Happy New Year! Here are my thoughts on the big stories of 2019, some highlights for C Bishop Law in 2019, and my resolutions for 2020.
PFAS – EPA and states are continuing to become more aware of PFAS chemicals. More states are starting to require testing for PFAS as part of an investigation, and many states have set very low limits for certain PFAS. I see this trend continuing in 2020.
Agency staff lack of experience – As I mentioned in my blog about TCEQ going rogue, many agency staff are inexperienced and ask for additional information that is not legally or technically required. I also, unfortunately, see this trend continuing in 2020.
Commercial real estate is hot – I am working on a lot of commercial real estate transactions. Buyer and sellers need to be aware of environmental impacts to avoid surprises by doing a Phase I Environmental Site assessment and possibly an environmental compliance audit. Read my blog post for more information on this topic.
2019 Highlights for C Bishop Law PC
Recognized as one of the Top Women Attorneys in Texas by Texas Monthly
Webster dictionary defines rogue as “resembling or suggesting a rogue elephant especially in being isolated, aberrant, dangerous, or uncontrollable.” I think Rambo is a better example. Lately, it seems that some of the project managers at the Texas Commission on Environmental Quality (TCEQ) have gone rogue. Continue reading Has TCEQ Gone Rogue?
Cindy Bishop, founder and president of C Bishop Law, has been named to the Top 50 Women Lawyers in Texas by Super Lawyers for 2018.
To earn a spot on the top 50, attorneys must first be named
to the Super Lawyers list in their state; inclusion is based on a four-step
process that includes nominations, a peer review process, independent research
and a final selection. The female attorneys with the most votes are added to
the top 50. Cindy has been included on the Texas Super Lawyers list every year
In her practice, Cindy assists clients across the country in
resolving their environmental issues. A licensed professional engineer, Cindy worked
as an environmental consulting engineer before transitioning to a legal career.
In her capacity as an engineer, she completed air permits, removed underground
storage tanks and conducted asbestos inspections.
Now well into her 25-year legal career, Cindy applies her
knowledge as an engineer to finding innovative, risk-based environmental solutions
for her clients – from Fortune 500 companies to small businesses, commercial
developers to airlines. She helped one client save more than $4 million in
estimated cleanup costs and has reduced or eliminated state and federal
penalties for other clients through the Texas Audit Privilege Act and EPA’s
Other recognitions throughout her legal career include D
Magazine’s Best Lawyers in Dallas, Best Lawyers in America, a Chambers USA
ranking for environmental law, and a selection to Best Law Firms published by
U.S. News and Best Lawyers.
Here are some resolutions for 2019 that can help you avoid environmental
Resolve to commission a Phase I Environmental Site Assessment when buying or leasing real property – Yes, even for leases. Yes, even for raw land. For a few thousand dollars, you can get peace of mind and ensure that there are no hidden environmental surprises, such as indoor air issues from an old dry cleaner that got regulatory closure before indoor air was an issue. In addition to supporting a defense if contamination is later discovered, it makes good business sense. Also be aware of my Top 10 Due Diligence Mistakes.
Resolve to do more than a Phase I Environmental Site Assessment when buying a company – Make sure the acquired company has the necessary environmental permits and that the company is in compliance with those permits.
Resolve to be aware of trending environmental issues – You don’t have to be an expert. Just be aware of trending environmental issues, such as PFAS and greenhouse gas reporting. Read only the headlines if you are busy and just want to know the lingo. Then, ask your favorite environmental attorney for more information.
Resolve to use consultants for data gathering and interpretation and use lawyers for legal questions – Especially for the second resolution above, a consultant can gather data but should not make legal conclusions about whether a facility is in compliance or needs a permit. That opinion should come from an environmental attorney. Consultants and lawyers should work as a team.
Resolve to look at internal practices – Like stepping on the scale, it is hard to realize that your company should improve its practices. But it is better to catch issues yourself than have a regulatory agency catch it in an inspection. Take advantage of programs such as the Texas Audit Privilege Act or EPA’s e-disclosure program to self-disclose and correct problems with potential immunity.
This summer, I posted about a group of emerging contaminants: poly- and perfluoroalkyl substances (PFAS). There’s recent news from EPA on PFAS. On November 14, EPA posted draft toxicity assessments for two members of the PFAS group – GenX and perfluorobutane sulfonic acid (PFBS). Comments are due January 22, 2019.
Typically, the dogs days of summer are a slow news time for environmental issues, but this summer has been an exception.
Hot on the heels (pun intended) of my last post on emerging claims to watch, EPA announced renewed interest in regulating per- and polyfluoroalkyl substances (PFAS). EPA held a National Leadership Summit in May to discuss how to regulate and remove PFAS in the soil and groundwater from historical releases.
