Energy and Environment Monitorwww.eem.jacksonkelly.com

Hobet Averts A Shutdown

     Once again, the Ohio Valley Environmental Coalition, Coal River Mountain Watch, West Virginia Highland Conservancy and the Sierra Club have challenged a Clean Water Act § 404 permit issued by the Corps of Engineers.  Once again, U.S. District Court Judge Robert C. Chambers issued a temporary restraining order enjoining mining on the permit.  Once again, the TRO was lifted upon agreement of the Plaintiffs and Hobet Mining that the streams sought to be protected have already been disturbed by mining.

     On August 1, the Corps issued an individual § 404 permit to Hobet Mining for mining at its Mine 21 Complex in Boone and Lincoln Counties.  The permit authorized Hobet to mine through approximately 22,200 feet of mostly ephemeral and intermittent drainages that channel water into Berry Branch, a perennial stream that flows into Mud River.  Unlike most permits, no valley fills were authorized by permit.  Instead, all of the stream channels were recreated in nearly their original locations.  Overburden material in excess of that required to achieve the approximate original contour (AOC) on the permit is moved to an adjoining Hobet permit where it is placed in an existing valley fill.  Approximately 1.8 million tons of coal will be mined from the permit.  Hobet began mining immediately upon receiving the permit.

     On August 8, OVEC and the three other groups represented by Joe Lovett filed a suit challenging the permit (3:07-cv-0973) in the federal district in Huntington.  The suit names only the Corps as the Defendant.  It alleges that the Corps failed to provide appropriate notice of its decision to issue the permit, that its assessment of the stream functions disrupted by mining were inadequately evaluated by the corps under the CWA and NEPA and that the mine will discharge selenium into the Mud River Reservoir.  In a hearing conducted by telephone on August 12, Judge Robert Chambers issued a temporary restraining order and set a preliminary injunction hearing for August 20.

     In the following days Hobet management met with representatives of the Plaintiffs and demonstrated that the two principal stream channels on the permit were filled with rock and check dams to control sedimentation during the course of mining.  Notwithstanding their allegations that stream functions cannot be restored through mitigation, Hobet verified that a geo-morphologist had designed the new streams, and that the designer was acknowledged by the Plaintiffs own expert as having done excellent work.  Finally, the unionized workforce began to mobilize once WARN notices were issued on August 14.

     Following a breakfast meeting with Governor Manchin on Friday, August 15, the Plaintiffs met with Hobet and agreed to withdraw their motion for preliminary injunction.  Hobet is not required to amend its plan of mining in any way, but has agreed to consult with a forestry expert who has previously advised on reclamation to achieve forestry post mining land uses.  Hobet is also authorized to consult with another Plaintiff identified expert to review the adequacy of its material handling plan for selenium.  Hobet will also not oppose the Plaintiffs’ request that DEP impose immediately effecting selenium effluent limits. 

     OVEC and Hobet signed a settlement on August 19.  The Court dissolved the TRO in an order filed on August 21.  The Corps issued a letter to Hobet authorizing mining activity on August 22.  The lawsuit against the Corps challenging the inadequate notification practices and insufficient analysis remains unaffected.

     This article was authored by Blair M. Gardner, Jackson Kelly PLLC. For more information on the author see here.

EPA's Title V Monitoring and Testing Compliance Program Vacated

     The United States Court of Appeals for the District of Columbia issued a ruling on August 19, 2008 in Sierra Club v. EPA that vacates EPA's 2006 rule that implements Title V to assure compliance through monitoring.  The Court finds that EPA's prohibition of states and local authorities from supplementing inadequate monitoring requirements on a case-by-case basis in each permit issued is unlawful.  The Court concludes that EPA's prohibition means that some permit programs currently in place do not comply with Title V which requires that "every one" of the permits issued by permitting authorities include adequate monitoring requirements.  The Court focuses on the point that EPA has even conceded that some monitoring requirements may not be adequate to assure compliance and should be improved.  The Court reads Title V to mean that somebody must fix these inadequate monitoring requirements. 

     The court upheld the Part 70 rules in spite of challenge.  The Court concluded that Section 70.6(c)(1) ensures that all Title V permits include monitoring requirements "sufficient to assure compliance with the terms and conditions of the permit," even when Section 70.6(3)(i)(A) and 70.6(a)(3)(i)(B) are not applicable.  "This reading provides exactly what we have concluded the Act requires:  a permitting authority may supplement an inadequate monitoring requirement so that the requirement will "assure compliance with permit terms and conditions.""

