California Legislature Fails to Pass 33% Renewable Portfolio Standard

Thu, 02 Sep 2010 16:24:56 GMT

An alert written by Stoel Rives partner Seth Hilton:

Last night, the California legislature failed to pass Senate Bill 722—the 33% Renewable Portfolio Standard (RPS) legislation—by the close of the legislative session. The bill would have increased California’s RPS to 33% for both investor-owned and publicly owned utilities. It would also have placed limits on the use of renewable resources located out-of-state to meet California’s RPS—utilities would have been required to meet a certain percentage of their RPS obligations through resources whose first point of interconnection was a California balancing authority, or whose power is transmitted to California through a dynamic transfer arrangement or scheduled hourly or inter-hourly into California. The proposed legislation also would have authorized the use of renewable energy credits (RECs)—the environmental attributes of renewable power separated from the power itself—for RPS compliance, but would have imposed limits on the amount of RECs that could be used to meet the utilities’ RPS obligation.

Last year, California also failed to enact a 33% RPS bill, similar to SB 722, although the process proceeded farther than this year. Last year, the legislature passed the bill, but it was vetoed by Governor Schwarzenegger due to concerns about the limits placed on the use of out-of-state generation. Like SB 722, last year’s bill would have limited the extent to which California could rely on out-of-state renewable resources to meet California’s RPS. Part of the failure of SB 722 to pass this year can be attributed to disagreements between the legislature and the Governor regarding what limits would be appropriate for out-of-state generation.

Despite his concern about limits on out-of-state generation, Governor Schwarzenegger supports increasing California’s RPS to 33%. Following his veto of the legislation last year, he issued an executive order directing the California Air Resources Board (ARB) to develop regulations to implement a 33% RPS under authority the ARB had under AB 32, California’s Global Warming Solutions Act. Pursuant to the executive order, the ARB was to enact those regulations by July 2010. Shortly before the ARB considered those regulations, the Governor requested via letter to the ARB that it postpone consideration of those regulations while the legislature attempted to pass a 33% RPS bill. ARB therefore moved the hearing on those regulations to September 22, 2010. With the failure of SB 722, ARB may now move forward with those regulations, although there are questions regarding the extent to which those regulations would be implemented by the new Governor.

In March, the California Public Utilities Commission (CPUC), which is responsible for administering portions of California’s current 20% RPS for investor-owned utilities, adopted a decision that would have authorized the use of RECs to meet the 20% RPS, subject to certain caps. In May, the CPUC stayed that decision. If SB 722 were enacted, it would have preempted the CPUC’s efforts to set standards for the use of RECs. Just last week, the CPUC issued a proposed decision that, if adopted, will lift the stay. The proposed decision was seen by many as an effort to encourage the legislature to act on SB 722 and adopt standards for the use of RECs. Now that the legislation has failed, the CPUC is free to move forward with its proposed decision allowing the use of RECs, and to lift the stay of the March decision.

If you have any questions about the issues of this update, please contact:

Steven Hall at (503) 294-9434 or schall@stoel.com
Seth Hilton at (916) 319-4749 or sdhilton@stoel.com
Jennifer Martin at (503) 294-9852 or jhmartin@stoel.com
Marcus Wood at (503) 294-9434 or mwood@stoel.com

Does Collaborative Design Minimize LEEDigation Risk?

ccheatha@wthf.com (Chris Cheatham) — Thu, 02 Sep 2010 11:32:33 GMT

Today, I am publishing a guest post from engineer Ian T. Hadden. I asked Ian to write a guest post after he made the comment "there is something built into the high performance, sustainable design building method that works against litigation" on August 9. Below, Ian elaborates on his point so please take a look and let us know what you think.

If you are interested in guest posting for Green Building Law Update, please contact me at chris@cheathamconsulting.com with your story idea. Your story should focus on risk management, legal or regulatory issues in the green building industry.

By Ian T. Hadden

I apparently peaked Chris' interest with my recent comments about integrated, collaborative design reducing the rate of LEEDigation as he's afforded me the opportunity to expand my thoughts. As a little background, I've been actively involved in the LEED certification of 4 projects and am working as the Project Administrator for 14 additional projects. All of these projects are from the K-12 education sector and have used design build, traditional hard bid and construction management procurement methods.

Maybe my experiences have been out of the norm or they were less litigious because they were school districts. But after hearing tales of other LEED projects and continued exposure to LEED projects, I believe the process avoids more pitfalls that lead to litigation than it opens doors for new litigation paths. The process drives detailed conversations that start early and continue through the process and they highlight the interdependency of the owner, the designers and the contractors. And that's why I think LEEDigation will be more common from outside parties, such as the school in MN, than between members of the integrated design team.

As part of role as a LEED Project Administrator, I often find myself helping facilitate the integrated design process. Often, many of the team members do not have any experience with an integrated design process. To avoid confusion, let's define integrated design as the use of deliberate steps to ensure all parties affected by the life cycle of project are engaged in the development of the project. It has a focus on data collection (like energy modeling), discussion, visioning and goal setting. This is often done in charrettes which provide a face to face, personal meeting of this cross discipline group of people. In traditional design, the owner often doesn't have much contact with any of the design team beyond the architect. This face to face meeting with the opportunity to have input starts building a level of trust and mutual accountability across all parties. When trust is present in any relationship, it becomes easier for all parties to admit and take responsibility for errors and omissions and focus on corrective action rather than blame. Let's take look at a couple of hypothetical situations and since I'm an engineer we'll focus around energy issues.

In traditional design, without an energy model there are likely few conversations the owner and the mechanical engineer have other than "what kind of HVAC equipment do you like." With the owner's preference in mind, the engineer proceeds to design a system assuming maximum occupant capacity and maximum allowable lighting power density and the engineer adds a 10 or 15% safety factor onto his or her load calculations to make sure no one every complains about being to hot or cold. But when the electrical engineer is very aggressive and reduces the lighting power density and the average occupancy is only 85% of capacity the system is now oversized so it doesn't control humidity well and does not operate efficiently. Who is at fault? Why are they at fault? Was the mechanical engineer responsible for asking the electrical engineer about lighting or was it the electrical engineer's responsibility to tell the mechanical? Is the owner at fault for failing to discuss occupancy patterns?

By comparison, a project team pursuing LEED typically does an energy model, which drives discussions about these topics and more. With an energy model, systems are sized more closely to the design load and with fewer compounded safety factors. There is risk in this method that weather or occupancy patterns outside the design parameters may lead to comfort issues. But those risks have been discussed and been jointly accepted by the owner and the design team.

California's Proposition 23

Wed, 01 Sep 2010 20:46:39 GMT

This coming campaign season, Californians will be given the opportunity to vote on Proposition 23, an initiative that would suspend California's clean energy legislation, the Global Warming Act of 2006 or AB32. The California Jobs Initiative, a movement reportedly financed by Texas oil companies, is charging that AB32 will cost California 1.1 million jobs and $3.7 billion a year in higher energy costs.

Proponents of AB32 are answering the charge. Joe Romm, a well-known climate expert and blogger, considers it to be "one of the most progressive pieces of environmental legislation ever enacted." According to Romm, in addition to reducing pollution levels and dependence on foreign oil, AB32 is spurring market growth in California’s clean tech and clean energy industries. His climate blog reports that AB32 has stimulated more than $9 billion of private investment, helped pave the way for more than 12,000 companies, and has contributed to the creation of more than 100,000 green jobs. Also, by sending a clear carbon price signal, AB32 provides the long term market certainty necessary for businesses to invest. As a result, California’s clean energy sector has grown stronger and now sits at the forefront of our nation’s energy innovation. In 2007 alone, Californian businesses patented 1,401 new clean technologies, constituting one sixth of all clean energy technology patents in the nation for that year. Contrary to the arguments of the jobs initiative, supporters of AB32 argue that the law has helped buoy California’s economy through the recent recession.

