From Cans to Labels: Effects of Government Activity on the Craft Beer Industry

Resiliency and innovation are hallmarks of the craft brewing industry. From experimenting with new ingredients to finding ways to survive in the face of prohibition, developing creative solutions to challenges is something we’ve come to expect from our favorite craft brewers. 2018 tested that resiliency, both politically and economically. Trade policy has created a shifting playing field, with tariffs threatened and enacted, and trade agreements proposed and dismantled. 2018 ended, and this year began, amidst the longest federal government shutdown in history. These unique conditions have affected—and continue to affect—most industries, and the craft beer industry is no exception. As part of an already constantly changing industry, breweries offer an informative glimpse into possible developments we might see in coming years.

Read Kathleen Kline’s article, “From Cans to Labels: Effects of Government Activity on the Craft Beer Industry,” published in The Legal Intelligencer Feb. 23, 2019.

Limits on Administrative Orders to Clean Up in Delaware

By David Mandelbaum and Samuel L. Moultrie on February 25, 2019 Posted in Court Cases, Environment, Solid waste, Waste

On Feb. 21, 2019, the Delaware Superior Court decided that the state’s Department of Natural Resources and Environmental Control (DNREC) cannot order an environmental violator to remedy its violation under the department’s general enforcement statute. That is, under that statute, DNREC can order a person illegally disposing of solid waste to stop adding to the waste pile, but it may not be able to order that person to remove what is already there.

Delaware Dept. of Nat. Res. & Envt’l Control v. McGinnis Auto & Mobile Home Salvage, LLC involved an automobile scrap yard operating in violation of Chapter 60 of Title 7 of the Delaware Code, the general obligation to have a permit for, among other things, solid waste disposal, and the need to operate in compliance with that permit. DNREC issued an order under Section 6018 requiring McGinnis not only to cease receiving any further automobiles or mobile homes to dismantle, but also to take affirmative steps to remove cars and parts already on the property and to dispose of them properly.

Section 6018 of Title 7 provides:

The Secretary shall have the power to issue an order to any person violating any rule, regulation or order or permit condition or provision of this chapter to cease and desist from such violation; provided, that any cease and desist order issued pursuant to this section shall expire (1) after 30 days of its issuance, or (2) upon withdrawal of said order by the Secretary, or (3) when the order is suspended by an injunction, whichever occurs first.

First the Environmental Appeals Board, then the Superior Court, agreed with McGinnis that DNREC overreached. Section 6018 only authorizes administrative orders to “cease and desist,” and those orders expire after 30 days. A mandatory injunction, or even a permanent prohibitory injunction, reasoned the court, exceeds DNREC’s authority under Section 6018 and requires a lawsuit in the Chancery Court.

The McGinnis court does note that DNREC has authority to require corrective action for hazardous waste releases causing imminent and substantial hazard. 7 Del. Code §§ 6308, 6309. We know from this decision that DNREC may not require affirmative steps to remove illegally disposed solid waste. Whether DNREC could require affirmative steps to address water or air pollution (such as notifying downstream users or downwind residents, cleaning up beds and banks, etc.) remains to be seen.

Further, what counts as “ceasing and desisting” and what counts as corrective action is not always apparent. If the presence of the automobile waste violates, for example, the permit requirement of Section 6003, how can one “cease and desist” from that violation without either removing the waste or obtaining a permit?

For more on waste disposal, click here.

Mexico’s National Registry for Greenhouse Gases and Compound Emissions

By Erick Hernández Gallego and Nancy Guillén Espinosa on February 21, 2019 Posted in Climate Change, Energy, Environment, Greenhouse Gas, GT Alert

Mexico’s General Climate Change Law (Ley General de Cambio Climático) published in the Federal Official Gazette (Diario Oficial de la Federación “DOF”) on June 6, 2012, and the Regulations to the General Climate Change Law of the National Emissions Registry (Ley General de Cambio Climático en Materia del Registro Nacional de Emisiones) published in the DOF on October 28, 2014, set forth the creation of several public policy instruments, which include the National Emissions Registry (the Registry).