     The Court grants the petition for review with respect to the 2006 rule, which they vacate and denies the petition for review with respect to the monitoring provisions of the Part 70 Rules. 

     This article was authored by Kathy G. Beckett, Jackson Kelly PLLC. For more information on the author see here.

Southern Governor’s Association to Address Climate Change

     At its annual meeting held on August 11, 2008, Virginia Governor Tim Kaine took over as the Chairman of the Southern Governors Association [“SGA”] and announced that the theme of his term in office would be “Energy Sustainability and Climate Change”. 

     Pointing out that other regions of the nation had undertaken formal climate change initiatives, Governor Kaine called upon the other SGA Governors to support a national climate change framework, executed at the local level.  He urged the Governors in attendance to use the SGA as a regional voice on climate change. 

     Governor Kaine reviewed an impressive list of climate change and energy success stories occurring across the SGA states even in absence of a regional energy/climate change policy.

     His stated outcomes for the SGA climate change initiative are: 

     1.  Conduct a dialogue aimed at creating a regulatory strategy and providing the SGA states with a strong voice on climate change issues;  and

     2.    Identification of issues for state action in such areas as energy independence, conservation and efficiency, clean technology development and climate change adaption. 

     We will follow closely the next steps to be undertaken by the SGA to follow-up on Governor Kaine’s initiative. 

     This article was authored by David M. Flannery, Jackson Kelly PLLC. For more information on the author see here.

Congressional Fix for CAIR???

     On August 11, 2008 James L. Connaughton, Chairman, Council on Environmental Quality delivered a proposal to the Southern Governors Association and the Southern States Energy Board.  He came to this group to discuss the implication of the D.C. Circuit decision that vacated the Clean Air Interstate Rule 2005 (“CAIR”).  This rule was initially designed to reduce emissions from power plants of SO₂ by 73% and NOx by 61%.   The CAIR rule was designed by EPA to be the main tool for eastern states to comply with the new federal air quality standards and other major requirements.  Connaughton’s message was that if the decision stands, states will now be forced to go back to square one to meet the current air programs that are promulgated pursuant to the Clean Air Act and can not rely upon the CAIR program to demonstrate compliance. 

     He summarized the impact of the court ruling as follows:

• Delayed health and air quality benefits.
• $10 - $15 billion of planned pollution investment through 2010 at risk.
• States must redo statewide air quality and permitting plans and develop new regulations on both new and old factories.
• Each state now may need to try to force factories and power plants in neighboring states to cut emissions through administrative petitions and litigation.
• Jeopardizes affordable and reliable clean coal energy.

     Solutions summarized by Connaughton are set forth below.  The last item in bold is his suggested line of action: 

• Ask the D.C. Circuit to reconsider which will result in further delay and uncertain outcome.
• Petition the Supreme Court to overturn which will mean more delay with an uncertain outcome and it places states in a tighter bind on how it will meet the requirements of the Clean Air Act in the mean time.
• Ask Congress to restore the rule which means preservation of the trading and all other CAIR program elements with a simple sentence of reinstatement to get the program back on track.

     Connaughton urged the Governors attending the meeting to contact their congressional delegations to promote the reinstatement of CAIR by Congress.  He reported that he would be approaching other regional organizations within the CAIR states to promote this strategy.  In response to the question about what political pitfalls exist with this approach, Connaughton responded by asserting that since there was only minimal litigation over CAIR and most of the states had already incorporated CAIR into their SIPs, he would not expect justifiable objections, except for those few who had litigated issues.  Since his announcement on Monday, it is being reported that some are urging only reinstatement of Phase I of CAIR, excluding Phase II.  Unless the congressional solution would address Phase II of CAIR, there would remain outstanding program compliance issues for NSR, BART, RACT, etc.

     This article was authored by Kathy G. Beckett, Jackson Kelly PLLC. For more information on the author see here.

