Green Building Law Update

Environmental Law and Sustainability for Business

EPA Releases Draft National Recycling Strategy

The U.S. Environmental Protection Agency has released a draft National Recycling Strategy and is seeking public comment through December 4, 2020, with the goal of finalizing it in early 2021.

Maybe not since Plato wrote about the value of reusing waste in the fourth century BC has recycling faced the challenges that we are seeing right now. The draft National Recycling Strategy is released against a backdrop where our current recycling, largely based on notions from the 1960s, no longer makes economic sense. This draft identifies strategic objectives and actions needed to create a stronger, more resilient U.S. solid waste recycling system.

“Recycling is a key driver of the U.S. economy and a way to conserve resources and protect the environment. Environmental benefits include reducing the amount of waste sent to landfills and incinerators, which can reduce the amount of air emissions released into the atmosphere.”

EPA reports the total generation of municipal solid waste (.. yes, a subset of all waste, but a good datapoint) in 2018 was 292.4 million tons or 4.9 pounds per person per day. Of that waste generated, approximately 69 million tons were recycled and 25 million tons were composted. Together, 93.9 million tons of waste were recycled and composted, equivalent to a 32.1% recycling and composting rate (.. but, it is suggested that may reflect “collected for recycling” and not necessarily recycled). However, in response to recent international policy changes related to accepting recyclables, see my blog post The World is Forced to Rethink Recycling, and major domestic changes in use patterns related to more time spent at home and other Covid-19 challenges (e.g., Baltimore City has not collected recycling since August), anecdotal evidence suggests recycling numbers have decreased sharply in 2020.

On November 16, EPA Administrator Wheeler announced the goal to increase the U.S. recycling rate to 50 percent by 2030. The strategy recognizes the historic broad underperforming of recycling programs and that stressing those programs are factors including: confusion about what materials can be recycled; recycling infrastructure that has not kept pace with today’s diverse and changing waste stream; reduced markets for recycled materials; and varying methodologies to measure recycling system performance.

What may be called for is a better approach to resource use and operation of buildings. It is important to accept that EPA’s authority to regulate recycling is fuzzy at best, beyond the agency’s implementation of the Resource Conservation and Recovery Act. Most solid waste collection in the U.S. is at the municipal level.

Benefits of recycling are obvious including conserving natural resources, such as timber, water and critical minerals; and preventing pollution by reducing the need to collect new raw materials. Economic and community benefits include increasing economic security by tapping a domestic source of materials; supporting American manufacturing; conserving valuable resources; and creating jobs in the recycling and manufacturing industries. EPA’s data shows recycling and reuse activities accounted for approximately 757,000 jobs, $36.6 billion in wages, and $6.7 billion in tax revenues

But in response to all of that, including the historic low success rates in recycling programs, EPA has begun a redoubled effort to focus on recycling challenges facing states and municipalities and private (e.g., Cradle to Cradle) programs. In recent years, there have been plastic bag bans, bars on plastic drinking straws and just last month I wrote a blog post, Maryland Becomes First State to Ban Polystyrene this Thursday.

This new federal strategy organizes high-level actions around three strategic objectives to improve the cacophony of state and municipal recycling systems by reducing contamination in the recycling stream, increasing processing efficiency, and improving markets.

To read the draft National Recycling Strategy and provide comments visit: https://www.epa.gov/americarecycles/national-recycling-strategy-and-framework-advancing-us-recycling-system

And we continue to work with businesses to pursue their waste goals, including achieving near zero waste while cutting their carbon footprint and supporting public health, and in satisfying LEED, Green Globes and IgCC waste management plan requirements. Some of the most satisfying sustainability work we have done is working with businesses to maximize resource use and facility operations.

With no good market in which to sell most recyclables and existing laws barring much domestic reuse, it is now time to rethink the solid waste practices that are currently not supported by good science, and disproportionately negatively impact on economically disadvantaged people, which recycling practices have been largely unchanged since the 1960s.

COVID-19 Liability for Building Owners

By Stuart Kaplow on November 15, 2020 Posted in Codes and Regulations, Legal Developments

With Covid-19 spreading across the U.S. and some places reclosing in reaction to the new surge, considered against a backdrop of more than 2,000 new statutes, regulations and executive orders addressing the pandemic that have been enacted in a matter of months, many commercial real estate owners are questioning if they can be liable for damages when someone, whether an employee of a business tenant or someone else, claims to have contracted the Coronavirus Disease (Covid-19) at their building?

And these questions are not unfounded because as of November 1, 2020, legal industry databases of state and federal litigation are tracking more than 6,100 cases involving Covid-19 claims.

But U.S. courts have never addressed a pandemic like SARS-CoV-2 (the current designation for what had been the Novel Coronavirus 2019). There was not a mature plaintiff’s bar during the 1918 Spanish flu. This evolving and rapidly changing experience is and likely will continue to be governed by state, and sometimes local law that varies from jurisdiction. Over time coronavirus pandemic exposure claims may result in a new emergent subset of premises liability case law and in a number of jurisdictions new statutes are already limiting liability, but in most instances it is presumed the longstanding body of premises liability law will control.

In premises liability cases in Maryland, the state’s highest court has adopted the general rule, also applied in a majority of states with some variations, contained in Restatement (Second) of Torts § 343 (1965) that provides:

“A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, but only if, he

(a) knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and

(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and

It is widely accepted that while a property owner owes a duty to exercise ordinary care to keep the premises in a reasonably safe condition, it is not the insurer of the invitee’s safety. Moreover, an invitee cannot maintain a negligence suit merely from a showing that an injury was sustained in the defendant’s building.

No tort case has yet provided an answer to a building owner’s liability for failure to enforce social distancing or to wear a mask, or for that matter to take the temperature of all invitees.

As early as March lawsuits had already been filed in courts in San Francisco and Miami against Princess Cruise Lines Ltd. alleging negligence that passengers on cruise ships became ill with Covid-19 because the ships did not employ proper screening protocols and more.