Perhaps more importantly, as California has historically done with clean air legislation, AB32 serves as a model for federal action. Suspending AB32 would further complicate the struggles to enact federal legislation on climate change. If California decides that it cannot afford to address climate change, other states will be hesitant to follow California's lead. This would not be welcome news for climate change activists at a time when our most respected environmental groups feel as if they’re losing the battle over the climate bill. Regardless of the outcome this November, it will serve as an important referendum over energy policy.

U.S. EPA Solicits Proposals for Brownfield Assessment and Clean Up Grants

Wed, 01 Sep 2010 18:39:36 GMT

U.S. EPA has released its fiscal year 2011 request for proposals (RFP) for brownfield assessment and clean up grants. There is a relatively short window of opportunity to file your application- the deadline is October 15, 2010.

[Click here for access to U.S. EPA's RFP for the brownfield assessment, clean up and revolving loan]

There is a total of $92.9 million available. While the RFP allows for greater funding under certain circumstances, the basic limit is $200,000 per site for assessment or clean up. EPA is required to expend 25% of the total amount available for sites contaminated with petroleum.

Ohio is lucky to have one of the best state brownfield grant programs- Clean Ohio. Often Clean Ohio is a better option than pursuing the U.S. EPA grant funding because U.S. EPA's program is a national competition. However, there are certain circumstances that make the U.S. EPA brownfield grant program potentially a better option than Clean Ohio.

COAF Clean Up Funding Exhausted for this Fiscal Year

The Ohio Dept. of Development announced that it is no longer providing funding under the Clean Ohio Assistance Fund (COAF) for clean up of brownfields in fiscal year 2011. However, assessment funding remains.

COAF can provide provide up to $750,000 in funding for clean up of brownfields. Projects are evaluated and grants awarded on a rolling basis.

Clean Ohio Revitalization Fund (CORF) is still available to fund clean up. It provides up to $3 million in funding per site. However, a 25% match is required and there are only two CORF rounds per year which typically are competitive. Therefore, for smaller clean up projects looking for funding in the next year, U.S. EPA's program may be the better option.

Abandoned or Vacant Gas Stations

Under the Clean Ohio policies, removal and clean up of BUSTR (Bureau of Underground Storage Tank Regulation) regulated storage tanks and remediation of leaks from such tanks are not eligible costs under either the Clean Ohio Assistance Fund (COAF) or the Clean Ohio Revitalization Fund (CORF).

For local governments that are trying to deal with abandoned or vacant gas stations in their communities, the U.S. EPA brownfield grant may be their best option. Communities can seek money for sampling of the site to determine if contamination exists.

The fear of the unknown (whether contamination exists) acts as a strong deterrent to purchase and redevelopment by private parties. Once sampling data has been generated, it removes one more impediment to purchase and redevelopment of the site.

Of course if sampling reveals contamination, this can act as a major obstacle to redevelopment. However, communities can secure clean up funding for these sites under the U.S. EPA program.

Community Assessment Grants

U.S. EPA's program may also be better for communities that are interested in creating a brownfield inventory of various sites within their jurisdiction. Also, U.S. EPA's program is great for local communities that want to create and fund their own local brownfield assessment programs.

For example, in Northeast Ohio, the Northcoast Brownfield Coalition was created using U.S. EPA funding. The Coalition is made up of the Cuyahoga County Board of Commissioners, the City of Cleveland, the Cleveland-Cuyahoga Port Authority and the Northeast Ohio First Suburbs Consortium. The Coalition makes provides local grant funding for brownfield projects in Northeast Ohio in amounts up to $30,000.

Below are the applicable limits for assessment grants under the U.S. EPA program:

(Photo: everystockphoto peasap)

Regulating Waterfront Property in Rhode Island: Ownership Does Not Mean Control

Wed, 01 Sep 2010 16:00:47 GMT

If you own waterfront property in Rhode Island and think you can do with it what you will, so long as you observe zoning ordinances like everyone else, think again.

Coastal waterfront property in Rhode Island is heavily regulated by the Coastal Resources Management Council (CRMC) under a complex set of regulations found in the Rhode Island Coastal Resources Management Program. You ignore that regulatory structure at your peril.

Staying out of Jail

By way of example, some years back one of my law partners came to me with a problem—he had been served with a violation and penalty from the CRMC for “improving” his water view by removing some phragmites and other vegetation. Could I help, he asked?

After ascertaining more of the facts, I said he had a problem, but at least he hadn’t hired a bulldozer to tear up the coastline. There was a long pause and then he said, “Well, I did rent a Bobcat”.

I said I could probably keep his wife out of jail but he had better pack his toothbrush!

Of course, no one went to jail, but he did pay a fine, and the last I heard CRMC was discussing restoration of wetlands with him.

Now, if a lawyer who should know better can get himself into this kind of trouble, you can imagine what else may be going on along our coastline.

Here is the reality:

If you own waterfront property, you are subject to increased regulations which can be stringent and may control everything from whether you can have a dock to where you can build a patio to what bushes or trees you could prune or remove.

CRMC Buffer Regulations

As for the coast, the CRMC regulates activity within 200 feet of the inland edge of a coastal feature, which includes the open ocean, coastal wetlands, tidal inlets, bays, coves, and tidal rivers. And if a coastal feature, such as a tidal inlet, runs not just along the property’s outer boundary but onto the property, jurisdiction is effectively more extensive.

If the CRMC buffer regulations apply to your property, there is little you can do in the buffer area without getting CRMC permission. (RICRMP Section 150. Coastal Buffer Zones) The buffer regulations typically apply to new residential development (for example, the construction of a house on a vacant lot), commercial and industrial development, energy related activities and certain public infrastructure.

The regulations create a buffer zone on applicable properties, the size of which is based on the size of the property and the type of water (one of six categories linked to the condition of the abutting shoreline). For example, a 10,000 to 20,000 square foot lot on Type 1 waters may have a 25 foot buffer zone, while an 80,000 square foot lot on Type 1 waters may have 150 foot buffer zone. (Variances may be granted from these requirements at the discretion of the CRMC.)

Assuming say, a 75 foot buffer zone from the most inland edge of the tidal feature on a property, the property owner would be prevented from altering this buffer in anyway, except in compliance with the regulations. The following would generally apply in a buffer zone:

· Maintenance of vegetation in its natural, undisturbed condition
· The planting of native vegetation if CRMC decided that was required
· The filing of a plan for CRMC approval if you wish to prune or trim vegegtation
· Restrictions on what you can do in the buffer zone.

The purpose of the buffer zones is to protect water quality, coastal habitat, scenic and aesthetic quality, historic and archaeological resources and to foster erosion control and flood control.

Given these protections, the regulations for buffer areas are stringent.

Regulatory Restrictions

For example, pathways which provide access to the shoreline “are normally considered permissible” provided they are less than or equal to six feet wide and follow a winding path that minimizes erosion.

And if you want to actually see the water, from your new house, “selective tree removal and pruning and thinning of natural vegetation may be allowed within a defined corridor in order to promote a view of the shoreline” but “only the minimal alteration of vegetation necessary to obtain a view shall be acceptable to the Council”.