EPA Announces First NRS Settlement in Western U.S. Requiring Installation of FGC and SCR

     EPA announced on August 12, 2008, that the Salt River Project Agricultural Improvement and Power District (SRP) has agreed to install and operate flue gas desulfurization devices, known as scrubbers, to control SO₂ at both units and selective catalytic reduction (SCR) controls to limit NO_x at one of the units at its Coronado Generating Station in St. Johns, Arizona. APE and the Department of Justice noted that this is the first settlement ever to secure an SCR retrofit of an existing coal-fired electric generating unit in the Western United States. The controls will reduce combined emissions of sulfur dioxide (SO₂) and nitrogen oxides (NO_x) by over 21,000 tons each year.

     The control requirements are part of the fifteenth settlement negotiated by the U.S. Environmental Protection Agency and the U.S. Department of Justice to control emissions from coal-fired power plants and are estimated to cost $400 million. IN addition, SRP agreed to pay a $950,000 civil penalty.

     This article was authored by Skipp Kropp, Jackson Kelly PLLC. For more information on the author see here.

Clean Coal Technology Gaining Widespread Support

     Clean Coal technologies are designed to enhance both the efficiency and the environmental acceptability of coal as a source of energy.  These efforts can include chemically washing minerals and impurities from the coal, gasification, treating the flue gases with steam to remove sulfur dioxide, and other proposed technologies to capture the carbon dioxide from the flue gas.

     United States Senator and presumptive Republican Presidential Nominee John McCain has pledged $2 billion annually to support the development and use of advanced clean coal technologies. When speaking recently at an energy forum in Springfield, MO, McCain emphasized the important role such technologies will play in helping meet America’s future energy needs while accomplishing important environmental goals. “Coal is a strategic national resource,” said McCain, noting that coal “today provides most of our Nation’s electricity” using coal in an increasingly clean manner “is a challenge of practical problem solving and human ingenuity, and we have no shortage of those in this country,” said McCain. “Perhaps no advancement in energy technology could mean more to America than the clean burning of coal and the capture and storage of carbon emissions.”

     McCain pledged to spend $2 billion annually to “build the demonstration plants, refine the techniques and equipment, and make clean coal a reality.” Doing so, McCain said “will deliver not only electricity, but jobs to some of the areas hardest hit by our economic troubles. The good that clean coal can do extends around the world—and into its skies,” said McCain. “Once we supply the means of clean burning coal and carbon capture, nations everywhere will pursue the same end: abundant energy with low carbon emissions.” McCain said that, “China in particular has enormous coal reserves that could power its continued economic growth cleanly and efficiently and by mastering the technology, America will lead the way.”

     In addition to John McCain’s support of clean coal technology, powerful interest groups have shown their support for the development of these technologies.  Both coal producers and unions support clean coal technology. National Mining Association (NMA) president and CEO Kraig R. Naasz and United Mine Workers of America president Cecil Roberts has urged Congress to support the “Carbon Capture and Storage Early Deployment Act” (H.R. 6258) sponsored by Representatives Rick Boucher (D-Va.), Fred Upton (R-Mich.) and a bipartisan coalition of lawmakers.

     The bill would establish a $1 billion annual fund to finance large-scale demonstration projects for capturing and storing greenhouse gases from coal-based power plants. Naasz issued the following statement in support of the bill:  “The United States and much of the world will benefit from the investment in U.S. —led technologies that will neutralize carbon from coal, the most widely used fuel for electric power generation. Representatives Boucher, Upton and their colleagues deserve the full support of Congress for a bill that will be an indispensable part of any solution to the energy and environmental challenges we face.”

     This article was authored by Donnie L. Adkins, Jackson Kelly PLLC. For more information on the author see here.

“Kentucky Court of Appeals Addresses Clean Air Act's “best available control technology””

     On Tuesday, July 29th, a three-judge panel of the Kentucky Court of Appeals heard oral arguments in Environmental and Public Protection Cabinet v. Sierra Club. This litigation involves Peabody Energy’s efforts to obtain the air permit necessary for the construction of the $2.5 billion 1500 megawatt, coal-fired Thoroughbred Power Plant slated for Central City, Kentucky.

     Peabody first submitted the permit application for the Thoroughbred plant construction in 2001.  It was initially granted an air permit in 2002, prompting the Sierra Club to file an appeal alleging that the plant's proposed emission standards violated the Clean Air Act and that Peabody failed to meet the "best available control technology" (BACT) standard set forth by the Act. 