Historically, state courts have awarded damages for negligent transmission of diseases imposing liability on individuals who have harmed others (from occupational diseases like silicosis inhaled while grinding steel, to cotenants in a two apartment house infected with tuberculosis, and having unprotected sex and transmitting AIDS).

There are likely intervening issues, including significantly that legal action by employees is almost all barred and claims limited to the workers’ compensation system where the employer has insurance (and despite defying the facts, at least 15 states now have an interpretation that assumes an individual who contracts Covid-19 was infected in the workplace triggering workers’ compensation). And while OSHA is providing guidance through a May 19, 2020 Updated Interim Response Plan the agency has issued no new mandates and in fact has announced enforcement discretion as to existing standards, which will further bar employee claims; although many expect that a Biden Administration OSHA will issue an emergency temporary standard which will establish mandatory workplace rules.

Customers, as well as business invitees and even trespassers might be able to articulate some claim, but proof during a pandemic that exposure was in a particular building will likely face insurmountable causation problems not to mention an inability to prove some breach was the proximate cause of the harm?

All of this begs the question if a business owner’s premises liability insurance covers such claims? And while reviewing insurance policies, it is also likely prudent to review liability provisions in tenant leases.

While there are more than 2,000 new federal, state and local statutes, regulations and executive orders enacted in a matter of months to respond to the pandemic, likely more than have ever been enacted in the U.S. on a single topic in such a short period, few have directly impacted matters of liability. Georgia, Idaho, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Utah and Wyoming have each enacted liability shields for civil claims related to SARS-CoV-2 by a newly enacted statute, and of course there are differences between the enactments and what is shielded; and not all would protect a building owner. Alabama and Arkansas’ liability shields were enacted by executive order. Other states have legislation pending. There, of course, has been discussion in Congress about limiting liability for everything from grocery stores and pharmacies to others that have provided essential services, and some lawmakers have discussed eventually making similar protections universal.

I am not aware of any cases interpreting those new laws. I did write an earlier blog post about a concomitant matter, A Force Majeure Decision during the Covid-19 Pandemic.

These are uncharted waters, but exercising reasonable care may be adopting conduct by following available government guidance, including from the CDC and states about buildings. California offers widely quoted guidance on reopening.

And while there is some very good information about reopening in the real estate marketplace including from the U.S. Green Building Council that rolled out a series of pilot credits, including the well regarded Safety First: Managing Indoor Air Quality During COVID-19 credit. But caution must be observed when following third party advice; for example some of the green building industrial complex required cleaning products and disinfectants necessary to achieve a rating system credit are not on the EPA List N of disinfectant products that have qualified for use against SARS-CoV-2 and could expose a building owner to legal jeopardy.

There is a great deal of uncertainty, at this time when we are still learning about this coronavirus. I wrote in an earlier blog post, COVID-19 in Buildings is all about Ventilation, making clear that “until effective vaccines exist and are in wide-spread use, enhanced ventilation in buildings will be key, and even more significant than the important social distancing including community masking, and hand washing, in limiting the spread of SARS-CoV-2.”

There are some things a building owner should likely do. Most state premises liability law provides a duty of a property owner to warn a business invitee of an unsafe condition and while it might sound silly in this instance, posting warning signs is prudent. The CDC has provided some printable signs at the link above that serve to warn and also may allay the concerns of those entering a premises, another key issue. Additionally, some of the newly enacted Covid-19 liability shield laws require specific warnings be posted.

But a building owner should likely not adopt policies that it seeks to impose on others. Arguably there could be liability for failing to reasonably or consistently enforce a self created policy. However, should an owner determine to articulate some Covid-19 policy, it should include a disclaimer, like this one created for a business owner that occupied its own building:

Disclaimer: While the strategies embodied in these policies are intended to help promote health and safety in the built environment, an individual’s health and safety are determined by a number of factors particular to that individual and implementing the strategies in these policies do not in any way guarantee that the individuals in a space will be safe, healthy or healthier, nor that the space will be free from bacteria, viruses, allergens, volatile organic compounds or other pathogens; and the content of these policies does not constitute the provision of medical advice nor is does it represent all possible strategies that may be implemented or recommended to promote health and safety.

Some have asked those coming on their land to sign liability waivers, including notably President Trump’s reelection campaign had supporters sign liability waivers at a Tulsa, Oklahoma rally.

The coronavirus pandemic is obviously unprecedented, and as such it is not possible to predict with any degree of certainty how a court might rule on premises liability or other exposure claims, however, the legal reasoning above may provide guidance on the role of law in this pandemic and possibly mitigating the legal risk to commercial building owners.

While much is still being discovered about this novel coronavirus I have been asked about our business’ adaptations. We believe the best approach to keeping people safe and mitigating risk to owners of buildings is to employ a variety of interventions. In our personal law offices we trust in technology and innovation and we have never closed our offices, but rather after posting warning signs, we adapted our operations, by way of example having stopped recirculating indoor air, increased airflow, upgraded to MERV 13 air filters, and disinfecting air with UV-C light, in addition to social distancing including community masking and hand washing, in our war with SARS-CoV-2.

With more than 6,100 cases involving Covid-19 claims pending, building owners should track liability shield laws in their jurisdiction (.. including because some require warning signs). And it is important that all mitigate the risk in the coronavirus pandemic operation of their building or face the legal risk being another victim of this disease.

COVID–19 in Buildings is all about Ventilation

By Stuart Kaplow on November 8, 2020 Posted in Codes and Regulations, Environmental, Local Government

This post is about what we know today about how to occupy commercial and public buildings, from offices to schools, in order to prevent the spread of the SARS-Cov-2 (the now designation for what had been the novel coronavirus 2019).

If in 1992, “it’s the economy, stupid” was the phrase coined as the message of the day, today as we face another surge in SARS-Cov-2 cases, it should be “it’s the ventilation, stupid.”

