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Published by the Environmental Law Section of the Virginia State Bar for its members

EnvirCnmental Law News CVolume XI, No. 1 Winter 2001

Virginia Statutes of Limitation inEnvironmentalActionsby Michael C. Davis, Esquire, Willcox & Savage, P.C.

Environmental litigation raisesunique and complex issuesinvolving the application of

statutes of limitation. This is so fortwo basic reasons. First, environ-mental contamination is often notdetected when it initially occurs.For example, hazardous substancesmay be released and seep, undetect-ed, onto neighboring property overa period spanning many years.Second, the impacts of contamina-tion may be difficult to detect untilmany years later. For example, dis-eases manifesting themselves nowmay have been caused by exposureto chemicals years ago; due to longlatency periods, it may be decadesbefore a plaintiff discovers, or rea-sonably should discover, any symp-toms of her injuries. These twofactors combine to create the possi-bility that damages as a result ofenvironmental contamination willoccur but remain undiscovereduntil well after the initial spill orother release.

In Virginia, if a plaintiff’s cause ofaction is not discovered until afterthe initial spill or release, the defen-dant may argue the cause of action istime barred pursuant to the statuteof limitations. This is so becauseVirginia’s General Assembly, and its

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Chair’s Corner

T his is another very active year for the Environmental LawSection, with many educational events and opportunities foryour participation in Section activities. We have already co-

sponsored an outstanding, CLE-accredited seminar on environmentalliability. The next major event is the publication of an issue of theVirginia Lawyer magazine, in April, that will be focused on theSection. This is an excellent opportunity for our Section to show thediversity and vitality of our field to all of the lawyers in Virginia. As ofthis date, we have commitments for the production of an adequatenumber and range of articles. However, if you are interested in submit-ting an article for the magazine, please do so quickly. The requirementsfor articles are as follows:

➤ 3,500 words each (14 typed pages each, double-spaced)➤ photo of author, print preferred (not e-mail file)➤ short bio of author requested with article copy➤ endnotes (not footnotes)➤ hard copy and e-mail of the draft version sent as soon as possi-

ble to the Section, care of Dolly Shaffner at [email protected],and

➤ final version sent by February 23, in Word or WordPerfect for-mat to Rod Coggin at [email protected].

Please do not hesitate to submit an article for publication. Thosearticles that cannot be incorporated into the magazine may be offeredpublication in a future edition of this newsletter.

If you attended the environmental liability seminar that the Sectionco-sponsored, then you already know that the Section is soliciting mem-bers’ views on possible themes for the biennial Science and Law Seminarthat will be held this April. Past seminars have provided a general surveyof scientific information used in environmental law. This year, we’relooking for ways to tailor this presentation to the most current issues inlitigation and regulation. Please send any suggestions to Leonard Vanceat [email protected].

Finally, for our Annual Meeting presentation, we plan to co-sponsora seminar on environmental liability with the Local GovernmentSection. Expect more on that in the next edition of this newsletter. Ilook forward to seeing you at any of these upcoming events, or seeingyou in print.

Edward A. Boling

EnvirCnmental Law News

EnvirCnmental Law NewsVolume XI, No. 1

Prepared by the staff ofEnvironmental Law Digest

Washington & Lee UniversitySchool of Law

Lewis Hall, Room 220ALexington, Virginia 24450-0303

Editor-in-ChiefRobert D. Mason, Jr.

Managing EditorJ. Brandon Holder

Articles EditorLoren L. Lunsford

Articles StaffValerie L. Bracken

Amy L. Pierce

Case Review EditorsHeather L. Necklaus

Todd M. Gaynor

Case Review StaffOriana Repic

Legislative EditorJill M. Schatz

Legislative StaffDaniel G. Murdock

Robert Bailey

Faculty AdvisorProfessor Denis J. Brion

courts, have consistently refused toadopt a so-called “discovery” rulegenerally applicable to environmen-tal actions. Such a discovery rule,which has been adopted in manystates other than Virginia, typicallyprovides that causes of action do notaccrue until the plaintiff knew, orshould have known, of her injuries.

While Virginia has been reluctantto adopt such a discovery rule, fed-eral law has, in many respects,superimposed a discovery rule formany environmental actions since1986. The federal discovery ruleapplies to actions alleging violationsof Virginia’s common law even ifthose actions are pending inVirginia’s state courts. Additionally,as a result of emerging theoriesunder state law involving the con-cept of “intermittent” wrongs,Virginia courts have moved muchcloser to adopting a de facto discov-ery rule in the environmental con-text for certain types of actions.

In order to understand how theapplication of statutes of limitationwork in the environmental context,and the interplay between state andfederal law, this article addressesthese topics in three sections. Thefirst section addresses Virginia’sstatutes of limitation generallyapplicable to the causes of actioncommonly asserted in environmen-tal litigation such as trespass, nui-sance, and negligence. It explainsthe accrual of environmental causesof action and explores how Virginiacourts have, in some instances, soft-ened the oftentimes harsh accrualrules by distinguishing betweenbeing exposed to contaminants andbeing injured by them. The secondsection addresses federal statutorylaw which has modified Virginia’sstatutes of limitation otherwiseapplicable to many environmentalcauses of action. This sectionexplains that, for many environ-

The articles in this section areintended to provide analysis anddiscussion of topics that may inter-est environmental law attorneys.The Environmental Law Digestwelcomes submissions and sugges-tions of articles and topics for futureissues. Please send your articles orsuggestions to the following address:

Environmental Law DigestRoom 520, Lewis HallWashington & Lee Law SchoolLexington, Virginia 24450540/462-4750

Articles of General Interest

Table of Contents

Virginia Statutes of Limitation in Environmental Actions. . . . . . . . . . . . . . 1

A Sustainable BalanceBetween Agriculture and Growth? . . . . . . . . . 9

Compliance Checkup:Virginia’s New Industrial Storm Water General Permit . . 12

Environmental Marketing and the FTC Green Guides . . . . 13

Case Digest . . . . . . . . . 18

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mental actions alleging propertydamage or personal injuries, federallaw replaces Virginia’s accrual rulewith one that is more plaintiff-friendly. The third section willaddress the theory of “intermittent”wrongs which has been asserted inenvironmental litigation in anattempt to ameliorate the effects ofVirginia’s strict statutes of limita-tion.

Virginia’s Statutes of Limitation

Statutes of limitation aredesigned to ensure that prospectiveplaintiffs assert their claims in atimely manner.1 Given this purpose,one might suppose that statutes oflimitation would start to run afterthe plaintiff knew, or should haveknown, of her injuries. However,under Virginia law, this is not typi-cally the case.

Consider the following two typesof actions. In actions seeking com-pensation due to environmentaldamage to real estate, which typi-cally sound in trespass and nui-sance, the applicable statute oflimitations in Virginia is five yearsafter the cause of action accrues.2 Inactions seeking damages for person-al injury due to exposure to toxins,which typically are based on allega-tions of trespass, nuisance, or negli-gence, the applicable statute oflimitation is two years after thecause of action accrues.3 Thus, forboth property damage and personalinjury actions alleging injuries dueto environmental contamination,the date the cause of action accruesis vitally important. In both cases,the applicable statute of limitationcommences to run when the dam-age to person or breach of dutyoccurs and not when the damage is,or should be, discovered. This isdue to Va. Code § 8.01-230, whichprovides:

In every action for which a lim-itation period is prescribed, thecause of action shall be deemedto accrue and the prescribedlimitation period shall begin torun from the date the injury issustained in the case of injuryto the person, when the breachof contract or duty occurs in thecase of damage to property andnot when the resulting damageis discovered, except where therelief sought is solely equitableor where otherwise providedunder § 8.01-233, subsection Cof § 8.01-245, §§ 8.01-249,8.01-250 or other statute.4

Obviously, in the environmentalcontext there may be a wide dis-crepancy between the date theinjury or breach first occurs and thedate when the injury is first discov-ered and suit is brought. Such a dis-crepancy is made more likely by therule that once an injury is sus-tained, no matter how slight, theright of action for injury accruesand the statute of limitation beginsto run.5 Under the “slight injury”rationale, it is immaterial that allthe damages resulting from thewrong may not have been sustainedat the time of the initial negligentact which caused some injury.Indeed, the running of the statute oflimitations is not postponed by thefact that substantial damages do notoccur until a date substantially afterthe initial injury.6

As a result of Virginia’s tradition-al statutes of limitation, totallyunknown environmental claims maybe barred even if they are assertedimmediately after a plaintiff learns,or in the exercise of due diligenceshould learn, of her claims. Whilenot an environmental case,Granahan v. Pearson,7 provides anexample of how this may occur. InGranahan, the plaintiff sued herdoctor claiming that she becamesterile due to her doctor’s negligentfailure to remove an intrauterinedevice. The court held that the plain-tiff’s claim was time barred despitethe fact that the plaintiff filed suitwithin two years of first learning of

her sterility. The court reasoned thatbecause the doctor’s treatment of theplaintiff, including his failure toremove the devise, ended in 1979,more than two years before suit wasbrought, the statute of limitationshad expired. The court held thatwhile it was “unfortunate” that theplaintiff did not discover her infertil-ity until after the Virginia statute oflimitations barred her claim, it hadno discretion in the matter.8

Similarly, in Irvin v. Burton,9 theplaintiff was sterilized by the defen-dant physician in 1980 but, due to amistake made by the physician dur-ing the sterilization procedure, shebecame pregnant in the summer of1984 and delivered a child in 1985.The plaintiff sued in 1985, but thecourt held that this claim was nottimely because the actionable con-duct and the harm occurred fiveyears earlier. Notably, Judge Turk,the author of the Irvin decision,commented in a footnote that thisresult, while mandated by Virginialaw, was “absurd.”10

Perhaps because of the question-able public policy inherent in bar-ring unknown causes of action,Virginia courts have on certainoccasions attempted to modify theharsh application of statutes of lim-itation by holding that exposure andinjury may be distinct in time. Byseparating exposure and injury,courts have been able to permitenvironmental claims to proceedeven if the last exposure to the envi-ronmental hazard occurred manyyears before suit was filed.

For example, in Locke v. Johns-Manville Corp.,11 the plaintiff filedsuit in 1978 alleging he contractedcancer as a result of inhalingasbestos fibers from approximately1948 to 1972.12 Because the litiga-tion was filed approximately sixyears after the plaintiff’s last expo-sure to asbestos, the cause of actionwould be time barred if it com-menced to run from the date of theplaintiff’s last exposure. However,

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the plaintiff attempted to avoid thisresult by arguing that his injury didnot occur until well after his lastexposure to asbestos. That is, whilethe plaintiff inhaled asbestos fibersfrom 1948 to 1972, he argued thatthese fibers, which remainedtrapped in his body, did not begin toharm him, even slightly, until wellafter 1972. The plaintiff offered evi-dence that, prior to November of1977, a year before he filed suit, hewas in excellent health and hadabsolutely no physical symptoms oflung disease or cancer. Based onthese facts, the court held the plain-tiff’s claims were not time barred.

The court reached this result bydistinguishing between the time ofexposure to asbestos and the timewhen that exposure first causedinjury to the plaintiff. The courtheld that the running of the statuteof limitations commences when theharm occurs, which may be sub-stantially after the last date of expo-sure.13 The court held that becausethe cancer did not arise when theasbestos dust was inhaled andbecame trapped in the plaintiff’sbody, the statute of limitations didnot begin to accrue until the cancerwas present.

The distinction used in Lockemay be helpful to plaintiffs assertingenvironmental actions if they areable to prove that the disease, andnot just noticeable symptoms of thedisease, occurred more recentlythan exposure to the harmful mate-rials. If the plaintiff can make sucha showing, her claims should notaccrue until the disease first mani-fested itself in some manner so as tobe capable of physical detection.

However, as a practical matter, itmay be difficult for many plaintiffsto use Locke to their advantage.Proving that the disease did notmanifest itself, in any form, untilyears after the exposure com-menced may not always be possible.Moreover, this type of analysis ulti-mately depends on how courts

define “injury.” For example, cells,or DNA in cells, may mutate at thetime of exposure to certain haz-ardous chemicals. However, thesecells may not become cancerousuntil years later. In this case, thecourts would need to decidewhether the mutation or the growthof the cancer itself constituted theactionable “injury.” These sorts ofissues seem to have little to do withthe traditional purposes served bystatutes of limitation.

Additionally, Locke may haveless application to property damageactions. In actions alleging propertydamage, courts may have a more dif-ficult time distinguishing betweenexposure and injury. Defendants willsurely argue that even the slightestcontamination of property by haz-ardous chemicals constitutes a tech-nical trespass and is thereforesufficient to start the running of thestatute of limitations. Defendantsmay also argue that any contamina-tion, regardless of amount, consti-tutes an “injury” to property.

However, in a case assertingproperty damage as a result of con-tamination, the theories utilized inLocke have been employed by aplaintiff with success. In McKinneyv. Trustees of Emory and HenryCollege,14 the plaintiff sued thedefendant claiming that a stream onthe plaintiff’s land was contaminat-ed by sewage originating on thedefendant’s upstream property. Thedefendant claimed the action wasbarred by the statute of limitationsbecause the defendant began direct-ing sewage into the stream morethan five years prior to the filing ofthe suit. The plaintiff counteredthat the sewage placed into thestream more than five years ago wasnegligible and inflicted no injury onthe plaintiff at that time.

The Virginia Supreme Courtheld that the statute of limitationsdid not commence when the sewagewas first directed into the streambecause, at that time, the pollution

was not inflicting any injury on theplaintiff. Instead, the court heldthat the “plaintiff’s cause of actionaccrued when the discharge ofsewage into Emery Creek was insufficient quantities to pollute thestream and constitute a nuisance.”15

Thus, according to McKinney, it isonly when the pollution is in such aquantity that it is great enough tocause injury that the statute com-mences to run.16

While offering important argu-ments to plaintiffs asserting environ-mental causes of action, thereasoning behind the Locke andMcKinney decisions will at mostsuspend the accrual of the statute oflimitation until the plaintiff is actu-ally injured by the contamination. Itis still possible, even if the Lockeand McKinney theories of accrualare employed to their fullest extent,that a plaintiff will not learn of herinjury, or the cause of her injury,until the statute of limitations hasexpired. However, since 1986, dueto a change in federal law, the accru-al date under Virginia law has beensuperseded, and a discovery rule hasbeen imposed, for many types ofenvironmental actions, includingboth personal injury and propertydamage claims. This issue isaddressed immediately below.

