Water Law; Environmental Law; Security Law Archive - Attorney Blog | Natural Resources, Commercial Law

Archive for the ‘Water Law; Environmental Law; Security Law’ Category

Brownfield Due Diligence – Don’t Get Married, Get Engaged

Posted on: October 22nd, 2016
by David Ganje

Let’s not pretend. We have messed up parts of mother earth. Now let’s use the tools at hand to undo the mess and be good stewards again. Brownfield recycling, that is the brownfields program is one means to that end. If you are looking to start a new redevelopment project don’t get married, get engaged. Do your due diligence and explore the possibilities from exposing a brownfield.

The EPA defines a brownfield as “real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant”. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) mandated that the purchasers of property are liable for any contamination on this property regardless of when they acquired a site. However, CERCLA also created a defense known as the “innocent landowner defense” that can only be used if “appropriate due diligence” was conducted prior to the acquisition of the property. Appropriate due diligence has been exercised if an environmental site assessment (ESA), a thorough investigation of a sites current and previous owners, has been prepared.

ESA’s have an average cost of about $4,000 for a small business acquisition and can vary depending on variety of factors specific to the job. The typical businesses that leave behind brownfields include gas stations, dry cleaners, railroads, oil refineries, liquid / chemical storage facilities, and steel / heavy manufacturing plants. Typical hazardous materials they leave behind include hydrocarbons, solvents, pesticides, heavy metals such as lead, and asbestos. Much of the information about previous and past owners is public.

What is so dangerous about leaving these brownfields alone? Many of these brownfields are abandon commercial properties and tend to be an eyesore in the community. Not only can this lead to decreased property values in surrounding neighborhoods but the property can also pose serious health risks for new tenant and their neighbors. For example, the Love Canal disaster in Niagara Falls, in the late 70’s. Hooker Chemical Co. dumped over 20,000 tons of chemical waste in the unfinished and abandoned Love Canal. The canal was later paved over and sold to the city. The city then developed residential neighborhoods and schools on top of the contaminated land. About 25 years later, after an unusual amount of rain, a large amount water absorbed by the land upwelled the “entombed” chemical waste. Residents complained of chemical burns, organ failures, mental disabilities, and congenital birth defects. Eventually local families were relocated and the land was cleaned up. However, in recent years, residents on the rebuilt lands have complained of health issues similar to the ones originally reported 35 years earlier and have filed lawsuits against Hooker Chemical Co.’s parent company.

Once you suspect that the land you are planning to purchase could be a brownfield in need of cleanup what can you do? If you have not purchased the land yet you could include provisions in the purchase agreement that can indemnify you from liability for claims associated with existing contamination.

If you have done your due diligence and you know what you are getting into then you should already know that the Environmental Protection Agency (EPA) has set up the Brownfield Cleanup Program (BCP) “to encourage private-sector cleanups of brownfields and to promote their redevelopment as a means to revitalize economically blighted communities.” The BCP provides incentives through, grants, loans, training, and tax benefits to aid with the cleanup. Since the cost of cleanup is considerable the BCP may provide several hundred thousand dollars towards the cost of cleanup. This money comes with strings attached of course. Among other things, the costs are shared with the property owner, up to 20%, and the brownfield site must be cleaned up within a three-year period. In addition to tax incentives and financial assistance provided through the various governmental programs the land developer should be comforted by the fact that his contributions have also helped the environment. Furthermore, awards are given out by the NYC Brownfield Partnership providing public recognition for the most successful brownfield redevelopment projects.

Additionally, taking on a new brownfield project in NYC grants access to special municipal assistance programs through the NYC Office of Environmental Remediation (OER). The OER was established in 2009 to “design, build, and operate a set of world class municipal programs to advance cleanup and redevelopment of brownfield sites.” Since then they have developed over thirty new programs that take some of the most blighted properties in some of the most disadvantaged neighborhoods, cleans them up, makes them safer, and enables new development that brings new jobs and affordable housing.

