Green Building Law Update

Environmental Law and Sustainability for Business

Court Adopts New Evidentiary Standard for Science

By Stuart Kaplow on Posted in Environmental

In 2020 when science and politics appear to have collided in a car wreck, confidence of the public in scientists is at an all time low. That observed, the public does not often think about the role courts have in accepting scientific theories. Last week Maryland’s highest court drew attention to this vital unsettled matter nationwide when it adopted a new evidentiary standard for scientific testimony.

While the case before the Court involved the harm caused by lead paint exposure and many think of expert scientific testimony about medical malpractice, and cases of those types that appear on court dockets in large numbers, there are also other overarching public policy cases that involve science, for example lawsuits over damages for climate change and banning pesticides; that all will be impacted by this Court opinion.

The Court said, “we have implicitly recognized that a trial judge’s gatekeeping function should not be limited to new scientific theories—old ‘junk science’ should be kept out of our courts as well,” but some background is necessary, ..

Nearly a century ago, the United States Court of Appeals for the District of Columbia announced a new evidentiary standard by which the admissibility of expert testimony rooted in a novel scientific principle or discovery turned on the “general acceptance” of such evidence “in the particular field in which it belongs.” Frye v. United States. In the ensuing fifty years, “almost all of the courts in the country” that considered “the admissibility of scientific evidence” adopted the rationale set out in Frye, including Maryland held, “before a scientific opinion will be received as evidence at trial, the basis of that opinion must be shown to be generally accepted as reliable within the expert’s” relevant scientific community.

In 1993 the Supreme Court of the United States upset the applecart of the admissibility of expert scientific testimony. In Daubert v. Merrell Dow Pharmaceuticals, Inc., the Supreme Court held that Federal Rule of Evidence superseded Frye’s general acceptance test. In place of Frye, the Supreme Court provided a list of flexible factors to help courts determine the reliability of expert testimony.

All these years later, Maryland now joins a majority of other states and adopted the Daubert reliability factors, overruling Frye. Many trial lawyers believe what the high court has done is a good thing:

When interpreting considering the admissibility of scientific evidence, now Maryland courts, instead of merely looking to the general acceptance in the relevant scientific community, should consider, but are not limited to: (1) whether a theory or technique can be (and has been) tested; (2) whether a theory or technique has been subjected to peer review and publication; (3) whether a particular scientific technique has a known or potential rate of error; (4) the existence and maintenance of standards and controls; (5) whether a theory or technique is generally accepted; (6) whether experts are proposing to testify about matters growing naturally and directly out of research they have conducted independent of the litigation, or whether they have developed their opinions expressly for purposes of testifying; (7) whether the expert has unjustifiably extrapolated from an accepted premise to an unfounded conclusion; (8) whether the expert has adequately accounted for obvious alternative explanations; (9) whether the expert is being as careful as he or she would be in his or her regular professional work outside his or her paid litigation consulting; and (10) whether the field of expertise claimed by the expert is known to reach reliable results for the type of opinion the expert would give.

But, it is not that simple, a three judge dissenting opinion, questioning in part the high court making this change in an opinion in a case as opposed to in a public process,

At a minimum, before any decision to adopt the Daubert standard, I would recommend that the Standing Committee on Rules of Practice and Procedure undertake a study of the impact of Daubert and make a determination as to whether adoption of Daubert in Maryland will negatively affect African American people, people of color, or people of limited financial means as potential litigants.”

The majority replies in a footnote, “We do not reject the seriousness of this contention.” And curiously goes on to quote parenthetical in a law review article, .. (“[A] state’s choice of scientific admissibility standard does not have a statistically significant effect . . . [and] a state’s adoption of Frye or Daubert makes no difference in practice.”)

The dissenting opinion goes on, “The Majority does not advise that the article, like other sources, likens Daubert to tort reform, stating: .. The resulting effects of Daubert have been decidedly pro-defendant.” Be assured with the courts as a coequal branch of government, keeping science out of cases because it may be unpopular or worse, not only puts a thumb on the scales of justice in civil cases, but also criminal prosecutions.

The public is increasingly sophisticated and understands that all science is bought and paid for, whether by a police department crime lab or an industry trade group, and many believe all science is junk science carrying with it that pejorative connotation that the science is untowardly driven. Allowing more scientific evidence into a case rather than excluding some, and allowing a jury to evaluate it all may restore trust.

There is no question the Court had the authority to make this change when Maryland Constitution provides, the Court of Appeals from time to time shall adopt rules and regulations concerning the practice and procedure in and the administration of the appellate courts and in the other courts of this State, which shall have the force of law ..”

But the broader question may be the far reaching consequences of a nearly two decades old (.. are you using the same phone you used in 1993?) new, but dated, evidentiary standard now used by a supermajority of courts across the country for the admission of scientific evidence in future cases that will emanate from coronavirus disease 2019 to CRISPR gene editing, and much more.

Science by consensus is at best not reliable and at worst junk science. Simply because there is a general agreement upon something does not actually make it true. 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 case is Stanley Rochkind v. Starlena Stevenson.

I Just Read my 1000th Phase I Environmental Site Assessment this Year

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

For those concerned about the state of the environmental industrial complex during the coronavirus disease 2019 pandemic, I can report that last Friday I reviewed my 1,000th Phase I Environmental Site Assessment this year. In context, last year I did not hit that 1,000 mark until late September, and while it is an unscientific indicator, because it is often a gateway assessment into matters of environmental law, I find, annually, it is an accurate gauge of environmental law activity.