This is taken from a Zoom webinar I gave last week and is actually an update to my (.. admittedly very widely read) blog post on April 29, COVID-19 and the Risk from Recirculated Air in Buildings, but I must acknowledge, while this may refresh your recollection, there is little if any new guidance. And you might ask, ‘why advice from an attorney?’ to which I say, as an environmental attorney who reviews a lot of standards and codes, including about indoor air quality, I offer a perspective where others have not, including that my now much quoted April 29 blog post that was among the earliest writings on the topic.

In addition to more widely recognized transmission via direct contact with respiratory droplets generated by infected people or from contaminated surfaces, inhaling fine droplets and particles (often described as aerosols) being smaller than 10 microns is a principle pathway for infection of SARS-Cov-2. While uncertainties exist with respect to transmission pathways, it is beyond dispute that we cannot wait for 100% scientific certainty and owners of commercial buildings must now target airborne transmission within those buildings as part of any larger strategy.

Much of this can be easily implemented without much first dollar cost.

First and foremost, open the windows! If the building has operable windows, by all means provide ventilation by introducing outdoor air through those openings in the wall.

Increasing numbers of experts who study indoor air quality suggest the Centers for Disease Control and Prevention has placed insufficient emphasis on protection from small, virus laden, airborne droplets within the built environment. While others that deal specifically with buildings, like REHVA (the Federation of European Heating, Ventilation and Air Conditioning Associations) and ASHRAE (previously, the American Society of Heating, Refrigerating, and Air-Conditioning Engineers), have both acknowledged the indoors airborne hazard and in response described ventilation control measures.

Of course, the measures described here must be implemented by building owners in combination with increased disinfection of high touched surfaces, closing water fountains, and encouraging occupant behaviors like community wide use of face masks and hand washing.

Reasonable, but not certain inferences, including REHVA guidance, tell us:

Ventilation is key to reducing airborne transmission of SARS-Cov-2. Ventilation is the process of providing outdoor air to a space or building by natural or mechanical means to maintain the quality of indoor air. Appropriate building engineering controls are necessary and proper including avoiding air recirculation, enhanced by particle filtration and air disinfection, and avoiding overcrowding.

The most significant REHVA recommendation is “no use of recirculation” in any building with a mechanical ventilation system. However, the recirculation of indoor air is actually required by law, through application of standards incorporated into building codes, to save energy in the operation of buildings. But recirculated air can transport airborne contaminants including SARS-Cov-2 from one indoor place within a building to other areas in the building.

Particulate filters (MERV 13 filters and above) and disinfection equipment in recirculated air streams (such as ultraviolet germicidal irradiation and germicidal ultraviolet) can significantly reduce this risk, where feasible, but they need to be professionally installed and then regularly serviced.

Additionally, portable air cleaning machines may be beneficial in modest sized spaces.

Significantly, in a mechanically ventilated building, ventilation rates should be increased by HVAC system modifications. Increase air supply can be accomplished by extending operating times to start ventilation at least 2 hours before building usage, if not 24/7. Multiple matters need to be considered in addition to only the ventilation rate, including temperature control, relative humidity, air flow distribution and direction.

Again, if ventilation is provided by opening windows, by all means, open them. Theoretically at least, natural ventilation could introduce pollutants from the outside air, but ..?

Lest it be lost on anyone, ventilation plays a critical role in removing exhaled virus laden air, thus lowering the overall concentration and therefore any subsequent dose inhaled by the occupants.

Concomitantly, and while it might seem obvious, minimizing the number of people within an indoor space (from classrooms to restaurants and ..) accomplishes the same in limiting the spread of SARS-Cov-2.

Of import the science does not support plexiglass room dividers (.. becoming common in courtrooms and restaurants) for reducing risk of airborne transmission. Maybe they do NOTHING, but anecdotal evidence articulated by environmental engineers suggests they change the airflow patterns in the room and can cause pooling of air and hotspots, dangerously reducing ventilation effectiveness. Plexiglass barriers are only effective in preventing spray-borne drops from hitting you in the face if you are very close to a person (e.g., a sneeze guard for a cashier in a supermarket). It is like a shield to protect you from someone who is trying to spray you with a water gun.

World Health Organization curated studies describe that humidification and air-conditioning have no practical effect as coronaviruses are quite resistant to environmental changes and are susceptible only for a very high relative humidity above 80% and a temperature above 30 ˚C.

Note, duct cleaning has no practical effect and changing of outdoor air filters is not efficacious.

Arguably retro commissioning or otherwise tuning up HVAC systems could be advantageous or not.

But this is Not what is being done in the U.S. today. In fact, many local codes make increased ventilation illegal. ASHRAE 62.1, the standard specifying ventilation rates “to provide indoor air quality that is acceptable to human occupants and that minimizes adverse health effects” is widely suggested to not be enough in a SARS-Cov-2 period building, despite being mandated by many jurisdiction that have adopted the ICC codes that incorporate the standard by reference. And the use of no recirculated air, at all, is considered extreme by some, but likely necessary for a period of time (i.e., maybe until the population has been vaccinated?) in order to prevent the spread of coronavirus. ASHRAE’s leadership issued two statements last Spring in response to SARS-Cov-2, including, “changes to building operations, including the operation of heating, ventilating, and air-conditioning systems, can reduce airborne exposures.” But many building owners believe the ASHRAE epidemic task force, heavily weighted with academics, has been too slow to do anything (the European based REHVA acted months ago) and should do more, promptly providing direction on suspension of use of its standards, in particular those related to recirculated air and/ or provide greater guidance on filtering viruses.

State and local codes officials have, almost without exception failed, despite their more than 2,100 new SARS-Cov-2 related statutes, regulations and executive orders, to suspend code (BOCA, IECC, IgCC, etc.) requirements mandating use of recirculated air and the like. Code requirements for demand controlled ventilation should also be disabled during this pandemic.

