NRD Recovery Under CERCLA and OPA: What to Expect in 2018

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A NRD Recovery Under CERCLA and OPA: What to Expect in 2018 WEDNESDAY, DECEMBER 20, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Brian D. Israel, Partner, Arnold & Porter Kaye Scholer, Washington, D.C. Amanda G. Halter, Esq., Pillsbury Winthrop Shaw Pittman, Houston, TX and Washington, D.C. Dr. Robert I. Haddad, Ph.D., Group Vice President & Principal Scientist, Exponent, Menlo Park, Calif. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 The Future of NRD Brian D. Israel Strafford Webinars December 20, 2017 apks.com Arnold & Porter Kaye Scholer LLP All Rights Reserved.

6 The Future of NRD: Ten Bold Predictions Brian D. Israel Strafford Webinars December 20, 2017 apks.com Arnold & Porter Kaye Scholer LLP All Rights Reserved.

7 The Future of NRD: Ten Bold Predictions But NO Promises Brian D. Israel Strafford Webinars December 20, 2017 apks.com Arnold & Porter Kaye Scholer LLP All Rights Reserved.

8 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change Brian D. Israel ~ December 20,

9 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change A typical NRD assessment is lengthy, expensive and cumbersome. The current structure frequently results in unnecessary delay, internal agency disputes, unnecessary assessment work, increased costs for all parties, and delay in restoration. There is currently an opportunity to reform the portions of the NRDA regulations. Amanda will discuss details of reform options. Brian D. Israel ~ December 20,

10 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often Brian D. Israel ~ December 20,

11 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often Early restoration refers to the implementation of restoration projects prior to the completion of the damages assessment. Legal framework for early restoration pioneered in the Deepwater Horizon matter; nearly $1B spent on over 65 projects throughout the Gulf. Brian D. Israel ~ December 20,

12 Early Restoration Framework Agreement Brian D. Israel ~ December 20,

13 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often Framework from DWH can be scaled and applied to other sites. Three fundamental criteria: Parties agree on appropriate projects Parties agree on NRD credit NRD credit memorialized in writing, to be applied against ultimate injury Brian D. Israel ~ December 20,

14 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection Brian D. Israel ~ December 20,

15 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection Data collection is expensive and often not helpful to resolution. Increased efforts to minimize new data collection. Better use of existing site data, including from cleanup/response, as well as numerous other independent data sources. NRD and Big Data it s happening now. Brian D. Israel ~ December 20,

16 What is Big Data? 16

17 What is Big Data and How Will it Impact NRDAs? Three defining principles: Volume: large amounts of data Variety: from various structured and unstructured sources Velocity: acquired and processed at high rates of speed In NRDA context, possible big data sources include everything from decades of NOAA fisheries and oceanographic data to state park visitation receipts to remote sensing efforts. The ability to access and analyze Big Data could help facilitate an expedited NRDA analysis without creating a whole new data collection project. 17

18 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? Brian D. Israel ~ December 20,

19 The Future of NRD: Ten Predictions 4. The End of Cooperation? For years, NRD practitioners thought cooperative NRD assessments would lead to better and faster results. The evidence does not always support this assumption. Cooperative NRDAs that are not truly collaborative can be worse than no cooperation at all. Cooperation should be structured for success including clear rules for data sharing and expectations for collaboration. Brian D. Israel ~ December 20,

20 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. A Hybrid Approach: Independent but Cooperative Brian D. Israel ~ December 20,

21 The Future of NRD: Ten Predictions 5. Independent but Cooperative New NRD assessment approach surfacing in cases where full cooperation not possible. Parties undertake independent studies but share updates and results with the other parties. Studies are funded separately. Can create efficiencies and advance litigation preparation while still encouraging communication and settlement talks. Brian D. Israel ~ December 20,

22 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. Independent but Cooperative 6. Another Hybrid Approach: Shared Experts Brian D. Israel ~ December 20,

23 The Future of NRD: Ten Predictions 6. Shared Experts A shared expert is a scientist or economist retained jointly by the trustees and the liable parties for purposes of conducting a particular study or assessment. Studies are jointly directed and work product is shared simultaneously with all parties. A shared expert can be a highly-regarded academic with specialized expertise. Best if shared expert is unaffiliated with usual NRD consultant firms. Brian D. Israel ~ December 20,

