Month: March 2012

Court Rejects EPA Challenge to State BACT Determination for Coal Power Plant

The Clean Air Act imposes an alphabet soup of emission control technologies on owners and operators of stationary sources. Depending on the regulatory program and air pollutants, a facility may have to comply with BACT, BART, BDT, GACT, LAER, MACT and RACT. While the process of identifying the applicable emission standard is largely a technical …

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Court Rules Purchaser of Coal Plant Assets Acquired “Free and Clear” Is Liable For Pre-Closing NSR Violations

A federal district court ruled that purchaser of a coal-fired power plant was held liable as a successor for violations of the New Source Review program that had occurred prior to the transaction. The court said the purchaser had expressly assumed the liabilities even though the order of the bankruptcy court approving the sale provided …

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Regulatory Re-Interpretation Triggers Contractual Indemnity

Historical environmental compliance is critically important in corporate transactions especially when a business or facility may be subject to a regulatory programs that is evolving or subject to re-interpretation such as the New Source Review program. In such cases, the parties will try to contractually allocate the risks. Despite the fact that these agreements are …

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Bankruptcy Discharge Bars Claim of Purchaser Agst Former Oil Well Operator

In Shelton Property Rural Acreage, LLC v Placid Oil Co., 2011 U.S. App. LEXIS 16681 (5th Cir. 8/10/11), Placid Oil operated oil wells on leased property from 1942 to 1956. In 1986, Placid filed a chapter 11 bankruptcy proceeding. The bankruptcy court issued a confirmation order in 1988 that contained a discharge of all claims …

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Statute of Limitations Bars Purchaser’s Claim For 1981 Pipeline Spill

In Carolyn Vickers Inc. v. Unocal Corp., 2011 Cal. App. Unpub. LEXIS 9642 (Ct. App-2nd Dist. 12/19/11), Alan Little Ventures (ALV) purchased a 4.1 acre tract of land in San Luis Obispo in 2005. The land had been subdivided into 17 lots by the sellers, Phyllis and Alex Madonna (the “Madonnas”), and was zoned for …

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California Appeals Court Rules Reopening of NFA Letter Does Not Trigger Contractual Indemnification

Anyone who has negotiated the purchase of a gas station is aware that these agreements are incredibly complex. The contracts have dense definitions, dependent and inter-related provisions, and grant broad discretion to the sellers in determining the scope and conduct of the cleanup. A buyer who does not retain an environmental attorney who has previously …

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NJ Appeals Court Rules ISRA Does Not Provide Basis for Voiding Sale of Tax Lien

The New Jersey Industrial Site Recovery Act (“ISRA”, f/k/a Environmental Cleanup Resonsibility Act or “ECRA”) requires industrial establishments to undergo environmental investigation and cleanup when they are to be closed or transferred. I have always felt that if we had a national ISRA law, the country would have a lot fewer brownfield sites. One of …

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Bank Declines To Foreclose Because of Costs to Remedy Stormwater Violations

When builders were defaulting on construction loans during the height of the Great Recession, states began turning to banks to ensure that partially completed developments remained in compliance with environmental laws. The greatest number of enforcement actions were brought against banks in California,Georgia and North Carolina with unconfirmed reports in other states. Under the federal Clean …

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Corps Announces New and Reissued Nationwide Permits.

The Army Corps of Engineers recently reissued its 48 existing nationwide general permits (NWPs) and issued two new NWPs to facilitate renewable energy projects (77 FR 10184, 2/21/12). The reissued and new NWPs became effective on March 19th and will expire on March 18, 2017. The NWPs contain three new general conditions. However, activities authorized …

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Acquisitions Bring CERCLA Liability to Banking Conglomerate

From a purely legal standpoint, the recent ruling In Tennessee v. Roane Holdings Ltd., 2011 U.S. Dist. LEXIS 143703 (E.D.TN 12/14/11) was not unusual. The court ruled on a motion to dismiss that a party who had entered into an administrative order on consent could not bring a cost recovery action under CERCLA section 107 …

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