And if you actually want to enjoy that waterfront, well, “minor alterations of buffer zones may be permitted along the shoreline if they are determined to be consistent with the Council’s requirements. These alterations may include maintaining a small clearing along the shore for picnic tables, benches, and recreational craft (e.g. dinghies, canoes, day sailboats, etc.). Additionally, the CRMC may allow small, non-habitable structures including storage sheds, boat houses and gazebos…..where appropriate.”

Note the repeated use of the word “may”. The regulations give CRMC a good deal of discretion to protect the values served by buffer zones.

At this point, if you are feeling pretty good since you own waterfront property that is not subject to the buffer regulations because, for example, your house was constructed before the regulations were applicable to new residential construction, don’t get too comfortable. You could actually do something that would result in the buffer regulations being imposed on your property!

More specifically, if you expand the square footage of the foundations of your structures on your property by more than 50%, you would be subject to the buffer zone requirements. The regulations are a bit complicated in this area, so this requires some attention.

When considering expansion, weigh the benefits of the increased structure you want against the restrictions of imposing the buffer regulations on your property, and determine what is more important to you.

And for all of you who thought your house was your castle, well it is, but if that castle is waterfront property, you may be the lord but not necessarily the master of all you survey!

Congress' cap-and-trade action likely means EPA regulates GHGs beginning Jan. 2, 2011

Wed, 01 Sep 2010 15:52:58 GMT

This post was written by Christopher Rissetto, Larry Demase, Jennifer Smokelin, Bob Helland, and David Wagner.

In the weeks that have passed since our previous article on climate change activity in Congress and the Environmental Protection Agency, it has become evident that Washington is more likely to see a snowstorm this summer than congressional passage of a cap-and-trade measure for greenhouse gas emissions. Passage was never considered to be easy - something we noted in our previous alert. For example, the House of Representatives passed climate legislation in 2009 (H.R. 2454, sponsored by Congressmen Waxman (D-CA-30) and Markey (D-MA-7), but by only a six-vote margin. Still, the 2009 legislation, combined with the impact of the Gulf of Mexico Oil Spill, indicated to some that there was some momentum for a bill passing the Senate and reaching the President this year. But that momentum ran smack into the 60-vote requirement in the Senate, which all measures must clear before receiving a final vote. And the 60 votes were just not there - not for the Waxman-Markey measure or for the industry-specific compromise floated by Senators Kerry (D-MA) and Lieberman (I-CT) during the end of negotiations. It remains possible that the Senate could still take up a cap-and-trade measure, either when it meets from September 13 through October 8 or during its "lame-duck" session, set to begin November 15. But we would not recommend anyone holding their breath.

While action on cap-and-trade in the 111th Congress fizzled in the Senate, EPA has continued on its course of regulating greenhouse gas (GHG) emissions. As reported in Reed Smith’s Environmental Law Resource blog, in response to EPA’s “Endangerment Finding,” a number of petitions for reconsideration were filed by various industry and special interest groups. These petitions challenge the validity of EPA conclusions that global warming is currently at an all-time high and assert that other geologic periods - e.g., the Medieval Warm Period and the Holocene period - were in fact warmer than present. Specifically, the groups challenge data supporting reconstruction of historical earth temperatures and assert that certain e-mails involving scientists at the Climate Research Unit of the University of East Anglia in the United Kingdom demonstrate a deliberate and inappropriate manipulation of the data. The petitioners also challenge the process by which EPA developed the scientific support for the Endangerment Finding; that is, they are claiming that EPA did not independently judge the underlying science and thus did not convene a truly independent external peer review. Petitioners also claim EPA violated the Information Quality Act by failing to post the underlying data and scientific studies in the docket. Finally, the petitioners assert that new scientific studies refute evidence supporting the Endangerment Finding.

On July 29, 2010, EPA denied all of the petitions for reconsideration and found, inter alia, that there were no significant errors in the Intergovernmental Panel on Climate Change’s (IPCC) Fourth Assessment Report, and that there was no conspiracy to manipulate the data. EPA also rejected the claim by petitioners that new scientific studies refuted evidence supporting the Endangerment Finding. The court challenges to the Endangerment Finding can now proceed. These challenges, however, are not as likely to be successful as the challenges to the Tailoring Rule, discussed next.

There are significant challenges to the Tailoring Rule, EPA's rule that "tailors" permitting programs to limit the number of facilities that would be required to obtain New Source Review and Title V operating permits based on their greenhouse gas emissions. If there is a chink in EPA’s armor, it rests in these challenges. The crux of these challenges focus on the threshold and timing determination in the final Tailoring Rule, in which EPA sets a threshold of regulation at 75,000 tons GHGs. This effectively leaves major industrial sources under that threshold unregulated until at least 2016, and perhaps beyond. In the draft regulation, EPA had proposed a 25,000-ton GHG threshold. Challengers to the Tailoring Rule argue that this switch from 25,000 to 75,000 tons is arbitrary and capricious with no scientific basis in the record to support it. And they may be right. Last week, 20 of the lawsuits against EPA's tailoring rule were consolidated by the U.S. Court of Appeals for the District of Columbia Circuit. The case's court date has not yet been set. For more discussion, see here.

On the regulatory front, EPA continues to press its authority under the Endangerment Finding. Following up on its Tailoring Rule, on August 12, 2010, EPA proposed two rules regarding GHG emission permitting under the Clean Air Act . In the first rule, EPA proposed to require permitting authorities in 13 states to make changes in their implementation plans to ensure that GHG emissions will be covered. Other states are to inform EPA if their existing permitting authority does not allow them to address GHG emissions. In the second rule, EPA is proposing a federal implementation plan that would allow EPA to issue permits for covered GHG sources located in states not able to develop and submit revisions to their implementation plans before the Tailoring Rule becomes effective. Neither of the rules has been published in the Federal Register yet. Once they are published, EPA will schedule a public hearing on the federal implementation plan rule likely in Arlington, Va., in September.

This summer, EPA also issued its proposed “Transport Rule” to provide for the attainment and maintenance of the 1997 and 2006 fine particulate matter National Ambient Air Quality Standards and the 1997 ozone NAAQS. While targeting only reductions in emissions of NOx and SO2 transported between the states, many believe this rule will have a dramatic impact on the viability of coal-fired electric generating capacity in the eastern United States. The Transport Rule is discussed in more detail at the Environmental Law Resource.

Finally, the Obama Administration is also considering a variety of actions it can take without Congress. In a report entitled, “Plan B: Near Term Presidential Actions for Energy and Environmental Leadership,” the Presidential Climate Action Project concluded that President Obama could implement the following ideas prior to the United Nations 16th Conference of the Parties in Cancun:

Work with states and local governments to create a national roadmap to the clean energy economy
Declare war on energy waste
Begin reinventing national transportation policy
Eliminate fossil energy subsidies under the Administration’s control
Establish ecosystem restoration as a climate action strategy

IAC slams IPCC process, suggests removal of top officials ( whether Pachauri should resign??)

SteveH1031@aol.com (Stephen Holzer) — Wed, 01 Sep 2010 15:13:04 GMT

Flaws Found in U.N. Climate Structure By NEIL MacFARQUHAR UNITED NATIONS ? The scientists involved in producing the periodic United Nations reports on climate change need to be more open to alternative views and more transparent about their own possible...