24 The Future of NRD: Ten Predictions 6. Shared Experts: Mechanics Funding likely funded by PRPs, though funding can be indirect. Contract a three-way contract is preferable. Reservation of Rights parties may retain right to disagree with expert s conclusions in litigation. Admissibility parties may agree up front to waive admissibility objections, at least for parts of the expert s work (e.g. data). Alternative parties may agree that no part of the expert s work may be used in litigation (similar to a mediation expert). Brian D. Israel ~ December 20,

25 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. Independent but Cooperative 6. Shared Experts 7. A Third Hybrid Approach: Increased Use of Stipulations Brian D. Israel ~ December 20,

26 The Future of NRD: Ten Predictions 7. Increased Use of Stipulations Stipulations allow parties to reach early agreements on various aspects of the NRDA even while the overall assessment continues. Stipulations can range in degree of complexity, from data admissibility to injury conclusions for particular resource categories. Helps reduce transaction costs and narrow issues for trial. Does not require formal cooperation. Brian D. Israel ~ December 20,

27 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. Independent but Cooperative 6. Shared Experts 7. Increased Use of Stipulations 8. Changing Mindset: Trustees Brian D. Israel ~ December 20,

28 The Future of NRD: Ten Predictions 8. Changing Mindset: Trustees Increased focus by state and tribal trustees. Growing expertise and experience (from DWH and other large cases). Increasing recognition by many that NRD is not punitive: goal is restoration of the environment, not extraction of maximum dollars. Increased recognition by some of burden of proof on causation and baseline issues, and need to avoid controversial methods. Brian D. Israel ~ December 20,

29 DWH Baseline Example Natural Seeps Brian D. Israel, ABA Fall Conference,

30 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. Independent but Cooperative 6. Shared Experts 7. Increased Use of Stipulations 8. Changing Mindset: Trustees 9. Changing Mindset: Responsible Parties Brian D. Israel ~ December 20,

31 The Future of NRD: Ten Predictions 9. Changing Mindset: Responsible Parties Increased interest in restoration, including early restoration, pilot projects, restoration banking and restoration-based settlements. Growing sense of frustration with cooperative process; while a cooperative NRDA sounds reasonable, often times responsible parties feel the promise is not meeting the potential. Increased sophistication and willingness to challenge speculative damages methodologies. Brian D. Israel ~ December 20,

32 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. Independent but Cooperative 6. Shared Experts 7. Increased Use of Stipulations 8. Changing Mindset: Trustees 9. Changing Mindset: Responsible Parties 10. Next Generation of NRD Practitioners Brian D. Israel ~ December 20,

33 The Future of NRD: Ten Predictions 10. Next Generation of NRD Practitioners NRD is a growing area of environmental practice for the future. Inherently more interesting than many areas. Next generation of NRD practitioners will bring new ideas and new energy. Important for all of us to provide opportunities for next generation of NRD lawyers, scientists and economists. Brian D. Israel ~ December 20,

34 The Future of NRD: Ten Predictions 1. Statutory or Regulatory Change 2. Restoration Early and Often 3. NRDAs without Data Collection 4. The End of Cooperation? 5. Independent but Cooperative 6. Shared Experts 7. Increased Use of Stipulations 8. Changing Mindset: Trustees 9. Changing Mindset: Responsible Parties 10. The Next Generation of NRD Practitioners Brian D. Israel ~ December 20,

35 Thank You Brian D. Israel apks.com Arnold & Porter Kaye Scholer LLP All Rights Reserved.

36 Generational NRD Cases, Is there a Better Path Strafford Webinars Robert Haddad, Ph.D. Group V.P. & Principal Scientist December 20, 2017

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38 Natural Resource Damages Goals Compensation for natural resource damages (NRD) under CERCLA/CWA and/or OPA is intended to Restore the natural environment to its prior condition and To compensate the public for the interim lost use from the time of contamination until restoration 38

