, compliance with a conservation plan, reliance upon an NRCS determination for highly erodible land, or allowable variances. 7 CFR § 12.5. If your activity on your wetlands fits into one of these exemptions, you may not be subject to the Swampbuster provisions. 

Finally, a farmer may be able to use mitigation to avoid the loss of the wetlands' function and therefore avoid losing their federal program benefits under Swampbuster. Mitigation is the creation, enhancement, or restoration of a site that compensates for lost wetland functions of site in question. If a farmer is going to use mitigation, she must ensure the mitigation site is in the same general area/watershed as the lost wetlands, must record an easement to the USDA, and must provide equivalent functions of the site being considered. The farmer will work with their local FSA and/or NRCS to determine how mitigation can be used on their farm. Under Swampbuster, mitigation is all about replacing the function of the wetlands. 

Contact an attorney if you are concerned that activity on your farm could affect a wetland. Swampbuster is fun to say, but not so fun when it causes a farmer to lose her federal benefits. 

U.S. Supreme Court Rules Unanimously in Favor of Monsanto

The United States Supreme Court ruled unanimously today in Bowman v. Monsanto, the case that pitted an Indiana soybean farmer against Monsanto. The Court held that the farmer could not use patented genetically modified soybeans to create new seeds without paying the company. A full copy of the decision is located here. I wrote about this case back in October of 2012 when the Supreme Court granted the farmer's petition for certiorari. Monsanto provides its take on the opinion here.  

A Game Changer for Environmental Due Diligence?

New standards will be released this year that will dramatically expand the scope of environmental due diligence that must be performed at some sites in order to ensure prospective purchasers of property are protected from CERCLA liability for past releases.  The American Society for Testing and Materials (ASTM) is preparing to release its revised standard for Phase I Environmental Site Assessments (ESAs), which will be known as ASTM E 1527-13, some time this spring or summer.  The most significant change will be the incorporation of vapor mitigation screening requirements, which will require the identification of sites up to 1/3 mile away that pose potential vapor intrusion risks for the subject site.  This will vastly expand the scope of Phase I ESAs and will likely increase the costs and timing for completion of the Phase I process.

The majority of the revisions to the standard simply clarify existing definitions and add additional terms to help streamline and simplify the process, including 1) redefining Recognized Environmental Conditions (RECs); 2) redefining Historical Recognized Environmental Conditions (HRECs); 3) adding a definition of Controlled Recognized Environmental Conditions (CRECs); and 4) clarifying the requirements and expectations of a regulatory file review.

The current Phase I standard, ASTM E 1527-05, was released in 2005, and since that time one of the major questions that has been debated among environmental professionals is whether vapor mitigation must be considered during a Phase I assessment.  The 2005 standard is not clear on this point, but most professionals had determined that vapor mitigation did not need to be considered because it is an Indoor Air Quality issue, which are generally outside the scope of Phase I assessments.  The new revision will make clear that vapor intrusion risks should be considered in a Phase I ESA.  ASTM has a separate standard for determining the likelihood of vapor migration risks at a site, which defines the "Area of Concern" in which suspected or known contaminated sites must be identified.  The area is 1/3 mile for sites with non-petroleum contaminants (COCs) and 1/10 mile for sites with petroleum COCs only.  The environmental professional performing the Phase I can use his or her discretion to exclude certain sites based on site-specific factors (i.e. hydraulic or physical barriers, soil characteristics, etc.) but there is always some risk involved in excluding properties within the defined area of concern.

The revised standard was recently submitted to the EPA, which will review the proposed changes to ensure that the standard is still consistent with the AAI rule.  If EPA determines that the revisions are acceptable for AAI compliance and approves the standard, it will then be published by ASTM.

For additional information, contact Dan Cory.

EPA Moving Forward With Lead-Abatement Regulation for Commercial Buildings

The United States E.P.A. is moving forward with preliminary rule-making activities for the regulation of lead-based paint hazards on and in public and commercial buildings (those built prior to 1978) under the Toxic Substances Control Act (TSCA).  The regulation of commercial structures will impact a number of real estate practitioners involved with pre-1978 buildings - including property owners and managers, construction and real estate contractors, and other industry professionals.

The EPA already has a Lead Renovation, Repair, and Painting (RRP) Rule in place for pre-1978 residential properties and child-occupied facilities, which imposes stringent disclosure obligations on owners and property managers and requires renovations, repairs and painting to be performed by EPA-certified contractors with training in lead abatement practices.  This rule has added significant costs to the ownership and maintenance of older homes and has exposed property owners and contractors to significant civil penalties for failing to comply with the rule.

