Kenny Rogers sang a song years ago with the lines “Know when to hold ‘em, know when to fold ‘em.” While referring to a poker game and a life lesson, I was reminded of the song in a recent criminal investigation a client was facing. In these investigations, you always have to decide how much you will volunteer versus waiting on specific requests from environmental criminal investigators or attorneys.Making the decision on how much to volunteer is a true judgment call.
In some cases, like the one I just worked on, you have to decide if the facts demonstrate a clear lack of criminal intent or knowing violation in the case of most state and environmental statutes. Some are based on strict liability or negligence, but most are “knowing” violations. The line between civil and criminal enforcement is often largely a matter of enforcement discretion by environmental agencies or attorneys, prosecutors, agency attorneys, or district attorneys.
Evaluating the facts and circumstances, and how they may be perceived by the individuals involved is critical. Different people will see matters differently.One sees something as a mistake, others as an intentional, knowing act.
Sometimes this may mean federal and state agencies, sometimes two or three. Occasionally, a local city or county investigator may want to be involved. In addition to environmental agencies, in Texas EPA and the Texas Commission on Environmental Quality, you may face review by wildlife agencies such as the US Fish and Wildlife Service or the Texas Department of Parks and Wildlife.
In the right case, it can be productive to disclose the facts and make facilities available for tour by the investigators.It can be effective to avoid a criminal investigation to disclose all and push for a decision that the matter should be referred to civil enforcement representatives, rather than being investigated by the criminal side of the agency house.
Often a rather early meeting and provision of documents and information may gain great confidence from the criminal investigators that the parties under review acted in good faith, but for whatever reason violated the law, even causing environmental damage.Avoiding the criminal investigation can be more important for reputation of the entity and potentially even stock price.Criminal environmental investigations tend to gain focus by the media and reverberate through the Internet and social media.A turn from the criminal to the civil can avoid much of the damaging reputational impact.For some parties that work with the government, criminal investigations can result in debarment from federal, state, or local contracts—with even greater damage than any fine.
When an event occurs that leads to a criminal investigation, a rapid legal analysis and strategy development is crucial. Sometimes, it makes a significant difference if the alleged violator acts quickly and presents information and explanation before any subpoena or other request for information is received.
The pro-active disclosure strategy does not fit every case. Sometimes waiting for any requests for information or documents is the best strategy. Every instance must be considered based on its unique facts and actions by the entity’s or contractor’s employees.
You have to “know when to hold ‘em, know when to fold ‘em.” I have found that in the right case, the full disclosure approach can turn a potentially damaging criminal investigation into a civil settlement of a small penalty.
One of the most interesting aspects of my career over the last 10 years is working with people who are trying to bring environmental disruptive technologies to market.Current and future environmental emissions, discharges, and damage result from invented technology.Innovation that leads to modified existing technology or new technology can reduce or eliminate the environmental impact of pre-existing technology.
Interestingly enough, evolution that takes so long to occur in natural ecosystems, can have quite rapid results in human technology, economies, and societies.Human evolution itself, may have ended in terms of physical terms or in our DNA, but our inner ideas and concepts and the resulting development of innovative technology never ends.Our post-physical evolution is potentially unlimited.
As a result, it is not out of the question that we can develop technologies that greatly reduce, and in some instances, eliminate environmental impact in certain sectors of business, industry, or our personal lives.
Disrutpive environmental technologies may be of many types. For fossil fuels, it may be a cheaper way to capture carbon dioxide from burning fossil fuels, or capturing the CO2 and making a product from it. It could be a new additive that increases gas mileage, reduces emissions, or both. A more efficient natural gas power plant may reduce emissions.
Capturing CO2 and using it for enhanced oil recovery, what is know as Carbon Capture, Use and Storage, is the more likely approach that may in time help reduce greenhouse gas emissions from power plants. It is being used for fertilizer plants, natural gas processing plants, and certain other plants that produce a more concentrated stream of CO2.
For renewable energy, it may be a more efficient wind turbine or solar panel. Manufacturing changes that make these technologies cheaper has been a major development particularly with respect to solar panels. Solar and wind are approaching fossil fuel prices to produce electricity, and in some parts of the world or even the US, this price has already been achieved.