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40 40 Regulating Services Provisioning Services Cultural Services Tobias, S. (2013). Preserving Ecosystem Services in Urban Regions: Challenges for Planning and Best Practice Examples from Switzerland. IEAM 9:2,

41 + + Generational Natural Resource Damage Assessments 41

42 NRDA - the ultimate balancing Act 42

43 Current Case Dockets OPA & CERCLA (1986 to Present) 100% Of the approx. 480 NRDA cases found on the DOI and NOAA websites* 22% - Active (Inj. Assmt/Rest. Plan) 60% - In Restoration 18% - Closed 80% 60% 40% 20% 0%

44 A more nuanced look - Generational NRDA Cases? Of the >100 cases with active assessment, many are waste sites/mines currently under CERCLA or CERCLA-like authority Many of the cases have been on the docket for years General Electric Hudson River (NY) - Trustee Council MOA signed in 1997 (20 yr ago) LCP Chemical (GA) - Trustee Council MOA signed 2002 (15 yr ago) Portland Harbor (OR) - Trustee Council MOA signed 2002 (15 yrs ago) Record of Decision (ROD) signed 2017, but Different case circumstances (all large and complex) GE/Hudson - single RP, small Trustee Council LCP Chemical - single RP, small Trustee Council Portland Harbor - >50 PRPs, large complex Trustee Council 44

45 Goal of Cooperation Achieve cost-effective restoration Based upon sound science and transparent communication, While minimizing transaction costs. 45

46 46 NRD Uncertainty Across many NRDA cases, the scientific issues faced by the NRTs and the RPs have much in common and may have been faced in prior cases in slightly different guises. All too often, a concern is expressed that the uniqueness of my case requires additional studies to overcome uncertainties associated with the potential injury. RP community wants to ensure injuries are appropriate and valued correctly The NRTs want greater support in bringing a specific type or magnitude of claim. 46

47 47 NRD Uncertainty These injury decisions are made with little formal or even informal consideration of the economic costs relative to the benefits of uncertainty reductions. And all too often, the science proposed and conducted Yields few new insights (we are dealing with natural systems) Fails to resolve disagreements as to the types and magnitude of natural resource injury, and Ends up creating its own little eddies of further discussion and debate with little forward movement. 47

48 48 Navigating NRD Uncertainty Can we integrate science and economics into evaluating the information base for making these uncertain decisions? Focusing on the endgame Understanding that the process must be ultimately a public one. In other words, is there a better way to incorporate the concept of restoration sufficiency into the decision-making progress, to avoid getting caught in seemingly endless eddies of less-then-edifying science? 48

49 Uncertainty - How Significant? Services Provided by Habitat Restoration Gain Interim Service Loss Benefit of Primary Restoration Incident Primary Restoration Begins Full Recovery With Primary Restoration Full Natural Recovery Time HEA assumes that equivalent habitats will provide equivalent services, meaning that years of lost services can be compensated for by providing acres of additional habitat. 49

50 50 Reasonable Worst Case Scenarios Balances amount of information at hand with desire to move the process forward expeditiously Predicated on the use of scientifically valid assumptions Is often tilted towards a more environmentally conservative perspective - as insurance for using assumptions May be influenced by additional data gathering Has been used by NOAA and DOI in many cases: Alcoa-Lavaca Bay: Former Empire Oil Refinery Site: Chevron Questa Mine: (agreement on injury and restoration) 50

51 51 Early Restoration Conduct injury determination and restoration planning in parallel Consistent with regulations (DOI and OPA) Assessment Phase (DOI) Restoration Planning Phase (OPA) Advantages: Goal of NRDA is to restore injured resources in order to make the public whole Early restoration starts the credit clock earlier! Coordination with remedial or response actions Facilitation of time-sensitive projects 51

52 Balancing/Bounding Uncertainty Services Provided by Habitat Restoration Gain Interim Service Loss Benefit of Primary Restoration Incident Primary Restoration Begins Full Recovery With Primary Restoration Full Natural Recovery Time HEA assumes that equivalent habitats will provide equivalent services, meaning that years of lost services can be compensated for by providing acres of additional habitat. 52