Flaws Found in U.N. Climate Structure
By NEIL MacFARQUHAR

UNITED NATIONS � The scientists involved in producing the periodic United Nations reports on climate change need to be more open to alternative views and more transparent about their own possible conflicts of interest, an independent review panel said Monday.

�
The revelations about the errors contributed to the already highly charged debate about the science of climate change and gave added ammunition to critics doubting assessments that the earth is warming. Coming on the heels of leaked e-mails among some of the leading climate change researchers which suggested that they were manipulating data, the mistakes contributed to what surveys showed were an erosion in public confidence in the science of climate change.

Progress Made In the Development of California's Green Chemistry Regulations

Wed, 01 Sep 2010 13:48:22 GMT

This post was written by Eric McLaughlin.

Since the enactment of California’s two landmark green chemistry laws in September 2008 (AB 1879 and SB 509), significant effort has been made to develop their implementing regulations. This process has proven to be difficult and controversial, because a compromise must be reached between numerous competing concerns, most notably the legislative mandate to protect human health and the environment, and the significant costs to be imposed on companies manufacturing and selling consumer products in California. The process has also come under intense nationwide scrutiny, because California's Green Chemistry Initiative is considered a possible model for national chemical policy reform.

State regulators at the Department of Toxic Substances Control (DTSC) have until January 1, 2011 to enact the final version of the green chemistry regulations, known as the Safer Consumer Products Alternatives (SCPA) regulations. An informal rulemaking process has been used to shape the regulatory framework and extensive public comment has been received from stakeholders, including the scientific community, industry and environmentalists. The most recent draft of the SCPA regulations was released on June 23, 2010 and public comments were accepted through July 15, 2010.

California’s green chemistry laws are intended to completely refocus the regulation of chemicals in consumer products on the beginning of the product life cycle – the design phase. This approach will enable determinations to be made about which chemicals should be used in which products, and weighing the potential effects of those products on human health and the environment before they occur. Drafting the regulations to accomplish this goal, however, has prompted much debate throughout the informal rulemaking process, which has intensified as the SCPA regulations have taken shape, and has focused on six main issues: (1) scope of the regulations; (2) prioritizing chemicals of concern; (3) alternatives analysis; (4) confidential business information; (5) conflicting and duplicative regulations; and (6) the cost of implementation. This post summarizes the status of these issues.

How wide to cast the net – a threshold issue is how to balance the goal of regulating chemicals in consumer products to reduce their potentially harmful effects with the financial burden imposed on the regulated community, particularly in this challenging economy. For instance, some wish to maximize the number of chemicals addressed and populate the public clearinghouse mandated by SB 509 with a great deal of data in a very short period of time. However, the burdens of this approach must also be recognized, which include the enormously time consuming and expensive tasks of identifying all the chemicals used in the broad array of consumer products sold throughout the State, followed by preparing life cycle assessments for each one of them.

Early versions of the SCPA regulations were strongly criticized for borrowing "lists of lists" of chemicals from other regulatory programs and adopting broad categories of loosely defined consumer products. The Green Chemistry Alliance warned that unless chemicals and products are selected and prioritized based upon real life exposure risk, the green chemistry initiative will collapse under its own weight. The current draft relies on this approach to a lesser degree, and instead applies a lengthy list of prioritization factors to chemicals in consumer products that exhibit hazard traits. Nevertheless, the number of chemicals covered at the outset – which include all 800+ listed under California's Proposition 65 – is still an ambitious first step.

Prioritizing chemicals of concern – An effective mechanism is needed to prioritize the chemicals addressed, but various stakeholders have advocated for different criteria to govern that process. Industry’s position is that a policy automatically equating any amount of exposure with harm is not only contrary to AB 1879, but would also put an onerous burden on manufacturers to develop, gather and analyze vast amounts of data on hazard traits and exposure in very little time, and in some cases without good reason. Scientists, including those on the Green Ribbon Science Panel, are concerned that without an effective prioritization mechanism, the green chemistry program will fall victim to “paralysis by analysis.” Environmentalists are similarly concerned that if the regulations do not take effect quickly enough, the primary goal of the program – to avoid adverse human health and environmental impacts – will be thwarted.

The current draft of the SCPA regulations uses a mechanism of funneling down those chemicals and consumer products to be regulated. Chemicals and consumer products are first "considered" based on their volume, toxicity and exposure potential, and then the highest priority products containing the highest priority chemicals are selected for further regulatory analysis. However, there are currently no deadlines for completing the various steps of this subsequent funneling process, which will follow DTSC's January 1, 2011 deadline to specify the threshold hazard traits to be regulated.

Alternatives analysis – The process by which manufacturers will be required to study potential alternative chemicals for use in consumer products remains the subject of much debate. Of particular concern to all involved is who will perform those assessments – industry, third parties working for industry, independent third parties, regulators, or some combination of those entities. Manufacturers prefer to conduct their own alternatives analyses, given the complexity of evaluating chemical uses and exposures, the risks associated with being bound by others’ decisions, and the desire to control the dissemination of confidential information. Assemblyman Feuer, the author of AB 1879, has commented on the need to counter the “adverse incentives” that would result if industry could sidestep regulation by failing to develop data upon which regulatory decisions could be based, e.g., by purposefully neglecting to fill critical "data gaps." Similarly, environmentalists insist that the data considered must be completely transparent to the public and subject to DTSC oversight.

Another criticism of the alternatives analysis process is the lack of deadlines to force industry to complete the various steps involved. DTSC's Acting Director Maziar Movassaghi has acknowledged that the timeframe under the current regulations is variable and that it could take years to find suitable alternatives for certain chemicals currently in use.

Confidential business information (CBI) – CBI is a hotly disputed issue and is closely tied to the alternatives analysis process. That process requires industry to provide detailed information about chemicals of concern (COC) and potential alternatives, including their identity, composition and performance characteristics, as well as redesign of COC-containing products, redesign of associated manufacturing processes, and manufacturers' customer lists. Much of this information is typically considered by industry to be proprietary CBI to protect substantial investments made in research and development, and its public disclosure would have severe economic consequences. Industry is also concerned that publicizing information about chemical and product design alternatives will pave the road for product liability lawsuits.

While the draft regulations do protect trade secrets identified by industry, they also: restrict the scope of data for which such protection can be claimed; reserve for DTSC the discretion to accept or reject claims of trade secret status; allow for disclosure of trade secrets in cases of "substantial need" as determined by DTSC; fail to specify the precise measures to be used to protect such confidential information; and do not impose legal liability against DTSC employees who fail to safeguard such information.

Conflicting and duplicative regulations – Faced with a new, all-encompassing system of chemical regulation, industry is concerned about how that system will overlap, and perhaps conflict, with the existing patchwork of chemical and product regulations already in effect on the federal and state level. For example, federal agencies could regulate a particular public health or environmental risk under their existing authority that could conflict with the regulatory actions taken under the draft SCPA regulations. Moreover, due to the perceived sluggish operation of the current SCPA regulations, lawmakers are currently considering the need for additional chemical-specific bans, the elimination of which was a goal of the green chemistry laws. The draft regulations allow for the exemption of COCs regulated in a similar manner under other laws, but leave exemption determinations to DTSC's discretion and do not specify the criteria to be considered when making such determinations.
Cost of implementation – Perhaps the one thing that all parties involved – scientists, industry, activists and regulators – appear to agree on is that implementing the new SCPA regulations will require significant funding and staffing resources. While much of this burden appears destined to fall on industry, a substantial role must also be played by the regulators to administer and enforce the program. However, the source of government funding remains unclear amidst the State’s budget crisis and service cutbacks.