Moreover, executive orders that close a restaurant or bar or other business after the building has been retrofitting to exchange indoor air 20 times per hour, avoid air recirculation, enhanced by particle filtration with MERVE 13 filters and air disinfection with UV-C technology, and additionally avoids overcrowding; are at best the wrong headed decisions of lazy policy making public officials and at worst unconstitutional takings without rational basis.

Make no mistake, “it’s the ventilation, stupid.”

Until effective vaccines exist and are in wide-spread use, enhanced ventilation in buildings will be key, and even more significant than the important social distancing including community masking, and hand washing, in limiting the spread of SARS-CoV-2.

To Make Dishwashers Great Again?

By Stuart Kaplow on November 1, 2020 Posted in Codes and Regulations, Environmental, Federal

Last Friday the U.S. Department of Energy issued a final rule effective November 30, 2020, that will once again permit American households to purchase dishwashers that actually clean dishes, as they had done for most of the machine’s 130 year history.

The October 30 final rule does not force anyone to change their currently installed dishwasher. And new machines will not be available for this year’s Thanksgiving meal, as future rulemaking is contemplated and manufacturers must produce the new class of machine. But the Department of Energy is giving consumers the choice to buy dishwashers that clean again while using less energy and less water.

Some might think it crazy that the federal government regulates dishwashers?

Congress enacted the first energy efficiency standard for dishwashers in 1987. The Energy Policy and Conservation Act (.. yes, the same law under which the Edison lightbulb was make illegal) has been updated three times, most recently by the Department of Energy in 2012. Arguably, dishwasher water and energy use have each declined by more than 50% over the past three decades.

The resultant effect is that modern dishwashers don’t clean dishes or cutlery well. Such is not surprising when hand dishwashing relies largely on physical scrubbing to remove food particles, the machine version relies on spraying hot water and heat, such that less water and less heat produce less cleaning over a longer period of time. Dishwashers that once took an hour from wash to dry today average two hours and 20 minutes, and even then they don’t accomplish the task. A 2016 GE Appliance survey of 11,000 dishwasher owners found that having to wait for hours for dishes to be done is a major consumer complaint.

Enter the Competitive Enterprise Institute. In 2018, the Department of Energy received a petition from the CEI to define a new product class under the Energy Policy and Conservation Act, for standard residential dishwashers with a cycle time for the normal cycle of less than one hour from washing through drying. Following evaluation of the petition and receipt of more than 2,700 public comment, the Department granted CEI’s petition and proposed a dishwasher product class with a cycle time for the normal cycle of less than one hour. This final rule establishes a new product class for standard residential dishwashers with a cycle time for the normal cycle of one hour or less from washing through drying.

Some environmental zealots are not happy.

But getting the facts and science right, besides reducing the time consumers expend scrubbing and drying (.. think of improved quality of life), according to the EPA dishwashers use 3.5 to 5 times less water than it takes to do the job by hand (.. and yes, that is water that requires energy to be heated). They also sanitize dishes and even rinse away food allergens, that most hand washing cannot accomplish, making the average 1.5 kWh at a cost of 17 cents for electricity (to run a heavily soiled load) a bargain.

And curiously, the Association of Home Appliance Manufacturers has argued that dishwasher manufacturers have made significant investments to meet the current standards, and that relaxing (or any unexpected change in) the standards would make these stranded investments. But with more than 8 million new machines sold each year, manufacturers will get over it.

And lest you think this is not a big deal, more than 75% of households in the U.S. have a dishwasher, many of which take more than 2 hours to not actually clean the dishes.

We are already working with home and condominium builders on the renewed sense of possibility marketing the installation of the new dishwashers.

And yes, it is crazy, if not also bad environmental public policy that the federal government regulates the robot in my kitchen that cleans and dries the dishes; and keeps changing the rules to the point that the machine first invented in 1886 no longer accomplishes its purpose. This less bad new environmental regulation will allow Americans a renewed sense of purpose making dishwashers great again.

HREC in a Phase l is Not a Recognized Environmental Condition

By Stuart Kaplow on October 25, 2020 Posted in Codes and Regulations, Environmental

Among the most misunderstood term in a Phase I environmental site assessment is the Historical Recognized Environmental Condition.

The environmental professionals who perform these assessments by and large do not take heed of Eduardo Galeano’s quote, “History never really says goodbye. History says, ‘see you later.’”

By way of background, a Phase I environmental site assessment is the process of evaluating a property’s environmental conditions and assessing potential liability for contamination.

More precisely, ASTM International Standard E1527-13 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process describes good commercial and customary practice for conducting an environmental site assessment of a parcel of commercial real estate with respect to the range of contaminants within the scope of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and petroleum products.

The purpose of a Phase I is almost universally to permit a user to satisfy one of the requirements to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations on CERCLA liability. That is, a Phase l constitutes all appropriate inquiries into the previous ownership and uses of the property as defined in the EPA issued rule.

It has been estimated there were more than 800,000 Phase Is completed last year in the U.S. I wrote a blog post in January about the huge expansion in the space, Phase I Assessments for Tenants are the Hottest Environmental Issue in 2020.

And in another blog post last month, I wrote, I Just Read my 1000^th Phase I Environmental Site Assessment this Year. A properly drafted Phase I can create huge dollar advantages serving as a marketing piece in an associated real estate transaction, be it a sale, a lease or a loan secured by real estate or .., while a poorly worded report can imperil the deal.

ASTM E1527 – 13 describes an Historical Recognized Environmental Condition as ..

“a past release of any hazardous substances or petroleum products that has occurred in connection with the property and has been addressed to the satisfaction of the applicable regulatory authority or meeting unrestricted use criteria established by a regulatory authority, without subjecting the property to any required controls ..”

Some context is useful. A Recognized Environmental Condition (a REC) is “the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment.” The presence of a REC can thwart a contemplated real estate transaction.

And an Historical Recognized Environmental Condition is distinct from the Controlled Recognized Environmental Condition (a CREC) which applies to an environmental condition on a site that has received regulatory closure but are still subject to controls. A CREC is a subset of a REC.