The EPA will be collecting information from the public and industry professionals regarding lead-based paint in commercial and public buildings until April 1, 2013.  Specifically EPA is seeking comments on the manufacture, sale and use of lead-based paint post-1978; use of lead-based paint in or on public and commercial properties; how often renovations were performed on public and commercial properties and the practices used in such renovations; estimates of the amount of dust created and possibly transported from the outside to the inside of the building; and the economic impact that the regulation would have on affected businesses and stakeholders - in particular small businesses.

The information gathering is designed to assist the EPA in determining whether renovations, repairs and painting activities in commercial and public buildings create lead-based paint hazards.  The EPA is required to either determine that no such risks exist or sign a proposed rule similar to the RRP rule for residential properties by July 1, 2015.

The EPA is planning to hold a public meeting regarding the potential commercial and public building rule on June 26, 2013.  Additional details regarding the public meeting will be available in the spring.

The full text of the request for information can be found here.  

 

Meth Busters

Image from the Indiana State Police Meth Suppression Section's website

A recent article in the Indiana Lawyer discusses the Indiana General Assembly's attempts to curb the state's growing methamphetamine problem.  Over the past ten years meth labs found by Indiana law enforcement have increased from 732 in 2002 to 1,726 in 2012.  In 2012, more than 10% of those meth labs were found in two of Indiana's 96 counties: Madison County (96 labs) and Vanderburgh County (81 labs).  The problem is so bad in Madison County that Rodney Cummings, the Madison County prosecutor, states that 35% of his docket is meth related.  

Six new bills addressing meth have been introduced during the 2013 session.  All six target ephedrine and pseudoephedrine, the main ingredients used in manufacturing meth.  Two of the bills would reduce the amount of medication containing these ingredients a person could purchase.  One such bill proposed by Sen. Carlin Yoder, a Republican from Middlebury, would limit each person to 61.2 grams of ephedrine and pseudoephedrine per year, increase criminal penalties for giving these ingredients to someone expressly for manufacturing meth, and prohibit any meth-related criminals from possessing these ingredients without a prescription for seven years.  The four other bills would make ephedrine and pseudoephedrine controlled substances that could only be purchased with a prescription.  In 2005, Oregon took such a step, which has led to a significant drop in meth labs.  Cummins believes that a similar result would occur in Indiana.  One such bill, proposed by Randy Head a Republican from Logansport, would make the two ingredients Schedule III controlled substances.  This bill, however, will not get a hearing this session.  I will continue to track the six proposed bills to see if the Assembly enacts any changes to Indiana's meth laws.    

With an increase in meth manufacturing comes an increase in meth lab explosions.  These explosions cause significant property damage, injuries, and even deaths.  I, along with fellow Monitoring Well authors, Brianna Schroeder and Sean Hirschten, and other attorneys at Plews Shadley Racher & Braun LLP, assist clients with cleaning up their properties after a tenant's meth lab explodes.  Often there is insurance coverage for these types of cleanups even if the policy contains an exclusion for illegal activities.  The firm also represents environmental consultants that clean up exploded meth labs.  If you are a property owner whose property has been damaged by a tenant's meth lab, please do not hesitate to contact our firm with any questions.  Also, for more information on Indiana's efforts to curb meth abuse, please refer to the Indiana State Police's and the State of Indiana's websites.     

Wine is Good for You...and for Agri-Tourism

This post is less about environmental litigation and more about the environment of wine.  Indiana wine grapes, in particular.  The federal government (specifically the Alcohol and Tobacco Tax and Trade Bureau or "TTB") recently designated 2,000,000 acres in southern Indiana as a viticultural area, to be called the "Indiana Uplands."  An "American Viticultural Area," or "AVA" is a designated wine grape-growing region distinguished by its geographic features.  The borders of the recently-designated AVA in Indiana runs from the Morgan-Monroe County line near Bloomington south to the Ohio River, a distance of just over 100 miles.  The soil, climate, and topography in this swath of land are conducive for growing great wine grapes.

This AVA designation indicates the growing importance of agri-tourism in Indiana.  The designation also allows vintners to better describe the origin of their wines and to allow consumers to better identify wines they want to purchase.  For a wine to be labeled with a viticultural area name, at least 85% of the wine must be derived from grapes grown within the viticultural area represented. The wine must also meet the other conditions in 27 CFR 4.25(e)(3) (discussing wine name and label requirements).