We can recycle and reuse a number of materials now considered wastes. Converting waste plastic to energy or transportation fuel is one of a number of waste to energy or fuel technologies under development or in early pilot or full-scale plants.
Thus, the future need not be considered bleak. How bleak was disease before immunization and antibiotics? How bleak was food supply before innovation in agricultural techniques and technology? How did we communicate before the Internet and email? How about the disruptive impact of computers, cell phones, and now smart phones and pad computers?
Environmental inventors and environmental entrepreneurs are working every day to try to bring new disrutpive environmental technologies into being. There are thousands of technologies being developed in the United States and around the world. Some of those wil be commercialized and most will never make it out of the garage stage. But the innovation continues apace.
Like any other invention, early stage capital will be needed to develop the technology to a pilot and then commercial level. This is the hard part. Finding capital is extremely difficult as I have watched many parties struggle and many times give up. Sometimes the technology is not right or cannot be developed into a cost-effective product or is otherwise not able to lead to a profitable business.
Other times, the inventor or others involved are not willing or able to work with capital providers to bring the technology along. Often the inventor will not give up enough ownership to get capital or wants to be the CEO, when they don't have the training or skills to manage a business, even though they may be highly talented with inventing technology.
Over the last 27 years of my own career as an energy and environmental lawyer, I have seen amazing strides in reducing environmental impact of industry and other aspects of our society and economy. I believe we will see a number of disruptive technologies come to the forefront to greatly reduce the environmental emissions and impact of our time. I am working with groups developing some of these technologies now.
We need more early stage investors with the knowledge and funding to invest in these companies, and have the capacity to evaluate the technologies and make good judgment as to which ones to invest. This will be one of the more crtical steps in our environmental evolution--enabling the commercialization of new and innovative technologies to address environmental concerns. Keep up the faith.
I will be speaking in an upcoming Strafford live webinar, "Mitigating Environmental Liability from Construction Debris and Contaminated Soil" scheduled for Wednesday, December 18, 1:00pm-2:30pm EST. Our panel will provide guidance to environmental counsel to mitigate the environmental risks and liability resulting from construction debris and resulting contaminated soil. The panel will offer steps for counsel to all parties involved (landowner, potential purchaser, construction contractor, etc.) to determine which party or parties are liable for clean up and for recovering remediation costs.
After our presentations, we will engage in a live question and answer session with participants so we can answer your questions about these important issues directly.
David Brooks published an editorial that extols the energy and economic virtues of natural gas and the discovery of how to extract it from shale. The big surprise is that it was published in the New York Times, which has taken a very negative approach to shale gas drilling and hydraulic fracturing, particularly in New York.
A few years ago, I received a call from a bankruptcy trustee,
who said he had a environmental problem he was struggling to resolve.It seems a company had developed a “mulch
business” that had ultimately led to bankruptcy, and liquidation at that.What may be surprising to some is the waste
involved seems so innocuous at first thought.
The problem related largely to construction debris.
Construction debris and wood waste (including trees and
branches) had been collected by the mulching company and placed over several
acres. The owner ultimately took the
money to receive the material, but then abandoned the site and never mulched or
did anything else with the material.The
city was very concerned about the growth of vermin and a substantial potential fire hazard. Home and business owners nearby were very
I was engaged by the trustee and the city to attempt to
identify potentially liable parties who had brought the waste to the site or
whose waste was brought there. The owner
had left all of the records for everyone who brought material, and we were
preparing to file suit against all of those parties to try to recover the costs
of addressing the acres of waste.
The city was able to get the Texas legislature to appropriate several
million dollars, and the lawsuit was never filed--all those developers, building owners, contractors, and subcontractors lucked out. But they are not and will always be so lucky.
In another case, I represented a landowner whose land had
become the dumping ground without their permission. One trucker illegally dumped on it, and then
within a short time, the word got out, and several acres were covered with
wood, shingles, bricks, and soil. What other wastes may have been mingled in or what contaminants were in soil was unknown.
The lesson is that construction waste can become a
significant potential liability for the owner of the project or the contractors
Other cases have involved disposal of contaminated soil on
an unknowing person’s land, who is looking for fill, or who, like my client, may not have wanted
any material placed on their land.
