United States district court

December 26, 2013

Andover settles toxic sludge case

Source: http://www.eagletribune.com, December 20, 2013
By: Dustin Luca

The town has officially settled a District Court lawsuit with Bancroft Road resident James Berberian, bringing an end to a toxic sludge case dating back to 2010.

Berberian stands to be paid $500,000 in the settlement, finalized by a unanimous vote from the Board of Selectmen at an open meeting last night, according to Town Counsel Tom Urbelis.

Of the money in the settlement, $450,000 will be paid by the town while $50,000 will be paid by engineering firm Pennoni Associates, according to Urbelis.

Pennoni Associates’ involvement in the matter came after the company had done work on Berberian’s 2-4 Bancroft Road property.

The settlement approved yesterday follows a similar agreement, which included a $440,000 payment from the town and a contingency for a separate agreement from Pennoni, which fell apart in October.

Other changes to the agreement from the previous one amount to rephrasing of some wording, Urbelis said.

The agreement was not available after the meeting last night. Berberian’s attorney, Joseph Wadland, couldn’t be reached for comment.

The lawsuit case began in November 2010, when water department employees were cleaning out the 6 million-gallon water storage tank at the Bancroft School as part of routine maintenance on the water system.

However, town workers were videotaped by Berberian dumping dark-colored water into leaking trucks and into a nearby storm drain. That drain flowed down Bancroft Road and onto Berberian’s property at the corner of South Main Street.

The brownish water contained dark sediment which ended up settling in a wetland on Berberian’s property. When that sediment was tested, it showed high levels of toxic metals, including arsenic, cadmium and nickel, among others.

The town attempted to clean up Berberian’s property, but he claimed that some sediment remains. In February 2012, he then sued the town in federal court over what he said was a violation of the federal Clean Water Act for discharging contaminated water into a wetland.

Following months of closed-door meetings, the Board of Selectmen voted in August to accept the earlier settlement agreement.

By the end of the month, with a counter-proposal filed by Berberian, it appeared the agreement was in jeopardy “through no fault of either party,” Wadland said at the time.

The full agreement will be available in the coming days, according to Urbelis.

 …

November 22, 2013

Environmental group sues over Yacolt quarry

Source: The Columbian, Vancouver, WA, November 20, 2013
Posted on: http://envfpn.advisen.com

A Clark County environmental group has filed a lawsuit against a Yacolt mining operation, claiming years of pollution and violations of the federal Clean Water Act.

In a suit filed in U.S. District Court in Tacoma, Friends of the East Fork Lewis River claims that the Yacolt Mountain Quarry and its owners have discharged dirt, silt and other pollutants into tributaries of the East Fork. The suit names quarry operator J.L. Storedahl & Sons, Inc., company leaders and landowner Brent Rotschy as defendants.

The quarry operation has long been a source of frustration among residents in the area. Friends of the East Fork President Richard Dyrland said the plaintiffs feel legal action is the only way to resolve the situation after years of problems. Opponents have contacted Storedahl directly in the past, he said, plus county, state and federal officials.

“We felt that things were not getting corrected as they should be, and this has been an ongoing thing,” Dyrland said. “If we’re going to get anything changed … we had to take this step.”

A representative of Kelso-based Storedahl was not immediately available to comment Tuesday.

The Yacolt Mountain Quarry began operating in 2008, extracting rock from the north Clark County site. The operation discharges pollutants including nitrates, oil and grease into an intended infiltration pond, according to the lawsuit, which frequently overflows and carries those substances into the East Fork Lewis River system — seen as crucial habitat for threatened salmon.

Pollutants are also released and washed down along an adjacent haul road, according to the complaint. And residents have long complained of impacts to local wells, safety hazards and other concerns stemming from the operation.

The lawsuit asks a judge to remediate past and future environmental harm in the area, and impose fines against the quarry operators. It also seeks economic and noneconomic damages for co-plaintiff David Rogers, a Friends of the East Fork board member who owns land near the quarry.

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June 26, 2013

Professional services exclusion precludes coverage for design defect claims

Source: http://www.lexology.com, June 14, 2013
By: Wiley Rein LLP

Applying Nevada law, a federal district court has held that an insurer has no duty to defend or indemnify claims alleging damage from design defects in houses constructed by the insureds due to the policy’s professional services exclusion. St. Paul Fire & Marine Ins. Co. v. Del Webb Communities, Inc., 2013 WL 1181904 (D. Nev. Mar. 19, 2013).

The insured construction companies were named as defendants in a class action lawsuit alleging damages as a result of structural seismic design defects in houses. The insureds tendered the lawsuit for defense and indemnity coverage under an excess policy issued by the insurer. The excess policy contained a professional services exclusion precluding coverage for damage “that results from the performance of or failure to perform architect, engineer, or surveyor professional services” including “the preparation or approval of any drawing and specification, map, opinion, report, or survey, or any change order, field order, or shop drawing; and any architectural, engineering, inspection, or supervisory activity.” The insurer accepted a defense subject to a reservation of rights and filed a declaratory judgment action seeking a determination that no defense or indemnity obligation existed under the excess policy pursuant to the exclusion.

