Many manufacturers have found themselves in the position of negotiating an order with an environmental agency over environmental conditions at a site. Oftentimes, these orders are the result of extensive negotiations, and they set the regulated entity on a long and detailed path of investigation and/or remediation. The environmental agency issuing the order often wants assurances from the regulated entity that it will complete the work and be able to pay for it. But what assurances does the regulated community get from the environmental agency that the work conducted will be sufficient?
A recent Connecticut case demonstrates the lack of security provided by government orders, perhaps to a greater degree than previously thought. The facts of Commissioner v. BIC Corporation detail a scenario where an environmental agency – the Connecticut Department of Energy and Environmental Protection (“DEEP”) – revoked a consent order a decade after its issuance.
DEEP issued a consent order to BIC Corporation (“BIC”) in 2003, which was modified in 2004, for the investigation of certain properties. Over the course of the next decade, BIC installed 30 groundwater wells and analyzed 786 soil samples as part of the investigation. BIC submitted numerous reports to DEEP detailing the investigation, all of which were approved.
In 2011, DEEP obtained notes from interviews with past BIC employees and, on the basis of those notes, revoked its prior approvals of the reports submitted by BIC. DEEP requested that BIC conduct additional studies and, when BIC refused, DEEP filed a lawsuit alleging that BIC failed to comply with the order. BIC counterclaimed against DEEP, alleging that DEEP breached the order.
Three years after filing its suit, DEEP revoked the order and withdrew its complaint against BIC, denying BIC the opportunity to demonstrate to the court that it complied with the order. The court dismissed the action for lack of jurisdiction, leaving BIC to deal with DEEP on an administrative level. While the court determined it did not have jurisdiction over BIC’s counterclaim, it did have some cautionary words for DEEP, stating:
One wonders whether the commissioner’s tactics may have the undesired and surely unintended consequence of precluding resolution of other cases in the future.
While the DEEP has the power to revoke an order, the facts in Commissioner v. BIC Corporation leave a regulated entity with little certainty that its hard work to investigate a site – with input and approvals from an environmental agency – will result in any sort of certainty or finality. When an entity commits to investigate the environmental conditions at a site under an order, it is making a commitment of time and money to do so. This recent case law may leave the regulated community questioning whether such a commitment is prudent.