Business law assignment
feras81
jennings_bleg10e_ch11.pptxChapter 11 Environmental Regulation and Sustainability
Its Legal, Ethical, and Global Environment
Marianne M. Jennings
Business
10th Ed.
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Nuisances
Interference with use and enjoyment
Damages and injunction possible
Balancing test employed
Case 11.1 Spur Industries, Inc. v. Del E. Webb Dev. Co. (1972)
What is “moving to the nuisance”?
Who wins? Who pays?
Common Law Remedies
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Air Pollution Regulation
Air Pollution Control Act (1955)
Clean Air Act (1963)
Air Quality Act (1977/1990)
Statutory Environmental Laws
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Statutory Environmental Laws
Clean Air Act Amendments of 1970
EPA authorized to establish standards
States required to adopt implementation plans (SIPs)
EPA approval required for plans
Economic and technological issues
Clean Air Act Amendments of 1977
Non-attainment areas
Prevention of significant deterioration (PSD) areas
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Statutory Environmental Laws
Economic Controls for Nonattainment Areas
New plants must have greatest possible emission control
All other operations must be in compliance
New plant emissions must be offset with reduction elsewhere
Follows bubble concept; for new plant to begin operations, its pollution must be offset by reduction in the area
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Statutory Environmental Laws
Control in PSD areas
Prevention of significant deterioration
EPA has right to review proposed plant construction
Plant has to show that there will not be significant deterioration
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Statutory Environmental Laws
1990 Amendments to Clean Air Act
Focuses on smog, alternative fuels, toxic emissions, and acid rain
Federal implementation plan (FIP) EPA Plan to reduce pollution in cities failing to submit adequate SIP
Plans must use maximum achievable control technology (MACT)
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Statutory Environmental Laws
1990 Amendments to Clean Air Act
Acid rain covered
Sulfur dioxide pollution from factories and coal-fired generating plants
Established market for excess sulfur dioxide emissions
Affected small businesses such as dry cleaners, paint shops, and bakeries
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Water Quality Act of 1965
Created Federal Water Pollution Control Administration (FWPCA)
States required to establish water quality standards
No enforcement procedures—states did little
Water Pollution Regulation
Rivers and Harbors Act of 1899
Prohibited discharges into navigable waters
Used for enforcement since other laws had no teeth
Most industries got around the act quickly by obtaining the permits required under the act
Statutory Environmental Laws
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Statutory Environmental Laws
Water Pollution Regulation
Federal Water Pollution Control Act of 1972
Federal government responsible for standards and control
Emissions controlled by industrial groups
Ranges for groups referred to as effluent guidelines
National Pollution Discharge Elimination Permit (NPDES)
Renamed Clean Water Act in 1977
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Other Water Regulation
Safe Drinking Water Act
Passed in 1986
States responsible for enforcement but must have minimum federal standards for drinking water systems
Oil Pollution Act of 1990
Passed in response to huge spills like Exxon Valdez
Companies must either clean up spill or pay federal government its costs for the clean-up
Applies to all navigable waters up to 200 miles offshore
Statutory Environmental Laws
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Solid Waste Disposal Regulation
Toxic Substances Control Act of 1976
Response to chemical dumping
EPA controls manufacture and disposal of toxic substances
Resource Conservation and Recovery Act of 1976
Regulates methods of disposal through a permit system
Discourages dumping
Statutory Environmental Laws
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Superfund
“SUPERFUND”: Comprehensive Environmental Response, Compensation, & Liability Act (CERCLA)
Suit can be brought to recover funds expended from company responsible for the dumping
1986 amendments Superfund Amendment and Reauthorization Act
EPA can now sue to recover clean-up funds from those who are responsible
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Liability For Clean-Up Cost May Extend to Lenders
Under the Asset Conservation, Lenders Liability, and Deposit Insurance Protection Act of 1966, Lenders are Protected From Liability So Long as They Do Not Participate in the Management of the Property
Superfund
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Four Cases of Responsible Parties
Owners and operates at the time of contamination
Current owners and operators – whether they were responsible for the contamination or not
Transporters of the hazardous material
Those who arranged for transport of the hazardous materials
Superfund
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Case 11.2
Case 11.2 Burlington Northern Railway/Shell Oil Co. v. U.S. (2009)
What is the meaning of “arranger” for purposes of CERCLA liability?
What is the basis for allocation of liability for CERCLA clean-ups?