The OER also distributes a variety of letters to aid sellers, lenders, and prospective buyers of brownfield properties. An “environmental review and assessment letter” is issued after the OER conducts an ESA on the property in question. It is used to provide assurances against liability. A “standstill letter” contains a preapproved remedy plan developed by a seller and the OER. The letter can be used to enroll the property in a brownfield cleanup program so that a prospective purchaser might receive financial assistance. This letter is intended to provide comfort to a prospective purchaser and its lender since the purchaser will be able to better estimate the cleanup costs.

If you have already started a construction on a new project and just learned of contamination, you may still be able to request a “look back letter” from the OER which would grant liability protection. Although a developer can gain liability protection after a project has started, they will not be eligible for brownfield funding incentives.

Many prime redevelopment sites are located on brownfields, don’t get married. Get engaged first and do your due diligence.

David Ganje practices law in the area of natural resources, environmental and commercial law.

Free Land – South Dakota Style

Posted on: October 22nd, 2016
by David Ganje

Water and land do not mix well in South Dakota. In the last few days South Dakota gave up on its disputed claim to a 500 acre three-mile-long island known as Goat Island located in the Missouri River. The state conceded jurisdiction over the claimed island giving control to the federal government. The lack of media coverage analyzing the pros and cons of this recent withdrawal of South Dakota’s disputed Goat Island land claim is disappointing. The state had argued that Goat Island was on the South Dakota side of the river when Lewis and Clark mapped the river in 1804. This is a public matter involving a state claim to land on the Missouri River. What were the reasons for the settlement of the claim? How is it good for South Dakota? The media did not ask. The government press releases did not say. Now the island is in the hands of the feds. The hand of government did this deal, but we know not the reasons for the decision.

Property boundaries matter when your land is next to a river or a body of water. If the river deposits land onto your riverfront by “accretion”, then who owns it? Accretion is the gradual increase to land, notably riparian land, stemming from the movement of water. A meandering river has no master. Certainly man-made law has not corralled a meandering river with anything close to perfection, or to some landowners, with any degree of satisfaction. Questions come up when riverfront boundaries naturally shift due to erosion or accretion.

South Dakota has enacted several laws regarding accretion rights. The first important section states that when land forms from natural causes gradually over time next to a stream or river such land belongs to the owner of the bank, and it does not matter whether the water is navigable or not. The second concerns avulsion, or the violent or sudden carrying away of land by a river or stream to another part of the river or opposite bank. Under the statute the owner of the original land may reclaim the land within one year of the new owner taking possession. And the US Supreme Court has gotten into the act by ruling in the 1970s that the doctrine of accretion applies to changes in the river caused by both artificial as well as natural causes.

One lesson to learn from old man river is: Don’t use fuzzy boundaries for the legal description in your deeds and contracts. That is, do not let your lawyer describe the boundaries of your land by reference to a body of water.

It must be wonderful to be the state. South Dakota can give land away, and it can receive control of newly formed lakes for free. In a recent law case involving a dispute over the ownership of three newly-formed lakes in the state, the state Supreme Court ruled that effective ownership of these three newly formed lakes, all on privately owned land, should be held in the name of the state. The Parks case ruling stated the lakebeds would continue to be owned by the private landowners but the lakes and water of the lakes are to be controlled by the state for the benefit of the people of the state. The result: more than two thousand surface acres of land, now in the form of lakes, would be controlled and supervised by the state and not the landowners. Surprisingly, no mention of compensation to the landowners was made for this taking. The state taketh and the state giveth away. It is wonderful to be the state.

David Ganje practices law in the area of natural resources, environmental and commercial law.

‘Ghost claims’ of dead pioneers haunt South Dakota water rights

Posted on: September 26th, 2016
by David Ganje

Author Seth Tupper Journal staff

It’s a safe bet that neither John P. Plunkett nor Edward Lynch will show up to defend their water rights when a state board considers terminating them later this year.