For more information on the recent designation of the Indiana Uplands, see the details of the TTB's determination in the Federal Register here.  The Hoosier Ag Today provides a bit more information about the economic impact of the designation in its top story today, located here.

Heightened Federal Pleading Standards and Environmental Long-tail and Toxic Tort Claims

I wrote an article with my colleague, Greg Gotwald, that was recently published in the American Bar Association's Section of Environment, Energy, and Resources' newsletter Trends.  The article provides an outline of how federal district courts have been handling environmental claims in light of Iqbal and Twombly's requirement that a plaintiff show plausible--not possible--entitlement to relief.  This can be hard to do when details of when and where the contamination originated may not be known at the time a complaint is filed.  The take-away of the article is that the more information a plaintiff can provide in a complaint, the better chance it has of defeating a 12(b)(6) motion. If defending an action, then Twombly and Iqbal provide justification for dismissing speculative claims.

Read more here.

President Obama & The Environment

I know that everyone was sick and tired of the media coverage leading up to the presidential election, so I thought I’d add a bit more discussion to the mix.  Seriously though, I thought I’d take a look at what President Obama’s second term has in store for environmental policy.  Interestingly, climate change was not mentioned once in the three presidential debates—the first time that has happened since 1984.  President Obama, however, did mention climate change in his acceptance speech, in which he stated: "We want our children to live in an America that isn't burdened by debt, that isn't weakened by inequality, that isn't threatened by the destructive power of a warming planet.”

On November 7, 2012, a day after President Obama was reelected, Audubon Magazine published the president’s answers to ten questions on the environment.  In the Audubon interview, President Obama called climate change "one of the biggest issues of this generation.”  Although most of the article dealt with what the president has done in his first term to address climate change, he did address some of his future plans.  The president proposes increasing limits on new fossil-fuel-fired power plants, limiting greenhouse gas emissions from automobiles, investing in renewable energy, and reaching emission limit agreements with other countries.  

                

One area where President Obama conflicts with environmentalists is on drilling in the Arctic.  The president believes that drilling in the Arctic must be a part of America’s “all-of-the-above energy strategy.”  He would, however, prevent drilling in the Arctic National Wildlife Refuge.  Another potential source of conflict with environmentalists is the Keystone oil pipeline.  The president’s administration is conducting a thorough assessment of the pluses and minuses of the proposed pipeline, while the Audubon interviewer stated that the pipeline “would transport what some consider to be the dirtiest oil in the world and cause destruction of boreal forest.”

                

The president does not believe that we have to choose between a clean environment and a thriving economy.  He believes that clean energy investment will lead to a $2.3 trillion global market.  Industry groups, however, disagree.   Industry groups fear that increased regulation of coal and other fossil fuels will hurt the economy and raise prices for consumers.  For more energy industry perspective, please click here. 

                

If you have questions about how new proposals, regulations, or laws will impact you or your business, please contact an environmental attorney.

Soybeans and Patents: Bowman v. Monsanto

On October 5, 2012, the Supreme Court of the United States ("SCOTUS") granted an Indiana farmer's petition for transfer to hear a case regarding whether the lower court erred by (1) refusing to find patent exhaustion in patented soybean seeds even after an authorized sale and (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies.  The case, Vernon Hugh Bowman v. Monsanto Company et al., 11-796 (more information on this case at the SCOTUS is available at this link), originated in the U.S. District Court of the Southern District of Indiana.  The district court granted Monsanto's motion for summary judgment (Judge Young's opinion is available here) and the Federal Circuit Court affirmed that judgment.

The Indiana farmer planted two soybean crops in 2007: the first was of Pioneer Hi-Bred beans (a Monsanto brand), and a later crop of commodity beans from his local elevator.  The farmer discovered that neither brand of seed was damaged by a particular herbicide.  He was able to save some of the second crop to plant in later years.  Monsanto sued the farmer, claiming that it had developed and patented the biotechnology that made the Pioneer Hi-Bred beans resistant to herbicide (these were called "Roundup Ready" (R) seeds).  Monsanto argued the farmer signed a licensing agreement that included a provision that meant the company's patent rights were not exhausted.  The farmer disagreed, claiming that when beans from a licensed Roundup Ready (R) are harvested and sold to a grain elevator, they are sold without restriction, mixed with all other soybean crops from the area, and therefore, when farmers purchase those beans later to use as seed, the beans are not protected by patent.