So, I can report the state of the business of the environmental in the U.S. is strong. There is great opportunity for those who seize it.

The majority of our work in reviewing Phase I Environmental Site Assessments is for lenders across the country, much of that undertaken by a non law subsidiary of this law firm, but the fastest growing segment in this space, by far, is Phase Is for commercial tenants.

As a result of an amendment to the Superfund law for the first time making clear that tenants can qualify as bona fide prospective purchasers, protected from cleanup costs from the presence of hazardous substances on a property, is prospective tenants are now ordering Phase l Environmental Site Assessments to take advantage of the new liability protections in the federal law.

Buried in the more than 800 page Consolidated Appropriations Act signed on March 23, 2018 were the very few words of Division N, the ‘‘Brownfields Utilization, Investment, and Local Development Act of 2018’’ (the BUILD Act).

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA, commonly referred to as Superfund), 42 U.S.C. § 9601 et seq., provides an important liability protection, including from cleanup costs, for parties who qualify as bona fide prospective purchasers (BFPPs).

The potential applicability of the BFPP protection to a tenant who leases contaminated or formerly contaminated real estate has been the subject of debate for the decades since the CERCLA’s enactment. The cases interpreting CERCLA make clear that the mere execution of a lease does not necessarily make a tenant liable as an owner or operator under the law. But courts have acknowledged uncertainty regarding the potential liability of tenants under CERCLA including because a tenant may be an operator of the property as well as a responsible person, but tenants had previously lacked any express protection in the Superfund laws. A prospective tenant may now to seek BFPP treatment in the event of a future federal CERCLA cleanup action at the leased property or simply to ensure appropriate environmental stewardship of the property.

Such is a dramatically large issue with the economic contribution of real estate to the U.S. economy, when in any given year the vast majority of real estate transactions are leases and not contracts of sale. In 2020, an increasingly large number of prospective tenants, from commercial banks to sports apparel retailers and the defense industry are actively seeking protection from existing contamination before signing leases.

Eighteen years ago, in 2002, as part of the Small Business Liability Relief and Brownfields Revitalization Act, the BFPP definition was amended to include the parenthetical phrase “(or a tenant of a person)” in the description of who can claim the BFPP defense, but there was no other direction on the treatment of tenants.

EPA later issued guidance in 2012 on the treatment of tenants as BFPPs, providing that a tenant could only derive it BFPP status through the property owner, and that status was limited to “so long as the owner maintains its BFPP status.” So while instructive, it provided little, if any, comfort to tenants.

This 2018 BUILD Act addresses the uncertainty dating to 1980, by amending CERCLA § 101(40) including by in subclause (II), by inserting

‘‘, by a tenancy, by the instruments by which a leasehold interest in the facility is created,’’ ..

And in that subsection, the term “bona fide prospective purchaser” has been amended to mean,

“(ii) a person who (I) who acquires a leasehold interest in the facility after January 11, 2002; (II) who establishes by a preponderance of the evidence that the leasehold interest is not designed to avoid liability under this Act by any person; and ..”

Which has the macro effect of increasing the value of many commercial and industrial properties making reuse viable, obviating one of the longstanding criticisms of CERCLA, that the law limits urban redevelopment across America, and the micro effect of mitigating a tenant’s risk in an individual leasehold, by allowing a tenant to avoid CERCLA liability by any of the following three means:

One, establishing the landlord is a BFPP because that landlord completed the “all appropriate inquiries” as required by federal law (including with a Phase I Environmental Site Assessment); or two, establishing that the landlord completed all appropriate inquiries, but later failed either with compliance or to complete additional requirements; or three, establish the tenant itself, as the BFPP, by completing all appropriate inquiries prior to acquiring the leasehold interest and maintaining compliance with the additional requirements, if any.

A tenant can now assert, without having to rely on the landlord’s status, the innocent landowner defense being protected from CERCLA liability including cleanup costs from the presence of a hazardous substances on the property.

In this year when cursed energy is “out” and dark energy is “in” Phase I Environmental Site Assessments ordered by prospective tenants are in.

As a pendent matter, when a Phase I Environmental Site Assessment report exists, it may now as a result of the 2018 Build Act be material information, under state law, that a real estate broker is obligated to disclose to a prospective tenant.

Concomitantly, should the Phase I Environmental Site Assessment reveal a recognized environmental condition, a tenant could seek protection as a “inculpable person” not liable for existing contamination under state Brownfield laws.

In 2020, the state of the environmental industrial complex is strong. Among the opportunities being seized upon are that a prospective tenant for commercial and industrial properties are now ordering a Phase I Environmental Site Assessment.

Selling a House with Solar Panels is Fraught with Peril

By Stuart Kaplow on Posted in Energy, Green Building, Solar Panel

There are nearly 2 Million houses in the U.S. with solar panels installed on the roof and that number was reached just 3 years after the 1 millionth installation. It can be perilous to fail to properly address rooftop solar panels at the time of sale of a house.

With home sales reaching lofty heights during this pandemic, among the most often made inquiries to this law firm are those arising from the failure to correctly transfer installed solar panels.

We have for years assisted real estate owners and those acquiring property in positively leveraging the constraints and finding advantages in matters involving solar power, often including new approaches and possibilities in this emergent area.