At that summit, EPA announced a 4-step action plan:
Evaluate the need for a maximum contaminant level for various PFAS in drinking water;
Propose designating PFAS as “hazardous substances” under CERCLA (also known as Superfund);
Develop groundwater cleanup recommendations; and
Work with state and federal agencies to develop toxicity values for specific PFAS.
These steps most likely will increase the list of contaminants identified at cleanup sites. This means that investigation and cleanup costs could increase because additional chemicals will need to be addressed. In addition, Superfund sites will have additional contaminants identified, leading to additional responsible parties identified as the sources of PFAS.
Texas Railroad Commission Initiative
In June, the Texas Railroad Commission (RRC) released its 2019 Oil & Gas Monitoring and Enforcement Plan. As part of this plan, the RRC set a goal to maintain its 158 oil and gas field inspectors, and these inspectors have been tasked to meet new, increased inspection targets. Specifically, all inland wells will be inspected at least once every five years, and wells in bays and offshore will be inspected at least once every two years. To put this in perspective, in 2017, 155,880 wells were inspected, and the RRC projects 176,000 to be inspected in 2019 – a roughly 13 percent increase.
With this increased emphasis on inspections, I encourage well operators to take advantage of the Audit Privilege program (Tex. Health & Safety Code Ch. 1101) and conduct a self-audit to identify and correct violations before the RRC does. Under the Audit Privilege program, operators who conduct self-audits can claim immunity from administrative penalties that are voluntarily discovered during the audit, reported to the RRC, and then promptly corrected.
Do you have questions or need assistance? I am here to help. I have a great deal of experience with self-audits in Texas and elsewhere and also can provide oversight of environmental consultants during site investigations and cleanups. I also can guide you through the self-audit process, which includes specific notification requirements. Contact me at firstname.lastname@example.org
Stay cool and watch for those school zones as classes begin in August.
In April, I attended a conference on emerging environmental claims sponsored by the Environmental and Emerging Claim Manager Association. The conference was targeted toward insurance risk managers, but I found it very useful to identify potential future environmental liability for clients and what may be “the next big thing.”
Below is a summary of the conference’s take on emerging claims:
Technically, PFAs are perfluoroalkyl and polyfluoroalkyl substances. Think of them as chlorinated hydrocarbons but with fluorine attached rather than chlorine. They are not volatile, resistant to degradation, and soluble in water. They are present in many consumer products to resist heat, resist stains, resist water, reduce friction, and as surfactants (here is an informative slide from the FluoroCouncil). Many have been removed from the market (SeeEPA fact Sheet), but they linger in older products and trash.
Why are PFAS an emerging issue? PFAS in the environment have generally not been regulated. There are few regulatory cleanup levels; however, EPA and state agencies have been taking a closer look at these materials. Expect more agencies to require testing for PFAS in the soil and groundwater as part of a site investigation.
The plaintiffs’ bar has been initiating a wave of litigation related to talc (baby powder) with some huge verdicts. There are two theories: that when the talc was mined, it was contaminated with a vein of asbestos; and talc allegedly causes ovarian cancer. Although a 2013 study of the Cosmetic Ingredient Review Board found that talc is safe (followed by similar conclusions from the FDA and CDC), since 2013 $806 million has been awarded to plaintiffs in the Johnson & Johnson baby powder lawsuits. Some predict that the stores that sell talc products (talc is in many products in addition to powder) may be the next group of defendants.
Endocrine disruptors are chemicals that affect hormones. Examples of endocrine disruptors include PCBs, dioxin, certain pesticides (e.g. DDT, atrazine), phthalates, BPA plastic and mercury, cadmium, and lead. However, agencies have reached different conclusions as to whether current data links endocrine disruptors to health effects in humans. Studies are ongoing and many manufacturers are voluntarily switching to other materials., For example, you now see “BPA-free” water bottles.
Confined Animal Feeding Operations (CAFOs)
This topic is not new, but I was grossed out by the statistics, which fortunately were presented after lunch. (Source: EPA/600/R-04/042 May 2004)
Looking at this figure, a pig generates almost 24 times as much poop as a human does. Yuck. Anyway, the regulation of discharges from animal feeding is still a big issue.
I think Prop 65 is a ridiculous law that highlights how stupid warnings can get. As background, Prop 65 requires manufacturers and sellers of products in California to include a warning if the product contains a chemical from the list of more than 900 Prop 65 chemicals and include the type of health effect (i.e. cancer or birth defects or other reproductive harm). What started out as a consumer protection law quickly got out of control, as practically everything (even Starbucks coffee) required a warning. But the California legislature doesn’t seem to recognize the joke this law has become and instead passed amendments to make it more strict. A major amendment to this California labeling law takes affect August 30, 2018. One of the more notable changes is that the warning must include the yellow triangle warning symbol. In addition, the warning must specify at least one chemical per health effect. No more generic warnings. Here’s a summary from the State of California.