That’s because Plunkett and Lynch are dead — and have been for a long time.

Yet their joint rights to divert water from Rapid Creek live on, because they obtained the rights in 1896, more than a decade before the government of South Dakota began regulating the use of water.

The grandfathered status of the old Plunkett-Lynch water rights means they are still technically in force, as are 437 other sets of water rights filed prior to the adoption of state water-use laws in 1907. Many of the rights are for large amounts of water, and some are attached to famous names like Seth Bullock, the legendary lawman of the Deadwood gold-rush era who still technically owns a water right on the Redwater River in Butte County.

One modern expert refers to the pre-regulatory water rights as “ghost claims,” and their potential to haunt modern water management is highlighted by the Plunkett-Lynch case. The case could soon be the subject of an adversarial hearing involving state regulators who want to cancel the water rights and a local rancher, Richard Rausch, who wants to keep the rights attached to the land he leases…..

To read the entire article, visit the Rapid City Journal here.

Also available via FarmForum.net

Solid Waste Management In The Dakotas

Posted on: September 26th, 2016
by David Ganje

Municipal Landfills in North Dakota

The operation of a municipal landfill, also known as a solid waste facility, involves legal risk, such as damage caused from a landfill leaking or by landfill contamination of groundwater. Modern landfills are created with liners and other collection systems designed to prevent contamination of the ground, groundwater and the air. Despite good practices, in 2003 the U.S. Geological Survey (citing the EPA) opined that “all landfills eventually will leak into the environment.”

In North Dakota municipalities are required, in the event of a spill or leak, to show their financial ability to take corrective action, but only after the event has already occurred. North Dakota does not require municipal landfills to maintain environmental or pollution liability insurance. Consider a landfill just west of Watford City, which was recently found storing thousands of pounds of illegal radioactive material. The costs to clean up a landfill leak can be beyond the financial capability of a municipality if adequate preparations are not made. An operating landfill is not the only party who might be on the hook to pay for leaks. By way of illustration, Grand Forks has promised to indemnify the operator of their landfill from any and all claims, suits or causes of action that arise from the landfill.

To put this liability issue in financial perspective, the cost to clean up a leaking 150-acre landfill next to a drinking water supply in Burnsville, Minn., was recently estimated by the state at $64 million. These clean up events are the type addressed by landfill pollution insurance, but few municipalities seem inclined to carry the insurance. I am not aware of any North Dakota municipal landfill that carries pollution liability insurance. This is akin to riding a motorcycle without a helmet. Landfills in the state are, in many cases, owned and run by cities and counties. Understand that municipal landfills are dutiful in complying with state and federal environmental regulations. State regulators and municipalities are following relevant statutes and rules. That is not the issue. The challenge is the risk of pollution liability, also called environmental liability – no small matter in today’s world, with costs that can reach into the millions.

Municipalities in North Dakota are not necessarily alone when a leak occurs. North Dakota maintains the Municipal Waste Landfill Release Compensation Fund, which would reimburse municipalities for reasonable corrective costs, including labor, testing, machinery, and consulting fees. However, the owner or operator must pay the first $100,000 for corrective action. Moreover, the Fund will not protect owners and operators who are negligent, or who caused the leak through misconduct, at the sole determination of the State. The Fund will not even reimburse for costs incurred through bodily injury or property damage. It is not a catch-all for landfill environmental liability.

If the Municipal Waste Landfill Release Compensation Fund cannot handle the issue, the release might be enough to trigger the State Disaster Relief Fund, which is there to help deal with a variety of issues, including widespread and severe water or air contamination. A problem on the scale experienced in Burnsville could be met with this State fund to help. A $64 million cleanup would however reduce the Disaster Relief Fund to near-empty, as North Dakota has just over $70 million currently in the fund.