CERCLA’s Preemption of Virginia’s Statutes of Limitation

Under certain circumstances,the Comprehensive EnvironmentalRe-sponse, Compensation, and Lia-bility Act (“CERCLA”), as amend-ed,17 supersedes the accrual datesotherwise mandated by statestatutes of limitation. Instead of theaccrual dates discussed above,which generally run from the dateof the injury, CERCLA substitutes adiscovery rule. CERCLA providesthat the state law statutes of limita-tion for actions alleging damagescaused or contributed to by a “haz-ardous substance” will commence


running when the plaintiff knew, orreasonably should have known, thatthe injury or damage was caused orcontributed to by the hazardoussubstance. While this preemption islittle known, it is explicit:

In the case of any actionbrought under State law for per-sonal injury, or property dam-ages, which are caused orcontributed to by exposure toany hazardous substance, orpollutant or contaminant,released into the environmentfrom a facility, if the applicablelimitations period for suchaction (as specified in the Statestatute of limitations or undercommon law) provides a com-mencement date which is earli-er than the federally requiredcommencement date, such peri-od shall commence at the feder-ally required commencementdate in lieu of the date specifiedin such State statute.

* * *

[T]he term “federally requiredcommencement date” meansthe date that plaintiff knew (orreasonably should have known)that the personal injury or prop-erty damages referred to in sub-section (a)(1) of this sectionwere caused or contributed toby the hazardous substance orpollutant or contaminant con-cerned.18

This preemption is extremelybroad. As a preliminary matter, itclearly applies to actions “broughtunder State law.” It also applies toactions “for personal injury, or prop-erty damages.” Thus, it should applyto the common law causes of actiontypically asserted in environmentalcases: trespass, nuisance, and negli-gence.

The only meaningful require-ments for the federal commence-ment date to apply are that theinjuries or damages must be (i)caused or contributed to by expo-sure to a “hazardous substance, orpollutant or contaminant,” which is(ii) released into the “environment,”(iii) from a “facility.” These terms

are all expansively defined by CER-CLA.

CERCLA defines a “hazardoussubstance” to include most com-mon industrial chemicals and met-als.19 There is, however, onesignificant exclusion. Petroleumproducts are typically excludedfrom the definition of hazardoussubstances and, therefore, contami-nation caused by most petroleumproducts is not covered by the fed-eral accrual date. “Pollutant or con-taminant” is similarly broadlydefined and also excludes petrole-um products.20

CERCLA defines “environment”to mean most surface water, groundwater, drinking water, land surfaceor subsurface, or ambient air “with-in the United States.”21 Thus, a spillor discharge virtually anywhere inthe country is subject to the federalcommencement date.

With few exceptions, CERCLAdefines a “facility” as virtually anylocation in any building, structure,installation, equipment, pipe,pipeline, well, pit, pond, lagoon,landfill, storage container, motorvehicle, rolling stock, aircraft, orany other site or area where a haz-ardous substance had been spilled,placed, disposed of, or located, butexcludes “any consumer product inconsumer use or any vessel.”22

Thus, as the above definitionsmake clear, the federal commence-ment date under CERCLA wouldapply to most spills of chemicalsanywhere in the United Statesunless the spill involved a petrole-um product, such as gasoline, orunless the spill resulted from a con-sumer product in consumer use,such as a leaking battery in aportable radio.

Some courts have attempted tolimit the scope of CERCLA’s pre-emption in a manner not explicitlyspecified in CERCLA. For example,one federal district court held thatCERCLA preempts state law only

where there is an “underlying CER-CLA action providing for cleanupand remedial activities.”23 However,other courts have rejected this lim-itation, which, these courts noted,is not contained in CERCLA.24

While this issue is not yet defini-tively resolved, the better reasonedview, which is more consistent withCERCLA’s statutory language andits purposes, is that no underlyingCERCLA cleanup is required for thefederally required commencementdate to be applicable.

However, even if the federalcommencement date applies, suitmust still be brought within theapplicable statutory period after theplaintiff knew or should haveknown that the personal injury orproperty damages were caused bythe hazardous substance. Thus, inthe example of a property damagecase, if more than five years elapsesafter the plaintiff has or should havesuch knowledge, the suit will bebarred. However, as discussedbelow, the theory of “intermittent”wrongs offers plaintiffs in appropri-ate cases an even longer statute oflimitations than provided by CER-CLA.

Permanent and Intermittent Wrongs

Virginia courts have held that,under certain circumstances, recov-ery of damages caused by contami-nation may not be time barred evenif the litigation is commenced morethan five years after the plaintifffirst learned of the harm. The courtshave reached this result by frag-menting the defendant’s wrongfulaction into a series of wrongfulactions. By segmenting the defen-dant’s action into many discreteactions, the courts have reasonedthat the contamination whichoccurred within the applicablenumber of years (five for damage toproperty or two for personalinjuries) immediately prior to thefiling of the plaintiff’s litigation is


not time barred. Under thisapproach, while the plaintiff will notbe able to recover for all of the harmcaused by the contamination, shewill be able to recover for all thedamages which occurred within theapplicable statutory period immedi-ately preceding the filing of suit.

The leading Virginia case to takethis approach is Hampton RoadsSanitation District v. McDonnell.25

In this case, the Hampton RoadsSanitation District (the “District”)operated a sewage pumping stationadjacent to the plaintiff’s propertysince 1969. During normal opera-tions, the pump station operatedwithout effecting the plaintiff’s land.However, when wastewater flowswere abnormally high, a relief valvewould open allowing the excess flowto reach the plaintiff’s property.

The District asserted that theplaintiff’s cause of action was barredby the five year statute of limita-tions because the plaintiff failed tofile suit within five years of theaccrual of his cause of action. TheDistrict reasoned that the cause ofaction accrued in 1969 when theoverflows from the pump stationfirst began. The plaintiff did notdeny that the overflows onto hisproperty began in 1969. Instead, heargued that each overflow was aseparate wrong giving rise to a sepa-rate cause of action. Thus, theplaintiff argued, he was entitled torecoup damages which occurred asa result of all overflows during thefive years prior to filing suit.

The trial court agreed with theplaintiff that each overflow was aseparate actionable event for whichthe plaintiff was entitled to seekrecovery. The Virginia SupremeCourt affirmed. Only claims as aresult of discharges which occurredmore than five years prior to filingsuit were time barred. The Courtexplained that a distinction must bemade between permanent actionsand actions that occur in intervals.It noted that “if the wrongful act is

of a permanent nature and one thatproduces all the damage which canever result from it, then the entiredamages must be recovered in oneaction and the statute of limitationbegins to run from the date of thewrongful act.” Thus, if the operationof the pumping station weredeemed to be of a permanentnature, the plaintiff’s claims wouldall be time barred. However, “whenwrongful acts are not continuousbut occur only at intervals eachoccurrence inflicts a new injury andgives rise to a new and separatecause of action.” The Court ruledthat, in this situation, “a plaintiff’sright of recovery…is limited by thestatute to the damages sustainedduring the five years immediatelypreceding the institution of thesuit.”

Based on the above analysis, theCourt ruled that the overflows dat-ing back to 1969 did not produce allthe damage to the plaintiff’s proper-ty that could ever result from thepumping station. Instead, when thepumping station became overloadedduring periods of heavy rainfall,new overflows would occur. TheCourt held that the plaintiff had aseparate cause of action after eachoverflow because each overflow wasa new injury.

McDonnell is a promising casefor plaintiffs in environmentalactions. In cases where a defendantcontinues to release contaminantsonto the plaintiff’s property,McDonnell will permit recovery forthe releases occurring within therelevant period prior to filing suiteven if the plaintiff first learned ofthe contamination long ago. Thus,McDonnell goes well beyond the dis-covery rule mandated by CERCLAbecause it permits recovery morethan five years after the plaintiff dis-covers that she has been harmed.

Of course, McDonnell does notpermit a full recovery, because aplaintiff may only recover for con-tamination released during the rele-

vant statutory period immediatelybefore suit was filed. However, as apractical matter, this may be a rela-tively unimportant limitation. Forexample, in the McDonnell case, itis likely that the discharges occur-ring more than five years prior tofiling suit caused exactly the samesort of damages caused by the laterdischarges. Thus, the plaintiff inMcDonnell was likely able to recov-er for damages similar to those hewould have obtained had his suitexplicitly sought damages as aresult of all discharges since 1969.However, if a plaintiff is unable toprove the amount of damage causedwithin the actionable time frame,evidence of harm may not be admis-sible.26

McDonnell may be somewhat dif-ficult to apply to differing factual sce-narios.27 One difficulty with theMcDonnell analysis is that the divid-ing line between permanent andintermittent wrongs is unclear.McDonnell itself offers a somewhatconfusing standard. It explains thatpermanent wrongs are those which“produce[] all the damage which canever result from it….” Conversely,for intermittent wrongs, each occur-rence “inflicts a new injury….”Thus, the test appears to be whetherthe defendant’s initial wrongfulaction caused all of the plaintiff’sharm or whether the plaintiff suffersadditional harm in the future as aresult of additional actions or inac-tions by the defendant.

As a preliminary matter, thisstandard may be in tension with theslight injury rule discussed above.The slight injury rule provides thatif any injuries are suffered by theplaintiff, the statute of limitationsaccrues. Under this rule, even ifsubstantial damages do not occuruntil a later date, the statute of lim-itations for all damages accrueswhen the initial damages, no matterhow slight, are suffered. It may bepossible to resolve the apparent ten-sion between the slight injury rule


and the analysis employed inMcDonnell. In McDonnell thepumping station continued to over-flow onto the plaintiff’s property.The slight injury rule, it might beargued, is only properly applied tocases where there is a single releaseof, and a single exposure to, chemi-cals which thereafter causes harmincrementally. This distinctionbetween a single release of chemi-cals and multiple releases may alsobe relevant for other reasons, as dis-cussed below.

McDonnell involved dischargesonto the plaintiff’s property even atthe time suit was filed. However, inmany environmental actions, whilethe damage continues due to thepassive migration of chemicals in theenvironment, the active discharge bythe defendant ceased long ago.Though at the heart of many envi-ronmental disputes, the applicationof McDonnell to cases of passive yetcontinuing migration is an issue cur-rently unresolved in Virginia.

Consider, for example, a plaintiffwho files suit against the owner of aneighboring landfill. The landfillstopped accepting waste and wasclosed ten years ago. The plaintiffalleges that the landfill has released,and continues to release, contami-nants onto the plaintiff’s propertythrough groundwater and a smallstream. The plaintiff knew aboutthese releases more than five yearsago but only recently filed suitagainst the owner of the landfill.Under these circumstances, are theplaintiff’s state law claims timebarred?

The answer is unclear. If the land-fill’s gradual release of contaminantsinto the ground and surface water,which then migrate to the plaintiff’sproperty, is a permanent wrong, thenthe plaintiff’s cause of action is timebarred. However, if the releases areconsidered intermittent, the plaintiffcan recover damages as a result ofreleases during the previous fiveyears.

While this issue has not beendefinitively addressed by the VirginiaSupreme Court, other jurisdictionshave held that continuing damages,unaccompanied by continuing tor-tious action, are insufficient to con-stitute an intermittent wrong forthese purposes. These courts haveheld that passive migration of con-tamination released into the envi-ronment long ago is not a continuingtortious action.28

Other cases, however, havereached a contrary conclusion, hold-ing that continuing passive migra-tion of contamination constitutes anintermittent wrong. For example, inNeiman v. NLO, Inc.,29 the courtheld that continuing effects of histor-ical releases were actionable asintermittent torts. In Neiman, theplaintiff sued the defendants, formeroperators of a nuclear facility, con-tending that a nuclear release hadoccurred which contaminated theplaintiff’s property. The defendantsraised the statute of limitationsbecause their operation of thenuclear facility allegedly ended in1985, and the plaintiff did not file thesuit until 1994. The court concludedthat “under the Restatement, a claimfor continuing trespass is not defeat-ed where the defendant’s last affir-mative act of wrongdoing precedesthe filing of the complaint by a peri-od longer than the statute of limita-tions.”30 Under Ohio law, “a claim forcontinuing trespass may be support-ed by proof of continuing damagesand need not be based on allegationsof continuing conduct.”31

In Murray v. Bath Iron WorksCorp.,32 the court reached a similarresult. In that case, the plaintiffslived near a landfill which, theyalleged, contaminated their proper-ty. Certain of the plaintiffs first dis-covered contamination of theirproperty in 1978. The defendantceased using the landfill in 1985 andthe landfill was closed in 1986. Suit,however, was not filed until 1993,and the plaintiffs alleged that the

landfill continued to contaminatetheir property. Not surprisingly, thedefendant raised the statute of limi-tations, which was six years. Thecourt concluded that the action wasnot time barred, holding that “[t]othe extent that the plaintiffs canshow that wastes from the site con-tinue to be present on their land,regardless of when they entered,they can maintain an action for con-tinuing trespass under Maine law,since that tort would be continuallyoccurring for statute of limitationspurposes.”33 Moreover, the court alsoruled that “[a]s long as the nuisancecontinues unabated, a plaintiff maybring successive actions for damagesthroughout its continuance with thestatute of limitations providing nobar, again since the tort is ongoing.”34

Similarly, in Cate v. Transconti-nental Gas Pipe Line Corp.,35 thecourt held that the operation of anatural gas pipeline compressor,which caused nitrogen dioxide emis-sions and loud noises, was an inter-mittent nuisance because the effectsof the nuisance were intermittentand because the source of the nui-sance may be capable of abatement.The court explained:

Rather than “flooding” plaintiffsonce and for all time with loudnoises, the facility peppers plain-tiffs with the nuisance…[T]hecourt doubts that the houses arein a constant state of vibration.Rather, it is a periodic, albeit fre-quent, state of vibration thatplaintiffs must endure. Finally,the complaint alleges that theemissions from the facility cre-ate health hazards, cause physi-cal discomfort, and aggravatehealth concerns. The court con-cludes that such effects are notof a permanent nature. Rather,the existence of such nuisanceswill tend to fluctuate with theprevailing winds, weather pat-terns, and industrial activity. Itwould appear that all the allegednuisances caused by the opera-tion of the facility may well becandidates for a substantialabatement.36


Finally, in the case of ArcadeWater District v. United States,37 thecourt also determined that continu-ing effects of historical releases maybe actionable as intermittent torts.In this case, the Arcade WaterDistrict filed suit in 1984 against theAir Force claiming that the AirForce’s laundry contaminated, andcontinued to contaminate, the plain-tiff’s well. The Air Force’s laundrywas closed in 1973, and the applica-ble statue of limitations underCalifornia law was two years. Thus,the issue was whether the continu-ing contamination of the well fromthe now closed laundry was an inter-mittent nuisance. The court held itwas. It reasoned that, in determiningwhether the nuisance was continu-ing, the “most salient allegation isthat contamination continues to leakinto Arcades Well 31.”38 The courtalso reasoned that, because the nui-sance might abate over time, andbecause the leaking from the oldlaundry site might be capable ofremediation, the nuisance may betemporary. Accordingly, the courtruled that the suit was not barred bythe statue of limitations.39

Some older Virginia cases apply-ing the same theory as McDonnelloffer some different standards to dis-tinguish between permanent andintermittent wrongs. Some suggestthat an injury is permanent if thestructures causing it are permanentor if the damages have occurred con-tinuously from the time that the haz-ardous chemicals first entered theplaintiff’s property. Consider, forexample, Magruder v. Virginia-Carolina Chemical Co.,40 in whichthe plaintiff complained of the defen-dant’s past, current, and future dis-posal of water used in ore-washinginto a river that flowed onto theplaintiff’s property. The trial courtheld that the cause of action wasbarred by the five year statute of lim-itations and the Virginia SupremeCourt affirmed. The Court explainedthat the “firmly established rule oflaw in this jurisdiction [is] that

where there is a permanent nui-sance, the consequences of which, inthe normal course of things, will con-tinue indefinitely, there can be but asingle action therefore….”41 TheCourt held that since the defendant’splant, when constructed, wasdesigned to be permanent, and thatas long as it operated the nuisancewould be constant, the cause ofaction was time barred unless com-menced within five years from thedate of the first pollution of plaintiff’sland.42

It is not clear that McDonnelland Magruder are completely con-sistent. Surely, in McDonnell thepumping station was just as perma-nent a structure as the defendant’splant in Magruder. Moreover, justas in Magruder, that pumping sta-tion, as long as it operated, wouldcontinue to periodically effect theplaintiff’s property. The only dis-tinction is the pollution of thestream in Magruder was apparentlycontinuous and the overflows inMcDonnell only occurred duringheavy rains or other times whenwastewater volume increased.