     After hearing seventy three days of testimony from twenty five witnesses and reviewing over 600 exhibits, Hearing Officer Janet C. Thompson recommended that the permit be remanded to the Division for Air Quality for further analysis on two issues: the newest pollution-control technology that is available for electric power plants and the projected environmental impacts of the plan.  Thompson's 400 page report stated that the Environmental and Public Protection Cabinet's approval of the permit ignored that there were newly available modern techniques to improve emissions not being employed by the Thoroughbred plant, meaning that Peabody fell short of the Clean Air Act's BACT requirement.

     LaJuana S. Wilcher, Secretary of the Environmental and Public Protection Cabinet reviewed the permit application, and after making adjustments, overruled the hearing officer and reissued the permit in April 2006. The Sierra Club appealed the decision to Franklin Circuit Court, where Judge Thomas Wingate sided with the Sierra Club, ruling that the permit should not have been granted.  Judge Wingate's August 6, 2007 opinion claims that Secretary Wilcher's decision to grant the permit in spite of the hearing officer's recommendations was contrary to the evidence contained in the hearing report and that Peabody's proposal incorporated outdated emissions control technology. 

     The Environmental and Public Protection Cabinet, along with Peabody Energy, filed their notice of appeal on August 23, 2007.  Between August 2007 and March 2008, amicus curiae briefs were filed by the Utility Air Regulatory Group, the East Kentucky Power Cooperative Inc., the Kentucky Power Company, Kentucky Utilities, Louisville Gas & Electric Company, Duke Energy Kentucky Inc., Western Kentucky Energy Corporation, the Kentucky Chamber of Commerce, and the National Parks Conservation Association.   In late April, the case was assigned to the three judge panel, supervised by Judge Denise G. Clayton and oral arguments were held on Tuesday, July 29. 

     The central issue addressed in Tuesday's oral arguments was the meaning of the Clean Air Act's "best available control technology" standard.  The Clean Air Act specifies that "No major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless the proposed facility is subject to the best available control technology for each pollutant subject  to regulation under this chapter emitted from, or which results from, such facility." 42 U.S.C. § 7475(a)(4).  Peabody's permit application used the best available technology for the kind of pulverized coal boiler intended to be employed at the plant.  However, there is a debate as to whether the Peabody plant must employ integrated gasification combined cycle technology, which improves air quality, yet is immensely expensive. 

     The court's decision may offer some guidance to the EPPC on the role cost may play in determining if the Clean Air Act's BACT requirement has been satisfied.  If the court decides that integrated gasification must be used, the cost of constructing and operating the Thoroughbred Power Plant will substantially increase.  Furthermore, the implications of such a ruling may deter future plant proposals because erecting such facilities would be economically unfeasible.  At the conclusion of the arguments, Judge Clayton announced that a decision would hopefully be rendered within a month. 

     This article was co-authored by Kevin McGuire and Mary Beth Naumann, Jackson Kelly PLLC. For more information on the authors see (McGuire) here and (Naumann) here. 

Unintended Consequences of Climate Change Programs?

     On July 11, 2008, EPA Administrator Stephen Johnson made clear that before the United States Congress can debate climate change issues, it must first resolve how to debate climate change issues.  Mr. Johnson rejected the United States Supreme Court’s statement that carbon dioxide emissions, if found to endanger the public, can be regulated as a pollutant under the Clean Air Act, declaring instead that “the Clean Air Act is the wrong tool for the job.” Mr. Johnson believes that Congress should deal with climate change issues under a separate and independent program.  He stated, “One point is clear:  The potential regulation of greenhouse gases under any portion of the Clean Air Act could result in unprecedented expansion of EPA authority that would have a profound effect on virtually every sector of the economy and touch every household in the land.” Several bills have been introduced in recent months with the aim of regulating greenhouse gas emissions, none of which have been able to garner the support needed to move them forward.  Meanwhile, lessons learned from other regulatory programs, namely the Kyoto Protocol’s cap and trade program, might add some fodder to the climate change debate. 

     Case in point:  a marginally-profitable chemical factory in South Korea recently installs 1970s-era pollution control technology, and as a result it makes 30 times more money by selling “carbon credits” than it makes by selling chemicals. 