Unfortunately for municipalities, when a serious landfill leak that cannot be handled at the city level occurs, the Environmental Protection Agency may become involved, triggering a Federal cleanup. Once the EPA gets involved, costs can skyrocket for everyone, and the EPA will bring suit against every party, including a negligent municipality, involved in the leak to pay for the cleanup costs. Facing off against the EPA in a million-dollar suit is the last place a municipality wants to be. It would be better to be able to handle landfill leaks with insurance, rather than involving other bureaucratic organizations who will use money inefficiently and then demand repayment.

This fund or ‘security account’ held by the state is not a complete answer, but it is a good start. Compare this with South Dakota which leaves municipalities buck naked to the law. South Dakota leaves municipalities at great legal risk. The South Dakota delegating law states that owners or operators of landfills are forever responsible for any pollution or legal problems caused by stored solid waste. The state has no special fund to deal with this issue. South Dakota’s rules allow a municipality to keep a separate fund (money deposited in a bank account, for example) to protect against the costs of a leaking landfill, or alternatively for coverage of such a leak by purchasing pollution insurance. Nevertheless, to maintain a separate fund large enough to cover a landfill leak is beyond the financial capability of municipalities in both states. Brown County, the third largest county in South Dakota, maintains a separate fund in the amount of $240,000. That is not enough money to cover a possible leak. Brown County is one of the municipalities that does not carry landfill pollution liability insurance. This is a problem, especially considering that the Brown County landfill makes a profit for the county. Yet Brown County will not consider pollution liability insurance to protect the landfill.

Just because the North Dakota has some financial support for landfills does not mean that preventative measures should be ignored. Government operated enterprises should not be so callous. The old concept of sovereign immunity (“the king can do no wrong”) is quickly becoming old law. The growing need for landfills is not going away. To the contrary, solid waste is increasing yearly. While North Dakota is more prepared than its neighbor to the south, there are still things that should be done. The State should protect municipal landfills by requiring landfills to hold insurance covering operating pollution events, and municipal landfills should choose to do so whenever possible.

Tribal Water Rights – The Road to Securing Water

Posted on: September 8th, 2016
by David Ganje

Tribal Water Rights – The Road to Securing Water
By David L Ganje

“Water is perhaps the most valuable tribal resource remaining and is one of the most significant potential forces of change. The potential size of tribal water rights should not be underestimated.” – Western Water Policy Review Advisory Commission

A Canadian Judge – in making a legal decision — recently recited two important principals of British law, both of which are found in US law. The Judge stated there are two legal maxims, one at common law and the other at the law of equity: First, the law comes to the aid of those who are vigilant, not those who sleep on their rights. Second the legal principle of equity comes to the aid of those who are vigilant, not those who sleep on their rights. Upper Great Plains tribes today must be vigilant in obtaining reserved but yet undetermined water rights. This involves two choices. Litigation or negotiation. In this article I argue that the Upper Great Plains tribes should undertake first, active, public and aggressive negotiation, and then if unsuccessful, litigation to recover water rights. But for the current water rights negotiation by the Standing Rock Sioux tribe, reserve language found in the successful Mni Wiconi Rural Water Supply Project and language found in some tribal water codes, Upper Great Plains tribes have not taken an official position with the BIA claiming reserved water rights. This silence is a mistake. My argument is this: treaties and case law have given Upper Great Plains tribes a property right, which is a right to use and access groundwater and surface water. However Upper Great Plains tribes have not fully sought and claimed that right. Both groundwater and surface water reserved rights must be championed by Upper Great Plains tribes.

While Standing Rock has taken the first step in opening negotiations with the State of South Dakota and North Dakota on the matter of water rights, the US Department of Interior has yet failed to assign a representative from its Indian water rights division to participate in these negotiations. Standing Rock is taking the right action; it is putting on the table the reservation’s water claims and doing it in a serious forum. Standing Rock has not by these negotiations abrogated its claims, and will preserve the tribe’s water rights throughout the negotiations without prejudice to its right to refuse any proposed terms or accept any proposed settlement terms. Having recognized this strategically proper first step by the tribe it is important to disclose the failure of the Department of Interior to participate in the negotiations. The DOI’s failure to participate in the ongoing talks is wrong and contradicts that department’s statutory duties regarding Indian tribes in the US. Interior Secretary Sally Jewell, who has publicly stated the administration’s commitment to resolving water rights, should immediately direct a staff person to actively participate in these water talks.