Magruder ’s reliance on thealleged permanency of the defen-dant’s operations as a factor relevantto the running of the statute of limi-tations seems to be further calledinto question by Norfolk andWestern Railway Co. v. Allen,43 acase decided two years prior toMagruder. In Allen, the plaintiffsued the railroad claiming that therailroad’s steam pumping station,which used water from a streamwhich flowed through the plaintiff’sproperty, took so much water so asto interfere with the plaintiff’s use ofthe same stream to power a grainmill. The railroad’s steam pumpingstation commenced operations in1903 and the plaintiff instituted suitin 1912. However, the plaintiffalleged he suffered no damage fromthe steam pumping operations until1907, when the pumping station

installed larger pipes and removedmuch more water from the stream.

The railroad argued that, becausethe pumping station was permanent,the statute of limitations started run-ning in 1903, when the pumping sta-tion was built and commencedoperations. The Virginia SupremeCourt disagreed. The Court held thatthe permanency of the railroad’spumping station was irrelevant:“[w]hether or not the tank and thepump connected therewith consti-tuted a permanent structure was animmaterial question in this case.”44

The Court explained that it was thediverting of water, which was notcontinuous, that was harmful to theplaintiff and that the pumping sta-tion itself did not damage the plain-tiff.45

In Spicer v. City of Norfolk,46 thecircuit court considered whetherallegedly continuing migration ofpollution to neighboring property asthe result of a now defunct facilityconstituted a permanent or inter-mittent nuisance for purposes ofapplying the statute of limitations.While the court did not definitivelyanswer this question, it did reviewthe relevant standards. The courtfirst noted that, while there wasVirginia case law to the contrary,“the ability to abate the nuisancedoes not determine whether a nui-sance is permanent or temporary forstatute of limitations purposes….”47

The court held that a nuisance ispermanent for statute of limitationspurposes when “either (1) the dam-ages are of a permanent characterand go to the entire value of theplaintiff’s property or (2) the nui-sance is permanent, the conse-quences of which in normal courseof things will continue indefinite-ly.”48 The court concluded that “[i]ndistinguishing between permanentand temporary nuisances, the onlyfactor the Supreme Court has statedis whether human labor is necessarybefore an injury can occur or, stateddifferently, whether the injury


inflicted depends upon the use ofthe property….”49 While the courtnoted that permanence is ordinarilya question of fact for a jury, in“proper circumstances” it may be aquestion of law.

Conclusion

Virginia’s statutes of limitationapplicable to environmental actionsare strict and may result in claimsbeing barred before a plaintiff has areasonable opportunity to asserther rights. In most cases, the statuteof limitations starts to run when theplaintiff is injured. However, inmany environmental cases, theaccrual dates provided by Virginialaw are irrelevant as federal law hassubstituted a discovery accrualdate. However, in certain cases,plaintiffs will desire to assert claimswhich occurred substantially afterthey were injured by the contami-nation and after they first learned ofthe contamination. Under these cir-cumstances, plaintiffs must arguethat the contamination is intermit-tent and that all damages occurringin the relevant period before suit isfiled are not time barred.

1 Lavery v. Automation Management Consul-tants, 234 Va. 145, 158, 360 S.E.2d 336(1987).

2 VA. CODE ANN. § 8.01-243(B).3 VA. CODE ANN. 8.01-243(A).4 While there are exceptions to this rule, theseexceptions are not generally applicable toactions alleging damage as a result of therelease of hazardous chemicals. According-ly, these exceptions, which may apply insome instances, are not addressed herein.

5 See, e.g., Williams v. E.I. DuPont deNemours and Co., 11 F.3d 464, 466 (4th Cir.1993).

6 Id.7 782 F.2d 30 (4th Cir. 1985).8 Id. at 34.9 635 F. Supp. 366 (W.D. Va. 1986).

10 Id. at 369, n. 3.11 221 Va. 951, 275 S.E.2d 900 (1981).

12 Virginia has now provided, by statute, for adiscovery statute of limitations for asbestosactions. See VA. CODE ANN.§ 8.01-249(4).

13 Id. at 957-958.14 117 Va. 763, 86 S.E. 115 (1915).15 Id. at 767 (emphasis added).16 In a recent decision, Spicer v. City of Norfolk,

46 Va. Cir. 535, 546-47 (Norfolk 1996), thecourt discussed allegedly continuing migra-tion from historical operations at a nowdefunct facility. The court noted that “the firstentry of pollutants onto a plaintiff’s propertywill not necessarily constitute damage forpurposes of the accrual of a nuisance causeof action unless the quantity is so great as toconstitute a nuisance. When the damagefirst occurred is a question for the jury.” Id. at546 (citations omitted). Whether the stan-dard for such injury was subjective or objec-tive was not addressed.

17 42 U.S.C. § 9601 et seq.18 42 U.S.C. §§ 9658(a)(1), (b)(4)(A).19 42 U.S.C. § 9601(14).20 42 U.S.C. § 9601(33).21 42 U.S.C. § 9601(8).22 42 U.S.C. § 9601(9).23 Knox v. AC & S, Inc., 690 F. Supp. 752, 757

(S.D. Ind. 1988); accord In re HanfordNuclear Reservation Litigation, 780 F. Supp.1551, 1574 n.42 (E.D. Wash. 1991); seealso First United Methodist Church v. U.S.Gypsum Co., 882 F.2d 862, 867 n.8 (4th Cir.1989), cert. denied, 493 U.S. 1070 (1990)(explicitly reserving judgment on this issue).

24 Kowalski v. Goodyear Tire and Rubber Co.,841 F. Supp. 104, 107 (W.D.N.Y. 1994)(“There is nothing in the language of thesection that requires an underlying CER-CLA action in order to apply the federallyrequired commencement date preemptionof the state statute of limitations.”).

25 234 Va. 235, 239, 360 S.E.2d 841 (1987).26 See Cooper v. Whiting Oil Co., 226 Va.

491, 496, 311 S.E.2d 757 (1984).27 Importantly for plaintiffs, whether the

defendant’s actions are permanent or inter-mittent seems to be a question of fact tobe resolved by a jury. Virginia Hot SpringsCo. v. McCray, 106 Va. 461, 471, 56 S.E.216 (1907).

28 See, e.g., M.R. (Vega Alta), Inc. v. CaribeGeneral Elec. Products, Inc., 31 F. Supp. 2d226, 240 (D.P.R. 1998) (“For there to be acontinuous tort, Defendants must be contin-uously acting, i.e., continuing to dump pol-lutants on Plaintiffs’ land. Defendants arenot continuously acting when the pollutantsentering the land are doing so without any

further impetus on the part of theDefendants beyond that committed in1988.”); Sable v. General Motors Corp., 90F.3d 171, 176 (6th Cir. 1996) (“[T]he defen-dants’ actions here are not of a continuingnature; defendants ceased dumping onplaintiff’s land in 1974. Since there were nocontinuing tortious acts within three yearsfrom the date plaintiff filed the cause ofaction, only continual harmful effects, plain-tiff’s reliance on the continuing-wrongful-acts doctrine is misplaced.”) (italics in origi-nal); Powell v. City of Danville, 625 N.E.2d830, 831 (Ill. App. Ct. 1993) (“While theeffects may be continuing because of theleaching, the tortious act ceased prior to1975.”), appeal denied, 633 N.E.2d 14 (Ill.1994); see also Dombrowski v. GouldElectronics, Inc., 954 F. Supp. 1006, 1013(M.D. Pa. 1996) (“There is no doubt in theCourt’s mind that it is a permanent trespass,for any alleged invasion occurred prior tothis litigation.…Since the alleged invasionsor trespasses constitute permanent inva-sions, the statute of limitations began to run“from the time [the emission] first occurred,or at least from the date it should reasonablyhave been discovered.”) (quoting Sustrick,413 Pa. at 326, 197 A.2d 44) (brackets inoriginal).

29 108 F.3d 1546, 1555 (6th Cir. 1997).30 Id. at 1557 (footnote omitted).31 Id. at 1559.32 867 F. SUPP. 33, 48 (D. Me. 1994).33 Id. at 48.34 Id. (citations omitted).35 904 F. SUPP. 526, 539 (W.D. Va. 1995)36 Id. at 539 (citations omitted).37 940 F.2d 1265 (9th Cir. 1991)38 Id. at 1268.39 See also In re Tutu Wells Contamination Lit-

igation, 846 F. SUPP. 1243, 1257 (D.V.I.1993) (“As other courts have explained,where the wrongful conduct continues andthe nuisance is maintained, every continu-ance tolls the statute of limitations. Becausethe invasion to the [plaintiffs’] wells contin-ues, and the Plaintiffs have argued that thequestion as to whether the damage is per-manent or temporary is to be determined,Plaintiffs’ nuisance claims are timely underthe two year statute of limitations.”) (citationsomitted); 325-343 E. 56th Street Corp. v.Mobil Oil Corp., 906 F. Supp. 669, 675-676(D.D.C. 1995) (The court held that a subse-quent owner’s claims against the prior own-ers for cleanup costs incurred as a result ofspills from a gasoline service station aredeemed to constitute a continuing tort.Thus, the court held, claims could be


asserted in 1993 despite the fact that theproperty had not been used as a gasolinestation since 1974.)

40 120 Va. 352, 91 S.E. 121 (1917).41 Id. at 354.42 Id. at 354-55; accord Worley v. Mathieson

Alkali Works, 119 Va. 862, 866, 89 S.E. 880(1916) (holding that the plaintiff’s claimsagainst a chemical plant for poisoning adownstream river were barred by thestatute of limitations because the defen-dant’s plant commenced operations in1895, more than five years before suit wasfiled, and “the damage alleged to havebeen sustained by the plaintiff has resultedfrom a cause permanent in its character.”).

43 118 Va. 428, 435, 87 S.E. 558 (1915).44 Id. at 431.45 Id. at 431-32.46 46 Va. Cir. 535, 546-47 (Norfolk Cir.

Ct.1996)47 Id. at 546. However, the court noted that

whether the nuisance was abatable mightaffect whether damages were of a perma-nent character and, accordingly, theamount of the plaintiff’s recovery. Id.

48 Id.49 Id. at 547 (citation omitted).

� �

A SustainableBalance BetweenAgriculture andGrowth?by Amy L. Pierce

According to a 1997 study bythe American FarmlandTrust, every state in this

country is experiencing the conver-sion of high quality farmland to sub-urban development.1 Each year thenation loses a million acres of irre-placeable agricultural land.2 So far,the vast agricultural resources of theUnited States have masked thisproblem. However, the long-termimplications are clear. Not only doesthis trend threaten the viability ofthe United States as a food exporter,

but with it comes the simultaneousloss of open space, wildlife habitat,groundwater recharge areas, wet-lands and other benefits attributableto farmland.3 Furthermore, the con-version of farmland to suburbanuses increases the developmentpressures on adjacent lands. WhileVirginia may not be one of the majoragricultural producing states in thenation, in 1997 agricultural opera-tions occupied over 8.2 millionacres of the Commonwealth andproduced $2.34 billion in revenuefrom the products sold.4

Since 1982, Virginia has lost over1.2 million acres of farmland.5 Muchof the land being lost is prime orunique farmland, disproportionatelylocated near metropolitan areas.6

The Northern Piedmont farmingregion has long been threatened bythe ever-burgeoning Washington, DCmetropolitan area. This resulted inrapid growth in traditionally ruralcounties. For example, LoudounCounty’s population grew 64 percentbetween 1980 and 1992.7 This phe-nomenon spread down the Route 29corridor to Culpeper and AlbemarleCounties (22.6 and 28.8 percentincreases in population between1980 and 1992, respectively).8 Otherendangered fertile farmland is locat-ed in Southeastern Virginia, near theCities of Chesapeake, Virginia Beachand Hampton Roads. This same pat-tern is occurring nation-widebecause prime farmland is oftenlocated near growing metropolitanareas and is the most attractive fordevelopment because of its well-drained soils and lack of steepslopes, resulting in lower develop-ment costs.9

The conversion of this prime agri-cultural land to non-agricultural usesresults in many long-term conse-quences, only one of which is theremoval of a parcel from agriculturalproductivity. All related amenitybenefits, including open space, pro-tection of groundwater rechargeareas and wetlands, and preservation

of wildlife habitats, associated withthis parcel disappear. However, inaddition to these primary effects, theconversion of a parcel to a non-farmuse has a potentially more importantand far-reaching secondary impacton surrounding parcels. The conver-sion of one parcel can create tremen-dous development pressures onadjacent land.10 This happens for sev-eral reasons.

One reason involves pure eco-nomics: the value of the land if devel-oped is usually substantially higherthan the potential income of thefarm. Often farmers are forced to sellfor this reason alone. As develop-ment occurs around them, the taxeson their property rise and can makeretaining the land in an agriculturaluse financially impossible. Anotherreason is that the development ofone parcel decreases the potentialproductivity of surrounding farm-land. The nature of farming creates ahigh potential for nuisance conflictswith scattered residential develop-ment. To mitigate potential conflictswith the odor, noise and dust offarming operations, localities willoften limit a farm’s current or futureuse.11 Furthermore, the potential of anuisance suit to enjoin a farm’s oper-ations increases as the level andexpense of the surrounding develop-ment increases. The only way to mit-igate these secondary impacts ofconversion of land to non-agricultur-al uses is through governmentalmeasures aimed at protecting farm-ing and reducing development pres-sures.