     The French company, Rhodia SA, manufactures hundreds of tons a day of adipic acid, an ingredient in nylon, at its factory in South Korea. However, the real money is not in what it makes, but in what it destroys. Its payoff could surpass $1 billion over seven years, and it comes from destroying nitrous oxide, or laughing gas, an unwanted byproduct and potent greenhouse gas.  Destroying nitrous oxide at its facilities in South Korea and Brazil generated $300.5 million in sales of pollution credits in 2007, and it is now Rhodia’s single most profitable business.  In fact, the Rhodia factory in South Korea is set to bring in more money under Kyoto’s cap and trade program than all the clean air projects on the continent of Africa. 

     South Korea is considered a developing economy under the Kyoto program, and companies there are not bound by emission reduction requirements but are allowed to nonetheless earn credits, and thereby earn millions, by doing what other industrialized countries have been doing for decades.  The Bush administration has refused participation in the Kyoto Protocol, insisting that agreements on climate change must be global in scope and include developing countries, as well.  Did Rhodia figure out how to game the system under Kyoto’s plan?  Whether it is “gaming” or not, the United Nations, which runs Kyoto’s cap and trade program, is trying to crack down on bogus “emissions reductions” schemes which threaten to undermine confidence in the system.

     When companies are making more money by cleaning up their factories than by running them, the potential for “gaming” and unintended consequences exists.  Is it possible that rewarding a company for destroying one type of emission can cause other things to happen that ultimately result in no net reduction of greenhouse gases, or even a net increase?  Given these unresolved questions, Mr. Johnson’s recent statements and Congress’s inability to move a climate change bill past its initial stages, it has become clear that the federal debate on how to debate climate change is certain to continue well into the next presidential and congressional terms.

     This article was authored by Whitney G. Clegg, Jackson Kelly PLLC. For more information on the author see here.

Responding to Subpoenas and Search Warrants

     Violating federal and state environmental laws can lead to harsh penalties for companies involved in the alleged conduct.  In addition to the possibility of severe civil penalties that may be levied for environmental violations, activity violating environmental laws can lead to criminal charges being filed against the company or specific individuals when the violations are found to have occurred through “egregious negligence or conduct involving intentional, willful or knowing disregard of the law.”[1]  Multiple federal agencies are involved when an environmental issue is investigated for potential criminal activity at the federal level.  When an investigation of alleged criminal activity occurs, the target of the inquiry will face a number of challenges as the investigation moves forward.  First and foremost of those challenges is ensuing they do nothing to risk additional legal problems such as failing to provide truthful information in response to government requests or obstructing the investigation.  Understanding how federal criminal environmental investigations are carried out and by what agencies is important in understanding the ramifications that a target will face during the course of an investigation.

     When a violation of federal environmental law is suspected, there are a number of federal agencies that may be involved in the criminal investigation of the alleged activity.  The Environmental Protection Agency (EPA) and the Department of Justice (DOJ) may both be active participants in a criminal investigation for violations of federal environmental laws.   EPA investigates alleged criminal activity through the Criminal Investigation Division (EPA CID).  This unit is comprised of EPA federal agents and scientific experts trained in law enforcement and environmental issues.  EPA CID agents are fully deputized federal law enforcement representatives with the power to conduct investigations, serve warrants, and make arrests.    

     The Department of Justice can be involved in both the initial investigation of the alleged activity and any subsequent prosecution.  The Federal Bureau of Investigation (FBI) is frequently involved in working on criminal investigations involving violations of federal environmental law. EPA CID and FBI agents often will pursue joint investigations.  Violations of environmental laws can lead to additional charges such as perjury, mail or wire fraud, and fraud against the government among many other possible outcomes.  The initial environmental issue can serve as the impetus for further problems for the target of the investigation.  If an investigation leads to an indictment, the prosecution can be pursued by the DOJ Environmental Crimes Section or the United States Attorney’s Office in the district where the alleged activity occurred. 

Subpoenas for Documents and Other Materials

     Generally, organizations and individuals are not furnished with formal advice that an investigation has been initiated.  After the commencement of an investigation there are, however, a number of events that provide de facto notice to individuals or businesses about the existence of the investigation.  These include the receipt of grand jury subpoenas, execution of search warrants, and the initiation of interviews by federal agents of company employees and other witnesses.  When a criminal investigation of a business organization is underway, it is typical that the entity being investigated or parties it does business with, such as vendors or sub-contractors, may receive subpoenas for the production of documents and for witness testimony.