Significantly, an Historical Recognized Environmental Condition is not a REC. To be clear an Historical Recognized Environmental Condition is not a recognized environmental condition for the purposes of a Phase I.

It is almost that simple. For a past REC to be determined an Historical Recognized Environmental Condition, the release or other condition must have been previously cleaned up or now meet current regulatory standards without clean up.

Additionally, in the event of prior regulatory intervention related to the condition, that the final action did not require use restrictions or engineering controls (restrictions on using water for drinking or a cap or the like).

A good example of an Historical Recognized Environmental Condition that is very common is when a regulatory agency issues a “no further requirements” determination as an UST is properly abandoned in place.

And to be an Historical Recognized Environmental Condition, the condition must meet current regulatory standards.

Note, some conditions identified as an Historical Recognized Environmental Condition under the prior version ASTM E1527-05 will no longer meet this determination under the revised express language of current, 2013, version ASTM E1527-13.

Arguably, for the vast number of properties, a Phase I identifying an HREC is a very good thing because it means the property has been managed in that the historic environmental issue “has been addressed to the satisfaction of the applicable regulatory authority.”

Again, an Historical Recognized Environmental Condition (an HREC) is not a Recognized Environmental Condition for the purposes of a prospective purchaser seeking protection from potential liability under CERCLA.

2018 IgCC to be Adopted in Baltimore City

By Stuart Kaplow on October 18, 2020 Posted in City, Green Building, Green Globes, IgCC

Last Monday evening an ordinance was introduced in the Baltimore City Council to adopt the 2018 International Green Construction Code.

In the realm of green building this is a big deal. In the more than 4,400 code adopting jurisdictions across the country only the town of Gaithersburg, Maryland has adopted the 2018 IgCC. It is worthy of note that a second jurisdiction, Montgomery County, Maryland (that includes the municipality of Gaithersburg) has promulgated regulations adopting the 2018 IgCC, but the code is not yet in effect.

I have regularly and consistently been critical of enactments of mandatory green building codes, as violative of the core principal modern green building is built upon that sustainable construction is a voluntary non regulatory response such that the built environment that can repair the planet.

But in this instance it is necessary to understand the context that Baltimore City was among the first in the nation when it enacted a mandatory green building law in 2007 that remains among the most sweeping of that in any major American city. The existing green building code mandates that nearly all newly constructed or extensively modified building must be certified green.

Accepting that this new green code replaces an existing green building mandate, Bill 20-0630 should be applauded as an excellent enactment of the 2018 IgCC, far superior to what Gaithersburg or Montgomery County have done.

Make no mistake, Baltimore is not greenwashing. The 38 pages of amendments to the form 2018 IgCC both cause the code of conform to the existing regulatory scheme in the City and tweak many of the difficult provisions of the form document that have likely caused other jurisdictions to take a pass on this code (.. click here for a free copy of the IgCC).

As proposed, the 2018 IgCC will apply to all building except not 1 or 2 family dwellings and not muli-family dwellings with no more than 3 stories and no more than 5 dwelling units.

Most significant, drawing on the current law, the Baltimore version of the 2018 IgCC is a voluntary code. That is, there are options; there are alternative compliance paths, including a structure that achieves:

LEED Silver certified or better,
Certain multi family residential and mixed use structures, NGBS Silver or better,
Enterprise Green Communities certification, or
GBI Two Green Globes rating.

Also of paramount import “the code official may, in unusual circumstances and only on good cause shown, grant an exemption from any requirement of this code ..”

Wisely, this enactment ameliorates the harsh effects of some of the form 2018 IgCC provisions that are unsupported by good science and appear to be the vestiges old trade group infighting at ASHRAE, including by way of example when in an effort to address urban heat island effect (within a major Northeastern city), Baltimore has reduced the area that must be mitigated to “40% of the site hardscape.”

To add flexibility while preserving sustainability, the enactments creates a new section eleven for electives, of which at least 10 points must be achieved. Those electives are provisions extracted from the form code that projects in Baltimore may not be able to reasonably achieve.

All 10 elective points are satisfied if the project pursues a net zero certification, including the International Living Futures Institute Zero Energy or Energy Pedal or LEED Zero Energy (and the project need only provide documentation demonstrating acceptance into the monitoring period).

Baltimore Department of Housing officials have done a good job at striking a balance with the larger environmental industrial complex and the real estate community when the City is surrounded by jurisdictions that do not have mandatory green building laws.

It should not be lost on the reader that the State of Maryland has to date declined to adopt the 2018 IgCC as a means of satisfying the State high performance building mandate for State capital projects, including new public school building, instead leaving in place a heavily amended version of the now out of date 2012 IgCC that no project has ever utilized. So, the 2018 IgCC does not apply to new public school building or other new State funded building in Baltimore City, Gaithersburg or Montgomery County.

The 2018 IgCC is not for the faint of heart, even with these 38 pages of amendments. There are no 2018 IgCC buildings, yet, anywhere in the country. Recall maybe only 17 or so (.. out of 4,400 code enacting jurisdictions) ever adopted the 2012 version of the IgCC, and Boulder County may be the only place to adopt the 2015 IgCC, so guesstimating difficulty in construction and estimating increased first construction cost is speculative at best. The only jurisdiction I am aware has used the 2018 IgCC, for any purpose, is Denver that included it within its voluntary 2018 Denver Green Code housing pilot program as a compliance option with LEED Platinum, Net Zero Energy or Passive House +Non-Energy DGC. That is, Denver determined the 2018 IgCC to be an alternative to LEED v4 Platinum!

Projects in Baltimore will certainly select one of the alternative compliance paths (.. most major projects will pursue NGBS certification) and avoid the 2018 IgCC until there is some experience with this green code.

