December 27, 2013

Benefits from fracking

Source:, December 23, 2013

A Dec. 8 letter asks: “Exactly how many Californians will get out of the unemployment line due to fracking?”

According to a study by the Craig School of Business at Fresno State, developing the Monterey shale could create up to 195,000 direct jobs and generate more than $22 billion in personal income in the unemployment-ravaged San Joaquin Valley. Further, a study by USC found that development of the Monterey shale could potentially create one million jobs by 2015 and 2.8 million by 2020.

Contrary to the author’s claims, hydraulic fracturing does not pose a credible threat for earthquakes. A recent study from Durham University found “it is extremely unlikely that any of us will ever be able to feel an earthquake caused by fracking.” A study from the National Research Council affirmed a low risk of fracking inducing a felt seismic event.

As for water contamination, U.S. Energy Secretary Ernest Moniz has said, “I still have not seen any evidence of fracking per se contaminating groundwater.” Numerous Obama administration officials and state regulators agree.

The science clearly tells us that fracking is safe, and developing California’s vast resources will create jobs and grow our economy. That’s something we should welcome.

Dave Quast

California Director of Energy in Depth

Los Angeles


November 22, 2013

Oil firm to pay penalty for discharging fracking fluid

Read here about an oil firm in California that has been fined $60,000 for discharging fracking fluid.


October 30, 2013

Chili odor leads to lawsuit in CA

Read here about a chili odor emanating from a factory in California that is the subject of a lawsuit.


October 29, 2013

United States: Design Professionals May Be Liable For Economic Loss Caused to Residential Homeowners Under California's SB 800 Law

Source:, October 25, 2013
By: Scott Hennigh, Sheppard Mullin Richter & Hampton

Typically an architect is liable under its contract to the owner if it negligently creates a defective design. But whether an architect is liable for the effects of a defective design on parties with whom it has no contract has traditionally been a more complicated legal question. That liability question becomes further complicated when defective design does not cause property damage, but rather a diminished value of the property which is known in the law as strict “economic loss”. Usually economic loss is not recoverable unless the parties are in “privity” (meaning that they have a contract with one another). But a California Appellate Court recently held that in residential construction, design professionals can be responsible for economic loss that their defective design causes to parties that never contracted to hire them.

The Appellate Court told a trial court to reinstate a complaint brought by an association of condominium owners who sued the architect that had originally designed their condominiums for a developer. The trial court adopted the architect’s argument that it had no liability without a contract with the condominium owners. But the appellate court based its ruling on two things. First, it determined that under a line of cases dating back 50 years, design professionals may have a duty of care to third parties if a certain checklist of factors is met concerning the foreseeability of impact to the third parties such that it creates a special relationship. Second, it determined that California’s SB 800 was intended to create responsibility for design professionals. SB 800 was State legislation passed in response to a California Supreme Court case in 2000 named Aas v. Superior Court that prevented homeowner lawsuits for buildings not built to code, but which had not suffered any property damage. The court held that SB 800 was passed with the legislature interpreting then-existing law as creating such liability for design professionals, and that the statute’s language reiterated such liability. Thus, the court held that that condominium owners could directly sue the original architect for the diminished value or cost of repair of their defectively designed condominiums. The case is Beacon Residential Community Assn. v. Skidmore, Owings & Merrill LLP (2012) 211 Cal. App. 4th 1301.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

October 28, 2013

Policyholders: Beware of Choice of Law Provisions

Source: Saxe Doernberger & Vita, P.C., October 2013

New York District Court Applies “No Prejudice” Rule to Late Notice Claim for Policy “Issued and Delivered” Outside the State with NY Choice of Law Provision

A New York federal district court applied the antiquated “no prejudice” rule to an insured’s late notice claim in Indian Harbor Insurance Co. v. City of San Diego, 2013 WL 5340380 (S.D.N.Y. Sept. 25, 2013). The insurance policy in question was issued in Pennsylvania, delivered to the policyholder in California, and insured risks located in California. The policy contained both New York choice of law and forum selection clauses. In holding that the insurer had no duty to indemnify, the court held that only those policies “issued and delivered” in New York are entitled to take advantage of New York’s statutory “notice-prejudice” standard, which requires that an insurer show prejudice resulting from the policyholder’s late notice in order to deny coverage on that basis. Rather, the court held that foreign insurance policies with New York choice of law provisions are subject to the draconian common law “no prejudice” standard, under which an insurer does not have to show that it was prejudiced by late notice in order to deny coverage.

The Indian Harbor case involved three underlying pollution claims made against the California State Association of Counties and the City of San Diego (collectively “the City”). For each claim, the City failed to give timely notice to the insurer after receiving the claim. The insurer disclaimed coverage and sought a declaration that it had no duty to indemnify the City due to the late notice.…

October 18, 2013

California passes fracking law

Source:, October 8, 2013
By: Philip L. Comella and William R. Schubert, Seyfarth Shaw LLP

California is the most recent state to pass a new, comprehensive statute with which to regulate the hydraulic fracturing industry.

The California statute is making headlines, and for a good reason: California contains an estimated two thirds of the nation’s shale-rock oil deposits. Further, since many details underlying the law remain unsettled, the stakes remain high – particularly in light of the fact that the statute authorizes civil penalties of up to $25,000 per violation.

The statute requires well operators to obtain permits before drilling. Permit applications must provide information including: the specific identification of the fracking well; the precise confines of the drilling activity; the names of any chemical constituents and fluid additives to be used; and written plans for the management of wastewater and the monitoring of groundwater.

