Natural Resource Damages Assessment: Strategies for Valuing and - - PowerPoint PPT Presentation

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Natural Resource Damages Assessment: Strategies for Valuing and - - PowerPoint PPT Presentation

Jul 14, 2023 122 likes •350 views

Presenting a live 90-minute webinar with interactive Q&A Natural Resource Damages Assessment: Strategies for Valuing and Contesting NRD Injury and Damages TUESDAY, JUNE 2, 2015 1pm Eastern | 12pm Central | 11am Mountain |

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Natural Resource Damages Assessment: Strategies for Valuing and Contesting NRD Injury and Damages

Today’s faculty features:

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

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

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

TUESDAY, JUNE 2, 2015

Presenting a live 90-minute webinar with interactive Q&A James H. (Jim) Colopy, Partner, Farella Braun + Martel, San Francisco Robert L. (Buzz) Hines, Partner, Farella Braun + Martel, San Francisco

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Natural Resource Damages Assessment: Strategies for Valuing and Contesting NRD Injury and Damages

Buzz Hines Jim Colopy

Farella Braun + Martel LLP San Francisco, CA rhines@fbm.com jcolopy@fbm.com

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Jim Colopy, a partner in Farella Braun + Martel's Environmental Law Department and Product Law Department, and recent Chair of the Department for the last six years, has specialized in environmental law for his entire twenty year career. Jim has represented clients in environmental, natural resource damages, toxic tort, government enforcement, citizen suit, cost recovery and property damage litigation in federal and state courts across the country. Buzz Hines, a partner in Farella Braun + Martel's Environmental Law Department and Product Law Department, is a longtime environmental practitioner. He is the current chair of Farella’s Air Quality and Climate Change group. Buzz represents clients in complex government and private litigation and enforcement actions, including state and federal cost recovery actions, NRD claims, air and water, and hazardous waste actions. A former trial attorney with the Department

  • f Justice Environmental Enforcement Section, Buzz is recognized by

Chambers USA 2015 and is listed in Best Lawyers and the International Who’s Who of Environmental Lawyers.

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  • Natural resources sound in the nature of biological entities:

Under CERCLA: “land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States… any State or local government… [or] any Indian tribe.” 42 USC 9601(16).

  • Five Federal statutes provide for recovery for NRD:
  • 1. CERCLA, 42 USC 9607
  • 2. Clean Water Act, 33 USC 1321(f)
  • 3. Oil Pollution Act of 1990, 33 USC 2702(a), (b)(2)
  • 4. National Marine Sanctuaries Act, 16 USC 1443(a)(1)

5. Park System Resource Protection Act, 16 USC 19jj

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“In the case of injury to, destruction of, or loss of natural resources… liability shall be to the United States Government and to any State for natural resources within the State or belonging to, managed by, controlled by, or appertaining to such State and to any Indian tribe for natural resources belonging to, managed by, controlled by, or appertaining to such tribe… .” CERCLA, 42 USC 9607(f)(1)

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Essence of the NRD Claim

“[Natural resource damages] … are calculated by adding (1) the cost of restoring, rehabilitating, replacing or acquiring the equivalent of, the damaged resources, (2) the diminution in value of those natural resources pending restoration, and (3) the reasonable cost of assessing those damages.” [plus (4) non-use damages] United States v Viking Resources, Inc., 607 F Supp 2d 808, 830 (S.D. Tx. 2009) For the (2) element above – it is more common to think of value of the interim lost use of the natural resource from the time of injury to the time of restoration.

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Standing to Bring a NRD Claim

  • Remember that natural resources are defined by CERCLA as

“…land, fish, wildlife, biota, air, water, ground water, and other such resources belonging

to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States … any State or local government, any foreign government, any Indian tribe, or, if such resources are subject to a trust restriction, any member of an Indian tribe…”. CERCLA 9601(16).

  • Case law has accordingly defined trustees to include those mentioned in this

definition plus –

  • Municipalities if authorized by Governor of State per CERCLA 9607(f)(2)(B).
  • Trustees do not include private parties.
  • To prevent double recoveries, where trusteeships overlap, Coeur d’Alene court

held that trusteeship is divisible.. Coeur d’Alene Tribe v. Asarco, 280 F. Supp. 2d 1094 (D. Idaho 2003)

See also United States v. Asarco, 28 F. Supp. 2d 1170 (D. Idaho 1998), vacated and remanded 214 F. 3d 1104 (9th Cir. 2000)

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An Overview of Natural Resource Damage Assessments (“NRDAs”)