Some tribes have not yet adopted tribal water codes – legal guides for the tribal community for the management and use of water. Tribes should consider the creation of an official water code as a relevant step to securing water rights. Some tribes may have to amend the tribal constitution in order to properly pass a tribal water code. But it is worth the effort.

Tribal rights to water is a treaty right. It cannot be lost through non-assertion. Indian reserved water rights may be asserted at any time, cannot be lost by nonuse, and are assigned priority dates based on the date for the establishment of reservation. In legal theory the loss of water rights would require abrogation by a tribe or the federal government before the rights could be extinguished. Such an abrogation is in reality irrelevant because this has not and will not happen. Abrogation is not therefore the issue at hand.

It is a mistake to assume that any non-Indian interest group or government agency will make efforts to preserve, advocate for or even address these reserved yet undetermined tribal water rights. The US Army Corps of Engineers (Corps), for example, recognized in congressional testimony in 2004 that the tribes have claims to reserve water rights. Having taken that position, the Corps nevertheless in 2012 proposed a new program to produce revenue for the US government by selling what it called “surplus water” from Missouri River reservoirs. In proposing this new program for the sale of so-called surplus water the Corps created a 204-page report to support its argument for the proposed project. The Corp’s report provided statistics, projections and data but ignored and failed to discuss the existing water rights of tribes. Indian tribes are not subject to the Corps’ general authority to create or impose surplus water regulations.

It has not proven so historically, and it is not to be expected that non-tribal government agencies, whether trust-based or regulatory, have any strong reason to advance tribal water rights. No politician or bureaucrat will seriously address tribal water rights as long as the institution he represents have unchallenged bureaucratic control over water management. The only change preferred by a bureaucracy-in-charge is a change resulting in an expansion of the bureaucracy’s own power. That has been the case, for example, with the slow accretion of non-Indian interests and water demands placed on existing water in the Missouri River. As time goes on there will be less and less water to claim.

The Corp’s recent surplus money project is an example of an agency asserting itself over available water. It matters not whether the available water is called surplus water, water behind a damn, groundwater, or instream flows. A claim was made to the water. The claim did not exist before the Corps did the study and asserted the claim. Had the Corp’s project been successful, that water would have been that much more water taken away and earmarked for management and control by a bureaucracy.
Litigation of reserved water rights is one of the two alternative means to secure water rights discussed in this article. Water rights litigation is a complex, time consuming legal playing field. Much can be achieved, but the time, well known litigation risks and money involved must be kept in mind.

The Crow Creek Reservation recently started water rights litigation in the United States Court of Federal Claims asking for both money damages as well as a request for a ruling quantifying the tribe’s reserved surface water rights to the Missouri River. The Crow Creek complaint calls for money damages, as mentioned, and for a judgment that the tribe is ‘entitled to declaratory and injunctive relief including judgment requiring Defendant (the United States) to establish and measure the reserved water rights held by the tribe, and to quantify the reserved water rights held by the tribe, and to assert water rights on behalf of the tribe and to record legal title to water held in trust for the benefit of the tribe.’

