Articles By Timothy Lambrecht

HOW TO RESPOND TO A NOTICE OF VIOLATION

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The New York State Department of Environmental Conservation (“NYSDEC”) issues Notices of Violation (“NOV”) to people and companies who it believes have violated New York’s Environmental Conservation Law (“ECL”) or its associated environmental regulations.  Typically, the NOV follows a citizen complaint and investigation into the complaint, so often times the NOV’s recipient is aware of its possibility.  In some instances, NYSDEC gives parties an opportunity to take corrective action after the investigation, with the NOV being withheld as long as the party follows through.  If you are the recipient of an NOV, or of a threatened NOV, what are some steps you should consider?

Treat the Matter Seriously.

Most parties who receive an NOV take it seriously.  The ones who get in the most trouble are the ones who ignore them.  Sticking your head in the sand like an ostrich and doing nothing is not going to make the problem go away.  In fact, it is pretty much a guaranteed way to make matters worse.  In some instances, the ECL calls for penalties of up to $15,000 per day for ongoing violations. In other instances, willful violations can constitute misdemeanors, calling for imprisonment of up to one year.  While those kinds of penalties are unlikely, they are possible—especially for parties who are non-responsive.  If you receive an NOV, don’t let it slip to the bottom of your to-do list.  Take it seriously.

Understand the NOV.

The NOV will describe the allegations against you.  It will cite the provisions of the ECL or regulations that NYSDEC believes have been violated and provide a short description of how it believes you have violated those provisions.  It will inform you of potential penalties.  It may provide you with copies of the laws or regulations it claims are violated.

Study these allegations carefully.  Just because you’ve been provided an NOV, does not mean that you have violated the law.  Sometimes NYSDEC is wrong.  Sometimes it does not have all the facts.  For that reason, NYSDEC allows you the opportunity to furnish materials for your defense and to request an informal conference with NYSDEC to discuss the allegations.  Remember, however, that any information you provide can be used against you in a civil or criminal enforcement proceeding.

Get Prepared.

At some point, you will be talking with NYSDEC to resolve the NOV.  In some instances, where the stakes are minor, maybe you feel comfortable doing it yourself—but more often than not, you will want experienced environmental counsel.  Remember that an NOV can mean more than fines or penalties.  It can mean a criminal investigation.  It can lead to a permit revocation or permit denial down the road.  If your business relies on that permit to operate, is that something you really want to risk without having the advice of counsel?

You or your counsel should thoroughly understand the provisions you’ve been charged with violating.  Is there a potential defense?  What records do you have that can show NYSDEC that it is mistaken, maybe in part if not in whole?  If you are liable for a violation, maybe you can show mitigating circumstances?  Or maybe you have no real defense?  You need to know the answer to these questions before you meet with NYSDEC to discuss the NOV.

Be prepared to negotiate.

It may be that you have a complete defense to the NOV and are willing to take the matter to hearing, if NYSDEC will not dismiss the NOV.  That happens.  You may feel you have no other choice.  If so, you want experienced counsel by your side because the risks are high.

But that situation is pretty uncommon.  Most NOVs are resolved through negotiations with NYSDEC.  The reason why is simple: both NYSDEC and you want the same thing.  NYSDEC wants to ensure that you and your company comply with applicable laws and regulations.  It wants to be protective of the environment and the state’s citizens.  You also want to be in compliance and, if there has been a violation, correct it and ensure you do not have to deal with the issue again.  The question is how to you get there and how do you minimize or maybe even eliminate any penalty?

Where it makes sense, following the investigation, NYSDEC often times will provide guidance on what needs to be corrected and, as long as that happens, will hold off on an NOV.  If the violations are not grave or too serious—and a party is responsive, has a good history of compliance, and is working with counsel to help facilitate corrective measures—NYSDEC typically is willing to be more lenient.  But the converse is also true: if the violations are severe and public health is at stake or the party has a history of violations and non-compliance, or was given an opportunity to take corrective action and failed, then NYSDEC is much less likely to be lenient.  The role of environmental counsel can be very important here.