The court held that coverage was precluded by the plain terms of the professional services exclusion in the excess policy. According to the court, the only damages sought in the class action lawsuit were “damages relating to curing the design defect” that fell directly within the scope of the exclusion. In so holding, the court rejected the insureds’ contention that additional discovery was warranted to determine if a concurrent cause for the damages existed that would defeat application of the exclusion. The court noted that the insureds “cannot show that there was a concurrent cause which would defeat the Exclusion because the only allegation in the [underlying action] is that homes were built using the allegedly defective [designs] and are hazardous because they do not meet seismic codes.” As such, the court rejected the insureds’ request for further discovery and held that no coverage obligations existed for the class action lawsuit under the excess policy.

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June 12, 2013

Portland power plant owners settle pollution lawsuit

Source: http://www.mcall.com, May 15, 2013
By: Peter Hall

Coal-fired generating units will cease operation six months earlier than scheduled

The Portland Generation Station will close June 1, 2014, about six months earlier than planned. (MONICA CABRERA, The Morning Call / June 15, 2011)

The owner of a power plant in Upper Mount Bethel Township has agreed to stop burning coal as part of a settlement in a lawsuit by two downwind states over air pollution.

NRG Energy, which acquired the Portland Generating Station last year in a merger with GenOn, will shut down two coal-fired generating units by June 2014 as part of the settlement with New Jersey and Connecticut, the company said in a statement Wednesday.…

April 26, 2013

Developer liable to clean up pre-existing contamination for failing to exercise “appropriate care”

Source: http://www.lexology.com, April 10, 2013
By: Honigman Miller Schwartz and Cohn LLP

A buyer of contaminated property was held to have lost its ability to claim to be a non-liable “bona fide prospective purchaser” under CERCLA because it failed to act appropriately with respect to hazardous substances it found on the site. As a result, the buyer was held responsible for cleanup costs.

From 1884 to 1972, fertilizer production on a 43 acre parcel of land in Charleston, SC caused releases of arsenic, lead and other hazardous substances into the soil. In 2003, Ashley II of Charleston, Inc. (Ashley) bought a 27.62 acre portion of the property to include it in a mixed-use project. After Ashley incurred response costs, it sued PCS Nitrogen, Inc. (PCS), as an alleged corporate successor to a company that had caused some of the contamination. PCS counterclaimed against Ashley and brought third-party contribution actions against others currently or formerly associated with the property.…

March 29, 2013

The Changing Landscape Of Liability For Natural Resource Damages

Source: The Metropolitan Corporate Counsel, March 19, 2013
By: John G. Nevius, Anderson Kill & Olick, P.C.

Many jurisdictions have announced that they plan to more actively pursue natural resource damages (“NRDs”) from potentially responsible parties (“PRPs”) deemed liable under CERCLA or Superfund. Recent developments in case law have changed the landscape when it comes to assessing the scope of this CERCLA/NRD liability and how to pay for it. NRDs are defined as “the dollar value of the appropriate degree of restoration necessary to assess, restore, rehabilitate, replace or otherwise compensate for the injury to ‘land, fish, wild life, biota, air, water’ as a result of a discharge.” NRDs also may be exacerbated by the spreading out of a discharge because of events such Superstorm Sandy said to be associated with climate change.

Apportionment Of CERCLA Liability, Causation And Insurance Implications

Under the 2009 Burlington Northern case, certain PRPs may be able to “apportion” their environmental liability where the facts provide a reasonable basis for division according to the respective contributions to the harm alleged. However, subsequent cases have clarified or limited apportionment where it has been asserted as a defense to further cleanup liability. See, e.g., the 2012 case, USA v. NCR Corp. Alternatively, jointly and severally liable PRPs without sufficient facts to support apportionment may be able to take advantage of traditional equitable principles to instead “allocate” their NRD liability. Several practical factors such as the PRP’s degree of involvement or cooperation come into play in allocating, but the results are often similar to what one eligible to apportion might expect. The key difference is that those faced with allocation remain jointly and severally liable and must generally complete the cleanup before seeking contribution. Apportionment, on the other hand, can offer a defense to conducting further work.…

March 8, 2013

Colorado joins states that exclude insurance coverage under pollution exclusion clauses for traditional and nontraditional pollution events

Source: http://www.lexology.com, March 5, 2013
By: Joseph F. Bermudez and Jessica C. Collier, Wilson Elser

Pursuant to an opinion issued by the Colorado Supreme Court (the Court) on February 25, 2013, insurance coverage may be excluded under absolute pollution exclusion clauses for both nontraditional as well as “traditional” pollution under Colorado law. Mountain States Mutual Casualty Company v. Christopher Roinestad, et al., 2013 CO 14 (Colo. Feb. 25, 2013). Agreeing with defense arguments on behalf of Mountain States Mutual Casualty Company (Mountain States), the Court joined other state supreme courts that uphold the broad nature of pollution exclusion clauses.