     When a business entity is served with a document subpoena, it is legally required to fully respond to the request.  Legal counsel should be notified immediately upon receipt of any subpoena where it is clear that the business is under investigation.  Typically, subpoenas require the production of “any and all documents relating to . . ..”  Such requests should be read liberally and all documents relating to the matter must be provided.  Responsive materials under a grand jury subpoena could be paper records, microfilm, or electronically stored information.  If there are issues regarding an organization’s ability to respond to the subpoena, counsel should notify the prosecutors and agents of the problem and discuss a resolution. Therefore, it is incumbent on company officials to identify any issues such as an insufficient time period to respond or the oppressive number of documents required to be produced. 

     If the subpoena requires the productions of voluminous documents or materials, company counsel and prosecutors generally can negotiate a staged production over a period of weeks or months.

Search Warrants

     In limited instances an organization may first become aware that it is under criminal investigation through the execution of a search warrant at a company facility.   Warrants also may be served and executed at an individual target’s home.  Under federal law, search warrants are generally issued by federal magistrates at the request of federal agents.  Search warrants are sought where agents or prosecution detail the specific location is to be searched, the documents or other items to be seized, and the time period when the search may be conducted.  Search warrants are issued when the federal judicial officer finds that there is probable cause to establish that a crime has been committed and that the place to be searched contains evidence of the crime, the means by which the crime was committed or the fruits of a crime.  Typically, warrants are issued in those situations where agents or prosecutors believe that on-going criminal activity is occurring or that documents or other evidence will be destroyed or otherwise not be produced under a subpoena. 

     The execution of the search warrant is always unannounced and can come at any time within the period specified in the warrant.  Unfortunately for the business and its employees, agents may arrive at any time regardless of convenience.

     If agents arrive on the premises with a search warrant a designated management employee should coordinate the company’s response.  The warrant should immediately be reviewed and an assessment of what is entailed in the search process should be made.  The warrant should spell out exactly the areas to be searched and what types of items the agents are seeking.  After reading the warrant, the coordinating employee should inform the agents that the organization has legal counsel and that counsel is being notified about the search.  Upon receipt of information that a client’s place of business is being searched, counsel typically will ask to speak to the agents to discuss the nature of the search.  If possible, the warrant should immediately be faxed or otherwise communicated to counsel for review. 

     While it is likely that a business organization will cooperate fully in any investigation, company employees should not orally consent to the search or sign a form or other document consenting to the search.  Rather, company employees should decline to do so and ask the agent to discuss the issue with company counsel.  Consenting to a search may make it difficult later to raise issues concerning the search process and object to items which may have been seized improperly. 

     Business organizations are obligated to comply with the agents’ requests but employees have no obligation to assist them during the search process.  Importantly, employees should do nothing to obstruct the search process.  Interfering with the agents could lead to charges of obstructing justice – against the business and individuals.  If agents are searching areas that are beyond the scope of the warrant, the legal system is the best place to handle the issue.  The coordinating employee or counsel should inform the lead agent that the area being searched is outside of the scope of the warrant.  If the agents want to search for and seize privileged legal documents such as written or electronic correspondence between company employees and counsel, the coordinating employee should identify the documents as privileged and request the agents to delay the review and seizure of those documents until after speaking with counsel.[2] 

     Be aware that the execution of search warrants can be a lengthy and complex process and involve technical challenges to the agents conducting the search.  The EPA Criminal Enforcement Program has a special Electronic Crimes Team (ECT) that supports agents during a search.  If a search warrant entitles agents to search computers or any electronically stored information, ECT provides forensic support to retrieve the information.  Other federal agencies such as the FBI have similar units.  Depending upon the nature of the investigation, the size of the facility being searched and the number of documents subject to seizure may involve dozens of agents.