Follow through.

Finally, when you resolve the NOV, follow through on what you promise to do.  If your company needs to take protective measures by a deadline, do it—and if it looks like you cannot, let NYSDEC know enough in advance that you are trying but need an extension.  You do not want to be tagged as a non-compliant party or a serial violator.  Also, take the opportunity to educate yourself and your workers about the law, what is required, what went wrong and how to avoid similar problems in the future.  An ounce of prevention is worth a pound of cure: with good guidance, you probably can avoid the cost and aggravation of a future NOV.

If you receive an NOV, it can be an intimidating experience—but environmental counsel can help you through it.  If you feel you need environmental counsel, feel free to contact Tim Lambrecht, Esq. or Kevin Murphy, Esq. at the Wladis Law Firm.

 

Picture Credit:  www.boldsky.com

Environmental Due Diligence: Do Your Homework before You Buy

for-saleEvery now and then we’re visited by a new client who discovers he bought contaminated property and needs legal help.  In almost all of these cases, our client bought the property without first getting advice from an environmental lawyer or conducting adequate environmental due diligence on the property.  We’re always glad to help, but the frustrating part is that if that client met with us before buying the property, we could have worked with him to help manage the risks and potential liabilities that come with the purchase of potentially contaminated properties.

So what is environmental due diligence?  In simple terms, it is a process by which trained professionals assess a property for any potential risk of environmental contamination.  Most lenders require environmental due diligence be completed before they will issue commercial loans, but those who are self-funding purchases should strongly consider undertaking this due diligence, also.

The process typically begins with a Phase I Environmental Site Assessment.  The Phase I assesses the current and historical uses of a property and examines local, state and federal records to identify past uses the property that may present an environmental risk.  Often times, this assessment is sufficient for prospective buyers and their lenders.  Sometimes properties will require a Phase II Environmental Site Assessment, which is a more intrusive assessment that includes soil and groundwater sampling from areas on a property that are deemed most likely to have contamination.  The depth and scope of the process typically turns on the property that’s examined.  A property that once had a gasoline service station probably will require a Phase II because of the higher likelihood of contamination.  A commercial property with office space and a satisfactory Phase I assessment typically would not.

There are major benefits to conducting environmental due diligence prior to a purchase.  Due diligence can uncover actual or suspected contamination, which may lead the prospective buyer to cancel a purchase, renegotiate the purchase price or—with the assistance of a knowledgeable environmental lawyer—negotiate protections in the purchase agreement, or determine a property’s brownfield eligibility to assist with cleanup costs.  Under the All Appropriate Inquiries rule, a properly managed assessment can grant protection for bona fide prospective purchasers from CERCLA liability, even if contamination is found after the property is purchased.  That is a potentially significant measure of protection as site cleanups can be very costly.

If you are looking into purchasing a property and need legal advice, our firm is glad to meet with you to discuss the due diligence process and the protection it affords.

Photo: www.susanfidler.com

What Should You Do When You Find Out Or Suspect Your Business Property Is Contaminated?

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Today, federal, state and even local agencies in New York enforce environmental laws and regulations designed to help keep the environment clean.  Companies find it makes good business sense to have sound environmental practices.  There is a culture of environmental awareness and recognition that we should be protective of the environment.

It wasn’t that long ago, however, that this wasn’t the case: many businesses didn’t see the value in being good stewards of the environment and engaged in less environmentally-sensitive practices.  As a result, in New York, with its legacy of industrial activity, many business properties are contaminated.  Often times, the contamination is decades old and the current landowner has no idea that the contamination exists.

There are many trigger events that lead to the discovery of contamination, or suspected contamination, on a property.  Some common ones are:

  • a prospective sale of a property
  • new development or renovation of a property
  • an environmental audit of the property
  • getting a mortgage on the property
  • the discovery of contamination on adjacent property.