After the district court granted Monsanto's motion for summary judgment, the Federal Circuit Court affirmed and relied in part on the "conditional sale exemption" that allows patent holders to continue to assert patent rights after an authorized sale is correct.  Now in front of the SCOTUS, the farmer argues that patent exhaustion results after an authorized sale.  As explained by the farmer: "[t]his case presents an issue both of core practical important to agriculture and of vital legal interest in patent law..."  Brief in Support of Certiorari, available here.  The importance of this case, and of seed patent rights, is especially apparent in a drought year, like the one we are currently having here in the Hoosier state.  (Soybean harvest is well underway in Indiana.)

The United States has filed an amicus brief in favor of Monsanto, available here.  As of October 22, 2012, oral argument in the case was to be determined.

Indiana's Environmental Progress

In May, the Indiana Department of Environmental Management released its Criteria Pollutants Air Quality Trend Analysis Report.  This report tracked Indiana's air quality from 1980 to 2010 in twelve geographic regions.  Our firm has offices in both Indianapolis and South Bend, so I reviewed the air quality trends for the Central Indiana and North Central Indiana regions, which include Marion County and St. Joseph county, respectively.  The news for the Central Indiana region (Boone, Hamilton, Hancock, Hendricks, Johnson, Marion, Morgan, Putnam, and Shelby counties) is good. Although population and vehicles miles traveled have increased over the past thirty years, the region's emissions have also decreased.  The air quality in the North Central region (Elkhart, Fulton, Kosciusko, Marshall, and St. Joseph counties) has also improved over the past thirty years despite an increase in population and vehicle miles traveled. Hopefully Indiana's air quality will continue to improve as businesses and individuals work with environmental attorneys to help them comply with complex state and national environmental regulations.  For an in-depth look at the air quality levels across Indiana, please click here.

New EPA Guidelines: To Frack or Not to Frack?

The somewhat controversial practice of hydraulic fracking has gotten its fair share of news headlines lately, for better or for worse.  While the intricacies and scientific technicalities of fracking perhaps are better left to another day, this blog post provides a quick and dirty guide to the debate over fracking and its environmental repercussions.

Hydraulic fracking is a process which has been around since the 1940s, but has gained international attention recently due in part to the energy crisis, and in part to the enhanced science we have available today to make it an economically feasible method to release natural gas from deep within the earth.  On one hand, fracking gives us access to an energy source which otherwise was inaccessible to us.  On the other hand, opponents argue that fracking will lead to increased groundwater contamination and potential unknown other pollutants being released into the air, groundwater, and soil.

Fracking involves pumping a liquid into an existing wellbore, generally located in shale rocks or coal beds.  The fracking liquid being pumped into the rock increases the pressure and forces the rock to crack.  The liquid extends deeper into the crack, which further extends the crack until it reaches the natural gas deep beneath the earth's surface, releasing the gas upward into the well area where it can be captured and piped out as an energy source.  Different liquids can be used as fracking liquids, but the most common is a mix of water and chemical additives.  Fracking liquids are also used to inject sand and other solids to stabilize the cracks without losing the permeability that allows the gas to rise up.  These solids are called "proppants."  These wells are then "tapped" to catch the natural gas that is released.  During the tapping and fracking processes, trace amounts of natural gas, methane, volatile organic compounds ("VOCs"), and other fracking fumes may be released.

In April, 2012, the Environmental Protection Agency ("EPA") passed new rules regarding fracking under the Clean Air Act ("CAA").  See the EPA's news release here. However, the rules do not take effect until 2015. Once the new rules go into effect, they will require the industry to perform a process called "green completion" to trap the fumes that are currently being released into the air. Certain states, such as Wyoming and Colorado already require green completion.  The EPA's CAA fracking rules are a step in the right direction to control VOC and methane gas air contamination while allowing companies to develop needed cutting-edge oil and gas drilling technologies to release new stores of energy.  As an added benefit, it is believed the industry will be able to sell the gases captured during green completion to recoup some of the costs incurred in becoming compliant with the rules by 2015.

On May 4, 2012, the EPA released a draft of a new guidance to follow if diesel fuel is used as the fracking fluid.  You can read this draft here.  This draft was published in large part in response to concerns about groundwater when diesel is injected into the ground.  EPA is holding a public meeting on the proposed draft on June 29, 2012 in Washington, D.C.  The draft is open to public comment until July 9, 2012.