The importance of farming is rec-ognized at the federal level througha variety of federal laws, rules andpolicies. The Federal AgriculturalIm-provement and Reform Act of1996, as known as the 1996 FarmBill, recognizes a broad commit-ment to conservation, protecting theenvironment and supporting theagricultural trade and the future offarming.12 However, this sameimportance is often not recognized


at the state and local levels. In Vir-ginia, state and local governmentpolicies have the most impact on theoperations of farms and the future offarming in the state. The state doeshave a Right to Farm Act, codified atVa. Code Ann. §§ 3.1-22.28 and 3.1-22.29. Right to farm laws aredesigned to strengthen the legalposition of farmers when neighborssue them for private nuisance and toprotect farmers from anti-nuisanceordinances and unreasonable con-trols on farming operations. HouseBill 863, which was under consider-ation in the 1999 legislative sessionof the General Assembly, sought tofurther limit the circumstancesunder which farming operationsmay be deemed a nuisance.13 Thebill provided that no agriculturaloperation would be deemed a nui-sance “by any changed conditions inor about the locality thereof afterthe same has been in operation formore than a year.”14 The bill died incommittee and was not carried overto the 2000 session.

The Commonwealth permits agri-cultural districting, which is a volun-tary policy for protecting land inagriculture. In agricultural district-ing, a participant sets aside an areaof farmland to remain undevelopedfor a fixed period of time.15 They aregenerally thought to be an ineffectivestrategy for preserving land nearurbanized areas and they are ineffec-tive as planning tools.16 A 1993 studyof agricultural preservation pro-grams in Maryland, Pennsylvaniaand Virginia study showed that mostof the agricultural districting pro-grams failed to discourage land spec-ulation in farmland, prevent farmdisinvestment or preserve farmlandat a pace equal to that of develop-ment.17

Virginia also has a law known asthe Open Space Land Act, codified atVa. Code Ann. §§ 10.1-1700–1705.The Act furnishes a tool for any pub-lic body to acquire interests or rightsin real property that will provide for

the preservation or provision of openspace and designate any real proper-ty in which it has an interest to beretained and used for open space.18

After acquisition, the public bodymay make the land available for agri-culture or timbering uses.19

The largest program to takeadvantage of the powers contained inthe Open Space Land Act is the Cityof Virginia Beach’s AgriculturalReserve Program (ARP). Enacted in1995, the ARP is a voluntary pro-gram that pays market value for per-petual easements over prime farmand forested land through the pur-chase of development rights (PDR).20

PDR programs retire the develop-ment rights of land and allow it toremain open without developmentpressures. As of 1997, the programhad approved the purchase of ease-ments for over 3,000 acres and hadpending applications for another3,500 acres.21 This program hasallowed, and will continue to allow,the southern half of Virginia Beachto remain in agricultural use, despiteits close proximity to the cities ofVirginia Beach and Norfolk.Albemarle County has also instituteda PDR program.

In spite of local efforts like thisacross the nation to protect openspace and farmland, uncontrolledurban growth and its effects haverecently grasped the attention of cit-izens and lawmakers alike. In someform or other, growth questionsappeared on over 200 ballot ques-tions across the country in theNovember 1998 election.22 By thattime, both the National Trust for His-toric Preservation and the SierraClub had made sprawl a high priori-ty.23 Beginning in 1998, the ClintonAdministration promoted “smartgrowth” initiatives to encourageplanned growth and protection offarms and endangered habitats.24

Lawmakers and citizens in Virginiahave been equally concerned. Acoalition of officials from 23 of thestate’s fastest growing counties and

cities, the Coalition of High GrowthCommunities, formed in 1998 andhas met regularly.25 In November1998, a statewide seminar entitled“Can Agriculture and Growth Co-Exist?” was sponsored by VirginiaTech’s Rural Economic Analysis Pro-gram and the Program for Communi-ty Vitality. In addition, Joint StudyCommittees were underway in vari-ous forms in the General Assemblyin 1999 and 2000.

The “Can Agriculture andGrowth Co-Exist?” seminar present-ed facts and figures on agriculturalproduction trends and prospects forthe future of farming in Virginia.26

According to a survey of 21 planningdirectors in Virginia conductedbefore the seminar, the top two chal-lenges facing agriculture in the stateare economic issues (high land valuein relation to farm profits) and sub-urban growth pressures.27 Thesechallenges have led to a reduction inthe number of farms and an increasein the acreage and number of live-stock necessary to produce a viableincome.

In the 1999 and 2000 legislativesessions, numerous subcommitteesheld the latest rounds of discussionswithin the General Assembly ongrowth management tools and tech-niques. Unfortunately, these sub-committees seem to have trottedover much of the same ground cov-ered by previous committees of theAssembly in the 1960s and 1980s totackle growth issues.28 However,S.J.R. 76 on the Future of Virginia’sEnvironment has been continued tostudy and develop visions forVirginia’s future throughout the2001 session.29 And S.J.R. 134established a farmland protectiontask force to develop a comprehen-sive farmland protection policy forthe Commonwealth.30

More significantly, the fiscal year2000 budget included $115,000over the two years to establish theVirginia Agricultural Vitality Pro-gram, an innovative project within


the Department of Agriculture andConsumer Services. The VitalityProgram’s goal is to preserve farm-land and the business of farming inVirginia through two complementa-ry initiatives. The first initiativeseeks to help localities develop andimplement purchase of develop-ment rights programs, similar to theprogram in Virginia Beach. The sec-ond initiative will help to link retir-ing farmers with young, aspiringfarmers and provide state assistancein business and estate planning.31

The $115,000 allocated in lastyear’s budget is merely seed moneyto establish the program. Muchmore money will be needed for theinitiative to succeed. The VirginiaFarm Bureau plans on asking the2001 General Assembly to provideat least $20 million for the project.32

What remains to be seen is whatwill become of the Agricultural Vital-ity Program and what might comeout of the General Assembly in theway of substantive legislation aimedat controlling growth and protectingagricultural land. If agriculture is toremain a viable and productive sec-tor of Virginia’s economy and rural,open space is to remain a character-istic of the landscape, more pro-active support by the legislature isneeded. Now is the only time to pre-serve agricultural land. After its con-version to non-farm uses, restorationto agricultural viability, while per-haps technically possible, would beprohibitively expensive.33 Amend-ments to the Right to Farm Act arenecessary to protect existing farmsfrom encroaching residential devel-opment. Agricultural districting andthe Open Space Land Act are veryworthwhile programs. Nonetheless,they need to be supplemented andlocal governments need to beencouraged or directed to imple-ment farm preservation programs ofthe state or local design. This goalcan be accomplished through theproposed Agricultural Vitality Pro-gram. Its future funding is critical to

halting the loss of farmland in Vir-ginia.

There is an extreme amount ofinterest in uncontrolled and un-planned growth at the present time.The General Assembly has spentmuch time and effort investigatingits effects and ways to accommodategrowth while protecting the environ-ment and preserving open space.The seed money for the proposedAgricultural Vitality Program was themost promising move by the 2000General Assembly in this regard.However, it remains to be seenwhether the 2001 General Assemblywill enact needed legislation andfully fund the Agricultural VitalityProgram or, as in past decades in Vir-ginia’s history, the enthusiasm forcontrolled growth fades away.

1 A. Ann Sorensen, Richard P. Greene &Karen Russ, Farming on the Edge, Ameri-can Farmland Trust Center for Agriculture inthe Environment, Northern Dekalb Universi-ty, March 1997, at 1.

2 Id.3 Id.4 United States Department of Commerce,Bureau of the Census: Census ofAgriculture. 1997.

5 Id.6 Andrew D. Carver & Joseph E. Yahner,Defining Prime Agricultural Land and Meth-ods of Protection, Perdue CooperativeExtension Service, ¶ 3 (1996) <http://www.agry.perdue.edu/agronomy/landuse/prime.htm>.

7 A. Ann Sorensen, Richard P. Greene &Karen Russ, Farming on the Edge, Ameri-can Farmland Trust Center for Agriculture inthe Environment, Northern DeKalb Universi-ty, March 1997, at 8.

8 Id.9 Andrew D. Carver & Joseph E. Yahner,Defining Prime Agricultural Land and Meth-ods of Protection, Perdue CooperativeExtension Service, ¶ 5 (1996) <http://www.agry.perdue.edu/agronomy/landuse/prime.htm>.

10 Id at ¶ 6. 11 Id at ¶ 7.

12 Agricultural Improvement and Reform Actof 1996, Pub. L. No. 104-127, 110 Stat.888 (1996).

13 H.B. 863, 1999 Sess. (Va. 1999).14 Id.15 Nancy J. Volkman, Vanishing Lands in the

USA: the use of agricultural districts as amethod to preserve farmland, LAND USE

POLICY, Jan. 1987, at 14.16 Id.17 George J. Maurer, Evaluation of Agricultural

Preservation Programs in Maryland, Penn-sylvania and Virginia (1993).

18 VA. CODE ANN. § 10.1-1701 (1998).19 VA. CODE ANN. § 10.1-1702 (1998).20 Jeryl Rose Phillips, Can Agriculture and

Growth Co-Exist?, VAPA NEWSBRIEF, (Va.Chapter of the American Planning Assoc.,Midlothian, Va.), Jan.-Feb. 1999, at 8.

21 Id.22 High Growth: A Hot Topic All Over, VAPA

NEWSBRIEF (Va. Chapter of the AmericanPlanning Assoc., Midlothian, Va.), Nov.-Dec.1998, at 3.

23 Id.24 Clinton Budget Pushes Smart Growth, OPEN

LAND, Planning, Feb. 1999, at 24.25 Squaring Off in Virginia, PLANNING, Feb.

1999, at 33.26 Jeryl Rose Phillips, Can Agriculture and

Growth Co-Exist?, VAPA NEWSBRIEF, (Va.Chapter of the American Planning Assoc.,Midlothian, Va.), Jan.-Feb. 1999, at 7.

27 Id.28 Bill Ernst, The Legislative Prospect, VAPA

NEWSBRIEF, (Va. Chapter of the AmericanPlanning Assoc., Midlothian, Va.), Jan.-Feb. 1999, at 5; S.J.R. 76, 2000 Sess. (Va.2000); S.J.R. 134, 2000 Sess. (Va. 2000),H.B. 713, 2000 Sess. (Va. 2000).

29 S.J.R. 76, 2000 Sess. (Va. 2000). 30 S.J.R. 134, 2000 Sess. (Va. 2000). 31 Virginia Farm Bureau Federation, Virginia

Ag Initiative <http://www.savefarms>. 32 Greg Edwards, Media Blitz Slated for

Farmland Effort, RICHMOND TIMES-DISPATCH,Sept. 14, 2000.

33 Andrew D. Carver & Joseph E. Yahner,Defining Prime Agricultural Land and Meth-ods of Protection, Perdue CooperativeExtension Service, ¶ 5 (1996).

� �


ComplianceCheckup:Virginia’s NewIndustrial StormWater GeneralPermitby Matthew L. Iwicki, Esquire, Gentry Locke Rakes & Moore, & James S. Willis, III, P.E., P.G., Engineering Consulting Services, Ltd.

V irginia’s new Industrial StormWater General Permit cover-ing “point source” discharges

of storm water “associated withindustrial activity” to surface watersof the Commonwealth became effec-tive June 30, 1999.1 The general per-mit mandates the development andimplementation of a facility-specificStorm Water Pollution PreventionPlan (SWPPP) for each covered facil-ity, and various monitoring and sam-pling requirements depending on afacility’s industry sector.2 Pointsource discharges are those that flowthrough any discernable, definedand discrete conveyance (such as aditch, channel or swale), as com-pared to uncollected “sheet-flow”run-off.3 Facilities conducting indus-trial activities required to have regis-tered under the general permit (or tohave obtained an individual permit)generally include those within Stan-dard Industrial Classification (SIC)codes 10-14, 20-45, 50 and 51, withmany specific exceptions or limita-tions.4 A facility may qualify for anexemption from the requirement toobtain a permit if it properly certifiesto the Virginia Department of Envi-ronmental Quality (DEQ) that stormwater is not contaminated by expo-sure to industrial activity at the facil-ity.5

The SWPPP must identify poten-tial sources of storm water pollu-tion, and detail measures to limitcontamination of storm water and

assure compliance with the otherrequirements of the general permitsuch as training, inspections, andmaintenance.6 The SWPPP mustalso contain a certification that thedischarge has been tested or evalu-ated for the presence of non-stormwater discharges, which generallymust be individually permitted.7

All covered facilities are requiredto obtain and visually inspect quar-terly grab-samples of storm waterdischarges for obvious signs of con-tamination.8 Facilities in numeroussectors (e.g. timber products, chem-icals and allied products manufac-turing, landfills, automobile salvageyards, scrap/waste recycling, foodand kindred products, concreteproducts, transportation, printing,fabricated metal products, miningand many others) are required toobtain and analyze samples forspecified pollutants of concern(POCs) twice a year, during yearstwo and four of the general permit,in order to determine the effective-ness of their SWPPPs.9 Many facili-ties are also subject to enforceablenumeric effluent limitations underthe general permit and must obtainand analyze samples for the limitedcontaminants annually to verifycompliance.10

For most covered facilities, theSWPPP, including any revisionsrequired to comply with the newgeneral permit, must have been pre-pared and implemented no laterthan March 26, 2000.11 If construc-tion is required to fully implementmeasures required by the plan, rea-sonable interim measures must betaken and full compliance must beachieved as soon as practicable, butno later than June 30, 2002.12

If a facility is currently operat-ing under the general permit, itshould be conducting quarterlyvisual monitoring of its storm waterdischarges and maintaining thereports of the observations on-sitewith its SWPPP.13 Facilities subject

to numeric effluent limitations orin sectors required to conductsemi-annual sampling for POCs inyears two and four of the permitshould have in place a program forthe required sampling, analysis andreporting.14 A facility’s obligationsunder the general permit should becarefully reviewed; if the facility issubject to numeric effluent limita-tions and/or is required to conductsemi-annual sampling in years twoand four of the permit and it missesthe deadlines for submitting thedata to DEQ, it could be invitingunwanted attention in the form ofan enforcement action.

If a facility is subject to numericeffluent limitations and its dis-charge exceeds those limitations, itwill be in violation of its permit andsubject to enforcement action.Significant fines may be assessed,15

and the facility will be required toundertake corrective measuressuch as reviewing its processes andoperations and making correspon-ding changes to its SWPPP.16

If a facility is required to con-duct semi-annual sampling in yearstwo and four of the permit, the aver-age concentrations of the POCs forthe second year sampling events arecompared to specified “monitoringcut-off concentrations” (MCOCs).17

These MCOCs are not enforceablelimits; rather, the facility and DEQutilizes them to assist in evaluatingwhether the facility’s SWPPP is ade-quate and being successfully imple-mented. If an annual average POCconcentration during the secondyear exceeds the MCOC, the facilitywill likely be required to review andimprove its SWPPP.18 The samplingin the fourth year will demonstratewhether the improvements wereeffective. If the annual average con-centrations for the POCs in the sec-ond year do not exceed theMCOCs, the fourth year samplingmay be waived (on a pollutant-by-pollutant and discharge-by-dis-charge basis) provided that the


facility continues to implement thesuccessful SWPPP.19

If either numeric effluent limita-tions or MCOCs are exceeded, thefacility should be prepared for aninspection by the DEQ. At thispoint legal and technical advice isessential. One focus of the inspec-tion will be the SWPPP. If theSWPPP is not up-to-date or if thereis no documentation for therequired activities, the DEQ mayconsider the facility to be out ofcompliance with the general permit.Regardless, as discussed above,changes to the facility or its prac-tices and procedures will berequired to eliminate theexceedances.