While the search is being conducted the instructions of the agents to employees should be followed, but there should be careful monitoring of exactly what the agents are doing.  If possible, the coordinating employee should document where the agents searched, and what they seized.  Although it is highly doubtful that the request will be granted, the coordinating employee should ask to make copies of any documents that they are seeking.  So long as it will not interfere with the search process, a video of the search process is permissible.  When the agents finish the search they should provide an itemized list of any items seized.  The itemized list and any notes taken by the employees monitoring the search process should be immediately provided to legal counsel.[3]

     Because of the nature of the activity and the often lengthy search process, it is advisable to send employees home for the duration of the search.  Agents cannot require employees to stay on site except for a limited time to ensure the agents safety during the search. Agents may, however, attempt to conduct interviews with company officials or employees while the search is underway.  (If practicable employees should be reminded that they are not required to speak with agents and are entitled to legal representation.) 

     If interviews are conducted during any part of the investigation, company officials and employees should be reminded that it is against the law to lie or mislead a federal agent or official even if the initial investigation leads to no charges.

     A federal investigation poses a number of complicated issues.  The issuance of subpoenas and search warrants are just the beginning of the process.  It is critically important that a business organization and its employees do nothing to complicate these issues.  It is imperative that if an organization believes that it is the potential subject of an investigation, consult with counsel immediately.  Experienced counsel can guide an organization through the legal process until the matter is resolved.

     This article was co-authored by E. Leslie “Pete” Hoffman and Stuart M. “Chip” Slaven, Jackson Kelly PLLC. For more information on the authors see (Hoffman) here and (Slaven) here. 

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[1] http://www.epa.gov/compliance/index-e.html

[2]“White Collar Basics: The Fundamentals.” A-2 to A-6, White Collar Crime 2008, (A Publication of the American Bar Association Criminal Justice Section and the Center for Continuing Legal Education Publication.). 

[3]

Id.

CERCLA: Pre-emption of State Statutes of Limitation

            Section 309 of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) provides:

In the case of any action brought under State law for personal injury, or property damages, which are caused or contributed to by exposure to any hazardous substance, or pollutant or contaminant, released into the environment from a facility, if the applicable limitations period for such action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.

42 U.S.C. § 9658(a)(1).  The “federally required commencement date” is: 

the date the plaintiff knew (or reasonably should have known) that the personal injury or property damages . . . were caused or contributed to by the hazardous substance or pollutant or contaminant concerned.

This statute generally pre-empts state law with respect to the commencement date for statutes of limitation and probably statutes of repose for common law torts within its ambit.  However, there has been disagreement among federal courts considering the issue of the exact scope of pre-emption.  At one extreme is O’Connor v. Boeing North Am., Inc., 311 F.3d 1139 (9^th Cir. 2002) which appears to hold that the statute applies to all toxic tort actions which assert state law claims without an accompanying CERCLA claim.  The other extreme is represented by Knox v. AC&S, Inc., 690 F. Supp. 752 (S.D.Ind. 1988) which held that Section 309 pre-empts a state statute only where the state cause of action exists in conjunction with a CERCLA cause of action.

     The compromise position most recently adopted by the United States Court of Appeals for the Fifth Circuit holds that pre-emption may apply in the absence of a CERCLA remedial action; however, the statutory elements of such an action must be present.  In Barnes v. Koppers, Inc., _____ F.3d _____, 2008 WL 2568825 (5^th Cir. 2008), the plaintiff filed a wrongful death action against Beazer East, Inc. and Koppers, Inc.  Beazer and, later, Koppers as successor-in-interest to Beazer, operated a wood treatment facility.  The plaintiff’s suit claimed that dioxins and polycycla aromatic hydrocarbons emitted from the facility caused her mother to contract a fatal case of breast cancer.

     The Court held that although a CERCLA clean-up action was not required to support pre-emption – the existence of the elements of such an action must be present and proven by the plaintiff.  Since the plaintiff failed to meet this burden of proof, the action was dismissed.

     In tune with this view are cases holding that Section 309 does not apply to state tort claims relating to the release of hazardous substances which would otherwise be exempt from CERCLA.  In First United Methodist Church of Hyattsville v. U.S. Gypsum Co., 882 F.2d 862 (4^th Circ. 1989), the plaintiff sued United States Gypsum to recover the cost of removing asbestos containing plaster it manufactured from the plaintiff’s church building.  The Court rejected the plaintiff’s pre-emption argument citing 42 U.S.C. § 9604(a)(3) which limited the President’s authority to respond to releases or threatened releases from products which are part of a structure.

     This article was authored by James R. Snyder, Jackson Kelly PLLC. For more information on the author see here.