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Due Diligence and EPA Standards
“All appropriate inquiries” pursuant to CERCLA section 101(35)(B) must be conducted within one year prior to the date of acquisition of the subject property and must include:
(1) An inquiry by an environmental professional as defined in §312.10, as provided in §312.21;
(2) The collection of information pursuant to §312.22 by persons identified under §312.1(b); and
(3) Searches for recorded environmental cleanup liens, as required in §312.25
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Due Diligence and EPA Standards
The following components of the all appropriate inquiries must be conducted or updated within 180 days of and prior to the date of acquisition of the subject property:
Interviews with past and present owners, operators, and occupants (see §312.23);
Searches for recorded environmental cleanup liens (see §312.25);
Reviews of federal, tribal, state, and local government records (see §312.26);
Visual inspections of the facility and of adjoining properties (see §312.23); and
The declaration by the environmental professional (see §312.21(d))
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Guidelines for Self-Audits
The violations were uncovered as part of a self-audit or due diligence done on property
The violations were uncovered voluntarily
The violations were reported to the EPA within 10 days
The violations were discovered independently and disclosed independently, not because someone else was reporting or threatening to report
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Guidelines for Self-Audits
There is correction of the violations within 60 days
There is a written agreement that the conduct will not recur
There can be no repeat violations or patterns of violations
There is no serious harm to anyone as a result of the violation
The company cooperates completely with the EPA
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Brownfield Issues
Many CERCLA Sites That are Abandoned and/or Unused
Fear of Liability Precludes Development and Use
Cost of Cleanup is Prohibitive For Projects
Federal, State, and Local Programs to Encourage Redevelopment
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Environmental Quality Regulation
National Environmental Policy Act of 1969
Requires federal agencies to file environmental impact statements for all major actions (EISs)
Content of EIS
Environmental impact
Adverse effects
Alternatives
New effects - short term versus long term
Irreversible effects
Environmental Quality
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Environmental Quality
Case 11.3 Sierra Club v. United States Department of Transportation (1985)
What is the basis for the appeal?
What has the FAA allowed?
Is another EIS ordered?
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Other Regulations
Surface Mining and Reclamation Act of 1977 requires mining company to restore land
The Fracking Issue
Noise Control Act of 1972; EPA and FAA regulate noise pollution for aircraft
Pesticide Control Act
Must register with EPA to ship
Must label all pesticides
OSHA
Responsible for work place environment and safety issues
Other Environmental Laws
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Other Regulations
Asbestos Hazard Emergency Response Act (AHERA)
Schools must inspect for asbestos and take action
Asbestos is a toxic pollutant and community right-to-know substance
Duty to disclose presence of asbestos
Endangered Species Act:
Powerful tool for environmentalists
Habitats cannot be disturbed
Other Environmental Laws
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Case 11.4 Babbitt v. Sweet Home Chapter of Communities for a Great Oregon (1995)
Did Congress intend to give the secretary authority to shut down an industry?
Endangered Species
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State Environmental Laws
State EPA
Regulation of fuel used
Incentives for carpooling
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Enforcement
Parties
Environmental Protection Agency—EPA
Council on Environmental Quality—CEQ
Part of executive branch
Sets national policies and makes recommendations
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Parties
Other agencies
Atomic Energy Commission
Federal Power Commission
HUD
Department of Interior
Forest Service
Bureau of Land Management
Department of Commerce
Enforcement
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Criminal Sanctions
Clean Air Act
$25,000 per day, up to one year in prison, or both
15 years for willful or repeat violations
$10,000 rewards for reporting violations
Clean Water Act
$25,000 per day, up to one year in prison, or both
Resource Conservation and Recovery Act
$250,000 and/or fifteen years for intentional
Enforcement
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Criminal Sanctions
Oil Pollution Act
$25,000 per day or $1,000 per barrel
$3,000 per barrel if willful or negligent
$250,000 and/or 5 years for failure to report
Civil Liability
Environmental groups can bring suits
Sierra Club
Environmental Defense Fund
League of Conservation Voters
Enforcement
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Case 11.5 U.S. v. Apollo Energies, Inc. (2010)
Did Congress intend to prosecute the failure to take action to protect birds and other species from injury?
Is there strict liability when animals are injured or killed by conditions on private property?
Enforcement
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EU Has European Environment Agency
ISO 14000
LEED Certification
International Issues
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Eco-Audit Stickers
Shows products environmental impact
International Organization for Standardization (ISO) developed ISO 14000, a series of environmental standards
Companies seek ISO 14000 certification
International Issues
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United Nations Framework Convention for Climate Change (UNFCC)
A group of governmental and environmental leaders concern with the issue of global warning
The Precautionary Principle in Regulation
International Issues
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BP and the Troubling History on Budget Cuts
Texas City Refinery
15 deaths; 170 workers injured
4,000 suits totaling $2.1 billion in damages
OSHA found 271 safety violations at the plant; they were not addressed prior to the explosion; post-explosion, 439 “willful and egregious violations”
$87 million OSHA fine (4X the last largest fine)
$50 million fine to EPA
Prudhoe Bay Pipeline Burst: No Smart-Pigging
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Findings on BP Atlantis Problems
“Put off repairing the pump in the context of a tight cost budget.”
“Leadership did not clearly question the safety impact of the delay in repair.”
Employee safety officer: “You only ever got questioned on why you couldn’t spend less.”
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BP Headlines
“BP Crew Focused on Costs” Wall Street Journal, June 15, 2010, p. A1.
“Unusual Decisions Set Stage for BP Disaster,” Wall Street Journal, May 27, 2010, p. A1.
“Oil Execs: BP Didn’t Meet Standards,” USA Today, June 16, 2010, p. 1B.
“Members of Past Disaster Panels See Recurring Pattern,” Wall Street Journal, June 16, 2010, p. A4.
“The Five Shortcuts That Prioritized Time and Money Over Safety,” Wall Street Journal, June 16, 2010, p. A4.
“BP Chose Riskier of Two Options for Well Casing,” Wall Street Journal, May 27, 2010, p. A1.
“Safety and Cost Drives Clashed As CEO Hayward Remade BP,” Wall Street Journal, June 30, 2010, p. A1.
“BP Relied on Cheaper Wells,” Wall Street Journal, June 19-20, 2010, p. A1.
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