Thus, while progress has been made in developing the SCPA regulations, there is much disagreement about whether this progress is headed in the right direction. For instance, industry representatives have recently commented that DTSC’s latest draft of the SCPA regulations may overreach the agency’s authority under the green chemistry laws and appear to be considering grounds for challenging the regulations in court. However, DTSC has not yet issued a final draft of the SCPA regulations, which will trigger further hearings and a 45-day public comment period under the formal rulemaking process. Consequently, there is still time and opportunity for further debate and revision of the SCPA regulations.

Kick the Tires and Check under the Hood: Due Diligence Provisions in Pennsylvania Agreements of Sale; Posting 3 of 3

Tue, 31 Aug 2010 21:37:09 GMT

Of the pre-closing due diligence triad, the property investigation almost always covers the most ground. While representations and warranties will help you spot and clarify issues during the negotiation of the Agreement of Sale, and title review will identify and locate recorded encumbrances, the property investigation is where the Buyer gets its hands dirty.

At a recent presentation with co-panelists Michael Moyer of Land Services USA, Inc. and Aileen Schwartz of Hill International, entitled “Real Estate For In-House Counsel: An Examination of Title Issues, Contracts and Negotiations in Real Estate Deals” at the Association of Corporate Counsel (Delaware Valley Chapter)’s 2nd Annual In-House Counsel Conference in Philadelphia, Pennsylvania, I discussed many of the areas a Buyer can explore in evaluating the property.

The scope of a property investigation is transaction-specific and can have many components, including feasibility review, environmental review, zoning review, and structural review.

The feasibility review focuses on the ability of the property to function in a manner that will effectively and efficiently serve the Buyer’s needs now and in the future. Attention should be paid, at a minimum, to:

Access to roadways
Sufficiency and location of utilities
Available building area

An environmental review of the property is also essential with a Phase I analysis and, where indicated, a Phase II study being conducted by a reputable consultant.

An understanding of the zoning regulations affecting the property is critical, as those restrictions dictate how the property can be used and developed. Included in the documents that the Buyer should review are:

The municipal zoning code and map
The local zoning file for the property
Prior approvals for the property

The Buyer can also request a zoning compliance letter from the municipality, although the willingness to issue those letters and the level of detail contained in them varies depending on the municipality.

A study of the structural fitness of existing buildings on the property and/or geotechnical studies may also be warranted, depending on the nature of the transaction and the Buyer’s plans for the site.

Other property related items that a Buyer should consider reviewing during the due diligence period include:

Leases (including subleases, if any) and rent rolls
Brokerage agreements
Casualty insurance policies
Environmental insurance policies
Service contracts that do not terminate as of closing
Prior engineering and feasibility studies or reports prepared by the Seller
Governmental permits and licenses
Notices of violations
Third party licenses

Like a used car, every property is unique, with its own individual history, nicks and scratches. There is no “one-size fits all” formula or approach to performing the due diligence on a property. Reps and warranties, title review and property investigation give a buyer the tools to determine whether the property is one which it should acquire. The thoughtful use of those tools is the key to a successful due diligence investigation and deciding whether to drive that car off the lot or look for a different one.

Alfred R. Fuscaldo is a Director in the Gibbons Real Property and Environmental Department.

UN climate panel urged to reform, stick to science | Reuters

SteveH1031@aol.com (Stephen Holzer) — Mon, 30 Aug 2010 23:15:12 GMT

UNITED NATIONS, Aug 30 (Reuters) - The U.N. climate panel should make predictions only when it has solid evidence and should avoid policy advocacy, scientists said in a report on Monday that called for thorough reform of the body. The...

UNITED NATIONS, Aug 30 (Reuters) - The U.N. climate panel should make predictions only when it has solid evidence and should avoid policy advocacy, scientists said in a report on Monday that called for thorough reform of the body.
The U.N. Intergovernmental Panel on Climate Change (IPCC) was widely criticized after admitting its 2007 global warming report wrongly said Himalayan glaciers would vanish by 2035 and that it overstated how much of the Netherlands is below sea level.

via www.reuters.com

Understanding "Beginning Construction" Under Section 1603

Mon, 30 Aug 2010 21:14:37 GMT

The Treasury Department recently issued a series of FAQs in an effort to clarify when projects will be treated as having "begun construction" for purposes of the section 1603 grant. As you may be aware, a project that otherwise qualifies for the grant but is not placed in service before the end of 2010 may still be eligible for the grant if construction on the project is begun in 2009 or 2010 and the project is eventually placed in service before the applicable "credit termination date." The new FAQs address a number of the unanswered questions. However, the framework adopted by the Treasury Guidance and the new FAQs is complex, and there appears to be a considerable amount of confusion among developers about how the "beginning construction" requirement can be met. Therefore, we thought it important to issue this alert.

"Beginning Construction"

There are two distinct ways to begin construction pursuant to the Treasury Guidance: (1) actual physical activity; or (2) the expenditure of money. These tests are entirely separate, and what counts toward meeting one test generally will not affect qualification for the other.

Physical Activity Test
Actual physical activity is the first test for beginning construction. The Treasury Guidance states that "[c]onstruction begins when physical work of a significant nature begins." FAQ 4 provides that even a small amount of physical activity will meet this requirement. However, FAQ 5 states that Treasury will scrutinize projects where the physical activity, once begun, does not involve a continuous program of construction. In other words, Treasury will evaluate whether work begun in 2009 or 2010 is carried on continuously and may disallow the section 1603 grant if it is not.

The Treasury Guidance and FAQs provide that both physical work done by the applicant itself and physical work done by others pursuant to a binding written contract may be taken into account. In addition, work done both on site and off site may count in meeting the physical activity test.

Importantly, there are specific requirements that must be met for a contract to be considered binding for purposes of section 1603, and only work done after the binding contract is entered into will count for purposes of this test.

On-site work may include excavation for foundations, pouring of concrete pads, building of certain roads, and assembly of machinery. Off-site work may include the manufacture of component parts, such as boilers or solar arrays, to be assembled or used on site. Preliminary work, such as planning and design, securing financing, researching, and site clearing, does not qualify. Physical work of a significant nature may begin even if a specific site for the facility has not been identified.
Expenditure Test – The 5 Percent Safe Harbor
As an alternative to the physical activity test, the Treasury Guidance provides that construction begins if a safe harbor is satisfied. To qualify for the safe harbor, an applicant must have "paid or incurred" more than 5 percent of the total cost of the property on or before December 31, 2010. As with the physical activity test, these costs must be paid or incurred pursuant to a binding written contract. This is strictly an expenditure test; physical work is neither required nor relevant. There has been considerable confusion about this test.

The term "paid or incurred" has a specific meaning for tax purposes, based on whether the taxpayer is an accrual method or cash method taxpayer. For accrual method taxpayers, mere payment of an expense (e.g., making a nonrefundable deposit) generally is not sufficient for the expense to have been "incurred."

For purposes of the safe harbor, the general rule is that amounts are not treated as paid or incurred by an accrual method applicant until the property or services have actually been provided to the applicant by the contractor (or until the payment date, if the property or services are reasonably expected to be provided within three-and-a-half months of the payment date).

In addition, the Treasury Guidance provides that, if there is a binding written contract but the property or services have not yet been provided to the applicant, costs may be treated has having been paid or incurred by the applicant when costs have been paid or incurred by the contractor.
Pros and Cons of the Two Tests
The 5 percent safe harbor is useful if physical work, either on site or off site, will not begin before 2011. Conversely, where it is possible for physical work of a significant nature to begin before the end of 2010, the 5 percent safe harbor has limited application. However, one advantage of meeting the 5 percent safe harbor, rather than the physical activity test, is that there is no requirement for the safe harbor that construction be continuous (see FAQ 22).