Common Sense Approach to Underage Drinking

This has nothing to do with environmental law, but I'd like to applaud the Indiana legislature's common sense approach to underage drinking.

On March 16, Governor Mitch Daniels signed Senate Enrolled Act 274 into law.  Today, he took part in a ceremonial signing of the act, which will go into effect July 1.  The so-called Lifeline Law prevents police officers from arresting a minor solely for public intoxication, minor possession, consumption, and/or transportation of alcohol if the minor sought medical attention for an intoxicated person and remained at the scene until emergency personnel arrived.  The law was proposed by college students at various Indiana schools.  Indiana is the twelfth state to adopt a Lifeline Law.  Hopefully, some lives will be saved if underaged drinkers are not forced to chose between saving someone's life and turning themselves in to the authorities.   

For the full text of the act, click here.  For the Indiana Lawyer's disussion, click here.

Temporary Restraining Orders in Environmental Litigation

Temporary restraining orders, known in the legal world as “TROs”, are a powerful tool in environmental litigation.  For a party that is considering a TRO, it has the power to immediately halt excavation, stop construction, or prevent the imposition of a new regulation.  For a party facing a TRO, violation of such an order can lead to steep fines, being held in contempt of court, and a multitude of other punishments.

TROs are often litigated in the environmental arena.  Recently, the Indiana Supreme Court considered a TRO in the context of an underground storage tank (“UST”) site.  In Witt v. Jay Petroleum, Inc., Cause No. 38S02-1110-CV-608 (Ind. March 21, 2012), the Supreme Court decided that the property owner, his attorney, and his environmental consultant were properly held in contempt of court for violating a TRO.  In that case, the property owner sued a prior owner, claiming the petroleum contamination he was cleaning up was from the prior owner’s use of the USTs.  The parties could not agree on a method for removing the USTs and testing the surrounding soil.  The trial court issued a TRO prohibiting any UST removal, soil excavation, or other environmental investigation and remediation activities until the court could conduct a preliminary injunction hearing.  Id., slip op. at 3.  The environmental consultant and other parties to the litigation continued excavating the UST area, and the trial court found them in contempt.  Id. at 3–4.  The Indiana Supreme Court eventually affirmed the trial court’s order.  See also Commissioner  v. RLG, Inc., 755 N.E.2d 556, 558 (Ind. 2001).  In RLG, the Indiana Department of Environmental Management (“IDEM”) sought preliminary injunctive relief against a landfill.  The defendant landfill agreed to remedy its environmental violations and to close the landfill, and IDEM agreed to drop its action for other civil penalties.  When defendant failed to comply, default judgment was entered for $3.1 million against landfill for violating the temporary restraining order.  The Indiana Supreme Court affirmed the judgment.          

This short recap of the Witt and RLG cases illustrates the applicability of the TRO in environmental litigation, and the extreme importance in abiding by a TRO.  A TRO expires within ten days after it was issued (unless the court extends it for good reason).  Ind. R. Trial P. 65(B). As soon as possible after the entry of a TRO, the trial court will conduct a preliminary injunction hearing where all parties can present their arguments regarding whether the activity that is the subject of the TRO should be enjoined pursuant to a more permanent preliminary injunction.  This powerful tool should not be overlooked—by the party filing it, or the party opposing it.

Indiana Rule of Trial Procedure 65 controls injunctions and temporary restraining orders (“TROs”).

To obtain a preliminary injunction, [the movant has] the burden of showing by a preponderance of the evidence that: (1) their remedies at law were inadequate, thus causing irreparable harm pending resolution of the substantive action; (2) they had at least a reasonable likelihood of success at trial by establishing a prima facie case; (3) the threatened injury to them outweighed the potential harm to the Appellees resulting from the granting of an injunction; and (4) the public interest would not be disserved by the granting of a preliminary injunction. If the party moving for an injunction fails to prove any of those four requirements, a. grant of an injunction to that party is an abuse of discretion. Stated another way, if, on appeal, the moving party cannot demonstrate that it proved each of those four requirements then the trial court’s denial of the movant's request for an injunction must be affirmed.

Curley v. Lake County Bd. of Elections & Registration, 896 N.E.2d 24, 32–33 (Ind. Ct. App. 2008).  While Curley was a case about elections, not the environment, the same TRO rules apply in the environmental context.

The lesson?  TROs are a powerful tool for any party—the government, property owners, defendants, plaintiffs, and anyone in between.  Parties should be aware of the usefulness of such a weapon, and if a TRO is entered against you, beware the consequences of violating that court order.