1 See 9 VAC 25-151-10 et seq. (GeneralVirginia Pollutant Discharge EliminationSystem (VPDES) Permit for Discharges ofStorm Water Associated with IndustrialActivity); 15 VA. REG. 1160 (January 18,1999) (Final Regulation).

2 See 9 VAC 25-151-70 (general permit con-ditions applicable to all storm water dis-charges associated with industrial activity);9 VAC 25-151-80 (storm water pollutionprevention plans); 9 VAC 25-151-90 etseq. (additional requirements for facilitieswithin specified industry sectors).

3 See 9 VAC 25-31-10 (definition of “pointsource”) (“‘Point source’ means any dis-cernible, confined, and discrete con-veyance, including but not limited to, anypipe, ditch, channel, tunnel, conduit, well,discrete fissure, container, rolling stock,concentrated animal feeding operation,landfill leachate collection system, vessel orother floating craft from which pollutantsare or may be discharged. This term doesnot include return flows from irrigated agri-culture or agricultural storm water runoff.”).Storm water discharges associated withindustrial activity through municipal or non-municipal separate storm sewer systemsto surface waters are also eligible for cov-erage under the general permit. See 9 VAC25-151-20.

4 See 9 VAC 25-151-10 (definitions of“industrial activity” and “storm water dis-charge associated with industrial activity”).

5 See 9 VAC 25-151-60 C (no exposure cer-tifications).

6 See 9 VAC 25-151-80 (storm water pollu-tion prevention plans).

7 See 9 VAC 25-151-80 D.3.g (1) (certifica-tion of testing and evaluation for the pres-ence of non-storm water discharges); 9VAC 25-151-70 D.1 (requiring most non-storm water discharges to be individuallypermitted).

8 See 9 VAC 25-151-70 C.8 (quarterly visualexaminations of storm water quality).

9 See 9 VAC 25-151-70 C.2-7 (monitoringfor POCs).

10 See 9 VAC 25-151-70 B (numeric effluentlimitations and compliance monitoring).

11 See 9 VAC 25-151-80 A.1 (deadline forSWPPP preparation and compliance forexisting facilities).

12 See 9 VAC 25-151-80 A.4 (deadline forSWPPP compliance where measuresrequire construction).

13 See 9 VAC 25-151-70 C.8.b (maintenanceof visual examination reports).

14 See 9 VAC 25-151-70 B.2 (compliancemonitoring and reporting for numeric efflu-ent limitations); 9 VAC 25-151-70 C.7(reporting of monitoring results); 9 VAC 25-151-70 E.3 (reporting monitoring results onDMRs); 9 VAC 25-151-70 C.2 (analyticalmonitoring and reporting for POCs); 9 VAC25-151-70 C.7 (reporting of monitoringresults); see also 9 VAC 25-151-70 E.3(reporting monitoring results on DMRs).

15 See VA. CODE § 62.1-44-32 (providing for,inter alia, civil penalties not to exceed$25,000 per day for each violation of theState Water Control Law).

16 See, e.g., 9 VAC 25-151-80 B.3 (authoriz-ing DEQ to order modifications to theSWPPP if it fails to meet the requirementsof the general permit); 9 VAC 25-151-80 C(requiring permittee to amend the SWPPPif it proves ineffective in eliminating or sig-nificantly minimizing storm water contami-nation).

17 See 9 VAC 25-151-70 C.4.b (low concen-tration waiver).

18 See note 18, supra.

19 See note 19, supra.

� �

EnvironmentalMarketing and theFTC Green Guidesby J. Brandon Holder

“It isn’t easy being green.”— Kermit the Frog

Introduction

Environmental marketing e-merged as an international phe-nomenon during the 1990s.”1 Softdrink bottles now admonish theconsumer to “Please Recycle” andaerosol cans regularly announce“No CFCs.” There are very fewitems for sale anywhere that arenot marked in some fashion withthe ubiquitous three-chasing-arrows symbol. In response, manyconsumers have changed their pur-chasing decisions based on environ-mental concerns. They avoidproducts believed to be environ-mentally harmful while purchasingproducts specifically because ofenvironmental advertising or label-ing. Consumers are even willing topay more for products perceived asenvironmentally preferable.2

While the enormous growth ofenvironmental marketing may gen-erally be viewed as a positive trend,as with all new trends it does pres-ent a number of questions and prob-lems. The purpose of this article isto examine the development of fed-eral regulation in the area of envi-ronmental marketing. Specifically,emphasis will be placed on theefforts of the Federal Trade Commis-sion (“FTC” or “Commission”) toregulate environmental claimsthrough the issuance of voluntarymarketing guidelines.3 These guide-lines, issued in 1992 as Guides forthe Use of Environmental Market-ing Claims (“Green Guides” or“Guides”), are intended to accu-rately inform consumers while pro-


moting sound environmental prac-tices and aiding industry in structur-ing legally permissible advertisingand marketing claims.

Unique Problems inEnvironmental Marketing

The proliferation of “green” mar-keting has presented significantconsumer protection problems.Former FTC Commissioner RoscoeB. Starek, III stated that “[w]henenvironmental advertising mush-roomed in the late 1980s and early1990s, it seemed that many of theclaims were exaggerated and con-cerns were expressed that therewasn’t much truth in environmentaladvertising.”4

Green marketing claims raisesome unique concerns in additionto the obvious one associated withany form of false advertising. As oneacademic commentator has written,“[g]reen marketing is more prob-lematic than certain other forms ofadvertising because consumers gen-erally cannot substantiate environ-mental claims on their own.Although people can compare thetaste of Coke and Pepsi, andobserve their laundry after washingwith Tide or Cheer, they generallycannot verify recycled contentclaims or statements about theozone layer.”5 Furthermore,because consumers are willing topay more for products that theybelieve are environmentally prefer-able, false advertising in this areamay lead consumers to spendmoney for the wrong products. Thishurts not only the consumer butalso honest industry competitors.6

State Regulatory Efforts

Industry concern over a patch-work of state laws in this area wasone of the initial considerationsleading to FTC involvement andsubsequent issuance of the GreenGuides discussed below. A number

of states have enacted environmen-tal marketing laws.7 All measuresdiffer in their particulars, but it isnot difficult to envision the compli-ance problems for companies mak-ing environmental marketing claimsin different geographic markets. Asof this writing, Virginia has limitedits regulation to labeling of organicproducts.8 California, in contrast,has a very detailed statute, prohibit-ing commonly-used environmentalterms like “recycled” unless prod-ucts meet certain criteria.9

The FTC Green Guides havehelped to alleviate the problems ofdiffering state laws. Several states,including California, New York, andRhode Island, have either repealedor modified their laws concerningenvironmental marketing claims tobe consistent with the GreenGuides.10 At least one state, Maine,has adopted the Green Guides intolaw.11 Nevertheless, there are stillmany different approaches beingpursued among the states. Counselmust be aware of applicable statelaws because the FTC guidancedoes not preempt them.

The Green Guides

Development

FTC involvement in the area ofenvironmental marketing began inthe 1970s. In 1973 the Commissionnegotiated an industry-wide agree-ment on phosphate and degradabil-ity claims for detergents.12 The FTCpursued a limited number of decep-tive environmental claims on acase-by-case basis throughout the1970s and early 1980s.13 The needfor increased regulation by the FTCwas not evident until the late 1980sand early 1990s when environmen-tal marketing came to the fore.

With states enforcing againstdeceptive or misleading environ-mental marketing claims undertheir own laws, businesses and

advertisers were growing increasing-ly concerned about the potentialdevelopment of differing or inconsis-tent standards on a state-by-statebasis. These concerns were matchedby the zeal of state law enforcersand environmental groups that con-tinued to express concern aboutpreventing deceptive claims.14 As aresult, the FTC received a number ofpetitions from members of industryand trade associations urging theCommission to issue uniformnational standards for environmen-tal marketing claims. A task force ofstate Attorneys General also recom-mended that national industry-wideguidance be provided.15

In May 1991 the Commissionpublished a Federal Register noticerequesting public comment onissues concerning environmentalmarketing and advertising claimsand announcing that it would holdpublic hearings.16 Comments weresubmitted by consumer and indus-try groups, environmental organi-zations, the U.S. EnvironmentalProtection Agency (“EPA”), theU.S. Office of Consumer Affairs(“USOCA”), and state and localgovernments. The “overwhelmingresponse from all quarters” sup-ported issuance of FTC guides forenvironmental marketing.17 In July1992, the Commission respondedby issuing Guides for the Use ofEnvironmental Marketing Claims(“Green Guides”), codified at 16C.F.R. Part 260.18 On the day thatthe Guides were issued, FTC Chair-man Janet D. Steiger addressedtheir purpose at a congressionalhearing:

Our goal is to protect consumersand to bolster their confidencein environmental claims, and toreduce manufacturers’ uncer-tainty about which claims mightlead to FTC law-enforcementactions, thereby encouragingmarketers to produce and pro-mote products that are lessharmful to the environment. I


believe these guides, togetherwith vigorous law enforcementby the FTC and the states, go along way toward achieving thesegoals.19

The Green Guides as issued in1992 contained a provision forreview after three years. The pur-pose of the review was “to seek pub-lic comment on the effectiveness ofthe Guides and on whether and howthey should be modified to reflectchanges in consumer understandingand developments in environmentaltechnology.”20 After receiving com-ments and holding another set ofpublic hearings, the Commissionissued revised guides in October1996.21 Only minor changes weremade as the Commission was still inthe process of reviewing the“Recyclable” and “Compostable”guides (discussed below) and want-ed to evaluate the results of relevantongoing consumer research as towhat meaning consumers assignedto these terms.

Following further consumerresearch and another public com-ment period, revised Green Guideswere again issued on May 1, 1998.22

They included expanded examplesof legitimate and illegitimate“Recyclable” and “Recycled con-tent” claims, as well as clarificationthat the Guides apply not only totraditional labeling and advertisingpractices but also to claims assertedthrough electronic media like theInternet. Copies of the currentGreen Guides are available from theFTC web site.23

Purpose and Scope

The FTC has enforcementauthority for false or misleadingenvironmental claims under Section5 of the Federal Trade CommissionAct (“FTC Act”), which generallyprohibits “unfair or deceptive actsor practices in or affecting com-merce.”24 The Commission’s Policy

Statement on Deception enumer-ates the three elements of a decep-tive claim: (1) there must be arepresentation, omission or practicethat is likely to mislead the con-sumer; (2) the act or practice mustbe considered from the perspectiveof a consumer acting reasonably inthe circumstances; and (3) the rep-resentation, omission or practicemust be material, i.e. it must be“likely to affect the consumer’s con-duct or decision with regard to aproduct or service.”25 Manufacturersand advertisers should note thatthey are liable not only for expressbut also for implied marketingclaims. It is a basic yet frequentlymisunderstood aspect of FTC lawthat marketers are responsible bothfor what they expressly say and forwhat their claims imply.26

Under Section 5 of the FTC Act,anyone making a marketing claimmust “possess and rely upon a rea-sonable basis substantiating theclaim. A reasonable basis consists ofcompetent and reliable evidence. Inthe context of environmental mar-keting claims, such substantiationwill often require competent andreliable scientific evidence….”27 Thepurpose of the Green Guides is toprovide guidance on the applicationof Section 5 to environmental adver-tising and marketing practices.28 Asguidance, the Green Guides are notenforceable regulations, nor do theyhave the force and effect of law.29

Like Section 5 of the FTC Actitself, the scope of the Green Guidesis quite broad. They apply to “envi-ronmental claims included in label-ing, advertising, promotionalmaterials and all other forms ofmarketing, whether asserted direct-ly or by implication, through words,symbols, emblems, logos, depic-tions, product brand names, orthrough any other means, includingmarketing through digital or elec-tronic means, such as the Internetor electronic mail.”30 The substan-

tive portion of the Green Guides isdivided into two sections, one stat-ing general principles and the otherproviding specific guidance on envi-ronmental marketing claims.

General Principles

The Green Guides enumeratefour general principles for environ-mental marketing claims. Theseprinciples, which are outlined below,are intended by the Commission toapply to all environmental marketingclaims. Examples are provided forclarification and further examplesare set forth in the Green Guides.

The first general principlerequires that product and packaging“qualifications and disclosures…should be sufficiently clear, promi-nent and understandable to preventdeception.”31 The concern here isthat “a disclosure that’s too small orinconspicuous for a consumer tonotice…isn’t going to be very help-ful.”32

Second, “[a]n environmentalmarketing claim should be present-ed in a way that makes clearwhether the environmental attrib-ute or benefit being asserted refersto the product, the product’s pack-aging, a service or to a portion orcomponent of the product, packageor service.”33 For example, a box ofaluminum foil is labeled with theclaim “recyclable,” without furtherelaboration. Unless the type ofproduct, surrounding language, orother context of the phrase estab-lishes whether the claim refers tothe foil or the box, the claim isdeceptive if any part of either thebox or the foil, other than minor,incidental components, cannot berecycled.34

Third, “[a]n environmental mar-keting claim should not be present-ed in a manner that overstates theenvironmental attribute or benefit,expressly or by implication. Mar-


keters should avoid implications ofsignificant environmental benefits ifthe benefit is in fact negligible.”35

For example, consider a packagelabeled “50% more recycled contentthan before.” The manufacturerincreased the recycled content ofits package from 2 percent recycledmaterial to 3 percent recycledmaterial. Although the claim istechnically true, it is likely to con-vey the false impression that theadvertiser has increased significant-ly the use of recycled material.36

Fourth, “[e]nvironmental mar-keting claims that include a com-parative statement should bepresented in a manner that makesthe basis for the comparison suffi-ciently clear to avoid consumerdeception. In addition, the advertis-er should be able to substantiate thecomparison.”37 For example, anadvertiser notes that its shampoobottle contains “20% more recycledcontent.” The claim in its context isambiguous. Depending on contextu-al factors, it could be a comparisoneither to the advertiser’s immedi-ately preceding product or to acompetitor’s product. The advertis-er should clarify the claim to makethe basis for comparison clear, forexample, by saying “20% more recy-cled content than our previouspackage.” Otherwise, the advertisershould be prepared to substantiatewhatever comparison is conveyedto reasonable customers.