Today, the contracts for the sale and purchase of a house are often provided through a multiple listing service usually by a local board of realtors and most of the forms in common use do not adequately address the admittedly new and only now evolving issues arising from a sale with rooftop solar panels. A form that may be the most widely utilized in the country only provides,

SOLAR PANELS: Solar panels are devices that convert light into electricity. If solar panels are installed on the property, Buyer is advised to inquire about the terms under which the solar panels were installed, how to transfer the ownership or lease, and any costs associated with the transfer.

That language accomplishes next to nothing for the seller or buyer and may only serve to mitigate risk for the real estate brokers.

There is of course no one homogeneous solar panel ‘deal’ with contract terms including ‘who owns the panels’ vary from one transaction type to another, and these installations are governed by checkerboard of state laws.

That observed, many residential solar panel ‘leases’ contain language similar to, ..

You agree that the solar panel system is the Company’s personal property under the Uniform Commercial Code.  You understand and agree that this is a lease and not a sale agreement. The Company owns the solar panel system for all purposes.

Obviously that language creates issues when selling a house with solar panels installed on the roof that belong to someone else. But despite that language, in many states the so called 20 to 25 year leases are not actually leases of fixtures attached to the land because they are not recorded and a lease of real estate and improvements of 7 years or more (the length of time varies from state to state) that is not recorded is not enforceable.

But it is also common that those residential solar panel leases, really adhesion contracts, contain language similar to, ..

If you sell your home you can transfer this lease and the monthly payments.

The person buying your home can sign a transfer agreement assuming all of your rights and obligations under this lease by qualifying in one of three ways: (1) the home buyer has a FICO score of 650 or greater; (2) the home buyer is paying cash for your home; or (3) if the home buyer does not qualify under (1) or (2), if the home buyer qualifies for a mortgage to purchase your home and the home buyer pays us a $250 credit exception fee.

Or, if you are moving to a new home in the same utility district, then where permitted by the local utility, the system can be moved to your new home. You will need to pay all costs associated with relocating the system, ..

So, as a threshold matter, issues of timing need to be considered when entering into a contract to sell a house,

You agree to give the Company at least 15 days but not more than 90 days prior written notice if you want someone to assume your lease obligations.

Some of the companies engaged in this business (.. but not all and maybe not even most) file a UCC-1 financing statement or filing in the land records that puts third parties on notice to their rights in the system. That fixture filing is in most states a lien or encumbrance against the system. But because in many residential transactions, title companies do not search the UCC-1 indexes (.. that are primarily used for business purposes), solar leases are regularly missed, if they are recorded at all.

However, the express language of solar system leases cannot be missed,

EXCEPT AS SET FORTH IN THIS LEASE, YOU WILL NOT SUBLEASE, ASSIGN, SELL, PLEDGE OR IN ANY OTHER WAY TRANSFER YOUR INTEREST IN THE SYSTEM OR THIS LEASE WITHOUT OUR PRIOR WRITTEN CONSENT.

That accepted, as suggested by the solar lease language above, there are options and fertile, enabling and desirable business terms that can add significant value to the real estate. The solar lease, as well as any power purchase agreement need to be considered in light of federal and state law (including tax laws) that stimulate new possibilities including create profit.

Maybe not surprisingly, this dark underbelly of the solar industry is not only a residential problem. This firm regularly receives inquiries arising from commercial real estate transactions that have not adequately addressed matters of solar panels, PPAs, tax credits and the like.

And while it might appear there is little litigation in this area, such is deceptive. Most residential real estate contracts contain mediation provisions, if not also mandatory arbitration provisions, so these disputes and differences are often resolved without judicial redress. But those contracts also usually contain fee shifting clauses such that the prevailing party in the mediation is entitled to attorneys’ fees.

In 2020, when cursed energy is “out” and dark energy is “in” leaders in the solar industry have projected there will be more than 2 Million new solar installations this year alone. Concomitantly, the issues related to the sale of houses will get much larger, faster.

Selling a house with solar panels is fraught with peril. There can be real legal jeopardy and significant dollar liability for the seller and buyer, failing to address the issues associated with solar power. As more solar panels are installed each year and those houses now being sold, with home sales surging in a market reshaped and accelerated by the pandemic, we are seeing a sudden, rapid increase in the opportunities to turn the environmental risk, that is a solar power, into an opportunity.

2018 IgCC Poised to be Adopted for the First Time

By Stuart Kaplow on Posted in Green Building, IgCC, LEED, Local Government

Montgomery County, Maryland is on the cusp of being the first to adopt the 2018 International Green Construction Code.

The proposed Executive Regulation 12-20 appeared in the Montgomery County Register on August 1. A public hearing will be held on proposed regulation on September 3. And written comments may be submitted until October 5.

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 a success to the environmental industrial complex through a triumph of method over magic, Montgomery is touted as the county in America with the most LEED building. But apparently not for long.

Since 2017, the 2012 IgCC has been permitted in the County as an alternative to mandatory LEED building. But in what is being described as a requiem to LEED in America, the 2018 IgCC will now be required, but LEED will no longer satisfy the local legal green building mandate in Montgomery County.

Make no mistake, the 203 page document that is the 2018 IgCC, unveiled by the coterie of trade group authors (.. including the USGBC) and available from the ICC for sale to the public (.. click here for a free copy of the IgCC), is an entirely new standard and bears little, if any relationship to earlier IgCC versions.