The complaint lists the type of relief that should be requested in reserved water rights litigation. The complaint filed by Crow Creek, however, has problems:

The court in which the complaint was filed does not have full jurisdiction to award the complete relief requested in the complaint. By the reorganization statutes of the Court of Federal Claims is has authority to render declaratory judgments only in matters regarding contract or procurement disputes.
The court is unlikely to get into its main jurisdictional issue: money damages in favor of the tribe. It is unlikely to do this because there is no existing water rights determination or quantification by statute, final decree, or water agreement from which the court could calculate a money damages amount. And, further, the important matter of Indian water rights under the Winter’s doctrine is beyond the general expertise of the Court of Claims.
One of the important requests in the complaint is for injunctive relief. This is also beyond the jurisdiction of the Court of Claims. Bowen v. Massachusetts, 487 U.S. 879, 905 (1988) (“[W]e have stated categorically that ‘the Court of Claims has no power to grant equitable relief.’’
The relevant requests in the Crow Creek complaint are requests for an injunction, for a declaration of rights, for the establishment of water rights and for quantification of water rights. The Court of Claims however has only incidental or collateral jurisdiction over these requests making it unlikely that the court would take on such important, significant and historical remedies.
The complaint does not include a necessary party if it is attempting to finalize tribal surface water rights. The state of South Dakota also has water rights to the river. The state is not named in the lawsuit. The Court of Claims cannot impose duties or obligations regarding water rights or the allocation of the tribe’s claim when a relevant party is not included in the suit.
Any adjudication against or settlement with the United States under the pending complaint would be incomplete as stated in the complaint. Groundwater is an integral part of all Indian reserved water claims. The majority of courts in the United States addressing Indian reserved water rights have acknowledged that Indian reserved water rights also apply to groundwater. The reserved water claims of the Crow Creek reservation, one must assume, also include groundwater. However, the Crow Creek complaint for damages for loss of water resources makes no claim for reserved tribal groundwater rights.

Tribes in the US have found success through water rights negotiations with State and Federal bodies. With an appreciation for the uncertainty of litigation, negotiating is the best first step. Negotiations should be pursued in the following fashion. The master water rights Settlement Agreement should include: an agreement setting forth rights to use and administer waters; and an agreement quantifying reserved water rights for historic and current as well as planned uses; and if there is a specific project planned by a tribe, then that project is to be negotiated and drafted as a separate agreement but integrated as a part of the master Settlement Agreement. Any Settlement Agreement would become effective if the Congress passes a Settlement Act and the President signs the act into law. Once the Settlement Act becomes law, the Secretary of the Interior must execute the Settlement Agreement and the Settlement Contract.

An advantage of multiple party negotiations: actual representatives are present sitting across the table. These face to face negotiations bring out the real differences between the parties without hiding behind silence, animosity or evasive politics. If the negotiated terms do not satisfy the rights of tribes, they are not bound to accept the terms. The final outcome of the negotiations is to be decided by the tribe.

The Snake River Water Settlement Act is a recent example of successful Indian water right’s negotiations. Although the US Senate is not an owíčhota of wisdom and justice, the Senate report discussing the Snake River Water Settlement Act addresses the issue of litigation of water rights versus negotiated water agreements:

“The shortcomings of the general stream adjudication process [this is a fancy phrase for litigation] as a device for water rights dispute resolution have led to an increasing number of agreed-to water rights settlements on streams in the western States where the parties, including Indian tribes, negotiate and compromise among themselves as to quantity, priority dates and other issues, and where the Federal government contributes money to the settlement in order to achieve various goals that could not otherwise be achieved within the confines of a general stream adjudication.”
Sen. Rep. 108-389, at 2-3

The Snake River water agreements provided, among other terms, designated water for a variety of tribal uses on the reservation; recognition of allotment water rights and a due process requirement for tribal regulation of such rights; a right to access and use of springs and fountains on federal lands in off-reservation areas; and instream flow minimums at over two hundred locations. When protecting a people’s rights, it is good to hesitate and think. However, it is not good to hesitate and think and then not act.

Water rights granted to tribes are the most important example in American law of treaty-based reserved rights. Tribes do not however dwell alone in the world of water rights. Tribes should abandon silence on the subject, stick their elbows in the table now and publicly assert their water rights. A tribe cannot secure what it does not itself assert.