Specific Environmental Marketing Claims

The Green Guides are perhapsmost significant for the specificguidance they offer on structuringenvironmental marketing claims.The Guides address eight cate-gories of environmental claims:(1) general environmental benefitclaims, (2) degradable biodegrad-able, and photodegradable claims,(3) compostable claims, (4) recy-

clable claims, (5) recycled contentclaims, (6) source reduction claims,(7) refillable claims, and (8) ozonesafe and ozone friendly claims.38

Each category describes the ele-ments of the different claims andany qualifications that may be nec-essary to avoid consumer deception.Each category is also accompaniedby examples illustrating claims thatdo and do not comport with theGuides. The examples are not anexhaustive list of all the differentclaims that could be made, but pro-vide some “safe harbors” and identi-fy some minefields. Representativeexamples from each of the eight cat-egories of environmental claims areset forth below.

General environmental bene-fit. A pump spray product is labeled“environmentally safe.” Most of theproduct’s active ingredients consistof volatile organic compounds thatmay cause smog by contributing toground-level ozone formation. Theclaim is deceptive because, absentfurther qualification, it is likely toconvey to consumers that use of theproduct will not result in air pollu-tion or other harm to the environ-ment.39

Degradable/biodegradable/photodegradable. A soap or sham-poo product is advertised as“biodegradable,” with no qualifica-tion or other disclosure. The manu-facturer has competent and reliablescientific evidence demonstratingthat the product, which is custom-arily disposed of in sewage systems,will break down and decomposeinto elements found in nature in ashort period of time. The claim isnot deceptive.40

Compostable. A manufacturermakes an unqualified claim that itspackage is compostable. Althoughmunicipal or institutional compost-ing facilities exist where the prod-uct is sold, the package will notbreak down into usable compost in

a home compost pile or device. Toavoid deception, the manufacturershould disclose that the package isnot suitable for home composting.41

Recyclable. A nationally market-ed bottle bares the unqualified state-ment that it is “recyclable.”Collection sites for recycling thematerial in question are not avail-able to a substantial majority of con-sumers or communities, althoughcollection sites are established in asignificant percentage of communi-ties or available to a significant per-centage of the population. Theunqualified claim is deceptivebecause, unless evidence shows oth-erwise, reasonable consumers livingin communities not served by pro-grams may conclude that recyclingprograms for the material are avail-able in their area. To avoid decep-tion, the claim should be qualified toindicate the limited availability ofprograms, for example, by stating“this bottle may not be recyclable inyour area,” or “recycling programsfor this bottle may not exist in yourarea.” Other examples of adequatequalifications of the claim includeproviding the approximate percent-age of communities or the popula-tion to whom programs areavailable.42 In contrast, the state-ment “Please Recycle” on an alu-minum beverage can is notdeceptive even without qualifica-tion. Because collection sites forrecycling aluminum beverage cansare available to a substantial majori-ty of consumers or communities,the claim does not need to be quali-fied to indicate the limited availabil-ity of recycling programs.43

Recycled content. A manufac-turer routinely collects spilled rawmaterial and scraps left over fromthe original manufacturing process.After a minimal amount of repro-cessing, the manufacturer combinesthe spills and scraps with virginmaterial for use in further produc-tion of the same product. A claim


that the product contains recycledmaterial is deceptive since the spillsand scraps to which the claim refersare normally reused by industrywithin the original manufacturingprocess, and would not normallyhave entered the waste stream.44

A product in a multi-componentpackage, such as a paperboard boxin a shrink-wrapped plastic cover,indicates that it has recycled pack-aging. The paperboard box is madeentirely of recycled material, butthe plastic cover is not. The claim isdeceptive since, without qualifica-tion, it suggests that both compo-nents are recycled. A claim limitedto the paperboard box would not bedeceptive.45 In contrast, a laserprinter toner cartridge, containing25% recycled raw materials and 40%reconditioned parts is labeled “65%recycled content; 40% from recon-ditioned parts.” This claim is notdeceptive.46

Source reduction. An ad claimsthat solid waste created by disposalof the advertiser’s packaging is “now10% less than our previous pack-age.” The claim is not deceptive ifthe advertiser has substantiationthat shows that disposal of the cur-rent package contributes 10% lesswaste by weight or volume to thesolid waste stream when comparedwith the immediately precedingversion of the packaging.47

Refillable. A bottle of fabric sof-tener states that it is in a “handyrefillable container.” The manufac-turer also sells a large-sized con-tainer that indicates that theconsumer is expected to use it torefill the smaller container. Themanufacturer sells the large-sizedcontainer in the same market areaswhere it sells the small container.The claim is not deceptive becausethere is a means for consumers torefill the smaller container fromlarger containers of the same prod-uct.48

Ozone safe and ozone friendly.The seller of an aerosol productmakes an unqualified claim that itsproduct “Contains no CFCs.”Although the product does not con-tain CFCs, it does contain HCFC-22,another ozone depleting ingredient.Because the claim “Contains noCFCs” may imply to reasonable con-sumers that the product does notharm the ozone layer, the claim isdeceptive.49

Practitioners should consult theregulations for more examples andfor descriptions of the elements andqualifications that should accompa-ny each category of claims.50

Evaluation

The Green Guides have been inexistence for eight years now, andthere is reason to believe that theyare having a positive impact. In anApril 1997 letter to a member of theCalifornia Legislature, the Directorof the FTC Bureau of ConsumerProtection noted that “[t]he com-ments the Commission received dur-ing the 1995-96 review period fromindustry, environmental groups, andfederal and state authorities indicat-ed that the Guides were working welland that industry largely was com-plying with them.”51 Further positiveindications of compliance were evi-denced by an informal FTC surveyconducted in April 1999 of 150Internet web sites making environ-mental advertising claims for theirproducts.52

A University of Utah study pres-ents empirical data to support thepositive impact of the GreenGuides. The study found that “thenumber of environmental claims onproducts actually increased sub-stantially between 1992 and 1994,indicating that the Guides did notdiscourage manufacturers frommaking environmental claims.”53

Although compliance was initiallynot widespread, “environmental

claims had improved in quality(that is, they had become more spe-cific and more qualified) withoutany decrease in their frequency.”54

The Director of the FTC Bureau ofConsumer Protection drew similarconclusions. He wrote in 1997 that“the most egregious, deceptiveclaims had disappeared from themarketplace, and the total numberof deceptive claims had also beenreduced.”55

Despite these accolades, somecommentators have been skepticalabout the true efficacy of the GreenGuides. A primary criticism is thatthe Guides are non-binding andthus offer little improvement overcase-by-case enforcement actionspursued under Section 5 of the FTCAct.56 The need for more narrowlydrawn “safe harbor” provisions andthe absence of a private cause ofaction under the FTC Act have alsobeen cited as weaknesses.57 Still oth-ers would like to see federal guide-lines that preempt state and localregulation.58

Congressional action in this areacould accommodate some of thesecriticisms. As discussed above, theregulation of environmental mar-keting subsumes the dual goals ofconsumer protection and soundenvironmental policy. Since theFTC has expressed doubt as to itsjurisdiction to effect substantiveenvironmental policy, an approachinvolving both the FTC and the EPAhas been suggested.59 This was theapproach favored by H.R. 3865, firstintroduced by Representative AlSwift of Washington in 1991.60 Thisbill, which was never enacted,would have given regulatory author-ity to the EPA while allowing forFTC enforcement. Another failedlegislative proposal was theEnvironmental Marketing ClaimsAct of 1990. It was first introducedas S. 3218 by Senators Lautenbergof New Jersey and Lieberman ofConnecticut in 1990 and reintro-


duced as S. 615 in 1991.61 Thismeasure would have “withdrawnFTC authority to define environ-mental marketing terms and wouldhave instead authorized EPA…todefine and govern the use of themost commonly occurring [envi-ronmental] terms.”62 There havebeen no significant bills since 1991as the emergence of the GreenGuides squelched all attempts toput EPA at the helm of the environ-mental marketing movement.63

Conclusion

The Green Guides have achievedmuch success over the past eightyears. This success, coupled withthe lack of significant congressionalinterest in this subject sinceissuance of the Guides, suggeststhat the FTC is likely to maintainthe dominant role in the area of fed-eral environmental marketing regu-lation and that the Green Guidesare here to stay.

1 Jamie A. Grodsky, Certified Green: TheLaw and Future of Environmental Labeling,10 YALE J. ON REG. 147, 147 (1993).

2 Roscoe B. Starek, III, Commissioner, FTC, ABrief Review of the FTC’s Environmental andFood Advertising Enforcement Programs(October 13, 1995) <http://www.ftc.gov/speeches/starek/rbsgre.htm>.

3 Other avenues of discussion include third-party certification methods, U.S. Environ-mental Protection Agency (“EPA”) efforts,and draft standards adopted by the Interna-tional Standards Organization (“ISO”).

4 Starek, supra note 2.5 Grodsky, supra note 1, at 150.6 Roscoe B. Starek, III, Commissioner, FTC,F.T.C. ‘Green Guides’: A Consumer Suc-cess Story, WEST’S LEGAL NEWS, December23, 1996, available in 1996 WL 730228.

7 Grodsky, supra note 1, at 164.8 See VA. CODE ANN. § 3.1-385.1-8 (Michie1996).

9 Percival et al., ENVIRONMENTAL REGULATION:LAW, SCIENCE, AND POLICY 136 (2d ed. 1996).The California statute withstood a FirstAmendment challenge. Association of Nat’l

Advertisers, Inc. v. Lungren, 44 F.3d 726(9th Cir. 1994).

10 Letter from Joan Z. Bernstein, Director ofthe FTC Bureau of Consumer Protection, toMichael J. Machado, Assembly member ofthe California Legislature (April 7, 1997)<http://www.ftc.gov/be/v970003.htm>.See CAL. BUS. & PROF. CODE § 17508.5(West 1995); N.Y. COMP. CODES R. & REGS.tit. 6, § 368.1 (1996); R.I. GEN. LAWS § 6-13.3-4 (1996).

11 See Me. Rev. Stat. Ann. tit. 38, § 2142(West 1996).

12 Starek, supra note 6.13 See, e.g., Standard Oil Co. of California, 84

F.T.C. 1401 (1974), aff’d as modified, 577F.2d 653 (9th Cir. 1978); Ex-Cell-O Corp.,82 F.T.C. 36 (1973).

14 Bernstein letter, supra note 10.15 Federal Trade Commission News Release

(July 28, 1992) <http://www.ftc.gov/opa/predawn/F93/greenguid3.txt>.

16 56 FED. REG. 24,968 (1991).17 Starek, supra note 2.18 57 FED. REG. 36,363 (1992).19 FTC News Release, supra note 15.20 Bernstein letter, supra note 10.21 61 FED. REG. 53,311 (1996).22 63 FED. REG. 24,240 (1998).23 See Consumer Protection hyperlink at

<http://www.ftc.gov>.24 15 U.S.C. § 45 (1994).25 16 C.F.R. pt. 260, n.1 (1999) (citing Cliffdale

Associates, Inc., 103 F.T.C. 110, 176, 176n.7, n.8, Appendix, reprinting letter datedOct. 14, 1983, from the Commission to theHonorable John D. Dingell, Chairman,Committee on Energy and Commerce, U.S.House of Representatives (1984)).

26 Starek, supra note 5.27 16 C.F.R. § 260.5 (1999).28 16 C.F.R. § 260.1 (1999).29 16 C.F.R. § 260.2 (1999).30 16 C.F.R. § 260.2 (1999).31 16 C.F.R. § 260.6(a) (1999).32 Starek, supra note 2.33 16 C.F.R. § 260.6(b) (1999).34 Id.35 16 C.F.R. § 260.6(c) (1999).

36 Id.

37 16 C.F.R. § 260.6(d) (1999).

38 16 C.F.R. § 260.7 (1999).

39 16 C.F.R. § 260.7(a) (1999).

40 16 C.F.R. § 260.7(b) (1999).

41 16 C.F.R. § 260.7(c) (1999).

42 16 C.F.R. § 260.7(d) (1999).

43 Id.

44 16 C.F.R. § 260.7(e) (1999).

45 Id.

46 Id.

47 16 C.F.R. § 260.7(f) (1999).

48 16 C.F.R. § 260.7(g) (1999).

49 16 C.F.R. § 260.7(h) (1999).

50 See 16 C.F.R. § 260.7 (1999).

51 Bernstein letter, supra note 10.

52 FTC Releases Revised Consumer Brochureabout “Green” Claims, M2 PRESSWIRE, April23, 1999, available in 1999 WL 15761440.

53 Bernstein letter, supra note 10, at n.3 (citingR.N. Mayer, B. Cude, J. Gray-Lee & D.L.Scammon, Trends in EnvironmentalMarketing Claims Since the FTC Guides:Technical Report (May 1, 1995)).

54 Id.

55 Bernstein letter, supra note 10.

56 See, e.g., Grodsky, supra note 1, at 159.

57 Id. at 158-60.

58 Kimberly C. Cavanagh, Comment: It’s aLorax Kind of Market! But Is It a SneetchesKind of Solution?: A Critical Review of Cur-rent Laissez-Faire Environmental MarketingRegulation, 9 VILL. ENVTL. L.J. 133, 183(1998).

59 Id. at 172-73.

60 See H.R. 3865, 102d Cong. (1991).

61 Grodsky, supra note 1, at 165 (citationsomitted); S. 3218, 101st Cong. (1990); S.615, 102d Cong. (1991).

62 Id.

63 Cavanagh, supra note 58, at 142.

� �


effected a regulatory taking or oth-erwise injured the property byunlawful acts without paying com-pensation or providing an ade-quate post-deprivation remedy forthe loss. The jury found in favor ofDel Monte Dunes on the takingsequal protection claims. DelMonte Dunes was awarded $1.45million in damages.

When the case reached theSupreme Court, the questions pre-sented were (i) whether issues ofliability were properly submittedto the jury on the takings claim,(ii) whether the jury may reweighthe reasonableness of the City’slanduse decision, and (iii) whetherthe rough-proportionality standardof Dolan v. City of Tigard, 512 U.S.374, 114 S.Ct. 2309 (1994),applied.

The Supreme Court addressedthese questions in reverse order.First, the Supreme Court held thatDolan was not designed to addressand is not readily applicable to sit-uations where the landowner’stakings claim is based not onexcessive exactions but on denialof development.

Second, the Supreme Courtaddressed the standard of reviewof the city’s denial and held thatthe jury instructions were consis-tent with the Court’s prior hold-ings. In particular, the jury waspresented with the question ofwhether, “in light of all the historyand the context of the case, theCity’s particular decision to denyDel Monte Dunes’ final develop-ment proposal was reasonablyrelated to the City’s proffered jus-tifications.”

The final issue before theSupreme Court was whether itwas proper for the District Courtto submit the question of liabilityon the takings claim to the jury.The answer hinged on whether

Del Monte Dunes had a statutoryor constitutional right to a jury,and if it did, the nature and extentof the right. Del Monte asserted aright to a jury trial under 28U.S.C. § 1983 and the SeventhAmendment. The Supreme Courtdisagreed with Del Monte Dunes’assertion that the phrase “actionat law” is a term of art implying aright to a jury trial and, therefore,found that Section 1983 does notconfer the right to a jury.