For a section by section review, see my earlier blog post see, 2018 IgCC – A Fast Paced Deep Dive.

The 2018 IgCC is ideally suited to be edited and revised for use as a voluntary compliance code promoting sustainability and energy efficiency, for specifications in contract documents, for college and professional school textbooks and curricula, and the like, but without significant editing it is not ideal for use in a regulatory setting for the compulsory certification of all buildings and construction materials as green.

The proposed regulation that is an adoption with very only modest editing of the 2018 IgCC form into a compulsory construction code can be accessed at MCER 12-20. County staff anticipates releasing a clean copy of the proposed regulation along with guidance, in the coming days (because the official version is difficult to interpret in that includes all of the text from the to be superseded Executive Regulation 21-15 AMII).

The Council may approve or disapprove of the regulation within 60 days of date it was transmitted, so it is possible that the regulation will be effective October 1, 2020. However, despite that nothing in the proposed regulation so provides, it is clear this is only phase one of a two phase enactment process. Not included in this regulation are any provisions from the IgCC about zoning, water use reduction or regulations of buildings after issuance of a certificate of occupancy because the Department of Permitting Services does not have the authority to regulate those matters through a building code, green or otherwise, without a change in law. That change in law will happen later and then further 2018 IgCC regulations will follow.

Rockville, the city that serves as the County seat separately regulates green building and will have future enactments. In a deep, dark secret, Gaithersburg, another city in the County, the fourth largest in the state, just behind Rockville, actually adopted the 2018 IgCC last year but apparently no building has yet been constructed to the green code.

There is no grandfathering in the new regulation, however, the County DPS will likely permit a 6 month phase because it has been their long standing and accepted policy when transitioning into a new code or code cycle, that projects significantly into the design phase during the regulatory transition period be allowed to apply under the code or regulation. Despite that the real estate community has known this action by county government was coming for nearly two years (.. DPS staffers should be applauded for having candidly discussed this), and sophisticated real estate developers have planned and redesigned building for the dramatic shift, the broader business community has expressed concern that the 2018 IgCC may have a stifling effect on not only new building but also renovations in the County.

Montgomery County is striving to be on the bleeding edge of green building regulation, even at a time when many believe green building in the U.S. has been a victim of COVID-19 and is moribund. Make no mistake, adopted the 2018 IgCC in whole as mandatory building code is much more than merely staying ahead of other local governments when there is no sense of reliability, there has been no testing or pilot anywhere and there appears to be no desire or appetite for this extreme government code. But the progressive County government is poised to enact this new code that nearly all acknowledge has a high risk in increasing renovation (including tenant fit outs) and new construction costs to a point beyond where new construction will simply move outside the County?

While no jurisdiction has yet utilized the 2018 IgCC as a building code, it is important to note that maybe only 17 or so (.. out of 4,400 code enacting jurisdictions) have adopted the 2012 version of the IgCC, and Boulder County may be the only place to adopt the 2015 IgCC, so estimating increased construction cost is speculative at best. The only jurisdiction I am aware has used the 2018 IgCC, at all, 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. Don’t miss that, Denver determined the 2018 IgCC to be an alternative to LEED v4 Platinum!

And while anticipating increased construction cost is suppositional, and of course there is no one homogeneous building type, the increase from a LEED 2009 New Construction Silver certified building to a 2018 IgCC building will be considerable (.. maybe 20% more for a typical suburban 5 story 125,000 sq. ft. office building!).

The County may choose to apply this new regulation to its own County owned building, but the most common government constructed building is a K thru 12 school, which building in accordance with state law must be LEED Silver certifiable, two Green Globes certifiable or constructed to the 2012 IgCC.

Some have suggested a novel coronavirus pandemic is not a good time to adopt a new green code, including mandated indoor air quality specifications that make it not legal to build to now accepted guidance on operating a safe space. In the name of green and without consideration to the health of building occupants, Montgomery County’s new regulations 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.

Should the Montgomery County Council determine this is not the time, that this piecemeal adoption process is not correct, or not be comfortable being the only place in the country to adopt this code, the 2021 IgCC is in the final stages of preparation and will be published the first quarter of 2021. Or the Council could delay approval and alter this regulation (.. to mirror the County government’s own construction) to allow LEED or Green Globes as alternative compliance paths, which each do not preclude the new normal of indoor air quality treatment.

Some may be surprised that Baltimore City, just a few miles to the north, a jurisdiction with a mandatory green building law on the books since 2007 and that has allowed the 2012 IgCC as an alternative compliance path since 2014, is within days of introducing a bill that will adopt the 2018 IgCC amending Chapter 37 of the building code, likely to be effective before the end of the year; possibly beating out Montgomery County as the first jurisdiction to adopt the 2018 IgCC.

Imposing civil penalties or criminalizing the failure of a landowner to satisfy some level of social engineering in constructing a building (.. while obviously not in the same order of magnitude as the penalty of death imposed by the Code of Hammurabi for failure to construct a building properly) raises very real issues including how efficacious a green project will be toward repairing the planet when the owner is only seeking to avoid legal jeopardy.

The ramifications of adopting the IgCC in this longstanding LEED only jurisdiction are of national import having longtime USGBC customers agonizing about the future of a beloved industry innovator as well as the road ahead for the very sector itself. Montgomery County is not only the most populous county in Maryland, it is one of the most progressive jurisdictions in the nation. 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 economic implications. Politically, the County is heavily Democrat and the citizens are likely in lockstep with this type of regulation. However, observers fret, if the green luster is off LEED (.. the green building rating system that disrupted markets) there, it will falter elsewhere.