Planning and Drafting for Meeting the "Beginning Construction" Requirement

It is important that various agreements, such as EPC and BOP contracts and turbine and other equipment supply agreements, address how the "beginning construction requirement" is intended to be met. Where necessary, these agreements should be drafted to ensure they meet the requirements for "binding written contracts." It may also be appropriate for them to set specific performance and payment deadlines, and to obligate particular parties to provide reports, allocate costs, etc. in order that the application for the section 1603 grant can be completed. Finally, the agreements should address the question of allocation of risks if the various requirements for "beginning construction" are not met.

Conclusion

Developing and implementing a strategy for satisfying the "beginning of construction" requirement requires a thorough analysis of the particular transactions being considered. In addition, great care must be exercised in drafting the various agreements to ensure that they address the various requirements.

We would be pleased to assist you in accomplishing these goals. Please contact one of the Stoel Rives attorneys listed below.

Energy

David Benson at (206) 386-7584 or Email
Bill Holmes at (503) 294-9207 or Email
Morten Lund at (858) 794-4103 or Email
Alan Merkle at (206) 386-7636 or Email
Julia Pettit at (801) 578-6958 or Email
David Quinby at (612) 373-4104 or Email
Howard Susman at (858) 794-4111 or Email

Tax

Chris Heuer at (503) 294-9206 or Email
Greg Jenner at (612) 373-8857 or Email
Adam Kobos at (503) 294-9246 or Email
Carl Lewis at (206) 386-7688 or Email
Kevin Pearson at (503) 294-9622 or Email

Obama Administration Opposes Use of Nuisance Claims to Address Climate Change

Mon, 30 Aug 2010 21:11:26 GMT

A group of eight states and conservation groups ("Plaintiffs") have been pushing a massive federal nuisance claim against utilities. The Plaintiffs claim that major emitters of carbon dioxide in twenty states have created, contributed to, or maintained a common-law public nuisance by contributing to global warming thereby injuring States and landowners feeling the impacts of climate change. (See prior post discussing 2nd Circuit decision to let nuisance action stand) .

The Plaintiffs claims were dismissed by the district court. Their suit was reinstated when Plaintiffs won their appeal in the Second Circuit Court of Appeals. The Appeals Court determined the Plaintiffs had a right to seek relief under federal common law nuisance doctrines. Now the utilities are requesting the Supreme Court reverse the Appeals Court.

Two critical legal questions at issue throughout the litigation have been:

Political Question- Resolution of the issue is best suited for Congress and not the Court because the relief sought would raise complex issues balancing economic, environmental, foreign policy, and national security.
Whether common law has been displaced by Congressional or Executive Branch actions regulating greenhouse gases.

The 2nd Circuit Court of Appeals determined the claims did not raise a "political question" and were not displaced by the mere presence of regulatory authority in the Clean Air Act. ( Federal common law claims are "displaced" whenever Congress establishes a mechanism to address the problem.) Now the utilities have petitioned the U.S. Supreme Court to hear their appeal of the lower Appeals Court decision.

In a surprise to environmentalists, the Department of Justice (DOJ) filed a brief in support of the utilities appeal to the Supreme Court. In its brief, DOJ argues that EPA, since the 2nd Circuit Court of Appeals decision was rendered, has issued a series of regulatory actions thereby displacing the common law claims of the plaintiffs. These include:

Finalization of the "endangerment finding"
Regulation of greenhouse gas emissions (GHGs) from motor vehicles- light duty vehicle standards
Issuance of the "Tailoring Rue" which will subject new or expanded major emitters of GHGs to federal permitting requirements
U.S. EPA is developing New Source Performance Standards for existing major emitters

While EPA regulatory actions is not completed, there actions may be sufficient for the Supreme Court to ultimately determine common law rights have been displaced. However, industry has also filed challenges to every regulatory action cited above. Those challenges may give the Court pause in dismissing the Plaintiffs claims.

DOJ's brief in support of the utilities came as a major surprise to some environmental groups. This from the Mother Jones website:

This is cold comfort to environmentalists, who are anxious that the administration isn't moving fast enough on those regulations. "It reads like a Bush administration brief," Matt Pawa, an environmental lawyer representing the plaintiffs in this case, told Mother Jones. "It felt like being stabbed in the back. The Obama administration claims to care about global warming, so why is it opposing an effort curtail greenhouse gas emissions from coal-fired power plants?"

Why is the Obama Administration opposing this effort? Because having the Courts establish climate change regulation would be chaotic. Here are some good quotes from the DOJ brief:

[Plaintiffs] are but a tiny subset of those who could allege they are injured by carbon-dioxide emissions that have contributed or will contribute to global warming...Moreover, global warming's effect will not be limited to landowner; they will also be felt by governments, individuals, corporations, and interest groups throughout the Nation and around the world.

...Any potential plaintiff could claim to have been injured by any (or all) of the potential defendants. The medium that transmits injury to potential plaintiffs is literally the Earth's entire atmosphere--making it impossible to consider the sort of focused and more geographically limited effect characteristic of traditional nuisance suits targeted at particular nearby sources of water or air pollution.

The practical reality is that Courts are ill-equipped to address climate change. How could they possibly be in the best position to address issues such as:

What percentage of reductions should be required and over what time period?
What sources should be required to reduce emissions?
What technologies are viable and should be employed?
How does forcing reductions by select emitters balance with similar emitters elsewhere in the country or the world?
When are the costs of compliance too significant?
How will reductions be monitored and enforced?

While the pace of Congressional action by be slow, turning to the Courts to develop perhaps the most complex, costly and extensive environmental regulatory scheme ever contemplated would not be wise.

Douglas Janacek: Panelist at Standing-Room Only "Solar Energy for New Jersey Businesses" Event

Mon, 30 Aug 2010 20:48:27 GMT

A standing-room only audience of more than 500 business owners, senior executives and industry representatives throughout the state attended a conference on August 19, sponsored by Gibbons P.C. and EisnerAmper LLP - Solar Energy for New Jersey Businesses, Developing & Financing Your Own On-Site Solar Facility - at the Woodbridge Hilton in Iselin, NJ.

The program (as covered by NJBIZ) featured elected officials, state representatives, and industry executives, who discussed the state of solar energy projects for business and other organizations in New Jersey - the second most active state for solar power installations and the seventh for venture capital investments in clean energy projects.

Speaking about real estate and development considerations affecting solar facility design and installation, Douglas Janacek, Co-Chair of the Gibbons Real Property & Environmental Department, emphasized the widespread desire of stakeholders to see construction of alternative energy facilities. In New Jersey, Mr. Janacek noted that there are a myriad of opportunities to locate solar facilities not just on new sites, but also existing, developed sites of all types and sizes.

“With millions of dollars available from venture capital funds and other financing sources, together with Federal and State mandates, New Jersey has become the leading marketplace for solar investment in the nation, and this is just the beginning,” said Frank T. Cannone, who leads the Gibbons Corporate Department and its Renewable Energy Finance Team. “This event addressed the unique opportunities available for businesses to get into the forefront in this growing area.”