In analyzing the SeventhAmendment right to a jury trial,the Supreme Court found that aSection 1983 suit seeking legalrelief is an action at law within themeaning of the Seventh Amend-ment. Because the Court foundthat the suit was an action at law,the Court next considered whetherthe particular issues of liabilitywere proper for determination bythe jury. The Court held that it wasproper to submit the liability issuesto the jury because they wereessentially “fact-bound” in nature.

United StatesCourt of AppealsOPA — RecoverableCosts Limited to CostsAssociated with CarryingOut Federal Coordinator’sDirectives

Gatlin Oil Company, Inc. v.United States, 169 F.3d 207(4th Cir. March 2, 1999)

The United States appealed theFourth Circuit’s ruling that an oilcompany was entitled to full com-

United StatesSupreme CourtTakings — Dolan NotApplicable to Denial ofPermits for Development

City of Monterey v. Del MonteDunes at Monterey, Ltd., 119S. Ct. 1624 (May 24, 1999)

Del Monte Dunes brought thisaction against the City of Montereyin the United States District Courtfor the Northern District ofCalifornia under 42 U.S.C. § 1983,alleging, inter alia, that denial of itsfinal development proposal was aviolation of the Due Process andEqual Protection clauses of theFourteenth Amendment and anunconstitutional, regulatory tak-ing.

Del Monte Dunes had submit-ted proposals to the City on fivedifferent occasions requesting theright to develop a parcel of land.The City denied these proposals,each time imposing more rigorousdemands on the developer. DelMonte Dunes alleged that the city

CaseDigest


pensation under the Oil PollutionAct, 33 U.S.C. § 2701 et seq.(“OPA”), for removal costs thatthe federal coordinator deter-mined were consistent with theNational Contingency Plan, costsresulting from actions he haddirected, and the loss of earningscapacity caused by carrying outhis directives.

In 1994, a vandal jammed openaboveground fuel storage tanks onGatlin Oil Company’s (“Gatlin’s”)property that caused an oil spill of20,000-30,000 gallons. The spillcaused a fire that destroyed awarehouse, bulk plant, inventory,a loading dock, and several vehi-cles. Upon arriving at the scene,the federal coordinator estimatedthat there were 5,500 gallons of oilin surrounding ditches and that10 gallons of oil had seeped into acreek. The federal coordinatoroutlined clean up directives forGatlin. State authorities imposedadditional requirements. Gatlincomplied with the federal andstate requirements and attemptedto recover its costs from the OilSpill Liability Trust Fund(“Fund”) created by OPA.

OPA was enacted in the wakeof the Exxon Valdez spill to pro-vide a prompt, federally-coordi-nated re-sponse to oil spills innavigable waters of the UnitedStates and to compensate inno-cent victims. The owner of anonshore facility is generallyresponsible for clean up costs aso-ciated with a spill from its facility.However, proof that a third partycaused the spill is a completedefense and entitles an owner toreimbursement of clean up costsconsistent with the NationalContingency Plan.

Because the spill was caused bya third party, Gatlin sought recov-

ery of all damages resulting fromthe oil spill and the ensuing fire, asum amounting to $850,000 plusinterest. The Coast Guard limitedGatlin’s recovery to damagescaused by the 10-gallons dischargeinto navigable waters, the 5,500gallons in the ditches, and oil ingravel around the two tanks thatthreatened to discharge into navi-gable waters. Gatlin sought judicialreview in federal district court,which set aside the agency deci-sion and remanded the case forfurther fact finding on compensa-tion. The United States appealed.

The Fourth Circuit reviewedthe Coast Guard’s interpretationof OPA under the two-step test ofChevron U.S.A., Inc. v. NationalResources Defense Council, 467U.S. 837, 104 S. Ct. 2778 (1984).The court held that the agency’sinterpretation was reasonable andthat Gatlin’s recovery was limitedto damages “that resulted from adischarge of oil or from a substan-tial threat of a discharge of oil intonavigable waters or the adjacentshoreline.” The court held thatGatlin was entitled to full compen-sation for loss of earnings andearnings capacity due to carryingout the federal coordinator’sdirections. However, Gatlin couldnot recover for fire damagebecause the fire did not cause thedischarge of oil into navigablewaters nor pose a substantialthreat of a discharge. The courtalso held that Gatlin was not enti-tled to recover the costs of com-plying with the directives of stateofficials. Gatlin’s claim for interestwas held barred by the no-interestrule, which prohibits an award ofinterest against the United Statesin the absence of an express waiv-er of sovereign immunity. Thecourt remanded the case for adetermination of whether the

Coast Guard’s measure of recover-able damages was reasonable.

Environmental Justiceand NEPA — NoDiscrimination Found inSiting of TreatmentFacility

Goshen Road EnvironmentalAction Team v. United StatesDepartment of Agriculture,176 F.3d 475 (4th Cir. Apr. 6,1999)

Goshen Road EnvironmentalAction Team (“GREAT”) and twoneighborhood residents broughtthis action in the United StatesDistrict Court for the Eastern Dis-trict of North Carolina against theUnited States Department of Agri-culture (“USDA”) and the Town ofPollocksville, North Carolina, inconnection with the Town’s sitingof a wastewater treatment plant(“WWTP”). Plaintiffs alleged viola-tions of Title VI of the Civil RightsAct of 1964, 42 U.S.C. § 2000d etseq., and the National Environ-mental Policy Act (“NEPA”), 42U.S.C. § 4321 et seq. They soughtpreliminary and permanentinjunctions against operation ofthe WWTP. The district courtdenied the request for a prelimi-nary injunction and the FourthCircuit affirmed. Goshen RoadEnvironmental Action Team v.USDA, 103 F.3d 117 (4th Cir.1996) (unpublished table deci-sion). The district court thengranted summary judgment for thedefendants, which was affirmed bythe Fourth Circuit.


In 1985, the Town contractedwith the engineering firm of Riversand Associates, Inc. (“Rivers”) toexamine options for the construc-tion of the WWTP. The firm recom-mended a WWTP that woulddischarge treated effluent into theTrent River. The Town then appliedfor and received funding for thefacility from the USDA through theFarmers Home Administration(“FmHA”) of the USDA. In April1986, the FmHA conducted anEnvironmental Assessment (“EA”)of the proposed project as requiredby NEPA. The agency concludedthat the project would not have asignificant effect on the environ-ment. Therefore, FmHA issued aFinding of No Significant Impact(“FONSI”), which eliminated theneed for a more detailed Environ-mental Impact Statement (“EIS”).

Prior to the construction of theplant, North Carolina reclassifiedthe Trent River as a nutrient sensi-tive waterway. The reclassificationwould have required additionaltreatment at the WWTP. Conse-quently Rivers changed its recom-mendation to land treatment,treated effluent is sprayed ontofields near the facility rather thandischarged to a waterbody.

The Town began searching forpossible sites. The Town rejectedsites to the north and east becausethey would have required pumpingthe effluent across the Trent Riverand Mill Creek. Land to the southwas rejected due to poor soil con-ditions. The Town selected foursites to the west for further study.Sites 1 and 3 were owned by whitepersons and sites 2 and 4 wereowned by African-Americans.Rivers contracted with Law Engi-neering to perform a soil analysisfor each site. Law Engineering con-cluded that Sites 2 and 4 werepreferable because they had good

soil, presented the least potentialfor public contact, and providednatural buffers to adjoining land.Rivers ultimately recommendedSite 4 because it had moreabsorbent soil, required slightlyless land than Site 2, had existingroad frontage for access, and wasfarther from the Trent River in theevent of a spill.

The Town selected Site 4 andinformed the FmHA of its deci-sion. In February 1991, the FmHAamended its original EA to reflectthe change to land treatment.Again, FmHA concluded that theproject would have no significantenvironmental impact and, there-fore, did not prepare a detailedEIS. The Town condemned Site 4,constructed the WWTP, and beganoperations.

Title VI of the Civil Rights Actprohibits discrimination on thebasis of race by any entity receiv-ing federal funding. 42 U.S.C.§ 2000d. USDA’s regulations underTitle VI prohibit funding recipientsfrom siting facilities in a mannerthat creates a disparate racialimpact. 7 C.F.R. § 1901.202(2)(viii)(A). GREAT claimed that theTown and the USDA violated TitleVI by locating the WWTP in amajority African-American com-munity. For the same reasonscited by the district court, theFourth Circuit rejected the Title VIclaim because the Town provided“substantial legitimate nondis-criminatory reasons” for its sitingdecision.

The court discussed the Town’sreasons for selecting land treat-ment over a more typical dis-charge facility as well as itsdecision to site the plant to thewest of town. Of the four westernsites, the court stated that theTown had based its selection of

Site 4 on the “legitimate, race-neutral recommendation” of itsengineers. The court also foundthat GREAT did not introduce anyscientific evidence to support itsclaim that other equally effectivesites existed in the area. GREATalso claimed that the Town’s rea-sons for selecting Site 4 were apretext for discrimination. GREATargued that the rejection of sitesto the north and east to avoidpumping treated effluent acrossthe Trent River and Mill Creek waspretextual because Site 4 requiredpumping across Goshen Creekand a swamp. The court rejectedthis argument because GREATproduced no evidence that cross-ing Goshen Creek or the swamppresented the same environmen-tal risks as crossing the reclassi-fied Trent River.

Finally, GREAT argued underNEPA that the FmHA’s amendedEA was insufficient and, therefore,the decision not to prepare adetailed EIS was arbitrary andcapricious. GREAT alleged that theamended EA was insufficientlysite-specific, failed to consider theGoshen area’s historical signifi-cance, failed to consider alterna-tives adequately, and failed toconsider the racially disproportion-ate burden resulting from selectionof Site 4. The court held that theoriginal EA sufficiently covered theGoshen area and, therefore,greater specificity in the amendedEA was unnecessary. The originalEA specifically referred to a statehistoric preservation officers find-ing of no historical significance. Italso rejected as infeasible alterna-tive methods of treatment. Thecourt held that there was no needto repeat these findings in theamended EA. As for the claim thatthe amended EA failed to considerany racially disproportionate bur-den, the court held that neither


NEPA nor the implementing regu-lations require an EA to include adisparate impact analysis.

Negligent Performance of an EnvironmentalAssessment

Jonas B. Crooke Interests, Inc.v. CTL Eng’g, Inc., Nos. 97-1227, 97-1357, 175 F.3d 1014(4th Cir. Mar. 29, 1999)

Jonas B. Crooke Interests, Inc.(“JCI”) brought this action againstCTL Engineering, Inc. (“CTL”) inthe United States District Courtfor the Eastern District of Virginiaalleging various causes of actionarising out of CTL’s performanceof an environmental site assess-ment (“ESA”). After JCI obtaineda jury verdict in the amount of$300,027, both parties appealedthe district court’s rulings on vari-ous motions. As discussed below,the Fourth Circuit affirmed in partand reversed in part.

In July 1995, JCI purchased anoption to buy a tract of land. Dur-ing the feasibility period under theoption agreement, JCI retainedCTL to conduct an ESA. CTLreported that there was no evi-dence of any recognized environ-mental condition on the property.With the option about to expire,JCI negotiated a proposed agree-ment for development of the prop-erty with Northwestern MutualLife Insurance Company (“North-western”). JCI was to assign itspurchase rights and the fruits ofits predevelopment activity toNorthwestern for an assignmentfee of $189,443. Then, Northwest-ern was to retain JCI to develop

the property for a development feeof $530,000. Before the dealclosed, however, Northwesternconducted its own ESA and dis-covered adverse environmentalconditions that CTL had failed toidentify. Northwestern wantedmore time to study the property,but JCI’s option expired and theproperty was sold to anotherbuyer.

JCI sued CTL alleging breach ofcontract, professional negligence,and constructive fraud. JCI soughtdamages for the money andresources expended on the projectand for the loss of benefits itwould have gained as a result ofthe agreement with Northwestern.The district court granted CTL’smotion for partial summary judg-ment on JCI’s claims for the$530,000 development fee butdenied the motion with respect toJCI’s claims for predevelopmentexpenses and for loss of opportu-nity to recover those expenses.The district court also grantedCTL’s motion for summary judg-ment on the constructive fraudclaim. After a jury returned a ver-dict for JCI in the amount of$300,027, CTL unsuccessfullymoved for judgment as a matter oflaw or alternatively for a new trialon damages.

On appeal, CTL argued that thedistrict court erred in denying itsmotion for judgment as a matterof law on the professional negli-gence claim because JCI’s allegedinjury was for a solely economicloss. The Fourth Circuit rejectedthis argument because underVirginia law economic losses maybe recovered under a negligencetheory if there is privity of con-tract between the parties. CTLand JCI had a contractual rela-tionship. Therefore, the courtheld that JCI was entitled to

recover damages for economicloss under a negligence theory.Assuming damages for economicloss are recoverable in a negli-gence action, CTL further arguedthat JCI did not offer sufficientevidence to prove that CTL’s fail-ure to detect the adverse environ-mental conditions caused JCI tosuffer any injury. JCI argued thatit was damaged in two ways. First,it incurred expenses on the proj-ect that would not have beenincurred if the ESA had been per-formed correctly. Second, thedelay resulting from the subse-quent discovery of the adverseenvironmental conditions causedJCI to lose reimbursement ofthose expenses under the agree-ment with Northwestern.

The Fourth Circuit found thatJCI had offered no evidence that itwould have abandoned the projectif CTL had conducted the ESAproperly. However, it also foundthat JCI had offered evidence sup-porting the inference that but forCTL’s negligence, JCI would havecleaned up the property, consum-mated the agreement with North-western, and obtained the$189,443 assignment fee uponclosing the deal. Therefore,Fourth Circuit held that the dis-trict court properly denied CTL’smotion for judgment as a matterof law on the negligence claim.

CTL also argued that the dis-trict court abused its discretion indenying CTL’s motion for a newtrial on damages. CTL assertedthat the only injury that the juryreasonably could have found tohave been proximately caused byCTL’s negligence was loss of the$189,443 assignment fee. Howev-er, the jury awarded $300,027.The Fourth Circuit agreedbecause the deal with Northwest-ern would have reimbursed JCI


less than $200,000 in predevelop-ment expenses. Thus, the courtreversed and remanded for a newtrial on damages as to the profes-sional negligence claim.

Finally, JCI argued that the dis-trict court erred in granting partialsummary judgment to CTL withrespect to the $530,000 develop-ment fee. JCI contended that theevidence presented a genuineissue of material fact regardingwhether it would have collectedthe development fee but for CTL’sfailure to identify the adverseenvironmental conditions. Thecourt disagreed, finding thatabsent evidence tending to provethat JCI and Northwestern actual-ly would have completed thedevelopment or some portion of it,JCI failed to raise a factual issue asto whether it would have earnedthe development fee. Thus, thecourt held that the district courtproperly granted partial summaryjudgment to CTL on JCI’s claimfor damages in the amount of thedevelopment fee.