More Than Green Buildings, Green Roads

By Stuart Kaplow on Posted in Green Building, LEED

If green building is going to repair the planet it will have to include green roads.

Over 65% of the impervious surfaces in the U.S. are related to transportation (e.g., roads, parking lots, sidewalks, and driveways), with the vast majority being roads. There are 4,180,817 miles of roads in the U.S. Roads are the largest built structures Americans come into contact with and yet they are so ubiquitous and familiar that they have become an impervious given, the dark matter of the motor vehicle cosmos. The amount of impervious roads is larger than the size of the state of Ohio. And the negative environmental impacts associated with all that impervious surface are daunting.

Additionally, road building consumes a lot of energy. Building a one mile long single road lane uses as much energy used to power 50 American households in a single year.

But when modern American society thinks about green building, those thoughts are almost universally of buildings and not of infrastructure like roads and bridges. As sustainability increasingly becomes mainstream, one of the strategies some government departments of transportation have adopted is a “green streets and highways rating system.” Similar to LEED certification for buildings, emerging sustainability initiatives for roads are slowly picking up speed across the nation although there is no current widely accepted standard or practice for rating green roads.

But, established in 2010 and gaining traction today, Greenroads Foundation is an independent nonprofit advancing sustainability education and initiatives for roads. As the developer of the Greenroads Rating System, the foundation manages the review and certification process for sustainable roadway and bridge construction projects in the U.S. and internationally.

The Greenroads Rating System was the first third party, point based system available to certify sustainable roadway and transportation infrastructure projects. There are 61 credits in the current version and 12 of those are mandatory. The points translate to one of four certification levels: Bronze, Silver, Gold and Evergreen. Greenroads v3 is being released on August 27.

There are currently more than 130 projects registered for the Greenroads Project Rating Program valued at more than $32 billion. According to Dr. Jeralee Anderson, the President/ CEO and co-founder of Greenroads International,

In the past ten years, Greenroads has grown from an initial inspiration supported by volunteers to a global nonprofit supported by a full-time operations staff, volunteers from all over the world, and more than 5,000 users in 64 countries. I am looking forward to seeing my team and our network of Greenroads leaders transform transportation infrastructure in every community as we shape a global green recovery.”

Everyone is invited to the free 10th anniversary virtual gala on August 27 at 7 pm EST. Information is here.

In 2020 when so much has changed, including when ‘What Is Cinema?’ is “out” and ‘What Is Television’ is “in” streets are undergoing a rethinking for Uber pickup lanes, delivery vehicle pull off lanes, consumer curbside delivery areas, not to mention bike lanes, reduced off street parking requirements and more, the public supports sustainable roads being part of that evolution. If it is possible to predict anything related to COVID-19, it appears likely federal government relief will include significant infrastructure spending making green roads an urgent issue.

I walked on what many believe to be the first ever paved street dating to around 4,000 BC in an archaeological site near the modern village of Harappa, Pakistan, and it struck me at that time in 2018, we had no come very far in road construction in 6,000 years. Maybe the photo above of the City of Tacoma team with the highest scoring Greenroads project to date, will change that?

If green building is going to repair the planet, society will have to think with a more expansive mindset than only buildings and Greenroads can be part of the expanded mix on solutions.

EPA Proposes First Greenhouse Gas Emissions Limits for Aircraft

By Stuart Kaplow on Posted in Climate Change, Environmental, Federal

Last Wednesday the Environmental Protection Agency proposed greenhouse gas emissions standards for airplanes used in commercial aviation and large business jets.

“This standard is the first time the U.S. has ever proposed regulating greenhouse gas emissions from aircraft,” according to EPA Administrator Andrew Wheeler.

And as much as I have railed against more and regressive environmental regulation in this blog, what is pragmatically proposed may be good for the planet and is definitely good for U.S. businesses. This action will align U.S. standards with the international carbon dioxide and nitrous oxide emission standards set by the International Civil Aviation Organization, making domestically manufactured aircraft able to be sold in the global marketplace.

This proposal also sets a precedent with the Trump Administration being the first to propose regulating greenhouse gas emissions from aircraft.

Typically, three out of four aircraft manufactured in the U.S. are sold overseas. These standards will help ensure consistent standards across the world, and most importantly allow U.S. manufactured planes, such as commercial and large passenger jets, to continue to be sold in the global marketplace.

The implementation process provides significant lead-time to designers and manufacturers of aircraft covered by the standards. The proposed GHG standards would apply to new type design airplanes on or after January 1, 2020 and to in production airplanes on or after January 1, 2028. They would not apply to already manufactured airplanes that are currently in-use.

There will be a 60 day comment period after the proposal publishes in the Federal Register.

Later in 2020, in a year when Cursed Energy is “out” and Dark Energy is “in” after EPA has promulgated that final rule with these aircraft fuel GHG standards, FAA will complete a subsequent rulemaking to enforce the standards. At that point, FAA could begin to certify airplanes of U.S. manufacturers. This process will take some time, and it is critical that EPA complete this part of the process so that the U.S. standards are in place well in advance of 2028, when the ICAO standards go into effect for in-production airplanes.