  • NRDAs are administrative processes – differ under each statute
  • NRDAs not required prior to suit
  • May be “cooperative” or “unilateral”
  • Advantages to trustees, including …..
  • Coordination of multiple trustee claims
  • Opportunity to improve quality of evidence
  • Control of the timeline to settlement discussions
  • Potentially obtaining “ the rebuttable presumption”
  • Advantages to responsible parties, including….
  • Opportunity to improve quality of evidence
  • Chance to demonstrate strength of defenses
  • Lower chance for inflation of assessed damages
  • Focus attention away from companion tort claims

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NRDA Under CERCLA – Using DOI Regulations

  • CERCLA NRDA conducted under DOI Regs at 43 CFR Part 11
  • CERCLA NRDA has four “phases”
  • Preliminary assessment screen – 43 CFR 11.20 to 11.25
  • Assessment plan – 43 CFR 11.30 to 11.38
  • Type A assessment – 43 CFR 11.40 to 11.44
  • Type B assessment – 43 CFR 11.60 to 11.84
  • Post assessment – 43 CFR 11.90 to 11.93
  • Trustees advance funds for assessment
  • But see Confederated Tribes of Yakima Nation v. United

States 2007 US Dist Lexis 65001 (ED Wash. 2007)

  • The administrative record of the NRDA must be “complete”
  • Includes information “developed and received” under statute
  • Includes information “considered” as well as “relied upon”
  • Dynamics of cooperative v. unilateral assessments
  • Important safeguards built Into assessment process

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Preliminary Assessment Screen (“PAS”)

  • PAS is critical step in the NRDA
  • PAS required under DOI regulations – 43 CFR 11.23
  • Objective is to determine whether there is a reasonable probability of

making a successful claim – 43 CFR 11.23

  • Authorized official “shall” preliminarily determine that “all” of 5 criteria

under 11.23(e) are met = honored in the breach

  • Authorized official “shall” determine the extent to which there would be

no liability for NRD in light of any or all of 11 stated defenses

  • Irreversible and irretrievable commitment
  • Wholly before December 11, 1980
  • Federally permitted release
  • Application of pesticide product registered under FIFRA
  • Recycled oil from service station
  • Exceptions from liability under CERCLA 107(f)(i)(j) and 114(c)
  • Exclusions in CWA 311(a)(2) or (b)(3)
  • Authorized official must preliminarily assess “baseline”
  • Authorized official must determine that NRDA is warranted

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Assessment Plan- Type A and Type B

  • Objective is to ensure assessment performed in systematic method

under Type A and/or B procedures at reasonable cost

  • Must identify and document use of all Type A and/or Type B procedures

to be followed - 43 CFR 11.31

  • Type B assessment plans must include, per 43 CFR 11.31 -
  • Statement of authority for asserting trusteeship
  • Detailed sampling plan
  • Plan for coordination with remedial activity under NCP
  • Procedure for sharing data with responsible parties
  • Confirmation of exposure
  • Restoration/compensation plan if data sufficient
  • Participation by the responsible parties – 43 CFR 11.32(a)
  • Public participation – 43 CFR 11.32(c)
  • Preliminary Estimate of Damages – 43 CFR 11.38
  • Consideration of Defenses
  • Importance of Baseline

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Assessment

  • Three-Subphase Process in Type B assessments
  • Injury determination subphase – 43 CFR 11.61 et seq.
  • Quantification subphase – 43 CFR 11.70 et seq.
  • Consideration of baseline - 43 CFR 11.70(a)
  • Consideration of defenses – 43 CFR 11.71
  • Damage determination subphase – 43 CFR 11.80 et seq.
  • Stated v. revealed preference economics
  • Disclosure of the Restoration and Compensation Plan – 43 CFR 11.81
  • Disclosure of the Preliminary Estimate of Damages – 43 CFR 11.38

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Post-Assessment

  • The Report of Assessment – 43 CFR 11.90
  • “Demand in writing”/Notice of Intent to Sue – 43 CFR

11.91

  • Extension of the 60-day Period – 43 CFR 11.91
  • Deposits into the Restoration Account – 43 CFR

11.92

  • Settlement Options
  • Settlement Strategies

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Injury determination

  • Covered natural resource?
  • Injury to resource?
  • Connection between incident/spill and injured

natural resource

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Injury quantification

  • Baseline condition of resource
  • Extent or scope of injury
  • Baseline services
  • Recoverability of resource
  • Reduction in services attributable to release

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Damage determination

  • Value of injured resource vs. cost to

restore/replace resource

  • Value of services lost
  • Compensable value/lost use value

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Cooperative assessment

  • Joint technical assessment of damages
  • Transaction costs
  • When does it make sense to proceed in a

“cooperative” fashion?

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Best practices

  • Overview and Recap
  • Injury determinations
  • Optimizing your position through prudent use of

the NRD assessment process

  • Cooperative assessment considerations

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Questions and Conclusion

rhines@fbm.com jcolopy@fbm.com

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