Of course, mandatory green building in Baltimore has its critics, from those who believe the City with the highest murder rate and among the highest violent crime rates in America should focus on making the City safe, to those who believe during a COVID-19 pandemic City government should not be enacting new building regulation that will not permit increasing outdoor air ventilation; disabling demand-controlled ventilation; further open minimum outdoor air dampers, as high as 100%, thus eliminating recirculation; improving central air filtration to MERV-13; or keeping systems running longer hours, if possible 24/7; etc.

This ordinance boldly describes its purpose to “reduce the negative impacts and increase the positive impacts of the built environment on the natural environment and building occupants.” Mandatory green building has been and remains the law in Baltimore City. Bill 20-0630 will make the flavor of green building bigger and better while more palatable for all of the City’s occupants, and it may just help repair the planet.

Supreme Court to decide Climate Change Case

By Stuart Kaplow on October 11, 2020 Posted in Climate Change, Environmental

While this week the confirmation of Judge Amy Coney Barrett begins in earnest before the Senate Judiciary Committee, last week the U.S. Supreme Court granted BP’s petition for a writ of certiorari in BP P.L.C. v. Mayor and City Council of Baltimore, a much watched climate change case.

In 2017, a number of state and local governments began filing lawsuits in state courts against various energy companies, alleging that the companies’ worldwide extraction, production, sale, and promotion of fossil fuels had caused injury by contributing to global climate change, even though most of the fossil fuel companies were nonresidents of the states where the cases were filed.

Those lawsuits primarily assert that the extraction, production, sale, and promotion of fossil fuels constitute a public nuisance and give rise to product liability under state common law and state consumer protection statutes; the plaintiffs are seeking relief largely in the form of compensatory and punitive damages. The defendant energy companies removed nearly all of those lawsuits to federal court.

In this case, the defendants are 21 domestic and foreign energy companies. The plaintiff is the municipal government of Baltimore, Maryland. Like a number of other state and local governments, Baltimore City filed this action against energy companies in Maryland state court, seeking to recover damages under state law for harms that it claims it has sustained and will sustain due to global climate change. As in other similar cases, the energy companies removed this case to federal court, asserting multiple grounds for removal. The district court remanded the case to state court, and on appeal the federal appellate court agreed (although such was inconsistent with other federal appeals courts), and energy companies filed this petition with the Supreme Court.

On the face of the pleadings, this case is narrowly about procedure in appellate court jurisdiction,

Whether 28 U.S.C. 1447(d) permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court when the removing defendant premised removal in part on the federal-officer removal statute, 28 U.S.C. 1442, or the civil-rights removal statute, 28 U.S.C. 1443.

And while a federal court of appeals ordinarily lacks jurisdiction to review a district court’s order remanding a removed case to state court, other federal courts of appeal have found there is authority for this appellate review, but moreover this is a case about climate change of national, if not global import, that many believe should not be decided in a Baltimore City Circuit Court courtroom.

Appreciate there are real differences in Maryland and federal law, both procedural and substantive, that may impact the outcome of these disputes. The consensus of environmental attorneys is if this case is heard in federal court such is not only all but certainly a victory for the energy companies, but also a victory for science.

The Supreme Court in a unanimous opinion written by Justice Ruth Bader Ginsburg in 2011 in American Electric Power Co., Inc. v, Connecticut, held

The Clean Air Act and EPA action the Act authorizes displace any federal common-law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.”

Baltimore and the other state and local governments are ignoring this settled law about claims for climate change and attempting to end run this precedent by suing in state courts.

Additionally, I wrote about a key procedural matter in a recent blog post,

If courts exclude scientific evidence from a jury only because people generally agree some other way, .. think for example excluding evidence in the pending lawsuit for damages from climate change brought by Baltimore City pending in the Maryland courts because one side’s scientific experts are called “climate change deniers,” offering junk science counterposed to “sound science,” .. courts risk being the next vehicle in the car wreck of confidence the public has in scientists.

The possible importance of this case in articulating the nature of applying science in the making of public policy should not be underestimated. A state court bench is simply not a good substitute for a laboratory bench in application of the scientific method.

It is widely suggested officials in Baltimore, a city notorious for its significantly high crime rate, including a murder rate that regularly tops the nation, are wrong and out of their element when they describe their prosecution of this case in apocalyptic terms. Rather the real dispute is not about whether the world is warming or the relative impact of man on the planet, but the costs to society of particular remedies and the efficacy of those remedies versus that money being spent improving the quality of life for earth’s inhabitants; not matters a Baltimore City Circuit Court judge is particularly well suited to resolve. As the Supreme Court has already determined matters of climate change are the purview of EPA and not a trial court judge.

It should be fun to watch BP P.L.C. v. Mayor and City Council of Baltimore, docket no. 19-1189, which is set for argument on January 19, 2021 (.. yes the day before Inauguration Day), with a decision expected by June.

New Green Building Tax Credit is a Progressive Effort

By Stuart Kaplow on October 4, 2020 Posted in Codes and Regulations, Green Building, LEED

At a time when the building industry is principally concerned with the impact of COVID-19 and the luster is off green building, the Montgomery County Council last Tuesday unanimously approved legislation “to accelerate the construction of highly energy efficient buildings and green retrofitting of existing buildings.”

Bill 10-20 dramatically upgrades the Maryland county’s existing green building real property tax credit, prioritizing energy reduction in the name of GHG emission reduction, in new and existing commercial and multifamily buildings and ensuring incentives are now given only for buildings that surpass requirements of the County’s building code.

While some think tax law is just boring, others have hailed this tax credit scheme as being a superb model ordinance for government incentivizing green building, despite that Montgomery County was among the first jurisdictions in the country, in 2008, to adopt a mandatory green building law for private building, requiring most new construction be LEED certified. Delivering victory to the environmental industrial complex, through a triumph of method over magic, Montgomery is today touted as the county in America with the most LEED building.

This new property tax credit should be viewed against that backdrop, but moreover that the County is on the cusp of being the first to adopt the 2018 International Green Construction Code, as a mandatory code (including that LEED will no longer satisfy the County’s green building mandate).