“The business case for solar projects is a strong one in this state,” said Rich Cleaveland, Partner at EisnerAmper LLP. “This conference drew a standing-room only crowd, with over 700 people requesting to attend, because it provided valuable information on building a successful solar energy project from financing and assembling a team through design, operation and maintenance.”

The Keynote Address was given by New Jersey State Assemblyman Upendra Chivukula, who is the Chairman of New Jersey's Telecommunications and Utilities Committee and the behind-the-scenes author of innovative energy legislation that is fueling New Jersey's unprecedented investment in solar energy. He discussed why New Jersey is an ideal location for solar project development, the state’s creation of incentives for businesses to develop smart grid, net-metering solar electric projects, and the future of continued energy growth within the state.

Mark Kuehn, Counsel in the Gibbons Corporate Department and President of the Association for Corporate Growth, NJ Chapter, welcomed the group and provided an overview of the solar marketplace. Steve Morgan, past Chairman and CEO of JCP&L and current President and CEO of American Clean Energy, a PPA developer, investor, owner and operator of solar electric systems, discussed the history of energy generation in the state and the evolution of the solar market.

Building the Project
The first panel provided insight into “Building the Project,” and covered the Design Phase including choosing the team, location, and system; Construction Phase and how to construct a project without business interruption; and Post-Construction Phase including operating, utilizing and maintaining your system.

Panelists and their topics of discussion included:

Accounting topics - Rich Cleaveland, Partner at EisnerAmper (Moderator)
Construction of solar energy projects - Al Bucknam, CEO SunDurance Energy
Engineering and design of systems - George Cruden, Director of Market Operations, Power & Communications Market Team, Clough Harbor Associates
Land use and development law - Douglas Janacek, Co-Chair, Real Property & Environmental Department, Gibbons P.C.
Experience as an owner of an existing solar site - Valerie Montecalvo, President, Bayshore Recycling Corp.
General contractor insight - Steve Morgan, President and CEO, American Clean Energy, LLC, and past senior executive of First Energy Corporation including CEO and Chairman of Jersey Central Power & Light

Structuring the Project
The second panel discussed “Structuring the Project,” with a focus on ownership, power purchase agreements, financing options, incentives including solar renewable energy credits, and the current regulatory environment.

The panelists and their areas covered included:

Corporate structure and project finance - Frank Cannone, Chair, Corporate Department, Gibbons P.C. (Moderator)
Financial models, tax and accounting topics - Anthony DiGiacinto, EisnerAmper
State incentives - Paula Durand, Senior Venture Officer, Clean Technology, New Jersey Economic Development Authority
Solar Renewable Energy Credits (SRECs) - Michael Flett, President and CEO, Flett Exchange LLC
Lending and financing opportunities - Kurt Fuoti, TD Bank
The regulatory environment and approvals - Ronald Reisman, Manager of Business Outreach, New Jersey Board of Public Utilities
Business financing and PPAs - James Rice, CEO, Nautilus Solar Energy, LLC

Finally, a demonstration of the unique software offered to track solar energy projects was offered by Govi Rao, President and Chief Executive Officer of Noveda Technologies, Inc.

The enthusiastic response to the conference, coupled with the State's demonstrated commitment to renewable energy such as solar and wind power indicate that New Jersey is a key location for investment and development.

More Confidentiality Issues For Chemicals in the EU; This Time They Also Involve the Classification, Labeling and Packaging Regulation

Mon, 30 Aug 2010 17:48:54 GMT

This post was written by Todd Maiden and David Wagner.

Earlier this month, the Environmental Law Resource addressed how to make valid confidentiality claims for chemical information in a REACH registration dossier, and reminded readers that the first wave of REACH registration dossiers must be submitted by November 30, 2010. In particular, the November 30 deadline applies to substances that are manufactured in or imported into the EU in volumes of 1 metric ton or more annually and to certain compounds that are particularly hazardous to human health or the aquatic environment. However, upcoming confidentiality issues and deadlines related to chemicals in the EU are not limited to REACH; there are also similar issues for chemicals under the EU’s Regulation on the Classification, Labeling and Packaging of Substances and Mixtures (CLP Regulation).

First, some background on the CLP Regulation. It introduces the United Nations’ globally harmonized system for classification and labeling of chemicals into Europe. It also requires, by January 3, 2011, companies that manufacture, import, use, or distribute chemical substances or mixtures to notify the European Chemicals Agency about the classifications of and labels for any substance or mixture, regardless of its annual tonnage, before they place it on the European Union’s market. For each substance, information on the classification and labelling will be published.

The link between REACH and the CLP regulation is that both contain hazard communication tools: the CLP establishes labeling rules and REACH establishes rules for Safety Data Sheets. Moreover, the CLP Regulation amended some of the Safety Data Sheet requirements in REACH, and these changes will be phased in over the next 5 years.

On August 13, 2010, the European Chemicals Agency issued an alert explaining that companies not required to register by the November 30, 2010 REACH registration deadline but still obligated to notify regulators on the classification and labelling of substances under the CLP Regulation can, in certain cases, keep the substances name confidential.

To restate, regulated entities with substances that are to be registered after the November 30 REACH deadline, but which must still provide the European Chemicals Agency information about their classifications and labels by January 3, 2011, can claim their chemical’s International Union of Pure and Applied Chemistry (IUPAC) name to be confidential under certain circumstances. Specifically, chemical manufacturers, importers, or distributors can do so if their chemical is new to the European market; if it is an intermediate (i.e., used to make other chemicals); if it is used for scientific research and development; or if it is used in product of process research and development.

Confused? We hope not. But know that EU requirements related to chemicals are picking up again and deadlines are approaching fast. If you have any questions, please send a comment or contact Todd Maiden or David Wagner.

The Importance of an Open Courtroom

james@jamespllc.com (Walter James) — Mon, 30 Aug 2010 14:44:43 GMT

On July 24, 2008, Braulio Agosto-Vega (“Agosto”) and Braulio Agosto Motors, Inc. (“Agosto Motors”) were found guilty of violating the criminal provisions of the Clean Water Act (CWA), 33 U.S.C. §§ 1251 et seq. for allowing the unlawful discharge of raw sewage from a point source into waters of the United States. What is interesting about this matter is that on appeal, the issue of open courts required the appellate court to grant a new trial. It is a right we tend to take for granted; however, it can be a slippery slope.

From the opinion, the facts are fairly straight forward. The District Court judge was conducting voir dire in a courtroom other than her usual courtroom as the regular courtroom was under repair. When jury selection began on June 18, 2008, the defense attorneys complained to the court that the “court's security officers were refusing to allow members of the Agosto family into the courtroom during jury selection.” The judge responded by stating that there was no room because the venire panel was taking up all of the room on the benches. After going back and forth on some suggestions of how to seat everyone, with no resolution, jury selection went forward, over the objections of defense counsel. After the jury selection, the defense counsel also noted that the press was also excluded from the courtroom.

In dealing with the issues on appeal, the First Circuit Court of Appeals commended the judge for trying to insulate the jury panel from “improper influences.” The First Circuit Court of Appeals also took the government’s lawyers to task for “failing to come to the court’s aid” regarding the jury selection process.

In overturning the conviction based on Sixth Amendment arguments, the First Circuit Court of Appeals cited Presley v. State, ___ U.S. ___, 130 S.Ct. 721 (2010) (Sixth Amendment right applies to jury selection process). It was a somewhat bitter sweet victory as the First Circuit Court of Appeals also found that the evidence was sufficient to warrant upholding the conviction. But for the closure of the court during jury selection . . ..

More later.

As always, feel free to contact me via e-mail at walter.james@jamespllc.com.