To put this issue in context, the ICAO says aircraft historically account for about 2% of the global carbon emissions (but not in the COVID-19 impacted 2020). Aircraft covered by the proposed rule account for 10% of all U.S. transportation GHG emissions and 3% of total U.S. GHG emissions.

Under the Clean Air Act, the Obama EPA found that emissions of GHGs from engines used in certain aircraft causes, or contributes to, air pollution which may reasonably be anticipated to endanger public health or welfare. Those findings in 2016 triggered a requirement for EPA to promulgate standards addressing GHG emissions from the fuel burned affected aircraft. This action begins the process of following through on that requirement.

U.S. airplane manufacturers, including Boeing, have been supportive of the proposed standard to avoid any limitations on their ability to sell their products abroad.

This action by EPA is instructive in that it teaches environmental regulation cannot be considered in a vacuum (.. it is suggested that Boeing, alone, represents about 1% of total U.S. GDP) and this proposed standard, based on practical international rather than larger philosophical considerations, and whatever its true ecological efficacy, keeps domestically manufactured aircraft flying in the global marketplace.

If truth be told, this law firm has in more than one instance advanced environmental legislation and driven regulatory changes that have allowed our clients to prosper by pursuing environmental risk as a business opportunity. There is nothing wrong with prospering while repairing the planet.

Bird Friendly Building now the Law in Howard County

By Stuart Kaplow on Posted in Green Building, LEED

Howard County, Maryland has become the first jurisdiction in the state and one of few places in the country to pass a mandatory “bird-friendly design” law for new construction of privately owned buildings.

The new law enacted on July 7, 2020 and effective on September 6, 2020 requires at the time of building permit application, the applicant for new construction submit,

Documentation showing that the building meets:

    1. The bird-friendly design standards of the 2011 edition of “Pilot Credit #55: Reducing Bird Collisions” in the LEED green building rating system; or
    2. The bird-friendly design standards that the Director adopts by regulation and that are equivalent to Pilot Credit #55.

Howard County has since 2008 been one of a limited number of jurisdictions across the country with a mandatory LEED green building law for private buildings. So, it is interesting that advocates for this bill, including a spokesperson for the Maryland Ornithological Society criticized green building programs, like LEED, that encourage using natural light to reduce energy use and encourage green views, resulting in the use of more glass as a building skin. “What [the bill] really is referring to is these big, glass buildings today that literally threaten the existence of birds because birds fly into the glass, unable to realize that it is glass, and they are dying by the millions as a result of these big, glass buildings,” said County Council chair, Deb Jung, who sponsored the bill.

Okay, windows are no friends to birds as we all know from the popular old Windex television ad.

Moreover, in a published report, the Urban Green Council, the New York City chapter of the USGBC indicates “today, almost all large, complex buildings make the same trade off:  they add more glass (leading to an energy penalty), and make up for it with superior mechanical systems.” In response to that collateral damage of the environmental kind, USGBC now awards up to one point in its LEED rating system for the adoption of bird collision deterrence mitigation. And interestingly, New York City passed a building code amendment last year requiring effective December 2020 the lowest 75 feet of new buildings to incorporate “avian-friendly materials” (.. a much more modest approach than the Howard County enactment).

So yes, it is an unintended consequence of LEED green building that creates the solution to this environmental issue that it arguably contributed to.

It was widely reported last year after an article in the journal Science that there are fewer birds. The study found “cumulative loss of nearly three billion birds since 1970, across most North American biomes, signals a pervasive and ongoing avifaunal crisis.” Since 1970, the researchers estimated, the North American bird population had declined by roughly 29%.

But there are problems with allowing public sentiment reacting to the environmental issue of the minute to dictate public, policy.

A 2014 study, conducted by scientists from the Smithsonian Institution and the Fish and Wildlife Service, estimated that between 365 million and 988 million birds are killed in the United States every year as a result of building collisions. But that study concluded that building collisions, driven by the increased use of glass building facades, are second to cats as the greatest threat to birds. But banning housecats does not make a good public policy in Howard County or elsewhere?

But there is no authoritative nationwide repository of bird casualties or injuries, so estimating the scope of this is difficult. A recent literature search published in The Condor, based on 23 studies, estimates that roughly 56% of mortalities are at U.S. buildings 4 to 11 stories, 44% at buildings 1 to 3 stories, and less than 1% at skyscrapers. But keep in mind there are only about 21,000 buildings of 12 stories or higher in the U.S. versus over 123 million 1 to 3 story buildings, so statistically only 24 birds might perish each year at any one skyscraper (and that number is likely artificially high because only a small percentage of those skyscrapers are located in bird flyways). And Howard County is not in any major bird flyway.

How many birds will actually be saved by the new law is debatable but it will have limited application in that it only applies to “new construction of buildings that are not publicly funded and have 50,000 square feet or more of gross floor area, or in downtown Columbia 10,000 square feet or more, ..” and does not apply to residential buildings less than 5 stories in height, and other expressly excluded building types. The County Department of Inspections, Licenses and Permits statistics indicate it would apply to less than 1% of permits issued each year.

Moreover, there is a fatal flaw in the language of the new law when it expressly requires compliance with the “2011 edition of “Pilot Credit #55” but that is not the current LEED credit and the 2011 version is archived and  not available for use on current projects, which the County requires be LEED certified?! USGBC made substantive changes to the credit in 2015 and in 2016 and again in 2019 resulting in the current LEED v 4.1 SSpc55 credit, but zealots may have preferred the originally drafted version by the American Bird Conservancy? A possible fix might be a regulation promulgated by the Directors allowing approval by GBCI of “the currently applicable version of the LEED Bird collision deterrence credit.”