Purpose of the Registry

The Registry compiles the required information on greenhouse gas and compound emissions with respect to the energy, transport, industrial, agricultural and livestock, waste, commerce and service sectors, which must submit mandatory reports (the Report) on direct and indirect emissions produced from their facilities, either from fixed or mobile sources, whenever they exceed 25,000 tons of carbon dioxide equivalent.

To read the full GT Alert, click here.

EPA Announces “Most Comprehensive Cross-Agency Action Plan for a Chemical of Concern” in History of EPA for PFAS

By Kaitlyn R Maxwell on February 14, 2019 Posted in Emerging Contaminants, EPA, PFAS, PFOA, PFOS, Safe Drinking Water Act, Toxic Tort

Today, U.S. Environmental Protection Agency (EPA) Acting Administrator Andrew Wheeler announced from Region 3 in Philadelphia, what EPA is describing as the most comprehensive cross-agency action plan for a chemical of concern in the history of EPA – the Action Plan for per- and polyfluoroalkyl substances (PFAS). The PFAS Action Plan has five primary components:

EPA is moving forward with the process to establish a federal Maximum Contaminant Level (MCL) under the Safe Drinking Water Act for perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA), which will include examination of other types of PFAS. If EPA does in fact adopt an MCL – a lengthy process – that MCL may become an applicable or relevant and appropriate requirement (ARAR) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Remedy selection under CERCLA requires consideration of protectiveness and ARARs. For groundwater, the ARARs are the Maximum Contaminant Level Goals or the Maximum Contaminant Levels. That means, if EPA adopts a federal MCL, it might turn into a de facto cleanup standard for groundwater.
Continuing enforcement actions – EPA is currently involved in eight direct enforcement actions. EPA initiated the regulatory development process for listing PFOA and PFOS as hazardous substances under CERCLA. EPA plans to release interim groundwater cleanup recommendations.
Expanding monitoring by including PFOA/PFOS for the second time on the list of chemical contaminants for the next Unregulated Contaminant Monitoring Rule (UCMR) and considering PFOA/PFOS data for the Toxic Release Inventory.
Expanding research efforts, including fate and transport pathways.
Risk communications.

According to Wheeler, EPA has not set a new MCL since the Safe Drinking Water Act was amended in 1996 and timing remains unclear.

Significant Environmental Cases in Pa. Courts During 2018 (Part 2)

By Greenberg Traurig on January 24, 2019 Posted in Court Cases, DEP, Environment, Litigation, Oil & Gas, Pennsylvania, Permitting

Part 2 of this series on the large number of environmental cases decided by the Pennsylvania appellate courts in 2018 discusses enforcement, the Oil and Gas Act, valuation, and a few other cases of note.

Read David G. Mandelbaum’s article from The Legal Intelligencer supplement Pa. Law Weekly, “Significant Environmental Cases in Pa. Courts During 2018 (Part 2).”

Martinez v. Colorado Oil and Gas Conservation Commission Update

By Casey A. Shpall on January 22, 2019 Posted in Colorado, Court Cases, GT Alert, Legislation, Oil & Gas

On Jan. 14, 2019, the Colorado Supreme Court held in Martinez v. Colo. Oil & Gas Conservation Comm’n, that the Colorado Oil and Gas Conservation Commission (Commission) properly denied a petition requesting that it adopt a rule that would halt the drilling of oil and gas wells for the foreseeable future.

The Supreme Court’s decision reinforces the Commission’s authority to regulate public health and environmental concerns, but not to the detriment of its charge to foster responsible, balanced development of the resource. A likely outcome of the decision will be proposed legislation seeking to alter the balance of current law, and further requests to the Commission for rulemaking to give local governments and other stakeholders more opportunities to address the issues raised in this case.

To read the full alert, click here.