Recently, one my clients had a subcontracting trucking firm
dump soil excavated from an area where contamination from a
former underground storage tank had been located. The soil had to be excavated for construction of a building. The soil was supposed to go to a landfill, but the environmental consultant engaged to monitor the contractor and subcontractors noted several waste manifests did not come back from the designated landfill with signatures or any weight tickets.
The issue of who is liable for this misplacement of affected soil, and what damages
will arise for remediation costs and any property damages arises. What about liability if the material is placed into wetlands, if
there were fish kills? Could it become a criminal matter?
The liability risks can grow, particularly if the state or
federal government holds the owner liable and the construction contractor or
sub contractors are unable or unwilling to cover the loss or address the issue.
In representing clients preparing for and engaging in clearing, demolition, grading, and construction, I have found there are ways to try to avoid these risks and be prepared to manage them. Some steps that can be taken to reduce the risk of
incurring environmental liability for construction debris or soils management during a
Establish contractual provisions to address construction
debris and soil management;
Ensure environmental laws and regulations are met;
Deal with safety issues for construction workers;
Consider environmental insurance for the project, negotiated
to cover these risks;
Obtain indemnities from the contractor;
Understand what the state will allow for managing debris and
affected soil on-site and off-site;
Develop a waste management or soil management plan, and have
the state environmental agency review and, if they will, approve it;
Have a tracking process for hazardous and non-hazardous
waste, that which must go to a landfill and to a site for unrestricted fill;
Engage an in-house person or outside environmental consultant to review and oversee the process to determine if waste manifests or trip tickets area coming
back and are properly filled out.
Best practices in this area may save your company or entity
a significant amount of money in avoiding some of the horror stories that can
arise when construction debris or soil ends up in the wrong place. Trucking companies hauling debris or soil from construction sites are renowned for looking for the cheapest and easiest way of getting rid of the material. A little preventative medicine may go a long
On October 15, 2013, the U.S. Supreme Court granted the appeal of various entities challenging the EPA's greenhouse gas permitting rules for stationary sources under the federal Clean Air Act (CAA). In 2007, in Massachusetts v. EPA, the court ruled that EPA may regulate greenhouse gases as air pollutants under the CAA. The decision led the EPA to regulate greenhouse gas (GHG) emissions emitted by auto mobiles, and then EPA concluded that once those gases were regulated, the EPA was required to regulate GHGs emitted from stationary sources, such as power plants and refineries. EPA then issued a series of regulations leading to permitting standards for certain very large sources that emit above a certain amound of GHGs when a new plant is constructed or an existing plant is modified.
On appeal, various
state and industry groups challenged these rules on the grounds that
they were based on an improper construction of the Clean Air Act and are
arbitrary and capricious because they are based on an inadequate
scientific record. The DC Circuit Court of Appeals rejected these appeals. The Supremen Court now has granted review of the EPA regulations, but not as to whether GHGs may be regulated at all, but on a much narrower ground.
Did the EPA permissibly determine that its
regulation of greenhouse gas emissions from new motor vehicles under the
Clean Air Act also triggered permit requirements for stationary sources
of greenhouse gas emissions?
While narrow, the decision by the Supreme Court is an important one with respect to the EPA's program for regulating GHGs from various stationary sources. The EPA is in the process of developing standards for new power plants and existing power plants in the near future. Thus, the decision will be another landmark environmental ruling when issued.
I was interviewed by Jack Fink, a reporter at Channel 11 in Dallas, Texas to discuss the legal issues relating to applicable federal and state statutes that may relate to any reporting or approval for storage of ammonium nitrate. The interview took place on April 30, 2013. We discussed more detail, but the quote during the news cast focused on the potential for criminal prosecution, particularly where there are knowing acts to put people in danger of death or serious injury. This is known as the "knowing endangerment" provision that is contained in some of the federal and state environmental statutes.
Some of the federal statutes that may apply to the West, Texas facility and the storage of ammonium nitrate include, the Chemical Facility Anti-Terrorism Standards Act, which is administered by the Department of Homeland Security, the Emergency Planning and Community Right to Know Act, administered by the EPA, and the federal Clean Air Act, administered by the EPA and delegated in part to certain states. The Clean Air Act requirements that may apply would be the Risk Management Plan requirement.
The applicability of these statutes to storage of ammonium nitrate, reporting, and other requirements depends on the statute and regulations issued under those statutes, as well as the specific facts of any case.