But in 2020, when in most places Birds are “out” and Birds of Prey are “in” Howard County can afford to enact less than ideal laws because it is one of the 10 wealthiest counties in the U.S. with an average household in excess of $116,000.

With the Maryland poultry industry producing more than 600 million birds a year, the bigger environmental, if not also public health issue is Avian Influenza that not only decimates flocks of chickens and turkeys, but kills people.

Let me be clear, I have advocated that for some businesses it may be ideal to announce voluntary compliance with the LEED v 4.1 Bird collision deterrence credit to “reduce bird injury and mortality from in-flight collisions with buildings” owned by the business. Green building laws that promote innovation and create an environment rich for investment in real estate can repair our planet, but mandatory bird laws, like Howard County Bill No. 11-2020, are not only not efficacious, but not good environmental public policy.

On a personal note, at a time when all of our wings are clipped and not travelling, I am thinking back to my summer last year, trekking and climbing across the Cordillera Huaywuash in Peru, where I saw nearly a hundred Andean condors (.. including the condor in the photo above), one of the bird types that have flourished, according to the journal Science study, increasing in population by more than 200%, in the Americas since the 1970s.

New Lead (Pb) in Soil Standard Now Effective in Maryland

By Stuart Kaplow on Posted in Environmental, State

The EPA has described lead as the number one environmental public health hazard in the U.S.

And despite that the CDC has in the past identified childhood lead poisoning prevention since 1971 as 1 of 10 great U.S. public health achievements which has included success in reducing human exposures on average, the amount of lead used within the U.S. has since that date actually increased. There is little debate that no amount of lead is safe.

Although much debated, it is widely accepted that lead poisoning contributed to the decline of the Roman empire.

Understanding of the sources of lead in the environment and the pathways of human exposure is necessary to understand why what Maryland has done is revolutionary.

Lead is a naturally occurring heavy metal and exists in varying concentrations in the earth’s crust.

In modern times, the major source of lead in air was leaded gasoline exhaust, until it was banned in 1996. Use of lead in paint was widespread for more than half a century before it was prohibited in 1978. Lead was also used in some toys and a variety of furniture until the practice was stopped in 1973. In the 1960s, attempts to calculate dietary lead intake found lead solder from food cans to be a surprising large source until it was banned in 1970. And today, in the most significant source of human exposure, lead still enters drinking water primarily through lead containing pipes and fixtures as I wrote about in an earlier post, Government to Allow Less Lead in Drinking Water.

Maryland is moving beyond those sources. Effective July 1, 2020, Maryland has imposed new lead (Pb) soil screening standards. The Maryland Department of the Environment will utilize a tiered approach for soil screening:

Residential Soil Screening Concentration – 200 mg/kg

Commercial Soil Screening Concentration – 550 mg/kg

Industrial Soil Screening Concentration – 1050 mg/kg

The rationale for the updated lead screening concentrations is that the scientific and public health communities, now, generally agree that adverse effects from lead exposure on the neurological functioning can occur at levels lower than previously recognized. In 2012 the CDC published a reference level of 5 micrograms per deciliter (µg/dl) to identify children with blood lead levels that are much higher than most children’s levels.

But these levels are very low. By way of example this new residential soil screening level is 100% lower than the EPA’s standard for lead in bare soil in play areas which is 400 ppm by weight and 1200 ppm for non-play areas. And that  value is for guidance only and is not enforceable. (Okay, there are a lot of science in this post, but assuming you are converting the mass of a substance, the conversion of mg/kg to ppm is 1 to 1. So, for the purposes of this post just substitute ppm for mg/kg or vice versa.)

In 2019, Maryland Governor Larry Hogan signed HB 1233, Chapter 341, which reduces, from 10 µg/dl to the 5 µg/dl CDC reference level, the blood lead level that triggers certain interventions under the State’s  Reduction of Lead Risk in Housing law that is aimed at protecting children. That new law recognizes that the CDC reference level is more reflective of current scientific consensus on the health impacts of lead exposure and is therefore a more appropriate level for triggering certain interventions. While that bill only amends the Reduction of Lead Risk in Housing law, the same rationale is also now being applied to other state government programs that use an elevated blood lead level as an input, without regard to children (.. which may be a stretch without express legislative authority); this includes the soil lead screening and assessment levels used by the MDE Land Restoration Program which now is using the lower blood lead reference level.

Some have suggested these new regulatory levels are too low when CDC published studies describe that a level of 600 ppm of lead in soil would contribute no more than 5 μg/dl to total blood lead of children under 12 years of age. Moreover, with the entire subject of the impact of lead in urban soil being controversial, the new residential and commercial levels are well below typical urban lead levels in inner city soils.

In 2020 when Elderberry is “out” and Elder candidates are “in” there is no doubt that this year’s new very low lead levels will impact citizens in Maryland and greatly disadvantage owners of land in Baltimore City and other urban areas. Most if not all properties in Baltimore City will exceed these new levels. MDE remedial actions including removal actions, engineering controls like capping, consolidation and capping, in-situ stabilization, and estimating lead relative bioavailability, will all be significantly altered and made more stringent, but still available as responses to lead in soil. While modest by comparison, response action plans and remedial plans that were pending but not approved to July 1, 2020 will be subject to the lower standards.