In each of these instances, some event causes either an inspection of the property, such as the need for an environmental site assessment, or some physical activity on the property, such as construction, demolition or sampling.

So what should you do if you discover you might have contamination on your property?  Like many things in life, the answer is it depends.  If you discover an active, ongoing source of contamination, you almost certainly have a fairly immediate reporting obligation, either under a statute/regulation or an environmental permit.   If you uncover what looks like it could be historic contamination but are unsure, your response can be more measured.

If you discover or suspect you have discovered contamination on your property, here are some actions you should consider taking:

  • Contact your legal counsel to discuss your options. How you respond to the discovery of contamination or suspected contamination can lead to a major headache with significant expenses, if not done correctly.  You may spend some money on getting sound legal advice, but you could end up paying out more if go at it alone.
  • Find out your reporting obligations right away. Different situations can call for different reporting requirements.  Some reporting requirements require almost immediate reporting and the failure to report could result in a substantial civil penalty or even criminal charges.  Experienced counsel can help you understand what these obligations are.
  • Take a look at your insurance coverage. Environmental contamination often is excluded from coverage, but not always.  You should review your coverage, with your insurance broker or counsel if necessary, to determine whether your business may have coverage that can help pay for a clean-up.
  • Understand what your property documents say. If your business purchased the property, look at the purchase documents to see what they say about contamination.  Often times, especially in a more sophisticated transaction, risk of contamination is allocated in the transaction documents.  If your business leases the property, see what the lease says.  There may be a provision that discusses what happens if contamination is found.
  • Consider hiring an environmental consultant. For many reasons, you may want to know what you can about any contamination or suspected contamination you find.  For example, if you suspect the contamination came from a neighboring property, you probably want to determine its source so you can determine who may be responsible for remediation.  Be aware that you may have to act on issues your consultant uncovers.
  • Look into whether you can recover or demand cleanup costs from a responsible party. Often times, more than one party is responsible for contamination at a property.  Considering the fact that cleanups of these properties can be very expensive, even if your business shares some responsibility for a cleanup, you should consider whether other responsible parties should share these costs.  Talk with your counsel about your options if you suspect another party or other parties might be responsible for any contamination.

No business wants to find it has or may have contamination on its property.  If it happens, however, your goal should be to consider taking these steps to help minimize your risks.

What to Do When an Agency Visits for an Inspection

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You’re working in your office when suddenly one of your employees is at your door: there are a couple of agents from the NYS Department of Conservation at your facility, here to conduct an inspection because the agency received a complaint about your business.  What should you do?  What can you do?  If you manage the visit correctly, then maybe it’s just a minor disruption.  If you don’t, you can be looking at a major headache.

Here are some big picture items to keep in mind.

Understand who is there and why they’re there.  The example used here is the DEC, but the agency at your door could be OSHA, or EPA or a host of other regulatory or investigative agencies.  Find out who they are and why they’re there.  Certain personnel—security guards, a foreman—will be the first to interact with the inspectors.  They should request credentials and ask about the purpose of the visit and find out if they have a search warrant.  They should contact management with this information.  Most importantly, they should be professional and courteous—this is a serious event with potentially significant consequences—and direct any questions to management.

Determine who you want present.  Depending on the nature of the inspection, you may want counsel present, or at least available by phone if that’s at all possible.  In any event, you want only the right people present with the inspectors.  While you want to cooperate with reasonable requests, there’s no need to have more people than you need present to answer any questions.  Answers can have far reaching consequences, which you may not know at the time.  A speculative answer volunteered by an employee trying to be helpful could end up hurting, not helping, your cause.  Limit your company’s presence to those with knowledge or a need to be present.

Document the event.  Arguably, nothing is more important than documenting the inspectors’ visit.  Know who was present and when they were present.  As soon as it is practicable, document the questions the inspectors asked, the answers they were given, and the parts of the facility they visited.  Keep notes and photograph anything an inspector photographs.  If an inspector requests or takes records, document what was requested or taken.  If the inspector takes samples, see if you can get split samples.  Document as much as you can, even if it seems unimportant at the time.