53 Can we identify driver(s) for the Problem? Are cases really more difficult to move forward today, or is this a perception? Is there less willingness to accept natural uncertainty? Are attorneys and technical people focused on the right things? Are we losing sight of the end-game? Interaction between law, public, science and NGOs Are we initiating Trustee Councils too early (e.g., CERCLA 116g concern [42 U.S.C. 9613(g)(1)(B)] Is it greed? 53

54 54 What s Next The idea of compensating the public for injuries to their natural resources helps to keep the Tragedy of the Commons at bay, however NRD Regulations should not be seen as being written in stone. It is time for a comprehensive review of the NRD regulations under OPA and CERCLA - and perhaps time for a single set of updated NRD regulations designed to achieve the 54

55 Natural Resource Damages Goals Compensation for natural resource damages (NRD) under CERCLA/CWA and/or OPA is intended to Restore the natural environment to its prior condition and To compensate the public for the interim lost use from the time of contamination until restoration 55

56 Thank You Robert Haddad, Ph.D. Group V.P. & Principal Scientist

57 Natural Resources Damages Recovery under CERCLA and OPA: Looking to 2018 Amanda Halter Pillsbury Winthrop Shaw Pittman LLP For Strafford Webinars December 20, 2017

58 As we enter 2018, is it fundamentally business as usual?

59 The backlog ever grows: NOAA has about 140 pending claims 1 DOI has about 550 pending claims 2 59

60 The complaints are the same: Too expensive Too bureaucratic Too inefficient Too opaque Jurisprudence too undeveloped Etc. 60

61 Winds of change? 1. Post-Deepwater world 2. New federal Administration 3. Superfund reform 4. NRDA regulatory reform 5. Agency guidance development 6. CERCLA jurisprudence 7. Climate change 61

62 1. Post-Deepwater World A generation of Trustees and practitioners educated by Deepwater Horizon Body of science Infusion of money into the system Expectations 62

63 2. New federal Administration Secretary Ryan Zinke NOAA Administrator Nominee Barry Myers 63

64 3. Superfund reform 64

65 4. NRDA Regulatory Reform? Executive Order

66 Regulatory reform ideas Combine NOAA and DOI NRDA regulations Require NRDAs to include time and cost targets Tighten up injury determination requirements Clarify causation/baseline standards Allow for non-reopener settlements Directly address recoverability of tribal service loss injuries 66

67 % of Services 5. Agency guidance development? Habitat Equivalency Analysis Proved a useful settlement tool Daubert vulnerability NOAA working with DOI on a guidance document? Natural Recovery [Loss of 800 SAY] Start Off-Site Restoration Invasive Clean-Up [Loss of 2,500 SAY] [Gain of 5,000 SAY] Years Full Recovery 67

68 5. Agency guidance development Tribal service losses DOI hosted a series of listening sessions with tribal trustees Purpose was to review and improve NRDAs and restoration methods vis-à-vis tribal service losses IEc and Dr. Mark Buckley wrote white papers for DOI (draft) 68

69 6. Evolving CERCLA jurisprudence U.S. liability cases: Chevron Mining v. U.S., 863 F.3d 1261 (10 th Cir. 2017) o U.S. holds title to unpatented mine claims and is therefore CERCLA owner El Paso Natural Gas Co. LLC v. U.S., 2017 WL (D. Ariz.) o U.S. owns Indian reservations in trust for Tribes; sufficient for RP status TDY Holdings v. U.S., 872 F.3d 1004 (9 th Cir. 2017) o Where U.S. was owner, shifting allocation in favor of operator 69

70 6. Evolving CERCLA jurisprudence Tribal trusteeship: Confederated Tribes and Bands of the Yakama Nation v. Airgas USA LLC, et al. (D. Or. No. 17-CV SB) CERCLA definition of natural resources includes those belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by an Indian tribe. 42 U.S.C. 9601(16) 70

71 7. Climate change Potential for more release incidents? Even more complicated baseline assessment Impacts on restoration planning Causation jurisprudence 71

72 Thank You Amanda Halter Pillsbury Winthrop Shaw Pittman LLP For Strafford Webinars s/amanda-halter.html December 20, 2017