Significant Environmental Cases in Pa. Courts During 2018 (Part 1)

By Greenberg Traurig on January 22, 2019 Posted in Court Cases, Environment, Environmental Rights Amendment, Pennsylvania, Pennsylvania, State & Local, Stormwater, Uncategorized, Waste

The Pennsylvania appellate courts decided a relatively large number of environmental cases during 2018. This survey briefly characterizes those cases under the following categories: Environmental Rights Amendment; pre-emption of local regulation; other local land use regulation issues; Sewage Facilities Act (Act 537); and stormwater, earth disturbance, and stream encroachment.

Read David G. Mandelbaum’s 42 Pa. L. Weekly 74 (Jan. 22, 2019), “Significant Environmental Cases in Pa. Courts During 2018 (Part 1).”

Anticipating Environmental Issues in an Economic Downturn: 2019 Edition

By David Mandelbaum and Curtis B. Toll on December 27, 2018 Posted in Contamination, Environment, Insurance, Risk management

On the morning of Dec. 25, the News Analysis on page A1 of the New York Times led off with this cheery holiday thought: “Sometime in the last couple of months, predictions of a major economic downturn or recession in 2019 went from being a crank view to the conventional wisdom.” At the front end of the Great Recession, we offered some ways in which businesses and others could protect themselves against environmental liabilities flowing from bad economic times. See “Anticipating Environmental Issues in an Economic Downturn,” Natural Resources & Environment, Vol. 24, No. 1 at 33 (Summer 2009). Many of those observations still hold.

Primarily, entities have often managed their environmental liabilities to clean up historic contamination or to maintain current compliance through agreements. Some may be direct: one party agrees to indemnify another party. Others may be indirect: the regulator agrees to seek compliance from one party first and the other party only as a backup. See “Managing Environmental Obligations: Tracking ‘Environmental Debtors,’” 35 Pa. L. Weekly 196 (Feb. 28, 2012), posted on this blog here.

Those arrangements collapse if the party with the environmental obligation cannot or will not perform due to other financial stress. The problem can be as simple as the new owner failing to pay the electric bill to power the pumps on a groundwater pumping system or allowing its housekeeping to lapse.

Now may be a time to inventory the environmental “debts” one is owed. If the debtor seems fragile, one may want to consider one’s options.

One option that is more common now is excess of indemnity insurance coverage. Rather than insist that that new owner somehow secure its obligations, you can insure against its default. It is a tool in the box if not new, then more commonly used, since 2009. Excess of indemnity approaches can insure over first-party performance obligations or more conventional third-party claims such as bodily injury and property damage causes of action. In cases where responsible parties have assumed cleanup obligations under a consent decree or administrative order on consent, the insurance can safeguard a prospective purchaser or lender from the risks associated with the responsible party’s default.

Staying in Lane Under the Environmental Rights Amendment

By Greenberg Traurig on December 26, 2018 Posted in Court Cases, DEP, Environment, Environmental Rights Amendment, Pennsylvania, Pennsylvania, State & Local

The Commonwealth Court recently provided new guidance on the extent to which the Environmental Rights Amendment to the Pennsylvania Constitution gives municipalities or agencies additional powers or imposes on them additional obligations. Frederick v. Allegheny Township Zoning Hearing Board, No. 2295 C.D. 2015 (Pa. Commw. Ct. Oct. 26, 2018), holds that the amendment does not alter the authority of the ZHB or its procedures. On the other hand, the Environmental Hearing Board seems to have held previously that the amendment requires the Department of Environmental Protection (DEP) to engage in an environmental assessment of some sort before granting a permit.

Read David G. Mandelbaum’s Dec. 20 article from The Legal Intelligencer, “Staying in Lane Under the Environmental Rights Amendment.”