CWA — No ReversibleError Where CounselInvites ErroneousInstruction

United States v. Ellis, 1999U.S. App. Lexis 2690 (4th Cir.Feb. 22, 1999) (unpublisheddecision)

Defendants Kerry Ellis andSeawitch Salvage (collectively,Ellis) were convicted in UnitedStates District Court for theDistrict of Maryland of violatingthe Clean Air Act and Clean Water

Act. Ellis was found guilty ofimproperly removing and dispos-ing of asbestos during the break-ing of Navy surplus vessels, failingto notify the appropriate environ-mental agency that asbestosremoval was occurring at the site,and dumping debris and petrole-um products into BaltimoreHarbor without a permit. Onappeal, Ellis argued that theindictment was constructivelyamended when the judge instruct-ed the jury on too broad a defini-tion of friable asbestos. Ellis alsoargued that defense counsel wasineffective, that prosecutorial mis-conduct occurred during closingargument, that the jury instruc-tions concerning violations of theClean Water Act erroneouslyomitted the knowledge require-ment, and that the governmentproduced insufficient evidence tosupport the false statement con-viction. The Fourth Circuit foundno reversible error and affirmedthe defendant’s conviction.

Ellis, the owner and presidentof Seawitch Salvage, a ship-break-ing business located on BaltimoreHarbor, purchased decommis-sioned Navy vessels and demol-ished them into scrap metal. Ellissuccessfully bid on and purchasedfour decommissioned Navy ships,the USS Inflict, the USS Fearless,the USS Illusive, and the USSCoral Sea. The government con-tract between Ellis and theDefense Reutilization and Market-ing Service (“DRMS”) clearly indi-cated that several compartmentson each of the four ships containedasbestos. The contract mandatedthat purchasers of the ships wereto dispose of all asbestos in accor-dance with applicable regulations.Ellis certified that asbestos abate-ment would be done on the Inflictand Fearless.

In May of 1993, Ellis did not,however, file the requiredNESHAP notice and thus noasbestos abatement occurredprior to the breaking of the Illu-sive. In August 1994, EPA agentsvisited Ellis to investigate whetherEllis had followed proper asbestosabatement procedures. Uponinspection, the EPA agents foundseveral environmental complianceviolations. As a result of the inves-tigation of Ellis’ ship breakingpractices, Ellis was charged with aseven-count indictment. A juryreturned a verdict of guilty on allcounts. The district court sen-tenced Mr. Ellis to 30 months’imprisonment, three years’ super-vised release, and assessed a$50,000 fine. In addition, thecourt sentenced Seawitch Salvageto five years’ probation andordered the company to pay a$50,000.00 fine.

On appeal to the FourthCircuit, defendants challengedtheir convictions on five grounds,all of which were rejected by theCourt. First, Ellis asserted that,pursuant to the defense counsel’srequest, the judge gave an incor-rect definition of “regulatedasbestos containing material.”The court rejected this assertionand found that defense counselinvited such an error in theinstructions. Ellis subsequentlyargued that defense counsel’s invi-tation of this error constitutedineffective assistance of counsel.The court rejected this argumentand held that such a claim of inef-fective assistance of counsel mustbe raised in a 28 U.S.C. § 2255motion in the district court ratherthan on direct appeal.

Ellis further argued that the gov-ernment committed reversibleprosecutorial misconduct duringits closing argument by making


twelve incorrect and misleadingstatements of fact or law relating tothe friability of asbestos aboard theIllusive and the Coral Sea. Thecourt held that the trial courtissued a curative instruction thatprevented any prejudicial state-ments by the prosecution frommisleading the jury. Ellis furtherargued that the district court gaveerroneous jury instructions regard-ing violations of the Clean WaterAct. The court held that becauseEllis did not object to the instruc-tions during the trial it must reviewfor plain error. Ultimately, thecourt held that although theinstructions were technically erro-neous the error was not such thatwould harm the fairness, integrityor public reputation of the judicialproceedings. Finally, Ellis arguedthat the evidence presented at trialwas insufficient to support a con-viction. The court ruled that Ellis’assertion was without merit andthat the evidence against Ellis wassubstantial.

Federal District CourtCWA and ESA —Discovery in Citizen SuitsLimited to AdministrativeRecord

American Canoe Ass’n, Inc. v. Environmental ProtectionAgency, 46 F. Supp. 2d 473, No.98-979-A, 1999 WL 258426(E.D. Va. Apr. 29, 1999).

The American Canoe Societyand the American Littoral Society

brought suit in the United StatesDistrict Court for the EasternDistrict of Virginia alleging thatthe United States EnvironmentalProtection Agency (“EPA”) hadfailed to perform certain non-dis-cretionary duties imposed by theClean Water Act (“CWA”) and theEndangered Species Act (“ESA”).EPA moved for a protective orderlimiting discovery to the adminis-trative record and striking plain-tiffs’ amended discovery requests.The district court granted EPA’smotion.

Count 4 of the complaintalleged that EPA had failed toestablish total maximum dailyloads (“TMDLs”) for Virginia’swaters in accordance with Section303(d) of the CWA. Count 6alleged that EPA’s failure to eitherapprove or disapprove Virginia’scontinuing planning process(“CPP”) constituted a failure toperform a non-discretionary dutyunder Section 303(e) of the CWA.Finally, Count 11 alleged that EPAhad violated the ESA by failing toconsult with the U.S. Fish andWildlife Service and the NationalMarine Fisheries Service pursuantto Section 7 of the ESA before tak-ing various actions related to itsapproval of Virginia’s CWA efforts.These claims were brought underthe citizen suit provisions of therespective statutes.

Plaintiffs sought discoverybeyond the administrative recordsproduced by EPA. EPA moved fora protective order on the groundthat judicial review of agencyaction is generally confined to theadministrative record. Plaintiffscontended this limitation onlyapplies to review of agency actionunder the Administrative Proce-

dure Act (“APA”), not to claimsunder the CWA and ESA citizensuit provisions for EPA’s failure toperform a non-discretionary duty.

The Fourth Circuit noted thatwhile it had not yet addressed thisquestion, the Eighth Circuitrecently had. In Newton CountyWildlife Ass’n v. Rogers, 141 F.3d803, 808 (8th Cir. 1998), the courtconcluded that review of ESA andCWA citizen suit claims should beconfined to the administrativerecord. Also, in United States v.Carlo Bianchi & Co., 373 U.S.709, 715 (1963), the SupremeCourt stated that “where Congresshas simply provided for review,without setting forth the stan-dards to be used or the proceduresto be followed,…consideration isto be confined to the administra-tive record and…no de novo pro-ceeding may be held.”

The court found that its owndecision in National WildlifeFederation v. Hanson, 859 F.2d313 (4th Cir. 1988), supported theconclusion that the CWA and ESAcitizen suit provisions operate inconjunction with the APA’s stan-dards and procedures for adminis-trative review. Therefore, “it wouldbe irrational to expand discoverybeyond the administrative record,as the APA’s ‘arbitrary and capri-cious’ standard assumes that thecourt will, in the usual circum-stance, base its review upon thematerial actually before theagency.” Therefore, the court heldthat discovery in CWA and ESAcitizen suits is properly limited toAPA record review. The court alsonoted that circumstances such asfailure of the record to explainadministrative action or agencyreliance on information not con-


tained in the administrative recordmay, in some cases, justifyexpanding the record or permit-ting discovery, but the plaintiffshad failed to demonstrate anysuch circumstances in this case.

NEPA — Agency’sEnvironmental ImpactStatement Held Adequate

Citizens Concerned About Jet Noise v. Dalton, No. 2:98CV800, 1999 WL322635, 48 F. Supp. 2d 582,(E.D.Va. May 19, 1999)

The defendant United StatesNavy obtained summary judgmentin United States District Court forthe Eastern District of Virginia ona claim by plaintiff Citizens Con-cerned About Jet Noise, Inc.(CCAJN). CCAJN was seeking tohalt the transfer of aircraft toNaval Air Station Oceana in Vir-ginia Beach. The plaintiff chal-lenged the transfer by objecting tothe adequacy of the Final Environ-mental Impact Study (“FEIS”)produced by the Navy pursuant tothe National Environmental PolicyAct (“NEPA”), 42 U.S.C.A. §§4321-70d. The court held thatCCAJN had failed to prove thatthe FEIS was inadequate or thatthe decision-maker did not havethe information necessary tomake an informed decision.

Under a 1993 Base Realignmentand Closure (“BRAC”) Commis-sion report approved by the Presi-dent and Congress, the Secretaryof Defense was directed to close theMaster Jet Base at NAS Cecil Field

outside of Jacksonville, Florida,and distribute its air assets to otherbases. The Navy evaluated 20 east-ern seaboard CCAJN air stationsand decided to place all of the air-craft at Oceana. CCAJN filed a suitin July 1998 requesting permanentinjunctive relief. In November1998, CCAJN moved for a prelimi-nary injunction and for summaryjudgment. The Navy responded byfiling a cross-motion for summaryjudgment.

The Court reviewed the FEIS todetermine whether the Navy’s deci-sion was arbitrary and capricious,an abuse of discretion, or not inaccordance with the law. CCAJNargued that the report’s alterna-tives analysis was inadequatebecause it did not consider otherreasonable alternatives. The courtconcluded that the Navy sufficient-ly analyzed the alternatives andwas properly informed to make areasonable decision. CCAJN alsoargued that the noise analysis wasin adequate because it did not fullyassess the costs to the communityof the higher noise levels associat-ed with the transferred aircraft.The court held that the plaintifffailed to demonstrate that theNavy’s decision to rely on averagenoise levels rather than single-event noise impacts was arbitraryand capricious. Plaintiff alsoargued that any cost benefit analy-sis based on the information con-tained in the FEIS was erroneousbecause the FEIS failed to disclosesignificant costs to the community.The court found that the Navy wasnot arbitrary and capricious in fail-ing to discuss the impact on prop-erty values in more detail. Finally,the court rejected CCAJN’s argu-ments concerning safety risks andair quality. The court concluded by

describing the citizens brief as“chronic faultfinding” and holdingthat the Navy’s decision was notarbitrary and capricious.

Virginia Supreme Court

Zoning — Cash ProffersCan Be Key Factor inDecision But Not SoleFactor

Gregory v. Board ofSupervisors of ChesterfieldCounty, 257 Va. 530, 514S.E.2d 350 (Apr. 16, 1999)

This case arose out of a denialby the Board of Supervisors ofChesterfield County (Board) forrezoning of a 30-acre parcel ofland. The proposed buyer of theproperty wished to change thezoning from “Agricultural A” to“Single-Family Residential R-12.”The Supreme Court of Virginiaaffirmed the trial court’s findingthat there was ample evidenceshowing that the Board’s denial ofthe request for rezoning was basedon the proposed development’simpact on health, safety, and wel-fare, and not just the lack or inad-equacy of cash proffers by thedeveloper.

By statute, a local governingbody may consider voluntarilyproffered conditions in decidingwhether to grant a rezoning appli-cation. The governing body must,however, make its decision basedon the merits of the entire appli-


cation and may not require thatany proffered conditions beincluded. See Va. Code §§ 15.2-2298, 15.1-2298(A), 15.2-2296;Board of Supervisors v. Reed’sLanding Corp., 250 Va. 397, 400,463 S.E.2d 668, 670 (1995) (alocal governing body is “notempowered to require a specificproffer as a condition precedent toa rezoning”). Here, the courtfound that a cash proffer was a“key factor” and even “expected.”However, the court determinedthat the Board’s decision was sup-ported by valid health, safety, andwelfare concerns and was notbased solely on the lack or inade-quacy of proffered monies.Therefore, the court upheld thedenial of the rezoning request.

Virginia Court of Appeals

VAPA Provides Right to Judicial Review ofDEQ’s Denial forReimbursement fromPetroleum Storage TankFund

May Department Stores Co. v.Commonwealth of Virginia,Dept. of EnvironmentalQuality and Dennis H. Treacy,Director, 29 Va. App. 589, 513S.E.2d 880 (Apr. 27, 1999)

The May Department StoreCompany sought reimbursementfor certain clean up efforts from thePetroleum Storage Tank Fund

(Tank Fund) administered by theDepartment of EnvironmentalQuality (DEQ). DEQ denied reim-bursement and the companyappealed to Circuit Court pursuantto the Virginia AdministrativeProcess Act (VAPA), Va. Code §§ 9-6.14:1 through 9-6.14:25. TheCircuit Court ruled that the com-pany had no right of appeal. Thesole issue on appeal to the Court ofAppeals was whether the VAPAprovides a right of appeal to circuitcourt of DEQ’s denial of reimburse-ment from the Tank Fund. TheCourt of Appeals held that theVAPA provides a right of appeal andremanded the case to circuit courtfor further proceedings.

The State Water Control Lawprovides expressly that appealsfrom certain regulations and deci-sions of the State Water ControlBoard (Board) shall be governedby the VAPA, but it does not indi-cate whether, or under what con-ditions, appeals may be taken fromother actions of the Board, such asdecisions made regarding the TankFund. DEQ, which administers theState Water Control Law, contend-ed that only the decisions listed inthe State Water Control Law’s spe-cific appeals provision may beappealed under the VAPA. Thecompany seeking reimbursementargued that the VAPA provides forreview of agency action evenwhere the agency’s basic law doesnot expressly do so, as long asreview is not specifically excluded.The Court of Appeals agreed.

The VAPA was designed as adefault or catchall provision,applicable whenever the basic lawfails to provide process. Thus,whenever an agency’s basic lawprovides expressly for VAPA cov-

erage of certain proceedings underspecified conditions and makes noprovision for judicial review ofother proceedings, the unmen-tioned proceedings are subject tothe VAPA unless otherwiseexpressly excluded. The fact thatVa. Code § 62.1-44.29 specificallymentions judicial review of only alimited number of Board decisionsdoes not compel the conclusionthat the General Assembly intend-ed only those decisions to bereviewable. The Court of Appealsfound that the provisions of theCode that specifically mentionjudicial review lay out a morestringent test than under theVAPA for determining who hasstanding to seek review.

DEQ also argued that the reme-dy sought by the company(i.e. reimbursement) rendered theVAPA inapplicable under theexclusion for agency action relat-ing to “[m]oney or damage claimsagainst the Commonwealth oragencies thereof” and “[g]rants ofstate or federal funds or property.”Va. Code §§ 9-6.14:4.1(B)(1), (4).The Court of Appeals rejected thiscontention because reimburse-ments from the Tank Fund are nei-ther “money or damage claims”nor “grants” within the meaning ofthe VAPA. The Court of Appealsfound that the VAPA provides aright to judicial review of theDEQ’s denial of reimbursementfrom the Tank Fund and remandedthe case to the circuit court forfurther proceedings.

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