Be aware lead is still an ongoing issue, including in many recycled materials. Playground surfaces made of recycled tire rubber and synthetic turf fields containing tire crumb rubber in Maryland are both part of an EPA lead biomonitoring study temporarily halted by COVID-19.

Lead is the number one environmental public health hazard in this country. And no amount of lead is safe. Period. Maryland regulators are boldly going where no man has gone before, becoming among the first to regulate lead in soils, certainly at these low levels, and may be blazing a trail for others across the nation to follow, but will no doubt be monetizing in real dollar terms the environmental externalities on current Maryland land owners.

A Force Majeure Decision during the COVID-19 Pandemic

By Stuart Kaplow on Posted in Environmental

There has been much speculation and supposition about the interplay of force majeure provisions in leases and other contracts in response to government orders closing businesses during the coronavirus disease 2019 (COVID-19) pandemic, but now there is an authoritative court decision that may provide persuasive authority.

In a motion in a Bankruptcy case the landlord demanded payment of post petition rent from the Hitz Restaurant Group or that the Chicago restaurant vacate the premises immediately.

There is no dispute that under section 2.1 of the parties’ lease and the exhibit labelled “Minimum Base Rent Schedule,” rent was due on the first of each month.

The restaurant argues that its obligation to pay any post-petition rent is excused by the lease’s force majeure clause, which provision is similar to ones found in many leases and other contract, and provides,

Landlord and Tenant shall each be excused from performing its obligations or undertakings provided in this Lease, in the event, but only so long as the performance of any of its obligations are prevented or delayed, retarded or hindered by. . . laws, governmental action or inaction, orders of government. . . . Lack of money shall not be grounds for Force Majeure.”

The restaurant argues that this clause was triggered on March 16, 2020, the effective date of an Executive Order issued by Illinois Governor J. B. Pritzker addressing the COVID-19 pandemic in Illinois. Section 1 of that Executive Order pertains to restaurants:

“.. all businesses in the State of Illinois that offer food or beverages for on – premises consumption – including restaurants, bars, grocery stores, and food halls – must suspend service for and may not permit on-premises consumption. Such businesses are permitted and encouraged to serve food and beverages so that they may be consumed off-premises, as currently permitted by law, through means such as in-house delivery, third-party delivery, drive-through, and curbside pick-up. In addition, customers may enter the premises to purchase food or beverages for carry-out.”

The Court concluded that the force majeure clause in this lease was unambiguously triggered by the Governor’s Executive Order. First, his order unquestionably constitutes both “governmental action” and issuance of an “order” as contemplated by the language of the force majeure clause. Second, that order and its extensions unquestionably “hindered” the restaurant’s ability to perform by prohibiting the restaurant from offering “on-premises” consumption of food and beverages. Finally, the order was unquestionably the proximate cause of the restaurant’s inability to pay rent, at least in part, because it prevented the restaurant from operating normally and restricted its business to take-out, curbside pick-up, and delivery.

It is significant to the analysis of the restaurant’s force majeure argument that Governor Pritzker’s Executive Order did not prohibit all restaurant operations in Illinois.

The Court’s analysis also, gratuitously, but instructively makes clear that force majeure clauses in contracts supersede the common law doctrine of impossibility or impracticability of performance. It then dispenses with the landlord’s arguments.

Landlord first argued that the force majeure clause was not triggered because the Governor’s Executive Order did not shut down the banking system or post offices in Illinois, and the restaurant therefore would have physically been able to write and send rental checks. The Court found that a specious argument and rejected it out of hand.

Second, landlord characterizes the restaurant failure to perform as arising merely from a “lack of money,” which it argues is not grounds for force majeure according to the lease’s own terms. The Court rejects that argument.

And third the landlord averred if the state government closed the business, the federal government was making SBA loans available, but the judge found no support in the lease or in law that the tenant must apply for a loan before invoking force majeure.

Nevertheless, the restaurant is not off the hook entirely. Governor Pritzker’s Executive Order did not prohibit the restaurant from performing carry-out, curbside pick-up, and delivery services. The Court reasons that, to the extent that the restaurant could have continued to perform those services, its obligation to pay rent is not excused by the force majeure clause. The Court therefore concludes the restaurant’s obligation to pay rent is reduced in proportion to its reduced ability to generate revenue due to the Executive Order.

Neither party offered much assistance to the Court in determining the amount of the rent reduction but the restaurant offered only its estimation that 75% of the square footage of the restaurant, consisting of its dining room and bar, was rendered unusable by Governor Pritzker’s Executive Order.

The Bankruptcy judge, the Honorable Donald R. Cassling, in a move to “do justice” and that may well have far wider impact than just this case, applies the force majeure clause in part, granting equitable relief signaling that force majeure does not have to be all or nothing, ordering the restaurant to pay 25% of the base rent and 25% of its share of both the common area maintenance fees and real estate taxes.

This debtor friendly decision, among the first to decide the matter of force majeure in a COVID-19 impacted dispute, is not binding on other courts, but it may have a substantial impact on cases across the country, far broader than merely rent disputes but involving the full gambit of matters involving contracts, including because state courts often look to federal courts (including Bankruptcy courts) for precedential or, at minimum, persuasive authority in equitable theories.

The case is In re Hitz Restaurant Group, U.S. Bankruptcy Court, Northern District of Illinois, Eastern Division, June 3, 2020.

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