All of this must be considered in light of the County’s earnest commitment to reducing GHG emissions by 80 percent by 2027 and 100 percent by 2035. “Energy consumption in commercial buildings accounts for 26 percent of greenhouse gas emissions in the County,” according to the most recent GHG inventory. Significantly reducing energy usage and emissions also requires retrofitting existing buildings.

“We need to reduce the energy consumption of our buildings if we are to ever have a chance of meeting our climate goals,” said Councilmember Hans Riemer. “Reducing energy use is expensive and complicated work, and it will take time. The changes to the green building tax credit proposed in this legislation will incentivize our private-sector partners to go further than ever before in designing energy-efficient buildings.”

Under current law, the green building tax credit is tied to the LEED or its equivalent. New and existing buildings meeting higher levels of LEED certification receive increasingly higher levels of the property tax credit for five and three years, respectively. The County caps the overall tax expenditure for this credit at $5 million annually. Since its inception, the County has awarded $33.4 million in credits, across 62 buildings (.. yes, 62 buildings!).

However, the credit has been regularly oversubscribed in the past few years.

To make the credit more effective and better align it with the County’s GHG effort, not green building more broadly, Bill 10-20, as drafted by a broad based work group, makes the following changes to the green building tax credit:

The new law creates a new two-tier structure for the credit. The first tier ties the amount of the credit to the energy reduction level relative to the existing building code. The bill defines “energy reduction level” as a level of energy performance, expressed as a percentage, that the Director of Environmental Protection finds to be at least 10% better than the level of energy performance that would be achieved under the current Building Code. The higher the energy reduction level, the higher the credit.

The second tier assigns a bonus credit. The amount of the credit, in addition to the new building energy reduction tax credit, is: (A) 25% of the property tax owed on the building for 4 years if the building achieves the most recent version available of LEED Gold, NGBS Gold, PHIUS+/PassiveHouse, BREEAM-NC Excellent or an equivalent standard; (B) 75% of the property tax owed on the building for 4 years if the building achieves the most recent version available of LBC Petal Certification, LEED Platinum, NGBS Emerald, 297 BREEAM-NC Outstanding or an equivalent standard; and (C) 75% of the property tax owed on the building for 5 years if the building achieves the most recent version available of Living Building Certification.

Interesting is that Green Globes is not recognized despite that the Montgomery County public school system is pursuing Green Globes certified school buildings.

With respect to existing buildings, the credit would be based upon the ENERGY STAR improvement of the building over a 12-month period. The greater the amount of ENERGY STAR improvement, the greater the amount of the credit. For example, a building that improved its ENERGY STAR score by 25-49 points would receive a higher tax credit than a building that improved its score by 1-24 points.

Significantly, the new law removes the annual cap on the credit for new buildings and maintains a $5 million cap annually for existing buildings. The County Office of Management and Budget estimated that removing the $5 million dollar cap on credits for new construction would result in approximately $2.6 million in additional tax credits, for a total of $7.6 million in credits.

The new law sets a four-year limit on the credit for new buildings and a two-year limit for existing buildings, so the monetary worth and usefulness to a property owner is capped.

Property tax credits are considered by many as the ideal incentive for green building (.. okay, maybe it is adulterated in a jurisdiction with a mandatory green building law?) and this variation is a mature version of that incentive. The ramifications of adopting this incentive at a time the County is in the final stages of adopting the 2018 IgCC as mandatory for all building are not clear beyond that buildings qualifying for this tax credit will be expensive to build. But Montgomery County is not only the most populous county in Maryland and one of the most progressive jurisdictions in the nation, but dramatically it has also been ranked by Forbes as the 10th richest in the United States and as such first construction costs may not have major implications.

This sophisticated property tax credit program, weighted heavily to minimizing energy use in the name of reducing GHG emission, may be a model for jurisdictions across the country that want to advance green building in an effort toward repairing the world. Read Bill 10-20.

Maryland becomes First State to Ban Polystyrene this Thursday

By Stuart Kaplow on September 27, 2020 Posted in Codes and Regulations, Environmental, State

During the 2019 legislative session, the Maryland General Assembly enacted what will be the first statewide ban of expanded polystyrene foam.

In the Spring of 2019 law makers did not foresee a pandemic that would shift restaurant dining (not to mention school meals and much more) to carry out in transportable food containers, but today in the context of coronavirus disease 2019 with a huge increase in takeout and the CDC recommending that everything in a restaurant be disposable, single use plastic is surging. But maybe not in Maryland?

Senate Bill 285 /House Bill 109, became Environment Article 9-2201 et seq, without the signature of Governor Larry Hogan, prohibits a person from selling or offering for sale in the state an “expanded polystyrene food service product” and a “food service business,” which includes specified businesses, institutional cafeterias, or schools from selling or providing food or beverages in an expanded polystyrene food service product.

Although foam coffee cups and plates are often referred to as “Styrofoam®,” that terminology is incorrect. Styrofoam is actually a registered trademark of Dow Chemical Company and is a brand generally used in industrial settings for building materials and pipe insulation. Styrofoam is not used in the food service industry for coffee cups, coolers, or packaging materials, which are generally made of expanded polystyrene.

“Expanded polystyrene food service product” under this law includes food containers, plates, hot and cold beverage cups, trays, and cartons for eggs or other food.

The ban actually went into effect beginning July 1, 2020, but as a result of Maryland’s COVID-19 state of emergency, the Maryland Department of the Environment announced it extended the deadline by which schools and food service businesses must discontinue the sale or provision of food or beverages in polystyrene food service products until October 1, 2020, but such was disingenuous at best because the extension did not apply to the ‘sale’ of polystyrene food service products which continued to take effect July 1, 2020. As a result, food service businesses and schools could continue to use existing inventories of polystyrene food service products until October 1, 2020, but were not be able to purchase additional polystyrene food service products after July 1, 2020.