New York to Propose Stringent Drinking Water Standards

By Robert M Rosenthal and Steven C. Russo on December 21, 2018 Posted in Contamination, New York, State & Local, Water

On Dec. 18, 2018, the New York State Drinking Water Quality Council, in consultation with the Departments of Health and Environmental Conservation, recommended drinking water standards for three so-called “emerging contaminants” – 1,4-Dioxane, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS). The recommended “maximum contaminant levels” or “MCLs” are one part per billion (ppb) for 1,4-Dioxane, and 10 parts per trillion (ppt) for PFOA and PFOS. The state announced in its press release that, if adopted, the new standards for these contaminants would be the “nation’s most protective.” The next step is for the Department of Health to issue a proposed rulemaking that will begin the formal process to adopt these new standards into law, something the agency is expected to initiate over the next 60 days. The proposed rulemaking will include a public comment period of at least 60-days. The expectation is that the Department of Health will formally adopt the new MCLs by the end of 2019.

The detection of 1,4-Dioxane, PFOA and PFOS in drinking water supplies around the state came to light from recent testing performed by water districts pursuant to a regulation promulgated by the Environmental Protection Agency in 2012. Section 1445(a)(2) of the Safe Drinking Water Act, 42 U.S.C. § 300j-4(a)(2), requires EPA to issue every five years a new list of no more than 30 unregulated contaminants to be monitored by public water systems. On May 2, 2012, EPA issued its third Unregulated Contaminant Monitoring Regulation, requiring public drinking water supplies to conduct monitoring for 29 previously unregulated contaminants, including 1,4-Dioxane, PFOA and PFOS. See 77 Fed. Reg. 25859, 26074 (May 2, 2012). Subsequent testing performed by water districts indicated the existence of these contaminants at relatively low levels in several drinking water supplies around the state, including in several water supplies on Long Island, and in Hoosick Falls, Newburgh and Plattsburgh.

The detection of 1,4-Dioxane, PFOA and PFOS in water supplies, in turn, caused the Cuomo administration to include in its 2017-18 budget the creation of New York State Drinking Water Quality Council, which was tasked with making recommendations to the Department of Health related to the regulation of emerging contaminants. See Public Health Law § 1113. 1,4-Dioxane, PFOA and PFOS were highlighted as examples of the types of contaminants to be regulated. Id. § 1112(3)(c). The council has since held public meetings regarding the regulation of these contaminants, most recently on Dec. 18, 2018, when it announced the recommended MCLs.

Once finalized by the Department of Health, the MCLs for 1,4-Dioxane, PFOA and PFOS will require the modification of treatment facilities around the state, at significant cost. For example, while 1,4-Dioxane is a volatile organic compound (VOC), traditional systems used to treat VOCs, like air strippers and activated carbon, cannot alone remove 1,4-Dioxane from water supplies. Reports show that installation of an Advanced Oxidation System that uses ultraviolet radiation and either ozone or hydrogen peroxide are effective in removing 1,4-Dioxane. By contrast, PFOA and PFOS are relatively easily removed by activated carbon systems. Water Districts in New York can apply for funding through the Environmental Facilities Corporation, which will provide up to 80 percent of the cost to fund these new systems.

In addition, the new standards are expected to impact landfill operations. For example, while 1,4-Dioxane is used as a stabilizer in some solvents, it is also included in personal care products, including detergents, dishwashing soaps, shampoos, cosmetics, deodorants, and body lotions. PFOA also comes from common household products, like non-stick pans, furniture, cosmetics, household cleaners, clothing, and packaged food containers. PFOS is used as a fabric protector and is often included as an active ingredient in fire-fighting foam. Since each of these contaminants is included in household products, one can expect they will also turn up in landfill leachate, which is typically treated on-site or taken off-site to be disposed at a sewage treatment plant. The New York State Department of Environmental Conservation is in the process of conducting a study to determine the prevalence of these contaminants in landfill leachate around the state.

The new MCLs are also expected to impact the investigation as well as remediation of hazardous waste sites and Brownfield sites. The standard for 1,4 dioxane is lower than the ambient water quality standards for other common solvents observed in New York state waters (most of which are set at 5 ppb), and the standards for PFOA and PFOS are significantly lower than 1 ppb.

Thus, they are predicted to increase the scope of site remediation projects where such measures are identified as feasible and where the source is identified as existing at the hazardous waste site.