You may not have to turn it over, but then again maybe you do.  Even with a search warrant, inspectors do not have carte blanche to inspect anything and everything at a facility or to take anything they wish.  Search warrants are powerful investigative tools, but they are typically limited in time and space and must set forth the particular items to be seized.  A search warrant for company records normally doesn’t give investigators the right to seize an employee’s private iPad kept at his desk.  That said, some federal (e.g., Clean Air Act) and state (e.g., Oil Spill Act) environmental laws require facilities to keep records showing their regulatory compliance.  The inspectors don’t need a warrant to review those records.

Read it carefully.  Sometimes an inspector will ask someone to sign a document after the inspection is completed.  Think about this request carefully because it can have serious legal implications.  Whatever the document is, read it closely before signing.  If you feel you cannot sign it, you probably should not.

Have a plan in place.  Finally, if you are a regulated industry or a workplace, you know that an investigative agency can pay you a visit.  Be prepared for it.  Have protocols in place for dealing with an inspection.  Have your employees know what they should do, how they should act and who they should contact if an inspector shows up at your facility.  Make sure management knows what it should do, including who should document the visit and who it might contact about any inspection.  Better to be prepared and not be inspected than to have an inspection and not be prepared.

The long and short of it is that being the subject of an agency investigation can be a nerve-wracking experience, but it doesn’t necessarily have to be.  It is all about preparation and sticking to protocols.  If you have a question about how your facility should prepare for an agency inspection, or if you’ve already been subject to one, feel free to contact Tim Lambrecht, Esq. or Kevin Murphy, Esq. at the Wladis Law Firm.

When should you report a petroleum spill to the NYS Spill Hotline?

Sandal and Red Maple Leaf on A Toxic Beach

Petroleum spills are a fairly common occurrence in New York State.  By the NYS Department of Conservation’s own estimate, it receives about 16,000 reports annually of spills through its Spill Hotline (800-457-7362).  While most of these reports are for releases of small quantities that are cleaned up quickly, some are substantial and require a significant cleanup.

 

The obligation to report petroleum spills is generally covered by New York’s Petroleum Bulk Storage (PBS) regulations and New York’s Oil Spill Act, which is also known as the Navigation Law.  Section 613.8 of the PBS regulations, which essentially is limited to limited to regulated bulk tanks, requires “[a]ny person with knowledge” of a petroleum spill to report it to the Department within two hours of discovery through the Spill Hotline.  The reporting requirement under Navigation Law § 175 also requires reporting within two hours of discovery, but applies to “[a]ny person responsible for causing a discharge.”  It is not limited to bulk tanks, but covers “discharges,” which essentially are defined by Navigation Law § 172(8) as releases of petroleum into State waters of the state or onto lands from which the releases might flow or drain into State waters.

 

Keep in mind that the penalty for failure to report a spill is pretty severe: violations are an offense punishable by a $25,000 fine under Navigation Law § 192.

 

Fortunately, the Department recognizes that it doesn’t make sense to burden the Spill Hotline with minor and not a threat to the environment.  A spill doesn’t have to be reported when all of the following conditions are met:

 

  • The quantity is known to be less than 5 gallons; and
  • The spill is contained and under the control of the spiller; and
  • The spill has not and will not reach the State’s water or any land; and
  • The spill is cleaned up within 2 hours of discovery.

 

A spill is considered to have not impacted land if it occurs on a paved surface such as asphalt or concrete.  A spill in a dirt or gravel parking lot is considered to have impacted land and is reportable.

 

While most times reported spills require little more than a cleanup and signoff from the Department, sometimes spills require a substantial cleanup or management.  In those cases, the Department will send a demand letter for the cleanup to who it believes is the discharger.  Often times, the issue of who really is the discharger is complicated, which can be a real issue when cleanup costs, which can be considerable, are at issue.  If the Department considers you or your company to be a discharger, you may want to seek legal guidance.