WDJiii

Stormwater Regulations Are Flawed: EPA Needs A Do-Over

Sun, 29 Aug 2010 18:46:08 GMT

EPA seems to have had a problem with a fundamental lesson we all learn by fifth grade: Do your homework.

On November 23, 2009, EPA imposed new stormwater discharge rules for construction sites. For the first time, a numeric turbidity limit of 280 NTUs would be imposed on the discharge from these sites. The cost of compliance, according to the National Home Builders Association and Small Business Administration, would exceed $10 billion dollars. NAHB promptly filed suit.

The matter is now before the U.S. Court of Appeals for the 7th Circuit. As is customary, the Department of Justice is representing the EPA. According to NHBA, in preparing the case, DOJ requested that its client, EPA, "defend the numeric limit." EPA apparently then admitted to several flaws and improper interpretation of the data. Based on this information and in a very unusual move, the DOJ filed a motion with the Court to vacate that part of its final rule relating to the average daily turbidity level of 280 NTUs. EPA requested a “partial vacature of the final rule and remand of the record.” In the words of DOJ:

Based on EPA’s examination of the dataset underlying the 280-NTU limit it adopted, the Agency has concluded that it improperly interpreted the data and, as a result, the calculations in the existing administrative record are no longer adequate to support the 280-NTU effluent limit. EPA therefore wishes to re-examine that number through a narrowly-tailored notice-and-comment rulemaking and, if necessary, revise that portion of the limit before proceeding with its defense of the rule.

DOJ also asked the Court to hold the remainder of the case in abeyance for 18 months. The motion was granted by the Court on August 24, 2010. As a result, the 280 NTU rule has been stricken, and the remainder of the rule is still in force and effect. This means that while additional regulation in the form of increased "best management practices" will be enforced (which several states had already imposed), there will be no numeric turbidity limit on the stormwater discharge.

So who really benefits from EPA’s action? It seems to me there are two groups. First, it is very good news for the building industry. The 280 NTU rule would have imposed huge additional costs with marginal benefits during the industry's darkest hour. Hopefully, EPA will do a more thorough review its second time around.

The second group which is benefited is the U.S. Chamber of Commerce (and the other entities which have challenged EPA on its Endangerment Finding). As we all know, the U.S. Chamber of Commerce is contending that the EPA is wrong on finding that green-house gases present a substantial risk of harm to human health and welfare. The Chamber contends that the science simply does not support EPA. EPA contends that the science is overwhelming and that the Chamber is wrong. EPA’s current admission that it may have misinterpreted the data for imposing the 280 NTU limit, significantly undermines EPA's credibility, at least from a public relations perspective (in an election year).

In conducting rulemaking, EPA must be right (or at least defensible) on the science and its interpretation of scientific data -- every time. Its rules can impose millions of dollars in compliance costs and penalties. Challenging an EPA determination is time consuming and extremely expensive. The Agency has the time, funds and duty to make sure that their regulations are supported. When EPA finds it necessary to file a motion in a pending action which essentially admits that it did not do sufficient due diligence to determine if its review was correct, the impact to its credibility is huge. Some people might start asking themselves if EPA was wrong about its interpretation of the data on something as significant as the stormwater discharge rules, could it also be wrong about the science regarding climate change. Or what about the science supporting the new lead paint rules? Or even what about . . . . ? EPA has all the time in the world to pass its rules and it will deflect most challenges if it consistently, methodically and verifiably bases the rules on sound science and takes the time to review and properly interpret the data. As soon as it concedes that it has not done its homework, there are all sorts of people who will be happy to take it to school.

The Train's A-Comin': More Stormwater Rule Changes

RealClearPolitics - Politics - Aug 28, 2010 - EPA denies bid to ban lead in hunting ammunition

SteveH1031@aol.com (Stephen Holzer) — Sun, 29 Aug 2010 17:21:56 GMT

via www.realclearpolitics.com "The Environmental Protection Agency has denied a petition by five environmental groups to ban lead in hunting ammunition, saying the issue is not within the agency's jurisdiction."

via www.realclearpolitics.com

"The Environmental Protection Agency has denied a petition by five environmental groups to ban lead in hunting ammunition, saying the issue is not within the agency's jurisdiction."

Ontario Power Authority directed to enter into biomass arrangement at Atikokan

mstyczen@stikeman.com (Mike Styczen) — Fri, 27 Aug 2010 22:53:30 GMT

The Ontario Power Authority has been directed to enter an agreement to purchase biomass power that will be produced at the Ontario Power Generation’s Atikokan station starting in 2012.

This development is part of the OPA’s 20-year plan that began in 2007, and proposed that the province phase-out coal-based electricity by 2014 and invest approximately $14.6 billion in renewable energy sources. Pursuant to Ontario Environmental Protection Act regulations made under the OPA plan, the Atikokan station is one of several coal facilities that will cease coal-fired steam electricity generation.

However, unlike the Lambton and Nanticoke stations that will be permanently decommissioned, OPG will convert the Atikokan station to use wood pellets as a biomass fuel source.

Frank Chiarotto, OPG’s Senior Vice-President (Thermal), acknowledged the benefit to the community by converting the Atikokan station, as opposed to shutting its doors.

Atikokan can provide Ontario with a new source of renewable energy and Northwestern Ontario with economic benefits for years to come ... This is good news for OPG, Northwestern Ontario and the province.

RNP and AWEA respond to WSJ editorial about wind energy

Fri, 27 Aug 2010 21:37:01 GMT

Tuesday's Wall Street Journal included an editorial by Robert Bryce titled "Wind Power Won't Cool Down the Planet," claiming that wind power does not reduce carbon pollution, based on fossil fuel industry studies. In response to Bryce's editorial, Renewable Northwest Project has released a statement from Ken Dragoon, RNP research director, countering Bryce's claims with facts from independent sources. (http://www.rnp.org/index.php?q=node/1001)

American Wind Energy Association (AWEA) has also issued a similar statement. http://awea.org/newsroom/pdf/08-27-10-Wind_and_emissions_response.pdf.

Dunder Mifflin Angered by the State Department Eliminating the Need for Seven Collated Copies

Fri, 27 Aug 2010 20:09:22 GMT

This post was written by Leigh Hansson and Chris Monahan.

The U.S. State Department spent a little ink in the Federal Register earlier this month in an attempt to get green in the 21st century. On August 4, 2010, the State Department, Directorate of Defense Trade Controls, or DDTC, announced a final rule requiring the electronic submission of requests for Commodity Jurisdiction Determinations, or CJs. Companies submit a CJ if they have doubts as to whether an article or service is covered by the U.S. Munitions List, or if they want to request consideration of a redesignation of an article or service currently covered by the U.S. Munitions List.

In a stunning departure for the federal government, the State Department developed and issued a new form for CJs. All kidding aside, this new wrinkle in State Department bureaucracy should be a welcome change for most companies interacting with the agency for a few reasons.

The new CJ form is a more environmentally responsible alternative to the old method that required companies to submit seven collated sets of their request and the supporting documentation. In addition to removing the need for all those copies, the new CJ request form must be submitted electronically as of September 2, 2010.

Applicants will not be required to use the DTRADE system and will also not be required to register with DDTC, as some had feared prior to the new rule. Instead, DDTC has created what appears to be a simple and less-burdensome alternative to the old CJ process. Applicants now download the form, scan and attach necessary supporting documents, and submit everything using an open net, web-based application system. DDTC has posted instructions as well as links here.

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