Background

This matter arose out of an incident in which respondents were overcome by hydrogen sulfide gas while cleaning a sewer clog near the Hog’s Breath Saloon & Restaurant (Hog’s Breath). Respondents filed suit in the state district court (the District Court) against Hog’s Breath, alleging negligence, negligence per se and off-premises liability. The negligence per se claim was based on a La Junta city ordinance that prohibits discharge of “pollutants” such as garbage and waste into the sewer system.

The District Court found that Hog’s Breath dumped large amounts of cooking grease into the sewer, which created a five- to eight-foot clog that led to the buildup of hydrogen sulfide gas. The District Court concluded that Hog’s Breath caused respondents’ injuries by dumping cooking grease into the sewer.…

March 7, 2013

Seller of drained transformers containing residual PCBs insulated from CERCLA "arranger" liability

Source: http://www.lexology.com, February 22, 2013
By: Andrew H. Perellis and Ilana R. Morady, Seyfarth Shaw LLP

If you sell products that you no longer need that contain residual hazardous substances, and the buyer mishandles them so as to create the need for remediation, are you liable under CERCLA for having arranged for disposal of the hazardous substance?

A federal District Court recently granted summary judgment to a CERCLA defendant concluding that because the company did not take intentional steps to dispose of a hazardous substance, it was not subject to CERCLA liability. In Carolina Power & Light Company (CP&L) v. Georgia Power Company et al., No. 08-CV-460 (E.D. NC February 1, 2013), CP&L filed a contribution complaint alleging that Georgia Power arranged for the disposal of hazardous waste when it sent electrical transformers containing PCB-laden oil to the Ward Superfund Site.

Yet Georgia Power only sent transformers to the site that were capped to prevent oil spillage or that had been drained of oil and contained only a residual oil sheen. The transformers also had resale value: the Ward Transformer Company repaired and reconditioned the transformers and sold them for a profit.

The Court granted Georgia Power’s summary judgment motion based on its consideration of several factors:

  • Value and usefulness of materials sold. Because Ward was able to resell the transformers for a profit, and because the transformers were, by extension, useful materials, the Court found that Georgia Power had not arranged for the disposal of a hazardous waste.
  • State of the product. Because the transformers were either capped or drained of oil save for a residual sheen, the Court found that Georgia Power’s purpose was not to dispose of the PCB-laden oil.
  • Knowledge. Although Georgia Power had general knowledge about transformer repair and PCBs in transformer oil, it did not have knowledge that the oil would be spilled or leaked at the Site.

This case is a reminder that simply sending a hazardous material to a Superfund site is not enough to establish arranger liability under CERCLA. Courts will undertake a fact-specific inquiry on whether a CERCLA defendant had the necessary intent to qualify as an arranger.

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March 5, 2013

Seller of drained transformers containing residual PCBs insulated from CERCLA "arranger" liability

Source: http://www.lexology.com, February 22, 2013
By: Andrew H. Perellis and Ilana R. Morady, Seyfarth Shaw LLP

If you sell products that you no longer need that contain residual hazardous substances, and the buyer mishandles them so as to create the need for remediation, are you liable under CERCLA for having arranged for disposal of the hazardous substance?

A federal District Court recently granted summary judgment to a CERCLA defendant concluding that because the company did not take intentional steps to dispose of a hazardous substance, it was not subject to CERCLA liability. In Carolina Power & Light Company (CP&L) v. Georgia Power Company et al., No. 08-CV-460 (E.D. NC February 1, 2013), CP&L filed a contribution complaint alleging that Georgia Power arranged for the disposal of hazardous waste when it sent electrical transformers containing PCB-laden oil to the Ward Superfund Site.

Yet Georgia Power only sent transformers to the site that were capped to prevent oil spillage or that had been drained of oil and contained only a residual oil sheen. The transformers also had resale value: the Ward Transformer Company repaired and reconditioned the transformers and sold them for a profit.…

February 5, 2013

Missouri Federal Court holds pollution exclusion inapplicable to exposure to fumes

Source: http://www.lexology.com, January 29, 2013
By: Brian Margolies, Traub Lieberman Straus & Shrewsberry LLP

In its recent decision in United Fire & Casualty Co. v. Titan Contractors Service, Inc., 2013 U.S. Dist. LEXIS 10716 (E.D. Mo. Jan. 28, 2013), the United States District Court for the Eastern District of Missouri, applying Missouri law, had occasion to consider the application of a total pollution exclusion to claims arising out of what would not ordinarily be considered traditional environmental contamination.

The insured, Titan, is a company that specializes in cleaning construction project sites. Three individuals that worked in an office space adjacent to where Titan had performed a cleanup project sued Titan. They alleged that Titan had used an acrylic floor sealant, TIAH, as part of its cleanup operations, and that the fumes from the sealant caused plaintiffs to suffer various physical ailments. Titan’s general liability insurer, United Fire, provided Titan with a defense in the underlying suit subject to a reservation of rights to deny coverage based on its policy’s pollution exclusion stating:

This insurance does not apply to:

f. Pollution

1. “Bodily injury” or “property damage” which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” at any time.…