The law relies heavily on public disclosure. Not only must well operators disclose information that will ultimately be made public (subject to assertions of trade secret protection) in the application, they also must turn over records after the close of operations. These will include “all electrical, physical, or chemical logs, tests, or surveys.” The law also provides that basic about the activity at each individual fracking well be published to an online database. Many operators already provide this sort of information to the public voluntarily. (See…

September 12, 2013

Consumer group asks judge to halt radiation cleanup at Santa Susana Field Laboratory

Source: Ventura County Star (CA), September 6, 2013
Posted on:

The nonprofit group Consumer Watchdog is asking a Sacramento judge to halt the demolition and removal of buildings and contaminated waste from an area of the Santa Susana Field Laboratory used as a nuclear test site.

Boeing Co., which owns most of the 2,800-acre site in the hills south of Simi Valley, and the state’s Department of Toxic Substances Control, which is overseeing the cleanup of radioactive and chemical contamination at the lab, had agreed to stop demolition work until Sept. 30.

But Liza Tucker, a consumer advocate, said Consumer Watchdog doesn’t know whether the aeronautics company and toxic substances department will stick to their self-imposed moratorium on demolition and truck debris to dumps not specially licensed to receive debris with radiation contamination.

That claim is at the center of a lawsuit the consumer group and other environmental and health organizations filed last month.

In addition, the Santa Monica-based group wants a judge-ordered injunction because it says the state has violated California’s Environmental Quality Act by allowing the demolition and debris removal from the nuclear test site called Area IV.

If the injunction is granted, it would halt work until the allegations in the August lawsuit are resolved in Sacramento County Superior Court.…

June 3, 2013

Wal-Mart pleads guilty in U.S. hazardous waste cases, to pay $82M

Source: Business Insurance, May 29, 2013

Wal-Mart Stores Inc. on Tuesday said it would pay nearly $81.63 million to the federal government as it pleaded guilty to charges that it improperly discarded hazardous waste such as bleach and fertilizer years ago.

The U.S. Department of Justice said that in cases filed by federal prosecutors in California, Wal-Mart pleaded guilty to six counts of violating the Clean Water Act by illegally handling and disposing of hazardous materials at U.S. stores.

The world’s largest retailer also pleaded guilty in Kansas City, Mo., to violating the Federal Insecticide, Fungicide and Rodenticide Act by failing to properly handle pesticides that had been returned by customers, the Justice Department said in a statement.

Wal-Mart said its plea agreements with the U.S. Attorneys’ Offices in the Northern and Central Districts of California, the U.S. Attorney’s Office for the Western District of Missouri and an administrative resolution signed with the Environmental Protection Agency bring an end to compliance issues that took place years ago.

Wal-Mart previously agreed in 2010 to pay $27.6 million to the state of California to settle a related lawsuit and agreed in 2012 to pay more than $1.25 million to the state of Missouri.

The issues involve prior practices such as throwing out lawn products such as fertilizer and pesticides in the trash rather than through a certified hauler.…

May 16, 2013

How will Brown Balance Oil, Environmental Interests?

Source:, May 14, 2013
By: Daniel Weintraub

California’s economy has been powered for decades by technology, trade and tourism — businesses and jobs mostly near the coast from San Diego to Los Angeles and around the San Francisco Bay Area. The state’s great inland valleys, while serving as a breadbasket for the world, have not been a land of high-paying employment or tax-producing industry.

A glance at the most recent unemployment numbers reflects this reality. While the state’s overall jobless rate is still high by historic standards, it has fallen to 6.3 percent in Orange County, 6.0 percent in San Francisco and 5.7 percent in San Mateo County. In the Central Valley, by contrast, unemployment remains in double digits from Kern County (13.6) all the way to San Joaquin (14.1).

Could Big Oil change all that?

A revolution in the oil industry that’s been taking place in Pennsylvania, Ohio and North Dakota is poised to sweep through California’s oil patch, with the potential to produce hundreds of thousands of jobs and billions in tax revenue for the state.

But there’s a big catch. That same revolution also brings the chance of environmental degradation, threatening the water supply and abetting a carbon-based economy that many were hoping would soon become a thing of the past. That might not be a problem in the rust belt or the job-starved upper Midwest, but environmental protection is one of California’s passions. It is also one of its attractions.

At issue is the future of what is known as the Monterey Shale, a geologic formation that stretches beneath the Central Valley from Bakersfield to Modesto. Parts of this region have been a source of oil for generations. Despite recent declines, California still ranks fourth among the states in crude oil production, behind Texas, Alaska and a surging North Dakota, and most of that oil comes from the southern Central Valley and the surrounding hills.…

May 1, 2013

California Assembly panel OKs three measures to halt fracking for more study

Source: The Sacramento Bee, May 1, 2013
Posted on:

In the latest sign of Democrats’ determination to rein in the disputed extraction process known as hydraulic fracturing, or fracking, a California Assembly committee has advanced three bills that would halt the practice in the state for the foreseeable future.

They were not the first fracking bills to make it out of committee this year, but they go further than other fracking legislation by calling for a moratorium to allow more time to study the impacts of hydraulic fracturing, which involves blasting a mix of chemicals and water deep underground.

Senate Bill 4 by Sen. Fran Pavley, D-Agoura Hills, for instance, would prohibit the state from issuing new fracking permits only if a study on fracking was not completed by Jan. 1, 2015.

Paul Deiro, a lobbyist testifying Monday before the Assembly Natural Resources Committee on behalf of the Western States Petroleum Association, told committee members that other proposals were “far more reasonable than the three moratorium bills you hear today,” arguing that there is no evidence that fracking is unsafe.

“The proponents of a moratorium have often said we don’t know, we need to collect information and find out,” but there are no cases of proven well failure or groundwater contamination in California, Deiro said. He added that a fracking ban would mean that the energy-rich Central Valley “loses the potential of creating millions of jobs.”

But Assembly members said they were responding to constituents alarmed that fracking is moving forward in California with seemingly little oversight or regulation.…