Although PCE (or perc), a common dry-cleaning solvent, has been a contaminant in cleanups for years, we are seeing increased personal injury claims from dry cleaning workers against the PCE manufacturers and suppliers. This increase is thought to be due to EPA’s 2012 designation of PCE as a likely human carcinogen.
Diacetyl is a flavoring agent used in foods such as popcorn, flavored juices and in “vape juice” to flavor e-cigarettes. Although the science is unclear, the plaintiff attorneys are alleging its consumption (by consumers and factory workers) leads to lung damage.
Are any of these the next asbestos? None of these appear to have the science or widespread exposure that asbestos did, but companies, their insurers, and their attorneys should be aware of the potential risks.
It’s time for my annual rant about the lack of respect given to environmental due diligence during the M&A process. It is still the overlooked stepchild of a deal, and buyers, lenders, and investors can get seriously burned by neglecting this critical component.
Dealmakers should be familiar with the term “Phase I,” which is the preliminary environmental report that could protect a buyer from pre-closing contamination and that must follow the guidelines set out in ASTM E1527-13.
But due diligence can be more than just commissioning a Phase I. Here are the top mistakes I already have seen in 2018:
Using the Lowest Bidder on a Phase I Report – You definitely get what you pay for. In addition to typos and poor grammar, I have seen obvious things overlooked (e.g. nearby leaking underground tanks) and non-problems made into problems. Many “cookie cutter” Phase I shops grind out the Phase I reports with the hope of getting the Phase II sampling work that they recommend (and, not surprisingly, charge significantly more for). To prevent this, ask around for consultant referrals. In addition, have the consultant generate a DRAFT report for your attorney to review before issuing the final report to prevent surprises.
Ignoring Potential Issues That Are Outside the Scope of the Phase I – Remember, a Phase I only looks at contamination and not compliance with environmental laws. Does the seller have all necessary permits AND is it complying with those permits? Representations and warranties in the sales contract are only as good as the seller’s continued financial viability.
Only Reading the Executive Summary of the Phase I – Have your environmental attorney read the entire report, including the appendices, to make sure nothing was missed. She should be able to complete this task in one or two hours.
Using an Old Phase I report – A Phase I that is more than 180 days old is considered out-of-date and needs to be updated. (ASTM E1527-13 Section 4.6).
Using the Seller’s Phase I – This is a problem for at least two reasons: First, the buyer has no privity of contract (i.e. no contractual relationship) with the consultant who did the seller’s report, so the buyer could not sue if the Phase I turns out to be wrong. This issue can be resolved by getting a reliance letter from the consultant. Second, the consultant may be biased toward the seller, so frankly, I would not trust their report.
Keep these points in mind when planning your next deal to prevent unwanted surprises.
When should you call your environmental lawyer? Some reasons are obvious: when you get sued or to review the environmental provisions of a contract, for example.
But here’s another good reason, based on a recent project I worked on: Environmental attorneys can provide oversight of your environmental consultant and be the “bad cop” with the government agency.
I have many friends who are environmental consultants. They do great work but are sometimes reluctant to take an adversarial stance with the government agency or offer cleanup alternatives that are contrary to the agency’s recommendation. Consultants work almost daily with the government agency project managers and want to stay on good terms with them.
But, sometimes, a bit of toughness is required. And that’s where your lawyer can come in handy. Nobody expects us to be nice.
Recently, I worked on a project where the Texas Commission on Environmental Quality (TCEQ) wanted my client to install additional monitoring wells and conduct more sampling to prove that the contamination was sufficiently low to close the file.
I didn’t support their reasoning. There were other businesses nearby with similar contamination, so how would we ensure that we weren’t detecting their contamination? Moreover, TCEQ had granted closure on those similar properties in the neighborhood with higher contamination levels than my client’s.
Our consultant wanted to propose some limited sampling to satisfy TCEQ, but I wanted to push back and say the data were sufficient to support closure. I found TCEQ guidance to back me up and, after a few emails and letters, TCEQ finally agreed with me and closed the file.
Nobody likes to spend money on lawyers, but spending a few hours of my time cost significantly less than installing the additional wells requested.
Attorneys are ethically obligated to act in their client’s best interest, and sometimes that means playing Bad Cop. I’m not saying that consultants are not similarly ethically obligated, but sometimes they are hesitant to push back to a project manager they deal with on a regular basis.
Bringing in a lawyer to play hardball lets the consultants maintain the camaraderie they need to do their jobs without sacrificing the client’s goals or needs.
Most businesses get inspected. Whether it’s EPA, OSHA, IRS, TCEQ, the city health inspector or the fire marshal, the general principles are the same: to be as prepared as possible. I’ve represented a lot of companies during and after inspections, and I’ve seen it all – the good, the bad, and the ugly. In this post, I’ll provide tips on being prepared for and properly responding to inspections.