However, many will not be impacted when the statewide ban goes into effect on Thursday because more than half of Marylanders live in Anne Arundel County, Baltimore City, Montgomery County or Prince George’s County, jurisdictions that already have local bans.

The law criminalizes the use of some polystyrene. But actually very little of it, when the chemistry industry estimates less than 1% of polystyrene is used in as a ‘food service product’ and that is all this law regulates. County governments are charged with enforcing the new state law’s prohibitions and may impose a penalty of up to $250 on a person or food service business that violates the prohibitions. However, the monetary penalty may only be imposed if the unit of county government first issues a written notice of violation and the violation is not corrected within three months of the written notice.

New York, Maine and Vermont have each enacted similar bans on polystyrene food service products, but none have yet taken effect and New York has expressly delayed any implementation in reaction to COVID-19. Other states are considering similar laws.

Maryland politicians should not be criticized because this new law will no doubt be popular in the very progressive Maryland. In a recent blog post, Maryland Enacts New Environmental Laws in 2020 , I reviewed other key environmental bills passed in most recent legislative session, including interestingly HB 1442 altering the definition of “expanded polystyrene food service product” enacted the year before to exclude egg cartons (.. apparently the chickens have good lobbyists?). Maryland has been described as having more pages of environmental statutes and regulations on a per capita basis than any other state and Maryland voters appear fine with that.

But getting the facts and science right appears to have evaded this law. During the debate on this legislation supporters regularly used the phase, “in 2018 the United Nations Environmental Programme estimated Styrofoam takes thousands of years to disintegrate.” But, of course, that is not true. In 2019 scientists from Woods Hole Oceanographic Institute reported that sunlight breaks down polystyrene in ocean water over a period as short as decades. Which also ignores that expanded polystyrene, a type 6 plastic, is 100% recyclable.

Reduction of waste is a good aim, but banning legal products does not accomplish that end and is bad government, including that what comes as a replacement may be worse? Moreover, local governments in Maryland with a similar polystyrene ban have each seen an increase in solid waste, in some instances double digit increases.

Media accounts have described COVID-19 associated changes in how Americans live and work has resulted in more than a 20% increase in solid waste over last year. So, in lieu of bans and criminalizing conduct, government might encourage innovation and look to new solutions in truly efficacious efforts repair the planet.

SEC Alters Environmental Disclosure Requirements for First Time in 30 Years But

By Stuart Kaplow on September 20, 2020 Posted in Climate Change, Federal

A final rule the U.S. Securities and Exchange Commission adopted on August 26, 2020 and effective 30 days after publication in the Federal Register may be more significant for what is not in the rule.

The rule is silent on ESG disclosures, including nary a mention of climate risk, but as described below the results of the Presidential election may be determinate on the ultimate shakeout of these issues.

SEC disclosure requirements, which had not undergone significant revisions in over 30 years, impact a broad breadth of environmental matters, for not only the thousands of public companies, but also for the millions who invest in them, when the Commission alters the description of business, legal proceedings, and risk factor disclosures that public companies are required to make pursuant to Regulation S-K.

While this topic may appear dense, what was done here, including what was not done, is actually fairly straight forward. Longstanding Federal law requires disclosure of “any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which a [public company] or any of its subsidiaries is a party or of which any of their property is subject.” SEC instructions have long described an administrative or judicial proceeding involving an environmental penalty of $100,000 or more, as not being “ordinary routine litigation incidental to the business.” Under the new rule, that we have been discussing advising public companies about for more than a month, the SEC has increased the disclosure threshold from $100,000 to $300,000 (eliminating an estimated more than 30% of those disclosures for environmental matters).

The SEC will also under this new rule also afford a company some flexibility by allowing management, at its election, to select a different threshold that it determines is reasonably designed to result in disclosure of material environmental proceedings, provided that the threshold does not exceed the lesser of $1 million or one percent of the current assets of the company.

Additionally, the final rule will require, to the extent material to an understanding of the business taken as a whole, “disclosure of the material effects that compliance with government regulations, including environmental regulations, may have upon the capital expenditures, earnings, and competitive position of the registrant and its subsidiaries.” This is an expansion from the longstanding rule that companies disclose the material effect of environmental laws to ‘all’ laws. The final rule also will continue to require registrants to include the estimated capital expenditures for environmental control facilities.

But in keeping with the current positions of the SEC, this new rule takes no position when it does not require or specify ESG related disclosures, arguably because the Commissioner’s principles based disclosure regime already produces disclosures on these topics, if any, that are material.

The same is true for climate risk. In 2010, the SEC issued guidance stating that issuers should include a discussion of climate risk in items 101 and 103, two of the provisions that were amend, to the extent it is material. But that guidance was not altered or even mentioned here.

So, while these express changes to environmental matters are positive, what may be most significant is that this new rule on environmental disclosures is silent on the topic of ESG disclosures including climate risk. A policy making official at a major NYSE member firm suggested, “the only reasonable inference is that these matters are not ‘material’ in the parlance of security regulation by the Federal government.”

Make no mistake this intentional omission is in a climate when the subject is politically hot. Last Tuesday, the California Governor pushed the President to accept the role climate change in the California wildfires. On Thursday, the Shanghai stock exchange, China’s largest, proposed listed companies would not be subject to EU ESG and other environmental disclosure requirements. On Friday, a registered investment advisor reported publicly that it had responded to a U.S. Department of Labor inquiry about their use of ESG disclosures. Just last Saturday, the Wall Street Journal published an Op-Ed, “Sustainable Investing is a Self-Defeating Strategy.”

And I published a blog, ESG Going the Way of the Dodo?, last month describing the Labor Department putting another nail in the coffin of ESG disclosures. With the Presidential election only weeks away, it may be premature to describe this SEC final rule as the final nail in that coffin, and a Biden Administration would all but certainly go in the opposite direction. However, if the President is reelected with a Republican controlled SEC, it now appears that ESG disclosures will become extinct like the dodo bird.