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

transcript

The audio portion of the conference may be accessed via the telephone or by using your computer's

speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Presenting a live 90-minute webinar with interactive Q&A

NRD Recovery Under CERCLA and OPA:

What to Expect in 2018

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, DECEMBER 20, 2017

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.

Tips for Optimal Quality

Sound Quality

If you are listening via your computer speakers, please note that the quality

of your sound will vary depending on the speed and quality of your internet

connection.

If the sound quality is not satisfactory, you may listen via the phone: dial

1-866-755-4350 and enter your PIN when prompted. Otherwise, please

send us a chat or e-mail sound@straffordpub.com immediately so we can

address the problem.

If you dialed in and have any difficulties during the call, press *0 for assistance.

Viewing Quality

To maximize your screen, press the F11 key on your keyboard. To exit full screen,

press the F11 key again.

FOR LIVE EVENT ONLY

Continuing Education Credits

In order for us to process your continuing education credit, you must confirm your

participation in this webinar by completing and submitting the Attendance

Affirmation/Evaluation after the webinar.

A link to the Attendance Affirmation/Evaluation will be in the thank you email

that you will receive immediately following the program.

For additional information about continuing education, call us at 1-800-926-7926

ext. 35.

FOR LIVE EVENT ONLY

Program Materials

If you have not printed the conference materials for this program, please

complete the following steps:

• Click on the ^ symbol next to “Conference Materials” in the middle of the left-

hand column on your screen.

• Click on the tab labeled “Handouts” that appears, and there you will see a

PDF of the slides for today's program.

• Double click on the PDF and a separate page will open.

• Print the slides by clicking on the printer icon.

FOR LIVE EVENT ONLY

apks.com

Arnold & Porter Kaye Scholer LLP

The Future of NRD

Brian D. Israel

Strafford Webinars

December 20, 2017

apks.com

The Future of NRD:

Ten Bold Predictions

Brian D. Israel

Strafford Webinars

December 20, 2017

apks.com

The Future of NRD:

Ten Bold Predictions

But NO Promises

Brian D. Israel

Strafford Webinars

December 20, 2017

1. Statutory or Regulatory Change

The Future of NRD: Ten Predictions

Brian D. Israel ~ December 20, 2017

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.

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, 2017 12

Early Restoration Framework Agreement

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

3. NRDAs without Data Collection

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.

What is Big Data?

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.

4. The End of Cooperation?

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.

5. A Hybrid Approach: Independent but Cooperative

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.

6. Another Hybrid Approach: Shared Experts

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.

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).

6. Shared Experts

7. A Third Hybrid Approach: Increased Use of Stipulations

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.

6. Shared Experts

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.

DWH Baseline Example –Natural Seeps

29 Brian D. Israel, ABA Fall Conference, 2016

6. Shared Experts

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.

6. Shared Experts

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.

6. Shared Experts

10. The Next Generation of NRD Practitioners

apks.com

Thank You

Brian D. Israel

brian.israel@apks.com

www.arnoldporter.com

Generational NRD Cases, Is there a Better Path

Strafford Webinars

Robert Haddad, Ph.D.

Group V.P. & Principal Scientist

December 20, 2017

https://hateandanger.wordpress.com/tag/calvin/

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

https://www.darrp.noaa.gov/ 39

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, 243-

251. 40

Generational

Natural Resource Damage Assessments

NRDA - the ultimate balancing Act

Current Case Dockets OPA & CERCLA (1986 to Present)

https://www.doi.gov/restoration, https://darrp.noaa.gov/

22% - Active

(Inj. Assmt/Rest. Plan)

60% - In Restoration

18% - Closed

Of the

approx. 480

NRDA cases

found on the

DOI and

websites*…

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

Goal of Cooperation

• Achieve cost-effective restoration

• Based upon sound science and transparent communication,

• While minimizing transaction costs.

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.

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.

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?

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.

Primary

Restoration

Begins

Benefit of

Primary

Restoration

Services

Provided by

Habitat

Incident Full Recovery

Primary Restoration

Natural

Recovery

Interim

Service Loss

Uncertainty - How Significant?

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: 2001-2007

– Former Empire Oil Refinery Site: 2002-2006

– Chevron Questa Mine: 2004-2007 (agreement on injury and restoration)

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

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.

Primary

Restoration

Begins

Benefit of

Primary

Restoration

Services

Provided by

Habitat

Incident Full Recovery

Primary Restoration

Natural

Recovery

Interim

Service Loss

Balancing/Bounding Uncertainty

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?

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

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

Thank You

Robert Haddad, Ph.D.

Group V.P. & Principal Scientist

bhaddad@exponent.com

Natural Resources Damages Recovery under CERCLA and OPA: Looking to 2018

Amanda Halter

Pillsbury Winthrop Shaw Pittman LLP

For Strafford Webinars

December 20, 2017

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

The backlog ever grows:

• NOAA has about 140 pending claims1

• DOI has about 550 pending claims2

The complaints are the same:

• Too expensive

• Too bureaucratic

• Too inefficient

• Too opaque

• Jurisprudence too undeveloped

• Etc.

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

1. Post-Deepwater World

• A generation of Trustees and practitioners educated by Deepwater Horizon

• Body of science

• Infusion of money into the system

• Expectations

https://response.restoration.noaa.gov/about/media/mapping-fallout-deepwater-horizon-oil-spill-developing-one-tool-bring-unity-response.htm

2. New federal Administration

NOAA Administrator Nominee Barry Myers

Secretary Ryan Zinke

3. Superfund reform

4. NRDA Regulatory Reform?

Executive Order 13777

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

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 Full Recovery

Invasive Clean-Up

[Loss of 2,500 SAY]

Off-Site Restoration

[Gain of 5,000 SAY]

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)

6. Evolving CERCLA jurisprudence

U.S. liability cases:

• Chevron Mining v. U.S., 863 F.3d 1261 (10th 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 3492993 (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 (9th Cir. 2017)

o Where U.S. was owner, shifting allocation in favor of operator

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-00164-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)

7. Climate change

• Potential for more release incidents?

• Even more complicated baseline assessment

• Impacts on restoration planning

• Causation jurisprudence

Thank You

Amanda Halter

Pillsbury Winthrop Shaw Pittman LLP

For Strafford Webinars

https://www.pillsburylaw.com/en/lawyers/amanda-halter.html

December 20, 2017

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

Documents